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UNITED STATES FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16
First Point Minerals Corp.
Suite 906 1112 West Pender Street, Vancouver,
B.C. V6E 2S1 Indicate by check mark whether the Registrant files or will
file annual reports under cover of Indicate by check mark whether the Registrant by furnishing
the information contained in this SUBMITTED HEREWITH Exhibits SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized. New Drill Program proposed for First Point's
Rio Luna Project Dr. Peter M D Bradshaw, P. Eng., Executive Chairman of
First Point Minerals Corp. (TSXV: FPX) is pleased to update results from
the drill program on the Balsamo Target of the Rio Luna Gold Project, Nicaragua.
Two additional drill holes have been completed on this target, which is located
on the same vein structure as, but about 500 meters west of, the Balsamo East
target: The first phase of the drill program, totaling 2,400 meters
in 28 holes, is now complete. Trenching has been expanded and the second drilling
program will commence when the heavy rains begin to abate, which typically occurs
in mid August. Management is very encouraged by the results generated to
date, particularly the high grade intercepts in Drill Holes 3 and 9, both presently
interpreted to be in the same main El Paraiso Vein, and Drill Holes 21 and 22
in the North Vein, which were completed late in the first phase of drilling.
The high grade results, the quartz textures and the geochemistry all indicate
that the recently completed drill program intersected the veins near the top
of the mineralized zones. This suggests excellent exploration potential exists
at depth and along strike and that an expanded work program is warranted. While
sometimes variable in structure and grade, low sulphidation epithermal veins
host some of the most profitable mines in the Americas. The recent blind discovery
of the Dorada Vein at the 2.2 million ounce gold equivalent El Piñon
Mine in Chile (Meridian Gold news release June 29, 2004) and the recent discovery
at the 3 million ounce El Limon Mine in Nicaragua (Glencairn news release July
5, 2004) support the systematic exploration approach being followed by First
Point. Greater detail on the results to date, including maps and
sections, are available on the Company's web site at www.firstpointminerals.com.
Select the "Properties" tab and refer to the section captioned "Rio Luna Gold-Silver" Next Exploration Phase The next exploration phase has three primary objectives: (i)
step-out drill testing both at greater depth and along strike of the high grade
intersections; (ii) drill test new vein targets, and (iii) additional trenches
to extend the strike of known veins and to follow-up numerous quartz vein boulder
trains to locate and sample new veins as further drill targets. (i) A
step-out drill program designed to expand the high-grade targets
along strike and at depth will commence in August, when weather conditions begin
to improve. Initial targets are listed below: (iii) Additional
trenching has commenced on extensions of known veins and will also follow-up
additional targets represented by quartz vein boulders whose sources have not
yet been identified. ON BEHALF OF THE BOARD OF DIRECTORS "Peter Bradshaw" First Point Minerals Corp. is a Canadian precious and base
metal exploration and development company with five precious and base metal
projects located in the Americas. The Company is currently focusing its activities
to explore, define and advance its Rio Luna Gold Project in Nicaragua. For more
information please view: www.firstpointminerals.com or phone Ran Davidson, Director
of Investor Relations at (604) 681-8600 or toll free at 1-866-FPM-8601. The TSX Venture Exchange has not reviewed, nor accepts
responsibility for the adequacy or accuracy of this news release.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended August 31, 2004
File No 0-49918
(Name of Registrant)
(Address of principal executive offices)
Form 20-F or Form 40-F. FORM 20-F x FORM
40-F ¨
Form is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b)
under the Securities Exchange Act of 1934. Yes ¨
No x
First Point Minerals Corp.
(Registrant)
Dated September 13, 2004
/s/ J. Christopher Mitchell, President and Director
Suite 906 1112 West Pender Street
Vancouver, BC Canada V6E 2S1
Tel: 604/681-8600
Fax: 604/681-8799
e-mail "firstpoint@firstpointminerals.com"
TSX Venture Exchange: FPX
FOR IMMEDIATE RELEASE
July 12th, 2004
SIGNIFICANT DRILL INTERVALS
BALSAMO TARGET AREA
Hole #
From
To
Meters
Gold
(g/t)
DD-RL-27
102.0
106.1
4.1
0.2
DD-RL-28
9.5
19.2
9.7
1.2
* DD-RL-1
10.7
11.9
1.2
1.4
35.5
37.7
2.2
0.5
* DD-RL-2
18.5
21.5
3.0
0.1
49.2
53.5
4.3
0.9
* DD-RL-3
including 36.3
45.4
9.1
6.2
42.8
45.4
2.6
19.4
* DD-RL-4
46.6
47.5
0.9
0.4
55.4
58.0
2.6
0.2
*
Previously Released
Results from previous drilling
Target
location Description of proposed drilling
Drill
hole
number Estimated
true width
(meters) Gold
(g/t)
Balsamo East - North vein
Along strike to the west and deeper, down dip
RL-21
RL-22 3.2
5.2 15.8
13.5
Balsamo East - South vein
Initially deeper down dip
RL- 8
13.4
1.1
Balsamo
Along strike east and west and deeper down dip
RL- 3
RL-28 2.6
9.7 19.4
1.2
Santa Rita
Along strike east and west
RL- 9
1.3
19.0
Results from previous
trenching
Target
location Description of proposed work
Meters
Gold
(g/t)
Lomita vein
drill holes below the trench
4.9
4.2
Santa Juana
drill holes below the trench
6.2
0.9
Filidelfia
drill holes below the trench
5.7
0.7
Peter M. D. Bradshaw, Executive Chairman
Suite 906 1112 West Pender Street
Vancouver, BC Canada V6E 2S1
Tel: 604/681-8600
Fax: 604/681-8799
Toll Free Number: 1-866-FPM-8601
e-mail "firstpoint@firstpointminerals.com"
TSX Venture Exchange: FPX
FOR IMMEDIATE RELEASE | September 9, 2004 |
Second Phase of Drilling Started at Rio Luna, New Veins Discovered.
Dr. Peter M D Bradshaw, P. Eng., Executive Chairman of First Point Minerals Corp. (TSXV: FPX) is pleased to announce that the second phase drill program has commenced on the Rio Luna gold property in Nicaragua. The initial holes of this program will test both the down dip and along strike extensions of the North vein of the Balsamo East target where two holes from the first phase of drilling, as previously announced, returned 15.8 grams/tonne (g/t) gold over 3.2 meters (including 0.3 meters of 87.7 g/t) and 13.5 g/t gold over 5.2meters (including 1.2 meters of 57.6 g/t gold).
