RNS Number:8612T
Mano River Resources Inc
05 January 2004
MANO RIVER RESOURCES INC
NEWS RELEASE
05 January 2004
No: 2004/1
TSX-Venture Exchange (Trading Symbol: MNO)
London Stock Exchange - AIM (Trading Symbol: MANA)
PUBLICATION OF THIRD QUARTER 2003 ACCOUNTS
The Board of Mano River Resources Inc. is pleased to release the Accounts of the
Company for the quarter ended October 31st 2003, together with the Management
Discussion & Analysis.
On behalf of the Board of Mano River Resources Inc.
Tom Elder
President and CEO
For further information on Mano River Resources and its exploration programme,
you are invited to visit the Company's website at www.manoriver.com or contact
one of the following:
Tom Elder President and CEO UK +44 (0) 1235 810 740
Guy Pas Chairman Switzerland +41 22 758 2151
Anthony Rhatigan Vice-Chairman Mobile +44 (0)7785 297 348
Raz Hussein Controller Canada +1 (604) 689 1700
Dru Edmonstone Seymour Pierce UK +44 (0) 20 7107 8000
Gary Middleton Capital PR UK +44 (0) 20 7902 0703
The TSX Venture Exchange has not reviewed and does not take responsibility for
the adequacy or accuracy of this release
Schedule 'C'
Management Discussion and Analysis
for the Quarter Ending October 31st, 2003
The Consolidated Financial Statements for Mano River Resources Inc. ("Mano" or
the "Company") covering the quarter ending October 31st, 2003 are provided
herein for your review. Unless otherwise indicated, all amounts herein are in US
dollars.
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 period ending October 31st, 2003 with a net loss of
$387,901 as compared to a net loss of $275,761 for the corresponding quarter in
2002. This is a $112,140 increase in net loss compared to 2002. This increase
was primarily due to a write-off of resource property of $90,090 in the second
quarter of 2003. The operating expenses excluding the write-off of resource
property amounted to $301,284 for Q3 2003, compared with $283,419 for Q3 2002.
The increase of $17,865 over 2002 was due to increases in administrative
expenses. Some administrative expense categories experienced higher costs: bank
and interest charges increased mainly due to interest payable on a convertible
debenture. Investor communications expense 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 $3,473 as compared to $7,658 in 2002, a decrease of $4,185
as a result of lower interest rates. Total assets on October 31, 2003, were
$12,756,697 as compared to $12,253,662 at year ended January 31, 2003. As at
October 31, 2003, the Company had total current liabilities of $290,465 as
compared to $402,859 at year ended January 31, 2003. Current liabilities include
$208,338 due to related parties for management fees, bridging loans and
reimbursable expenses.
At October 31, 2003, the Company had cash and cash equivalents of $162,379 as
compared to $39,643 at October 31, 2002. The Company had as at October 31, 2003
a working capital deficiency of $101,194 as compared to deficiency of $466,439
at October 31st 2002.
The Company's ability to continue its operations is dependent on its capacity to
secure additional financing on an ongoing basis 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 actively pursues such additional sources of financing.
Exploration and Project Development
Exploration activity during the quarter under review continued to be focused on
gold and diamonds in Sierra Leone.
a. *Diamond Exploration - Sierra Leone
In August 2003, Mano announced that it had received further 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. +0.71mm No. +2.0mm Total Weight Calculated
Number Diamonds Diamonds (carats) Grade (cpht)
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-owned
ground, where it links with the latter's Koidu Pipes and Dykes project on which
commercial mining reportedly commenced in December.
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
appear to 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 potentially being diamond
bearing.
b. *Gold Exploration - Sierra Leone
Mano's portfolio of gold targets in Sierra Leone comprises:
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, which host parts of known lode gold
deposits shared with two EPLs held by AfCan Mining (TSX-V:AFK), over which
AfCan has a Heads of Agreement for a Joint Venture with Ashanti Goldfields
(see www.manoriver.com/mano/projects/gold_sl_nimini.shtml)
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.
In November 2003, Mano announced that it had signed a Letter of Agreement for
joint venturing all of the above EPLs with Golden Star Resources. See below for
details.
In September 2003, Mano announced that a review of historic data had defined
high-grade drill targets at the Yirisen gold project on the North Pampana EPL
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 (see news release of 11th September 2003 for
details)
*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 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, indicated 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. 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. Seven north easterly trending
sub-vertical lodes of gold mineralised quartz veining, averaging 150m in
length identified. Sampling returned numerous gold intersections in
trenches, with a best value of 6.4m grading 23 g/t gold (see news
release of 11th September 2003 for complete data).
ii. *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 yielding a best
intersection in hole K-1 of 0.51m grading 24.5 g/t gold (see news
release of 11th September 2003 for complete data).
