-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WOzaX5QlKSfqGAwbwXJDyTKZu4VfGM7G/G6VdMzorxAakk3CvS9bZQ6duOwxfndR sXq8NdIfGkzpspMeAxditw== /in/edgar/work/20001101/0000949353-00-000180/0000949353-00-000180.txt : 20001106 0000949353-00-000180.hdr.sgml : 20001106 ACCESSION NUMBER: 0000949353-00-000180 CONFORMED SUBMISSION TYPE: SB-1 PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 20001101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA RIVER RESOURCES INC CENTRAL INDEX KEY: 0001043720 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 911835664 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-1 SEC ACT: SEC FILE NUMBER: 333-49122 FILM NUMBER: 751205 BUSINESS ADDRESS: STREET 1: 856 HOMER STREET STREET 2: #304 CITY: VANCOUVER BRITISH CO STATE: A1 BUSINESS PHONE: 6046627667 MAIL ADDRESS: STREET 1: 856 HOMER STREET #304 STREET 2: VANCOUVER BRITISH COLUMBIA CITY: CANADA V6B 2W5 STATE: A1 SB-1 1 0001.txt FORM SB-1 As filed November 1, 2000 File No. ____________ ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 COLUMBIA RIVER RESOURCES INC. (Exact name of small business issuer in its charter Nevada 1040 91-1835664 (State or other (Primary Standard (I.R.S. Employer jurisdiction of Industrial Classification Identification No.) incorporation or Code Number) organization) SUITE 304 - 856 HOMER STREET, VANCOUVER, BRITISH COLUMBIA V6B 2W5 (604) 688-1163 (Address and telephone number of principal executive offices) SUITE 304 - 856 HOMER STREET, VANCOUVER, BRITISH COLUMBIA V6B 2W5 (Address of principal place of business or intended principal place of business) ROBERT R. FERGUSON, PRESIDENT COLUMBIA RIVER RESOURCES INC. SUITE 304 - 856 HOMER STREET VANCOUVER, BRITISH COLUMBIA V6B 2W5, CANADA (604) 688-1163 (Name, address and telephone number of agent for service) Copies of all communications to: Adam P. Stapen, Esq. Dill Dill Carr Stonbraker & Hutchings, P.C. 455 Sherman Street, Suite 300 Denver, Colorado 80203 (303) 777-3737; (303) 777-3823 fax Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of the Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]_____ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]_____ If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]_____ If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ]_____ CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------- TITLE OF EACH CLASS DOLLAR PROPOSED PROPOSED OF SECURITIES TO BE AMOUNT TO BE MAXIMUM OFFERING MAXIMUM REGISTERED REGISTERED PRICE PER UNIT AGGREGATE OFFERING AMOUNT OF PRICE REGISTRATION FEE - -------------------------------------------------------------------------------------------------------------- Common Stock 10,000,000 shares $0.45 $4,500,000 $1,188.00 - -------------------------------------------------------------------------------------------------------------- Common Stock 499,000 shares $0.25 (1) $124,750 $32.93 - --------------------------------------------------------------------------------------------------------------
(1) Calculated in accordance with Rule 457(c) as of October 26, 2000. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Disclosure Alternative used (check one) Alternative 1 [ ]; Alternative 2 [X] SUBJECT TO COMPLETION, DATED NOVEMBER 1, 2000 COLUMBIA RIVER RESOURCES INC. 10,000,000 Shares of Common Stock We are offering 10,000,000 shares of common stock for sale to the public. We are not required to sell any specific number or dollar amount of shares but will use our best efforts to sell the maximum number of shares offered. There is no minimum offering and no escrow. Therefore any funds received from a purchaser will be available to us as received and need not be refunded to the purchaser. This offering of shares will terminate on the earlier of the date all of the shares offered are subscribed for or ___________________ [90 days from the date of this prospectus]. Please note that we may extend this date for up to an additional 90 days. This prospectus also covers 499,000 shares of common stock owned by four (4) other stockholders. The selling stockholders are allowed to sell their shares at any time after the effective date of this prospectus. We will not receive any proceeds from the resale of these shares. We have agreed to pay for all expenses of this offering. Our common stock is traded on the local over-the-counter markets and the Pink Sheets published by Pink Sheets LLC under the symbol "CRVV." THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not an offer to buy these securities in any state where the offer or sale is not permitted.
- ------------------------------------------------------------------------------------------------------------ SHARES OFFERED BY THE UNDERWRITING DISCOUNTS PROCEEDS TO THE COMPANY PRICE TO PUBLIC AND COMMISSIONS COMPANY - ------------------------------------------------------------------------------------------------------------ Per Share $0.45 $0.045 $0.405 - ------------------------------------------------------------------------------------------------------------ Total Offering $4,500,000 $450,000 $4,050,000 - ------------------------------------------------------------------------------------------------------------
Underwriting commissions and discounts: We are acting as the general selling agent. If broker-dealers are used to sell the shares, we will pay them a 10% commission. Proceeds to the Company: These amounts do not reflect the deduction of expenses of this offering, estimated at $60,000. SUITE 304 - 856 HOMER STREET VANCOUVER, BRITISH COLUMBIA V6B 2W5, CANADA (604) 688-1163; FAX (604) 688-6375 WWW.COLUMBIARIVER1.COM The date of this prospectus is ______________, 2000 TABLE OF CONTENTS Page METRIC EQUIVALENTS.......................................................... 1 PROSPECTUS SUMMARY.......................................................... 2 RISK FACTORS................................................................ 3 FORWARD LOOKING STATEMENTS.................................................. 9 DILUTION.................................................................... 10 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................... 11 DIVIDEND POLICY............................................................. 12 USE OF PROCEEDS............................................................. 12 SELECTED FINANCIAL DATA..................................................... 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................................................... 13 BUSINESS.................................................................... 15 DESCRIPTION OF PROPERTY..................................................... 17 GHANA, WEST AFRICA.......................................................... 26 MANAGEMENT.................................................................. 28 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.............. 31 SELLING SHAREHOLDERS........................................................ 32 INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS................... 33 DESCRIPTION OF SECURITIES................................................... 35 PLAN OF DISTRIBUTION........................................................ 36 SEC POSITION ON INDEMNIFICATION............................................. 38 LEGAL MATTERS............................................................... 38 EXPERTS..................................................................... 39 AVAILABLE INFORMATION....................................................... 39 REPORTS TO STOCKHOLDERS..................................................... 39 FINANCIAL STATEMENTS....................................................... F-1 METRIC EQUIVALENTS The following table sets forth the conversion from metric into imperial equivalents: TO CONVERT FROM TO IMPERIAL MEASUREMENT UNITS MULTIPLY BY Grams Ounces (troy) 0.0322 Tonnes Tons (short) 1.1023 Grams/tonne Ounces (troy/ton, short) 0.0292 Hectares Acres 2.4711 Kilometres Miles 0.6214 Metres Feet 3.2808 1 PROSPECTUS SUMMARY COLUMBIA RIVER RESOURCES INC. Columbia River Resources Inc. ("Columbia River"/"We"/"Our") was organized under the laws of the State of Nevada on June 13, 1997, to engage in the acquisition, exploration, and if warranted, development of mining properties located worldwide. We have acquired and subsequently abandoned several mining properties in pursuit of our business. At this time, we are focusing our operations on the exploration of the Tanoso Reconnaissance License located in Ghana, West Africa, as well as the continued reconnaissance evaluation for other possible acquisitions in the Federal Republic of Nigeria. Our mining property is not in production and, consequently, we have no current operating income or cash flow. We are in the exploration stage and have not generated any revenues from operations. Our executive offices are located at 304 - 856 Homer Street, Vancouver, British Columbia V6B 2W5, and our telephone number is (604) 668-1163. THE OFFERING Securities offered........10,000,000 shares of common stock ........Resale of 499,000 shares of common stock owned by four (4) stockholders Securities outstanding....13,167,259 shares of common stock (as of October 26, 2000) Use of Proceeds...........Estimated at a maximum of $3,990,000 net of offering expenses, to be used for property acquisitions, further exploration and administration expenses. We will not receive any of the proceeds from the resale of common stock owned by the four stockholders. RISK FACTORS Investing in our securities involves a high degree of risk. You should consider carefully the information under the caption "Risk Factors" in deciding whether to purchase the securities offered under this prospectus. SUMMARY FINANCIAL INFORMATION The following summary financial data is derived from our unaudited financial statements for the period ending June 30, 2000, and from our audited financial statements for the years ended December 31, 1999 and 1998, respectively, included elsewhere in this prospectus. We have prepared our financial statements in accordance with generally accepted accounting principles in the United States. Our results of operations for any interim period do not necessarily indicate our results of operations for the full year. You should read this summary financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," and our financial statements. Our results from operations for any interim period do not necessarily indicate our results of operations for the full year.
Balance Sheet Data: June 30, 2000 December 31, 1999 December 31, 1998 Current Assets $ 70,773 $ 43,229 $ 211 Total Assets 165,069 62,525 78,211 Current Liabilities 222,198 393,389 85,299 Long-Term Liabilities 0 0 0 Stockholders' Deficiency 57,129 330,864 7,088 Working Capital Deficiency 151,425 350,160 85,088
2
Statement of Loss Data: Six Months Ended Year Ended Year Ended June 30, 2000 December 31, 1999 December 31, 1998 Revenues $ 0 $ 0 $ 0 Net Loss 380,281 565,329 68,231 Net Loss per Share 0.04 0.10 0.02
RISK FACTORS Investing in our common stock involves a high degree of risk. You should be able to bear a complete loss of your investment. You should carefully consider the following risk factors and other information in this prospectus before deciding to invest in shares of our common stock. WE HAVE NOT MINED ANY GOLD OR OTHER METALS AND WE HAVE NO PRODUCTION HISTORY Our company has no history of producing gold or other metals. We are in the exploration stage. If warranted, the development of our mining property will require the construction or rehabilitation and operation of mines, processing plants and related infrastructure. As a result, we are subject to all of the risks associated with establishing new mining operations and business enterprises. We cannot assure you that we will successfully establish mining operations or produce gold or other metals at our property. WE HAVE A HISTORY OF LOSSES AND WE EXPECT LOSSES TO CONTINUE FOR AT LEAST THE NEXT TWO YEARS As an exploration company that has no production history, we have incurred losses since our inception, and we expect to continue to incur additional losses for at least the next two years. As of December 31, 1999, we had an accumulated deficit of $646,149. We cannot assure you that we will ever achieve or sustain profitability. WE EXPECT LOSSES FROM OPERATIONS AND WE EXPECT TO ENCOUNTER RISKS FREQUENTLY FACED BY EARLY STAGE COMPANIES To date, we have not generated any revenues from operations to fund ongoing operational requirements and cash commitments. We have financed our operations principally through the sale of our equity securities. We incurred a net loss of $380,281 for the six months ended June 30, 2000, a net loss of $565,329 for the year ended December 31, 1999, a net loss of $68,231 for the year ended December 31, 1998, and a net loss of $12,589 for the year ended December 31, 1997. We have a limited operating history and our operations are subject to all of the risks inherent in a new business enterprise engaged in the mining industry. The likelihood of our success must be considered in light of the expenses, difficulties and delays frequently encountered in connection with the start-up of new businesses, those historically encountered by us, and the competitive environment in which we operate. WE DO NOT GENERATE ANY REVENUES AND WE RELY ENTIRELY UPON OUTSIDE FINANCING Assuming that we are able to raise all of the capital necessary to undertake our planned exploration program, we believe that we will not be able to generate revenues for at least two years. Because of our inability to generate revenues, we rely entirely upon external sources of financing. We will need external financing to continue the exploration of our only property, Tanoso Reconnaissance License, and to fund the acquisition and exploration of any other mineral property we might acquire. Sources of external financing may include bank borrowings, joint ventures, and future debt and equity offerings. We cannot assure you that financing will be available on acceptable terms, or at all. The failure to obtain external financing could have a material adverse effect on our results of operations and financial condition. We do not have sufficient financial resources to undertake our planned exploration program on the Tanoso Reconnaissance License. If we cannot obtain external funding when needed, we may be forced to cease operations and abandon our property and business, and you may lose your entire investment. 3 WE RELY ENTIRELY UPON THE SERVICES OF CME & COMPANY, OUR CONTROLLING SHAREHOLDER CME & Company is a mining exploration and development company located in Guernsey, Channel Islands, and is our controlling shareholder. CME & Company is an affiliate of our company and became our controlling shareholder by accepting shares of our common stock in exchange for performing exploration activities at the Tansoso Reconnaissance License, and by performing evaluation activities in Nigeria. CME & Company performs all of our exploration and evaluation activities. CME & Company also assisted us in entering into our agreement to the rights to the Tanoso Reconnaissance License, and CME & Company is an affiliate of the company that entered into that agreement. We rely entirely upon the services of CME & Company. Our dependence on CME & Company has made us vulnerable to changes in the operations of CME & Company. If we are unable to develop any other key relationships or fail to maintain and enhance our existing relationship with CME & Company, we will suffer material and adverse consequences. We can give you no assurance that we will be able to maintain our relationship with CME & Company, or that we will be able to develop and maintain other strategic alliances. WE RELY ENTIRELY ON A SINGLE EXPLORATION PROPERTY We anticipate that a majority, if not all, of our exploration costs for the next few years and beyond will be incurred in connection with the Tanoso Reconnaissance License. We do not have another exploration property at this time. Therefore, we will suffer material adverse consequences if we are unable to complete our exploration activities in a timely manner, or if the results do not warrant development operations. THE EXPLORATION OF THE TANOSO RECONNAISSANCE LICENSE IS SUBJECT TO DELAYS We plan to complete the exploration of the Tanoso Reconnaissance License and, if warranted, commence development operations in five years. However, there can be no assurance that: * the exploration of the Tanoso Reconnaissance License will be completed on a timely basis, if at all; * the results will warrant development operations; or * the exploration costs and ongoing operating costs associated with the exploration of the Tanoso Reconnaissance License will not be higher than anticipated. If the actual cost to complete the exploration of the Tanoso Reconnaissance License is significantly higher than what we expect, we cannot assure you that we will have enough funds to cover these costs or that we will be able to obtain alternative sources of financing to cover these costs. Unexpected cost increases or the failure to obtain necessary project financing on acceptable terms, or to commence or complete the exploration of the Tanoso Reconnaissance License on a timely basis, will have a material adverse effect on our future results of operations and financial condition. The exploration of the Tanoso Reconnaissance License is subject to the other risk factors described in this prospectus. WE CONDUCT ALL OF OUR EXPLORATION ACTIVITIES IN COUNTRIES WITH DEVELOPING ECONOMIES, AND WE ARE SUBJECT TO THE RISKS OF POLITICAL AND ECONOMIC INSTABILITY ASSOCIATED WITH THESE COUNTRIES We currently conduct exploration activities in Ghana, West Africa, and reconnaissance evaluations in the Federal Republic of Nigeria. Ghana and Nigeria have experienced from time to time economic and/or political instability. We may be materially and adversely affected by risks associated with conducting operations in countries, including: * political instability and violence; * war and civil disturbance; * expropriation or nationalization; 4 * changing fiscal regimes; * fluctuations in currency exchange rates; * high rates of inflation; * underdeveloped industrial and economic infrastructure; and * unenforceability of contractual rights. Changes in mining or investment policies or shifts in the prevailing political climate in any of the countries in which we conduct exploration and evaluation activities could adversely affect our business. Our operations may be affected in varying degrees by government regulation in Ghana and Nigeria with respect to, among other things: * exploration restrictions; * price controls; * export controls; * income and other taxes; * maintenance of claims; * environmental legislation; * foreign ownership restrictions; * foreign exchange and currency controls; * labor; * welfare benefit policies; * land use; * waste disposal; * land claims of local residents or entities; * water use; * mine safety and occupational health; and * toxic substances and other matters. Although we cannot accurately predict the effects of these factors, compliance with such laws and regulations may increase the costs associated with the exploration of our property. This could have a material and adverse effect on our financial condition and results of operations. The various effects of these laws and regulations may also impact our decisions to acquire another exploratory property. Furthermore, the exploration of mineral properties is also contingent upon governmental approvals that are complex and time consuming to obtain. We cannot assure you that we will be able to obtain or maintain governmental approval on any of our properties, or in a timely manner. In addition, legislation in the United States and Canada regulating foreign trade, investment and taxation could have a material adverse effect on our financial condition and results of operations. 5 WE ARE SUBJECT TO EXTENSIVE FOREIGN ENVIRONMENTAL LAW AND REGULATION Ghana and Nigeria have laws and regulations which control the exploration of mineral properties and their effects on the environment, including air and water quality, mine reclamation, waste handling and disposal, the protection of different species of animals, and the preservation of lands. These laws and regulations will require us to acquire permits and other authorizations for certain activities. In Ghana and Nigeria, there is relatively new comprehensive environmental legislation, and the permitting and authorization processes may be less established and less predictable than they are in the United States. We cannot assure you that we will be able to acquire necessary permits or authorizations on a timely basis, if at all. Delays in acquiring any permit or authorization could increase the exploration cost of the Tanoso Reconnaissance License and could have a material adverse effect on our operations and financial position. Environmental legislation in Ghana and Nigeria is evolving in a manner that will likely require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for us. We cannot predict what environmental legislation or regulations will be enacted or adopted in the future or how future laws and regulations will be administered or interpreted. Compliance with more stringent laws and regulations, as well as potentially more vigorous enforcement policies or regulatory agencies or stricter interpretation of existing laws, may (1) necessitate significant capital outlays, (2) cause us to delay, terminate or otherwise change our intended activities with respect to our property and (3) materially and adversely effect our future operations. The Tanoso Reconnaissance License is located in a historic mining district where prior owners may have caused environmental damage that may not be known to us or to the regulators. We have not sought a complete environmental analysis of the Tanoso Reconnaissance License and have not conducted a comprehensive review of the environmental laws and regulations in Ghana. To the extent that we are subject to environmental requirements or liabilities, the cost of compliance with these requirements and the satisfaction of these liabilities would increase our costs and could have a material adverse effect on our financial condition and results of operations. If we are unable to fully fund the cost of remediation of any environmental condition, we may be required to suspend or terminate our operations. THE EXPLORATION OF OUR PROPERTY IS HIGHLY SPECULATIVE, INVOLVES SUBSTANTIAL EXPENDITURES, AND MAY BE NON-PRODUCTIVE Our exploration of the Tanoso Reconnaissance License is highly speculative in nature and may be non-productive. Substantial expenditures are required to: * establish ore reserves through drilling and metallurgical and other testing techniques; * determine metal content and metallurgical recovery processes to extract metal from the ore; and * construct, renovate or expand mining and processing facilities. If we discover ore, it usually takes several years from the initial phase of exploration until development or production is possible. During this time, the economic feasibility of development or production may change. As a result of these uncertainties, we cannot assure you that we will be able to acquire additional mineral rights or that our exploration program will result in proven or probable mineral reserves of sufficient quantities to justify development or production. Our exploration activities are also subject to the risk of unanticipated delays. Such delays may be caused by the following factors, among others: fluctuations in commodity prices, exploration risks, difficulty in arranging and obtaining needed financing, unanticipated permitting requirements or legal obstruction in the permitting process, and other unforeseen matters beyond our control. In addition to increasing capital and operating costs, such delays, if protracted, could result in a write off of all or a portion of the carrying value of the property. 6 TITLE TO OUR MINERAL PROPERTY MAY BE CHALLENGED Our policy is to seek to confirm the validity of our rights to title to, and contract rights with respect to, each mineral property in which we may have a material interest. However, we cannot guarantee that title to our property will not be challenged or impugned. Title insurance generally is not available and our ability to ensure that we have a secure claim to our exploration property may be severely constrained. We have not conducted a survey of the property and, therefore, the precise area and location of Tanoso Reconnaissance License may be in doubt. Accordingly, our property may be subject to prior unregistered agreements, transfers to claims, and title may be affected by, among other things, undetected defects. In addition, we may be unable to operate our property as permitted or to enforce our rights with respect to our property. WE MAY LOSE OUR PROPERTY IF WE FAIL TO MEET PAYMENT REQUIREMENTS We entered into an agreement Ayaco (Ghana) Limited, an affiliate of our company, to acquire the rights to the Tanoso Reconnaissance License. Under the agreement, we are still required to issue 500,000 shares of our common stock to Ayaco (Ghana) Limited on December 15, 2000, and spend an additional $145,000 in exploration work. If we fail to issue our shares when due, or fund the required exploration program, our rights to the property may lapse. We cannot assure you that we will be able to issue our shares when due, or fund the required exploration program. WE CANNOT INSURE AGAINST ALL OF THE RISKS ASSOCIATED WITH EXPLORATION The business of exploration is subject to a number of risks and hazards, including: * adverse environmental effects; * industrial accidents; * labor disputes; * technical difficulties due to unusual or unexpected geologic formations; * failures of pit walls; and * flooding and periodic interruptions due to inclement or hazardous weather conditions. These risks can result in, among other things: * damage to, and destruction of, mineral properties or production facilities; * personal injury; * delays or cessation in our exploration activities; * monetary losses; and * legal liability. Although we maintain, and intend to continue to maintain, insurance with respect to our operations and property within ranges of coverage consistent with industry practice, we cannot assure you that insurance will be available at economically feasible premiums. Insurance against environmental risks is not generally available, and we may elect to not seek coverage for all risks. These environmental risks include potential liability for pollution or other disturbances resulting from mining exploration. In addition, not all risks associated with exploration activities are included in coverage, and the risks that are included may result in liabilities which exceed policy limits. The occurrence of an event that is not fully covered, or covered at all, by insurance, could have a material adverse effect on our financial condition and results of operations. 7 WE ARE SUBJECT TO CURRENCY FLUCTUATIONS For accounting purposes, we use the U.S. dollar as our functional currency. To date, all of our equity financing and certain debt financing have been conducted in U.S. dollars. However, with our principal offices in Vancouver, Canada, we maintain a certain amount of our cash holdings in Canadian dollars. Recently the Canadian dollar has experienced a devaluation against the U.S. dollar. Gains and losses resulting from the fluctuation of foreign exchange rates have been included in the determination of income. Continued devaluation of the Canadian dollar may have a material and adverse effect on our ability to conduct financings in the future. OUR SELLING SHAREHOLDERS COULD NEGATIVELY IMPACT OUR OFFERING Our selling shareholders are allowed to sell their shares at any time after the effective date of this prospectus. If the price per share in the secondary market is less than our offering price at $0.45 per share, prospective purchasers would most likely purchase our stock in the secondary market and from our selling shareholders, which would decrease our proceeds from this offering and adversely impact our financial position and plan of operations. YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION The initial public offering price of the shares does not necessarily bear any relationship to assets, book value or net worth of the Company. We established the price for the common stock with a view to the current market price for the stock. If you purchase in this offering, you will suffer immediate and substantial dilution in your investment, which can range from $0.28 per share to $0.40 per share, based on our net tangible book value at June 30, 2000. YOU MAY SUFFER ADDITIONAL DILUTION FROM THE EXERCISE OR CONVERSION OF OPTIONS, WARRANTS, AND CONVERTIBLE SECURITIES ISSUED TO OTHER PERSONS There are outstanding options, warrants, and convertible securities to acquire shares of our common stock. If any of the outstanding options, warrants, and convertible securities are exercised or converted, your percentage ownership in will be reduced. So long as these options, warrants, and convertible securities are exercisable, the holders will have the opportunity to profit from a rise in the price of our common stock. The existence of such options, warrants, and convertible securities may adversely affect the terms on which we can obtain additional financing. The holders of such options, warrants, and convertible securities can be expected to exercise them at a time when we would probably be able to obtain additional capital by an offering of our common stock at a price higher than the exercise price of these outstanding options, warrants, and convertible securities. OUR OFFICERS, DIRECTORS AND MANAGEMENT MAY BE SUBJECT TO CONFLICTS OF INTERESTS DURING OUR OPERATIONS Our officers, directors and management may be affiliated with other companies that are engaged in the business of exploration of mining properties, including properties located in Ghana and Nigeria. Such associations may give rise to conflicts of interest from time to time. A conflict of interest poses the risk that we may enter into a transaction on terms that would place us in a worse position than if no conflict existed. Our directors are required by law to act honestly and in good faith with a view to our best interest and to disclose any interest which they many have in any project or opportunity of which we are involved. However, each director has a similar obligation to other companies for which such director serves as an officer or director. We have no specific internal policy governing conflicts of interest. "PENNY STOCK" RULES COULD AFFECT THE SECONDARY MARKET FOR OUT COMMON STOCK AND MAY AFFECT YOUR ABILITY TO SELL SHARES OF OUR COMMON STOCK Our common stock is subject to rules promulgated by the SEC that regulate broker-dealer practices in connection with transactions in "penny stocks". Generally, penny stocks are equity securities with a price of less than US$5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). If the Company's shares are traded for less than US$5 per share, as they currently are, the shares will be 8 subject to the SEC's penny stock rules unless (1) the Company's net tangible assets exceed US$5,000,000 during the Company's first three years of continuous operations or US$2,000,000 after the Company's first three years of continuous operations; or (2) the Company has had average revenue of at least US$6,000,000 for the last three years. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prescribed by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. As long as our common shares are subject to the penny stock rules, the holders may find it difficult to sell their shares. WE MAY HAVE DIFFICULTIES ENFORCING THE LEGAL PROCESS Service of process upon individuals or firms that are not resident in the United States may be difficult to obtain within the United States. Some of the directors and officers of our company reside outside the United States. Furthermore, since most of our assets are located outside the United States, any judgment obtained in the United States against us or such persons may not be collectible within the United States. FORWARD LOOKING STATEMENTS Some information contained in this prospectus may contain forward-looking statements. These statements include comments regarding exploration plans, costs, grade, permitting, financing needs, the availability of financing on acceptable terms, the timing of environmental permitting, and the markets for gold and other metals. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", and similar expressions are intended to identify uncertainties. We believe the expectations reflected in those forward-looking statements are reasonable. However, we cannot assure you that these expectations will prove to be correct. You should not unduly rely on forward-looking statements included in this prospectus. These statements speak only as of the date of this prospectus. In particular, this prospectus contains forward-looking statements pertaining to the following: * projections of future capital costs for exploration activities in connection with the Tanoso Reconnaissance License; * expectations regarding the levels or timing of exploration; * potential growth in our operations; * geographic location or focus of our operations; * potential investments of the proceeds of this offering pending the application of the net proceeds; * expected sources or uses of funds; * anticipated methods exploration and evaluation; and * foreign governmental laws and regulations. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of the risk factors set forth below and other factors set forth in, or incorporated by reference into, this prospectus: * worldwide economic and political events affecting the supply of and demand for metals; 9 * volatility in market prices for metals; * financial market conditions, and the availability of financing on terms acceptable to us; * uncertainties associated with exploration activities, including potential cost overruns, and the unreliability of estimates in early stages of exploration; * geological, technical, permitting, exploration and processing problems; * the availability and timing of acceptable arrangements for power, transportation, and water; * uncertainties regarding future changes in foreign laws and regulations; * the availability and performance of CME & Company; and * the factors discussed under "Risk Factors". Many of those factors are beyond our ability to control or predict. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements to reflect future events or developments. Subsequent written and oral statements attributable to us and persons acting on our behalf are qualified in their entirety by the cautionary statements contained in this section and elsewhere in this prospectus. DILUTION "Dilution" represents the difference between the public offering price per share of common stock and the adjusted pro forma net tangible book value per share of common stock immediately after the completion of this offering. Dilution arises mainly from our arbitrary decision about the offering price per share of common stock. In this offering, the level of dilution will be increased as a result of our low net tangible book value before this offering. The following table illustrates the anticipated dilution of a new investor's equity in a share of common stock at different amounts of success with this offering, based on our net tangible book value at June 30, 2000:
- ------------------------------------------------------------------------------------------------------------------- 25% sold 50% sold 100% sold - ------------------------------------------------------------------------------------------------------------------- Offering price per share of common stock $0.45 $0.45 $0.45 - ------------------------------------------------------------------------------------------------------------------- Net tangible book value per common share before offering $(0.01) $(0.01) $(0.01) - ------------------------------------------------------------------------------------------------------------------- Increase per share attributable to new investors $0.06 $0.11 $0.18 - ------------------------------------------------------------------------------------------------------------------- Pro forma net tangible book value per common share after offering $0.05 $0.10 $0.17 - ------------------------------------------------------------------------------------------------------------------- Dilution per common share to new investors $0.40 $0.35 $0.28 - ------------------------------------------------------------------------------------------------------------------- Percentage dilution 88.9 % 77.8% 62.2% - -------------------------------------------------------------------------------------------------------------------
The following table sets forth, as of June 30, 2000, after giving effect to the sale of 25%, 50%, and 100% of the offering, a comparison of the respective investment and equity of the current shareholders and investors purchasing shares in this offering.
25% of Offering Sold - ----------------------------------------------------------------------------------------------------------------- Shares Purchased Total Consideration Average Number Percent Amount Percent Price per Share - ----------------------------------------------------------------------------------------------------------------- Existing shareholders 12,438,366 83.26% $ 963,551 46.13% $0.08 - ----------------------------------------------------------------------------------------------------------------- New investors 2,500,000 16.74% $1,125,000 53.87% $0.45 - ----------------------------------------------------------------------------------------------------------------- Total 14,938,366 100.0% $2,088,551 100.0% - -----------------------------------------------------------------------------------------------------------------
10
50% of Offering Sold - ----------------------------------------------------------------------------------------------------------------- Shares Purchased Total Consideration Average Number Percent Amount Percent Price per Share - ----------------------------------------------------------------------------------------------------------------- Existing shareholders 12,438,366 71.33% $ 963,551 29.98% $0.08 - ----------------------------------------------------------------------------------------------------------------- New investors 5,000,000 28.67% $2,250,000 70.02% $0.45 - ----------------------------------------------------------------------------------------------------------------- Total 17,438,366 100.0% $3,213,551 100.0% - -----------------------------------------------------------------------------------------------------------------
100% of Offering Sold - ----------------------------------------------------------------------------------------------------------------- Shares Purchased Total Consideration Average Number Percent Amount Percent Price per Share - ----------------------------------------------------------------------------------------------------------------- Existing shareholders 12,438,366 55.43% $963,551 17.64% $0.08 - ----------------------------------------------------------------------------------------------------------------- New investors 10,000,000 44.57% $4,500,000 82.36% $0.45 - ----------------------------------------------------------------------------------------------------------------- Total 22,438,366 100.0% $5,463,551 100.0% - -----------------------------------------------------------------------------------------------------------------
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our common stock trades under the symbol "CRVV", with quotations on the pink sheets published by Pink Sheets LLC. The following table sets forth the range of high and low bid quotations for each fiscal quarter since the stock began trading. These quotations reflect inter-dealer prices without retail mark-up, markdown, or commissions and may not necessarily represent actual transactions.
BID PRICES HIGH LOW 1998 FISCAL YEAR Quarter ending 03/31/98 $0.80 $0.125 Quarter ending 06/30/98 $0.45 $0.125 Quarter ending 09/30/98 $0.29 $0.06 Quarter ending 12/31/98 $0.20 $0.04 1999 FISCAL YEAR Quarter ending 03/31/99 $0.26 $0.03 quarter ending 06/30/99 $0.285 $0.10 Quarter ending 09/30/99 $0.23 $0.06 Quarter ending 12/31/99 $0.14 $0.05 2000 FISCAL YEAR Quarter ending 03/31/00 $0.49 $0.06 Quarter ending 06/30/00 $0.56 $0.13 Quarter ending 09/30/00 $0.35 $0.13
On October 26, 2000, the closing price for the common stock was $0.20. We had 17 record holders of our common stock as of October 26, 2000, including those shares held in street name. Holders of shares of common stock are entitled to dividends when, and if, declared by the board of directors out of funds legally available therefor. 11 DIVIDEND POLICY We have never paid any cash dividends on our common stock and intend to retain future earnings, if any, to finance the development and expansion of our business. Our future dividend policy is subject to the discretion of the board of directors and will depend upon a number of factors, including our future earnings, capital requirements, and financial condition. USE OF PROCEEDS If we sell all of the shares being offered, our net proceeds are estimated to be $3,990,000 after deducting legal, accounting, and other offering expenses estimated at $60,000 and a 10% selling commission on all of the shares. To the extent that we sell more shares without using the services of a placement agent, the net proceeds will be increased. We intend to use the net proceeds, along with any other financing sources that may become available to us, to fund our exploration and property reconnaissance activities over the next twelve months. We expect to experience negative cash flow from operations for at least the next two years. We expect that our cash requirements will exist principally in the following areas and, based upon the level of success we achieve in this offering, we anticipate using the proceeds from this offering as follows:
Level of Success in this Offering: 25% 50% 100% Tanoso Reconnaissance License (Phase II) Work Program (1) $396,500 $ 396,500 $ 396,500 Reconnaissance Exploration in the Federal Republic of Nigeria (2) 250,000 250,000 250,000 Tanoso Reconnaissance License (Phase III) Work Program (3) 266,000 956,000 1,983,500 Working Capital Administration expenses 40,000 80,000 90,000 Other mineral property evaluations (4) 0 282,500 500,000 Other mineral property reconnaissance, acquisition And exploration (4) 0 0 770,000 -------- ---------- ---------- Total - $952,500 $1,965,000 $3,990,000 ======== ========== ==========
------------------- [FN] (1) The amount of proceeds to fund the Tanoso Reconnaissance License (Phase II) Exploration work program is based upon our agreement with CME & Company dated April 7, 2000, and reflects the work as set forth in that agreement. (2) The amount of proceeds to fund the reconnaissance exploration in the Federal Republic of Nigeria is based upon our agreement with CME & Company dated May 3, 2000, and reflects the work as set forth in that agreement. (3) This phase of exploration is contingent upon the results of the work which is yet to be completed by CME & Company. Accordingly, this is only an estimate and some modifications will likely be made to the proposed funding as results are received and priorities reevaluated. (4) These amounts of unallocated working capital will be used for additional property acquisitions, exploration work and administration expenses. This allocation of funds is our best estimate. There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary. We will only redirect our funds to other properties on the basis of a written recommendation from an independent, professional geologist or engineer. Pending the application of net proceeds, we expect to invest the proceeds from this offering in short term, investment-grade, and interest bearing securities. 12 SELECTED FINANCIAL DATA Pannell Kerr Forster has audited our financial statements for the fiscal year ended December 31, 1999. Jones Jenson & Company, independent auditors, now known as HJ & Associates, LLC, has audited our financial statements for the fiscal years ended December 31, 1998 and December 31, 1997. The financial data derived those statements and shown below should be read in conjunction with the notes to the financial statements included elsewhere in this prospectus and to "Management's Discussion and Analysis of Results of Operations and Financial Condition" which follows.