This second phase of drilling will total approximately 1,000 meters in five to seven holes. The program was previously announced in First Point's July 12th news release and can be viewed at the Company's web site www.firstpointminerals.com. The drill core will be sent to the CAS laboratory in Honduras with checks by ACME in Vancouver. Assay results will be announced as they are received.
Trenching completed over the past two months has identified several new veins in the El Paraiso vein system (sub-parallel to the main Anillo structure) near the Balsamo East, Balsamo, Balsamo West and Santa Juana targets. These include:
a. | The Pablo vein, which is located approximately 100m
SW from the Anillo vein. The Pablo vein is close to the Balsamo and Balsamo
West targets and has been traced for 1.4 kilometers (km) and remains open
in both directions. The highest grab sample from the vein to date is 6.9
g/t gold. Systematic trenching and sampling will commence shortly. |
b. | The Silvia vein, which is located approximately
200m NE from the Anillo vein, and striking towards the high grade intersections
at Balsamo East. The Silvia vein has been traced discontinuously for 1.7km.
Systematic trenching and sampling is in progress. |
c. | Several other veins have been discovered between
the Pablo and Silvia veins. Investigation of these has been given a lower
priority at the moment. |
The location of these new veins can be seen on the Company's web site at www.firstpointminerals.com (see fig.2 under Rio Luna gold project), together with the existing drill holes. Some of the veins are now shown in different orientations from those previously plotted, based on updated interpretations as new information has been added. It is also apparent from this map that less than 10% of the strike extent of the known veins have been drilled. Together with the
drilling program, the Company is continuing its aggressive trenching and sampling program to gain a more detailed understanding of the gold content, location, strike and dip of the veins in order to select the next drill targets.
A total of 12km of epithermal quartz veining has now been identified at the Company's 90 square km Rio Luna gold project with a number of priority gold targets identified along these veins. First Point has an option to earn 100% interest in the Rio Luna gold project from Terra Nova Resources Inc. Work is progressing with several crews to prioritize these targets and to define an efficient drilling campaign.
The qualified person supervising work on this project is Dr. Peter Bradshaw, P. Eng.
First Point Minerals Corp. is a Canadian precious and base metal exploration and development company with five precious and base metal projects located in the Americas. The Company is currently focusing its activities to explore, define and advance its Rio Luna gold project in Nicaragua. For more information please view: www.firstpointminerals.com or phone Ran Davidson, Director of Investor Relations at (604) 681-8600 or toll free at 1-866-FPM-8601.
ON BEHALF OF THE BOARD OF DIRECTORS
"Peter Bradshaw"Peter M. D. Bradshaw, Executive Chairman
The TSX Venture Exchange has not reviewed, nor accepts responsibility for the adequacy or accuracy of this news release.
FIRST POINT MINERALS CORP.
FINANCIAL STATEMENTS
SECOND QUARTER 2004
August 25, 2004
NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited interim financial statements of First Point Minerals Corp. (the "Company") have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.
FIRST POINT MINERALS CORP.
CONSOLIDATED BALANCE SHEETS
June 30, 2004 and December 31, 2003
ASSETS | |||||||
June 30 | December 31 | ||||||
2004 | 2003 | ||||||
(Unaudited) | (Audited) | ||||||
CURRENT | |||||||
Cash | $ | 789,331 | $ | 1,869,354 | |||
Accounts and advances receivable | 64,514 | 30,339 | |||||
Prepaid expenses and deposits | 30,213 | 33,571 | |||||
884,058 | 1,933,264 | ||||||
FUNDS IN TRUST | 61,246 | 61,246 | |||||
INVESTMENT | (Note 3) | 864,073 | - | ||||
CAPITAL ASSETS | (Note 4) | 32,728 | 31,086 | ||||
MINERAL PROPERTIES | (Note 5) | 2,975,073 | 3,348,973 | ||||
4,817,178 | 5,374,569 | ||||||
LIABILITIES | |||||||
CURRENT | |||||||
Accounts payable and accrued liabilities | 56,447 | 16,784 | |||||
SHAREHOLDERS' EQUITY | |||||||
SHARE CAPITAL | (Note 6) | 10,243,150 | 10,114,236 | ||||
CONTRIBUTED SURPLUS | 309,438 | 278,697 | |||||
DEFICIT | (5,791,857 | ) | (5,035,148 | ) | |||
4,760,731 | 5,357,785 | ||||||
$ | 4 ,817,178 | $ | 5,374,569 |
APPROVED BY THE DIRECTORS | ||
/s/ Peter M.D. Bradshaw | /s/ Robert A. Watts | |
Director | Director |
See notes to the consolidated financial statements
FIRST POINT MINERALS CORP.
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(Unaudited, prepared by management)
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30
Three Months | Six Months | |||||||||||
Ended June 30 | Ended June 30 | |||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||
EXPENSES | ||||||||||||
Accounting, legal and audit | $ | 2,814 | $ | 2,322 | $ | 3,287 | $ | 19,560 | ||||
Amortization | 2,354 | 2,595 | 4,308 | 4,223 | ||||||||
Communications | 808 | 919 | 1,849 | 1,633 | ||||||||
Management fees | 23,500 | 8,800 | 39,500 | 18,400 | ||||||||
Office and administration | 2,910 | (1,883 | ) | 10,109 | 1,335 | |||||||
Rent | 5,894 | 4,254 | 11,055 | 8,507 | ||||||||
Stock-based compensation | 28,140 | - | 30,741 | - | ||||||||
Travel and promotion | 15,565 | 15,721 | 29,938 | 28,478 | ||||||||
Trust and filing fees | 15,503 | 17,441 | 27,327 | 23,081 | ||||||||
Wages and benefits | 2,723 | 10,965 | 25,022 | 20,422 | ||||||||
General exploration | 56,484 | 91,093 | 232,743 | 155,130 | ||||||||
LOSS BEFORE OTHER ITEMS | 156,695 | 152,227 | 415,879 | 264,691 | ||||||||
OTHER ITEMS: | ||||||||||||
Interest income | (6,536 | ) | (4,578 | ) | (15,049 | ) | (9,639 | ) | ||||
Loss/(gain) on foreign exchange | (6,199 | ) | 6,412 | (5,337 | ) | 1,217 | ||||||
Loss on disposal of mineral | ||||||||||||
property (Note 5) | - | - | 361,216 | - | ||||||||
NET LOSS FOR THE PERIOD | 143,960 | 154,061 | 756,709 | 256,269 | ||||||||
DEFICIT, BEGINNING OF PERIOD | 5,647,897 | 4,267,060 | 5,035,148 | 4,164,852 | ||||||||
DEFICIT, END OF PERIOD | $ | 5,791,857 | $ | 4,421,121 | $ | 5,791,857 | $ | 4,421,121 | ||||
LOSS PER SHARE | $ | (0 .00 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.01 | ) |
WEIGHTED AVERAGE NUMBER OF SHARES | ||||||||||||
OUTSTANDING | 31,257,850 | 23,636,987 | 31,203,674 | 23,456,987 |
See notes to the consolidated financial statements
FIRST POINT MINERALS CORP.