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 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.
iii. *United Nations Revolving Fund (UNRF) - mid 1980s
Between 1984 and 1987, the United Nations Revolving Fund (UNRF) for
Natural Resources Exploration undertook an extensive regional
programme of gold exploration in the Pampana district. 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.
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.
Investor Relations
Press Releases issued during the quarter covered such issues as the exercise of
warrants, recovery of diamonds from Kono dykes, and definition of drill targets
at Yirisen. Subsequently, Mano announced the signature of the Heads of Agreement
with Golden Star over Yirisen and the commencement of a placement aimed at
raising up to GBP2.5m (see below).
Mano also announced, in November 2003, the appointment of Capital Integrated
Marketing Communications (Europe) Ltd ("Capital"), to act as its financial
public relations adviser in the UK. This ensures continuity of service,
following the move to that company of Mano's London-based investor relations
manager, Mr Gary Middleton. Capital is a financial PR company with offices in
Australia, London and China, specialising in natural resources. Its strengths
lie in the personal relationship it has with the media and with the financial
community, through the extensive contacts and experience of its staff. Capital
will provide a valuable service to Mano, aimed at lifting its profile so as to
achieve a better appreciation in the investment community and media of the
Company's portfolio of gold and diamond exploration projects in West Africa.
The increased coverage of the Company's activities in both the specialized and
general press was exemplified by Mano recently featuring simultaneously in no
fewer than six UK national papers in one day, including the Guardian,
Independent, Daily Mail and Telegraph.
Corporate
On 7th August 2003, Mano announced that it had received notice of the conversion
of warrants covering 1,250,000 fully paid common shares in the Company at 3p per
share for total proceeds of #37,500. Dealings in the shares on AIM commenced on
Tuesday 12 August 2003.
As agreed with the parties concerned at the time of the June 2003 Private
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 TSX 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 June private placement,
was seen as strengthening Mano's financial position, as it aggressively pursues
exploration of its promising mineral properties.
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, 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 TSX Venture Exchange.
Subsequent Events - Corporate
On November 25th, Mano announced that it had signed a Letter of Agreement
("LoA") with Golden Star Resources ("GSR"), containing all the main terms of a
proposed joint venture covering three licence packages ("the Joint Venture
Licences") within the highly prospective greenstone gold bearing belts in Sierra
Leone.
About GSR
GSR is a gold producer with an aggressive growth strategy in West Africa. Its
major assets are located in Ghana, where it holds interests in the Bogoso/
Prestea open-pit gold mine, the Prestea underground mine, and the Wassa gold
project. GSR has gold reserves of 3 million ounces and is forecast to produce
350,000 ounces per year in 2005. Its shares are listed on the TSX (GSC) and AMEX
(GSS) markets.
Regarding the LoA Mano's CEO, Dr Tom Elder, commented: "Golden Star are the
perfect partner for Mano. They are mainly West Africa focussed, have a proven
ability to build and operate major gold mines and, like Mano, have an aggressive
growth strategy. Through its pioneering approach (started in 1996) Mano was able
to select what are generally considered to be three of the country's top gold
prospects. Once GSR has earned its equity interest, Mano has ensured that it
will have the option to contribute pro rata funding to each prospect in order to
maintain its 49% interest through to gold production."
Terms of the LoA
Under the terms of the LoA, GSR can earn a 51% interest in the gold rights of
the licences currently held by Mano, as follows:
1. *Pampana North, Pampana South Licences (termed hereafter Pampana Licences),
2. *Sonfon North and Sonfon South Licences (termed hereafter Sonfon Licences),
3. *Nimini Central and Nimini South Licences (termed hereafter Nimini Licences)
See http://www.manoriver.com/mano/projects/gold_sl_overview.shtml for the
location of the Joint Venture Licences.
The LoA provides for a 60 day period for due diligence and the completion of the
full Joint Venture Agreement. GSR will make an investment of US$6M over a staged
four-year period in order to earn a 51% interest in the Joint Venture Licences,
earning a final equity of up to either 71% or 85% if Mano does not co-fund
respectively the Feasibility Study nor mine development.
The main terms of the LOA are as follows:
Stage 1 GSR commits to spend a minimum US$1,000,000 by 31
December 2004, to earn the right to proceed to Stage 2. Mano
will operate an agreed programme during this period. No
equity will be earned by GSR at this stage. A decision to
proceed with the next stage must be made by 31 December
2004.
