RNS Number:3487Q
Mano River Resources Inc
30 September 2003
MANO RIVER RESOURCES INC.
INTERIM RESULTS
The Board of Mano River Resources Inc. is pleased to release the Accounts of the
Company for the second quarter ended July 31 2003, together with the Management
Discussion and Analysis.
Schedule 'C'
Management Discussion and Analysis
for the Quarter Ending July 31, 2003
The Consolidated Financial Statements for Mano River Resources Inc. ("Mano" or
the "Company") covering the quarter ending July 31, 2003 are provided herein for
your review.
Description of Business
Mano is engaged in the acquisition, exploration and development of gold and
diamond properties. Through its subsidiaries, it holds interests in properties
located in Guinea, Liberia and Sierra Leone.
Operations and Financial Condition
The Company completed the second quarter ending July 31st, 2003 with a net loss
of $290,126 as compared to a net loss of $225,230 for the corresponding quarter
in 2002. This is a $64,896 increase in net loss compared to 2002. This increase
was due to a write-off of resource property of $90,090 in the current quarter.
The operating expenses excluding the write-off of resource property amounted to
$202,242 for Q2 2003, compared with $229,737 for Q2 2002. The decrease of
$27,495 over 2002 was due to a decrease in management fees, professional fees
and other administrative cost savings. Some administrative expense categories
experienced higher costs: bank and interest charges increased mainly due to
interest payable on convertible debenture. Investor communications increased
significantly during the quarter as the Company focused its effort on expanding
investor awareness of the Company's exploration projects. Revenue for the
quarter, consisting of interest income, was $2,206 as compared to $4,507 in
2002, a decrease of $2,301. Total assets on July 31, 2003, were $12,741,546 as
compared to $12,253,662 at year ended January 31, 2003. As at July 31, 2003, the
Company had total current liabilities of $373,630 as compared to $402,859 at
year ended January 31, 2003. Current liabilities include $253,278 due to related
parties for management fees, bridging loan and reimbursable expenses.
As at July 31, 2003, the Company had cash and cash equivalents of $418,928 as
compared to $203,243 at July 31st 2002. The Company had as at July 31, 2003
working capital of $54,192 as compared to deficiency of $168,073 at July 31st
2002.
The Company's ability to continue its operations is dependent on its capacity to
secure additional financing in the near term and, while it has been successful
in doing so in the past, there can be no assurance it will be able to do so in
the future. In order to continue developing its mineral properties, management
is actively pursuing such additional sources of financing.
Exploration and Project Development
Exploration activity during the quarter under review was focused on gold and
diamonds in Sierra Leone.
a. *Diamond Exploration - Sierra Leone
The field teams completed the collection of five one tonne samples of
kimberlite from dykes Lion-1, -2, -3 and -5 in the Yengema-Kono district,
together with 200 loam samples. The samples were shipped to South Africa for
analysis and the results announced during August. See below under
Exploration - Subsequent Events for the details.
b. *Gold Exploration - Sierra Leone
In June 2003, Mano announced the acquisition of the 'North Pampana' Exclusive
Prospecting Licence (EPL), which hosts the high grade Yirisen gold deposit and
strategically adjoins Mano's 'South Pampana' EPL.
The North Pampana EPL, in addition to the well known Yirisen gold deposit,
contains several further gold anomalies as defined by a 1980s United Nations
Development Program (UNDP) funded geochemical programme.
Mineralisation was first noted at Yirisen by the Geological Survey of Sierra
Leone in 1958. Seven north easterly trending sub-vertical lodes of quartz
veining returned gold values of between 5.5 and 48 g/t over widths of between
0.7 and 6.4 metres. The host rocks are predominantly talc schists with extensive
pervasive sulphide mineralization.
Artisanal miners are currently working the Yirisen deposit to depths of up to 15
m, defining a strike length of over 1km to the known mineralization, which
remains open in both directions.