Consolidated statements of changes in cash position
(Unaudited, prepared by management)
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30
Three Months | Six Months | |||||||||||
Ended June 30 | Ended June 30 | |||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||
CASH PROVIDED BY (USED FOR): | ||||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net loss for the period | $ | (143,960 | ) | $ | (154,061 | ) | $ | (756,709 | ) | $ | (256,269 | ) |
Add items not involving cash | ||||||||||||
Amortization | 1,333 | 2,595 | 30,741 | 4,223 | ||||||||
Stock-based compensation | 28,140 | - | 3,287 | - | ||||||||
Disposal of mineral | ||||||||||||
property (Note 5) | - | - | 1,136,636 | - | ||||||||
(114,487 | ) | (151,466 | ) | 413,955 | (252,046 | ) | ||||||
CHANGES IN NON-CASH WORKING | ||||||||||||
CAPITAL COMPONENTS: | ||||||||||||
Accounts receivable | (35,111 | ) | (22,373 | ) | (34,175 | ) | (301 | ) | ||||
Prepaid expenses | 13,286 | 2,981 | 3,358 | 12,243 | ||||||||
Accounts payable and accrued | ||||||||||||
liabilities | (102,178 | ) | 69,772 | 39,663 | 80,148 | |||||||
(238,490 | ) | (101,086 | ) | 422,801 | (159,956 | ) | ||||||
FINANCING ACTIVITIES * | ||||||||||||
Common shares issued for cash | - | 77,460 | 26,414 | 236,210 | ||||||||
INVESTING ACTIVITIES * | ||||||||||||
Equity in development company | - | - | (864,073 | ) | - | |||||||
Mineral Exploration | (382,176 | ) | (110,366 | ) | (660,236 | ) | (425,827 | ) | ||||
Purchase of capital assets | (1,934 | ) | (929 | ) | (4,929 | ) | (6,533 | ) | ||||
(384,110 | ) | (111,295 | ) | (1,529,238 | ) | (432,360 | ) | |||||
NET CASH (USED) DURING PERIOD | (622,600 | ) | (134,921 | ) | (1,080,023 | ) | (356,106 | ) | ||||
CASH, BEGINNING OF PERIOD | 1,411,931 | 725,148 | 1,869,354 | 946,333 | ||||||||
CASH, END OF PERIOD | $ | 789,331 | $ | 90,227 | $ | 789,331 | $ | 590,227 |
· Supplemental Disclosure of non---cash financing and investing activitiess
During the Second quarter of 2004, the Company issued 500,000 (2003 nil) common shares at an aggregate value of $102,500 (2003 nil) in connection with mineral property acquisition agreements
See notes to the consolidated financial statements
FIRST POINT MINERALS CORP.
Notes to the Unaudited Consolidated Financial Statements
(Prepared by management)
June 30, 2004 and 2003
1. | NATURE AND CONTINUANCE OF OPERATIONS |
The Company is incorporated under the Alberta
Business Corporations Act and is involved in the acquisition and exploration
of property interests that are considered potential sites of economic
mineralization. At the date of the financial statements, the Company has
not identified a known body of commercial grade ore on any of its properties
and the ability of the Company to recover the costs it has incurred to
date on these properties is dependent upon the Company being able to identify
a commercial ore body, to finance its exploration and development costs
and to resolve any environmental, regulatory, or other constraints which
may hinder the successful development of the property. |
|
These unaudited interim financial statements have
been prepared by management on a going concern basis which assumes that
the Company will be able to realize its assets and discharge its liabilities
in the normal course of business for the foreseeable future. The continuing
operations of the Company are dependent upon its ability to continue to
raise adequate financing and to commence profitable operations in the
future. The financial statements have not been audited, reviewed or otherwise
verified as to the accuracy or completeness of information. Readers are
cautioned that these statements may not be appropriate for their purposes.
|
June 30, 2004 | December 31, 2003 | ||||||
Deficit | $ | (5,791,857 | ) | $ | (5,035,148 | ) | |
Working Capital | $ | 827,611 | $ | 1,916,480 |
2. | SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting | |
The accompanying unaudited interim financial statements
have been prepared by management in accordance with generally accepted
accounting principles ("GAAP") in Canada on a basis consistent with those
outlined in the Company's audited financial statements for the year ended
December 31, 2003. They do not include all of the information and disclosures
required by Canadian GAAP for audited financial statements. In the opinion
of management, all adjustments considered necessary for fair presentation
have been included in these financial statements. These unaudited interim
financial statements should be read in conjunction with the most recent
audited annual financial statements of the Company, including the notes
thereto. |
|
The Company has not changed any of its existing
accounting policies, nor has it adopted any new accounting policies since
its last fiscal year end. |
|
Stock-Based Compensation |
|
The Company records compensation associated with
stock options granted to directors, officers, employees and consultants
using a fair value measured basis and records the expense as the options
vest with the recipients. |
|
Comparative Figures |
|
Certain comparative figures have been reclassified
to conform with the current period's presentation. |
FIRST POINT MINERALS CORP.
