================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to_______________
Commission File Number 0-2660
----------------------------------------
NAPTAU GOLD CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 22-3386947
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5391 Blundell Road
Richmond BC
Canada V7C 1H3
(address of principal executive offices)
(604) 277-5252
(Issuer's telephone number)
--------------------------------------------------
(former address)
9551 Bridgeport Road
Richmond BC
Canada V6X 1S3
-----------------------------
(Former name, former address and former fiscal year
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes |_| No |X|
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 5,933,500 shares of Common
Stock, $.001 par value, were outstanding, as of June 30, 1999.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
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<PAGE>
Form 10-QSB
INDEX Page
Number
Part I. Financial Information.............................................. 2
Balance Sheets...................................................... 2
Statements of Operations and Deficit................................ 3
Statements of Cash Flows............................................ 4
NOTES TO FINANCIAL STATEMENTS....................................... 5
Item 2. Plan of Operation.................................................. 6
Part II.................................................................... 6
Item 6. Exhibits and Reports on Form 8-K................................... 6
SIGNATURES.......................................................... 7
<PAGE>
Part 1. Financial Information
Balance Sheets
(expressed in United States dollars)
June 30, 1999 December 31, 1998
------------- -----------------
Assets
Current assets
Cash $ 2,490 $ 2,734
Equipment 71,582 71,582
Mineral properties 2,098,200 2,098,200
----------- -----------
$ 2,172,272 $ 2,172,516
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 500,049 $ 386,357
Contracts payable to related parties 2,529,687 2,506,843
Loans payable to related parties 27,002 30,304
----------- -----------
$ 3,056,738 $ 2,923,504
Shareholders' equity
Capital stock
Authorized:
5,000,000 preferred shares with a par
value of $0.001 per share
20,000,000 common shares with a par
value of $0.001 per share
Issued and outstanding:
6,933,500 common shares 6,934 6,934
Additional paid-in capital 1,581,105 1,581,105
Deficit (2,472,505) (2,339,027)
----------- -----------
$ (884,466) $ (750,988)
----------- -----------
$ 2,172,272 $ 2,172,516
=========== ===========
See accompanying notes to financial statements.
2
<PAGE>
Statements of Operations and Deficit
(expressed in United States dollars)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Expenses:
Exploration and development costs $ 2,291 $ 245,976 $ 639 $ 235,304
Interest Expense 57,717 1,083 29,143 253
Investor Relations 3,195 3,195
Management Salary 45,000 45,000 22,500 22,500
Professional Fees 22,032 21,871 10,674 15,203
Office and Administrative $ 3,243 2,656 $ 1,191 2,621
----------- ----------- ----------- -----------
Loss for the period (133,478) (316,586) (67,342) (275,881)
Deficit, beginning of period (2,339,027) (1,325,111) (2,405,163) (1,365,816)
----------- ----------- ----------- -----------
Deficit, end of period $(2,472,505) $(1,641,697) $(2,472,505) $(1,641,697)
=========== =========== =========== ===========
Loss per share $ (0.02) $ (0.05) $ (0.01) $ (0.04)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Statements of Cash Flows
(expressed in United States dollars)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Cash generated from (used in):
Operations:
Loss for the period $(133,478) $(316,586) $ (67,342) $(275,881)
Change in non-cash operating
working capital:
Accounts Payable and
Accrued Liabilities $ 113,691 $ 62,934 75,259 39,824
--------- --------- --------- ---------
(19,787) (254,192) 7,917 (236,057)
Financing:
Contracts payable 22,844 318,950 (3,644) 265,709
Loans payable to related parties $ (3,301) $ (4,543) (4,563) --
--------- --------- --------- ---------
19,543 314,408 (8,207) 265,709
Investing activities:
Mineral properties: (60,132) (30,064)
--------- --------- --------- ---------
Increase (Decrease) in cash (244) 84 (290) (412)
Cash, beginning of period 2,734 0 2,780 496
--------- --------- --------- ---------
Cash, end of period $ 2,490 $ 84 2,490 84
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
NAPTAU GOLD CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. The Company and basis of presentation:
Naptau Gold Corporation (the "Company") was formed under the laws of the
State of Delaware on January 8, 1988 and was inactive until 1995 when it
entered into an agreement to acquire certain mineral properties. The
Company's principal business activity is the exploration and development
of mineral properties, with its principal mineral properties comprising of
various placer leases in the Cariboo Mining Division of British Columbia,
Canada (the "Placer Leases").