Stage 2 GSR spends up to US$1,750,000 on the projects by 31
December 2005, with Mano operating an agreed programme. No
equity will be earned by GSR at this stage. A decision to
proceed with the next stage must be made by 31 December
2005.
Stage 3 GSR spends a further US$2,500,000 on the projects and
may elect to manage and operate at the beginning of this
stage. The expenditure must be met by 31st August 2006.
Upon completion of this stage GSR will have earned a 51%
equity in the Nimini and Sonfon Licences, subject to having
expended a minimum of US$2M and US$1.5M respectively on
these two projects.
Stage 4 GSR may spend a further US$750,000 on the Pampana
Licences by 31 December 2007 to earn a 51% interest. A
decision to proceed with this stage must be made by 31
December 2006.
At the end of this stage GSR will have earned a 51% interest
in the Pampana Licences.
Within 120 days of completing Stage 3 in the case of the Nimini and Sonfon
Licences, and Stage 4 in the case of the Pampana Licences, GSR may elect to
proceed to a Feasibility Study (FS) for any or all of the projects. Mano has the
right to elect to contribute pro-rata to the FS to retain its 49% equity. If it
decides not to do so, GSR may sole-fund the FS to earn a further 14% interest,
thereby taking its equity to 65%.
Upon completion of a positive FS on any or all of the projects GSR may elect to
proceed to mine development. Mano has the right to contribute pro-rata to any
mine development to retain its 49% equity or dilute to either a 15% or 29% free
carried interest depending on its earlier elections to co-fund the feasibility
study and mine construction, GSR thereby advancing to a 71% or 85% equity
depending on elections made.
In either case, Mano will retain a 2% Net Smelter Return (NSR) royalty on
production in excess of the first 1M oz of gold from each project.
The proposed Joint Venture Agreement remains subject to regulatory approval and
definitive documentation.
On December 10th 2003, the Company announced that it had arranged, subject to
regulatory approval, a brokered Private Placement to raise gross proceeds of
between GBP1.5 million and GBP2.5 million.
The Placement at a price of GBP0.05 per common share was arranged in the UK of
20 million common shares through Williams de Broe and up to 30 million shares
through Seymour Pierce. Commission of 4% will be paid. Application will be made
for approval of the Placement by the TSX Venture Exchange and for the new shares
to be admitted to trading on AIM.
The proceeds of the Placement will be 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, particularly kimberlite diamond exploration in
Sierra Leone and advancing its gold projects in western Liberia, and for general
working capital purposes.
The Chairman and CEO visited both Sierra Leone and Liberia in November and, with
increasing market recognition of the recent positive evolution in the regional
political and economic landscape, Mano is starting to capitalise on its position
as the pre-eminent gold and diamond explorer in the sub-region.
Subsequent Events - Exploration
In November the Company announced the results of exploration work under way at
Yirisen in Sierra Leone, highlights being:
*3.75 km long gold system open along strike
*Zone of mineralisation locally up to 200m wide
*5,000m - 10,000m multi-rig drill programme planned to produce resource
estimate
Independent consultants ACA Howe International Ltd reported from a visit to
Yirisen that several bands of high-grade gold mineralization occur over a total
width of up to 200m. Artisanal workings confirm that gold is not solely
restricted to the high-grade veins and that, within both the oxide and sulphide
zones, it is partially free milling.
Mano's geological field crews have now completed a surface exploration
programme, involving cutting more than 400 channel samples, aimed at verifying
previous sampling. This will enable an aggressive first phase drilling programme
to be designed to thoroughly test the mineralization and, subject to results
obtained, permit the estimation of a preliminary resource. It is anticipated
that this drill programme will commence in the first quarter of 2004. The
channel samples have been shipped to OMAC in Ireland, with results expected
early in January 2004.