Notes to the Unaudited Consolidated Financial Statements
(Prepared by management)
3. | INVESTMENT |
The Company entered into an agreement (the "Shareholder
Agreement") effective January 16, 2004 with a Michigan limited liability
company, Menominee River Exploration Co., LLC ("MREC") and seven individuals,
being the owners of MREC (the "Initial US Investors"). Pursuant to the
terms of the Shareholder Agreement, MREC and the Company transferred MREC's
Back Forty project in Michigan and First Point's Cedros Property in Honduras
to a new company, Aquila Resources Corp. ("Aquila"). In addition, First
Point agreed to provide the management services needed to take Aquila
public on a Canadian stock exchange and to use its best efforts to arrange
for certain funds to be raised for Aquila. |
|
As consideration for the foregoing transactions,
First Point was to receive 2,215,569 Aquila common shares, of which 1,000,000
shares have been issued and are held in a special escrow account pending
the Honduran government completing transfer of title to the Cedros property
to Aquila. The balance of the shares, being 1,215,569 shares, will be
issued to First Point following the completion of Aquila's Initial Public
Offering, at which time Aquila will be listed for trading on a Canadian
stock exchange. First Point also purchased 253,209 common shares of Aquila
at $0.35 per share. Concurrently, the Initial US Investors purchased 889,649
common shares of Aquila at the same price. Subsequently, Aquila completed
a small private placement in which certain investors purchased an additional
565,321 common shares. As a result of the foregoing transactions, at the
end of the second quarter, the Company owned or held conditional rights
to an aggregate of 2,468,778 shares of Aquila having a deemed value (at
$0.35 per share) of $864,073, representing an ownership interest in Aquila
of 21.1%. |
|
4. | EQUIPMENT |
June 30, 2004 | December 31, 2003 | |||||||
Accumulated | ||||||||
Cost | Amortization | Net Book Value | Net Book Value | |||||
$ | $ | $ | $ | |||||
Computers | 37,355 | 25,382 | 11,973 | 12,724 | ||||
Office furniture and equipment | 74,347 | 53,592 | 20,755 | 18,362 | ||||
111,702 | 78,974 | 32,728 | 31,086 |
5. | MINERAL PROPERTIES |
HONDURAS |
|
Cacamuya Property |
|
The Company acquired an option in July 1999 to purchase
a 60% interest in the Cacamuya Property in southern Honduras from Minera
Battle Mountain Gold Company ("BMG"). BMG has subsequently become a wholly-
owned subsidiary of Newmont Gold Company. |
|
To earn its interest, the Company was required to
incur US$1,000,000 in exploration expenditures (completed) and to issue
700,000 common shares to BMG by July 2004. Of these, 200,000 shares had
been issued as at March 31, 2004, and the remaining 500,000 were issued
to BMG in June 2004. BMG retains a 0.6% NSR royalty interest in the property.
|
|
The Company also has an option to earn the remaining
40% interest in this property from a wholly-owned Honduran subsidiary
of Breakwater Resources Ltd. by issuing 500,000 common shares at such
time as the Honduran government enacts the regulations to the new Honduran
mining code and converts title to the property. Breakwater Resources will
retain a sliding scale royalty of 0.4% of the gross sale proceeds starting
at US$325 |
FIRST POINT MINERALS CORP.
Notes to the Unaudited Consolidated Financial Statements
(Prepared by management)
5. | MINERAL PROPERTIES (Continued) |
HONDURAS (Continued) |
|
per ounce of gold and rising to a maximum of 1.2%
of the gross sale proceeds at US$400 per ounce of gold for all gold production,
and 0.4% of the gross sale proceeds starting at US$5.25 per ounce of silver
and rising to a maximum of 1.2% of the gross sale proceeds at US$7.00
per ounce of silver for all silver production. |
|
Cedros Property |
|
As part of the Shareholder Agreement (see note 3),
the Company agreed to transfer its Cedros zinc-silver property in Honduras
to Aquila in return for 2,215,569 Aquila common shares. The carrying value
of the Cedros property was $1,136,636. The Company placed a deemed value
of $775,420 on the Aquila shares issuable in consideration for the transfer
of the Cedros property and accordingly, has recorded a loss of $361,216
on the disposal of the Cedros property. |
|
Guayape Property |
|
Late in the first quarter of 2004, the Company acquired
an exploration concession from the Honduran government covering the Guayape
Property. A total of $4,791 in deferred exploration expenditures were
incurred on this concession in the second quarter (being an aggregate
of $7,935 since the project was acquired in the first quarter). |
|
NICARAGUA |
|
Rio Luna Property |
|
In December 2002, the Company entered into an option
agreement to acquire a 100% interest in the Rio Luna Property from Novaterra
Resources Inc. ("NRI") and Inversiones de Terra Nova S.A. ("Intersa"),
a subsidiary of NRI. To keep the option agreement in good standing the
Company must make a cash payment to NRI of US$10,000 prior to or on the
second anniversary date of the option agreement and must issue an additional
60,000 common shares of the Company to NRI prior to or on the third anniversary
date. Expenditures on this project during the quarter totalled $352,724
(2003 - $60,007). Expenditures for the half year totalled $597,692 (2003
- $84,597). |
|
EL SALVADOR, HONDURAS, NICARAGUA |
|
Exploration and Property Option Agreement
|
|
In February 2003, the Company entered into an exploration
and property option agreement with BHP Billiton World Exploration Inc.
("BHPBilliton") whereby the parties agreed to complete a US$200,000 exploration
program in El Salvador, Honduras and Nicaragua (the "Target Area") to
explore for copper-gold deposits, with the Company as operator of the
program. BHPBilliton subscribed to a private placement of First Point
units at $0.42 per unit, being the equivalent of US$50,000, and contributed
an additional US$50,000 in cash to the exploration budget. The Company
contributed an aggregate of US$150,000 to the exploration budget. |
|
Cumulative expenditures reached US$200,000 late
in the first quarter of 2004. The parties have agreed to fund additional
expenditures on a 50/50 basis, up to a maximum of US$243,066. Cumulative
expenditures from project inception to the end of the second quarter of
2004 are US$234,926, exclusive of a 7.5% management fee the Company is
entitled to receive for managing the exploration program. |
|
Until such time as a property has been acquired,
all expenditures incurred under this agreement are being expensed. |
FIRST POINT MINERALS CORP.
Notes to the Unaudited Consolidated Financial Statements
(Prepared by management)
5. | MINERAL PROPERTIES (Continued) |
EL SALVADOR, HONDURAS, NICARAGUA (Continued)
|
|
Exploration and Property Option Agreement (Continued)
|
|
The properties currently controlled by the Company
in Honduras and Nicaragua are excluded from the agreement with BHPBilliton.