The North Pampana licence acquisition completes Mano's portfolio of gold targets
in Sierra Leone, comprising:
i. *The Joint Venture (JV) with Golden Prospect Plc (AIM:GOL) over contiguous
exploration licences in the Sonfon area, at the northern end of the Sula
Mountains greenstone gold belt. The JV has defined a 3km long gold in soil
anomaly, below which trenching has revealed a gold-bearing stockwork vein
system with a best trench intersection of 7.3m @ 7.4g/t. (see
www.manoriver.com/mano/projects/gold_sl_sonfon.shtml).
ii. *The two strategically located Nimini Central and Nimini South EPLs within
the Nimini Hills greenstone gold belt (see www.manoriver.com/mano/projects/
gold_sl_nimini.shtml) which host parts of known lode gold deposits shared
with two EPLs held by AfCan Mining (TSX-V:AFK), namely Nimini East and
Nimini West and over which AfCan recently announced the signature of a Heads
of Agreement for a Joint Venture with Ashanti Goldfields
iii. *The North and South Pampana EPLs containing the Yirisen gold deposit
within the Yirisen-Massamank mineralised trend, 30km north of the Baomahun
gold deposit, where a joint venture was recently announced between Mr Ronald
Winston and Caldera Resources (TSX:CDR)
LIBERIA AND GUINEA
There was no exploration activity during the period under review. Programmes in
Liberia will recommence as soon as an improving security situation allows.
CANADA
Towards the end of the quarter, it was agreed with our partner, International
Taurus Resources, that Mano would withdraw from the ManoTaur diamonds JV in
Ontario/Quebec. This decision was taken on the grounds that the results from the
Company's diamond exploration in Sierra Leone are proving so encouraging, and
cost effective, as to merit focussing all available financial resources in the
Yengema Kono area in the expectation of more rapidly adding value there than in
Canada.
Investor Relations
Press Releases issued during the quarter covered such issues as the change of
nominated adviser on AIM, the appointment of Britton PR as investor relations
adviser, acquisition of the North Pampana licence in Sierra Leone, the
successful completion of a Private Placement and changes to the Mano board.
The engagement of Britton Financial PR ("Britton") has seen a marked rise in
Mano's profile with increased coverage of the Company's activities in both the
specialized and general press, the most recent example being articles in the
Financial Times of London which mentioned Mano as a credible participant in the
context of the future development of Liberia.
Corporate
In May 2003, Mano announced that Seymour Pierce Limited has been appointed as
the Company's new Nominated Adviser on the London Stock Exchange - AIM market.
Seymour Pierce Ltd together with 100% affiliate Seymour Pierce Ellis Ltd, Mano's
Nominated Broker since its AIM listing in 1997, are a leading adviser and broker
to AIM, with some one hundred retained corporate clients.
In June 2003, The Company announced that the board of directors had adopted a
stock option plan (the "Plan") which subsequently received TSX Venture Exchange
and shareholder approval. The Plan will allow for the reservation of up to 10%
of the Company's issued and outstanding shares for the grant of Stock Options
(the Company at the time having 133,890,216 (10% = 13,389,021) shares issued and
outstanding). Options under the Plan may be granted to the Company's directors,
officers, employees, management company employees and consultants. The Plan will
govern any outstanding stock options previously granted and any new stock
options issued.
Also in June 2003, the Company completed a brokered Private Placing to raise
gross proceeds of GBP431,250 (approximately US$698,000) from existing and new
institutional investors. The brokered Placing was arranged in the UK of
17,250,000 common shares at GBP0.025 per share through Seymour Pierce Ltd. The
TSX Venture Exchange approved the placing and the new shares were admitted to
trading on AIM.
The proceeds of the Placing are being used by Mano to continue the Company's
exploration programme over its range of promising gold and diamond targets in
the Mano River Union countries, and for general working capital purposes.
At its 2003 Annual General Meeting in Vancouver, Jonathan Challis (51) was
elected in place of Peter Dwerryhouse, who had previously indicated he would not
be continuing as a director. The Board expressed its appreciation to Mr
Dwerryhouse for his valuable contribution to the Company. Mr Challis is a mining
engineer with over 30 years experience in the operation, management, financing
and analysis of mining projects around the world. A past President of Shore Gold
Inc., he has a degree in Mineral Exploitation from University College, Cardiff,
and an MBA from Cranfield University, England.