The financial statements presented herein as of June 30, 1999 and for the
six month periods ending June 30, 1999 and 1998 are unaudited and, in the
opinion of management, include all adjustments (consisting only of normal
and recurring adjustments) necessary for a fair presentation of financial
position and results of operations. Such financial statements do not
include all of the information and footnote disclosures normally included
in audited financial statements prepared in accordance with generally
accepted accounting principles.
2 Mineral property interests:
Mineral property acquisition costs and related exploration and development
expenditures are deferred until the property is placed into production,
sold or abandoned. These costs will be amortized on a unit-of-production
basis over the estimated proven and probable reserves of the property
following commencement of commercial production or written off if the
property is sold, allowed to lapse or abandoned.
Mineral property acquisition costs include cash consideration and the fair
value of common shares issued for mineral properties. Administrative
expenditures are expensed in the period incurred.
Exploration and development expenditures are expensed in the period
incurred until such time as the Company establishes the existence of
commercial feasibility at which time these costs will be deferred.
On an on-going basis, the Company evaluates the status of its mineral
properties based on results to date to determine the nature of exploration
and development work that is warranted in the future. If there is little
prospect of further work on a property being carried out, the deferred
costs related to that property are written down to their estimated
recoverable amount.
The amounts shown for mineral properties represent costs incurred to date
and is not intended to reflect present or future values.
Results of operations for the six month period ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the full
year ended December 31, 1999. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's 1998 Annual Report on Form 10-KSB.
These financial statements have been prepared on the basis of accounting
principles applicable to a going concern. At June 30, 1999, the Company
had a working capital deficiency of approximately $3,054,249, a
significant portion of which is due to related parties. The Company's
continuing operations and the ability of the Company to discharge its
liabilities are dependent upon the continued financial support of its
related parties and the ability of the Company to obtain the necessary
financing to meet its liabilities as they come due.
The recoverability of the amounts shown as mineral properties is dependent
upon economically recoverable mineral reserves, the ability of the Company
to obtain the necessary financing to complete the development of its
mineral properties and upon future profitable production or proceeds from
the disposition thereof.
5
<PAGE>
NAPTAU GOLD CORPORATION
Item 2. Plan of Operation
This Plan of Operation. In some cases, readers can identify forward-looking
statements by terminology such as "may," "will," "should," "could," "expects,"
or the negative of such terms or other comparable terminology. These statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results, levels of activity, performance or achievement to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, decisions and activities related to the
mining properties, anticipated grade, geological, metallurgical, processing or
other problems, conclusion of feasibility studies, changes in projected
parameters or plans, the timing and receipt of governmental permits, the failure
of plant, equipment or processors to operate in accordance with specifications
or expectation, results of current exploration activities, accidents, delays in
start-up dates, environmental costs and risks, changes in gold prices, as well
as other factors described elsewhere in this Form 10-QSB. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels or activity, performance
or achievements. We undertake no duty to update any of the forward-looking
statements contained herein, whether as a result of new information, future
events or otherwise.
The Company is engaged in the acquisition, exploration, and development of
mineral properties, primarily gold properties. The Company's properties are
comprised of one Lease of Placer Minerals (LPM) and two adjacent staked placer
claims (collectively, the "Properties") located in the Cariboo Mining District,
British Columbia, Canada.
It is estimated that the Company and prior owners of the Properties have
expended an aggregate of approximately $4,500,000 in exploring and developing
the Properties. Because of the inconsistencies of placer golds, none of the
Company's Properties may be defined as containing proven or probable reserves.
Although prior exploration programs have produced in excess of 300 ounces of
gold from the Properties, the Company has not generated meaningful revenues and
will not generate revenues until commencement of full-scale placer mining
operations.