Consolidated Balance Sheets
(Prepared by Management without audit)
(Stated in U.S. Dollars)
Nine months Year ended
ended October January 31,
31, 2003 2003
$ $
(unaudited) (audited)
---------------------- --------- ---------
ASSETS
Current
Cash and cash
equivalents 162,379 184,116
Accounts
receivable 32,892 2,139
---------------------- --------- ---------
195,271 186,255
Investments
(Note 3) 34,496 34,496
Resource
properties
(Note 4) 3,955,000 4,045,090
Deferred
exploration
costs 8,231,320 7,647,211
Reclamation
bonds (Note 5) 340,610 340,610
---------------------- --------- ---------
12,756,697 12,253,662
---------------------- --------- ---------
LIABILITIES
Current Liabilities
Accounts
payable and
accrued
liabilities 88,127 97,664
Due to related
parties (Note
9) 208,338 305,195
---------------------- --------- ---------
296,465 402,859
Provision for
reclamation
(Note 5) 340,610 340,610
Convertible
debenture
(Note 8) 216,973 138,723
SHAREHOLDERS' EQUITY
Share capital
(Note 6) 16,712,859 15,867,323
Subscriptions
(Note 7) 73,544 -
Equity
component of
convertible
debenture 96,000 96,000
Cumulative
translation
difference (21,755) (21,755)
Deficit (4,957,999) (4,570,098)
---------------------- --------- ---------
11,902,649 11,371,470
---------------------- --------- ---------
12,756,697 12,253,662
---------------------- --------- ---------
Consolidated Statements of Loss
(Prepared by Management without audit)
Stated in U.S. Dollars)
Three months Three months Nine months Nine months
ended October ended October ended October ended October
31, 2003 31, 2002 31, 2003 31, 2002
$ $ $ $
(unaudited) (unaudited) (unaudited) (unaudited)
-------------- -------- -------- -------- --------
Revenue
Interest
income 1,267 3,151 3,473 7,658
-------------- -------- -------- -------- --------
Expenses
Administrative
and office
expenses 1,326 832 3,995 4,494
Bank and
interest
charges 1,014 191 8,799 512
Directors fees 6,000 8,000 8,000 21,000
Foreign
exchange loss
(gain) (1,190) (3,779) 91 922
Investor
communications 20,033 - 47,001 -
Loss on sale
of investments - - - 5,568
Management
fees 24,000 12,000 59,500 67,500
Mine
maintenance
expenses 1,479 12,292 33,469 41,212
Nominated
broker and
adviser 6,129 9,959 26,187 32,930
Professional
fees, legal,
audit and
accounting 19,623 11,833 75,294 76,776
Transfer agent
and regulatory
fees 20,628 2,354 37,101 26,405
Travel and
promotion - - 1,847 6,100
-------------- -------- -------- -------- --------
99,042 53,682 301,284 283,419
-------------- -------- -------- -------- --------
Loss before
under noted
item (97,775) (50,531) (297,811) (275,761)
Write-off of
resource
property - - (90,090) -
-------------- -------- -------- -------- --------
Loss for the
period (97,775) (50,531) (387,901) (275,761)
-------------- -------- -------- -------- --------
Loss per share (0.001) (0.000) (0.002) (0.002)
-------------- -------- -------- -------- --------
Consolidated Statements of Deficit
(Prepared by Management without audit)
Stated in U.S. Dollars)
Nine months Year ended
ended October January 31,
31, 2003 2003
$ $
(unaudited) (audited)
--------------- --------- ---------
Deficit,
Beginning of
year -4,570,098 -4,217,881
Loss for the
Period (387,901) (352,217)
--------------- --------- ---------
Deficit, End
of Period (4,957,999) (4,570,098)
--------------- --------- ---------
Consolidated Statements of Cash Flows
(Prepared by Management without audit)
Stated in U.S. Dollars)
Three months Three months Nine months Nine months
ended October ended October ended October ended October
31, 2003 31, 2002 31, 2003 31, 2002
$ $ $ $
(unaudited) (unaudited) (unaudited) (unaudited)
--------------- -------- --------- --------- ---------
Operating
Activities
Loss for the
period (97,775) (50,531) (387,901) (275,761)
--------------- -------- --------- --------- ---------
Changes in
non-cash working
capital
accounts
Loss on sale
of investments - - - 5,568
Write-off of
resource
property - - 90,090 -
Accounts
receivable (23,998) 2,168 (30,753) (3,386)
Accounts
payable (32,225) 76,128 (9,537) 19,830
--------------- -------- --------- --------- ---------
(153,998) 27,765 49,800 (253,749)
--------------- -------- --------- --------- ---------
Financing
Activities
Issuance of
share capital
(net of costs) - - 728,989 631,412
Subscriptions 73,544 73,544 -
Proceeds from
sale of
investments - - - 94,432
Convertible
debenture - - 78,250 200,000
Due to related
parties 71,607 56,470 19,690 (70,188)
--------------- -------- --------- --------- ---------
145,151 56,470 900,473 855,656
--------------- -------- --------- --------- ---------
Investing
Activities
Resource
properties -
Acquisition of
resource
properties - - - (86,196)
Deferred
exploration
expenditures (247,702) (247,835) (584,109) (601,166)
--------------- -------- --------- --------- ---------
(247,702) (247,835) (584,109) (687,362)
--------------- -------- --------- --------- ---------
Increase (
Decrease) In
Cash (256,549) (163,600) (21,737) (85,455)
Cash,
Beginning of
Period 418,928 203,243 184,116 125,098
--------------- -------- --------- --------- ---------
Cash, End of
Period 162,379 39,643 162,379 39,643
--------------- -------- --------- --------- ---------
Supplemental disclosure of non-cash financing and investing activities
During the quarter ended October 31, 2003, the Company:
Issued 2,819,397 common shares in settlement of $116,547 due to related parties
During the quarter ended October 31, 2002, the Company:
Issued 6,427,545 common shares in settlement of $415,295 due to related parties
Consolidated Statements of Deferred Exploration Costs
(Prepared by Management without audit)
Stated in U.S. Dollars)
Three months Three months Nine months Nine months
ended October ended October ended October ended October
31, 2003 31, 2002 31, 2003 31, 2002
$ $ $ $
(unaudited) (unaudited) (unaudited) (unaudited)
--------------- -------- --------- --------- ---------
Deferred
exploration
expenditures
Assays incl.