In addition, any copper-gold deposit identified pursuant to this agreement,
unless the copper constitutes more than 25% of the economic value of the
deposit, will belong 100% to the Company, and BHPBilliton will have no
interest in such deposit. |
|
6. | SHARE CAPITAL |
Authorized share capital consists of an unlimited
number of common shares without par value and an unlimited number of first
and second preferred shares. |
Number of | |||||
Common | |||||
Shares | $ | ||||
Common shares: | |||||
Issued at December 31, 2002 | 22,839,954 | 8,015,161 | |||
Private placements (1) | 6,178,000 | 1,510,260 | |||
Warrants exercised | 1,950,000 | 557,950 | |||
Shares issued for a prepaid expense | 30,500 | 10,065 | |||
Options exercised | 50,000 | 16,000 | |||
Mineral property acquisition | 15,000 | 4,800 | |||
8,223,500 | 2,099,075 | ||||
Issued at December 31, 2003 | 31,063,454 | 10,114,236 | |||
Warrants exercised | 90,000 | 26,414 | |||
Mineral property acquisition | 500,000 | 102,500 | |||
Issued at June 30, 2004 | 31,653,454 | 10,243,150 |
(1) net of share issue costs of $64,500 | |
a) | Stock options: |
The Company has an incentive stock option plan that
conforms to the requirements of the TSX Venture Exchange and that has
been approved by the shareholders. Options to purchase common shares have
been granted to directors, officers, employees and consultants of the
Company at exercise prices determined by the market value of the common
shares on the date of the grant. A summary of the options outstanding
at June 30, 2004 follows: |
FIRST POINT MINERALS CORP.
Notes to the Unaudited Consolidated Financial Statements
(Prepared by management)
6. | SHARE CAPITAL (continued) |
a) | Stock options (continued) |
Exercise Price | ||||||
Number | Expiry | |||||
Outstanding | $ | Date | ||||
50 ,000 | 0.32 | August 1, 2004 | ||||
620,000 | 0.39 | December 27, 2004 | ||||
50,000 | 0.55 | April 30, 2005 | ||||
315,000 | 0.50 | June 27, 2005 | ||||
75,000 | 0.19 | Januar y 16, 2007 | ||||
305,000 | 0.20 | Januar y 22, 2007 | ||||
50,000 | 0.53 | June 4, 2007 | ||||
460,000 | 0.55 | June 27, 2007 | ||||
150,000 | 0.34 | November 4, 2008 | ||||
710,000 | 0.35 | December 12, 2008 | ||||
40,000 | 0.33 | Februar y 1, 2009 | ||||
175,000 | 0.20 | April 15, 2009 | ||||
3 ,000,000 |
Weighted-Average | Number | Weighted-Average | |||||
Exercise Price | of Options | Contractual | |||||
Remaining Life | |||||||
Balance, December 31, 2002 | 0.41 | 2,274,000 | 3.03 | ||||
Granted | 0.36 | 910,000 | |||||
Exercised | 0.53 | (50,000 | ) | ||||
Cancelled | 0.20 | (100,000 | ) | ||||
Balance, December 31, 2003 | 0.395 | 3,034,000 | 2.80 | ||||
Granted | 0.33 | 40,000 | |||||
0.20 | 175,000 | ||||||
Expired | 0.45 | (199,000 | ) | ||||
0.53 | (50,000 | ) | |||||
Balance, June 30, 2004 | 0.382 | 3,000,000 | 2.69 |
The fair value of options reported as compensation
expense in the current quarter has been estimated using the Black-Scholes
Option Pricing Model. A total of 185,000 options vested during the quarter.
Stock-based compensation expense of $28,410 was recorded during the current
quarter (2003 nil). The assumptions used to determine the fair
value of the stock options that were granted during the first and second
quarters of 2004 and that vested during the second quarter are set out
in the following table: |
Granted in First | Granted in Second | ||||
Quarter 2004 | Quarter 2004 | ||||
Risk free interest rate | 3.64% | 3.78% | |||
Volatility | 132.3 | 124.2 | |||
Term (in years) | 5 | 5 | |||
Vesting terms | 25% per quarter | Fully vested |
FIRST POINT MINERALS CORP.
Notes to the Unaudited Consolidated Financial Statements
(Prepared by management)
6. | SHARE CAPITAL (continued) |
a) | Stock options (continued) |
Option pricing models require
the input of highly subjective assumptions, particularly as to the expected
price volatility of the stock. Changes in these assumptions can materially
affect the fair value estimate and therefore it is management's view that
the existing models do not necessarily provide a single reliable measure
of the fair value of the Company's stock option grants. |
|
b) | Warrants outstanding at June 30, 2004 are summarized as follows: |
Number | Exercise Price | Expiry | |||
Outstanding | $ | Date | |||
82 ,987 | 0.65 | July 2, 2004 | |||
89,000 | 0.62 | (1) | April 28, 2005 | ||
3,100,000 | 0.30 | December 9, 2005 | |||
3,271,987 |
7. | LOSS PER SHARE |
Loss per share has been calculated using the weighted-average
number of common shares outstanding during the period. Diluted loss per
share has not been calculated as it is anti-dilutive. |
|
8. | RELATED PARTY TRANSACTIONS |
During the quarter, the Company paid companies controlled
by Company officers an aggregate of $23,500 (2003 $8,800) for management
and administrative services. |
|
9. | SUPPLEMENTARY NOTES |
As at August 25, 2004, there were 31,653,454 common
shares outstanding. There were also 3,000,000 options outstanding with
exercise prices ranging from $0.19 to 0.55 per share and expiry dates
extending to April 15, 2009 and 3,189,000 warrants outstanding with exercise
prices ranging from $0.30 to $0.62 per share and expiry dates extending
to December 9, 2005. |
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis ("MD&A") reviews the activities of First Point Minerals Corp. ("First Point", or the "Company") and compares the financial results for the second quarter and first six months of 2004 with those of the corresponding periods in 2003. In order to gain a more complete understanding of First Point's financial condition and results of operations, this MD&A should be read in conjunction with the financial statements and accompanying notes for the relevant periods, copies of which are filed on the SEDAR website.
First Point prepares its financial statements in accordance with Canadian generally accepted accounting principles, and these statements are filed with the relevant regulatory authorities in Canada. All monetary amounts are in Canadian dollars unless otherwise noted.
This MD&A contains certain forward-looking information. All information, other than historical facts included herein, including without limitation data regarding potential mineralization, exploration results and future plans and objectives of First Point is forward-looking information that involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate and actual results and future events could differ materially from those anticipated in the forward-looking information.
The forward-looking information is only made as of the date of this MD&A, August 25, 2004 (the "Report Date")
1. Overview
First Point was incorporated as a junior capital pool company in the province of Alberta on February 2, 1995 and established itself as a mineral exploration company in June 1996. The Company's exploration efforts at the present time are focused on the exploration and development of precious metal properties in Central America, principally in Honduras and Nicaragua, with five mineral properties and several exploration projects in Central America. First Point is also doing reconnaissance exploration in Peru.