At the end of the 1998 mining season the Company successfully completed
sustained test runs of the production plant yielding quantities of gold as
detailed in the following table.
- --------------------------------------------------------------------------------
Days of Cubic Yds. Recovered Ounces Oz/Cu. Yd. $/Cu.Yd.
Processing Processed Grams
between
clean-ups
- --------------------------------------------------------------------------------
3 900 473.3 15.22 0.017 3.87
6 1,580 2,092.7 67.28 0.049 11.05
3 672 1,696.7 54.55 0.081 16.91
4 1,814 4,063.3 130.65 0.072 17.34
5 1,642 2,976.0 95.68 0.058 14.33
7 2,360 6,716.4 215.93 0.091 24.17
- --------------------------------------------------------------------------------
"Clean-up" is the process of removing concentrated gold bearing materials
accumulated in a secure area of the processing plant and occurs at the
discretion of management, under the scrutiny of Company management personnel.
6
<PAGE>
During the previous quarter, Noble Metal Group Incorporated requested and the
Company agreed that as consideration for granting an extension of the due date
of the remaining balance due to Noble, the Bill of Sale Absolute for the Placer
Leases will be placed in trust with Noble's attorney until such time as the
Company has fulfilled all of its obligations to Noble with respect to repayment
of debt. Noble also agreed to convert 1,000,000 common shares of the Company
into an obligation to pay Noble 8,695 ounces of gold from the Company's share of
gold referred to in previous agreements in the following manner:
(i) for 1999, 33% of the ounces of gold remaining after fulfillment of
previous obligations to Noble; and
(ii) for 2000 and thereafter and until the 8,695 ounces have been paid to
Noble, 50% of the ounces of gold after fulfillment of previous obligations
to Noble.
The parties agreed that the Company may at any time elect to pay Noble more
ounces of gold than the minimum levels specified above.
The Company also entered into an agreement with an Affiliate, with respect to
its contract payable to the Affiliate of $200,000, whereby the Company agreed to
pay the Affiliate 200 ounces of gold instead of 150 ounces previously agreed,
from the Company's share of gold produced from mining operations on its placer
leases, if any, to extend the due date to December 31, 2001.
Because of the record snow fall over the winter at the site of the Company's
mining properties, the delay in the dissipation of the snow cover this spring
and early summer, and the lead time which will be required to prepare the site
for operation, the Company has not yet determined its operating plans for placer
mining for this season. As of this date the camp has been opened, equipment has
been made ready and the Operator, Noble Metal Group Incorporated, has personnel
on site assessing the feasibility and level of operation to be carried on this
season.
During this quarter the Company has taken the opportunity to deal with other
matters and taken steps to follow through on its diversification plans to
provide "Off Season" operations which complement and will not interfere with the
mining operations. In this vein the Company concluded a "Letter of Intent" with
Cyber Centers.com Inc. to acquire all of its shares of outstanding stock,
subject to the negotiation of a Definitive Agreement and the conclusion of the
parties' due diligence; which Definitive Agreement, among other matters, will
obligate the Company to divest itself at a future date of substantially all of
its interest in the operations of Cybercenters.com Inc. except that portion
still to be agreed upon.
Cyber Centers.com Inc is an E-commerce company committed to developing,
managing, and promoting internet products and services to consumers and
businesses. Cyber Centers.com Inc has four divisions, each with a promising
future in the Internet field:
Cybercenters International, Inc.tm are "virtual" retail facilities
offering computer and software training, on site computer rentals, high
speed Internet access, video conferencing, software library, "Cyber
Center" brand name computers, U.S. Mail Box accounts, Fax, printing and
other business services.
Sports Challenge, Inc. creates, markets and promotes interactive games,
tournaments, and contests to the Internet audience.
International Security Listing Services, Inc. currently controls two
financial guides, "Penny Stocks.net," and Small Cap Stocks.net."
InteractiveNetcast.com is creating a 24-hour/day talk show format. The
Company intends to market its broadcasting, programming, and interaction
to an exclusive Internet listening audience.