Shipment 4,305 2,695 26,546 8,893
Communications 8,388 6,915 25,253 22,825
Consultants 36,339 52,157 79,142 101,101
Data, images,
reports and
maps 2,084 233 6,243 2,269
Geologists'
support - 5,212 1,345 8,688
Licenses and
permit fees 34,896 10,000 92,242 123,735
Project/field
office costs,
other 26,762 51,903 64,152 69,418
Salaries and
wages 96,631 81,733 196,513 178,421
Subsistence 8,426 14,251 37,817 33,396
Transportation 29,871 22,736 54,856 52,420
--------------- -------- --------- --------- ---------
Net
expenditures
during the
period 247,702 247,835 584,109 601,166
Balance,
Beginning of
period 7,983,618 7,231,435 7,647,211 6,878,104
--------------- -------- --------- --------- ---------
Balance, End
of period 8,231,320 7,479,270 8,231,320 7,479,270
--------------- -------- --------- --------- ---------
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 loans from related parties or
equity offerings.
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
October 31, January 31,
2003 2003
--------- ---------
St. Andrew Goldfields Ltd. (formerly Royal
Victoria Minerals Ltd.) $34,496 $34,496
------------------ --------- ---------
34,496 34,496
------------------ --------- ---------
The St. Andrew Goldfields Ltd. Investment consists of 520,000 common
shares with a quoted market value at October 31, 2003 of $122,200
(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
October 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
------------------ ----------- ----------
5.RECLAMATION BONDS
As at October 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 provision if it is determined necessary.
6.SHARE CAPITAL
(a)Authorized -Unlimited common shares without par value
(b)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
Shares issued for settlement of debt 2,819,397 116,547
---------------------- -------- ----------
Balance at October 31, 2003 155,209,613 16,712,859
---------------------- -------- ----------
As at October 31, 2003, the following stock options were outstanding:
Exercise price
Number of per share
Common Shares (Cdn$) Expiry date
------------- ---------- -------------
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
905,000 $0.10 August 14, 2008
------------- ---------- -------------
10,380,000
------------- ---------- -------------
7.SUBSCRIPTIONS
SharesAmount
Share subscription for exercise of warrants1,550,00073,544
The Company received US$73,544 for the conversion of warrants covering
1,550,000 fully paid common shares at GBP 0.03 per share. At October 31,
2003, the common shares had not been issued.
8.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 will under this debenture be repayable 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 repayment and this
transaction has been approved by the regulatory authorities.
9.RELATED PARTY TRANSACTIONS
During the year to date, the Company incurred billings of $91,720 from
related parties for management fees and professional services. All
transactions with related parties have occurred in the normal course of
operations. As at October 31, 2003, the amount due to related parties
totals $208,338. These balances are payable on demand and have arisen
from the provision of services referred to above and provision of
short-term bridge financing.
10.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 October 31, 2003, the Company held approximately
$128,766 cash in bank accounts denominated in U.K. pounds. The Company
has taken no action to reduce its exposure to foreign currency risk.
11. SUBSEQUENT EVENTS
Subsequent to October 31, 2003, the Company:
a. *arranged a private placement for up to 50 million common shares at GBP
0.05p per share to raise gross proceeds of between GBP2 million and
GBP2.5 million. A commission of 4% will be paid to the brokers. This
private placement has been conditionally accepted by the regulatory
authorities.
b. *received notice of the conversion of warrants covering 3,900,000 fully
paid common shares at GBP 0.03 per share, raising gross proceeds of GBP
117,000 (US$196,338).
This information is provided by RNS
The company news service from the London Stock Exchange
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