BALANCE SHEET DATA: JUNE 30, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 Current Assets $ 70,773 $ 43,229 $ 211 Total Assets 165,069 62,525 78,211 Current Liabilities 222,198 393,389 85,299 Long-Term Liabilities 0 0 0 Stockholders' Deficiency 57,129 330,864 7,088 Working Capital Deficiency 151,425 350,160 85,088 Statement of Loss Data: Six Months Ended Year Ended Year Ended June 30, 2000 December 31, 1999 December 31, 1998 Revenues $ 0 $ 0 $ 0 Net Loss 380,281 565,329 68,231 Net Loss per Share 0.04 0.10 0.02
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis together with our financial statements and the selected financial data and related notes included elsewhere in this prospectus. GENERAL We are a mining company engaged in the acquisition, exploration, and if warranted, development of mining properties located worldwide. We are currently focusing our resources on the exploration of our only project, the Tanoso Reconnaissance License located in Ghana, West Africa, as well as the continued evaluation of other possible mining property acquisitions in the Federal Republic of Nigeria. Our only exploration property is not in production and, consequently, we have no current operating income or cash flow. We are in the exploration stage and have not generated any revenues from operations. We incurred a net loss of $380,281 for the six months ending June 30, 2000, and had an accumulated deficit of $646,149 as of December 31, 1999. The report of the independent auditors on our financial statements for the year ended December 31, 1999, includes an explanatory paragraph relating to the uncertainty of our ability to continue as a going concern. We have suffered losses from operations, require additional financing, and need to continue the exploration of the Tanoso Reconnaissance License. Ultimately we need to generate revenues. Exploration may take years to complete and the amount of revenues, should we ever develop our property, is difficult to determine. Our previous capital needs have been met by the issuance of our common stock, and by offering our common stock in exchange for services rendered. These factors raise substantial doubt about our ability to continue as a going concern. We cannot assure you that we have any reserves on the Tanoso Reconnaissance License, or that we will be able to develop a commercially feasible mining property. Even if we are able to develop a commercially feasible mining property, there is no assurance that we will be able to generate revenues and attain profitability. 13 FINANCIAL CONDITION AND RESULTS OF OPERATIONS We have not generated any revenue. For the six months ended June 30, 2000, we recorded a net loss of $380,281, as compared to $565,329 for the year ended December 31, 1999. The proportionately higher loss for the current fiscal period is due in part to paying CME & Company for its exploration work on the Tanoso Reconnaissance License, and its reconnaissance evaluation in Nigeria. The increased loss is also attributable to higher legal and accounting expenses incurred in anticipation of filing this registration statement. For the six months ended June 30, 2000, the statement of cash flows reflects net cash used in operating activities of $539,477, which was offset by net cash provided by financing activities of $547,765. Since we have no source of revenue, our working capital will be depleted by operating expenses and payments to CME & Company, and we will rely entirely upon external sources of cash. At June 30, 2000, we had a working capital deficit of $151,425. Funds required to maintain the our existence have been provided by related parties and through offerings of our common stock. We require another offering of common stock to provide sufficient working capital. In addition to another offering of common stock, we anticipate that additional financing may be obtained through long- or short-term loans against our equity, or through a joint venture or strategic alliance. We cannot provide you any assurance that we will be able to obtain additional funding, or obtain additional funding with terms favorable to us. Our failure to obtain additional financing could result in delay or indefinite postponement of the exploration programs on the Tanoso Reconnaissance License, and a complete loss of your investment. PLAN OF OPERATIONS We have two primary objectives during the next twelve months. Our first objective is to continue our exploration of the Tanoso Reconnaissance License. On December 15, 1999, we entered into an agreement with Ayaco (Ghana) Limited to acquire the rights to the Tanoso Reconnaissance License. According to the agreement, we assumed an obligation to fund an initial $160,000 work program as set forth within a report by CME (Ghana) Limited dated April 1998, which is a subsidiary of CME & Company, and a separate $295,000 funding and exploration program as set forth in the report by CME & Company dated September 30, 1999. As of June 2000, we performed the initial $160,000 work program, and have completed $150,000 of the $295,000 funding and exploration program. We still need to fund the remaining $145,000 work program. We believe that our exploration activities will enhance the perceived value of the Tanoso Reconnaissance License which, in turn, may allow us to enter into a joint venture or some other strategic alliance for its continued exploration and possible development, if any, or may allow us to obtain additional financing on favorable terms. As a result, we entered into another agreement with CME & Company dated April 7, 2000, and agreed to fund an additional $441,500 exploration program, which includes the remaining $145,000 work program as required by the CME & Company report dated September 30, 1999. On April 17, 2000, we advanced $20,000 to CME & Company and another $25,000 on May 19, 2000 for a total retainer of $45,000 for services to be performed under the agreement. Our second objective is to continue our reconnaissance activities and possibly acquire an option on a mining property in the Federal Republic of Nigeria. On May 3, 2000, we entered into an agreement with CME & Company whereby we agreed to fund a $300,000 regional and detailed evaluation of the southwestern, central and northeastern parts of Nigeria. On May 19, 2000, we advanced $50,000 to CME & Company as a retainer for the services to be performed under that agreement. We are focusing our reconnaissance evaluation to identify potential properties which may contain tantalum and other rare metals. If we are able to find a suitable property, we anticipate that an acquisition will require some form of an option agreement in exchange for the issuance of our shares of common stock, a cash payment, and/or a funding and development commitment. Our reconnaissance and exploration activities are capital intensive. In October 2000, CME & Company exercised 340,000 warrants for proceeds of $51,000. As a result, we believe that we will be able to meet our anticipated operating expenses for the next six months. However, we do not have sufficient financial resources to undertake our planned exploration program on the Tanoso Reconnaissance License, or to undertake our reconnaissance activities in the Federal Republic of Nigeria. As a result, we will need external financing to develop 14 and construct the Tanoso Reconnaissance License and to fund the exploration and development of any other mining property. Sources of external financing may include bank borrowings, joint ventures, and future debt and equity offerings. We cannot assure you that financing will be available on acceptable terms, or at all. The failure to obtain additional financing could result in delay or the indefinite postponement of further exploration and development of our projects, and the possible loss of such properties. We do not anticipate that we will purchase any significant equipment during the next twelve months. We anticipate retaining the services of contractors and other third parties to assist us in our reconnaissance, exploration and development activities. These contractors and other third parties generally use their own equipment and labor and, therefore, we do not anticipate hiring any employees during the next twelve months. ENVIRONMENTAL COMPLIANCE Our current and future exploration and development activities, as well as our future mining and processing operations, if warranted, are subject to various federal, state and local laws and regulations in the countries in which we conduct our activities. These laws and regulations govern the protection of the environment, prospecting, development, production, taxes, labor standards, occupational health, mine safety, toxic substances and other matters. Our management expects to be able to comply with those laws and does not believe that compliance will have a material adverse effect on our competitive position. We intend to obtain all licenses and permits required by all applicable regulatory agencies in connection with our mining operations and exploration activities. We intend to maintain standards of compliance consistent with contemporary industry practice. BUSINESS Our company was organized under the laws of the State of Nevada on June 13, 1997, to engage in the acquisition, exploration, and if warranted, development of mining properties located worldwide. We have acquired and subsequently abandoned several mining properties in pursuit of our business. At this time, we are focusing our operations on the exploration of the Tanoso Reconnaissance License located in Ghana, West Africa, as well as the continued evaluation for other possible mining properties in the Federal Republic of Nigeria. ABANDONED MINING PROPERTIES During 1997, we entered into a letter of intent to purchase an option for mineral properties located in Chihuahua, Mexico. Pursuant to the letter of intent, we paid $15,000 and issued 100,000 shares of our common stock. During 1998, we entered into a separate agreement to purchase an option on 150 mining claims northwest of Elko, Nevada, and we paid $25,000 and issued 100,000 shares of our common stock. We subsequently decided to abandon these properties in 1999, and we have no further obligations with respect to the abandoned properties. THE TANOSO RECONNAISSANCE LICENSE BACKGROUND The Tanoso Reconnaissance License is located at Tanoso in the Techiman District of Ghana, West Africa. On July 5, 1999, Ayaco (Ghana) Limited, an affiliate of our company, entered into an agreement with the government of the Republic of Ghana and paid 250,000 cedis to acquire a twelve (12) month renewable right to conduct geological and geophysical investigations in the licensed area in order to identify the potential of gold and diamond deposits. Under the agreement, Ayaco (Ghana) Limited agreed to fund a $160,000 work program as recommended in a report by CME (Ghana) Limited dated April 1998. If the work program was not entirely funded, then the agreement provided that the difference between the amounts actually expended and the total amount outstanding would become a debt owed to the Ghana government. The yearly rental fee for the Tanoso Reconnaissance License is 614,000 cedis (US$111.67), and pursuant to the Ghana mining laws, the Ghana government is entitled to a 10% net profit interest in the licensed area. 15 ACQUISITION On September 28, 1999, we entered into a Binding Heads of Agreement with Ayaco (Ghana) Limited to acquire an option to purchase the rights to the Tanoso Reconnaissance License from Ayaco (Ghana) Limited. In accordance with the Binding Heads of Agreement, we issued 100,000 shares of our common stock to Ayaco (Ghana) Limited and received an exclusive three month due diligence period. After conducting our due diligence review, we exercised our option to acquire the rights to the Tanoso Reconnaissance License and entered into a separate agreement with Ayaco (Ghana) Limited. Under the separate agreement dated December 15, 1999, we agreed to assume the required $160,000 work program as recommended by CME (Ghana) Limited, a subsidiary of CME & Company, and a separate $295,000 funding and exploration program as set forth in the report by CME & Company dated September 30, 1999. In addition to assuming these obligations, we agreed to issue Ayaco (Ghana) Limited an additional 1,000,000 shares of our common stock. We issued Ayaco (Ghana) Limited 500,000 shares of common stock on January 4, 2000, and we are required to issue the remaining 500,000 shares on December 15, 2000. If we complete the funding and exploration programs, and issue the remaining 500,000 shares of our common stock, then we will receive title to the Tanoso Reconnaissance License, subject to a 10% net profit interest payable to Ayaco (Ghana) Limited and the 10% net profit interest payable to the Ghana government. Although the Ghana government has approved the transfer of the license from Ayaco (Ghana) Limited to our company, subject to a consideration fee, title to the Tanoso Reconnaissance License is currently held by Ayaco (Ghana) Limited. We expect that the consideration fee to be paid to the Ghana government will be a nominal amount. FUNDING AND EXPLORATION REQUIREMENTS We have completed the initial $160,000 work program as recommended in the report by CME (Ghana) Limited dated April 1998, and we filed the appropriate documents with the Ghana government to evidence our expenditures. We have no further obligations with respect to this work program. We are in the process of completing the separate $295,000 funding and exploration obligation as required by the agreement with Ayaco (Ghana) Limited dated December 15, 1999. On October 1, 1999, we entered into an agreement with CME & Company, an affiliate of our company, and CME & Company agreed to perform a $150,000 reconnaissance and exploratory work program on the Tanoso Reconnaissance License. CME & Company completed its services and has received payment from us. We have no further obligations under that agreement. Our funding of this agreement was applied to the $295,000 obligation. On April 7, 2000, we entered into a separate agreement with CME & Company to fulfill the remaining $145,000 of our $295,000 obligation. Under this agreement, CME & Company agreed to perform an additional $441,500 exploration program on the Tanoso Reconnaissance License, which will include trenching, drilling, excavation, and soil and drainage geochemistry. On April 17, 2000, we advanced $20,000 to CME & Company and another $25,000 on May 19, 2000, as a retainer for the services to be performed under the agreement. We will need additional external financing in order to satisfy the remaining $396,500 payments due to CME & Company, which includes our remaining $145,000 obligation as required by our agreement with Ayaco (Ghana) Limited dated December 15, 1999. We will be using a portion of the proceeds from this offering to pay that amount. However, we cannot assure you that we will receive sufficient funds from this offering to meet our obligations. If we fail to obtain additional financing, this could result in the delay or indefinite postponement of further exploration and development activities at the Tanoso Reconnaissance License. As a result, we may also have to exercise our right to terminate the agreement at any time by providing CME & Company two weeks prior written notice and, upon termination, we are required to pay CME & Company for all work and expenses incurred prior to termination. RECONNAISSANCE EXPLORATION IN THE FEDERAL REPUBLIC OF NIGERIA We are currently considering the possible acquisition of mining properties in the Federal Republic of Nigeria. To assist in this endeavor, we entered into an agreement with CME & Company dated May 3, 2000, whereby CME & Company has agreed to perform a $300,000 regional and detailed evaluation of the southwestern, central and northeastern parts of Nigeria. Under the agreement, CME & Company will provide all necessary 16 personnel, equipment, materials and services, and CME & Company will focus its evaluation on properties that may contain tantalum or other rare metal deposits. CME & Company will conduct geological mapping and rock sampling of potential areas, which may be followed by trenching and trench sampling if necessary. On May 19, 2000, we advanced $50,000 to CME & Company as a retainer for the services to be performed under this agreement. Although we have not identified any potential acquisition, and no assurance can be given that we will acquire a mining property in Nigeria, we will need external financing to fund CME & Company's reconnaissance evaluation activities in Nigeria. If additional funding is not obtained, we may have to terminate our agreement by providing two weeks prior written notice and, upon termination, we will be required to pay CME & Company for all work and expenses incurred prior to termination. EMPLOYEES / CONSULTANTS As of the date of this prospectus, we have no employees in our company. We conduct our operations by retaining consultants and independent contractors. FACILITIES Our principal offices are located in Vancouver, British Columbia, Canada. On February 19, 1999, we entered into a sublease agreement with CME Consulting Ltd. for 913.25 square feet. The term of the sublease agreement is from April 1, 1999 to November 30, 2000. In accordance with the sublease agreement, our lease payments are CDN$1,170.41 per month, and every third month we are required to pay an additional CDN$86.67 as a security deposit. The monthly payments include the use of two desks, two chairs, and common office furniture. LEGAL PROCEEDINGS There are no legal proceedings pending and, to the best of our knowledge, there are no legal proceedings contemplated or threatened. DESCRIPTION OF PROPERTY The following is a summary taken from a geological report and property evaluation by Robert J. Griffis, Ph.D., P.Eng., titled "Geological Report on the Ayaco Reconnaissance Concession in the Brong Ahafo/Ashanti Regions of Ghana for Columbia River Resource Inc.", dated March 2000, and submitted as an exhibit to this prospectus. We believe that the summary of the report is fair and accurate. Location and Access The Ayaco reconnaissance exploration licence is located mainly in the Brong Ahafo Region of southwestern Ghana (see fig.1) although a portion of the area includes a very small area in the NW tip of the Ashanti Region. The centre of the area is about 290km NW of Ghana's capital, Accra and it is about 280km north of the port city of Takoradi in the Western Region. It is also about 20km east of Sunyani, the regional capital of Brong Ahafo. The reconnaissance licence covers an area of about 307 sq.km in two separate blocks; the larger northern block makes up about two-thirds of the area and the southern block makes up the balance (see Fig. 3). The reconnaissance licence is dated July 5, 1999 and is valid for a 12 month period after which it may be renewed for a further period up to 12 months or, alternatively, areas within the reconnaissance licence may be applied for as a prospecting concession. According to PNDC Law 153 (Minerals and Mining Law, 1986), a renewal of the licence must be applied for three months prior to the expiry date. By law, exploration work on a reconnaissance licence is intended to have minimal disturbance on the land and would normally exclude drilling and any substantial surface excavations. The latter, more advance type of work would be appropriate on prospecting licences which are generally smaller (up to 150 sq.km); such licences cover up to 3 year periods and are also renewable. Independent enquiries at the Minerals Commission which recommends 17 and oversees exploration and mining licences indicates that the Ayaco concession is currently in good standing. A further requirement is that a qualified professional who will oversee the exploration work on a reconnaissance or prospecting licence must apply for a prospecting permit which is issued by the Mines Department and is renewable on an annual basis. The reconnaissance licence is held in the name of Ayaco (Ghana) Ltd., a local company which has entered a joint venture agreement with Vancouver-based Columbia River Resources Inc. (CRRI). This agreement, dated December 10, 1999, calls for CRRI to earn an 80% interest in the Ayaco concession, leaving Ayaco with a 10% net profit interest and the Government receives its mandatory non-contributing 10% interest. Access to the general area is quite good. The southern (or western) block is located immediately north of the paved highway between Kumasi and Sunyani; a well-maintained gravel road from Kyeraa crosses part of the concession. The northern (or eastern) block is traversed by the Kumasi-Techiman highway and a good gravel road which links up the main highways to Techiman and Sunyani. A number of 4WD dirt roads are also present in both blocks and, as elsewhere in southern Ghana, footpaths and dirt tracks to small villages and farms criss-cross much of the area. The area occurs in the headwaters of the Tano River which cuts across both blocks of the concession and includes many secondary and tertiary tributaries that form a dendritic pattern throughout the region. The topography is gently undulating with the highest hill just over 400m (approximately 1300-1350 ft) and most of the main valleys being at about 300m (approximately 1000 ft). The lowest elevation is about 240m (approximately 800 ft) along the main Tano River valley where it exits the southern block of the concession; the same river has an elevation of close to 320m (approximately 1050 ft.) at Tanoso on the Kumasi-Techiman highway. On a regional basis, it appears that the tops of the hills and ridges in the area probably correlate with an old, now largely dissected, peneplain which is gently tilted to the SW. The Tano River will be the only perennial river in the area whereas virtually all of the tributaries will flow mainly in the rainy seasons. The area falls within the wet semi-equatorial belt which features relatively abundant rainfall (on average about 1400mm/yr) occurring in two main seasons. The initial season generally starts in about March and peaks in June. There is a drop-off in July-August and then a second season which falls mainly in September-October. The months of November through February are usually quite dry and generally mark the `Harmattan' season when the dry, dusty winds from the Sahara cover the region. For most of the year daily temperatures fall in the range 25(Degree)-35(Degree)C; during the Harmattan, night-time temperatures may dip below 20(Degree)C and in March before the main rains arrive, the day-time temperatures will often be in the high 30's. The relatively high rainfall and warm temperatures produce quite luxurious forest growth featuring a great variety of high canopy tropical hardwoods typical of the moist semi-deciduous forest zone which covers most of southwestern Ghana. Although much of the primary forest has been removed by timbering and farming, most of the forest reserves in the area host advanced secondary growth. In recent years the Government of Ghana has been making a concerted effort to preserve the dwindling forest reserves throughout the country. Towards the north part of the concession, the area starts to feature more open areas with fewer trees and grasslands which become more extensive in the savannah lands just to the north of the area. The area features a few larger towns within are immediately adjacent to the concession blocks; these include Kyraa just west of the southern block and Tanoso, Afrantwo and Akumadan along the Kumasi-Techiman highway by the northern block. Quite a few smaller villages and hamlets are scattered around the area, especially in the southern block of the concession. The area falls within the cocoa belt of southern Ghana and this is the main cash crop for the area. In addition, farming of maize, cassava, various types of yams and plantain is very widespread but intended mainly for local use. 18 HISTORY The dominant gold producing area in Ghana has been in the Ashanti belt where probably 90% of the production has come from in the past 100 years and where much of the previous artisanal mining was concentrated for centuries (Junner, 1935; Kesse, 1985). However, the Sefwi belt has had some important production, mainly from the Bibiani area, but there are very widespread indications of extensive historical small-scale surface mining in many parts of the belt as well as small underground operations within the past 50-60 years. Of course, the more remote location of the Sefwi belt has contributed to the lack of more extensive exploration and the overall potential was always considered quite positive. In recent years, this view has been very much substantiated and new, important discoveries, particularly in the Yamfo district, promise to see very significant production in the near future. At the south end of this belt, Cote d'Ivoire, the Eden Roc group of Canada developed a number of small open-pit operations in the mid 1990s in the general vicinity of Anuiri. Although this operation closed a couple of years ago, the area certainly has considerable potential for shallow open-pit or deeper underground operations. Unfortunately, much of the primary gold in this area is refractory and will require roasting or bioxidation treatment methods to recover gold closely associated with arsenopyrite and pyrite and usually hosted in quartz veins and stockwork systems. On the Ghana site of the border, small production from shallow underground mines occurred in the 1930s and into the early 1950s from prospects SE of Enchi. Starting in the late 1980s this area has attracted considerable exploration attention and although significant mineralized gold systems over a strike length of at least 15km has been confirmed, the gold is largely confined to relatively narrow vein systems. As yet, not viable prospects have been confirmed although the overall potential must still be considered as quite good. The Enchi prospects occur on the eastern margin of the belt and appear to be closely associated with regional structures that may extend into the Anuiri area. The largest producer in the belt has been from the underground operations at Bibiani that produced over 2 million ounces; modern production in this area started at the turn of the century but most of the production came in the period 1935-1965. The mine closed in 1969 but renewed interest in the 1990s has resulted in a major new open-pit operation, producing at rate of about 250,000 ozs/yr at overall costs of less than 175USD/oz. This project was largely the result of exploration work by the Canadian junior, International Gold Resources which was later taken over by Ashanti Goldfields. At Bibiani much of the gold is associated with an extensive quartz stockwork system related to a major NE trending fault complex; most of the gold is free-milling. Immediately south of Bibiani are series of prospects on a concession held by Chirano Goldfields and currently being explored by the Australian junior, Red Back Mining. Earlier, this property had been explored by Placer Dome and later by Reunion Mining but the potential has been considerably enhanced by extensive drilling carried out by Red Back. Many of the prospects in this area are related to quartz stockworks hosted by intermediate intrusives and again associated with NE trending faults. Current indications are for a resource potential of about 1 million ounces of gold and substantial production is likely to result in due course as grades appear favourable and both the oxides and primary mineralization is free-milling. The most exciting new development in Ghana's gold sector has come recently from the long neglected western margin of the Sefwi belt in what is now generally referred to as the Yamfo district. At the beginning of the 1990s, Dr Alex Barko, a Ghanaian consultant successfully applied for a prospecting concession (in the name of Minconuslt Ltd.) immediately east of the town of Yamfo and not far from the regional capital, Sunyani. Barko's research into historical data indicated very elevated gold values in panned concentrates, from the Susan river which were reported in an annual report of the Gold Coast Geological Survey in the mid 1930s. At about the same time as Dr Barko acquired the Yamfo concession, the BGR/Ghana geological Survey regional mapping program confirmed extensive soil geochemical anomalies in the same general 19 area. After some preliminary exploration work, Minconsult entered into a JV with the Gencor group of South Africa. Further successful results brought the BRGM/La Source group of France into the area as they had a regional (West Africa) JV arrangement with Gencor and acquired several adjacent properties along strike from the Yamfo concession, then held in a new company, Centenary Mining, which was controlled by Gencor. Eventually the Normandy Poseidon group of Australia entered the picture when it essentially acquired control of the La Source group and they eventually took control of the area when they bought Gencor's interest when most of Gencor's gold assets were sold of to Gold Fields. Southwest of Yamfo (approximately 30km), a longstanding concession was held by S. Amegashie and Partners over the known Kenyase prospects. Early work on the concession (late 1980s) was encouraging but not definitive and eventually the property was JV'd to Noel Kiernan's Irish company, Moydow. Moydow followed up some of the earlier work and extended the soil geochem coverage in the area. Eventually drilling on the relatively low rank geochemical anomaly at Ntotoroso produced very favourable results. By this point, Moydow negotiated an agreement with Normandy Poseidon whereby Normandy would acquire a major interest in the project with an option to earn a majority interest but Moydow would manage the exploration work through to a feasibility stage. Although little technical and geological data have been released by Normandy, Moydow has announced most of their drill results and some geological information on the Ntotoroso prospect area. The whole belt is now developing into a major exploration play; the main zone of interest has a strike length exceeding 40km with Kenyase in the south followed by Ntotoroso, Bosumkese, Yamfo and Subenso at the north end (see Fig. 4). All the prospects have a strong structural control along a major NE trending fault corridor and mineralization is hosted in a number of units although the dominant host is a belt-type intermediate granitoid, especially at the southern end of the district whereas further to the north Birimian metasediments appear to be the preferred host. At Ntotoroso, the mineralization in the belt granitoid is apparently controlled by shallow-dipping structures with extensive silicification, sulphides and carbonate alteration which result in quite wide (20-50+m) zones of mineralization an most of the gold appears to be free-milling. At present, the Normandy group is in the feasibility stage and are expected to make a positive production decision on the Yamfo concession later this year. The Moydow group is currently at a pre-feasibility stage but proceeding very aggressively to complete drilling and resource estimates. The general indications are that the combined resources evaluated by Normandy (mainly the Subenso, Yamfo and Kenyase prospects) will likely be in the order of 5 million ozs whereas the Ntotoroso zone may contribute at least another 2 million ozs. This is certainly the most exciting mining project in Ghana for many years and, along with the Morilla project in Mali, the most exciting exploration/mining gold project in West Africa. Ayaco's location along strike from the nearby Yamfo-Subenso prospects must be considered quite favourable. Part of this area was apparently under licence to the Gencor group several years ago but details on the nature and extent of any work is not currently available. It would appear that Gencor dropped part of the area based on a geological interpretation that the main Yamfo structure swings to the ENE just north of the Centenary concession where they retained some area. However, the interpretation of the complicated structure in this area is difficult and it appears quite possible that some of the major structures in the Ayaco concession area extend to the Yamfo area. RECENT WORK RESULTS Two technical reports by CME & Company ("CME") on recent work (dated September 30, 1999 and February 15, 2000) on the Ayaco concession were supplied to the author. These reports are quite thorough and, as a result, a site visit was considered unnecessary. In addition, the author has been involved in other exploration work in nearby areas and is quite familiar with the geographic and geological conditions in the concessions area. 20 CME conducted the exploration on the Tanoso Reconnaissance Licence. The fieldwork carried out by CME has been of a high professional standard utilizing exploration methods that have proven very successful elsewhere in this region. Care has been taken to ensure the integrity of the sampling and analytical methods using laboratories with well-established reputations in the industry. RECONNAISSANCE EXPLORATION The initial reconnaissance exploration work carried out on the Ayaco concession involved broad-scale geological mapping and stream sediment sampling which has proven to be an effective means to detect the presence of possible gold-bearing structures and to prioritize areas for more detailed prospecting and exploration. The stream sediment program included 138 samples covering most of the concession. Two types of samples were taken; one type (active) included samples taken from straight portions of stream channels where the sediment would include typical sediment load including a small proportion of heavy minerals such as gold; the second type (trap) was taken from areas in the channel where concentrations of heavy minerals would be expected, for example, on the leeward side of boulders, at the base of waterfalls etc. Approximately 2kg of samples were taken from each site after having been we sieved and the -2mm fraction retained for analysis. Locations of samples were aided by using hand-held GPS units and following drainages defined on the topographic map (1:50,000 scale). The two methods are generally complimentary with the trap samples giving a slightly better indication of coarse gold entrained in the base of the stream sediment load and the active sampling giving a better indication of very fine-grained gold that my adhere to clastic particles throughout the stream bedload. Although the number of samples (64 active samples and 74 trap samples) is perhaps not enough for a rigorous statistical analysis, they certainly are sufficient to indicate background and anomalous levels with considerable confidence. The 2kg samples were sent to Transworld Laboratories, a reputable analytical facility in Tarkwa which has been operating in Ghana for several years. Each of the samples was dried, pulverized and bottle rolled for 24 hours with a strong cyanide solution which would dissolve virtually all of the contained gold. The gold in solution was precipitated and the concentration determined with an AA finish. This method is especially useful in detecting very low levels (300 parts per trillion or 0.3 ppb) of gold in samples and is now routinely used in many exploration projects. For the active stream samples (64), a statistical analysis indicated three main populations; the lowest population has threshold value of 4ppb, whereas a second population has a threshold level of 10ppb and anomalous values are taken to be those samples over 32ppb. The lower population probably reflects low background levels in metasediments whereas the second population probably with slightly higher background levels appears to correlate with areas underlain by metavolcanics (mainly basalts). A total of seven anomalous values (13.8% of population) over 32ppb were determined; these were in the range of 32 to 856ppb and 4 of the 7 samples were above 100ppb which would be considered very anomalous. The trap samples (74) appear to indicate four populations with an anomalous threshold of 45ppb. The other populations also appear to reflect background levels in metasediments and metavolcanics. Eight samples (8.3% of population) were above 45lppb and ranged as high as 1408ppb; five of these samples were above 150ppb which would be considered very anomalous. As noted by CME, quite a few of the active samples have higher background levels of gold which suggests a possible bedrock source with very finely disseminated gold. The regional stream sediments indicated significant anomalies in the southern half of the western block. These areas were selected for more detailed evaluation that included airphoto interpretation, soil geochemistry, ground magnetometer survey and a limited pitting and trenching program. 21 PRELIMINARY FOLLOW-UP EXPLORATION PROGRAM The follow-up exploration program to isolate and evaluate bedrock sources of stream geochem anomalies was carried out over about a three month period at the end of 1999. The initial work involved an airphoto interpretation to identify regional structures, especially those that may extend northwards from the Yamfo area. A number of early NE features as well as later cross-cutting fracture systems were identified. This was followed up by an extensive soil geochemical survey, concentrated in the southern portion of the western block where stream geochemical sampling had been encouraging and where favourable structures have been interpreted. Soil geochemistry has certainly been demonstrated to be the single most effective tool for gold exploration in Ghana over the past 15 years and it should prove very useful in the Ayaco concession area. Control for the soil geochemical program was provided with an extensive cut and surveyed grid (total 159 line km) with a baseline oriented approximately NE and the cross-lines, spaced at 400m, oriented NW-SE. Samples were taken at 25m intervals on the cross-lines but initially, every second sample was analysed; if results from the first set of analyses produced anomalies, then the adjacent samples were analysed. In addition, areas with good anomalies on the 400m lines were resurveyed with additional cross-lines at 100m intervals and samples taken at 25m intervals. Soil samples were taken at 40-50cm depth, fully logged and dispatched to Transworld Laboratories in Tarkwa where samples were processed and 30gm fractions treated with aqua regia and the dissolved gold determined by AAS. A total of 344 soil samples were analysed for gold and all of the procedures followed by CME were quite standard and appropriate. In addition to the gold analyses, pulps from the soil samples were sent to the well-established ACME Analytical Laboratories in Vancouver for multi-element ICP analysis. In many instances, certain trace elements are effective pathfinders for gold, and multi-element analysis will sometimes help to discriminate and prioritize various anomalies and target areas. However, in Ghana, experience to date has certainly demonstrated that gold anomalies in soils are certainly the best indicator for gold in underlying bedrock and other multi-element analyses are much less indicative. Due to the widespread association of arsenic with gold in many Birimian occurrences, it is common and often quite useful to include arsenic analysis as was done in the Ayaco soil geochem program. Discussion of soil geochem results are in the following section of this chapter. After completion of the surveyed grid for soil geochem, a ground magnetometer survey was also carried out. Again the intent was to get a better indication of bedrock geology because of the very limited exposures, and especially to assist in identifying possible bedrock structures which may have anomalous magnetic signatures or may be interpreted by possible offsets in bedrock lithologies with distinctive magnetic signatures. This survey was carried out by Spectral Geophysics who have conducted many similar surveys in Ghana over the past several years. The results have confirmed the probable presence of various types of bedrock structures (mainly folding and faulting) and, in particular, have identified one fairly strong NE trending magnetic anomaly in close association with major gold anomalies in the soils. The preliminary exploration program also included a limited number of pits (21 in total) located mainly in Area 1 of the grid (see Fig. 6) where the major soil anomalies occur. In addition, four trenches, each 100m long and about 3m deep, were completed in the same general area to test bedrock areas underlying some of the geochemical anomalies. Results of this work are also discussed in the following section. SIGNIFICANT RESULTS The soil geochemical survey was carried out over the priority areas in the southern portion of the western block as indicated by the stream sediment anomaly patterns. A geostatistical evaluation of soil geochemical data revealed a threshold value of 25ppb Au and results above this value are considered to be anomalous. Three broad areas of 25+ppb Au were indicated within the grid; two 22 of the areas (#2 and 3 on Fig. 6) are broadly but quite weakly anomalous whereas #1 is distinctly more interesting. The broad anomalous zone of Area #1 covers a strike-length of approximately 2.8km and is up to about 400m wide; it is oriented with a long axis at approximately NE-SW. Details of Area #1 are shown in Fig 7. Within the broadly anomalous areas are two zones with significantly higher values. The western zone extends from line 11400E to about line 12100E (minimum 700m length) and is variable in width from about 50 to 200m; most of the soil values are 100+ppb au with five samples being above 250ppb and a high of 546 ppb. The eastern zone in Area #1 is noticeably stronger with a length of about 1000m (from line 128000E to 13800E) and a fairly consistent width of 150-200m; values within this zone are also mainly above 100ppb with 11 samples above 250ppb Au and two samples above 1000ppb Au. This is obviously a significant anomaly worthy of detailed follow-up work. The pits were scattered throughout much of Area #1 (see Fig. 7) to better evaluate individual soil sample results and the four trenches were extended along line with multiple sample anomalies (see Fig. 7). The significant results from the pits and trenches are summarized in the attached tables. All pit and trench samples were fire assayed (50gm aliquots) at Transworld in Tarkwa. Most of the pits and trenches reached the weathered saprolite which should give a generally good indication of bedrock mineralization. Many of the pits yielded anomalous bedrock gold values above 200ppb Au (0.2 g/t) and quite a few indicated values in excess of 500ppb Au (0.5g/t). The best results were in pit #6 (on line 12900E and 4700N) located at the western end of east zone of Area #1; this pit gave results of 3.3 and 3.9 g/t in two of the channel samples and a grab sample of a narrow, horizontal quartz vein (more or less in place) in the pit yielded a value of about 7.2 g/t. This pit certainly confirms the presence of mineralized vein structures and disseminated gold values in adjacent metasediment hostrock. In the trenches, narrow zones of anomalous bedrock values were indicated in trenches 1,3 and 4. Trench #1, at the north end of Area #1, is in an area with isolated geochemical highs whereas 3 and 4 are located in and adjacent to the strong anomaly at the eastern end of Area #1. The best results are a 6m zone in trench #3 averaging about 0.7g/t and there are several other zones (2-6m wide) with values in the range 0.5-1.2g/t. Trench #4 yielded several narrow zones (1-4m wide) with values in the range of 0.2-0.6g/t. Grab samples of quartz veins and veinlets from both trench #3 and #4 yielded several values greater than 1g/t with the two highest being 6.1g/t (trench #3) and 4.7 g/t (trench #3). Although the mineralized zones are not very wide, the results are nevertheless encouraging and further confirm mineralized bedrock structures (vein systems) and disseminated gold in the metasedimentary hostrocks. These results indicate that more systematic follow-up work is warranted.