Effective January 16, 2004, First Point entered into an agreement (the "Shareholders Agreement") with Menominee River Exploration Co. LLC, a Michigan limited liability company, ("MREC") and certain individuals who are the shareholders of MREC for the purposes of advancing First Point's Cedros property in Honduras and MREC's Back Forty property in the Upper Peninsula of Michigan. A new company, Aquila Resources Corp. ("Aquila"), was formed under the Canada Business Corporations Act and First Point and MREC have contributed the Cedros and Back Forty properties, respectively, to Aquila. Aquila's principal focus will be on zinc and copper deposits with commercially important gold and/or silver credits.
As consideration for First Point contributing the Cedros property to Aquila and providing the management services required to take Aquila public by means of a listing on a Canadian stock exchange, Aquila agreed to issue 2,215,569 of its common shares to First Point. The Company has placed a value of $775,420 on these shares. Of these shares, 1,000,000 have been placed in a special escrow pending the Honduras government transferring title to the Cedros property to Aquila and 1,215,569 shares are to be issued to First Point when Aquila's shares begin to trade publicly. First Point also subscribed for 253,208 common shares at $0.35 per share. The Company's aggregate shareholding in Aquila is 2,468,777 common shares, representing an ownership interest of approximately 21.1%, with an aggregate cost basis of $864,073. This is the amount shown on the balance sheet as the carrying value of First Point's investment in Aquila.
1
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
2. Results of Operations
First Point explores for precious metal deposits, none of which have been advanced to the point where a production decision can be made. The Company has no producing properties, and no sales or revenues.
The net loss for the quarter ended June 30, 2004 was $143,960 (2003 - $154,061). There were two significant increases in expenses as compared to the prior year's second quarter: (a) stock-based compensation was $28,140 (2003 - $nil), being the fair value of stock options that vested during the second quarter (none vested in the prior year's second quarter); (b) management fees in the second quarter of 2004 were $23,500 (2003 - $8,800). The increase in management fees results from having an increased portion of the services needed to manage the Company's affairs provided under contractual arrangements rather than performed by employees. General exploration expenditures for the second quarter of 2004 of $56,484 (2003 - $91,093) were lower because the Company's technical resources were directed at the Rio Luna project (where exploration expenditures were capitalized) instead of to general exploration, where such costs would have been expensed.
For the half year ended June 30, 2004, the net loss was $756,709 (2003 - $256,269). The largest component of the increase was the write-off of $361,216 of deferred exploration expenditures (2003 - $nil), being the difference between the carrying value of the Cedros property ($1,136,636 at December 31, 2003) and the $775,420 deemed value of the 2,215,569 Aquila common shares issuable to the Company as consideration for transferring title to the Cedros property to Aquila. The next largest increase in expenses for the first half of 2004 was general exploration, a reflection of the expenditures incurred under the agreement with BHP Billiton. The bulk of those expenditures were incurred after the first half of 2003. The consolidated statements of project and general exploration expenses for the six months ended June 30, 2004 and 2003 on pages 3 and 4 following provide details on the nature of the Company's exploration expenditures. Accounting, legal and audit expenses of $3,287 (2003 - $19,560) were lower in part because the 2003 period included legal costs associated with negotiating the arrangements with BHP Billiton.
Nicaraguan operations:
The Company incurred gross expenditures on the Rio Luna property during the first half of 2004 of $597,692 (2003 - $ 84,597).
First Point entered into an option to purchase agreement in December 2002 to acquire a 100% interest in the Rio Luna property. Geological reconnaissance and trenching on the property during 2003 identified 8.8 kilometers of strike length in several vein systems. Late in the first quarter of 2004, the Company started a drilling program on four areas: Balsamo, Balsamo East, Santa Rita and El Rodeo. Most of the drilling took place during the second quarter, with the result that drilling expenditures of $331,015 for this program constituted approximately 55% of total expenditures on the Rio Luna project during the first half of the year. The program, which consisted of 2,400 meters of core drilling in 28 holes, was suspended early in the third quarter due to the onset of adverse weather conditions.
2
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
STATEMENT OF PROJECT AND GENERAL EXPLORATION EXPENDITURES
SIX MONTHS ENDED JUNE 30, 2004
PROJECT DEFERRED EXPLORATION | GENERAL EXPLORATION | TOTAL | ||||||||||||||
HONDURAS | NICARAGA | Cent & So | ||||||||||||||
Cacamuya | Guayape | Cedros | Rio Luna | BHP Billit | America | Other | ||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||
BALANCE - December 31, 2003 | 1,973,594 | - | 1,136,636 | 238,743 | - | - | - | 3,348,973 | ||||||||
Property Acquisition and Option Costs | 126,831 | 126,831 | ||||||||||||||
Field - Community Relations | 2,196 | 15 | 2 | 77 | 2,290 | |||||||||||
Field Drilling | 331,015 | 331,015 | ||||||||||||||
Field - Food & Accommodation | 375 | 96 | 14,420 | 7,548 | 1,727 | 70 | 24,236 | |||||||||
Field Labour | 9,214 | 227 | 53 | 24,203 | 24,360 | 78 | 58,135 | |||||||||
Field - Office Rent & Communication | 921 | 1,000 | 2,871 | 1,242 | 336 | 6,370 | ||||||||||
Field Supplies | 4 | 2 | 59 | 4,748 | 2,680 | 213 | 7,706 | |||||||||
Field - Transportation & Freight | 1,698 | 367 | 434 | 21,302 | 24,994 | 2,733 | 51,528 | |||||||||
Assaying & Analysis | 11,842 | 34,652 | 4,276 | 50,770 | ||||||||||||
Computer Usage | 150 | 1,830 | 1,040 | 1,300 | 460 | 4,780 | ||||||||||