Subsequent Events - Corporate
On 7th August 2003, Mano announced that it had received notice of the conversion
of warrants over 1,250,000 fully paid common shares in the Company at 3p per
share for total proceeds of #37,500. The Company then made application for the
1,250,000 new common shares to be admitted to trading on AIM and dealings
commenced on Tuesday 12 August 2003.
As agreed with the parties concerned at the time of the June Placement, the
Board announced in August that it had approved arrangements to satisfy accrued
amounts totalling GB#70,485 due for payment as of 31 January 2003 with Mano
shares at the same price as the placement, i.e. GB#0.025.
The debt settlement subsequently received regulatory approval by the Canadian
Venture Exchange and the 2,819,397 new shares resulting from the settlement were
admitted to trading on AIM.
The shares for debt settlement, in combination with the recent private
placement, was seen as strengthening Mano's financial position as it
aggressively pursues exploration of its promising mineral properties, especially
now that it appears Liberia is following Sierra Leone on the way to become a
stable and acceptable investment environment.
The debt settlement represented amounts mainly incurred up to the end of the
2002-03 financial year and owing directly or indirectly to directors, or
companies with which they are associated, and senior officers of Mano for
directors' fees, management services, reimbursable expenses and loan advances
supporting exploration. The Board considers that the settlement of these amounts
in shares helps to preserve the Company's cash as it continues to advance
exploration of its properties.
On August 14th, 2003, under the Stock Option Plan previously announced on 5th
June 2003, the Company granted a total of 905,000 incentive stock options
("Options") to certain employees and directors to purchase common shares in the
capital stock of the Company, including 100,000 each to directors Malcolm Burne
and Jonathan Challis. The Options are exercisable at a price of Cdn$0.10 per
share for a period of five years ending on August 14th 2008 and were
subsequently approved by the Canadian Venture Exchange.
Subsequent Events - Exploration
In August 2003, Mano announced that it had received further very encouraging
results from diamond exploration within its two Exclusive Prospecting Licences
(EPLs) in the Kono diamond district of Sierra Leone, the highlights of which
were as follows:
*Five 1 tonne Mini-Bulk Samples collected from Lion-1, 2, 3 and 5 dykes
*Macrodiamonds recovered from Lion-1, 2 and 5 samples
*Preliminary (diluted) grades of up to 94 cpht (in Lion-5)
*Additional 200 loam samples collected over high interest stream anomalies
in area of no previously known kimberlites
The first mini-bulk sample from the Lion-1 dyke having returned an encouraging
grade of 65cpht, Mano then embarked on further mini-bulk sampling of the Lion-1,
2, 3 and 5 kimberlite dykes. These samples, each comprising 1 tonne of
kimberlite, were washed and jigged on site to recover diamonds in the +0.71 to
-2.0mm and +2.0mm size fractions. The results are set out in Table 1 below:
Table 1 - Results of Mini-Bulk Samples
Kimberlite Sample No. No. Total Calculated
+0.71mm +2.0mm Weight Grade (cpht)
Number Diamonds Diamonds (carats)
Lion-1 50225 2 1 0.15 15
Lion-2 50223 12 3 0.46 46
Lion-2 50231 35 5 0.45 45
Lion-3 50227 0 0 0 0
Lion-5 50229 15 5 0.94 94
All of the diamonds recovered from these samples were weighed and described by
John Gurney's Mineral Services laboratory in Cape Town.
A significant grade of 94cpht was obtained for a sample of the Lion-5 dyke,
which has been mapped for a distance of approximately 1km. Mano's stream and
loam sample results show that this dyke extends in a westerly direction well
into Mano's EPL and eastwards into the immediately adjacent DiamondWorks ground,
where it links with the latter's Koidu Pipes and Dykes project on which
commercial mining is expected to commence soon.
In the release, Mano's CEO, Dr Tom Elder commented: "The recovery of
macrodiamonds from these mini-bulk samples is very encouraging and suggests that
these dykes have economic potential. Mano intends, subject to financing and the
acquisition of the required expertise in dyke/fissure mining, to embark on a
bigger scale bulk sampling exercise on the Lion dykes in order to obtain a
preliminary diamond value for these potential resources, as well as obtain a
more confident grade assessment through the processing of larger tonnage
samples."