7
<PAGE>
As of the filing of this report the parties are continuing to negotiate the
terms of the Definitive Agreement and Naptau is conducting its due diligence
review of Cybercenters.com and its principals.
In order to finance its ongoing operating costs and meet some of its commitment
to Noble, with the consent of Noble Metal Group Incorporated, the Company raised
$66,000 by the presale of 300 troy ounces of raw placer gold for delivery on or
before the end of October, 1999.
At June 30, 1999, the Company has a shareholders' deficiency of approximately
$884,500 and working capital deficiency in excess of $3,054,000, a significant
portion of which is due to related parties, all of whom have a vested interest
in ensuring the Company's continued existence. The Company's continuing
operations and ability to realize the amounts shown as mineral properties on its
balance sheet are dependent upon the Company's ability to obtain the financing
necessary to meet its obligations and continue its exploration and development
activities. To date, substantially all of the financing for the Company's mining
activities has been provided by Noble. There is no assurance that Noble will
continue to fund the Company or that necessary financing will be made available
by third parties or, if made available, be on terms acceptable to the Company.
Part II
Item 5. Other Information
a) Accounting Policies
During the most recent quarter the Company received correspondence from the
Securities and Exchange Commission wherein it reiterated its belief that the
Company's policy of capitalizing its mineral property acquisition costs is not
practical until commercial feasibility under Industry Guide 7 is established. As
noted below, KPMG LLP, the Company's previous auditor has declined to stand for
re-appointment as auditors of the Company. When the Company has appointed a new
auditor it will review its accounting policies and respond to the Securities and
Exchange Commission. Such response could include a change in the Company's
method of accounting.
b) Director Resignations / New Directors Appointed
In June the Company received letters of resignation from John J. McIntyre,
Murray A. Bratten and Warren W. Gayle from their positions as Directors of the
Company. Each indicated that the demands of their other businesses would not
permit them to devote the appropriate tine to the affairs of the Company.
The Company is pleased to announce that Walter Harder and John Lawrence Fix have
been appointed Directors.
Walt Harder Mr. Harder was born and raised on a farm in Ridgeville, Manitoba and
now resides with his wife in the greater Vancouver, British Columbia area. At
age 20 he left the farming community to pursue a career in marketing and sales.
He spent the next 22 years in the advancement of this career in the auto/steel
industry (Channellock Tools and Dominion Chain Co.) serving distributors in
Western Canada. He subsequently decided to take on the challenge of being
self-employed and progressed into and has, for the last 17 years, been involved
in the financial services industry in British Columbia. Both Mr. Harder and his
wife are active in local community affairs. He brings to the Board of Naptau the
knowledge and determination to complete tasks that comes from the
entrepreneurial experience.
John Lawrence Fix Mr. Fix has a rounded background commencing from an early age
including farming, sawmill operations, oilfield construction, and road building.
Through his high-school years he also managed a motel. After attending the
University of British Columbia he attained Chief Flying Instructor/Charter Pilot
positions progressing to become a Certified Aircraft Engineer. Having attained
these successes he returned to taking on tasks relating to the mining industry
such as staking, promoting,
8
<PAGE>
road building and overburden removal in an area near Summerland, British
Columbia. Because of his background in aviation opportunities opened in the
insurance industry where he carried out aircraft accident investigation and rose
to manager of Brower & Company Aviation, a Lloyds of London Agent. Upon the sale
of Brower & Co. he formed Pacific Adjusters carrying out insurance investigation
on large international claims. Having established this he then applied some of
his earlier gained knowledge an moved into the oilfield servicing industry
through the purchase of Shirley Air Services Limited. In addition to these
operations he manage to also form and operate Lower Mainland Security World
which carried out burglar alarm installations as well as developing network
installation for the computerization of homes (Smart House). This included
central control of the complexities of a home including remote access and
satellite computer control of remote equipment. To fill any spare time he
co-incidentally invested in, owned and operated multiple duplex rental units and
carried on the international brokerage of goods. He believes "all fields of
endeavor are money making opportunities if you keep your eye on the ball but
that the trip is not complete until the profit is in the Bank". Mr. Fix brings
to the Board of Naptau his analytical abilities and the drive and determination
to bring a project to a successful conclusion.
c) Decline of Auditor to Stand for Re-appointment
In June, 1999, KPMG LLP, which had previously been engaged as the principal
accountant to audit the Company's financial statements advised the Company that
it did not intend to stand for re-appointment as the auditors of the Company.