Environmental & Reclamation | 34 | 34 | ||||||||||||||
Geological & Technical Services | 43,353 | 16,313 | 8,293 | 67,959 | ||||||||||||
Legal & Accounting Fees | 1,321 | 4,774 | 2,166 | 2,174 | 840 | 11,275 | ||||||||||
Office Costs/Communications | 37 | 19 | 6 | 196 | 3,871 | 4,129 | ||||||||||
Property Taxes | 4,698 | 1,442 | 4,338 | 2,851 | 13,329 | |||||||||||
Salaries/Employee Benefits | 4,822 | 45,757 | 27,555 | 42,959 | 14,954 | 136,047 | ||||||||||
Travel & Accommodation | 630 | 6,653 | 3,107 | 2,778 | 83 | 13,251 | ||||||||||
General Administration | 4,212 | 1,104 | 617 | 83,144 | 17,568 | 11,676 | 2,516 | 120,837 | ||||||||
Recoverable Expenses | (35,043 | ) | (35,043 | ) | ||||||||||||
TOTAL EXPLORATION EXPENDITURES | 157,109 | 7,935 | 4,440 | 597,692 | 126,289 | 83,931 | 18,083 | 995,479 | ||||||||
WRITEOFF: GENERAL EXPLORATION | (4,440 | ) | (126,289 | ) | (83,162 | ) | (18,083 | ) | (232,743 | ) | ||||||
DEFERRED EXPLORATION | (1,136,636 | ) | (1,136,636 | ) | ||||||||||||
NET DEFERRED EXPLORATION | 157,109 | 7,935 | (1,136,636 | ) | 597,692 | 0 | 0 | 0 | (373,900 | ) | ||||||
BALANCE June 30, 2004 | 2,130,703 | 7,935 | 0 | 836,435 | 0 | 0 | 0 | 2,975,073 |
3
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
STATEMENT OF PROJECT AND GENERAL EXPLORATION EXPENDITURES
SIX MONTHS ENDED JUNE 30, 2003
PROJECT DEFERRED EXPLORATION | GENERAL EXPLORATION | TOTAL | ||||||||||||||
HONDURAS | NICARAGUA | BHP | Cent & So | |||||||||||||
Cacamuya | Cedros | Rio Luna | Chaparral | Billiton | America | Other | ||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||
BALANCE - December 31, 2002 | 1,584,214 | 1,126,110 | 28,362 | - | - | - | - | 2,738,686 | ||||||||
Property Acquisition and Option Costs | 11,370 | 2,273 | 13,643 | |||||||||||||
Field Community Relations | 65 | 65 | ||||||||||||||
Field Drilling | 196,465 | 196,465 | ||||||||||||||
Field - Food & Accommodation | 2,838 | 4,548 | 147 | 3,401 | 4,437 | 22 | 15,391 | |||||||||
Field Labour | 22,470 | 16,697 | 10 | 206 | 39,383 | |||||||||||
Field - Office Rent & Communication | 2,630 | 975 | 500 | 75 | 609 | 152 | 4,943 | |||||||||
Field Supplies | 1,794 | 3,314 | 32 | 1,462 | 607 | 7,208 | ||||||||||
Field - Transportation & Freight | 6,490 | 10,164 | 319 | 1,498 | 7,097 | 25,567 | ||||||||||
Field - Trenching | 5,567 | 5,567 | ||||||||||||||
Assaying & Analysis | 6,291 | 6,940 | 293 | 2,579 | 16,842 | |||||||||||
Computer Usage | 1,590 | 30 | 883 | 820 | 1,870 | 850 | 6,043 | |||||||||
Environmental & Reclamation | 724 | 588 | 1,312 | |||||||||||||
Geological & Technical Services | 4,909 | 4,636 | 4,292 | 16,216 | 30,053 | |||||||||||
Legal & Accounting Fees | 13 | 13 | ||||||||||||||
Office Costs/Communications | 1,898 | 265 | 737 | 511 | 9 | 3,421 | ||||||||||
Property Taxes | 5,764 | 5,764 | ||||||||||||||
Salaries/Employee Benefits | 40,223 | 887 | 14,330 | 15,476 | 50,500 | 20,418 | 141,834 | |||||||||
Travel & Accommodation | 2,834 | 1,645 | 1,650 | 2,644 | 381 | 9,153 | ||||||||||
General Administration | 33,343 | 217 | 8,692 | 99 | 3,515 | 9,942 | 2,483 | 58,291 | ||||||||
TOTAL EXPLORATION | 335,882 | 4,382 | 84,597 | 966 | 34,208 | 96,760 | 24,163 | 580,958 | ||||||||
EXPENDITURES | ||||||||||||||||
WRITE OFF: GENERAL EXPLORATION | - | - | - | - | (34,208 | ) | (96,760 | ) | (24,163 | ) | (155,130 | ) | ||||
DEFERRED EXPLORATION | - | - | - | - | - | - | - | - | ||||||||
NET DEFERRED EXPLORATION | 335,882 | 4,382 | 84,597 | 966 | - | - | - | 425,827 | ||||||||
BALANCE June 30, 2003 | 1,920,096 | 1,130,492 | 112,959 | 966 | - | - | - | 3,164,513 |
4
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In the latter stages of the program, drilling revealed the presence of a second vein in the Balsamo East target area, which is now believed to contain at least two major, moderate to steep south-dipping epithermal quartz breccia veins and stockwork zones. Drilling will resume late in the third quarter, when the rains begin to abate and ground conditions improve. Hand trenching and geologic mapping have continued throughout the rainy season.
Honduran operations:First Point's deferred exploration expenditures on the Cacamuya property during the first six months of 2004 were $157,109 (2003 - $335,882). The 2004 figure consisted largely of the deemed value ($102,500) of 500,000 First Point shares issued to exercise the option to acquire a 60% interest in this property from Minera Battle Mountain Gold. The 2003 expenditures included $196,465 in drilling expenses. No drilling was done on this project during the first half of 2004, as the Company's exploration personnel were deployed to work on the Rio Luna project and the BHP Billiton reconnaissance program during much of the period. As there was no drilling in the 2004 period, expenditures for field labour, salaries and benefits in this period were substantially lower than in the prior year's first half. In addition, since general administration expenses are allocated to individual projects and general exploration activities on a prorata basis using total expenditures excluding G&A costs, the portion of general administration expenses allocated to Cacamuya for the first half of 2004 was correspondingly lower, as compared to the amount allocated in the 2003 period.
BHP Billiton exploration and property option agreement:
The Company's net expenditures under the BHP Billiton agreement during the first half of 2004 were $126,289 (2003 - $34,208). Field work did not commence until the second quarter of 2003 and as a consequence, expenditures for the half year ending June 30, 2003 were modest. The original budget for the exploration program was US$200,000 and cumulative expenditures were US $201,642 through March 31, 2004, exclusive of a 7.5% management fee payable to the Company for acting as manager of the project. During the second quarter of 2004 an additional US$52,000 of expenditures were authorized. It is anticipated that a further modest increase in expenditures will be authorized prior to the end of the third quarter. The $35,043 of recoverable expenditures represents amounts recoverable from BHP for its share of the expenditures incurred through June 30, 2004 in excess of the originally authorized US$200,000.