Sampling of a further loam block in the Yengema East EPL was completed and the
200 samples exported to South Africa for analysis. During the course of the
sampling large blocks of hypabyssal kimberlite float were identified which no
doubt represent an undiscovered kimberlite in an area where there are no
previous kimberlites identified. Intensive artisanal mining within the block
points to these as yet undiscovered kimberlites being diamond bearing.
In September 2003, Mano announced that a review of historic data had defined
high-grade drill targets at the Yirisen gold project in Pampana and extended its
potential strike length. The key highlights were:
*Drill targets defined beneath high grade gold zone with best trench
intersect of 6.4m@23g/t
*Total inferred strike of Yirisen gold system extends over 4km and remains
open
The Yirisen project is located 150km east of Freetown, within Mano's North
Pampana Exclusive Prospecting Licence (EPL) which, together with the Company's
contiguous South Pampana EPL targets crustal scale gold mineralised shear zones
across 140km2 of the southern end of the Sula Mountains greenstone gold belt.
The EPLs include stretches of the Pampana River comprising one of Sierra Leone's
richest alluvial gold mining districts.
Reconnaissance work undertaken in May 2003 by independent consultants ACA Howe
International Ltd, indicates that artisanal mine workings currently extend for
1.5km to the southwest of the project, to depths of up to 15m. The total
inferred strike length for the Yirisen gold system is currently estimated to be
in excess of 4km and remains open along strike. A targeted follow up programme
including drilling, trenching and soil surveying is currently being planned and,
subject to financing, will be undertaken to test the vertical continuation of
gold mineralization and the strike extension of the mineralized system. Detailed
maps are available on the following webpage http://www.manoriver.com/mano/
projects/gold_sl_pampana.shtml.
In the release, on the subject of the results from the historic survey data,
Mano's CEO, Dr Tom Elder commented: "The availability of such a comprehensive
exploration database for a project which exhibits the apparent high potential
seen at Yirisen is rare. The extensive gold in soil anomalies, which indicate
the gold system is open along strike and which are coincident in places with
high grade trench and drill results, means the Yirisen gold project is at the
drill ready stage. Mano's benchmark for gold exploration is high grade deposits
grading at least 4g/t with potential for greater than one million ounces and
amenable to open pit mining. Such deposits typically require large structures in
which to form, carry significant surface geochemical signatures and are proximal
to extensive primary or secondary artisanal gold workings. Certain parallels in
terms of the style and extent of shear zone hosted mineralization at Yirisen can
be drawn with Mano's KGL gold deposit, located approximately 350km to the south
east, in western Liberia, where an initial indicated and inferred gold resource
of 610,000 ounces at an average 4.8 g/t has been defined. The results from the
historic database indicate that Yirisen has many of the hallmarks of a
significant gold deposit with excellent exploration potential".
Three sets of historic data have been integrated into Mano's Geographical
Information System (GIS), as detailed below.
i. *Geological Survey of Sierra Leone - 1958
Hard rock gold mineralization first noted at Yirisen by the Geological
Survey of Sierra Leone in 1958 during mapping and sampling of the
country's major hard rock artisanal gold mines. Seven north easterly
trending sub-vertical lodes of gold mineralised quartz veining,
averaging 150m in length identified. Sampling returned numerous gold
intersections in trenches, the significant values being listed in Table
1 below.
Table 1.
Lode Length metres g/t Gold
----------- ------------ ----------
3 mid S 2.69 20.97
4N 2.29 44.08
4midN 2.36 15.92
4mid 6.38 22.96
4midS 5.28 24.80
5mid 0.69 83.27
7N 1.37 20.97
7S 0.46 30.61
----------- ------------ ----------
i. *Northern Province Prospecting Venture (NPPV) - mid 1960s
In the mid 1960s, the NPPV undertook mapping, soil geochemical surveying,
trenching and drilled three holes at Yirisen giving the results listed in
Table 2 below.
Table 2.