The Company is currently interviewing possible successors.
During the Company's two most recent fiscal years and the subsequent period
preceding the receipt of KPMG's declination, there were no disagreements between
KPMG and the Company on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of KPMG would have caused KPMG
to make reference to the subject in its report. In addition, during the
Company's two most recent fiscal years and the interim period preceding KPMG's
declination no reportable events, as defined in Item 304(a)(1)(iv)(A), (B) (D)
or (E) of Regulation S-B occurred.
d) Commencement of Bulletin Board Trading
On March 31, 1999 the Company concluded the listing for Blue-Sky purposes and
was published in the Standard & Poor's Corporation Records Current News Edition
dated March 31, 1999. Subsequent to this, the Company, through First London
Securities, Inc. was approved for quotation on the OTC Bulletin Board.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 10.1.1 Letter of Intent Between the Company and Cyber
Centers.com, Inc.
Exhibit 10.1.2 Addendum to Letter of Intent
Letter dated June 2, 1999 from KPMG, LLP
Exhibit 24.1 Item 24.1
9
<PAGE>
NAPTAU GOLD CORPORATION
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NAPTAU GOLD CORPORATION
/s/ Edward D. Renyk
---------------------------------
Dated: August 17, 1999 By: Edward D. Renyk
President and
Principal Accounting Officer
Exhibit 10.1.1
Cyber Centers.com, Inc.
8501 Wilshire Blvd.
Suite 150
Beverly Hills, CA 90211
Phone 310-288-4585 ext. 325 - FAX 310-273-1772
Letter of Intent
I. This agreement shall serve as a Letter of Intent by and between NAPTAU Gold
Corp., a Delaware Corporation with its principal address being 5391 Blundell
Road, Richmond, British Columbia, Canada V7C 1H3 (herein after referred to as
"NPTU" or "buyer"), and Cyber Centers.com, Inc. Nevada corporation with its
principal place of business being 8501 Wilshire Blvd., Suite 150, Beverly Hills,
Ca. 90211 (herein after referred to as "CCC" or "seller").
II Whereas "NPTU" is a publicly traded company on the Over The Counter Bulletin
Board in the United States and has varied business interest in the U.S. and
Canada and
III. Whereas "CCC" is the business of acquiring, promoting, and operating
certain assets, selling procedures, materials, E-commerce business's and various
Internet related consumer services and products;
It is therefore the intention of both parties, pending the approval of their
respective Board of Directors and a definitive agreement to follow this Letter
of Intent that;
"CCC" shall offer and "NPTU" shall acquire the corporation and all its
property's as listed on exhibit "A" for Ten Million dollars ($10,OOO,OOOUS). The
payment shall be in the form of common stock in "NPTU" One Million (1,000,000.)
shares of its common stock shall be transferred at "closing date". Said date to
be no later then July 31,1999. The dollar value to be attributed to these shares
shall be established as the average market trading price of the immediately
preceding ten trading days to the date of "closing". The balance shall be paid,
in stock, that number of shares to be determined by dividing the balance by
shares valued at $5.00US each. Transfer of shares to take place when the per
share price of NPTU trades at an average of $5.00US per share for ten (10)
consecutive trading days or when the subsidiary corporation files for and is
granted a symbol as an independent, publicly traded company, whichever happens
first.
VI. "CCC" shall become a wholly owned subsidiary of "NPTU" with its Board of
Directors and management group to stay in place. "NPTU" shall add such members
to the Board of "CCC" as it deems necessary too properly
Initialed
EDR / JV
<PAGE>
oversee the activities of the. subsidiary and in turn shall allow for "CCC" to
appoint one member to the Board of "NPTU".