Table 2: Selected Gold Results: Pitting (after CME - February 15, 2000 Report) ------------------------------------------------------------------------------------ Pit Sample Sample Pit Sample Number Direction Length (m) Result (ppb Au) ------------------------------------------------------------------------------------ 2 vertical 0.90 442 ------------------------------------------------------------------------------------ 2 horizontal 1.10 429 ------------------------------------------------------------------------------------ 2 horizontal 1.00 1,418 ------------------------------------------------------------------------------------ 3 vertical 3.00 318 ------------------------------------------------------------------------------------ 3(including) vertical 2.00 399 ------------------------------------------------------------------------------------ 3(including) vertical 0.40 662 ------------------------------------------------------------------------------------ 3 horizontal 0.80 448 ------------------------------------------------------------------------------------ 4 vertical 0.60 344 ------------------------------------------------------------------------------------ 5 vertical 1.60 111 ------------------------------------------------------------------------------------ 6 vertical 2.56 3,320 ------------------------------------------------------------------------------------ 6(including) vertical 1.50 3,861 ------------------------------------------------------------------------------------ 23 ------------------------------------------------------------------------------------ 6 - Grab: 7,159 quartz vein ------------------------------------------------------------------------------------ 7 vertical 2.21 177 ------------------------------------------------------------------------------------ 9 vertical 1.50 102 ------------------------------------------------------------------------------------ 9(including) vertical 0.75 137 ------------------------------------------------------------------------------------ 11 vertical 1.40 661 ------------------------------------------------------------------------------------ 12 vertical 0.55 763 ------------------------------------------------------------------------------------ 12 - Grab: 1,966 quartz vein ------------------------------------------------------------------------------------ 13 vertical 2.30 127 ------------------------------------------------------------------------------------ 14 vertical 1.10 713 ------------------------------------------------------------------------------------ 17 vertical 1.09 370 ------------------------------------------------------------------------------------ 17 horizontal 1.10 871 ------------------------------------------------------------------------------------ 17 horizontal 1.00 281 ------------------------------------------------------------------------------------ 20 horizontal 0.82 248 ------------------------------------------------------------------------------------
Table 3: Selected Gold Results: Trenching (after CME - February 15, 2000 Report) -------------------------------------------------------------------------------------------- Trench Sample Sample Length Trench Sample Number Direction (m) Result (ppb Au) -------------------------------------------------------------------------------------------- 1 horizontal 2 667 -------------------------------------------------------------------------------------------- 1 horizontal 2 839 -------------------------------------------------------------------------------------------- 3 horizontal 6 390 -------------------------------------------------------------------------------------------- 3(including) horizontal 2 952 -------------------------------------------------------------------------------------------- 3 vertical 2 528 -------------------------------------------------------------------------------------------- 3 horizontal 6 714 -------------------------------------------------------------------------------------------- 3(including) horizontal 2 1,225 -------------------------------------------------------------------------------------------- 3 vertical 2 739 -------------------------------------------------------------------------------------------- 3(including) vertical 1 1,354 -------------------------------------------------------------------------------------------- 3 - Grab: quartz 739 stringers -------------------------------------------------------------------------------------------- 3 - Grab: quartz 4,664 stringers -------------------------------------------------------------------------------------------- 4 Horizontal 4 304 -------------------------------------------------------------------------------------------- 4 Vertical 1 309 -------------------------------------------------------------------------------------------- 4 Vertical 1 573 -------------------------------------------------------------------------------------------- 4 Vertical 2 222 -------------------------------------------------------------------------------------------- 4(including) Vertical 1 274 -------------------------------------------------------------------------------------------- 4 Vertical 1 241 -------------------------------------------------------------------------------------------- 24 ------------------------------------------------------------------------------------------- 4 - Grab: quartz 6,093 stringers -------------------------------------------------------------------------------------------- 4 - Grab: quartz 1,967 stringers -------------------------------------------------------------------------------------------- 4 - Grab: quartz 172 stringers -------------------------------------------------------------------------------------------- 4 - Grab: quartz 1,141 --------------------------------------------------------------------------------------------
EXPLORATION EXPENDITURES Details on expenditures to date were not available for this report but it is estimated that the initial reconnaissance work probably cost in the order of $50,000 whereas the preliminary follow-up program probably cost about $250,000. The original cost estimates by CME for the follow-up work was about $295,000 but this included a considerably larger grid and more geochemical sampling than was eventually completed. In both cases, the estimated costs would represent good value for the work carried out. PROPOSED WORK PROGRAM The following recommendations are presented. o The reconnaissance licence should be immediately converted to a prospecting licence (150 km2 maximum) in order to carry out additional exploration work on the property not legally permissible on reconnaissance licenses. A qualified technical expert should also obtain the mandatory prospecting permit from the Mines Department in order to oversee future work on the project. If necessary, a second prospecting licence may be applied for if the 150 km2 maximum does not cover all areas of interest. o The two priority target areas for immediate attention should be the strong soil anomalies outlined in Area #1 at the southern end of the western block. Other areas with more isolated stream and soil anomalies should not be neglected. o The follow-up work in Area #1 should entail more extensive trenching followed by a preliminary drilling program. The trenching would likely involve up to about 2000m of trenching with most trenches 100-200m long and a maximum of 3m deep; this work should be carried out only in the dry season as the soil becomes quite waterlogged in the wet season and collapsing of trench walls can be a significant safety hazard. After the trenches have been thoroughly sampled, mapped and surveyed, and after drilling has been completed, most of the trenches should be re-filled to avoid future accidents to local inhabitants and any open trenches required for future work should be safely cordoned off. o The initial drilling should probably consist of RAB drilling (approximately 8000m) which is relatively inexpensive but can give reliable data on gold values to shallow depths (perhaps to 50m depending on ground conditions). This is, in effect, a scouting drill program to better outline areas of interest confirmed by the soil geochemistry and additional trenching. Encouraging results from trenching and RAB drilling would be followed by more detailed RC drilling which is considerably more expensive but also provides much more reliable samples that can be used more effectively in resource estimates. o Additional ground geophysics may also prove very useful in helping to prioritize drill targets and to assist in better defining bedrock structures of possible interest. An IP survey (10-20 line km) in the priority areas of Area #1 may be quite effective in outlining zones in the bedrock with disseminated sulphides which are probably associated with gold-bearing structures and vein 25 systems. Additional ground magnetic surveying will assist in identifying structures and the lithologies of the underlying bedrock. o These recommendations are in general accord with those of CME (February 15, 2000 Report) and, as noted by CME, additional work is also required to further evaluate other areas of the concession. o The CME recommendations call for overall expenditures of about $300,000. The above program should cost about the same amount; the lower RAB drilling cost will permit more drilling than the 5000m of RC drilling recommended by CME. In addition, the above program includes modestly more trenching (or pitting where appropriate) than recommended by CME. It may be possible to carry out the above program in the period mid March-June but because of uncertainty on the timing of the rainy seasons, it may be more prudent to delay the work until later in the year after the main rainy season is over and ground conditions improve for trenching and drilling which are the critical activities of the proposed program. GHANA, WEST AFRICA We have compiled the following information from governmental and private publications, and believe the same to be fair and accurate. GENERAL INFORMATION Ghana is a country in West Africa near the equator and on the Greenwich Meridian, bounded on the northwest by Burkina Faso, on the east by Togo, on the south by the Gulf of Guinea, and on the west by Cote d'Ivoire, which is also known as the Ivory Coast. Ghana's total geographical area is 238,537 square kilometers (92,100 square miles), and its capital is the city of Accra. Other significant cities include Kumasi, Tema, Tamale and Sekendi-Takaradi. Although there are numerous African languages spoken in Ghana, English is the official language. Ghana is an agricultural country with mineral deposits, including gold, diamonds, bauxite and manganese. Ghana's leading exports are gold, cocoa (beans, butter, chocolate), tropical hardwoods, bauxite, diamonds, and manganese. Ghana is a member of the Economic Community of West African States (ECOWAS). POLITICAL BACKGROUND In 1874, the area of Ghana was a colony of Great Britain. By 1901, Great Britain had annexed Ashanti and declared a protectorate over the country's north. In 1957, the area gained independence and took the name Ghana, and British Togoland became part of the new country. During the 1970's and early 1980's, Ghana suffered severe economic problems. In 1981, one of the former military leaders, Flight Lieutenant Jerry Rawlings, led a revolt and gained control of the government, and political parties were banned. At or around 1990, Ghana experienced pressure from the Western nations concerning its militia government, and the Western nations used economic aid as an incentive for the return to a democratic government. This led to the formation of new political organizations and a gradual return to a democratic society. In December 1990, Flt. Lt. Rawlings announced proposals for the introduction of a new Constitution by the end of 1991. In May 1991, Flt. Lt. Rawlings established a consultative assembly, which was to a draft a new Constitution. On April 28, 1992, the new Constitution was subsequently approved by 92% of votes cast during a national referendum, with 43.7% of the electorate voting. A program for the transition to a multi-party system was drafted, and in the following years a number of political associations were established. In the presidential election on November 3, 1992, Flt. Lt. Rawlings secured 58.3% of the votes. Although international observers maintained that the election had been conducted fairly, the main four opposition parties, which had contested the election, claimed that electoral impropriety had taken place. In protest, these parties withdrew from the forthcoming legislative elections. As a result, the pro-government National Democratic 26 Congress secured 94.5% of the electoral seats. On January 7, 1993, Flt. Lt. Rawlings was sworn in as President and the new Parliament was inaugurated. Under the terms of the Constitution, Ghana has a multi-party political system. Executive power is vested in the President, who is the Head of State as well as the Commander-in-Chief of the Armed Forces. The President is elected for a maximum of two four-year terms. Legislative power is vested in a two hundred member unicameral Parliament, with each member elected for four years. The running mate of the successful Presidential candidate becomes the Vice-President. The President appoints the Cabinet, subject to approval by Parliament. RECENT ECONOMY Ghana's economy has suffered a sustained decline since the mid-1970s. In 1983, the government introduced an extensive economic reform program that received financial support from the International Monetary Fund and the World Bank. The economic recovery program and subsequent government actions have improved Ghana's economic position. Ghana's gross domestic product averaged 4.5% in 1999. The annual rate of inflation declined from approximately 123% at the end of 1983, to single digits in late 1999. Ghana's economy still depends upon receiving foreign aid. Ghana's currency is a cedi, and at the end of 1999, one U.S. dollar equaled 4,400 cedis. The major minerals exported from Ghana are gold, bauxite, diamonds and manganese. Ghana is Africa's second largest gold producer behind South Africa. MINING LAW Under the Constitution and the mining laws of Ghana, all minerals in Ghana in their natural state are the property of the government of Ghana, and title is vested in the President on behalf of, and in trust for, the people of Ghana. The government of Ghana grants certain rights to these minerals through licenses and leases. A license is required for the export and disposal of minerals and the government has a pre-emptive right over all such minerals. The Minister of Energy and Mines generally has the power to negotiate, grant, revoke, suspend or renew any mineral right. The government holds, as of right and without payment of any compensation, a 10% interest in the rights and obligations of all reconnaissance, prospecting or mining operations in relation to a mineral right, and the government has the option to acquire an additional 20% interest where any mineral is discovered in commercial quantities, on terms agreed between the government and the holder of the mining lease. In addition, the Ghana government is entitled to a net royalty of 3% to 12% of all mineral sales. In addition, the government may acquire an interest in any Ghana company engaged in mining operations in Ghana, which will result in the company having to obtain the government's approval for (1) any action which will have the effect of making a person a controller of the company; (2) the voluntary bankruptcy or liquidation of the company; or (3) the disposal of any mining lease or a substantial asset of the company. Under the mining laws, a "controller" is defined as a person who either directly or indirectly directs the affairs of the company or controls at least 20% of the voting power. There are two kinds of licenses: a reconnaissance license and a prospecting license. A reconnaissance and prospecting license grant the right to erect camps or temporary buildings and installations in the licensed area. A prospecting license also grants the right to make boreholes and such other excavations. A prospecting license is granted for an initial period of not more than three (3) years and may be renewed at the government's discretion. If the holder desires to mine any minerals on the property, the holder is required to apply for a mining lease. A mining lease grants the right to take all reasonable measures on and under the surface of the property in order to mine, erect equipment, plant and buildings, to prospect within the mining area, and to stack mineral waste in an approved manner. Activities such as the diversion of water require separate licenses or governmental consents. A mining lease is granted for a period of not more than thirty (30) years and may be renewed at the government's discretion. A holder of a mining lease is obligated to file a mining, recruiting and training program with the government and comply with its terms. A holder of a mining lease is required to seek government consent on various issues, which may withheld in the government's sole discretion. 27 MANAGEMENT OFFICERS AND DIRECTORS Our officers and directors are as follows:
NAME AGE POSITION Robert R. Ferguson 45 President, Treasurer and Director since inception. Robert F. Weicker 43 Director since August 1998 Tim Earle 43 Secretary since August 1998
The term of office of each director ends at the next annual meeting of our stockholders or when such director's successor is elected and qualifies. The term of office of each officer ends at the next annual meeting of the our board of directors, which is expected to take place immediately after the next annual meeting of our stockholders, or when such officer's successor is elected and qualified. Since our inception, we have not had an annual meeting of our stockholders. ROBERT R. FERGUSON, PRESIDENT, TREASURER AND DIRECTOR SINCE INCEPTION IN JUNE 1997. As President, Treasurer and Director, Mr. Ferguson is responsible for our day-to-day operations, including corporate development, investor and media relations, and corporate finance. From 1993 to 1997, Mr. Ferguson was the manager of corporate development for Eldorado Gold Corporation, Vancouver, British Columbia, and a separate company, HRC Development Corporation, Vancouver, British Columbia. In that capacity, he was responsible for supervising the investor relations department, prepare and deliver corporate presentations, and assist in the preparation of the annual and quarterly reports to the shareholders. From 1986 to 1992, Mr. Ferguson was the manager of investor relations for American Reserve Mining Corporation, Vancouver, British Columbia, and was responsible for similar activities. Mr. Ferguson received his high school diploma in 1975, and has since completed seminars on managing and directing a public company, and the Canadian securities laws. Mr. Ferguson owns a minority interest in a small chain of restaurants and bars located in Vancouver, British Columbia. He has been a member of the Prospectors and Developers Association in Vancouver, British Columbia since 1994. ROBERT F. WEICKER, DIRECTOR SINCE AUGUST 1998. From September 1995 to September 1999, Mr. Weicker was the Manager of Exploration for Newhawk Gold Mines Ltd., in Vancouver, British Columbia. Mr. Weicker was responsible for directing the exploration functions of the company, and assisted the company with acquisitions in Canada and the United States. From May 1994 to August 1995, Mr. Weicker was the President and Chief Executive Officer of Oracle Minerals Inc., a Canadian publicly traded mineral exploration company located in Vancouver, British Columbia. In that capacity, Mr. Weicker supervised and coordinated the company's exploration activities in El Salvador and in Ontario, Canada. From January 1989 to February 1994, Mr. Weicker was the Chief Mining Geologist for Equinox Resources Ltd., a Canadian publicly traded mineral exploration and production company in Vancouver, British Columbia. Mr. Weicker was involved in the direction, growth and administration of the company, including project generation, property evaluations, budgeting and assessment reporting, ore reserve calculations, and geotechnical and environmental concerns. Mr. Weicker is a registered Professional Geoscientist in the Province of British Columbia, Canada, and a member of The Association of Professional Engineers and Geoscientists of British Columbia. Mr. Weicker graduated from the University of Waterloo in 1977 and received a degree with honors Earth Sciences. TIM EARLE, SECRETARY SINCE AUGUST 1998. Since 1993, Mr. Earle has been the President of Leare Developments Ltd., a real estate development and consulting company in Vancouver, British Columbia. Mr. Earle is responsible for identifying, acquiring, and rezoning real property for residential and commercial uses. Mr. Earle also manages the construction and leasing of improvements on real property. Since 1999, Mr. Earle has been a Director and Treasurer of Longwood Brew Pub Ltd., a restaurant and bar located in Nanaimo, British Columbia. From 1985 to 1992, Mr. Earle was an associate with Realtech Realty Corporation, in Vancouver, Canada. Mr. Earle was responsible for establishing a sales division in conjunction with the financing of commercial properties for institutional funds. From 1980 to 1984, Mr. Earle was an associate with Knowlton Realty Ltd., a 28 commercial real estate firm in Calgary and Vancouver, Canada. Mr. Earle's duties included lease negotiation, management of properties, and development and valuation analyses. Mr. Earle has been a licensed real estate agent in Canada since 1991. Mr. Earle received a Diploma of Technology in Administrative Management - Real Estate Option from the British Columbia Institute of Technology in 1980. No other directorships are held by each director in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any company registered as an investment company, under the Investment Company Act of 1940. Messrs. Ferguson, Weicker and Earle may be deemed to be "promoters" and "control persons" of our company, as that term in defined in the Securities Act of 1933. KEY CONSULTANTS AND CONTRACTORS As of the date of this prospectus, we have no employees in our company. We conduct our operations by retaining the following key consultants and contractors: 1. FREEFORM COMMUNICATIONS INC. On January 1, 2000, we entered into a one year agreement with Freeform Communications Inc., an affiliate of our company which is owned by operated by Robert R. Ferguson. Under the agreement, Freeform Communications Inc. provides day-to-day management consulting services to our company for $1,650 per month. 2. CME & COMPANY. We have retained CME & Company to provide exploration services on our Tanoso Reconnaissance License, and to evaluate potential acquisitions in Nigeria. CME & Company is an affiliate of us and became our controlling shareholder by accepting shares of our common stock in exchange for services rendered. Since our inception in June 1997, we engaged CME & Company to perform services as follows: a. Under the agreement with CME & Company dated, October 1, 1999, CME & Company agreed to perform a $150,000 reconnaissance and exploratory work program on the Tanoso Reconnaissance License. b. Under the agreement with CME & Company dated October 10, 1999, CME & Company agreed to perform reconnaissance evaluation services to identify potential acquisitions in the Northern Maru Belt and Anka Belt of Nigeria for $300,000. c. Under the agreement with CME & Company dated April 7, 2000, CME & Company agreed to perform an additional $441,500 exploration program on the Tanoso Reconnaissance License. We have the right to terminate this agreement at any time by providing two weeks written prior notice and, upon termination, we would be obligated to pay CME & Company for all work and expenses incurred prior to termination. d. Under the agreement with CME & Company dated May 3, 2000, CME & Company agreed to perform a $300,000 regional and detailed evaluation of the southwestern, central and northeastern parts of Nigeria. We have the right to terminate this agreement at any time by providing two weeks written prior notice and, upon termination, we would be obligated to pay CME & Company for all work and expenses incurred prior to termination. 29 EXECUTIVE COMPENSATION The following table sets forth the remuneration for Messrs. Ferguson, Weicker and Earle from inception (July 26, 1996) through December 31, 1999.
NUMBER OF SECURITIES UNDERLYING NAME OF INDIVIDUAL CAPACITIES IN WHICH AGGREGATE WARRANTS & OPTIONS OR IDENTITY OF GROUP REMUNERATION WAS RECEIVED REMUNERATION GRANTED Robert R. Ferguson Director, President & $61,397 (1) 306,984 Robert. F. Weicker Director $10,000 (2) 50,000 Tim Earle Secretary $10,000 (3) 50,000 (1) This amount consists of $25,000 of options and $36,397 of warrants. On January 8, 1998, Mr. Ferguson was granted 125,000 options at a price of $0.25 per share, which will expire on January 8, 2003. On December 1998, Freeform Communications Inc., an affiliated company owned and operated by Mr. Ferguson, advanced our company CDN$20,000, and on December 30, 1998, we repaid the advanced funds by issuing 181,984 Units to Freeform Communications Inc., with each Unit consisting of one share of our common stock and one warrant to purchase one share of our common stock at a price of $0.15 per share until December 30, 1999, and at price of $0.25 per share from December 31, 1999 to December 30, 2001. (2) On August 26, 1998, Mr. Weicker was granted 50,000 options at a price of $0.25 per share, which will expire on August 26, 2003. (3) On August 26, 1998, Mr. Earle was granted 50,000 options at a price of $0.25 per share, which will expire on August 26, 2003.
On January 1, 2000, we entered into a one year consulting agreement with Freeform Communications Inc., an affiliated company owned and operated by Robert R. Ferguson. Under the agreement, Freeform Communications Inc. provides day-to-day management consulting services to our company for $1,650 per month. Other than the agreement with Freeform Communications Inc., we do not pay monetary compensation to our officers and directors, nor do we compensate our directors for attendance at meetings. We reimburse our officers and directors for reasonable expenses incurred during the course of their performance. There are no employment agreements with any of our executive officers, and we have no long-term incentive or medical reimbursement plans. We anticipate offering some form of incentive-based monetary compensation in the future. STOCK OPTION PLAN We do not have a formal stock option plan. Our board of directors, in its discretion, issues options to officers, directors, and consultants on a case-by-case basis. In general, options may be exercised by payment of the option price by either (i) cash, (ii) tender of shares of our common stock which have a fair market value equal to the option price, or (iii) by such other consideration as the board of directors may approve at the time the option is granted. 30 The following table provides certain option, warrant and rights information (whether vested or not) as to the officers and directors individually, and as a group, as of October 26, 2000:
TITLE OF NUMBER OF NAME OF HOLDER SECURITIES SECURITIES EXERCISE PRICE EXPIRATION DATE Robert R. Ferguson (1) Options 125,000 $0.25 01/08/2003 Director, President, and Treasurer Warrants 181,984 $0.15 / $0.25 12/30/999; 12/30/2001 Robert F. Weicker Options 50,000 $0.25 08/26/2003 Director Tim Earle Options 50,000 $0.25 08/26/2003 Secretary Officers and directors as a group (3 Options 225,000 persons) Warrants 181,984 - ------------- (1) Includes the warrants owned by Freeform Communications Ltd., an affiliated company owned and operated by Robert R. Ferguson.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table provides certain information as to the officers and directors individually and as a group, and the holders of more than 5% of the Company's common stock, as of October 26, 2000. Except as otherwise indicated, the persons named in the table have sole voting and investing power with respect to all shares of common stock owned by them.
NUMBER OF OPTIONS/ PERCENT OF NAME AND ADDRESS OF OWNER SHARES HELD PRIOR WARRANTS TOTAL CLASS TO OFFERING(1) EXERCISABLE(2) BEFORE/AFTER OFFERING(3) - ------------------------------------------------------------------------------------------------------------------------------------ Robert R. Ferguson (4) 904 - 850 Burrard Street 511,984 306,984 818,968 6.1% / 3.5% Vancouver, British Columbia V6Z 2J1 CANADA Robert F. Weicker 3000 Walton Avenue 0 50,000 50,000 0.4% / 0.2% Coquitlam, British Columbia V3B 6V6 CANADA Tim Earle 1348 Marine Drive, 2nd Floor 0 50,000 50,000 0.4% / 0.2% North Vancouver, British Columbia CANADA
31
NUMBER OF OPTIONS/ PERCENT OF NAME AND ADDRESS OF OWNER SHARES HELD PRIOR WARRANTS TOTAL CLASS TO OFFERING(1) EXERCISABLE(2) BEFORE/AFTER OFFERING(3) - ------------------------------------------------------------------------------------------------------------------------------------ CME & Company (5) P.O. Box 199 Victory House, Le Truchot 5,274,171 4,262,013 9,536,184 54.7% /34.8% St. Peter Port,Guernsey GY1 4HX Channel Islands Officers and directors, as a group (3 persons) 511,984 406,984 918,968 6.8% / 3.9% - ------------------ (1) Management does not anticipate that any of the persons or entities listed will subscribe for shares in the offering. (2) Includes options of shares of common stock exercisable within 60 days from October 26, 2000. These additional shares are deemed to be outstanding for the purpose of computing the percentage of class owned by such persons, but are not deemed to be outstanding for the purpose of computing the percentage of any other person. (3) Based on 13,167,259 shares of common stock outstanding on October 26, 2000. Where the persons listed on this table have the right to obtain additional shares of common stock within 60 days from October 26, 2000, these additional shares are deemed to be outstanding for the purpose of computing the percentage of class owned by such persons, but are not deemed to be outstanding for the purpose of computing the percentage of any other person. (4) Includes shares held by Freeform Communications Ltd., an affiliated company owned and operated by Mr. Ferguson. (5) Includes the shares of common stock owned by C.M. Explorations Services Ltd., an affiliate of CME & Company, and shares of common stock and warrants owned by Sarah Hawkins, who is related to T. Gregory Hawkins, Managing Director of C.M. Exploration International, the General Partner of CME & Company.
CHANGES IN CONTROL We are not aware of any arrangements that may result in a change in control of our company. SELLING SHAREHOLDERS We are registering shares of common stock held by existing shareholders of our company. The shares are being registered to permit public secondary trading of such shares, and each of the selling shareholders may offer the common stock for resale as they wish. The following table sets forth the name and amount of shares for each selling shareholder. None of the selling shareholders ever had any position, office, or material relationship with us within the past three years. 32
COMMON PERCENTAGE AMOUNT TO SHARES BEING TOTAL COMMON OWNERSHIP BE OWNED SELLING STOCKHOLDER(1) REGISTERED SHARES OWNED BEFORE SALE AFTER (2) OFFERING Christopher Dundas 394,000 394,000 3.0% -0- George Arvanitis 20,000 20,000 0.2% -0- Onyx Trading Corporation 20,000 20,000 0.2% -0- c/o George Arvanitis Sandra Mosca Redon 65,000 65,000 0.5% -0- TOTAL 499,000 499,000 3.8% -0- - ---------------- (1)To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person's name. The address of each of the persons in this table is as follows: c/o Columbia River Resources, Inc., Suite 304 - 856 Homer Street, Vancouver, British Columbia V6B 2W5. (2)Based on 13,167,259 shares of common stock outstanding as of October 26, 2000.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS JIM ROMANO. On October 24, 1997, we issued Jim Romano 50,000 shares of our common stock as a finder's fee for our acquisition of a mining property located in Chihuahua, Mexico. On January 8, 1998, we granted Jim Romano an option to purchase 125,000 shares of our common stock at a price of $0.25 per share, with an expiration date of January 8, 2003. Jim Romano exercised his option on March 22, 2000. CALDERAN VENTURES LTD. Calderan Ventures Ltd. is a company owned and operated by Jim Romano. Pursuant to an oral agreement, Calderan Ventures Ltd. provided our company with investor relations services from January 2000 through March 2000, and we were invoiced $18,000. On April 11, 2000, we satisfied the debt owed to Calderan Ventures Ltd. by issuing it 72,000 shares of our common stock. We no longer use the services of Calderan Ventures Ltd. 562275 B.C. LTD. 562275 B.C. Ltd. is a company owned and operated by Jim Romano. In 1998, 562275 B.C. Ltd. advanced $35,000 to our company, and on December 30, 1998, we repaid 562275 B.C. Ltd. by issuing it 500,000 Units at $0.07 per Unit, with each Unit consisting of one share of our common stock and one warrant. FREEFORM COMMUNICATIONS LTD. Freeform Communications Ltd. is an affiliated company owned and operated by Robert R. Ferguson, the President and a director of the Company. Under the agreement dated January 1, 2000, Freeform Communications Ltd. provides day-to-day management services in exchange for $1,650 per month. In 1998, Freeform Communications Ltd. also advanced CDN$20,000, and on December 30, 1998, we repaid Freeform Communications Ltd. by issuing it 181,984 units at $0.07 per unit, with each unit consisting of one share of our common stock and one warrant. In 1997, Freeform Communications Ltd. purchased 330,000 shares of our common stock for $3,300. 33 CME & Company. CME & Company is a mining exploration and development company located in Guernsey, Channel Islands. CME & Company is an affiliate of us and became our controlling shareholder by accepting shares of common stock in exchange for services rendered. The following table provides certain option, warrant and rights information (whether vested or not), as to CME & Company, as of October 26, 2000:
Title of Number of SECURITIES SECURITIES EXERCISE PRICE EXPIRATION DATE Warrants 214,286(1) $0.15 / $0.25 11/25/2000; 11/25/2002 387,790 $0.15 / $0.25 10/15/2000; 10/15/2002 2,500,188 $0.15 / $0.25 01/24/2001; 01/24/2003 66,682 $0.15 / $0.25 02/03/2001; 02/03/2003 321,055 $0.25 03/16/2002 450,000(2) $0.15 / $0.25 12/25/1999; 12/25/2000 322,012 $0.15 / $0.25 02/03/2001; 02/03/2002 Total: 4,262,013 - ------------- (1) Warrants held in trust by CM Exploration Services Ltd. and on behalf of CME & Company. (2) Warrants owned Sarah Hawkins, who is related to T. Gregory Hawkins, Managing Director of C.M. Exploration International, the General Partner of CME & Company.
Since our inception in June 1997, we have entered into or assumed the following agreements with CME & Company: a. Under our related party agreement with Ayaco (Ghana) Limited dated December 15, 1999, we agreed to assume a $160,000 funding and exploration program as set forth in the report by CME (Ghana) Limited dated April 1998, which is a subsidiary of CME & Company, and a separate $295,000 funding and exploration program as provided in the report by CME & Company dated September 30, 1999. b. Under the agreement with CME & Company dated, October 1, 1999, CME & Company agreed to perform a $150,000 reconnaissance and exploratory work program on the Tanoso Reconnaissance License. Our funding of this agreement was applied to our $295,000 funding obligation under the agreement with Ayaco (Ghana) Limited. c. Under the agreement with CME & Company dated October 10, 1999, CME & Company agreed to perform reconnaissance evaluation services to identify potential acquisitions in the Northern Maru Belt and Anka Belt of Nigeria for $300,000. d. Under the agreement with CME & Company dated April 7, 2000, CME & Company agreed to perform an additional $441,500 exploration program on the Tanoso Reconnaissance License. An amount of $145,000 will be applied to satisfy our remaining funding obligation under the December 15, 1999 agreement with Ayaco (Ghana) Limited. We have the right to terminate this agreement at any time by providing two weeks written prior notice and, upon termination, we would be obligated to pay CME & Company for all work and expenses incurred prior to termination. e. Under the agreement with CME & Company dated May 3, 2000, CME & Company agreed to perform a $300,000 regional and detailed evaluation of the southwestern, central and northeastern parts of Nigeria. We have the right to terminate this agreement at any time by providing two weeks written prior notice and, upon termination, we would be obligated to pay CME & Company for all work and expenses incurred prior to termination. 34 CME & Company is partnership of C.M. Exploration International Ltd. and C.M. (Exploration ) Ltd. CME & Company is affiliated with C.M. Exploration Services Ltd. by common directors. CME & Company's wholly-owned subsidiary is CME (Ghana) Limited. CME (Ghana) Limited is affiliated with Ayaco (Ghana) Limited by a common director. As a result, CME & Company is also affiliated with Ayaco (Ghana) Limited. CME (GHANA) LIMITED. CME (Ghana) Limited is a mining exploration and development company located in Accra, Ghana. CME (Ghana) Limited is a subsidiary of CME & Company, and is affiliated with Ayaco (Ghana) Limited by a common director. Under our agreement with Ayaco (Ghana) Limited dated December 15, 1999, we agreed to assume a $160,000 funding and development program as set forth in the report by CME (Ghana) Limited dated April 1998. AYACO (GHANA) LIMITED. Ayaco (Ghana) Limited is a mining exploration and development company located in Accura, Ghana. Ayaco (Ghana) Limited is affiliate of CME & Company. Under our agreement with Ayaco (Ghana) Limited dated December 15, 1999, we were granted the right to acquire the Tanoso Reconnaissance License if we assumed and completed a $160,000 work program as recommended by CME (Ghana) Limited, a subsidiary of CME & Company, and a separate $295,000 funding and exploration program as set forth in the report by CME & Company dated September 30, 1999. In addition to assuming these obligations, we agreed to issue Ayaco (Ghana) Limited 1,000,000 shares of our common stock. CME CONSULTING LTD. CME Consulting Ltd. is a mineral exploration consulting company located in Vancouver, British Columbia, Canada. CME Consulting Ltd. is affiliated with CME Managing Consultants, Inc., as both entities have common officers, directors and shareholders. On February 19, 1999, we entered into a sublease agreement with CME Consulting Ltd. for 913.25 square feet of office space. The term of the sublease agreement is from April 1, 1999 to November 30, 2000. Under the agreement, our lease payments are CDN$1,170.41 per month, and every third month we are required to pay an additional CDN$86.67 as a security deposit. The monthly payments include the use of two desks, two chairs, and common office furniture. CME MANAGING CONSULTANTS, INC. CME Managing Consultants, Inc. is a mining exploration and development company located in Vancouver, British Columbia, Canada. CME Managing Consultants, Inc. is affiliated with CME Consulting Ltd., as both entities have common officers, directors and shareholders. On October 20, 1998, we entered into an agreement with CME Managing Consultants, Inc. whereby we agreed to fund and paid a CDN$7,500 work program on one of our abandoned properties. C.M. EXPLORATION SERVICES LTD. On November 24, 1999, C.M. Exploration Services Ltd., an investment company located in Guernsey, Channel Islands, submitted an unsolicited offer to purchase 214,286 units at a price of $0.07 per unit, with each unit consisting of a share of our common stock and a warrant. We accepted the offer and issued the units. C.M. Exploration Services Ltd. is affiliated with the general partner of CME & Company by common directors. We believe that the terms of the above-described transactions were no less favorable to us than would have been obtained from a nonaffiliated third party for similar consideration. DESCRIPTION OF SECURITIES GENERAL We are authorized to issue of up to 50,000,000 common shares, $0.001 par value per share, and 1,000,000 preferred shares, $0.01 par value per share. The following summary does not purport to be complete. You may wish to refer to our articles of incorporation and bylaws, copies of which are available for inspection. None of the holders of any class or series of our capital stock has preemptive rights or a right to cumulative voting. As of October 26, 2000, 13,167,259 shares of common stock were issued and outstanding and no shares preferred stock had been issued. 35 PREFERRED STOCK The Articles of Incorporation authorize the Board of Directors to issue, by resolution, 1,000,000 shares of preferred stock, in classes or series, having such designations, powers, preferences, rights, and limitations as the Board of Directors may from time to time determine. As of the date of this prospectus, no classes of preferred stock have been designated and no shares have been issued. COMMON STOCK As of October 26, 2000, there were 13,167,259 shares of common stock issued and outstanding. The board of directors may issue additional shares of common stock without the consent of the common stockholders. VOTING RIGHTS. Each outstanding share of common stock is entitled to one vote. The common stockholders do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares voting for the election of directors can elect all of the directors to be elected, if they so choose. NO PREEMPTIVE RIGHTS. Holders of common stock are not entitled to any preemptive rights. DIVIDENDS AND DISTRIBUTIONS. Holders of common stock are entitled to receive such dividends as may be declared by the directors out of funds legally available for dividends and to share pro rata in any distributions to holders of common stock upon liquidation or otherwise. However, we have never paid cash dividends on our common stock, and do not expect to pay such dividends in the foreseeable future. TRANSFER AGENT The registrar and transfer agent for the common stock is Computershare Investor Services, 12039 West Alameda Parkway, Suite Z-2, Lakewood, Colorado 80228. PLAN OF DISTRIBUTION GENERAL We are acting as the general selling agent with respect to the common stock being offered at a price of $0.45 per share. We intend to enter into agreements with securities broker-dealers, who are members of the NASD, so that broker-dealers who will be involved in the sale of the shares will be paid a commission of ten percent by us. No broker-dealer has agreed to participate in this offering as of the date of this prospectus. The NASD must first approve the arrangements with any broker-dealers that will participate in the distribution of this offering. In addition, our officers and directors may also be involved in the sale of the shares but will not receive any sales commission or other remuneration. This distribution will not involve any reallocations between NASD members and non-members. We may provide any sales agent or broker-dealer with a list of persons whom we believe may be interested in purchasing shares in this offering. The sales agent or broker-dealer may sell a portion of the shares to any such person if he resides in a state where the shares can be sold and where the sales agent or broker-dealer can sell the shares. No sales agent or broker-dealer is obligated to sell any shares to any such person and will do so only to the extent that such sales would not be inconsistent with the public distribution of the shares. We are unaware of any person, including any affiliate, who intends to finance any portion of the purchase price of the shares to be acquired in this offering. It is not intended that the proceeds from this offering will be used, directly or indirectly, to enable anyone to purchase shares. METHOD OF SUBSCRIBING You may subscribe by completing and delivering our form of subscription agreement to us. The subscription price of $0.45 per share must be paid by check, bank draft, or postal or express money order payable in United States dollars to the order of Columbia River Resources Inc. Certificates for shares of common stock subscribed for will be issued as soon as practicable after termination of the offering. 36 EXPIRATION DATE The subscription offer will expire ___________________________ [90 days from the date of this prospectus] which period may be extended for an additional 90 days, or on such earlier date as we shall determine in our discretion. RIGHT TO REJECT We reserve the right to reject any subscription in our sole discretion and to withdraw this offer at any time prior to our acceptance of the subscriptions received, if acceptance of a subscription would result in the violation of any laws to which we are subject. NO ESCROW We have not established an escrow account and we are employing the funds as they are being raised. THIS OFFERING IS NOT SUBJECT TO ANY MINIMUM SUBSCRIPTION LEVEL, AND THEREFORE ANY FUNDS RECEIVED FROM A PURCHASER ARE AVAILABLE TO US AND NEED NOT BE REFUNDED TO THE PURCHASER. The Nevada General Corporation Law and Article VI of our Articles of Incorporation permit the us to indemnify our officers and directors and certain other persons against expenses in defense of a suit to which they are parties by reason of such office, so long as the persons conducted themselves in good faith and the persons reasonably believed that their conduct was in our best interests, not opposed to our best interests, or unlawful. Indemnification is not permitted in connection with a proceeding by or in the right of us in which the officer or director was adjudged liable to us or in connection with any other proceeding charging that the officer or director derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the officer or director was adjudged liable on the basis that he or she derived an improper personal benefit. SELLING SHAREHOLDERS When the selling shareholders sell their shares, the shares may be delivered and/or sold in transactions from time to time on the over-the-counter market, in negotiated transactions, or a combination of such methods of sale. These transactions will be at market prices prevailing at the time, at prices related to such prevailing prices, or at negotiated prices. The selling stockholders may effect such transactions by selling to or through one or more broker-dealers, and such broker-dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the selling stockholders. The selling stockholders and any broker-dealers that participate in the distribution may under certain circumstances be deemed to be "underwriters" within the meaning of federal securities laws. Any commissions received by such broker-dealers and any profits realized on the resale of securities by them may be deemed to be underwriting discounts and commissions under federal securities laws. Any broker-dealer participating in such transactions as agent may receive commissions from the selling stockholders and, if they act as agent for the purchaser of the securities, from such purchaser. Broker-dealers may agree with the selling stockholders to sell a specified number of securities at a stipulated price per share. To the extent such a broker-dealer is unable to do so acting as agent for the selling stockholders, it may purchase as principal any unsold securities at the price required to fulfill the broker-dealer commitment to the selling stockholders. Broker-dealers who acquire securities as principal may then resell these securities in transactions which may involve crosses and block transactions and which may involve sales to and through other broker-dealers, including transactions of the nature described above in the over-the-counter market, in negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices. In connection with such resales broker-dealers may pay to or receive from the purchasers of these securities commissions computed as described above. To the extent required under the federal securities laws, a supplemental prospectus will be filed, disclosing I. the name of any such broker-dealers; II. the number of securities involved; III. the price at which such securities are to be sold; IV. the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable;
37 V. that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, as supplemented; and, VI. other facts material to the transaction.