Hole From (m) To (m) Intercept (m) Au (g/t) Ag (g/t)
------- -------- ------ --------- ------ --------
K-1 86.04 86.72 0.67 5.51 74.69
K-1 89.18 89.69 0.51 24.49 277.96
K-1 92.35 92.74 0.38 7.65 42.55
K-1 95.39 95.48 0.09 7.96 94.29
K-2 159.03 159.11 0.08 14.69 22.96
K-3 11.53 11.84 0.30 4.90 46.53
K-3 28.37 28.73 0.36 3.37 102.55
K-3 33.45 33.78 0.33 31.53 221.94
K-3 41.20 41.30 0.10 3.98 7.96
K-3 57.61 57.99 0.38 11.63 7.35
K-3 63.60 63.96 0.36 0.31 0.92
------- -------- ------ --------- ------ --------
Mano considers it significant that drill hole K-1 shows narrow high grade
intercepts occurring over a drilled width of some 20m. The distribution of
results from the drill holes suggests that only zones containing visible
gold may have been sampled, while the host rock material between these
intercepts which contains pervasive sulphide mineralization and possible
disseminated gold mineralization appears to have not been sampled. Based on
maps prepared by NPPV, it is considered likely by Mano that drill hole K-2
was collared too far east to have intersected the zone of mineralization.
ii. *United Nations Revolving Fund (UNRF) - mid 1980s
Between December 1984 and May 1987, the United Nations Revolving Fund (UNRF) for
Natural Resources Exploration undertook an extensive regional programme of gold
exploration in the Pampana district, designed to identify the source rocks of
the alluvial gold being mined extensively by artisanal miners. Stream sediment
sampling, soil sampling, topographic surveying, mapping, pitting and trenching
were undertaken. Two areas namely, Yirisen and Masamank (South Pampana EPL),
were targeted for detailed follow up.
At Yirisen, soil sampling grids were extended 2.5km north-eastward from the
northern limit of known gold mineralization. Two anomalous gold zones were
defined by a 50 parts per billion (ppb) gold-in-soil contour. The most southerly
anomaly comprised three parallel mineralised trends, one of which continues for
700m from the mapped extent of the Yirisen project. Some 1,200m north-east of
the known mineralization, a second 1,500m by 200m gold anomaly extends along the
contact between amphibolite and talc schist lithologies. A second grid, 400m
east of the main Yirisen grid at Kalmoro, identifies a 750m by 500m northeast
trending anomalous gold zone, parallel to the trend of the Yirisen gold system.
Management encourages shareholders and other interested parties to contact the
following individuals at any time for information about the activities of Mano:
Tom Elder President and CEO UK +44 (0)1235 810 740
Guy Pas Co-Chairman Switzerland +41(0)22 758 2151
Anthony Rhatigan Co-Chairman Mobile +44 (0)7785 297 348
Dru Edmonstone Seymour Pierce UK 020 7107 8000
Gary Middleton Britton Financial UK +44 20 7251 2544
Consolidated Balance Sheets
(Prepared by Management without audit)
(Stated in U.S. Dollars)
-------------------------- Six months Year
ended ended
July 31, January 31,
2003 2003
$ $
(unaudited) (audited)
--------------------------
ASSETS
Current
Cash and cash equivalents 418,928 184,116
Accounts receivable 8,894 2,139
-------------------------- --------- ---------
427,822 186,255
Investments (Note 3) 34,496 34,496
Resource properties (Note 4) 3,955,000 4,045,090
Deferred exploration costs 7,983,618 7,647,211
Reclamation bonds (Note 5) 340,610 340,610
-------------------------- --------- ---------
12,741,546 12,253,662
-------------------------- --------- ---------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 120,352 97,664
Due to related parties (Note 8) 253,278 305,195
-------------------------- --------- ---------
373,630 402,859
Provision for reclamation (Note 5) 340,610 340,610
Convertible debenture (Note 7) 216,973 138,723
SHAREHOLDERS' EQUITY
Share capital (Note 6) 16,596,312 15,867,323
Equity component of convertible debenture 96,000 96,000
Cumulative translation difference (21,755) (21,755)
Deficit (4,860,224) (4,570,098)
-------------------------- --------- ---------
11,810,333 11,371,470
-------------------------- --------- ---------
12,741,546 12,253,662
-------------------------- --------- ---------
Consolidated Statements of Loss
(Prepared by Management without audit)
Stated in U.S. Dollars)
----------------- -------- -------- -------- --------