VII It is understood that "CCC" (the subsidiary) shall raise Five Million
Dollars ($5,OO0,00OUS) to support its current established business plan. The
security to be issued shall be that of the parent, "NPTU" with the share price
being established at $5.OOUS. Said shares shall be offered in the form of a unit
in which will be attached a warrant(s). The terms and pricing of same shall be
addressed and finalized in the "Definitive Agreement" to follow. In the event
"CCC" is unable to or for any reason does not raise the amount as set forth in
the offering, "NPTU" may at its sole option void or modify the "Agreement" based
on circumstances then in effect.
VIII It is further understood that within those guidelines to be set forth in
the "Definitive Agreement" to follow, "CCC" shall have full and continued
control of its day to day business operations and that within an agreed upon
period of time with the full support of "NPTU", take whatever actions necessary
and file with the Securities Exchange Commission to become an independent
publicly traded company.
IX Certain aspects of both businesses are proprietary in nature and as such
shall remain confidential and be reserved by both parties until actual
agreements are in place and executed. Except for this and paragraph 10, which
shall be legally binding in accordance with their respective terms, this
agreement in principle is not intended to, and shall not, create a binding legal
obligation, and the understandings set forth herein are subject to satisfactory
due diligence by the "buyer" and to the execution of the "Definitive Agreement".
X. The responsibility for the "Definitive Agreement" shall be that of "CCC".
If the foregoing accurately sets forth our understanding, please so indicate by
signing in the space provided.
This letter may be signed in counterparts, both of which taken together shall
consitute one instrument.
/s/ Edward D. Renyk
- ------------------------------------
Mr. Edward D. Renyk, C.A., President
Naptau Gold Corporation
/s/ John Veyette
- ------------------------------------
Mr. John Veyette, President
Cyber Centers.com., Inc.
Exhibit 10.1.2
NAPTAU GOLD CORPORATION
5391 Blundell Road, Richmond, British Columbia, Canada, V7C 1H3
TEL: 604-277-5252 FAX: 604-277-5282
July 28, 1999
ADDENDUM TO LETTER OF INTENT SIGNED JULY 6, 1999
BETWEEN:
CYBER CENTERS.COM, INC. AND NAPTAU GOLD CORPORATION
8501 Wilshire Blvd., Suite 150 5391 Blundell Road
Beverly Hills, CA 90211 Richmond, B.C., V7C 1H3
IT IS HEREBY MUTUALLY AGREED that time is of the essence and the "closing date"
is hereby extended to be "no later than August 31, 1999.
Acknowledged and agreed to this 27th day of July, 1999.
CYBER CENTERS.COM, INC. NAPTAU GOLD CORPORATION
/s/ John Veyette /s/ E. D. Renyk
- --------------------------- --------------------------------
per John Veyette, President per E. D. Renyk, C.A., President
Exhibit 24.1
KPMG
KPMG LLP
Chartered Accountants
Box 10426 777 Dunsmuir Street Telephone (604) 691-3000
Vancouver BC V7K 1K3 Telefax (604) 691-3031
Canada www.kpmg.ca
Mr. Ed Renyk
President
Naptau Gold Corporation
5391 Blundell
Richmond BC V7C 1H3
June 2, 1999
Dear Mr. Renyk
Please be advised that we decline to stand for re-appointment as auditors of
Naptau Gold Corporation (the "Company").
We recommend that you seek legal advice to ensure all relevant legal, statutory
and regulatory requirements are met.
Yours very truly
/s/ D. C. Peniuk
D.C. Peniuk
Partner
(604) 691-3105
DCP:cec/83 185
cc Board of Directors
KPMG LLP, a Canadian owned limited liability partnership
established under the laws of Ontario,
is a member of KPMG International, a Swiss association
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,490
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,490
<PP&E> 2,172,272
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,172,272
<CURRENT-LIABILITIES> 3,056,738
<BONDS> 0
0
0
<COMMON> 6,934
<OTHER-SE> (884,466)
<TOTAL-LIABILITY-AND-EQUITY> 2,172,272
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 133,478
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,143
<INCOME-PRETAX> (133,478)
<INCOME-TAX> 0
<INCOME-CONTINUING> (133,478)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (133,478)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