Under applicable rules and regulations under federal securities laws, any person engaged in the distribution of the resale of securities may not simultaneously engage in market making activities with respect to the securities of our company for a period of two business days prior to the commencement of such distribution. In addition, the selling stockholders will be subject to applicable provisions of the federal securities laws, and the rules and regulations under these laws, including Regulation M, which provisions may limit the timing of purchases and sales of the securities by the selling stockholders. The selling stockholders will pay all commissions and other expenses associated with the sale of the common stock by them. The shares of common stock offered through this prospectus are being registered because of our contractual obligations with the selling stockholders, and we have paid the expenses of the preparation of this prospectus. SEC POSITION ON INDEMNIFICATION As permitted by Nevada law, our Articles of Incorporation provides that a director of our company shall not be personally liable to us or our stockholders for monetary damages for a breach of fiduciary duty as a director, except (i) for any breach of the director's duty of loyalty to us or our stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the law, or (iii) under Section 78.300 of the Nevada General Corporation Law, which prohibits the unlawful payment of dividends or the unlawful repurchase or redemption of stock. This provision is intended to afford our directors protection against, and to limit their potential liability for monetary damages resulting from, suits alleging a breach of the duty of care by a director. The provisions diminish the potential rights of action which might otherwise be available to our shareholders by limiting the liability of officers and directors to the maximum extent allowable under Nevada law, and by affording indemnification against most damages and settlement amounts paid by a director of our company in connection with any shareholders derivative action. However, the provisions do not have the effect of limiting the right of a shareholder to enjoin a director from taking actions in breach of his fiduciary duty, or to cause our company to rescind actions already taken, although as a practical matter courts may be unwilling to grant such equitable remedies in circumstances in which such actions have already been taken. Also, because we do not presently have directors' liability insurance and because there is no assurance that we will procure such insurance or that if such insurance is procured it will provide coverage to the extent directors would be indemnified under the provisions, we may be forced to bear a portion or all of the cost of a director's claims for indemnification under such provisions. If we are forced to bear the costs for indemnification, the value of our stock may be adversely affected. In the opinion of the Securities and Exchange Commission, indemnification for liabilities arising under the Securities Act of 1933 is contrary to public policy and, therefore, is unenforceable. LEGAL MATTERS Dill Dill Carr Stonbraker & Hutchings, P.C., Denver, Colorado will pass upon the validity of our shares offered hereby. 38 EXPERTS Our financial statements as of December 31, 1998 and December 31, 1997, have been audited by Jones Jenson & Company n/k/a HJ & Associates, LLD, independent chartered accountants, as set forth in their report on such financial statements, and are included in this prospectus in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. The financial statements for the fiscal year ended December 31, 1999 have been audited by Pannell Kerr Forster, as set forth in their report on such financial statements, and are included in this prospectus in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. AVAILABLE INFORMATION We have not previously been subject to the reporting requirements of the SEC. We have filed with the SEC a registration statement on Form SB-1 under the Securities Act with respect to the Securities offered hereby. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. For further information on us and our securities, you should review the registration statement and the exhibits and schedules thereto. Statements made in this prospectus regarding the contents of any contract or document filed as an exhibit to the registration statement are not necessarily complete. You should review the copy of such contract or document so filed. You can inspect the registration statement and the exhibits and the schedules thereto filed with the commission, without charge, at the office of the SEC at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549. You can also obtain copies of these materials from the public reference section of the SEC at 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed rates. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Commission maintains a web site on the Internet that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission at HTTP://WWW.SEC.GOV. We have a web site on the Internet at HTTP://WWW.columbiariver1.com. REPORTS TO STOCKHOLDERS As a result of filing this registration statement, we will become subject to the reporting requirements of the Securities Exchange Act, and will be required to file periodic reports, proxy statements, and other information with the SEC. We will furnish our shareholders with annual reports containing audited financial statements certified by independent public accountants following the end of each fiscal year, proxy statements, and quarterly reports containing unaudited financial information for the first three quarters of each fiscal year following the end of such fiscal quarter. 39 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Interim Balance Sheet (Unaudited) (U.S. Dollars)
- ---------------------------------------------------------------------------------------------------- June 30, December 31, 2000 1999 - ---------------------------------------------------------------------------------------------------- ASSETS CURRENT Cash $ 19,251 $ 10,963 Share Receivable 31,250 - Prepaid expenses 4,984 1,636 Due from stockholder 15,287 30,630 - ---------------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 70,773 43,229 PROPERTY AND EQUIPMENT 4,296 4,296 OPTIONS ON MINERAL PROPERTIES 90,000 15,000 - ---------------------------------------------------------------------------------------------------- TOTAL ASSETS $ 165,069 $ 62,525 ==================================================================================================== LIABILITIES CURRENT Accounts payable $ 4,982 $ 10,242 Advances from stockholder 207,628 373,559 Notes payable 9,588 9,588 - --------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 222,198 393,389 - --------------------------------------------------------------------------------------------------- CONTINGENCY STOCKHOLDERS' DEFICIT PREFERRED STOCK, $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding COMMON STOCK PAR VALUE OF $0.001 50,000,000 Shares authorized 12,438,366 and 7,377,222 Shares issued and outstanding 963,551 402,254 SUBSCRIPTIONS RECEIVED 10,418 27,132 OTHER RECEIVABLE (4,668) (114,101) DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE (1,026,430) (646,149) - --------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' DEFICIT (57,129) (330,864) - --------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 165,069 $ 62,525 ===================================================================================================
F-1 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Interim Statement of Cash Flows (Unaudited) Six Month Period Ended June 30, 2000 (With comparative figures for the year ended December 31, 1999) (U.S. Dollars)
- -------------------------------------------------------------------------------------------------- 2000 1999 - -------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss (380,281) (565,329) Adjustments to reconcile net loss to net cash used by operating activities Contributed interest - - Depreciation - 1,655 Write-off of options on mineral properties - 116,025 Changes in non-cash working capital Due from shareholder 15,343 (30,630) Prepaid expenses (3,348) (1,636) Organization costs - - Accounts payable (5,260) (5,548) Advances from shareholder (165,931) 373,559 - -------------------------------------------------------------------------------------------------- NET CASH USED BY OPERATING ACTIVITIES (539,477) (111,904) - -------------------------------------------------------------------------------------------------- CASH FLOWS USED BY INVESTING ACTIVITIES Purchase of property and equipment - (5,951) Purchase of option on mineral properties - (38,025) - -------------------------------------------------------------------------------------------------- NET CASH USED BY INVESTING ACTIVITIES - (43,976) - -------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Subscriptions received 125,136 27,132 Other receivable 114,100 - Proceeds from (repayment of) notes payable - (7,500) Issuance of common stock 308,529 147,000 - -------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 547,765 166,632 - -------------------------------------------------------------------------------------------------- INFLOW (OUTFLOW) OF CASH 8,288 10,752 CASH, BEGINNING OF PERIOD 10,963 211 - -------------------------------------------------------------------------------------------------- Cash, End of Period 19,251 10,963 ================================================================================================== NON-CASH FINANCING ACTIVITIES Common stock issued for settlement of debt 52,421 Shares receivable 31,250 - Common stock issued 21,768 114,101 Common stock issued for mineral options 75,000 15,000 ==================================================================================================
F-2 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Interim Statement of Operations (Unaudited) Six Month Period Ended June 30, 2000 (With comparative figures for the year ended December 31, 1999) (U.S. Dollars)
- -------------------------------------------------------------------------------------------------- 2000 1999 - -------------------------------------------------------------------------------------------------- EXPENSES Property exploration expenses $ 338,483 $ 384,778 Write-off of options on mineral properties - 116,025 General and administrative 41,798 62,871 Depreciation - 1,655 - -------------------------------------------------------------------------------------------------- TOTAL EXPENSES 380,281 565,329 - -------------------------------------------------------------------------------------------------- Net Loss for Period $ (380,281) $ (565,329) ================================================================================================== Net Loss Per Share $ (0.04) $ (0.10) ================================================================================================== Weighted Average Number of Common Shares Outstanding 10,334,524 6,251,566 ==================================================================================================
F-3 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Financial Statements December 31, 1999 and 1998 INDEX Page Report of Independent Chartered Accountants 1 Financial Statements Balance Sheets 2 Statements of Operations 3 Statements of Stockholders' Deficit 4 Statements of Cash Flows 5 Notes to Financial Statements 6-12 F-4 JONES, JENSEN & COMPANY, LLC Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT To the Board of Directors Columbia River Resources, Inc. (A Development Stage Company) Vancouver, B.C. Canada We have audited the accompanying balance sheet of Columbia River Resources, Inc. (a development stage company) as of December 31, 1998, and the related statements of operations, stockholders' equity (deficit), and cash flows for the year ended December 31, 1998 and for the period from inception on June 13, 1997 through December 31, 1997 and 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects the financial position of Columbia River Resources, Inc. (a development stage company) as of December 31, 1998 and the results of its operations and its cash flows for the year ended December 31, 1998 and for the period from inception on June 13, 1997 through December 31, 1997 and 1998 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company has no operations and limited capital which together raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Jones, Jensen & Company Jones, Jensen & Company Salt Lake City, Utah February 27, 1999 50 South Main Street Suite 1450 Salt Lake City, Utah 84144 Telephone (801) 328-4408 Facsimile (802) 328-4461 F-5 REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS TO THE DIRECTORS OF COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) We have audited the accompanying balance sheet of Columbia River Resources, Inc. (An Exploration Stage Company) as at December 31, 1999 and the related statements of operations, stockholders' deficit and cash flows for the year then ended and the cumulative totals for the development stage operations from June 13, 1997 (inception) through December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. Our opinion, insofar as it relates to the cumulative totals for the development stage operations from June 13, 1997 (inception) through December 31, 1998, is based solely on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards in the United States. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, these financial statements present fairly, in all material respects, the financial position of Columbia River Resources, Inc. (An Exploration Stage Company) as at December 31, 1999 and the results of its operations and cash flows for the year then ended and the cumulative totals for the development stage operations from June 13, 1997 (inception) through December 31, 1999 in conformity with generally accepted accounting principles. Our opinion, insofar as it relates to the cumulative totals for development stage operations from June 13, 1997 (inception) through December 31, 1998 is based solely on the report of the other auditors. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 2 to the financial statements, the Company has no revenues and limited capital which together raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Pannell Kerr Forster "Pannell Kerr Forster" Chartered Accountants Vancouver, Canada March 27, 2000 F-6 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Balance Sheets December 31, 1999 and 1998 (U.S. Dollars)
======================================================================================================================== 1999 1998 - ------------------------------------------------------------------------------------------------------------------------ ASSETS CURRENT Cash $ 10,963 $ 211 Prepaid expenses 1,636 0 Due from stockholder (note 10) 30,630 0 - ------------------------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 43,229 211 PROPERTY AND EQUIPMENT (note 5) 4,296 0 OPTIONS ON MINERAL PROPERTIES (note 6) 15,000 78,000 - ------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $ 62,525 $ 78,211 ========================================================================================================================= LIABILITIES CURRENT Accounts payable $ 10,242 $ 15,790 Advances from stockholder (note 10) 373,559 4,682 Notes payable (note 7) 9,588 64,827 - ------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 393,389 85,299 - ------------------------------------------------------------------------------------------------------------------------- CONTINGENCY (note 11) STOCKHOLDERS' DEFICIT (note 8) PREFERRED STOCK, $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding COMMON STOCK AND PAID IN CAPITAL IN EXCESS OF $0.001 PAR VALUE 50,000,000 Shares authorized 7,377,222 and 3,660,000 Shares issued and outstanding 402,254 73,732 SUBSCRIPTIONS RECEIVED 27,132 0 OTHER RECEIVABLE (note 9) (114,101) 0 DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE (646,149) (80,820) - ------------------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' DEFICIT (330,864) (7,088) - ------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 62,525 $ 78,211 =========================================================================================================================
See notes to financial statements. F-7 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Statement of Operations (U.S. Dollars)
==================================================================================================================================== From Inception on June 13, June 13 to 1997 Through Year Ended December 31 December 31, December 31, 1999 1998 1997 1999 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Property exploration expenses $ 384,778 $ 0 $ 0 $ 384,778 Write-off of options on mineral properties 116,025 0 0 116,025 General and administrative 62,871 67,547 12,506 142,924 Depreciation 1,655 684 83 2,422 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL EXPENSES 565,329 68,231 12,589 646,149 - ------------------------------------------------------------------------------------------------------------------------------------ NET LOSS FOR PERIOD $ (565,329) $ (68,231) $ (12,589) $ (646,149) ==================================================================================================================================== NET LOSS PER SHARE $ (0.10) $ (0.02) $ (0.00) ==================================================================================================================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,251,566 3,597,500 3,510,000 ====================================================================================================================================
See notes to financial statements. F-8 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Statement of Stockholders' Deficit (U.S. Dollars)
Deficit Common Stock Accumulated and Paid-In During the Common Capital In Other Subscription Exploration Shares Excess of Par Receivable Received Stage Total - ------------------------------------------------------------------------------------------------------------------------------------ BALANCE AT INCEPTION ON JUNE 30, 1997 0 $ 0 $ 0 $ 0 $ 0 $ 0 Issuance of common stock for cash at $0.01 per share (net of issuance costs) 3,460,000 33,399 0 0 0 33,399 Issuance of common stock for mineral property at $0.01 per share (note 6(b)) 50,000 500 0 0 0 500 Net loss from inception on June 13, 1997 to December 31, 1997 0 0 0 0 (12,589) (12,589) - ------------------------------------------------------------------------------------------------------------------------------------ BALANCE DECEMBER 31, 1997 3,510,000 33,899 0 0 (12,589) 21,310 Contributed interest 0 2,333 0 0 0 2,333 Issuance of common stock for mineral property at $0.25 per share (note 6(b)(c)) 150,000 37,500 0 0 0 37,500 Net loss for year ended December 31, 1998 0 0 0 0 (68,231) (68,231) - ------------------------------------------------------------------------------------------------------------------------------------ BALANCE, DECEMBER 31, 1998 3,660,000 73,732 0 0 (80,820) (7,088) Issuance of common stock for mineral property at $0.15 per share (note 6(a)) 100,000 15,000 0 0 0 15,000 Issuance of common stock for cash at $0.07 per share (note 8(b)) 2,100,000 147,000 0 0 0 147,000 Issuance of common stock for settlement of debt at $0.07 per share (note 8(b)) 748,865 52,421 0 0 0 52,421 Issuance of common stock for settlement of debt at $0.1485 per share (notes 9 and 12(c)) 768,357 114,101 0 0 0 114,101 Other receivable (note 9) 0 0 (114,101) 0 0 (114,101) Subscriptions received (note 8(c)) 0 0 0 27,132 0 27,132 Net loss for year ended December 31, 1999 0 0 0 0 (565,329) (565,329) ==================================================================================================================================== BALANCE, DECEMBER 31, 1999 7,377,222 $ 402,254 $ (114,101) $ 27,132 $(646,149) $(330,864) ====================================================================================================================================
See notes to financial statements. F-9 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Statement of Cash Flows (U.S. Dollars)
================================================================================================================================ From June 13, June 13 to 1997 Through Year Ended December 31 December 31, December 31, 1999 1998 1997 1999 - -------------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (565,329) $ (68,231) $ (12,589) $ (646,149) Adjustments to reconcile net loss to net cash used by operating activities Contributed interest 0 2,333 0 2,333 Depreciation 1,655 684 83 2,422 Write-off of options on mineral properties 116,025 0 0 116,025 Changes in non-cash working capital Due from shareholder (30,630) 0 0 (30,630) Prepaid expenses (1,636) 1,406 (1,406) (1,636) Organization cost 0 0 (767) (767) Accounts payable (5,548) 19,982 490 14,924 Advances from shareholder 373,559 0 0 373,559 - -------------------------------------------------------------------------------------------------------------------------------- NET CASH USED BY OPERATING ACTIVITIES (111,904) (43,826) (14,189) (169,919) - -------------------------------------------------------------------------------------------------------------------------------- CASH FLOWS USED BY INVESTING ACTIVITIES Purchase of property and equipment (5,951) 0 0 (5,951) Purchase of option on mineral properties (38,025) (25,000) (15,000) (78,025) - -------------------------------------------------------------------------------------------------------------------------------- NET CASH USED BY INVESTING ACTIVITIES (43,976) (25,000) (15,000) (83,976) - -------------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Subscriptions received 27,132 0 0 27,132 Proceeds from (repayment of) notes payable (7,500) 64,827 0 57,327 Issuance of common stock 147,000 0 33,399 180,399 - -------------------------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 166,632 64,827 33,399 264,858 - -------------------------------------------------------------------------------------------------------------------------------- INFLOW (OUTFLOW) OF CASH 10,752 (3,999) 4,210 10,963 CASH, BEGINNING OF PERIOD 211 4,210 0 0 - -------------------------------------------------------------------------------------------------------------------------------- CASH, END OF PERIOD $ 10,963 $ 211 $ 4,210 $ 10,963 ================================================================================================================================ NON-CASH FINANCING ACTIVITIES Common stock issued for settlement of debt $ 52,421 $ 0 $ 0 $ 52,421 Common stock issued 114,101 0 0 114,101 Common stock issued for mineral options 15,000 37,500 500 53,000 ================================================================================================================================
See notes to financial statements. F-10 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 1. INCORPORATION AND NATURE OF OPERATIONS The Company was incorporated on June 13, 1997, in the State of Nevada. The Company is in the exploration stage as defined in Statement No. 7 of the Financial Accounting Standards Board. Its principal business is the acquisition and exploration of mining properties. 2. GOING CONCERN These financial statements have been prepared in accordance with generally accepted accounting principles on a going concern basis. This presumes funds will be available to finance on-going development, operations and capital expenditures and the realization of assets and the payment of liabilities in the normal course of operations for the foreseeable future. Management intends to raise additional capital through share issuances to finance operations. The Company has minimal capital resources presently available to meet obligations which normally can be expected to be incurred by similar companies and has an accumulated deficit of $646,149. These factors raise substantial doubt about the Company's ability to continue as a going concern and is dependent on its ability to obtain and maintain an appropriate level of financing on a timely basis and to achieve sufficient cash flows to cover obligations and expenses. The outcome of these matters cannot be predicted. These financial statements do not give effect to any adjustments to the amounts and classification of assets and liabilities which might be necessary should the Company be unable to continue as a going concern. 3. REALIZATION OF ASSETS The investment in options on resource properties comprises a significant portion of the Company's assets. Recovery of the carrying value of the investment in resource properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the exploration and development, the attainment of future profitable production or the disposition of the properties for proceeds in excess of their carrying value. 4. SIGNIFICANT ACCOUNTING POLICIES (a) Property and equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated at the following rates (commencing when the assets are put into use): Computer hardware - 30% Declining balance Office furniture and equipment - 20% Declining balance The Company reviews property and equipment to determine if the carrying amount is recoverable based on the estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If in this determination there is an apparent shortfall, the loss will be recognized as a current charge to operations. F-11 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 4. SIGNIFICANT ACCOUNTING POLICIES (b) Exploration stage expenditures The Company expenses all expenditures for exploration of resource properties as they are incurred where the properties do not have proven mineral reserves. (c) Foreign currency translation Amounts recorded in foreign currency are translated into United States dollars as follows: (i) Monetary assets and liabilities are translated at the rate of exchange in effect at the balance sheet date; (ii) Non-monetary assets and liabilities at the exchange rates prevailing at the time of the acquisition of the assets or assumption of the liabilities; and, (iii) Revenues and expenses, at the average rate of exchange for the year. Gains and losses arising from this translation of foreign currency are excluded from net loss for the period and accumulated as a separate component of stockholder's deficit. (d) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and would impact future results of operations and cash flows. (e) Loss per share Loss per share computations are based on the weighted average of common shares outstanding during the period. Diluted loss per share has not been presented separately as the outstanding stock options and warrants are anti-dilutive for each of the periods presented. (f) Financial instruments The Company's financial instruments include cash, due from stockholder, accounts payable, advances from stockholder, and notes payable. It is management's opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments and that currency risks are nominal. F-12 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 5. PROPERTY AND EQUIPMENT
- --------------------------------------------------------------------------------------------------------- 1999 1998 - --------------------------------------------------------------------------------------------------------- Accumulated Cost Depreciation Net Net - --------------------------------------------------------------------------------------------------------- Computer hardware $ 4,643 $ 1,393 $ 3,250 $ 0 Office furniture and equipment 1,308 262 1,046 0 - --------------------------------------------------------------------------------------------------------- $ 5,951 $ 1,655 $ 4,296 $ 0 =========================================================================================================
6. OPTIONS ON MINERAL PROPERTIES (a) Tanoso Reconnaissance License, Ghana On September 28, 1999, the Company entered into a Binding Heads of Agreement ("BHA") with Ayaco (Ghana) Limited ("Ayaco") to purchase an option to acquire a 100% working interest ("interest") in the Tanoso Reconnaissance License ("License"). In exchange for a non-refundable 100,000 shares of common stock issued at a deemed value of $0.15 per share (the "Option Payment"), Ayaco granted the Company the following: (i) An exclusive 3 month due diligence period during which the Company may investigate all aspects of the licenses and the corporate matters of Ayaco so far as those matters affect the BHA. (ii) The right to make an election ("Election") to acquire the interest from Ayaco through written notice. Pursuant to the terms of the BHA, the Company is required to issue 500,000 shares of its common stock to Ayaco upon each of the first anniversary of the BHA and on the date of Election for a total of 1,000,000 shares of common stock. The Company is also required to assume funding and development costs of $150,000 relating to the License. The Option Payment and any other sums incurred by the Company relating to the option or the BHA, shall be applied toward the earn-in expenditures. F-13 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 6. OPTIONS ON MINERAL PROPERTIES (Continued) Once the shares have been issued pursuant to the BHA, Ayaco will transfer title of the License to the Company. The Company will own a 100% interest in the License, subject to a 10% net profit interest payable to Ayaco and a 10% net profit interest payable to the Government of Ghana. 100,000 shares of common stock were issued to Ayaco in 1999 in compliance with the BHA. On December 15, 1999, the Company entered into an Agreement ("Agreement") with Ayaco to exercise the option. This agreement contains the same terms as BHA, with the exception that 500,000 shares of common stock could be issued 20 days after the execution date. These shares were subsequently issued in 2000. The Agreement may be terminated at any time by the Company through written notice. Upon termination, the parties to the Agreement shall not be responsible for any unfulfilled obligations under the Agreement. (b) Roble Property, Mexico On July 21, 1997, the Company entered into a Letter of Intent with Hunter Exploration Group and Seguro Projects, Inc. to purchase an option for mineral properties located in Chihuahua, Mexico. Pursuant to the terms of the Letter of Intent, the Company made payments of $15,000 and issued 50,000 shares of common stock. The Company was committed to pay an additional $25,000 and to issue an additional 50,000 shares of common stock. During 1999, the Company abandoned the option. (c) Blue Basin Property, Nevada On July 13, 1998, the Company purchased an option on 150 mining claims northwest of Elko, Nevada for cash of $25,000 and 100,000 shares of its common stock valued at $0.25 per share. The Company was committed to fund exploration expenditures of $75,000 and cash payments of $50,000 by June 29, 1999. During 1999, the Company abandoned the option. 7. NOTES PAYABLE Notes payable are non-interest bearing and have no fixed terms of repayment. F-14 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 8. STOCKHOLDERS' EQUITY (a) Stock options The Company has granted founders, directors and certain employees stock options. Stock option activity is summarized as follows: ====================================================================== Exercise Number Price of Shares ---------------------------------------------------------------------- Balance outstanding, December 31, 1997 $ 0.00 0 1998 - Granted $ 0.32 * 1,250,000 1998 - Cancelled $ 0.42 (500,000) ---------------------------------------------------------------------- Balance outstanding, December 31, 1998 and 1999 $ 0.25 750,000 ====================================================================== * Weighted average exercise price In 1995 the FASB issued SFAS No. 123 "Accounting for Stock-Based Compensation", which contains a fair value-based method for valuing stock-based compensation that entities may use. This measures compensation cost at the grant date based on the fair value of the award. Compensation is then recognized over the service period, which is usually the vesting period. For U.S. GAAP purposes management accounts for options under APB Opinion No. 25. As option exercise prices approximated market price on the dates of grants no compensation expense has been recognized. (b) On December 30, 1998, the Board of Directors of the Company authorized a private placement of its common stock. Under the terms of the private placement, the Company can issue up to 3,571,479 units ("Unit") at a value of $0.07 each. Each Unit consists of one share of common stock and a warrant to purchase one share at $0.15 per share within a year of issue and at $0.25 per share in the second year following issue. 2,848,865 Units were issued in 1999. (c) On September 30, 1999, 66,881 warrants were exercised for proceeds of $10,032. The shares subscribed have not been issued. Accordingly, they are reflected as subscriptions received. (d) On December 21, 1999, the Company accepted an unsolicited offer to purchase 244,286 Units for cash. The Company also resolved to issue 727,790 Units, for settlement of accounts payable owed to a shareholder. These units were subsequently issued in January 2000 (note 12(e)). (e) Warrants issued and outstanding were as follows: ====================================================================== Issued in 1999 (note 8(b)) 2,848,865 Exercised (66,881) ---------------------------------------------------------------------- Outstanding at December 31, 1999 2,781,984 ====================================================================== Warrants are exercisable at $0.15 per share in the first year and at $0.25 per share in the second year. F-15 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 9. OTHER RECEIVABLE In 1999, the Company's transfer agent erroneously issued 768,357 shares. Subsequent to the year-end, these shares were cancelled. 10. RELATED PARTY TRANSACTIONS (a) Amounts due from a stockholder are non-interest earning and have no fixed terms of repayment. (b) Advances from a stockholder are non-interest bearing and have no fixed terms of repayment. (c) The Company made payments for various purposes to related parties as listed below:
==================================================================================================== Relationship 1999 1998 1997 ---------------------------------------------------------------------------------------------------- Included in General and Administrative Expenses Rent to affiliate $ 13,976 $ 0 $ 0 Office services to affiliate $ 8,905 $ 0 $ 0 Management services to company with common officer $ 19,800 $ 0 $ 0 Consulting services to related party $ 0 $ 0 $ 4,000 Included in Property Exploration Expenses Consulting services by stockholder $378,487 $ 0 $ 4,000 ====================================================================================================
(d) The Company issued 768,865 Units to companies controlled by shareholders as settlement for debt incurred for consulting services which were provided in the normal course of its commercial operations. (e) The Company erroneously issued 768,357 shares to a company controlled by stockholders. (f) The Company has agreed to pay a company employing an officer of the Company a fee of $1,650 per month for management fees and has also agreed to pay an affiliate of the Company approximately $8,800 for rent. 11. CONTINGENCY During the year ended December 31, 1999, the Company had not purchased any insurance. Management is in the process of obtaining insurance. F-16 COLUMBIA RIVER RESOURCES, INC. (An Exploration Stage Company) Notes to Financial Statements Years Ended December 31, 1999 and 1998 and Period From June 13, 1997 (Inception) Through December 31, 1999 (U.S. Dollars) - -------------------------------------------------------------------------------- 12. SUBSEQUENT EVENTS (a) On January 4, 2000, the Company resolved to issued 500,000 shares, valued at $0.15 each, to purchase options on mineral properties. (b) On January 24, 2000, the Company resolved to issue 2,500,188 Units, valued at $0.07 each, for settlement of accounts payable of $175,013 to a stockholder. (c) On January 31, 2000, the Company resolved to issue 2,571 Units, valued at $0.07 each, for settlement of accounts payable $180 owed to an affiliate. It also resolved to cancel 768,357 shares incorrectly issued in 1999 so that they could be issued correctly (note 9). (d) On February 3, 2000, the Company resolved to issue 66,682 Units, valued at $0.07 each, for settlement of accounts payable owed to an affiliate. (e) In January 2000, 972,076 units were issued (note 8 (d)). 13. INCOME TAXES A deferred tax asset stemming from the Company's net operating loss carry forward, has been reduced by a valuation account to zero due to uncertainties regarding the utilization of the deferred assets. At December 31, 1999, the Company has available a net operating loss carry forward of approximately $300,000 which it may use to offset future United States federal taxable income. The net operating loss carry forward if not utilized, will begin to expire in 2016. F-17 [Back cover of prospectus] DEALER PROSPECTUS DELIVERY OBLIGATION Until _________, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Nevada General Corporation Law and Article VI of the registrant's Articles of Incorporation permit us to indemnify its officers and directors and certain other persons against expenses in defense of a suit to which they are parties by reason of such office, so long as the persons conducted themselves in good faith and the persons reasonably believed that their conduct was in the registrant's best interests, not opposed to the registrant's best interests, or unlawful. Indemnification is not permitted in connection with a proceeding by or in the right of the registrant in which the officer or director was adjudged liable to the registrant or in connection with any other proceeding charging that the officer or director derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the officer or director was adjudged liable on the basis that he or she derived an improper personal benefit. ITEM 2. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The expenses to be paid by the registrant in connection with the securities being registered are as follows:
Securities and Exchange Commission filing fee.........................$ 1,221 NASD filing fee.......................................................$ 962 Accounting fees and expenses..........................................$ 10,000 Blue sky fees and expenses............................................$ 5,000 Legal fees and expenses...............................................$ 30,000 Transfer agent fees and expenses......................................$ 5,000 Printing expenses.....................................................$ 5,000 Miscellaneous expenses................................................$ 2,817 Total.................................................................$ 60,000 ======