Three months Three months
ended July 31, ended July 31,
2003 2002
$ $ Six months Six months
ended July 31, ended July 31,
2003 2002
(unaudited) (unaudited) $ $
(unaudited) (unaudited)
----------------- -------- -------- -------- --------
Revenue
Interest income 353 455 2,206 4,507
----------------- -------- -------- -------- --------
Expenses
Administrative 1,394 1,292 2,669 3,662
and office
expenses
Bank and interest 4,651 129 7,785 321
charges
Directors fees - 8,000 2,000 13,000
Foreign exchange (3,068) 3,857 1,281 4,701
loss (gain)
Investor 16,279 - 26,968 -
communications
Loss on sale of - 5,568 - 5,568
investments
Management fees 14,500 15,000 35,500 55,500
Mine maintenance 22,629 15,142 31,990 28,920
expenses
Nominated broker 20,058 17,371 20,058 22,971
and adviser
Professional 35,142 52,589 55,671 64,943
fees, legal,
audit and
accounting
Transfer agent 13,164 19,521 16,473 24,051
and regulatory
fees
Travel and 647 - 1,847 6,100
promotion -------- -------- -------- --------
-----------------
125,396 138,469 202,242 229,737
----------------- -------- -------- -------- --------
-------- --------
Loss before (125,043) (138,014) (200,036) (225,230)
undernoted item
Write-off of (90,090) - (90,090) -
resource -------- -------- -------- --------
property
-------
-------- --------
Loss for the (215,133) (138,014) (290,126) (225,230)
Period -------- -------- -------- --------
-----------------
Loss per share (0.001) (0.001) (0.001) (0.002)
----------------- -------- -------- -------- --------
Consolidated Statements of Deficit
(Prepared by Management without audit)
Stated in U.S. Dollars)
------------------- ---------- ----------
Six months Year ended
ended July 31, January 31,
2003 2003
$ $
(unaudited) (audited)
------------------- ---------- ----------
Deficit, Beginning of year (4,570,098) (4,217,881)
Loss for the Period (290,126) (352,217)
------------------- ---------- ----------
Deficit, End of Period (4,860,224) (4,570,098)
------------------- ---------- ----------
Consolidated Statements of Cash Flows
(Prepared by Management without audit)
Stated in U.S. Dollars)
----------------- -------- -------- -------- --------
Three months Three months
ended ended Six months Six months
July 31, July 31, ended ended
2003 2002 July 31, July 31,
$ $ 2003 2002
(unaudited) (unaudited) $ $
(unaudited) (unaudited)
----------------- -------- -------- -------- --------
Operating
Activities
Loss for the (215,133) (138,014) (290,126) (225,230)
period -------- -------- -------- --------
-----------------
Changes in
non-cash working
capital
accounts
Loss on sale of - 5,568 - 5,568
investments
Write-off of 90,090 - 90,090 -
resourc
property
Accounts 9,017 (5,831) (6,755) (5,554)
receivable
Accounts 17,981 (70,648) 22,688 (56,298)
payable -------- -------- -------- --------
-----------------
117,088 (70,911) 106,023 (56,284)
----------------- -------- -------- -------- --------
Financing
Activities
Issuance of share 728,989 533,842 728,989 631,412
capital (net of
costs)
Share - 294,395 - 294,395
subcriptions
Proceeds from - 94,432 - 94,432
sale of
investments
Convertible 78,250 200,000 78,250 200,000
debenture
Due to related (259,069) (474,207) (51,917) (421,053)
parties -------- -------- -------- --------
-----------------
548,170 648,462 755,322 799,186
----------------- -------- -------- -------- --------
Investing
Activities
Resource
properties -
Acquisition of - (86,196) - (86,196)
resource
properties
Deferred (160,298) (192,639) (336,407) (353,331)
exploration -------- -------- -------- --------
expenditures
-----------------
(160,298) (278,835) (336,407) (439,527)
----------------- -------- -------- -------- --------
Increase ( 289,827 160,702 234,812 78,145
Decrease) In
Cash
Cash, Beginning 129,101 42,541 184,116 125,098
of Period -------- -------- -------- --------
-----------------
Cash, End of 418,928 203,243 418,928 203,243
Period -------- -------- -------- --------
-----------------
Supplemental disclosure of non-cash financing and investing activities
During the quarter ended July 31, 2002, the Company:
Agreed to issued 5,219,759 shares in settlement of $294,395 due to related
parties
Consolidated Statements of Deferred Exploration Costs
(Prepared by Management without audit)
Stated in U.S. Dollars)
---------------- -------- -------- -------- --------
Three months Three months
ended July 31, ended July 31,
2003 2002
$ $ Six months Six months
ended July 31, ended July 31,
2003 2002
(unaudited) (unaudited) $ $
(unaudited) (unaudited)
---------------- -------- -------- -------- --------
Deferred
exploration
expenditures
Assays and 5,396 5,532 22,241 6,198
geochem
Communications 11,957 7,324 16,865 15,910
Consultants 23,678 10,410 42,803 48,944
Data, images, 1,807 363 4,159 2,036
reports and
maps
Geologists' 1,345 1,185 1,345 3,476
support
License, permit 6,866 109,983 57,346 113,735
fees
Project/field 16,246 286 37,390 17,515
office costs,
other
Salaries 46,994 43,109 99,882 96,688
Subsistence 27,402 6,592 29,391 19,145
Transportation 18,607 7,855 24,985 29,684
---------------- -------- -------- -------- --------
Net expenditures 160,298 192,639 336,407 353,331
during the
period
Balance, 7,823,320 7,038,796 7,647,211 6,878,104
Beginning of -------- -------- -------- --------
period
-------
-------- --------
Balance, End of 7,983,618 7,231,435 7,983,618 7,231,435
period -------- -------- -------- --------
----------------
1. NATURE OF OPERATIONS AND CONTINUING OPERATIONS
The Company is engaged in the acquisition, exploration and development
of gold and diamond properties. The Company is in the development stage
and has no source of cash flows other than equity offerings or loans
from related parties.
These consolidated financial statements are prepared on a going concern
basis which assumes that the Company will be able to realize assets and
discharge liabilities in the normal course of business. The Company's
ability to continue on a going concern basis depends on its ability to
successfully raise additional financing. If the Company cannot obtain
additional financing the Company may be forced to realize its assets at
amounts significantly lower than the current carrying value.
2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared in accordance with
generally accepted accounting principles in Canada and reflect the
following significant accounting policies. The United States dollar has
been identified as the Company's currency of measurement and is used for
external reporting purposes.
(a) Principles of consolidation
These financial statements include the accounts of Mano River
Resources Inc. and its principal subsidiary, Mano River
Resources Ltd. and its subsidiaries.
(b) Cash and cash equivalents
Cash and cash equivalents consists of cash on hand, deposits in
banks and highly liquid investments with an original maturity of
ninety days or less.
(c) Investments
Investments are recorded at the lower of cost and net realizable
value
(d Resource properties and deferred exploration costs
The Company follows the method of accounting for its mineral
properties whereby all costs related to acquisition, exploration
and development are capitalized by property.
(e) Loss per share
Loss per share is computed using the weighted average number of
shares outstanding during the year.
3. *INVESTMENTS
July 31, January 31,
2003 2003
--------- ---------
St. Andrew Goldfields Ltd. $34,496 $34,496
(formerly Royal Victoria Minerals
Ltd.)
------------------------ --------- ---------
34,496 34,496
------------------------ --------- ---------
The St. Andrew Goldfields Ltd. Investment consists of 520,000 common shares
with a quoted market value at July 31, 2003 of $67,772 (January 31, 2003
-$75,925)
The Royal Victoria Minerals Ltd., St. Andrew Goldfields Ltd. and United
Tex-Sol Mines completed a business combination by way of a plan of
arrangement with St. Andrew as the surviving entity. Under the terms of the
arrangement, Royal Victoria shareholder received two common shares of St.
Andrew for each Royal Victoria common share.
4. *RESOURCE PROPERTIES
July 31, January 31,
2003 2003
----------- -----------
Acquisition costs
Liberia, West Africa $320,000 $320,000
Guinea, West Africa 1,940,000 1,940,000
Sierra Leone, West Africa 1,695,000 1,695,000
ManoTaur Joint Venture, Canada - 90,090
-- --- ----------- -----------
Closing balance $3,955,000 $4,045,090
-- --- ----------- -----------
During the period, the Company relinquished its interest in ManoTaur
Joint Venture, Canada and wrote-off resource property costs of $90,090.