All amounts are estimates except the SEC filing fee and NASD filing fee ITEM 3. UNDERTAKINGS (A) The small business issuer will: (1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (i) Include any prospectus required by section 10(a)(3) of the Securities Act; (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) Include any additional or changed material information on the plan of distribution. II-1 (2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. (B) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. ITEM 4. UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN ONE YEAR For the period from June 1999 to present, the registrant sold and issued the following units and shares of its common stock, which sales and issuances were not registered under the Securities Act of 1933, as amended (the "Act"): On June 15, 1999, the registrant issued 768,357 shares of common stock in exchange for services rendered, valued at $114,100.99, in reliance upon the exemption from registration contained in Section 4(2) of the Act. On December 1, 1999, the registrant issued 100,000 shares of common stock to Ayaco (Ghana) Limited as consideration for an option to acquire the rights to the Tanoso Reconnaissance License. The shares were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On December 21, 1999, the registrant issued 214,286 units to C.M Exploration Services Ltd., and 30,000 units to David Wingfield, in exchange for cash, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On December 21, 1999, the registrant issued 727,790 units to CME & Company in exchange for services rendered, valued at $50,945.32, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On January 4, 2000, the registrant issued 500,000 shares of common stock to Ayaco (Ghana) Limited as consideration for an option to acquire the rights to the Tanoso Reconnaissance License. The shares were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On January 31, 2000, the registrant issued 2,571 units to CME Managing Consultants Inc. in exchange for services rendered, valued at $180.00, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. II-2 On January 31, 2000, the registrant issued 2,500,188 units to CME & Company in exchange for services rendered, valued at $175,013.19, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On February 3, 2000, the registrant issued 66,682 units to CME & Company in exchange for services rendered, valued at $4,667.71, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On April 1, 2000, the registrant issued 499,000 shares of common stock to four purchasers in exchange for cash of $124,750. The shares were issued in reliance upon the exemption from registration contained in Rule 506 of Regulation D. On April 11, 2000, the registrant issued 321,055 units to CME & Company in exchange for services rendered, valued at $64,211.07, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On April 11, 2000, the registrant issued 72,000 shares of common stock to Calderan Ventures, Ltd., in exchange for services rendered, valued at $18,000. The shares were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On April 11, 2000, the registrant issued 125,000 shares of common stock to James Romano in exchange for cash of $31,250. The shares were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On June 26, 2000, the registrant issued 322,012 units to CME & Company in exchange for services rendered, valued at $22,540.81, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock. The units were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On August 15, 2000, the registrant issued 66,881 shares of common stock to CME Managing Consultants Inc. in exchange of $10,032.50. The shares were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. On October 23, 2000, the registrant issued 340,000 shares of common stock to CME & Company in exchange for $51,000. the shares were issued in reliance upon the exemption from registration contained in Section 4(2) of the Act. With respect to the sales of securities above, no underwriting commissions or discounts were paid on these sales. II-3 ITEM 5. INDEX TO EXHIBITS
- ---------------------------------------------------------------------------------------------------------------------- Sequential Page Exhibit No. Exhibit Number - ---------------------------------------------------------------------------------------------------------------------- 1.1 Form of Selling Agent Agreement 63 - ---------------------------------------------------------------------------------------------------------------------- 2.1 Articles of Incorporation 68 - ---------------------------------------------------------------------------------------------------------------------- 2.2 Bylaws 74 - ---------------------------------------------------------------------------------------------------------------------- 4.1 Form of Subscription Agreement 96 - ---------------------------------------------------------------------------------------------------------------------- 6.1 Lease Agreement between Columbia River Resources Inc. and CME Consulting Ltd. 98 - ---------------------------------------------------------------------------------------------------------------------- 6.2 Binding Heads Property Agreement between Columbia River Resources Inc. Ayaco 102 - ---------------------------------------------------------------------------------------------------------------------- 6.3 Agreement between Columbia River Resources Inc. and Ayaco (Ghana) Limited dated 107 - ---------------------------------------------------------------------------------------------------------------------- 6.4 Agreement between Columbia River Resources Inc. and Freeform Communications Ltd. 112 - ---------------------------------------------------------------------------------------------------------------------- 6.5 Agreement between Columbia River Resources Inc. and CME & Company - Tanoso 115 - ---------------------------------------------------------------------------------------------------------------------- 6.6 Agreement between Columbia River Resources Inc. and CME & Company - Nigeria 122 - ---------------------------------------------------------------------------------------------------------------------- 6.7 Report on Reconnaissance Rock, Stream Sampling and Geological Mapping on the Ayaco 129 - ---------------------------------------------------------------------------------------------------------------------- 6.8 Agreement between Columbia River Resources Inc. and CME & Company, dated October 154 - ---------------------------------------------------------------------------------------------------------------------- 6.9 Agreement between Columbia River Resources Inc. and CME & Company - Tantalum 161 - ---------------------------------------------------------------------------------------------------------------------- 10.1 Consent of Jones, Jensen & Company, LLC n/k/a HJ & Associates, LLC 167 - ---------------------------------------------------------------------------------------------------------------------- 10.2 Consent of Pannell Kerr Foster 169 - ---------------------------------------------------------------------------------------------------------------------- 10.3 Consent of Dill Dill Carr Stonbraker & Hutchings, P.C. (incorporated by reference to Exhibit 11.1) 171 - ---------------------------------------------------------------------------------------------------------------------- 10.4 Consent of Robert J. Griffis, Ph.D., P.Eng. 173 - ---------------------------------------------------------------------------------------------------------------------- 11.1 Opinion re legality 175 - ----------------------------------------------------------------------------------------------------------------------
II-4 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-1 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Vancouver, Province of British Columbia, on November 1, 2000. COLUMBIA RIVER RESOURCES INC. (Registrant) By:/S/ROBERT R. FERGUSON ------------------------------------------- Robert R. Ferguson, President In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
SIGNATURE TITLE DATE President , Treasurer & Director /s/ Robert R. Ferguson (Principal Executive, Financial and - -------------------------------- Accounting Officer) November 1, 2000 Robert R. Ferguson /s/ Robert F. Weicker - -------------------------------- Director November 1, 2000 Robert F. Weicker
II-5 EX-1.1 2 0002.txt FORM OF SELLING AGENT AGREEMENT Columbia River Resources, Inc. #304 - 856 Homer Street Vancouver, British Columbia V6B 2W5 (604)688-1163 SELLING AGENT AGREEMENT _______________, 2000 Gentlemen: We are offering for sale 10,000,000 Shares of common stock of Columbia River Resources, Inc., a Nevada corporation (the "Company"), on a "best efforts, all or none" basis. The Shares and the terms upon which they are to be offered for sale are more particularly described in the enclosed Prospectus. We invite your participation, as Selling Agent, on the terms and conditions stated herein. 1. OFFERING PRICE. The Shares are to be offered to the public at the price of $0.45 per Share (hereinafter called the "Public Offering Price") and shall not be directly or indirectly offered or sold to the public by Selling Agents at any other price during the period this Agreement is in effect. 2. SELLING AGENTS. Members of the National Association of Securities Dealers, Inc. (the "NASD") who shall agree to offer Shares hereunder (herein referred to as "Selling Agents") will be allowed a commission of ten percent (10%) of the total sales price (i.e., $0.04 per Share) and payable as hereinafter provided. No commission shall be earned or paid unless the Shares are sold on or before _______________________ [90 days from the date of the Prospectus], which date may be extended for up to an additional 90 by the Company. 3. SUBSCRIPTIONS. We reserve the right to reject all subscriptions, in whole or in part, to make allotments, and to close the subscription books at any time without notice. The Shares allotted to you will be confirmed, subject to the terms and conditions of this Agreement. Payments for Shares sold by you are to be made by check or money order only and shall be made payable to Columbia River Resources, Inc. In respect to all Shares sold by you pursuant hereto, you will promptly transmit (by noon of the next business day following receipt) to us all checks and money orders received in payment in the full amount of the Public Offering Price for the number of Shares purchased, without deduction for any commission, in compliance with Rule 15c2-4 under the Securities Exchange Act of 1934 (the "1934 Act"). YOUR TRANSMITTAL LETTER ACCOMPANYING CHECKS OR MONEY ORDERS TO US SHALL SET FORTH THE NAMES AND ADDRESSES, TOGETHER WITH SOCIAL SECURITY OR APPROPRIATE TAX I.D. NUMBERS, OF THE PURCHASERS WITH THE NUMBER OF SHARES PURCHASED. NO COMMISSIONS SHALL BE PAYABLE, AND ALL SUBSCRIPTIONS ARE SUBJECT TO REJECTION, UNLESS AND UNTIL THE SELLING AGENT HAS COMPLIED WITH THE ABOVE UNDERLINED PROVISION. Each sale shall be contingent upon the sale of the Shares being sold on or before _________________ [90 days from the date of the Prospectus] (which date may be extended for up to an additional 90 days by the Company), and upon the acceptance of such sale by the undersigned. In the event any order submitted by you is not accepted, we will return all funds paid by the subscriber. Payment of the selling commissions in respect of each such sale will be made to the Selling Agent by us when and only upon the acceptance of such sale by us. The offering is made subject to the issuance and delivery of the Shares, to the approval of legal matters by counsel, and to the terms and conditions herein set forth. If an order is rejected or if a payment is received which proves insufficient or worthless, any compensation paid to the Selling Agent shall be returned by the Selling Agent's remittances in cash. 4. OFFERING TO PUBLIC. Shares sold to the public by dealers shall be sold by the Selling Agents as agents for the Company. Neither you nor any other person is, or has been, authorized to give any information or to make any representations in connection with the sale of the Shares other than as contained in the Prospectus. The Selling Agent will not sell the Shares pursuant to this Agreement unless the Prospectus is furnished to the purchaser at least forty-eight (48) hours prior to the mailing of the confirmation of sale, or is sent to such person under such circumstances that it would be received by him forty-eight (48) hours prior to his receipt of a confirmation of the sale. The Selling Agent understands that during the ninety (90)-day period after the first date upon which the Shares of the Company are bona fide offered to the public, all Selling Agents effecting transactions in the Company's securities shall be required to deliver the Company's current Prospectus to any purchasers thereof prior to or concurrent with the receipt of the confirmation of sale. Additional copies of the then current Prospectus will be supplied by the Company in reasonable quantities upon request. No Selling Agent is authorized to act as an agent for the Company except in offering the Shares to the public pursuant to this Agreement. 5. COMPLIANCE WITH SECURITIES LAWS. Upon becoming a Selling Agent, and in offering and selling the Shares, you agree to comply with all applicable requirements of the Securities Act of 1933, as amended (the "1933 Act"), the 1934 Act, any applicable state securities or "Blue Sky" laws, and the Conduct Rules of the NASD, including, but not limited to: a) IM-2110-1 "Free-Riding and Withholding", b) Rule 2420 "Dealing with Non-Members", c) Rule 2730 "Securities Taken in Trade", d) Rule 2740 "Selling Concessions, Discounts and Other", and e) Rule 2750 "Transactions with Related Persons". Upon application, you will be informed as to the states in which we have been advised by counsel to the Company that the Shares have been qualified for sale under the respective securities or Blue Sky laws of such states, but we assume no obligation or responsibility as to the right of any Selling Agent to sell the Shares in any state, or as to any sale therein. By acceptance of this Agreement, you represent that you are a member in good standing of the NASD. By acceptance of this Agreement, each Selling Agent has assumed full responsibility for thorough and prior training of its representatives concerning the selling methods to be used in connection with the offer and sale of the Shares, giving special emphasis to the NASD's principles of full and fair disclosure to prospective investors, suitability standards, and the prohibitions against "Free- Riding and Withholding." Each Selling Agent agrees to indemnify and hold harmless the Company and the other Selling Agents against and from any liability, loss, damage, or expense arising out of any failure by the Selling Agent to comply with the 1933 Act, the 1934 Act, applicable securities laws of any state, the rules and regulations of the Securities and Exchange Commission, or the Rules of Fair Practice of the NASD, due to any act or omission by the Selling Agent. 2 6. PROSPECTUS AND OFFERING. The Registration Statement on Form SB-1 (File No. __________) with respect to the subject Shares was declared effective on __________, 2000. By signing this Agreement, each Selling Agent acknowledges receipt of a copy of the Prospectus included in said Registration Statement. Additional copies of the Prospectus will be supplied to you in reasonable quantities upon request. 7. LIABILITY. Nothing will constitute the Selling Agent an association or other separate entity or partners with us or with each other, but you will be responsible for your share of any liability or expense based on any claim to the contrary. We will not be under any liability for or in respect of any matter connected with this Agreement, except for lack of good faith obligations expressly assumed by us in this Agreement, and any liability due to our act or omission arising under the 1933 Act. 8. TERMINATION. This Agreement shall terminate ___________________ (which date may be extended for ____________ by the Company), or by either party giving notice of termination to the other at any time, but such termination shall not affect your obligation to comply with the requirements of this Agreement or your right to commissions on orders confirmed by us prior thereto. 9. NUMBER OF SHARES PURCHASED. You agree, upon our request, at any time prior to the termination of this Agreement, to report to us the number of Shares purchased by your customers. Your Share allocation is subject to reduction at any time prior to sale confirmations and funds therefor being received by us. 10. NOTICES. Notice to us should be addressed to us at our office: #304 - - 856 Homer Street, Vancouver, British Columbia V6B 2W5, with a copy to Adam P. Stapen, Esq., Dill Dill Carr Stonbraker & Hutchings, P.C., 455 Sherman Street, Suite 300, Denver, Colorado 80203. Notices to you shall be deemed to have been duly given if telegraphed, mailed, or delivered to you at the address set forth by you in this Agreement, or if given verbally and confirmed in writing. 11. CONFIRMATION. If you desire to participate in the offering of the Shares as hereinbefore set forth, please sign the acceptance below and provide the pertinent information requested. Very truly yours, COLUMBIA RIVER RESOURCES, INC. By:___________________________________ Robert R. Ferguson, President 3 Accepted on: ---------------------------------------------------- Firm Name: ---------------------------------------------------- By: ---------------------------------------------------- Position: ---------------------------------------------------- Address: ---------------------------------------------------- Telephone Number: ---------------------------------------------------- IRS I.D. Number: ---------------------------------------------------- Share Allocation: ---------------------------------------------------- 4 EX-2.1 3 0003.txt ARTICLES OF INCORPORATION FILED in the office of the Secretary of State of the State of Nevada June 13, 1997 No. C 12576-97 Dean Heller, Secretary of State ARTICLES OF INCORPORATION OF COLUMBIA RIVER RESOURCES INC. ARTICLE I The name of the corporation is Columbia River Resources Inc. (the "Corporation"). ARTICLE II The amount of total authorized capital stock which the Corporation shall have authority to issue is 50,000,000 shares of common stock, each with $0.001 par value, and 1,000,000 shares of preferred stock, each with $0.01 par value. To the fullest extent permitted by the laws of the State of Nevada (currently set forth in NRS 78.195), as the same now exists or may hereafter be amended or supplemented, the Board of Directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of capital stock of the Corporation. ARTICLE III The business and affairs of the Corporation shall be managed by a Board of Directors which shall exercise all the powers of the Corpora tion except as otherwise provided in the Bylaws, these Articles of Incorporation or by the laws of the State of Nevada. The number of members of the Board of Directors shall be set in accordance with the Company's Bylaws; however, the initial Board of Directors shall consist of one member. The name and address of the person who shall serve as the director until the first annual meeting of stockholders and until his successors are duly elected and qualified is as follows: NAME ADDRESS Bob Ferguson 904 - 850 Burrard Street Vancouver, British Columbia V6Z 1X8 CANADA 1 ARTICLE IV The name and address of the incorporator of the Corporation is Craig A. Stoner, 455 Sherman Street, Suite 300, Denver, Colorado 80203. ARTICLE V To the fullest extent permitted by the laws of the State of Nevada (currently set forth in NRS 78.037), as the same now exists or may hereafter be amended or supplemented, no director or officer of the Corporation shall be liable to the Corporation or to its stockholders for damages for breach of fiduciary duty as a director or officer. ARTICLE VI The Corporation shall indemnify, to the fullest extent permitted by applicable law in effect from time to time, any person against all liability and expense (including attorneys' fees) incurred by reason of the fact that he is or was a director or officer of the Corporation, he is or was serving at the request of the Corporation as a director, officer, employee, or agent of, or in any similar managerial or fiduciary position of, another corporation, partnership, joint venture, trust or other enterprise. The Corporation shall also indemnify any person who is serving or has served the Corporation as a director, officer, employee, or agent of the Corporation to the extent and in the manner provided in any bylaw, resolution of the shareholders or directors, contract, or otherwise, so long as such provision is legally permissible. ARTICLE VII The owners of shares of stock of the Corporation shall not have a preemptive right to acquire unissued shares, treasury shares or securities convertible into such shares. ARTICLE VIII Only the shares of capital stock of the Corporation designated at issuance as having voting rights shall be entitled to vote at meetings of stockholders of the Corporation, and only stockholders of record of shares having voting rights shall be entitled to notice of and to vote at meetings of stockholders of the Corporation. 2 ARTICLE IX The initial resident agent of the Corporation shall be the Corpora tion Trust Company of Nevada, whose street address is 1 East 1st Street, Reno, Nevada 89501. ARTICLE X The provisions of NRS 78.378 to 78.3793 inclusive, shall not apply to the Corporation. ARTICLE XI The purposes for which the Corporation is organized and its powers are as follows: To engage in all lawful business; and To have, enjoy, and exercise all of the rights, powers, and privileges conferred upon corporations incorporated pursuant to Nevada law, whether now or hereafter in effect, and whether or not herein specifically mentioned. ARTICLE XII One-third of the votes entitled to be cast on any matter by each shareholder voting group entitled to vote on a matter shall constitute a quorum of that voting group for action on that matter by shareholders. ARTICLE XIII The holder of a bond, debenture or other obligation of the Corporation may have any of the rights of a stockholder in the Corpora tion to the extent determined appropriate by the Board of Directors at the time of issuance of such bond, debenture or other obligation. 3 IN WITNESS WHEREOF, the undersigned incorporator has executed these Articles of Incorporation this 11th day of June, 1997. By /S/ CRAIG A. STONER ------------------------------- Craig A. Stoner Incorporator STATE OF COLORADO ) CITY AND ) ss. COUNTY OF DENVER ) Personally appeared before me this 11th day of June, 1997, Craig A. Stoner who, being first duly sworn, declared that he executed the foregoing Articles of Incorporation and that the statements therein are true and correct to the best of his knowledge and belief. Witness my hand and official seal. /s/ FAY M. MATSUKAGE -------------------------------- Notary Public My commission expires: Address: 455 SHERMAN STREET 1-12-99 SUITE 300 - ------------------ DENVER, CO 80237 1:2-1artic.wpd 1524.01 4 CERTIFICATE OF ACCEPTANCE OF APPOINTMENT BY RESIDENT AGENT I, Corporation Trust Company of Nevada, with address at One East First Street, Town of Reno, County of Washoe, State of Nevada, hereby accept the appointment as Resident Agent of Columbia River Resources Inc. in accordance with NRS 78.090. In Witness Whereof, I have hereunto set my hand this 12TH day of June, 1997. /s/ Marcia J. Sunahara ------------------------------------- Resident Agent 5 EX-2.2 4 0004.txt BYLAWS COLUMBIA RIVER RESOURCES INC. BYLAWS - ------------------------------- Adopted as of June 13TH , 1997 COLUMBIA RIVER RESOURCES INC. BYLAWS TABLE OF CONTENTS SECTION PAGE ARTICLE I OFFICES 1.1 Registered Office.......................................... 1 1.2 Principal Office........................................... 1 ARTICLE II STOCKHOLDERS 2.1 Annual Meeting ............................................. 1 2.2 Special Meetings............................................ 1 2.3 Place of Meeting............................................ 2 2.4 Notice of Meeting........................................... 2 2.5 Adjournment................................................. 2 2.6 Organization................................................ 2 2.7 Closing of Transfer Books or Fixing of Record Date.......... 3 2.8 Quorum...................................................... 3 2.9 Proxies..................................................... 3 2.10 Voting of Shares............................................ 3 2.11 Action Taken Without a Meeting.............................. 4 2.12 Meetings by Telephone....................................... 4 -i- SECTION PAGE ARTICLE III DIRECTORS 3.1 Board of Directors; Number; Qualifications; Election....... 4 3.2 Powers of the Board of Directors: Generally................ 4 3.3 Committees of the Board of Directors....................... 5 3.4 Resignation................................................ 5 3.5 Removal.................................................... 5 3.6 Vacancies.................................................. 5 3.7 Regular Meetings........................................... 5 3.8 Special Meetings........................................... 6 3.9 Notice..................................................... 6 3.10 Quorum..................................................... 6 3.11 Manner of Acting........................................... 6 3.12 Compensation............................................... 6 3.13 Action Taken Without a Meeting............................. 6 3.14 Meetings by Telephone...................................... 6 ARTICLE IV OFFICERS AND AGENTS 4.1 Officers of the Corporation................................ 7 4.2 Election and Term of Office................................ 7 4.3 Removal.................................................... 7 4.4 Vacancies.................................................. 7 4.5 President.................................................. 8 4.6 Vice Presidents............................................ 8 4.7 Secretary.................................................. 8 4.8 Treasurer.................................................. 9 4.9 Salaries................................................... 9 4.10 Bonds...................................................... 9 -ii- SECTION PAGE ARTICLE V STOCK 5.1 Certificates............................................... 10 5.2 Record..................................................... 11 5.3 Consideration for Shares................................... 11 5.4 Cancellation of Certificates............................... 11 5.5 Lost Certificates.......................................... 11 5.6 Transfer of Shares......................................... 11 5.7 Transfer Agents, Registrars, and Paying Agents............. 12 ARTICLE VI INDEMNIFICATION OF OFFICERS AND DIRECTORS 6.1 Indemnification; Advancement of Expenses................... 12 6.2 Insurance and Other Financial Arrangements Against Liability of Directors, Officers, Employees, and Agents................................................... 12 ARTICLE VII ACQUISITION OF CONTROLLING INTEREST 7.1 Acquisition of Controlling Interest........................ 13 ARTICLE VIII EXECUTION OF INSTRUMENTS; LOANS, CHECKS AND ENDORSEMENTS; DEPOSITS; PROXIES 8.1 Execution of Instruments................................... 13 8.2 Loans...................................................... 13 8.3 Checks and Endorsements.................................... 13 8.4 Deposits................................................... 14 8.5 Proxies.................................................... 14 8.6 Contracts.................................................. 14 -iii- SECTION PAGE ARTICLE IX MISCELLANEOUS 9.1 Waivers of Notice.......................................... 14 9.2 Corporate Seal............................................. 14 9.3 Fiscal Year................................................ 15 9.4 Amendment of Bylaws........................................ 15 9.5 Uniformity of Interpretation and Severability.............. 15 9.6 Emergency Bylaws........................................... 15 Secretary's Certification........................................... 16 -iv- BYLAWS OF COLUMBIA RIVER RESOURCES INC. ARTICLE I OFFICES 1.1 REGISTERED OFFICE. The registered office of the Corporation required by the General Corporation Law of Nevada, Nevada Revised Statutes, 1957 ("NRS"), Chapter 78, to be maintained in Nevada may be, but need not be, identical with the principal office if in Nevada, and the address of the registered office may be changed from time to time by the Board of Directors. 1.2 PRINCIPAL OFFICE. The Corporation may have such other office or offices either within or outside of the State of Nevada as the business of the Corporation may require from time to time if so designated by the Board of Directors. ARTICLE II STOCKHOLDERS 2.1 ANNUAL MEETING. Unless otherwise designated by the Board of Directors, the annual meeting shall be held on the date and at the time and place fixed by the Board of Directors; provided, however, that the first annual meeting shall be held on a date that is within 18 months after the date on which the Corporation first has stockholders, and each successive annual meeting shall be held on a date that is within 18 months after the preceding annual meeting. 2.2 SPECIAL MEETINGS. Special meetings of stockholders of the Corporation, for any purpose, may be called by the Chairman of the Board, the president, any vice president, any two members of the Board of Directors, or the holders of at least 10% of all of the shares entitled to vote at such meeting. Any holder or holders of not less than 10% of all the outstanding shares of the Corporation who desire to call a special meeting pursuant to this Section 2 of Article II shall notify the president that a special meeting of the stockholders shall be called. Within 30 days after notice to the president, the president shall set the date, time, and location of a stockholders' meeting. The date set by the president shall be not less than 30 nor more than 120 days after the date of notice to the president. If the president fails to set the date, time, and location of special meeting within 1 the 30-day time period described above, the stockholder or stockholders calling the meeting shall set the date, time, and location of the special meeting. At a special meeting no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting. 2.3 PLACE OF MEETING. The Board of Directors may designate any place, either within or outside the State of Nevada, as the place for any annual meeting or special meeting called by the Board of Directors. If no designation is made, or if a meeting shall be called otherwise than by the Board, the place of meeting shall be the Company's principal offices, whether within or outside the State of Nevada. 2.4 NOTICE OF MEETING. Written notice signed by an officer designated by the Board of Directors, stating the place, day, and hour of the meeting and the purpose for which the meeting is called, shall be delivered personally or mailed postage prepaid to each stockholder of record entitled to vote at the meeting not less than 10 nor more than 60 days before the meeting. If mailed, such notice shall be directed to the stockholder at his address as it appears upon the records of the Corporation, and notice shall be deemed to have been given upon the mailing of any such notice, and the time of the notice shall begin to run from the date upon which the notice is deposited in the mail for transmission to the stockholder. Personal delivery of any such notice to any officer of a corporation or association, or to any member of a partnership, constitutes delivery of the notice to the corporation, association or partnership. Any stockholder may waive notice of any meeting by a writing signed by him, or his duly authorized attorney, either before or after the meeting. 2.5 ADJOURNMENT. When a meeting is for any reason adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, any business may be transacted which might have been transacted at the original meeting. 2.6 ORGANIZATION. The president or any vice president shall call meetings of stockholders to order and act as chairman of such meetings. In the absence of said officers, any stockholder entitled to vote at that meeting, or any proxy of any such stockholder, may call the meeting to order and a chairman shall be elected by a majority of the stockholders entitled to vote at that meeting. In the absence of the secretary or any assistant secretary of the Corporation, any person appointed by the chairman shall act as secretary of such meeting. An appropriate number of inspectors for any meeting of stockholders may be appointed by the chairman of such meeting. Inspectors so appointed will open and close the polls, will receive and take charge of proxies and ballots, and will decide all questions as to the qualifications of voters, validity of proxies and ballots, and the number of votes properly cast. 2 2.7 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The directors may prescribe a period not exceeding 60 days before any meeting of the stockholders during which no transfer of stock on the books of the Corporation may be made, or may fix a day not more than 60 days before the holding of any such meeting as the day as of which stockholders entitled to notice of and to vote at such meetings must be determined. Only stockholders of record on that day are entitled to notice or to vote at such meeting. 2.8 QUORUM. Unless otherwise provided by the Articles of Incorporation, one-third of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If fewer than one-third of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting without further notice for a period not to exceed 60 days at any one adjournment. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of stockholders so that less than a quorum remains. If a quorum is present, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the stockhold ers, unless the vote of a greater number or voting by classes is required by law or the Articles of Incorporation. 2.9 PROXIES. At all meetings of stockholders, a stockholder may vote by proxy, as prescribed by law. Such proxy shall be filed with the secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after 6 months from the date of its creation, unless it is coupled with an interest, or unless the stockholder specifies in it the length of time for which it is to continue in force, which may not exceed 7 years from the date of its creation. 2.10 VOTING OF SHARES. Each outstanding share, regardless of class, shall be entitled to one vote, and each fractional share shall be entitled to a corresponding fractional vote on each matter submitted to a vote at a meeting of stockholders, except as may be otherwise provided in the Articles of Incorporation or in the resolution providing for the issuance of the stock adopted by the Board of Directors pursuant to authority expressly vested in it by the provisions of the Articles of Incorporation. If the Articles of Incorporation or any such resolution provide for more or less than one vote per share for any class or series of shares on any matter, every reference in the Articles of Incorporation, these Bylaws and the General Corporation Law of Nevada to a majority or other proportion or number of shares shall be deemed to refer to a majority or other proportion of the voting power of all of the shares or those classes or series of shares, as may be required by the Articles of Incorporation, or in the resolution providing for the issuance of the stock adopted by the Board of Directors pursuant to authority expressly vested in it by the Articles of 3 Incorporation, or the General Corporation Law of Nevada. Cumulative voting shall not be allowed. Unless the General Corporation Law of Nevada, the Articles of Incorporation, or these Bylaws provide for different proportions, an act of stockholders who hold at least a majority of the voting power and are present at a meeting at which a quorum is present is the act of the stockholders. 2.11 ACTION TAKEN WITHOUT A MEETING. Unless otherwise provided in the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if a written consent thereto is signed by stockholders holding at least a majority of the voting power, except that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is required. In no instance where action is authorized by written consent need a meeting of stockholders be called or notice given. The written consent must be filed with the minutes of the proceedings of the stockholders. 2.12 MEETINGS BY TELEPHONE. Unless other restricted by the Articles of Incorpora tion or these Bylaws, stockholders may participate in a meeting of stockholders by means of a telephone conference or similar method of communication by which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this Section constitutes presence in person at the meeting. ARTICLE III DIRECTORS 3.1 BOARD OF DIRECTORS; NUMBER; QUALIFICATIONS; ELECTION. The Corporation shall be managed by a Board of Directors, all of whom must be natural persons at least 18 years of age. Directors need not be residents of the State of Nevada or stockholders of the Corporation. The number of directors of the Corporation shall be not less than one nor more than twelve. Subject to such limitations, the number of directors may be increased or decreased by resolution of the Board of Directors, but no decrease shall have the effect of shortening the term of any incumbent director. Subject to the provisions of Article III of the Corporation's Articles of Incorporation, each director shall hold office until the next annual meeting of shareholders or until his successor has been elected and qualified. 3.2 POWERS OF THE BOARD OF DIRECTORS: GENERALLY. Subject only to such limitations as may be provided by the General Corporation Law of Nevada or the Articles of Incorporation, the Board of Directors shall have full control over the affairs of the Corporation. 4 3.3 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more directors, which, to the extent provided in the resolution or resolutions or in these Bylaws, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to all papers on which the Corporation desires to place on a seal. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Unless the Articles of Incorporation or these Bylaws provide otherwise, the Board of Directors may appoint natural persons who are not directors to serve on committees. 3.4 RESIGNATION. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Board of Directors, the president, any vice president, or the secretary of the Corporation. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office. 3.5 REMOVAL. Except as otherwise provided in the Articles of Incorporation, any director may be removed, either with or without cause, at any time by the vote of the stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to voting power. 3.6 VACANCIES. All vacancies, including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, unless it is otherwise provided in the Articles of Incorporation. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. A director elected to fill a vacancy caused by an increase in the number of directors shall hold office until the next annual meeting of stockholders and until his successor has been elected and has qualified. 3.7 REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after and at the same place as the annual meeting of stockholders. The Board of Directors may provide by resolution the time and place, either within or outside the State of Nevada, for the holding of additional regular meetings without other notice than such resolution. 5 3.8 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the president or a one-third of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or outside Nevada, as the place for holding any special meeting of the Board of Directors called by them. 3.9 NOTICE. Notice of any special meeting shall be given at least two days previously thereto by written notice delivered personally or mailed to each director at his business address. Any director may waive notice of any meeting. A director's presence at a meeting shall constitute a waiver of notice of such meeting if the director's oral consent is entered on the minutes or by taking part in the deliberations at such meeting without objecting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. 3.10 QUORUM. A majority of the number of directors elected and qualified at the time of the meeting shall constitute a quorum for the transaction of business at any such meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. 3.11 MANNER OF ACTING. If a quorum is present, the affirmative vote of a majority of the directors present at the meeting and entitled to vote on that particular matter shall be the act of the Board, unless the vote of a greater number is required by law or the Articles of Incorporation. 3.12 COMPENSATION. By resolution of the Board of Directors, any director may be paid any one or more of the following: his expenses, if any, of attendance at meetings; a fixed sum for attendance at such meeting; or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. 3.13 ACTION TAKEN WITHOUT A MEETING. Unless otherwise provided in the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at a meeting of the Board of Directors or a committee thereof may be taken without a meeting if, before or after the action, a written consent thereto is signed by all the members of the Board or of the committee. The written consent must be filed with the minutes of the proceedings of the Board or committee. 6 3.14 MEETINGS BY TELEPHONE. Unless other restricted by the Articles of Incorpora tion or these Bylaws, members of the Board of Directors or of any committee designated by the Board, may participate in a meeting of the Board or committee by means of a telephone conference or similar method of communication by which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this Section constitutes presence in person at the meeting. ARTICLE IV OFFICERS AND AGENTS 4.1 OFFICERS OF THE CORPORATION. The Corporation shall have a president, a secretary, and a treasurer, each of whom shall be elected by the Board of Directors. The Board of Directors may appoint one or more vice presidents and such other officers, assistant officers, committees, and agents, including a chairman of the board, assistant secretaries, and assistant treasurers, as they may consider necessary, who shall be chosen in such manner and hold their offices for such terms and have such authority and duties as from time to time may be determined by the Board of Directors. One person may hold any two or more offices. The officers of the Corporation shall be natural persons 18 years of age or older. In all cases where the duties of any officer, agent, or employee are not prescribed by the Bylaws or by the Board of Directors, such officer, agent, or employee shall follow the orders and instructions of (a) the president, and if a chairman of the board has been elected, then (b) the chairman of the board. 