5. RECLAMATION BONDS
As at July 31, 2003, term deposits totaling $340,610 (January 31, 2003 -
$340,610) have been pledged to the State of Washington as security for
reclamation costs on the Van Stone property. A reclamation provision has
been accrued in the amount of $340,610. The Company has completed an
assessment of the reclamation and closure costs and it is anticipated
that costs incurred will not exceed this provision. The Company will
continually monitor the costs related to the Van Stone mine and will
make further provisions if it is determined necessary.
6. SHARE CAPITAL
(a) Authorized - Unlimited common shares without par value
a. *Issued
Shares Amounts
--------- ----------
Balance at January 31, 2002 101,162,671 $14,357,213
Shares issued on private placement (net of 26,300,000 1,094,815
costs)
Shares issued for settlement of debt 6,427,545 415,295
-- --------- ----------
Balance at January 31, 2003 133,890,216 15,867,323
-- --------- ----------
Shares issued on private placement (net of 17,250,000 668,094
costs)
Shares issued on exercise of warrants 1,250,000 60,895
-- --------- ----------
Balance at July 31, 2003 152,390,216 16,596,312
-- --------- ----------
During the period, the Company concluded a private placement of
17,250,000 common shares at a price of GBP 0.025 per share for the total
proceeds of GBP 431,250.
As at July 31, 2003, the following stock options were outstanding:
-------------
Number of Exercise price Expiry date
Common Shares per share
(Cdn$)
-------------
2,540,000 $ 0.34 February 12, 2004
100,000 $ 0.34 April 14, 2005
990,000 $ 0.22 May 1, 2006
845,000 $ 0.10 February 21, 2007
5,000,000 $ 0.11 March 21, 2007
--------------- ------------- -------------
9,475,000
--------------- ------------- -------------
7. CONVERTIBLE DEBENTURE
The Company entered into a convertible debenture agreement with respect
to advances from a company controlled by a director. Advances totaling
$200,000 are repayable under this debenture on April 30, 2004, together
with accumulated interest at 6% per annum. The principal amount is
convertible by the holder into common shares of the Company at a price
of #0.04 per share at any time prior to maturity.
During the period, the Company entered into a convertible debenture
agreement with respect to advances from a company controlled by a
director. Advances totaling GBP 50,000 ($78,250) are repayable under
this debenture on March 25, 2005, together with accumulated interest at
5% per annum. The principal amount is convertible by the holder into
common shares of the Company at a price of #0.02 per share at any time
prior to maturity. This agreement is subject to regulatory approval.
8. RELATED PARTY TRANSACTIONS
During the year to date, the Company incurred billings of $53,560 from
related parties for management fees and professional fees. All
transactions with related parties have occurred in the normal course of
operations. As at July 31, 2003, the amount due to related parties
totals $253,278. These balances are payable on demand and have arisen
from the provision of services referred to above and provision of
short-term bridge financing. The Company was subsequently able to settle
approx. $114,300 of this debt by issue of Mano shares. (Subsequent event
note 9 (a)
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial assets and liabilities are cash and cash
equivalents, accounts receivable, investments, accounts payable and
accrued liabilities, and due to related parties. The fair values of
these financial instruments are estimated to approximate their carrying
values due to their immediate or short-term nature except for
investments whose fair value is described in Note 3. Due to the nature
of the Company's operations, there is no significant credit or interest
rate risk. As at July 31, 2003, the Company held approximately $376,663
cash in bank accounts denominated in U.K. pounds. The Company has taken
no action to reduce its exposure to foreign currency risk.
10. SUBSEQUENT EVENTS
Subsequent to July 31, 2003, the Company:
a. *has arranged to settle outstanding debts with directors or companies
with which they are associated and officers of the Company in the amount
of GBP70,485 ($114,300) with Mano shares at a price of GBP 0.025 per
share. A total of 2,819,397 common shares are to be issued and the debt
settlement has been approved by the regulatory authorities.
(b) granted additional stock options to certain directors, officers,
consultants and employees to purchase up to 905,000 common shares of the
Company at an exercise price of Cdn.$0.10 per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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