4.2 ELECTION AND TERM OF OFFICE. The officers of the Corporation shall be elected by the Board of Directors annually at the first meeting of the Board held after each annual meeting of the stockholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Each officer shall hold office until the first of the following occurs: until his successor shall have been duly elected and shall have qualified; or until his death; or until he shall resign; or until he shall have been removed in the manner hereinafter provided. 4.3 REMOVAL. Any officer or agent may be removed by the Board of Directors or by the executive committee, if any, whenever in its judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. 4.4 VACANCIES. A vacancy in any office, however occurring, may be filled by the Board of Directors for the unexpired portion of the term. 7 4.5 PRESIDENT. The president shall, subject to the direction and supervision of the Board of Directors, be the chief executive officer of the Corporation and shall have general and active control of its affairs and business and general supervision of its officers, agents, and employees. He shall, unless otherwise directed by the Board of Directors, attend in person or by substitute appointed by him, or shall execute, on behalf of the Corporation, written instruments appointing a proxy or proxies to represent the Corporation, at all meetings of the stockholders of any other corporation in which the Corporation shall hold any stock. He may, on behalf of the Corporation, in person or by substitute or by proxy, execute written waivers of notice and consents with respect to any such meetings. At all such meetings and otherwise, the president, in person or by substitute or proxy as aforesaid, may vote the stock so held by the Corporation and may execute written consents and other instruments with respect to such stock and may exercise any and all rights and powers incident to the ownership of said stock, subject however to the instruc tions, if any, of the Board of Directors. The president shall have custody of the treasurer's bond, if any. If a chairman of the board has been elected, the chairman of the board shall have, subject to the direction and modification of the Board of Directors, all the same responsibilities, rights, and obligations as described in these Bylaws for the president. 4.6 VICE PRESIDENTS. The vice presidents, if any, shall assist the president and shall perform such duties as may be assigned to them by the president or by the Board of Directors. In the absence of the president, the vice president designated by the Board of Directors or (if there be no such designation) the vice president designated in writing by the president shall have the powers and perform the duties of the president. If no such designation shall be made, all vice presidents may exercise such powers and perform such duties. 4.7 SECRETARY. The secretary shall perform the following: (a) keep the minutes of the proceedings of the stockholders, executive committee, and the Board of Directors; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation and affix the seal to all documents when authorized by the Board of Directors; (d) keep, at the Corporation's registered office or principal place of business within or outside Nevada, a record containing the names and addresses of all stockholders and the number and class of shares held by each, unless such a record shall be kept at the office of the Corporation's transfer agent or registrar; (e) sign with the president or a vice president, certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the Corporation, unless the Corporation has a transfer agent; and (g) in general, perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the Board of Directors. Assistant secretaries, if any, shall have the same duties and powers, subject to supervision by the secretary. 8 4.8 TREASURER. The treasurer shall be the principal financial officer of the Corporation and shall have the care and custody of all funds, securities, evidences of indebtedness, and other personal property of the Corporation, and shall deposit the same in accordance with the instructions of the Board of Directors. He shall receive and give receipts and acquittances for monies paid in or on account of the Corporation, and shall pay out of the funds on hand all bills, payrolls, and other just debts of the Corporation of whatever nature upon maturity. He shall perform all other duties incident to the office of the treasurer and, upon request of the Board, shall make such reports to it as may be required at any time. He shall, if required by the Board, give the Corporation a bond in such sums and with such sureties as shall be satisfactory to the Board, conditioned upon the faithful performance of his duties and for the restoration to the Corporation of all books, papers, vouchers, money, and other property of whatever kind in his possession or under his control belonging to the Corporation. He shall have such other powers and perform such other duties as may be from time to time prescribed by the Board of Directors or the president. The assistant treasurers, if any, shall have the same powers and duties, subject to the supervision of the treasurer. The treasurer shall also be the principal accounting officer of the Corporation. He shall prescribe and maintain the methods and systems of accounting to be followed, keep complete books and records of account, prepare and file all local, state, and federal tax returns, prescribe and maintain an adequate system of internal audit, and prepare and furnish to the president and the Board of Directors statements of account showing the financial position of the Corporation and the results of its operations. 4.9 SALARIES. Officers of the Corporation shall be entitled to such salaries, emoluments, compensation, or reimbursement as shall be fixed or allowed from time to time by the Board of Directors. 4.10 BONDS. If the Board of Directors by resolution shall so require, any officer or agent of the Corporation shall give bond to the Corporation in such amount and with such surety as the Board of Directors may deem sufficient, conditioned upon the faithful performance of that officer's or agent's duties and offices. 9 ARTICLE V STOCK 5.1 CERTIFICATES. The shares of stock shall be represented by consecutively numbered certificates signed in the name of the Corporation by its president or a vice president and by the treasurer or an assistant treasurer or by the secretary or an assistant secretary, and shall be sealed with the seal of the Corporation, or with a facsimile thereof. Whenever any certificate is countersigned or otherwise authenticated by a transfer agent or transfer clerk, and by a registrar, then a facsimile of the signatures of the officers or agents, the transfer agent or transfer clerk or the registrar of the Corporation may be printed or lithographed upon the certificate in lieu of the actual signatures. If the Corporation uses facsimile signatures of its officers and agents on its stock certificates, it cannot act as the registrar of its own stock, but its transfer agent and registrar may be identical if the institution acting in those dual capacities countersigns or otherwise authenticates any stock certificates in both capacities. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is delivered by the Corporation, the certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed the certificates, or whose facsimile signature has been used thereon, had not ceased to be an officer of the Corporation. If the Corporation is authorized to issue shares of more than one class or more than one series of any class, each certificate shall set forth upon the face or back of the certificate or shall state that the Corporation will furnish to any stockholder upon request and without charge a full statement of the designations, preferences, limitations, and relative rights of the shares of each class authorized to be issued and, if the Corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences between the shares of each such series, so far as the same have been fixed and determined, and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series. Each certificate representing shares shall state the following upon the face thereof: the name of the state of the Corporation's organization; the name of the person to whom issued; the number and class of shares and the designation of the series, if any, which such certificate represents; the par value of each share represented by such certificate or a statement that the shares are without par value. Certificates of stock shall be in such form consistent with law as shall be prescribed by the Board of Directors. No certificate shall be issued until the shares represented thereby are fully paid. 10 5.2 RECORD. A record shall be kept of the name of each person or other entity holding the stock represented by each certificate for shares of the Corporation issued, the number of shares represented by each such certificate, the date thereof and, in the case of cancellation, the date of cancellation. The person or other entity in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof, and thus a holder of record of such shares of stock, for all purposes as regards the Corpora tion. 5.3 CONSIDERATION FOR SHARES. Shares shall be issued for such consideration, expressed in dollars (but not less than the par value thereof) as shall be fixed from time to time by the Board of Directors. That part of the surplus of a corporation which is transferred to stated capital upon the issuance of shares as a share dividend shall be deemed the consideration for the issuance of such dividend shares. Such consideration may consist, in whole or in part, of money, promissory notes, other property, tangible or intangible, or in labor or services actually performed for the Corporation, contracts for services to be performed or other securities of the Corporation. 5.4 CANCELLATION OF CERTIFICATES. All certificates surrendered to the Corporation for transfer shall be canceled and no new certificates shall be issued in lieu thereof until the former certificate for a like number of shares shall have been surrendered and canceled, except as herein provided with respect to lost, stolen, or destroyed certificates. 5.5 LOST CERTIFICATES. In case of the alleged loss, destruction, or mutilation of a certificate of stock, the Board of Directors may direct the issuance of a new certificate in lieu thereof upon such terms and conditions in conformity with law as it may prescribe. The Board of Directors may in its discretion require a bond, in such form and amount and with such surety as it may determine, before issuing a new certificate. 5.6 TRANSFER OF SHARES. Upon surrender to the Corporation or to a transfer agent of the Corporation of a certificate of stock duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, and such documentary stamps as may be required by law, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate. Every such transfer of stock shall be entered on the stock book of the Corporation which shall be kept at its principal office or by its registrar duly appointed. The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as may be required by the laws of Nevada. 11 5.7 TRANSFER AGENTS, REGISTRARS, AND PAYING AGENTS. The Board may at its discretion appoint one or more transfer agents, registrars, and agents for making payment upon any class of stock, bond, debenture, or other security of the Corporation. Such agents and registrars may be located either within or outside Nevada. They shall have such rights and duties and shall be entitled to such compensation as may be agreed. ARTICLE VI INDEMNIFICATION OF OFFICERS AND DIRECTORS 6.1 INDEMNIFICATION; ADVANCEMENT OF EXPENSES. To the fullest extent permitted by the laws of the State of Nevada (currently set forth in NRS 78.751), as the same now exists or may hereafter be amended or supplemented, the Corporation shall indemnify its directors and officers, including payment of expenses as they are incurred and in advance of the final disposition of any action, suit, or proceeding. Employees, agents, and other persons may be similarly indemnified by the Corporation, including advancement of expenses, in such case or cases and to the extent set forth in a resolution or resolutions adopted by the Board of Directors. No amendment of this Section shall have any effect on indemnification or advancement of expenses relating to any event arising prior to the date of such amendment. 6.2 INSURANCE AND OTHER FINANCIAL ARRANGEMENTS AGAINST LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS. To the fullest extent permitted by the laws of the State of Nevada (currently set forth in NRS 78.752), as the same now exists or may hereafter be amended or supplemented, the Corporation may purchase and maintain insurance and make other financial arrangements on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, for any liability asserted against such person and liability and expense incurred by such person in its capacity as a director, officer, employee, or agent, or arising out of such person's status as such, whether or not the Corporation has the authority to indemnify such person against such liability and expenses. 12 ARTICLE VII ACQUISITION OF CONTROLLING INTEREST 7.1 ACQUISITION OF CONTROLLING INTEREST. The provisions of the General Corporation Law of Nevada pertaining to the acquisition of a controlling interest (currently set forth NRS 78.378 to 78.3793, inclusive), as the same now exists or may hereafter be amended or supplemented, shall not apply to the Corporation. ARTICLE VIII EXECUTION OF INSTRUMENTS; LOANS, CHECKS AND ENDORSEMENTS; DEPOSITS; PROXIES 8.1 EXECUTION OF INSTRUMENTS. The president or any vice president shall have the power to execute and deliver on behalf of and in the name of the Corporation any instrument requiring the signature of an officer of the Corporation, except as otherwise provided in these Bylaws or where the execution and delivery thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. Unless authorized to do so by these Bylaws or by the Board of Directors, no officer, agent, or employee shall have any power or authority to bind the Corporation in any way, to pledge its credit, or to render it liable pecuniarily for any purpose or in any amount. 8.2 LOANS. The Corporation may lend money to, guarantee the obligations of, and otherwise assist directors, officers, and employees of the Corporation, or directors of another corporation of which the Corporation owns a majority of the voting stock, only upon compliance with the requirements of the General Corporation Law of Nevada. No loans shall be contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. 8.3 CHECKS AND ENDORSEMENTS. All checks, drafts, or other orders for the payment of money, obligations, notes, or other evidences of indebtedness, bills of lading, warehouse receipts, trade acceptances, and other such instruments shall be signed or endorsed by such officers or agents of the Corporation as shall from time to time be determined by resolution of the Board of Directors, which resolution may provide for the use of facsimile signatures. 8.4 DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited from time to time to the Corporation's credit in such banks or other depositories as shall from time to time be determined by resolution of the Board of Directors, which 13 resolution may specify the officers or agents of the Corporation who shall have the power, and the manner in which such power shall be exercised, to make such deposits and to endorse, assign, and deliver for collection and deposit checks, drafts, and other orders for the payment of money payable to the Corporation or its order. 8.5 PROXIES. Unless otherwise provided by resolution adopted by the Board of Directors, the president or any vice president may from time to time appoint one or more agents or attorneys-in-fact of the Corporation, in the name and on behalf of the Corpora tion, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation, association, or other entity any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation, association, or other entity or to consent in writing, in the name of the Corporation as such holder, to any action by such other corpora tion, association, or other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, all such written proxies or other instruments as he may deem necessary or proper in the premises. 8.6 CONTRACTS. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. ARTICLE IX MISCELLANEOUS 9.1 WAIVERS OF NOTICE. Whenever notice is required by the General Corporation Law of Nevada, by the Articles of Incorporation, or by these Bylaws, a waiver thereof in writing signed by the director, stockholder, or other person entitled to said notice, whether before, at, or after the time stated therein, or his appearance at such meeting in person or (in the case of a stockholders' meeting) by proxy, shall be equivalent to such notice. 9.2 CORPORATE SEAL. The Board of Directors may adopt a seal circular in form and bearing the name of the Corporation, the state of its incorporation, and the word "Seal" which, when adopted, shall constitute the seal of the Corporation. The seal may be used by causing it or a facsimile of it to be impressed, affixed, manually reproduced, or rubber stamped with indelible ink. 9.3 FISCAL YEAR. The Board of Directors may, by resolution, adopt a fiscal year for the Corporation. 14 9.4 AMENDMENT OF BYLAWS. The provisions of these Bylaws may at any time, and from time to time, be amended, supplemented or repealed by the Board of Directors. 9.5 UNIFORMITY OF INTERPRETATION AND SEVERABILITY. These Bylaws shall be so interpreted and construed as to conform to the Articles of Incorporation and the laws of the State of Nevada or of any other state in which conformity may become necessary by reason of the qualification of the Corporation to do business in such state, and where conflict between these Bylaws, the Articles of Incorporation or the laws of such a state has arisen or shall arise, these Bylaws shall be considered to be modified to the extent, but only to the extent, conformity shall require. If any provision hereof or the application thereof shall be deemed to be invalid by reason of the foregoing sentence, such invalidity shall not affect the validity of the remainder of these Bylaws without the invalid provision or the application thereof, and the provisions of these Bylaws are declared to be severable. 9.6 EMERGENCY BYLAWS. Subject to repeal or change by action of the stockholders, the Board of Directors may adopt emergency bylaws in accordance with and pursuant to the provisions of the laws of the State of Nevada. 15 SECRETARY'S CERTIFICATION The undersigned Secretary of Columbia River Resources Inc. (the "Corporation") hereby certifies that the foregoing Bylaws are the Bylaws of the Corporation adopted by the Board of Directors as of the 13 day of June, 1997. By /S/ ROBERT FERGUSON ----------------------------------- Robert Ferguson Secretary 16 EX-4 5 0005.txt EX. 4.1 FORM OF SUBSCRIPTION AGREEMENT SUBSCRIPTION FORM To: COLUMBIA RIVER RESOURCES INC. The undersigned hereby acknowledges receipt of the Prospectus, dated ___________, 2000, of Columbia River Resources Inc. (the "Company") and subscribes for the following number of Shares of the Company upon the terms and conditions set forth therein: Number of Shares: All subscriptions are subject to ------------- acceptance by the Company, to Price Per Share: $ availability, and to certain other ------------- conditions, and any subscription may Payment Enclosed: $ be declined in whole or in part by ------------- return of the subscription monies without interest. (Make checks payable to "Columbia River Resources Inc.") Accepted by Company: Date:_________________, 2000 ------------------------------------ Authorized officer - ----------------------------------- for Shares - ----------------------------------- ---------------- (Signature(s) of Subcriber(s) - ----------------------------------- Social Security or Tax I.D. Check one if more than one owner: The certificates for such stock are [ ] Joint tenants WRS to be issued as follows: [ ] Tenants in Common - ----------------------------------- [ ] Custodian under UGMA Name(s) Other: - ----------------------------------- -------------------------- - ----------------------------------- Address - ----------------------------------- - ----------------------------------- EX-10 6 0006.txt EX. 6.1 LEASE AGREEMENT DATED 2/19/99 CME CME Consulting Ltd. Canadian Mineral Exploration Consultants Working Worldwide February 19, 1999 Mr. Robert Ferguson, President Columbia River Resources Inc. Suite 510, 1090 West Pender Street Vancouver, BC V6E 2N7 Dear Bob, Per your visit yesterday, the following is our proposal for Suite 304, 856 Homer Street, Vancouver, BC: 1. TERM April 1, 1999 to November 30, 2000 - a total of 20 months 2. FOOTAGE 913.25 sq. ft.2 3. Monthly payment (see attached schedule) *The above mentioned will be incorporated in the standard lease agreement. If the proposal is acceptable, please sign and return this letter to us at your earliest convenience. Please note that we need this agreement in order for us to notify our landlord in writing. Sincerely, Accepted, /s/ Peter Chen /s/ Robert Ferguson Peter Chen Robert Ferguson Columbia River Resources Inc. - -------------------------------------------------------------------------------- #302 - 856 Homer Street, Vancouver, British Columbia, Canada V6B 2W5 Telephone (604) 687-7938 Facsimile (604) 687-2319 Columbia River Resources Schedule of Rent Payments for 2000 - ------------------------------------------------------------------------------ MONTH PAYMENT DUE 7%GST SECURITY TOTAL Jan. 1, 2000 1,093.84 76.57 86.67 1,257.08 Feb. 1 1,093.84 76.57 1,170.41 Mar. 1 1,093.84 76.57 1,170.41 Apr. 1 1,093.84 76.57 86.67 1,257.08 May 1 1,093.84 76.57 1,170.41 Jun. 1 1,093.84 76.57 1,170.41 Jul. 1 1,093.84 76.57 86.67 1,257.08 Aug. 1 1,093.84 76.57 1,170.41 Sept. 1 1,093.84 76.57 1,170.41 Oct. 1 1,093.84 76.57 86.67 1,257.08 Nov. 1 1,093.84 76.57 1,170.41 - ------------------------------------------------------------------------------ Note: 1. Monthly payment includes 2 desks & 2 chairs, any extra furniture can be provided without cost if available. 2. Leasehold improvement & telecommunications will be Tenant's responsibility. Columbia River Resources Schedule of Rent Payments for 1999 - ------------------------------------------------------------------------------ MONTH PAYMENT DUE 7%GST SECURITY TOTAL 1-Apr-99 2,187.68(1) 153.14 86.67 2,427.49 1-May-99 1,093.84 76.57 1,170.41 1-Jun-99 1,093.84 76.57 1,170.41 1-Jul-99 1,093.84 76.57 86.67 1,257.08 1-Aug-99 1,093.84 76.57 1,170.41 1-Sep-99 1,093.84 76.57 1,170.41 1-Oct-99 1,093.84 76.57 86.67 1,257.08 1-Nov-99 1,093.84 76.57 1,170.41 1-Dec-99 1,093.84 76.57 1,170.41 - ------------------------------------------------------------------------------ Note: 1. Includes first month and last month rent. 2. Monthly payment includes 2 desks & 2 chairs, any extra furniture can be provided without cost if available. 3. Leasehold improvement & telecommunications will be Tenant's responsibility. 4. Rent for Dec. 1999 & Nov. 2000 may be varied due to fluctuation of operating expenses. 2/19/99 EX-10 7 0007.txt EX. 6.2 BINDING HEADS PROPERTY AGMT DATED 9/28/99 BINDING HEADS OF AGREEMENT THIS HEADS OF AGREEMENT MADE EFFECTIVE AS OF THE 28TH DAY OF SEPTEMBER, 1999. BETWEEN: COLUMBIA RIVER RESOURCES INC. (hereinafter referred to as CRVV) a Limited and Public Company incorporated in the State of Nevada, USA Withits head office located at 304 - 856 Homer Street Vancouver, British Columbia, Canada Or its assigns AND AYACO (GHANA) LIMITED (Hereinafter referred to as Ayaco ) a limited and private company incorporated in the Republic of Ghana P.O. Box 5999, Accra-North Ghana. WHEREAS, Ayaco holds a 100% interest in the Tanoso Reconnaissance License (the License) subject to a 10% carried net profit interest to the Government of Ghana - ---------------------------------------------------------------------- WHEREAS, CRVV wishes to acquire a 100% working interest (the Interest) from Ayaco subject to a 10% net profit interest payable to Ayaco and to the additional 10% payable to the Government of Ghana. NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: THE OPTION In exchange for a nonrefundable 100,000 common shares of CRVV, with a deemed value of $0.15 per share all payable to Ayaco (the "Option Payment"), Ayaco hereby grants to CRVV the following (hereinafter referred to as the "Option"). An exclusive three (3) month due diligence period the "Due Diligence Period") during which CRVV may investigate all aspects of the licenses and the corporate matters of Ayaco so far as these matters may affect this agreement; The right, on or before the end of the Due Diligence Period, to make an Election (the Election) to acquire the Interest by notifying Ayaco in writing, at the address shown above of such election by December 31, 1999. Immediately upon the election by CRVV Ayaco shall register or failing this authorizes CRVV to register this agreement against title held in respect to the mineral title for the License acquired as a result of the Election. EARN IN In the event CRVV makes the Election, as set forth above in Paragraph A(1)(b), CRVV shall have the right to earn the Interest in the Licence by making the following payments and funding expenditures (hereinafter referred to as the "Earn-in Expenditures"). CRVV shall assume all funding obligations for the further development of the Licence shown in Schedule 1 attached hereto: and CRVV and its joint venture partners, if any, commit to the program of Earn-in-Expenditures as outlined in the report by CME & Co. dated September, 1999 and attached here to as Schedule 11. c) CRVV, shall issue to Ayaco, 500,000 shares in the capital of CRVV upon each of the first anniversary of and on the date of Election for a total of 1,000,000 shares in the capital of CRVV. The Option Payment, and any other payments incurred by CRVV since January, 1999 relating to the Option or this Heads of Agreement, shall be applied towards the Earn-in Expenditures. Following the completion of items above CRVV shall have earned a 100% working interest on the Licence subject to a 10% net profit interest payable to Ayaco and 10% payable to the Government of Ghana. CONDITIONS All work is to be carried out by CME & Company, of Guernsey, the Channel Islands. The management of Ayaco shall be responsible for facilitating the work of CRVV and CME & Company ensuring Ayaco is maintained in accordance with the laws of Ghana otherwise they will forfeit all rights to the License to CRVV. CRVV may terminate this Heads of Agreement during the Option Period or the Earn-in Period by giving written notice to Ayaco at the address specified herein. In the event CRVV terminate this Heads of Agreement pursuant to this paragraph, CRVV shall not be further obligated in any way than to deliver to Ayaco all information pertinent to the Earn-in Expenditures. REPRESENTATIONS AND WARRANTIES Ayaco represents to CRVV, and acknowledge that CRVV is relying on such representations and warranties, as follows; This Heads of Agreement has been duly authorized and delivered by Ayaco and is a valid and binding obligation of Ayaco. Ayaco is incorporated and validly existing under the laws of the Republic of Ghana. Ayaco warrants that they have full title to the License as set forth in Schedule 1 attached hereto, and that Ayaco will retain all titles to the said Licence during the term of this Agreement or until such title is transferred to CRVV; and CRVV hereby represents to Ayaco and acknowledges that Ayaco is relying on such representations and warranties: This Heads of Agreement has been duly authorized, executed and delivered by CRVV and is a valid and binding obligation of CRVV; and CRVV is duly incorporated and validly existing under the laws of the State of Nevada, in the United States of America. E. MISCELLANEOUS 1. This Heads of Agreement shall supercede any and all other agreements between the parties relating to the matters set forth herein. 2. Any amendments to this Heads of Agreement shall be in writing signed by all of the parties hereto. 3. This Heads of Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 4. This and all subsequent Agreements are governed by the laws and exclusive jurisdiction of England. 5. The Heads of Agreement shall inure to the benefit of, and be binding upon, the partied hereto and the respective successors and assigns. F. FINAL AGREEMENT 1. This Heads of Agreement shall be succeeded by a formal agreement, which incorporates all of the terms, conditions and interests and only the terms, conditions and interests contained herein and incorporates language such that all legal and regulatory requirements precedent in all appropriate and effective jurisdictions of the respective parties of this Heads of Agreement are satisfied. In witness whereof the parties hereto have executed and delivered this Heads of Agreement as of the 28th day of September, 1999. COLUMBIA RIVER RESOURCES INC. /s/ Robert R. Ferguson /s/ Alex Adjei - ------------------------------- -------------------- Robert R. Ferguson Alex Adjei President Ayaco (Ghana) Limited Director /s/ Alhaji Nantogma Abudulai - ------------------------------- --------------------- Alhaji Nantogma Abudulai Ayaco (Ghana) Limited Director SCHEDULE 1 (INCLUDE MAP OF AREA OF INTEREST) SCHEDULE 11 Include report by CME & Co. dated September, 1999 PHASE 1 In phase 1, all corner beacons will be surveyed for the Special Prospecting Licenses, Prospecting Licenses and Mining Leases. Detailed mapping will locate all existing workings and these will be sampled where possible. Considering the marked anisotropic nature of the grade, which varies in the horizontal and vertical planes and the layered nature of mineralization within the albitite zones, selected deposits in the area will be further investigated through a program of pitting. Targets selected in Phase 1 include the pegmatites at the - ------------------------- Occurrences. A summary of pitting in these areas along a pit line separation of 20 metres with a pit spacing of 10 metres is given in Table 14. Table 14: Phase 1 Work Program: Pitting: -------------- Tantalite Field (insert table) Results from Phase 1 will be used to commence and manage a resource database. The total cost for Phase I is US$------------. PHASE II Phase II will entail preliminary resource evaluation of the most prospective target to a depth of ----- metres vertically below surface, Considering the - -------- Occurrence as the potential target, diamond drillholes will be drilled on a three hole fence with the inclination guided by the pit results. Each fence has an estimated length of ----- metres and fences will initially have a separation of ----- metres with a total of ------ metres drilling. Although the mineralization is "disseminated" the tantalite is usually coarse-grained therefore HQ core will be required to minimize nugget effects. The total estimated cost for Phase II including preliminary metallurgical separation tests and updating of the resource database is US$----------. PHASE III Subject to the variability in grade, Phase III will lead to infill drilling on 50 Metre spaced lines with establishment of a Pre-feasibility report. This Phase is estimated to cost US$------------. EX-10 8 0008.txt EX. 6.3 COLUMBIA/AYACO (GHANA) AGMT DATED 12/15/99 AGREEMENT This Agreement, made effective as of the 15 day of December 1999, is entered in by and between COLUMBIA RIVER RESOURCES INC. (hereinafter referred to as CRVV), a corporation formed under the laws of the State of Nevada, USA, with its head office located at 304 - 856 Homer Street, Vancouver, British Columbia, Canada, and AYACO (GHANA) LIMITED (hereinafter referred to as Ayaco), a business corporate entity incorporated under the laws of the Republic of Ghana, with its head office located at P.O. Box 5999, Accra - North, Ghana. WHEREAS, Ayaco owns a 100% interest in the Tanoso Reconnaissance License, dated 5 July 1999, for the property located in both the Brong Ahafo and Ashanti Regions of Ghana. The licence area is 380 kilometres northwest of Accra and 20 kilometres east of Sunyani. The licence area is comprised of an eastern and western block which are separated by the Yaya and Mankrang Forest Reserves in the north and south, respectively. Exploration is currently prohibited in the forest reserves. The western block lies within latitude 7(degrees)15' and 7(degrees)25'N and longitude 2(degrees)10' and 2(degrees)03'W, while the eastern part lies within latitude 7(degrees)20' and 7(degrees)30'N and longitude 2(degrees)05' and 1(degree)55'W., which is subject to a 10% carried net profit interest payable to the Government of Ghana (hereinafter referred to as the License); and WHEREAS, on September 28, 1999, Ayaco and CRVV entered into a Binding Heads of Agreement granting CRVV an option to acquire the License; and WHEREAS, as consideration for the option, CRVV issued 100,000 shares of its common stock to Ayaco; and WHEREAS, CRVV has exercised its option to acquire the License; and WHEREAS, pursuant to the September 28, 1999 agreement, the parties intended to enter into a subsequent binding agreement that would supercede all terms and conditions of the September 28, 1999 agreement; and WHEREAS, the parties desire to enter into that subsequent binding agreement at this time; NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for good and valuable consideration, the receipt of which is hereby acknowledge, the parties agree as follows: A. EARN-IN The parties agree that CRVV has exercised its option to acquire the License, and that the purchase price and obligations for the License shall be as follows: 1) CRVV and its joint venture partners, if any, shall assume all funding and development relating to the License as outlined in the report by CME & Company, dated September 30, 1999, and attached hereto as Exhibit A; 2) Pursuant to the exemption from registration contained in Section4(2) of the Securities Act of 1933, as amended, CRVV shall issue 1,000,000 shares of common stock to Ayaco in the following amounts: a. Within 20 days from the execution date of this Agreement, CRVV shall issue 500,000 shares of common stock, at a price of $0.15 per share; and b. Upon the first anniversary date of this Agreement, CRVV shall issue 500,000 shares of common stock, at a price of $0.15 per share. 3) This Agreement in no way restricts CRVV from issuing additional shares of its capital stock for matters either related or not related to this Agreement. 4) Following completion of the items set forth above in this Section A, Ayaco shall immediately transfer title to the License to CRVV, and CRVV shall have earned a 100% ownership interest in the License subject to a 10% net profit interest payable to Ayaco and a 10% net profit interest payable to the Ghana government. B. CONDITIONS 1. All work is to be carried out under the direction of CME & Company of Guernsey, the Channel Islands. 2. CRVV shall have the absolute right to terminate this Agreement at anytime by providing written notice to Ayaco at the address set forth herein. The parties agree that upon termination, CRVV and Ayaco shall not be responsible for any unfulfilled, outstanding or further obligations under this Agreement. C. REPRESENTATIONS AND WARRANTIES 1. Ayaco, its officers, directors and representative hereby represent and warrant to CRVV, and acknowledge that CRVV is relying upon such representations and warranties, as follows: a) This Agreement has been duly authorized, executed and delivered by Ayaco and is a valid and binding obligation of Ayaco; b) Ayaco is duly incorporated and validly existing under the laws of Ghana; c) Ayaco owns a 100% interest in the Tanoso Reconnaissance License, subject to a 10% net profit interest payable to the Ghana government, dated 5/7/99, for the property located in both the Brong Ahafo and Ashanti Regions of Ghana. The licence area is 380 kilometres northwest of Accra and 20 kilometres east of Sunyani. The licence area is comprised of an eastern and western block which are separated by the Yaya and Mankrang Forest Reserves in the north and south, respectively. Exploration is currently prohibited in the forest reserves. The western block lies within latitude 7(degrees)15' and 7(degrees)25'N and longitude 2(degrees)10' and 2(degrees)03'W, while the eastern part lies within latitude 7(degrees)20' and 7(degrees)30'N and longitude 2(degrees)05' and 1(degrees)55'W., and shall retain said title and ownership during the term of this Agreement; and d) During the term of this Agreement, Ayaco shall maintain the property and the License in the same condition and status as they were on the date of this Agreement. 2. CRVV hereby represents and warrants to Ayaco, and acknowledges that Ayaco is relying upon such representations and warranties, as follows: a) This Agreement has been duly authorized, executed and delivered by CRVV and is a valid and binding obligation of CRVV; and b) CRVV is duly incorporated and validly existing under the laws of the State of Nevada, in the United States of America. E. MISCELLANEOUS 1. This Agreement shall supersede any and all other agreements between the parties relating to the matters set forth herein. 2. Any amendments to this Agreement shall be in writing signed by all of the parties hereto. 3. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 4. This and all subsequent Agreements are governed by the laws and exclusive jurisdiction of England. 5. CRVV shall have the absolute right, in its sole discretion, to assign, subcontract, farm-out, or otherwise transfer any or all its obligations and funding requirements under this Agreement, except for the issuance of CRVV's common stock. 6. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and the respective successors and assigns. In witness whereof the parties hereto have executed and delivered this Agreement as of the 10th day of December, 1999. COLUMBIA RIVER RESOURCES INC. AYACO (GHANA) LIMITED /s/ Robert R. Ferguson /s/ Alex Adjei - -------------------------------- ---------------------------------- Robert R. Ferguson, President Alex Adjei, Director /s/Alhaji Nantogma Abudlai ---------------------------------- Alhaji Nantogma Abudulai, Director Agreement Dated November 18, 1999 Page 4 of 4 EX-10 9 0009.txt EX. 6.4 AGREEMENT WITH FREEFORM COMMUNICATIONS January 1, 2000 Freeform Communications Inc. 904-850 Burrard Street Vancouver, BC V6Z 2J1 ATTENTION: MR. ROBERT FERGUSON Dear Mr. Ferguson, RE: COLUMBIA RIVER RESOURCES (THE COMPANY) CONSULTANT APPOINTMENT We are pleased to confirm that effective January 1, 1999 you have been retained to provide our Company with management and corporate development services. DUTIES You are retained to provide the Company with day to day management services and as a specialist in corporate financing to provide the Company with contacts and sources of financing with the global investment community; and to provide advice and direction dealing with such financiers, and the methods and means of financing best suited to the Company's circumstances form time to time, (the "services"). Your responsibilities will extend to providing information regarding the Company and its mineral property interests and mining operations to prospective financiers, and sourcing potential joint venture partners and financial investors. You will at all times be subject to the direction and discretion of the Board of Directors in the Services you provide, and how you undertake the same. You will report to the President and the Board of Directors. In order to allow you to perform the Services, we agree to provide you with current, timely and accurate information upon which you may rely in your analysis of the Company. The Company will indemnify and save you harmless from any liability, obligation or loss which you may incur as result of or in connection with your employment by the Company and/or your reliance upon information provided to you by the Company. COMPENSATION While providing the Services, you will be entitled to receive a regular salary of US$1,650.00 per month, beginning January 1, 1999. You will also be entitled to reimbursement for any and all documented expenses which you may incur in providing the Services, as long as those expenses were previously agreed upon by ourselves. -2- January 1, 1999 TERMINATION You will have the right to terminate your Services any time thirty days' prior written notice. The Company will have the right to terminate your services at any time after January 1, 2000 upon thirty days' prior written notice. ENTIRE AGREEMENT This letter contains the entire agreement and understanding between us and supersedes any prior negotiations, agreements and discussions concerning the subject matter hereof that may have taken place between us. MODIFICATION AND WAIVER This letter may not be altered or modified except by a written document signed by each of us. No waiver of any breach or violation of this letter will be effective unless in writing executed by the party granting such waiver, and mere acquiescence or delay will not be a bar to the enforcement of either party's rights hereunder. APPLICABLE LAW Although the Company recognizes that some or all of your services may be performed elsewhere, this letter has been negotiated and executed in the jurisdiction noted above as the location of the Company's office, and all parties have agreed that it will governed by the laws of such jurisdiction. Please confirm your agreement to these terms and conditions signed by the enclosed duplication of this letter where indicated below and returning it. Yours truly, COLUMBIA RIVER RESOURCES INC. Robert Weicker Director Acknowledged this 1st day of January, 2000 /s/ Robert Weicker Authorized Signature EX-10 10 0010.txt EXHIBIT 6.5 AGREEMENT BETWEEN COMPANY AND AYACO CME CME & Company A partnership of: C.M. Exploration International Ltd. C.M. (Exploration) Ltd. April 7, 2000 Columbia River Resources Inc. #304-856 Homer Street Vancouver, BC Canada V6B 2W5 ATTN.: MR. ROBERT FERGUSON PRESIDENT RE: CONTRACT FOR PROFESSIONAL SERVICES - AYACO PHASE II Further to discussions between Columbia River Resources Inc. and CME & Company, the following outlines our proposal for the terms and conditions for the services to be rendered by CME in Ghana. The parties to this agreement are: Columbia River Resources Inc. #304-856 Homer Street Vancouver, BC Canada V6B 2W5 hereinafter referred to as "CRVV" and CME & Company 104-106 Kings Road, Brentwood, Essex, UK CM14 4EA hereinafter referred to as "CME." - ------------------------------------------------------------------------------- P.O. Box 199 Victory House, Le Truchot, St. Peter Port, Guernsey, GY14JQ. Channel Islands Telephone (441 481) 723372 Facsimile (441 481) 711354 1. SCOPE OF SERVICES AREA I 1. Work is required to better establish the controls on mineralization. This work will entail approximately 400 metres of trenching to saprolite at a depth of 2 metres. Additional trenching is required, especially across the regional northeast-southwest trending magnetic lineaments, to further prove the control on mineral location. The structural complexity of the area, gained both from the air photo and magnetic survey, suggests possible remobilization of existing gold into structural traps and the probable location of late-stage auriferous vein systems into extensional shears; 2. The location and attitude of probable controlling structures and mineralization should be enhanced through selected IP profiling using the gradient array. Approximately 20 line kilometres of grid may be required; 3. The strike extent, width and depth continuity of mineralization is to be established through reverse circulation (RC) drilling. The initial program will entail 5000 metres of drilling of angle holes on fences. These fences will provide a continuous profile across the mineralized zone; 4. Infill geophysics will be carried out between lines 14400E and 15600E of the current soil grid. A total of 12 line kilometres of traversing is required. AREA II 1. Ten (10) reconnaissance pits will be excavated close to the Chobidi River to determine the nature of the bedrock and potential structurally controlled gold mineralization associated with the northeast continuation of the regional shear, which follows the course of the river. The pits will be excavated at 400 metre centres; 2. Drainage geochemistry along the Chobidi River at 200 metre intervals with collection at trap locations. The objective is to determine the extent of particulate gold along the stream to better identify the limits of the possible source; 3. Additional soil geochemistry using a hand-held auger to the base of the C horizon will obviate the problems of an alluvial blanket. It is estimated that 200 auger samples will be collected; 4. Follow-up magnetic profiling will which will entail approximately 100 kilometres of traverse lines; 5. Preliminary target-testing will entail 600 metres of trenching to saprolite. 2. REPORTING CME shall provide CRVV with the following reports: 1) A monthly report by fax or e-mail comprising a detailed summary of progress and results in regard to work completed, and 2) A final technical report detailing the work completed and results of the program. The completion of the report is contingent upon receiving all analytical results from the proposed work program. The report will be delivered to CRVV no later than 45 days from receiving the last batch of analytical results. A total of seven copies of the final technical report will be created. Four copies of the report will be provided to CRVV and three copies will be kept on file with CME, all in hardcopy and digital format. Any additional reports requested by CRVV will be charged at cost plus 15%. 3. PROJECT MANAGEMENT PROVISIONS CME shall provide all necessary personnel, equipment, materials and services to carry out the proposed work program. CME will prepare terms of reference and/or tender documents for subcontract services, as required, and solicit bids from qualified suppliers. The selection will be on the basis of the lowest qualified bidder, and the selection will be approved by CME and signed between the approved bidder and CME. Upon the scope of services, budget and schedule having been agreed to by CRVV, CME shall execute the necessary exploration tasks for the completion of the project and assume full control of, and responsibility for, this execution. CRVV shall appoint a client representative whom CME shall report to. CME shall keep the representative informed as to the progress of the project and refer to the representative when there are: a) changes in scope, and b) significant changes which will effect the cost 4. CHARGES Billings for the work carried out will be based on actual time spent and costs incurred, in accordance with the terms and conditions set out in this agreement. CRVV agrees to pay CME for the work performed at the following contract rates: SERVICES OF CME PERSONNEL US$ ------------------------- --- Consultant I $750 per day Consultant II $600 per day Project Manager $500 per day Senior Geologist $450 per day Geologist $350 per day Field Supervisor $300 per day Vehicle $150 per day Subcontractor cost plus 15% CRVV also agrees to reimburse CME for all costs(1) incurred in connection with this project and to pay an administration fee of 15% of such costs All prices in this proposal are quoted without taxes, environmental or exploration fees. It is agreed that CRVV will be responsible for such taxes and/or fees that may arise out of the execution of the proposed work program. 5. BUDGET ITEM COST (US$) Personnel 81,600 Travel/Truck Rental 27,835 Mag Survey (100km) 5,500 IP Survey (22km) 15,000 Trenching/Pitting 20,200 Site Prep 12,000 RC Drilling 120,000 Analysis 60,100 Food & Accommodation 23,250 Communication 2,000 Field Supplies 2,700 Miscellaneous (Courier/Shipping) 4,300 Report Costs 25,000 Administration 14,750 Contingency 7% 27,265 TOTAL 441,500 The total budget for the proposed program is $441,500 which does not include any applicable taxes. - -------- 1 Cost of any of CME's service providers (including, but not limited to, long distance telephone, long distance facsimile, travel and laboratory services) will be charged according to the cost charged CME without any credit CME may have received from time to time by reason of the volume of CME's overall business with its service providers 6. CHANGE IN SCOPE AND COST REVISIONS. CRVV may at any time instruct CME to investigate changes in the scope of the proposed work program and CME shall forthwith prepare for CRVV's approval an estimate reflecting the cost if any, of such change, based on the charges set out in Section 4. 7. GENERAL PROVISIONS All prior agreements (whether oral or written) between the parties with respect to the work to be performed are superseded by this agreement. It is mutually agreed that this agreement shall be binding upon and ensure to the benefit of the parties hereto, their respective successors and permitted assigns, but shall not be assignable by either party without the consent in writing of the other party first hand and obtained. If requested by CRVV, CME will obtain all necessary work permits on behalf of and at the expense of CRVV. CRVV will be responsible for any damage to the environment incurred in the course of normal operations. CME will be responsible where direct negligence of its crews can be demonstrated. CME shall perform and execute all works and services required pursuant to this contract in a proper, careful and workmanlike manner. CME shall comply with all mining and other laws, ordinances, rules and regulations relating to the work and to the preservation of the public health and safety. CME shall at all times, enforce strict discipline and maintain good order among its employees, and shall not retain on the work any unfit person or anyone not skilled in the work assigned to them. CME shall be excused for failure to perform its obligations hereunder if such a failure is caused by war, invasion, insurrection, riot, the order or regulations of any civil or military authority, or by strikes, lockouts, or labour disputes, whether in or in the neighborhood of the work site or by the failure to perform by any supplier or subcontractor necessary for the completion of the contract. CME shall be responsible for all damages arising by reason of injuries (including death) sustained by any person or by reason of damage to property arising out of or in relation to work performed hereunder or equipment and vehicles used hereunder, and will indemnify CRVV against all claims arising by reason of such injuries and damages, excluding, however, claims arising out of negligent acts or omissions of CRVV, its servants or agents. CRVV will be responsible for the cost of removing CME employees and contractors from the field in the event of restrictions to the site due to fire, fire hazard, flood or other Acts of God or environmental hazards which threaten the safety of CME crews. CRVV agrees that any employee of its company while visiting the property outlined above will not in any way be considered an employee of CME. Any documents, data or maps released to an authorized representative of CRVV during a site examination shall be the responsibility of CRVV in the event of loss or damage. It is understood that CME and its staff will not disclose any information with respect to this program, except to an authorized representative of CRVV, without the prior written consent of CRVV. CRVV agrees not to use the name CME & Company or CME (Ghana) Ltd. in any form, or the name of any of their employees in any public announcement, press release or public document without the prior written consent of CME. 8. PAYMENT CME will send invoices twice a month to CRVV. Payment will be due on receipt of CME invoices. Interest will be charged on invoices more than 15 days overdue at the rate of 2% per month. An initial down payment of US$20,000 will be paid by CRVV to CME on signing of this Agreement. Prior to the mobilization of drill crews to the Property, CRVV will pay CME a second down payment of US$200,000. These down payments will be credited to the final invoice to CRVV. 9. TERMINATION This contract may be terminated by either party two (2) weeks after the receipt of written notification. In the event of termination by CRVV, CME will be reimbursed for all work performed to the date of termination in accordance with the terms of this contract and all costs incurred to demobilize crews and all obligations entered into with suppliers or subcontractors prior to termination. If the preceding is acceptable as set out, please sign and return one copy to CME. Yours very truly, Accepted, CME & Company Columbia River Resources Inc. By C.M. Exploration International General Partner /s/T. Gregory Hawkins /s/ Robert Ferguson - ------------------------- ---------------------------- T. Gregory Hawkins Robert Ferguson Managing Director President EX-10 11 0011.txt EX. 6.6 AGMT BETWEEN COMPANY AND CME & COMPANY CME CME & Company A partnership of: C.M. Exploration International Ltd. C.M. (Exploration) Ltd. May 3, 2000 Columbia River Resources Inc. #304-856 Homer Street Vancouver, BC Canada V6B 2W5 ATTN.: MR. ROBERT FERGUSON PRESIDENT RE: CONTRACT FOR PROFESSIONAL SERVICES - NIGERIA EVALUATION PHASE II Further to discussions between Columbia River Resources Inc. and CME & Company, the following outlines our proposal for the terms and conditions for the services to be rendered by CME in Nigeria. The parties to this agreement are: Columbia River Resources Inc. #304-856 Homer Street Vancouver, BC Canada V6B 2W5 hereinafter referred to as "CRVV" and CME & Company 104-106 Kings Road, Brentwood, Essex, UK CM14 4EA hereinafter referred to as "CME." - ------------------------------------------------------------------------------- P.O. Box 199 Victory Houts, Le Truchot, St. Peter Port, Guernsey, GY1 4JQ, Channel Islands Telephone (441 481) 723372 Facsimile (441 481) 771354 1. SERVICES REGIONAL EVALUATION Geological mapping and rock sampling will be designed to cover the SW, Central and NE parts of Nigeria. Minerals of interest include Tantalum and other rare metals. In the SW regional two gold properties will be visited. Maping will include detailed rock descriptions and structural measurements. An estimated 500 rock, 200 soil and 50 silt samples will be taken. DETAIL EVALUATION Three areas from the Phase I Evaluation Program will be followed up with further studies. They include the Angwan Mallan, Tattara and the Nawa pegmatite fields. Follow up work will include geological mapping, rock sampling, prospecting, trenching and trench sampling. Promising areas found during the regional evaluation will be followed up with trenching and trench sampling. An extimated 700 metres of trenching will be excavated and 700 rock and trench samples will be taken. 2. REPORTING CME shall provide CRVV with the following reports: 1) A monthly report by fax or e-mail comprising a detailed summary of progress and results in regard to work completed, and 2) A final technical report detailing the work completed and results of the program. The completion of the report is contingent upon receiving all analytical results from the proposed work program. The report will be delivered to CRVV no later than 45 days from receiving the last batch of analytical results. A total of seven copies of the final technical report will be created. Four copies of the report will be provided to CRVV and three copies will be kept on file with CME, all in hardcopy and digital format. Any additional reports requested by CRVV will be charged at cost plus 15%. 3. PROJECT MANAGEMENT PROVISIONS CME shall provide all necessary personnel, equipment, materials and services to carry out the proposed work program. CME will prepare terms of reference and/or tender documents for subcontract services, as required, and solicit bids from qualified suppliers. The selection will be on the basis of the lowest qualified bidder, and the selection will be approved by CME and signed between the approved bidder and CME. Upon the scope of services, budget and schedule having been agreed to by CRVV, CME shall execute the necessary exploration tasks for the completion of the project and assume full control of, and responsibility for, this execution. CRVV shall appoint a client representative whom CME shall report to. CME shall keep the representative informed as to the progress of the project and refer to the representative when there are: a) changes in scope, and b) significant changes which will effect the cost 4. CHARGES Billings for the work carried out will be based on actual time spent and costs incurred, in accordance with the terms and conditions set out in this agreement. CRVV agrees to pay CME for the work performed at the following contract rates: SERVICES OF CME PERSONNEL US$ ------------------------- --- Consultant I $750 per day Consultant II $600 per day Project Manager $500 per day Senior Geologist $450 per day Geologist $350 per day Field Supervisor $300 per day Vehicle $150 per day Computer $25 per day Subcontractor cost plus 15% CRVV also agrees to reimburse CME for all costs(1) incurred in connection with this project and to pay an administration fee of 15% of such costs. All prices in this proposal are quoted without taxes, environmental or exploration fees. It is agreed that CRVV will be responsible for such taxes and/or fees that may arise out of the execution of the proposed work program. - -------- 1 Cost of any of CME's service providers (including, but not limited to, long distance telephone, long distance facsimile, travel and laboratory services) will be charged according to the cost charged CME without any credit CME may have received from time to time by reason of the volume of CME's overall business with its service providers 5. BUDGET ITEM COST (US$) Personnel/Labour 127,000 Travel/Truck Rental 64,000 Analysis 18,000 Food & Accommodation 28,300 Communication 1,700 Field Supplies 4,000 Miscellaneous (Courier/Shipping) 4,700 Report Costs 11,700 Administration 20,000 Contingency 7% 20,600 TOTAL 300,000 The total budget for the proposed program is $300,000 which does not include any applicable taxes. 6. CHANGE IN SCOPE AND COST REVISIONS. CRVV may at any time instruct CME to investigate changes in the scope of the proposed work program and CME shall forthwith prepare for CRVV's approval an estimate reflecting the cost if any, of such change, based on the charges set out in Section 4. 7. GENERAL PROVISIONS All prior agreements (whether oral or written) between the parties with respect to the work to be performed are superseded by this agreement. It is mutually agreed that this agreement shall be binding upon and ensure to the benefit of the parties hereto, their respective successors and permitted assigns, but shall not be assignable by either party without the consent in writing of the other party first hand and obtained. If requested by CRVV, CME will obtain all necessary work permits on behalf of and at the expense of CRVV. CRVV will be responsible for any damage to the environment incurred in the course of normal operations. CME will be responsible where direct negligence of its crews can be demonstrated. CME shall perform and execute all works and services required pursuant to this contract in a proper, careful and workmanlike manner. CME shall comply with all mining and other laws, ordinances, rules and regulations relating to the work and to the preservation of the public health and safety. CME shall at all times, enforce strict discipline and maintain good order among its employees, and shall not retain on the work any unfit person or anyone not skilled in the work assigned to them. CME shall be excused for failure to perform its obligations hereunder if such a failure is caused by war, invasion, insurrection, riot, the order or regulations of any civil or military authority, or by strikes, lockouts, or labour disputes, whether in or in the neighborhood of the work site or by the failure to perform by any supplier or subcontractor necessary for the completion of the contract. CME shall be responsible for all damages arising by reason of injuries (including death) sustained by any person or by reason of damage to property arising out of or in relation to work performed hereunder or equipment and vehicles used hereunder, and will indemnify CRVV against all claims arising by reason of such injuries and damages, excluding, however, claims arising out of negligent acts or omissions of CRVV, its servants or agents. CRVV will be responsible for the cost of removing CME employees and contractors from the field in the event of restrictions to the site due to fire, fire azard, flood or other Acts of God or environmental hazards which threaten the safety of CME crews. CRVV agrees that any employee of its company while visiting the property outlined above will not in any way be considered an employee of CME. Any documents, data or maps released to an authorized representative of CRVV during a site examination shall be the responsibility of CRVV in the event of loss or damage. It is understood that CME and its staff will not disclose any information with respect to this program, except to an authorized representative of CRVV, without the prior written consent of CRVV. CRVV agrees not to use the name CME & Company or CME (Ghana) Ltd. in any form, or the name of any of their employees in any public announcement, press release or public document without the prior written consent of CME. 8. PAYMENT CME will send invoices twice a month to CRVV. Payment will be due on receipt of CME invoices. Interest will be charged on invoices more than 15 days overdue at the rate of 2% per month. An initial down payment of US$50,000 will be paid by CRVV to CME on signing of this Agreement. This down payment will be credited to the final invoice to CRVV. 9. TERMINATION This contract may be terminated by either party two (2) weeks after the receipt of written notification. In the event of termination by CRVV, CME will be reimbursed for all work performed to the date of termination in accordance with the terms of this contract and all costs incurred to demobilize crews and all obligations entered into with suppliers or subcontractors prior to termination. If the preceding is acceptable as set out, please sign and return one copy to CME. Yours very truly, Accepted, CME & Company Columbia River Resources Inc. By C.M. Exploration International General Partner /s/ T. Gregory Hawkins /s/ Robert Ferguson - ------------------------- --------------------- T. Gregory Hawkins Robert Ferguson Managing Director President EX-10 12 0012.txt EX. 6.7 REPORT ON RECONNAISSANCE ROCK REPORT ON RECONNAISSANCE ROCK, STREAM SAMPLING AND GEOLOGICAL MAPPING ON THE AYACO RECONNAISSANCE LICENCE GHANA, WEST AFRICA FOR COLUMBIA RIVER RESOURCES INC. BY CME & COMPANY SEPTEMBER 30, 1999 SUMMARY The 306.99 sq. kilometer Ayaco Reconnaissance License is located in the northeastern portion of the Sefwi-Bibiani Belt in the Brong Ahafo and Ashanti Regions of Ghana. It lies on-strike to the northeast of highly prospective ground held by Normandy LaSource and Moydow Mines International Ltd., where recent drilling has indicated an estimated resource in excess of 1 million ounces gold. This resource is associated with major northeast-southwest trending shears. Reconnaissance mapping indicates the presence of greywackes and argillites in the west with silicified metabasalts (greenstones) in the south. These lithologies belong to the Birimian Supergroup. In the north and west, the Birimian is flanked by granite gneiss, which is tentatively believed to be older than the Birimian. In the west, sandstones of the Voltaian Supergroup unconformably overlie the Birimian. Northeast-southwest trending shears, known to control gold mineralization to the southwest of the concession, are present. The shears form the tectonic contact between granites, greenstones and metasediments and represent late-stage Birimian activity. These faults do not cut the Voltaian sediments. A total of 138 stream sediment samples were collected and analyzed by the Bulk Leach Extractable Gold (BLEG) method. At the majority of sample locations, both active and trap samples were collected. The maximum values obtained are 856.2 ppb Au in the active sediment samples and 1,407.6 ppb Au in the trap samples. At several localities, the anomalous response from the active sediment exceeded the value of the trap site. This suggests the presence of very fine disseminated gold in the license area in addition to coarser grained gold, which ordinarily concentrates at trap localities. The metabasalts have a higher gold signature than the Birimian and Voltain sediments. Geostatistical evaluation has also revealed a strong spatial association with an east-west trending shear. This shear separates metabasalts from sediments in the south of the concession. These anomalies suggest the presence of an auriferous system that may be related, in part, to brittle fracturing within metabasalts along the shear. Additional shearing and structural preparation for migrating auriferous fluids within the metabasalt should not be overlooked. The Ayaco Reconnaissance License is highly prospective. Detailed exploration over the metabasalt and shears in the southern portion is strongly advised. The cost of this work, entailing soil geochemistry, geological mapping, rock sampling, and report preparation is estimated at US$295,000 and should be completed in approximately three months. ii TABLE OF CONTENTS SUMMARY II 1.0 INTRODUCTION 1 2.0 LOCATION, ACCESS, TITLE AND PHYSIOGRAPHIC SETTING 1 2.1 LOCATION 1 2.2 ACCESS 1 2.3 TITLE 4 2.4 PHYSIOGRAPHIC SETTING 4 3.0 PREVIOUS WORK 4 4.0 REGIONAL GEOLOGICAL AND ECONOMIC SETTING 5 4.1 REGIONAL GEOLOGY 5 4.2 REGIONAL MINERALIZATION 8 4.2.1 BOUNDARY FAULT ENVIRONMENT 8 4.2.2 INTRABASINAL ENVIRONMENT 9 4.3 ECONOMIC SETTING 10 5.0 RECONNAISSANCE EXPLORATION PROGRAM 11 5.1 PROPERTY GEOLOGY 11 5.2 ROCK SAMPLING 13 5.3 STREAM GEOCHEMISTRY 14 5.3.1 RESULTS 14 6.0 CONCLUSIONS 16 7.0 RECOMMENDATIONS 16 8.0 REFERENCES 18 LIST OF TABLES page 1 Active Stream Sediment Samples: Selected Results 14 2 Trap Stream Sediment Samples: Selected Results 15 3 Active vs. Trap Samples: Results 15 4 Recommended Work Program 17 LIST OF FIGURES page 1 General Location Map; Ghana, West Africa (1:22,000,000) 2 2 Location and Access Map; Ghana, West Africa (1:333,333) 3 3 Regional Geology; Ayaco Licence Area (1:2,000,000) 6 4 Regional Geology and Concession Location (1:2,000,000) 7 5 Property Geology (1:50,000) map pocket 6 Stream Geochemistry: Location and Results (1:50,000) map pocket LIST OF APPENDICES Volume I List of Abbreviations and Conversion Factors I IIa Certificates of Analysis: Rock Samples I iii IIb Certificates of Analysis: Stream Sediment Samples I III Rock Sample Descriptions I IVa Methodology - Stream Sediment Samples Descriptions I IVb Stream Sediment Sample Descriptions I V Geostatistical Evaluation I iv 1.0 INTRODUCTION This report summarizes the results of the Reconnaissance Exploration Program carried out on the Ayaco Reconnaissance License in the Brong Ahafo and Ashanti Regions of Ghana, at the request of Mr. Bob Ferguson, President of Columbia River Resources Inc. The Reconnaissance Exploration Program commenced June 11, 1999 and ended July 20, 1999; with the objective of defining the presence of a possible gold system in the Ayaco license area. Work included stream sediment sampling using the bulk leach extractable gold method (BLEG), reconnaissance geological mapping and rock sampling. A list of abbreviations and conversion factors used in the report is presented in Appendix I. 2.0 LOCATION, ACCESS, TITLE AND PHYSIOGRAPHIC SETTING 2.1 LOCATION The Ayaco Reconnaissance License covers an area of 306.99 sq. kilometers and is located in both the Brong Ahafo and Ashanti Regions of Ghana (Figures 1 and 2). The license area is 380 kilometers northwest of Accra and 20 kilometers east of Sunyam. The license area is comprised of an eastern and western block which are separated by the Yaya and Mankrang Forest Reserves in the north and south, respectively. Exploration is currently prohibited in the forest reserves. The western block lies within latitude 7(degrees)15' and 7(degrees)25'N and longitude 2(degrees)10' and 2(degrees)03'W, while the eastern part lies within latitude 7(degrees)20' and 7(degrees)30'N and longitude 2(degrees)05' and 1(degree)55'W. The licence area is located on topographic Field Sheets 0703D2 and 0702C1. Larger towns and villages in the license include Asuakwa, Mankranho, Subenso, Krofofrom and Dagyamen in the western block, and New Takyiman, Tanaso, Mankranso, Eserentitia, Nyinatase and Adugyansu in the eastern block. 2.2 ACCESS Access to the western block is either via the paved Kumasi-Sunyani-Kyeraa road, or by way of the paved Kumasi-Takyiman road to the east. A well-maintained road from Kyeraa, which passes through the southern end of the Yaya Forest Reserve, and connects Eserentitia with Afrantwo on the Kumasi-Takyiman road, links the two roads. Several maintained dirt logging tracks cross the entire area and are accessible by four wheel drive vehicles during the dry season. Access within the license area during the two rainy seasons is difficult. Foot access is afforded by an extensive network of footpaths that connect the 1 LOCATION MAP LOCATION AND ACCESS MAP hamlets and cultivated fields in the area. 2.3 TITLE Ayaco (Ghana) Ltd. currently holds a 90% interest in the Ayaco license; the remaining 10% interest is held by the Government of Ghana. On September 27, 1999, Columbia River Resources Inc. signed a letter of intent with Ayaco (Ghana) Ltd. to acquire 99% of Ayaco's interest in the Ayaco Reconnaissance License. Ownership, summarized above, represents no legal opinion of CME, as this is beyond the scope of this report. 2.4 PHYSIOGRAPHIC SETTING The license area lies within an equatorial setting and experiences two rainy seasons. The earlier rainy season occurs between June and early August, and there is a later season from October to November. Average annual rainfall is approximately 1,400 millimeters. Temperatures range between 22(degrees) and 30(degrees)C. Low, thick bush and open canopy trees are found in the western block while the eastern area is characterized by open grassy tracts with isolated trees and bush. Secondary forest is found in the Yaya and Mankrang Forest Reserves. The Forestry Department has carried out a program of reforestation over large tracts. Topography is generally gently undulating. Some areas are characterized by moderate to steeply sloping ridges, with elevations ranging between 273 and 423 meters. The license is drained by the Tano River. Tributaries to the Tano include the Mankrang, Srani, Subri, Bisi, Ejuriansu, Nsuta and Bomina Rivers. Second and third order tributaries are dendritic. The Tano and its main tributaries flow northeast-southwest, with the exception of the Bisi, Ejuriansu and Srani Rivers in the south. These three rivers flow northwest-southeast. Tributaries to the main drainages mainly flow northwest-southeast. Cocoa is the main cash crop, in addition to subsistence farming of maize, cassava, yams, and cocoyams 3.0 PREVIOUS WORK Little evidence of aritisanal mining activity has been observed within the Ayaco license area. This may simply be the result of unsuccessful exploration techniques of native miners. Little or no evidence of native or European workings exists. Once again, this is probably not the result of the absence of gold in the area, but unsuccessful exploration efforts. 4 4.0 REGIONAL GEOLOGICAL AND ECONOMIC SETTING 4.1 REGIONAL GEOLOGY The regional geology of western Ghana is comprised of thick sequences of steeply dipping metasediments, alternating with metavolcanic units of Proterozoic age (~2200-2300 Ma). These sequences extend along strike for approximately 200 kilometers in a number of northeasterly trending belts, including the 30 to 60 kilometer wide Sefwi-Bibiani Belt. The Ayaco Reconnaissance License lies within the Sefwi-Bibiani Belt in southwestern Ghana. The Sefwi-Bibiani Belt is the second most significant gold-bearing belt in Ghana after the Ashanti Belt to the east. The belt hosts a major northeast trending regional structure with a strike length in excess of 200 kilometers, and is comprised of a sequence of Birimian upper greenschist to amphibolite facies metamorphic rocks and locally foliated metasedimentary with minor metavolcanic rocks. A detailed description of the geology of Ghana is discussed by Kesse (1985). Structural and lithological evolution is discussed by Eisenlohr (1989), Leube and Hirdes (1986) and Leube et. al. (1990). The geological evolution of the Sefwi-Bibiani Belt commenced with stabilization of the crust followed by an episode of rifting and incipient ocean floor spreading. The rifting gave rise to the formation of tectonically active basins and micro-plates. Along the margins of plates, volcanic island arc complexes formed. Volcaniclastics associated with the island arc complexes, along with sediments derived from uplift and erosion of the craton margins fed the basins, This was followed by a compressive episode (the Eburnean orogeny) in which the island arc and basinal assemblages were deformed. Under the compressional regime, the basinal sediments were folded and the island arc assemblages migrated along major thrust faults. Continued deformation gave rise to major wrench faults, which occurred preferentially at the margins of the volcanic belts and basinal sediments. The Eburnean Orogeny gave rise to a series of northeast trending linear volcanic belts (greenstone belts) and resulted in the intense deformation of basinal sediments. These sediments and associated volcanics collectively form the Birimian Supergroup. The orogeny is associated with several phases of tectonic activity, not all of which were compressive. Periods of extension in the Sefwi Basin are tentatively related to renewed "hot spot" activity, and led to incipient sea floor spreading and the formation of deep-seated faults which are located within the basinal metasediments. These faults trend northeast-southwest and are similar in genesis and characteristics to the Asankrangwa Fault in the Kumasi Basin. The faults have a strike extent exceeding 200 kilometers and control the location of many granitoids in the basin. Syn- and post-tectonic granitoids intruded both the metasediments and metavolcanics of the Birimian Supergroup as a result of the Eburnean Orogeny. The granitoids can be broadly grouped into two types; Basin and Belt types. Basin granitoids intrude the metasedimentary basins whereas Belt type intrude the volcanic and volcanosedimentary assemblages. 5 REGIONAL GEOLOGY SOUTHWESTERN GHANA MAP REGIONAL GEOLOGY AND CONCESSION LOCATIONS MAP Uplift and erosion, prior to the final stages of deformation, resulted in the deposition of intracratonic sediments; the Tarkwaian Supergroup, which unconformably overlie the Birimian. 4.2 REGIONAL MINERALIZATION Mineralization in Ghana can be divided into two groups based on spatial associations. The first group lies close to boundary faults that separate greenstone belts from basinal sediments; the second is found within the intrabasinal assemblage. Mineralization is tentatively believed to be 5 to 30 million years younger than the ages of corresponding granitoid emplacement. The age of mineralization is broadly coincident with intrusion of Basin granites and was coeval with regional deformation and metamorphism. 4.2.1 BOUNDARY FAULT ENVIRONMENT For over a century, mineralization associated with belt-basin faults was the target for both local prospectors and foreign exploration companies; and has proven to be a primary exploration target due to the presence of coarse, visible gold. Deposits of this type in Ghana include Obuasi, Prestea, Bogosu, Konongo and Bibiani. There are a number of commonly observed associations with gold mineralization which include: o located on, or close, to the lithological contact between greenstones and metasediments; o spatially related to deep-seated, high-angle wrench faults, which have a strike extent exceeding 100 kilometers. Cross-cutting northwest-southeast trending faults have also exerted an influence on the location of gold remobilized from the main zones; o native gold is hosted by quartz veins, which may possess an en-echelon character. Grade-width characteristics persist virtually unchanged to depths exceeding one kilometre. The veins are mainly concordant with the regional foliation but locally cross-cutting the foliation; o disseminated sulphides in the wallrock are common; o several generations of quartz veining are common and gold is seemingly associated with the final phase; o mineralization is spatially associated with graphitic phyllite and manganiferous sediments; 8 o mineralogy is simple with a strong positive correlation between gold and arsenopyrite. Accessory minerals include pyrite-chalcopyrite-pyrrhotite-bornite; o strong silicification is common, accompanied by sericite and carbonate alteration. Tourmaline may also be present; and, o granitoids may or may not be spatially associated with mineralization. 4.2.2 INTRABASINAL ENVIRONMENT Mineralization associated with intrabasinal sediments has received less exploration attention, however, the significance of these deposits is now being recognized. The Kumasi Basin, the northern area of the Sefwi-Bibiani Belt, and the southern area of the Ashanti Belt best represent this style of mineralization. This style of mineralization has also been found to occur in the basin north of the Sefwi-Bibiani Belt and south of the Ashanti Belt. Two different associations are recognized in this style of mineralization: SEDIMENTARY ASSOCIATION o disseminated mineralization, hosted by graphitic and manganiferous argillite and tuffaceous phyllite, with a strike extent exceeding 1,000 meters and a width in excess of 30 meters; o a direct association with intrabasinal faults; the Asankrangwa Fault is the prime example; and, o mineralogy is simple with disseminated pyrite-arsenopyrite with subordinate chalcopyrite. Silicification is common. INTRABASINAL GRANITOID ASSOCIATION Mineralization associated with granitoids within the intrabasinal environment is represented by the Bokitisi Mine at Ayanfuri, between Bogosu and Dunkwa. The following characteristics are present: o the granitoids are related to major intrabasinal shears; o pervasive sericitic alteration accompanied by silicification is common; o mineralogy is simple with gold-pyrite accompanied by subordinate pyrrhotite-chalcopyrite. Minor tellurides are also reported; o grade drops sharply to background level at the country rock contact. The thermal aureole is some 10's of meters wide and is associated with pyrite - carbonate alteration. 9 At Ayaco, mineralization occurs along the boundary/contact between rocks of the Birimian Supergroup and granitoids. Mineralization is hosted in metasediments and metavolcanics of the Birimian. 4.3 ECONOMIC SETTING The Ayaco Reconnaissance License is located in the northeastern portion of the Sefwi-Bibiani Belt. Other gold mines and prospects in the Sefwi-Bibiani belt include the Bibiani Mine to the south, where current reserves are estimated to be approximately 56,000 kilograms of gold and production has been 37,000 to 53,000 kilograms gold (CME, 1997). In addition, the Sewum, Tokosea, Ntubia and Aniuri Mines also occur within this belt. Structurally controlled quartz veins ranging in thickness from 1 to 8 meters along shear zones of several kilometers are the hosts to the ore zones at Aniuri. An evaluation of seven deposits has indicated a reserve base of 2.4 million tonnes grading 5.42 g/t gold (CME, 1997). This includes both open pit "heap leachable" oxides and underground accessible sulphide targets. Annual production for 1994 was 871 kg of gold with plans to increase to 2426 kg gold per year. The Ntubia Mine produced between 1912 and 1939, a recorded 38,667 tonnes of crushed ore yielding 581,257 g of fine gold grading on average 15.1 g/t gold (Junner, 1973). Southwest of Ayaco, are the license areas belonging to Moydow Mines International Ltd. and Normandy LaSource and Rank Mining Ltd. (Figure 4). Rank Mining is owned through a joint venture agreement between Moydow and Normandy. Six zones have been identified on the Ntotoroso License, which is owned by Rank Mining Ltd., and represents the northeast continuation of Normandy's Kenyase deposit. As of 1999, current resources at Ntotoroso, were estimated to be over 800,000 ounces of gold (Moydow, 1999) for two of the zones, with follow-up studies to occur in the other four zones. Of the 800,000 ounces, 700,000 ounces grading 2.5 g/t Au occur in a granodiorite. At Ntotoroso, gold mineralization occurs at both the immediate thrust contact with the underlying lower Birimian metasediments and along parallel shears developed entirely within batholiths at distances up to 2 kilometers from the thrust contact. Immediately north and southwest of the Ntotoroso License, initial soil sampling in licences held by Normandy revealed gold anomalies over a strike length of 40 kilometers. Subsequent drilling by Normandy to mid-1998 outlined a resource estimated at 4.35 million ounces of gold, largely in deposits at Yamfo, Kenyase and Subenso (Normandy, 1999). Currently, the existing resources are estimated at 6 million ounces (Normandy, 1999), with potential to increase the resource between known mineralized zones. These deposits are located along the contact zone between the granodiorite and metasediments, where gold is associated with the sheared margin between granites and metasediments. Also to the southwest of the Ayaco license is the Centenary Deposit, where resources have been estimated to be at 1.1 million ounces gold (Mbendi, 1999). 10 5.0 RECONNAISSANCE EXPLORATION PROGRAM The Reconnaissance Exploration Program commenced June 11, 1999 and ended July 20, 1999. The objectives of the program were to define the presence of a gold system in the Ayaco license area. The Reconnaissance Exploration Program included the following: o reconnaissance geological mapping and rock sampling of the Ayaco license area (19 samples), and o stream sediment sampling (138 samples). 5.1 PROPERTY GEOLOGY The Ayaco license is underlain primarily by Birimian metasediments and metavolcanics. In more detail, the following lithologies underlie the Ayaco license area: o Fine- to medium-grained, flat-lying sandstones in the northeast of the property. These belong to the late Precambrian to early Paleozoic Voltaian Supergroup. o Metavolcanics, volcaniclastics and sediments of the early Proterozoic Birimian Supergroup. The metavolcanics and volcaniclastics form part of the Sefwi-Bibiani Belt. o Granite gneiss crops out in the middle and north of the license. VOLTAIAN SANDSTONE Voltaian sandstone crops out in the northeast portion of the license, and is coincident with topographic highs which range from 394 to 423 meters. The sandstone is exposed on ridge tops and in stream channels around New Takyiman and Tanoso. The rock is fine to medium grained, grey-brown, friable and consists of more than 90% quartz with minor feldspar. The strike is mainly northeast-southwest with a very gentle dip to the southeast. Fracture planes strike between 160(degrees) and 170(degrees)with sub- vertical dips to the west. BIRIMIAN METASEDIMENTS. GREYWACKE The greywacke is interbedded with argillite and is exposed in the southwest of the license along the Tano, Subri and Adei Rivers near the village of Tanom. It also crops out on a road cut at Subenso. At Locality 1, the greywacke is exposed in the Tano River where it is massive, competent, fresh and undeformed, showing little foliation. It is greenish-grey with abundant red-brown ferruginous spots after iron bearing carbonate, probably siderite. 11 The rock consists of grey and blue quartz, up to 5 millimeters in diameter, with minor fragmental cherty material embedded in a fine- to medium-grained matrix. Euhedral post-tectonic pyrite is locally observed with a width up to 4 millimeters. Argillite beds in the greywacke are found at Locality 2 (Figure 5). The argillite is foliated and dark greyish-green with a well developed amorphous black mineral, tentatively identified as secondary chloritoid, occurring on fracture planes. The lithology is best observed in the Tano and Subri Rivers near Tanom. ARGILLITE The type locality is found 2 kilometers west of Krofofrom village in the southwest of the area (Locality 3; Figure 5). Here, the argillite is close to basaltic lavas that mark the southwest portion of the Sefwi-Bibiani Belt. The argillite is light-green, fine-grained, foliated, and is commonly intensely sheared and silicified. BIRIMIAN METAVOLCANICS BASALT Although basaltic float is common on hills and in drainages close to Twabidi village, exposure is scarce. Basalt crops out in the Subri River near Santaso village (Locality 5; Figure 5). Additional exposure is found outside the concession boundary at Sraneano and Subenso, in the southeast of Field Sheet 0703D2. At Locality 5 (Figure 5), the basaltic rock is fine- to medium-grained and light green. It is intensely silicified and possesses a shear foliation. Remnant phenocrysts of plagioclase and amphibole are observed. Near Twabidi village, float from a road cut consists of a dark green fine grained basalt. At Sraneano and Subenso the rock is intensely foliated and sheared with intense silicification and quartz veining. RHYOLITE Abundant rhyolite float and subcrop of rhyolite is identified on hills and in drainages close to Nyinatase and Adugyansu villages in the southeast corner of the property. The rhyolite occurs immediately above a basaltic flow and indicates bimodal activity through differentiation of a hypabyssal source. In hand specimen, the rock is aphanitic, pale-grey and may be intensely sheared and silicified (Locality 6; Figure 5). GRANITE GNEISS Granite gneiss is exposed outside the concession, within a quarry at Locality 7 (Figure 5), within the Yaya Forest Reserve along the Kyeraa-Takyiman road. It is also found near Mfronte village, along the feeder road from Kyeraa to Afrantwo through the forest reserve. Within the concession, the presence of granite gneiss is inferred through float in drainage channels and from waterwell spoil at Santaso village (Locality 4; Figure 5). At Locality 7, the biotite-muscovite granite gneiss is intruded by pegmatites several meters wide. These pegmatites are cut by later aplite dykes. At Asuakwa village, northeast of Kyeraa, weathered granitoid of dioritic composition is exposed. Due to the paucity 12 of exposure, relationship between the dioritic body and granite gneiss could not be determined. The intense deformation leading to formation of the granite gneiss strongly suggests formation before deposition and subsequent deformation of the Birimian Supergroup. STRUCTURE AND ALTERATION Although there is less than one percent exposure in the Ayaco license area, the probable presence of faults and shears was inferred through intensely sheared rocks and their spatial association to linear drainage patterns. Faulting in the Ayaco license has similarities with the basin-boundary environment where brittle deformation of metabasalts along the boundary of the basin results in the formation of preferential sites for gold emplacement. The dominant fault trends northeast-southwest, following the Tano River with an offset along the Mankrang River. The fault exceeds a strike extent of 40 kilometers of which 7 kilometers are contained within the Ayaco license. Three sets of strike-slip faults are tentatively identified and these post-date the Tano-Mankrang fault. The first group consists of three north to northeast trending shears that cut the main shear with left-lateral (sinistral) displacement. One of the set forms the tectonic boundary between basalt and granitoid (granite gneiss) in the eastern portion of the license. Measured foliation within the area is consistent with the shear direction. The second set trends northwest-southeast and feathers out in the northern part of the argillaceous lithology. This shear brings greywacke into tectonic contact with the argillite. In the east, this shear separates rhyolite from granitoids (granite gneiss). The third fault trends approximately east-west and separates basalt from rhyolite in the east and cuts the basalt in the central part of the license. At the fault contact between the greenstones and granite-volcaniclastics, silicification is common, with locally developed medium-grained pyrite. The dominant fabric in the concession area is a northeast striking, moderate to subvertical foliation that is sub-parallel to bedding. Locally developed sub-horizontal intersection lineations and minor fold axes are also present. 5.2 ROCK SAMPLING Although the concession is not covered by close canopy forest, exposure is very poor and mainly restricted to spot exposures along road cuts and some drainage channels. Nineteen (19) samples were collected, and the location of samples is shown in Figure 6. Due to the paucity of outcrop exposures, rock samples were unable to be obtained on or close to the east-west trending shear associated with the highly anomalous BLEG drainage samples in the south of the concession. The samples were sent to Transworld Laboratories, Tarkwa, Ghana for gold determination by fire assay. Certificates of analysis are presented in Appendix IIa. Sample descriptions for all samples can be found in Appendix III. All samples returned results that were below, or close to, the level of analytical detection (0.01 ppm Au). 13 5.3 STREAM GEOCHEMISTRY One hundred and thirty-eight (138) active and trap samples were collected over an area of 307 sq. kilometres with an average density of one sample in 4.5 sq. kilometres. A description of the methodology used in the collection of samples can be found in Appendix IVa. The location of samples was determined using a Global Positioning System (GPS) unit. Sample locations are shown in Figure 6. Each sample site was described according to stream width, sediment color and composition, bedload composition and site solid geology; and sample descriptions can be found in Appendix IVb. Samples were submitted to Transworld Laboratories, Tarkwa, Ghana, for BLEG determination. Certificates of analysis are presented in Appendix IIb. 5.3.1 RESULTS All results were geostatistically evaluated using 'PPLOT' software. A description of the data processing and development of applicable Log histograms and probability plots can be found in Appendis V. Applicable Log histograms and probability plots are also presented in Appendix V. ACTIVE SEDIMENT SAMPLES Sixty-four (64) active sediment samples were collected, with samples returning gold values ranging from (less than) 0.03 to 856.2 ppb Au. Geostatistical evaluation defined the presence of three populations. The upper population can be considered entirely anomalous with seven values exceeding the theoretical threshold of 32 ppb Au. Samples that returned values greater then the threshold are presented in Table 1. Table 1: Active Stream Sediment Samples: ANOMALOUS RESULTS SAMPLE NUMBER Au ppb AY-26 856.2* AY-29 247.9* AY-42 62.3 AY-45 32* AY-46 142.2 AY-48 135.3 AY-50 57.5 * - average value The lower population, with a threshold of 4 ppb Au, is tentatively related to sediments in the license. The second, higher population has a threshold of 10 ppb Au and is related to subcrop of basalt in the south of the license. Highly anomalous values show a spatial association with an east-west trending shear, which forms the contact between Birimian metabasalts and sediments. 14 TRAP SEDIMENT SAMPLES Seventy-four (74) trap samples were collected, with samples returning gold values ranging from (less than) 0.03 to 1,407.6 ppb Au. Geostatistical evaluation defined the presence of four populations. The upper population can be considered entirely anomalous with eight values exceeding the theoretical threshold of 45 ppb Au. Samples that returned values greater then the threshold are presented in Table 2. Table 2: Trap Stream Sediment Samples: ANOMALOUS RESULTS SAMPLE NUMBER AU PPB AY-27 1,407.6* AY-37 47.6 AY-43 159.4* AY-47 179.0 AY-49 785.1* AY-59 234.5* AY-130 50.2 AY-138 120.0 * - average value The cause of the lower population is uncertain and could be an artifact of the analytical method. The second population is tentatively related to the presence of metasediments, and has a threshold of 4.5 ppb Au. This is slightly higher than the threshold of the active sediments, a situation that is to be expected. The third population, with a threshold of 15 ppb Au is, in similarity with the active drainage results, spatially related to metabasalts. The upper population is entirely anomalous and shows a spatial relationship between the Birimian metabasalts and sediments. In several localities, the results obtained from the active sediment samples are higher than the corresponding trap value from the same area (Table 3). This is suggestive hydromorphic dispersion of gold in the active sediment, which may indicate the presence of a source of finely disseminated gold. Table 3: Active vs. Trap Samples: RESULTS SAMPLE PAIR RESULT (AU PPB) ACTIVE TRAP AY14(A); AY15(T) 4.6 2.7 AY50(A); AY51(T) 57.5 12.9* AY54(A); AY55(T) 9.8 6.3 AY76(A); AY77(T) 0.8 (less than)0.3 AY86(A); AY87(T) 4.9 0.8 AY96(A); AY97(T) 6.4 0.6 AY100(A); AY101(T) 5.3 4.4 AY132(A); AY133(T) 24.3 15.6 AY136(A); AY137(T) 2.9 (less than)0.3 15 6.0 CONCLUSIONS There are several factors that indicate and support the highly prospective nature of the Ayaco Reconnaissance License. Firstly, the Ayaco license area lies along strike northeast-southwest trending Sefwi-Bibiani Belt; host to a major new gold belt which has been identified in western Ghana. Also present in this belt, and to the immediate southwest of Ayaco are the estimated >1 million ounce resource of the Ntotoroso License and Yamfo, Kenyase and Subenso Deposits, and the 1.1 million ounce resource of the Centenary Deposit. Geologically, the Ayaco license area is in a setting similar to that for the aforementioned deposits and licenses. The Ayaco license area overlies Birimian metasediments, metavolcanics and granodiorites cut by a northeast-southwest trending shear zone. Results from reconnaissance stream sediment sampling returned encouraging values, especially in the southern portion of the license where high values in active and trap sediment samples appear to follow the northwest-southeast trend of the Sefwi-Bibiani Belt. Geostatistical evaluation of the results demonstrated a spatial association between basalt, and particularly the tectonic contacts between the basalt and adjacent metasediments. Also indicated by the geostatistical evaluation was the association between anomalous gold and late stage east-west shearing in the south of the permit. Although the stream sediment results reflect a lithological-structural association, the response given by both the active and trap sediments testifies to the presence of a gold-bearing system. This lithological-structural association has also been identified in other deposit within the belt. 7.0 RECOMMENDATIONS The basalt, and tectonic contacts between the basalt and metasediments should be further investigated through a program of soil geochemistry. A soil grid over the most prospective ground will have a line spacing of 200 metres with collection of soil samples along lines at 50 metre intervals. Lines will be oriented north-south to optimize the intersection of both lithological boundaries and faults in the license. The northern part of the area, up to and including the Tano River Fault, will be investigated through extension of the southern grid lines at a separation of 400 metres. Sample separation will be 50 metres. Tie-lines will be used to control the accuracy of the grid. Samples will be collected from a depth between 0.4 and 0.5 metres. In areas with alluvial cover, the depth may be extended; or hand augering may be implemented. This situation is not expected in the southern grid but may develop especially along the margins of the Tano River. Each soil site will be described n according to practice established by CME (Ghana). Standards and blanks will be randomly inserted to test for laboratory precision and contamination. 16 Samples will be dried disaggregated and sieved to -80# under the direct supervision of CME at their sample processing laboratory in Accra Ghana. The - -80# fraction will be homogenised and riffle-split to provide a 100g sample which will be sent to ACME Analytical Laboratories Ltd. in Vancouver, Canada for gold and multielement ICP analysis. The recommended work program is shown in Table 4. Table 4: Recommended Work Program ITEM LENGTH (KM) SAMPLES Baselines 10 Tie-lines 20.5 Cross-lines (200 m) 270 5,400 Cross-lines (400 m) 50 1,000 All lines will be leveled using hand-held inclinometer. In addition, a geological map will be produced at a scale of 1:10,000. The total cost of sample collection is estimated at US$125,000. The estimated cost for sample preparation and analyses, including precision control and airfreight, is US$120,000. Report preparation and production is estimated at US$50,000. The total estimated cost is US$295,000. Respectfully Submitted, CME & Company September 30, 1999 17 8.0 REFERENCES Cahen, L., Snelling, N.J., Delhal, J. and Vail, J.R. 1984. Geochronology and evolution of Africa; Carendon Press, Oxford, 512p. CME 1997. Report on Phase III Geology, Soil and Rock Geochemistry, Trenching and IP Survey on the Antubia-Afere Concession, Ghana, West Africa for Proxpex Mining Inc., October 31, 1997, 47p. Eisenlohr, B.N. 1989. The structural geology of the Birimian and Tarkwain rocks of southwest Ghana; Tech. Coop. Proj., 80.2040.6, Ghana, 66p. Junner, N.R. 1973. Gold in the Gold Coast; Gold Coast Geological Survey, Memoir 4, 67p. Kesse, G. 1985. The mineral and rock resources in Ghana; Balkema, Rotterdam- Boston, 610p. Leube, A. and Hirdes, W. 1986. The Birimian Supergroup of Ghana: depositional environment, structural development and conceptual model of an early Proterozoic suite; Tech. Coop. Proj., 80.2040.6, Ghana, 259p. Leube, A, Hirdes, W., Mauer, R. and Kesse, G. 1990. The early Proterozoic Birimian Supergroup of Ghana and some aspects of its associated gold mineralization; Precambrian Research, v.46, p.139-165 Mbendi 1999. Website; www.mbendi.co.za Moydow Mines International Ltd. 1999. Company website; www.moydow.com Normandy Mining Ltd. 1999. Annual Report 18 APPENDIX I LIST OF ABBREVIATIONS AND CONVERSION FACTORS ABBREVIATIONS AND SYMBOLS As arsenic aspy arsenopyrite Au gold Az azimuth CA core axis cm centimetre cpy chalcopyrite cu.cm cubic centimre cu.m cubic metre cu.yd cubic yard eqAg equivalent silver eqAu equivalent gold ft foot g gram g/cu.m grams per cubic metre g/t grams per metric ton kg kilogram kg/t kilograms per metric ton km kilometre lb Pound avoidupois m metre l litre mi mile mm millimetre n number of items in a statistical array po pyrrhotite py pyrite oz troy ounces oz/cu.yd troy ounces per cubic yard oz/T troy ounces per short ton ppb parts per billion ppm parts per million sq.km square kilometre sq.mi square mile T short ton t metric ton (tonne) tpd short tons per day t/d metric tons per day yd yard $US United States dollars x statistical mean % percent + - - plus or minus o degree ARGS Annual Report of the Geological Society GGS AR Annual Report (Gold Coast Geological Society) EX-10 13 0013.txt EX. 6.8 AGMT BETWEEN COMPANY AND CME & COMPANY CME CME & Company A partnership of: C.M. Exploration International Ltd. C.M. (Exploration) Ltd. October 1, 1999 Columbia River Resources Ltd. #304-856 Homer Street Vancouver, B.C. Canada V6B 2W5 ATTN.: MR. ROBERT FERGUSON PRESIDENT RE: CONTRACT FOR PROFESSIONAL SERVICES Pursuant to the agreement between Columbia River Resources Ltd. and Ayaco (Ghana) Ltd., the following outlines CME & Company's conditions, programs and budget for the services to be rendered by CME in Ghana. The parties to this agreement are: Columbia River Resources Ltd. #304-856 Homer Street Vancouver, B.C. Canada V6B 2W5 hereinafter referred to as "CRVV" and CME & COMPANY 104-106 Kings Road, Brentwood, Essex, UK CM14 4EA hereinafter referred to as "CME." - ------------------------------------------------------------------------------- P.O. Box 199 Victory House, Le Truchot, St. Peter Port, Guernsey, GY1 4JQ, Channel Islands Telephone (441 481) 723372 Facsimile (441 481) 711354 1. PROPOSE WORK PROGRAM Reconnaissance Exploration The objectives of the program are to define the presence of a gold system in the Ayaco licence area, which lies on-strike northeast of the highly prospective ground held by Normandy LaSource and Moydow Mines International Ltd. Work to be completed during this initial reconnaissance phase of exploration may include: o reconnaissance geological mapping and rock sampling of the Ayaco licence area, with the collected rock samples sent to an analytical lab for gold determination by fire assay. o stream sediment sampling over an approximately 307 sq. kilometre area. When possible, both active and trap samples will be collected. Sample locations will be determined through the use of a Global Positioning System (GPS) unit. Samples will be submitted to an analytical laboratory to be analyzed by the BLEG (Bulk Leach Extractable Gold) method. Phase I: Soil survey, trenching and pitting program The objective of the program is to further establish the presence of a gold-bearing system in the Ayaco licence area and define target areas for future exploration activity. Work completed during this phase of exploration may include: o A soil sampling program over the most prospective ground, with a line spacing of 200 metres, and with collection of soil samples along lines at 50 metre intervals. o Airphoto interpretation o Pitting along soil sampling lines which exhibit anomalous gold-in-soil values to investigate the source of such anomalies o Trenching in areas of anomalous gold-in-soil values to further investigate such anomalous values. 2. REPORTING The completion of the summary a report is contingent upon receiving all analytical results from the propose work program. Both CRVV and CME are aware of potential delays of sample shipment from Ayaco site to the analytical company in Vancouver, Canada and that such delays are beyond the control of CME. The summary report will be delivered to CRVV no later than 45 days from receiving the last batch of analytical results of the propose work program. Four copies of the summary report will be provided to CRVV. Any addition of the summary report requested by CRVV will be charged at cost plus 15%. 3. BUDGET Reconnaissance US$75,000 Phase I 75,000 ------------ Total(1) US$150,000 ============ 4. CHANGE IN SCOPE AND COST REVISIONS. CRVV may at any time instruct CME to investigate changes in the scope of the propose work program and CME shall forthwith prepare for CRVV's approval an estimate reflecting the cost if any, of such charge, based on the unit rates as follow: Personnel: Consultant I US$750 per day Project Manager/Consultant II US$650 per day Project Geologist US$400 per day Project Field Supervisor US$350 per day Equipment: Vehicle US$150 per day Subcontractor cost plus 15% CRVV also agrees to reimburse CME for all costs(2) incurred in connection with the project and to pay an administration fee of 15% of such costs. - -------- (1) Budgeted amount does not include any taxes that may be imposed by the Nigerian governemnt. (2) Cost of any of CME's service providers (including for long distance telephone, long distance facsimile, travel and laboratory services) will be charged according to the cost charged CME without any credit CME may 5. PROJECT MANAGEMENT PROVISIONS CME shall establish the project management team. CME shall organize the team to accomplish the project within the limits of time, cost, and quality agreed. Upon the scope, budget and schedule having been agreed to by CRVV, CME shall execute the necessary exploration tasks for the completion of the project and assume full control of, and responsibility for, this execution. CRVV shall appoint a client representative whom CME shall report to. CME shall keep the representative informed as to the progress of the project and refer to the representative when there are: a) changes in scope, and b) significant changes which will effect the cost 6. GENERAL PROVISIONS It is mutually agreed that this agreement shall be binding upon and ensure to the benefit of the parties hereto, their respective successors and permitted assigns, but shall not be assignable by either party without the consent in writing of the other party first hand and obtained. If requested by CRVV, CME will obtain all necessary work permits on behalf of and at the expense of CRVV. CRVV will be responsible for any damage to the environment incurred in the course of normal operations. CME will be responsible where direct negligence of its crews can be demonstrated. CME shall perform and execute all works and services required pursuant to this contract in a proper, careful and workmanlike manner. CME shall comply with all mining and other laws, ordinances, rules and regulations relating to the work and to the preservation of the public health and safety. CRVV will cooperate with CME and provide CME access to the site and to all exploration results and data. CME shall at all times, enforce strict discipline and maintain good order among its employees, and shall not retain on the work any unfit person or anyone not skilled in the work assigned to them. - ------------------------------------------------------------------------------- received from time to time by reason of the volume of CME's overall business with its services providers. CME shall be excused for failure to perform its obligations hereunder if such a failure is caused by war, invasion, insurrection, riot, the order or regulations of any civil or military authority, or by strikes, lockouts, or labour disputes, whether in or in the neighborhood of the work site or by the failure to perform by any supplier or subcontractor necessary for the completion of the contract. CME shall be responsible for all damages arising by reason of injuries (including death) sustained by any person or by reason of damage to property arising out of or in relation to work performed hereunder or equipment and vehicles used hereunder, and will indemnify CRVV against all claims arising by reason of such injuries and damages, excluding, however, claims arising out of negligent acts or omissions of CRVV, its servants or agents. CRVV will be responsible for the cost of removing CME employees from the field in the event of restrictions to the site due to fire, fire hazard, flood or other Acts of God or environmental hazards which threaten the safety of CME crews. CRVV agrees that any employee of its company while visiting the property outlined above will not in any way be considered an employee of CME. Any documents, data or maps released to an authorized representative of CRVV during a site examination shall be the responsibility of CRVV in the event of loss or damage. It is understood the CME and its staff will not disclose any information with respect to this program, except to an authorized representative of CRVV, without the prior written consent of CRVV. CRVV agrees not to use the name CME in any form, or the name of any of their employees in any public announcement, press release or public document without the prior written consent of CME. 7. PAYMENT CRVV agrees to make a 50% (US$75,000) payment of the budgeted amount (US$150,000), upon acceptance of this proposal and agreement on the scope and budget for the assignment. US$37,500 within two weeks of field work commencement. Receipt of balance immediately on client's receipt of 4 copies of final report. Payments will be due on receipt of CME invoices. Interest will be charged on invoices more than 15 days overdue at the rate of 1.5% per month (compounded to 19.6% over one year). This contract may be terminated by either party two weeks after the receipt of written notification. In the event of termination by CRVV, CME will be reimbursed for all work performed to the date of termination in accordance with the terms of this contract and all costs incurred to demobilize crews and all obligations entered into with suppliers or subcontractors prior to termination. If the preceding is acceptable as set out, please sign and return one copy to CME with an advance payment of US$75,000. Yours very truly, Accepted, CME & Company Columbia River Resources Ltd. By C.M. Exploration International General Partner /s/ T. Gregory Hawkins /s/ Robert Ferguson - ------------------------- --------------------------- T. Gregory Hawkins Robert Ferguson Managing Director President EX-10 14 0014.txt EX. 6.9 AGMT BETWEEN COMPANY AND CME & COMPANY CME CME & Company A partnership of: C.M. Exploration International Ltd. C.M. (Exploration) Ltd. October 10, 1999 Columbia River Resources Ltd. #304-856 Homer Street Vancouver, B.C. Canada V6B 2W5 ATTN.: MR. ROBERT FERGUSON PRESIDENT RE: CONTRACT FOR PROFESSIONAL SERVICES - TANTALUM PROJECT EVALUATION AND SOIL GEOCHEMICAL SURVEY MANAGEMENT AND GRID ESTABLISHMENT IN THE NORTHERN MARU BELT AND ANKA BELT, NIGERIA Pursuant to our conversation, the following outlines CME & Company's conditions, programs and budget for the services to be rendered by CME in Nigeria. The parties to this agreement are: Columbia River Resources Ltd. #304-856 Homer Street Vancouver, B.C. Canada V6B 2W5 hereinafter referred to as "CRVV" and CME & COMPANY 104-106 Kings Road, Brentwood, Essex, UK CM14 4EA hereinafter referred to as "CME." - ------------------------------------------------------------------------------- P.O. Box 199 Victory House, Le Truchot, St. Peter Port, Guernsey, GY1 4JQ, Channel Islands Telephone (441 481) 723372 Facsimile (441 481) 711354 1. PROPOSE WORK PROGRAM Phase I - Target delineation Geological mapping and rock sampling will be designed to cover the Northern Maru belt and the Anka belt and will include creek drainages, survey grid line and access roads. Mapping will include detailed rock descriptions and structural measurements. During the program, 10 kilometer of grid will be established. An estimated 200 rock samples, 220 soil samples, 120 BLEG and 120 stream sediment will be taken. Phase II - Tantalum deposit evaluation An approach for detailed geological mapping of the deposit, a sampling and assaying protocol; parameters for characterization of the mineralogy, chemistry and granulometry of the ore minerals and gangue; and preliminary metallurgy. In addition, an estimated of 10 kilometer of grid will be established at 25 meter spacing and pegged at 25 meter along lines and approximately of 10 pits to be excavated to 3 meter at selected localities in valleys between mineralized and albitized highs. 2. REPORTING The completion of the summary a report is contingent upon receiving all analytical results from the propose work program. Both CRVV and CME are aware of potential delays of sample shipment from Kano, Nigeria to the analytical company in Vancouver, Canada and that such delays are beyond the control of CME. The summary report will be delivered to CRVV no later than 45 days from receiving the last batch of analytical results of the propose work program. Four copies of the summary report will be provided to CRVV. Any addition of the summary report requested by CRVV will be charged at cost plus 15%. 3. BUDGET Phase I US$150,000 Phase II 150,000 ------------ Total(1) US$300,000 ============ - ------------------------- (1) Budgeted amount does not include any taxes that may be imposed by the Nigerian governemnt. 4. CHANGE IN SCOPE AND COST REVISIONS. CRVV may at any time instruct CME to investigate changes in the scope of the propose work program and CME shall forthwith prepare for CRVV's approval an estimate reflecting the cost if any, of such charge, based on the unit rates as follow: Personnel: Consultant I US$750 per day Project Manager/Consultant II US$650 per day Project Geologist US$400 per day Project Field Supervisor US$350 per day Equipment: Vehicle US$150 per day Subcontractor cost plus 15% CRVV also agrees to reimburse CME for all costs(2) incurred in connection with the project and to pay an administration fee of 15% of such costs. 5. PROJECT MANAGEMENT PROVISIONS CME shall establish the project management team. CME shall organize the team to accomplish the project within the limits of time, cost, and quality agreed. Upon the scope, budget and schedule having been agreed to by CRVV, CME shall execute the necessary exploration tasks for the completion of the project and assume full control of, and responsibility for, this execution. CRVV shall appoint a client representative whom CME shall report to. CME shall keep the representative informed as to the progress of the project and refer to the representative when there are: a) changes in scope, and b) significant changes which will effect the cost - -------- (2) Cost of any of CME's service providers (including for long distance telephone, long distance facsimile, travel and laboratory services) will be charged according to the cost charged CME without any credit CME may received from time to time by reason of the volume of CME's overall business with its services providers. 6. GENERAL PROVISIONS It is mutually agreed that this agreement shall be binding upon and ensure to the benefit of the parties hereto, their respective successors and permitted assigns, but shall not be assignable by either party without the consent in writing of the other party first hand and obtained. If requested by CRVV, CME will obtain all necessary work permits on behalf of and at the expense of CRVV. CRVV will be responsible for any damage to the environment incurred in the course of normal operations. CME will be responsible where direct negligence of its crews can be demonstrated. CME shall perform and execute all works and services required pursuant to this contract in a proper, careful and workmanlike manner. CME shall comply with all mining and other laws, ordinances, rules and regulations relating to the work and to the preservation of the public health and safety. CRVV will cooperate with CME and provide CME access to the site and to all exploration results and data. CME shall at all times, enforce strict discipline and maintain good order among its employees, and shall not retain on the work any unfit person or anyone not skilled in the work assigned to them. CME shall be excused for failure to perform its obligations hereunder if such a failure is caused by war, invasion, insurrection, riot, the order or regulations of any civil or military authority, or by strikes, lockouts, or labour disputes, whether in or in the neighborhood of the work site or by the failure to perform by any supplier or subcontractor necessary for the completion of the contract. CME shall be responsible for all damages arising by reason of injuries (including death) sustained by any person or by reason of damage to property arising out of or in relation to work performed hereunder or equipment and vehicles used hereunder, and will indemnify CRVV against all claims arising by reason of such injuries and damages, excluding, however, claims arising out of negligent acts or omissions of CRVV, its servants or agents. CRVV will be responsible for the cost of removing CME employees from the field in the event of restrictions to the site due to fire, fire hazard, flood or other Acts of God or environmental hazards which threaten the safety of CME crews. CRVV agrees that any employee of its company while visiting the property outlined above will not in any way be considered an employee of CME. Any documents, data or maps released to an authorized representative of CRVV during a site examination shall be the responsibility of CRVV in the event of loss or damage. It is understood the CME and its staff will not disclose any information with respect to this program, except to an authorized representative of CRVV, without the prior written consent of CRVV. CRVV agrees not to use the name CME in any form, or the name of any of their employees in any public announcement, press release or public document without the prior written consent of CME. 7. PAYMENT CRVV agrees to make a 50% (US$150,000) payment of the budgeted amount (US$300,000), upon acceptance of this proposal and agreement on the scope and budget for the assignment. US$75,000 within two weeks of field work commencement. Receipt of balance immediately on client's receipt of 4 copies of final report. Payments will be due on receipt of CME invoices. Interest will be charged on invoices more than 15 days overdue at the rate of 1.5% per month (compounded to 19.6% over one year). This contract may be terminated by either party two weeks after the receipt of written notification. In the event of termination by CRVV, CME will be reimbursed for all work performed to the date of termination in accordance with the terms of this contract and all costs incurred to demobilize crews and all obligations entered into with suppliers or subcontractors prior to termination. If the preceding is acceptable as set out, please sign and return one copy to CME with an advance payment of US$150,000. Yours very truly, Accepted, CME & Company Columbia River Resources Ltd. By C.M. Exploration International General Partner /s/ T. Gregory Hawkins /s/ Robert Ferguson - ------------------------- --------------------------- T. Gregory Hawkins Robert Ferguson Managing Director President EX-23 15 0015.txt EX. 10.1 CONSENT OF JONES, JENSEN & COMPANY, LLC HJ & ASSOCIATES, LLC CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS CONSENT OF INDEPENDENT AUDITORS Board of Directors Columbia River Resources, Inc. Vancouver, British Columbia We consent to the use in this Registration Statement of Columbia River Resources, Inc. on Form SB-1, of our audit report dated February 27, 1999 for Columbia River Resources, Inc. for the years ended December 31, 1998 and 1997 which are part of this Registration Statement, and to all references to our firm included in this Registration Statement. /s/ HJ & Associates, LLC HJ & Associates, LLC (Formerly Jones, Jensen & Company) Salt Lake City, Utah October 27, 2000 - -------------------------------------------------------------------------------- 50 South Main Street, Suite 1450 - Salt Lake City, Utah 84144 - Telephone (801) 328-4408 - Facsimile (801) 328-4461 - -------------------------------------------------------------------------------- EX-23 16 0016.txt EX. 10.2 CONSENT OF PANNELL KERR FORSTER PANNEL KERR FORSTER PKF worldwide 7th Floor, Marine Building, 355 Burrard St., Vancouver, B.C. Canada, V6C 2G8 Telephone: (604) 687-1231 Facsimile: (604) 688-4675 PLEASE REFERE TO: A.S. Henshaw File #: 19627.0 October 27, 2000 Board of Directors Columbia River Resources Inc. 304-856 Homer Street Vancouver, B.C. V6B 2W5 Dear Sirs: We consent to the incorporation in the Form SB-1 Registration Statement of our report dated March 27, 2000 relating to the balance sheet of Columbia River Resources Inc. as at December 31, 1999 and the related statements of operations, stockholders' deficit and cash flows for the year then ended which are part of this Registration Statement and to all references to our firm included in this Registration Statement. /s/ Pannell Kerr Forster PANNELL KERR FORSTER CHARTERED ACCOUNTANTS Vancouver, Canada ASH/dm EX-23 17 0017.txt EX. 10.3 CONSENT OF DILL DILL CARR [INCORPORATED BY REFERENCE TO EXHIBIT 11.1] EX-23 18 0018.txt EX. 10.4 CONSENT OF ROBERT J. GRIFFIS October 30, 2000 Columbia River Resources Inc. Suite 304-856 Homer Street Vancouver, British Columbia V6B 2W5 Canada Gentlemen: I have examined the Registration Statement of your company on Form SB-1 which is to be transmitted for filing with the Securities and Exchange Commission covering the registration under the Securities Act of 1933, as amended, of 10,000,000 shares of Common Stock to be sold to the public, including the exhibits and form of prospectus ("the Prospectus") filed therewith. I hereby consent to the use of my name in the Registration Statement and Prospectus, and the reference to and attachment of my geological report and property evaluation titled "Geological Report on the Ayaco Reconnaissance Concession in Brong Ahafo/Ashanti Regions of Ghana for Columbia River Resources Inc.", dated March 2000. Very truly yours, /s/ Robert J. Griffis Robert J. Griffis, Ph.D., P.Eng. - -------------------------------------------------------------------------------- GRIFFIS CONSULTING AND EXPLORATION SERVICES INC. Canada Address - 28 Kemp Drive, Ajax, Ontario, Canada L3T 4B1 Tel: 1-905-619-8831 - Fax: 1-905-619-3266 Ghana Address - Aviation House - Rm G8, c/o P.O. Box 16160 KIA, Accra, Ghana, West Africa Tel: 233-21-761370/ 233-21-761371 Fax: 233-21-761617 - Mobile: 233-27-553660 EX-5 19 0019.txt EX. 11.1 OPINION RE: LEGALITY November 1, 2000 Columbia River Resources Inc. Suite 304-856 Homer Street Vancouver, British Columbia V6B 2W5 Canada Gentlemen: As counsel for your company, we have reviewed your Articles of Incorporation, Bylaws, and such other corporate records, documents, and proceedings and such questions of law as we have deemed relevant for the purpose of this opinion. We have also examined the Registration Statement of your company on Form SB-1 which is to be transmitted for filing with the Securities and Exchange Commission (the "Commission") on November 1, 2000 covering the registration under the Securities Act of 1933, as amended, of 10,000,000 shares of Common Stock to be sold by the Company, and 499,000 shares of Common Stock to be sold by selling security holders, including the exhibits and form of prospectus (the "Prospectus") filed therewith. On the basis of such examination, we are of the opinion that: 1. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada with all requisite corporate power and authority to own, lease, license, and use its properties and assets and to carry on the businesses in which it is now engaged. 2. The Company has an authorized capitalization as set forth in the Prospectus. 3. The shares of Common Stock of the Company to be issued are validly authorized and, when (a) the pertinent provisions of the Securities Act of 1933 and such "blue sky" and securities laws as may be applicable have been complied with and (b) such shares have been duly delivered against payment therefor as contemplated by the Prospectus, such shares will be validly issued, fully paid, and nonassessable. We hereby consent to the use of our name in the Registration Statement and Prospectus in the section captioned "Legal Matters," and we also consent to the filing of this opinion as an exhibit thereto. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Commission thereunder. Very truly yours, DILL DILL CARR STONBRAKER & HUTCHINGS, P.C. /s/ Dill Dill Carr Stonbraker & Hutchings, P.C. -----END PRIVACY-ENHANCED MESSAGE-----