Aquila Resources Corp.:The Company vended the Cedros zinc-silver property in Honduras to Aquila Resources Corp. for 2,214,569 Aquila common shares, pursuant to an agreement effective January 16, 2004. The carrying value of the Cedros property on the Company's books was $1,136,636, whereas the Aquila shares issuable in consideration of the transfer of the property had a deemed value of $775,420, resulting in a loss of $361,216 on the transaction. The Cedros property had been kept on a "care and maintenance" basis for the past several years, awaiting higher metal prices. The Company is of the view that shareholder value from this property would best be enhanced by transferring ownership to an entity focused on exploring and developing base metal properties.
Aquila also acquired the Back Forty zinc-gold deposit in Michigan, and intends to build, over time, a portfolio of base metal properties. Preliminary discussions have been held with prospective sources of financing for the purposes of funding an aggressive exploration program, directed primarily at advancing the Back Forty project.
5
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Back Forty is an advanced stage exploration project focusing on gold and massive sulfide targets. Early in 2002, drill testing of a geophysical anomaly resulted in the discovery of the LK massive sulfide zinc/gold deposit. Subsequent drilling in 2003 defined a potentially economic resource of zinc and gold rich massive sulfide mineralization, plus adjacent gold rich sections low in sulfides. The massive sulfide lenses show impressive widths and continuity. The potential to expand the three massive sulfide zones is excellent. The Main Zone massive sulfides remain open down plunge to the west, and ground geophysical surveys indicate probable extension in this direction for at least another 425 meters. The Tuff Zone massive sulfide is open at depth and along strike to the east, and has not been drilled along its surface projections where there is potential for enriched gossans similar to the East Zone. In addition there are impressive gold intercepts in a variety of host rocks peripheral to massive sulfide mineralization suggest strong potential for "gold only" style mineralization.
3. Summary of Quarterly Results
The following tables summarize information derived from the Company's financial statements for each of the eight most recently completed quarters:
Quarter Ended: | June 30 | Mar. 31 | Dec. 31 | Sep. 30 | June 30 | Mar. 31 | Dec. 31 | Sep. 30 | |||||||||||
Year: | 2004 | 2004 | 2003 | 2003 | 2003 | 2003 | 2002 | 2002 | |||||||||||
(a) | Net sales or total revenue ($000s) | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil | $Nil | ||||||||||
(b) | Income (loss) from continuing operations: | ||||||||||||||||||
(i) | in total (000s) | $(157 | ) | $(259 | ) | $(456 | ) | $(155 | ) | $(152 | ) | $(107 | ) | $(277 | ) | $( 81 | ) | ||
(ii) | per share(1) | $(0.00 | ) | $(0.00 | ) | $(0.02 | ) | $(0.01 | ) | $(0.01 | ) | $(0.00 | ) | $(0.02 | ) | $0.00 | ) | ||
(c) | Net income or loss: | ||||||||||||||||||
(i) | in total (000s) | $(144 | ) | $(613 | ) | $(456 | ) | $(158 | ) | $(154 | ) | $(102 | ) | $(278 | ) | $( 72 | ) | ||
(ii) | per share(1) | $(0.00 | ) | $(0.02 | ) | $(0.02 | ) | $(0.01 | ) | $(0.01 | ) | $(0.00 | ) | $(0.02 | ) | $(0.00 | ) |
(1) Fully diluted loss per share amounts have not been calculated as they would be anti-dilutive.
4. Liquidity and Capital Resources
First Point finances its activities primarily by the private placement of securities. There is no assurance that equity funding will be accessible to First Point at the times and in the amounts required to fund the Company's activities, as there are many conditions that are beyond the ability of First Point to control that will have a bearing on the level of investor interest in purchasing the Company's securities.
Debt financing has not been used to fund the Company's property acquisitions and exploration activities and First Point has no current plans to use debt financing. The Company has no "standby" credit facilities, nor any off-balance sheet arrangements and it does not use hedges or other financial derivatives.
Cash and Financial Conditions:The Company's cash position was $789,311 at June 30, 2004 ($1,869,354 at December 31, 2003).
The Company's working capital was $827,611 at June 30, 2004 ($1,916,480 at December 31, 2003).
6
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Investing Activities:During the second quarter of 2004, the Company's cash flow used for investing activities was $384,110 (2003 - $111,295). For the first six months of 2004, cash flow used for investing activities was $1,529,238 (2003 - $432,360), of which $864,073 (2003 - $Nil) was the investment in Aquila, and $660,236 (2003 - $425,827) was for exploration expenditures that were deferred.
Financing Activities:The Company had no financing activities in the second quarter of 2004 (2003 - $77,460). During the first half of 2004, the Company received $26,414 from the exercise of warrants. In the comparable 2003 period, a total of $236,211 was received from the exercise of options and warrants and the private placement with BHP Billiton.
In a non-cash transaction in the second quarter of 2004 the Company issued 500,000 shares with a deemed value of $102,500 to complete the exercise of an option to acquire a 60% interest in the Cacamuya property in Honduras.
Outlook:
It is anticipated that for the foreseeable future, First Point will rely on the equities markets to meet its financing needs. The Company will also consider entering into joint venture arrangements to advance its projects.
For the second half of 2004, management has budgeted approximately $175,000 for the next phase of drilling at Rio Luna, which will consist of 1,000 meters of diamond drilling. Favourable results from this program will result in an additional appropriation of funds for a follow-on drilling program. Corporate administrative and overhead costs for the balance of the year are estimated at approximately $450,000. The Company's working capital will be used to fund these exploration, G&A and overhead expenditures.
Outstanding share data as at the Report Date:First Point had 31,653,454 shares outstanding, or 37,792,454 shares on a fully diluted basis on the Report Date. There are 3,189,000 warrants outstanding with conversion prices of $0.30 to $0.62 per share that expire at various dates ranging to December 9, 2005. In addition, there are 2,950,000 stock options outstanding under the Company's incentive stock option plan. The stock options are exercisable at prices ranging from $0.19 to $0.55 per share, with expiry dates ranging to April 15, 2009. If the holders were to acquire all 6,139,000 shares issuable upon conversion of all warrants and exercise of all incentive stock options outstanding, the Company would receive an additional $2,130,430.
6. Transactions with related partiesDuring the second quarter, First Point paid $23,500 (2003 - $8,800) to companies controlled by certain officers of the Company for management and administrative services.
These transactions were in the normal course of operations and were measured at the agreed amount, which was the amount of consideration established and agreed to with the related parties.
7
Interim Certificate
I, Peter M.D. Bradshaw, Executive Chairman and Chief Executive Officer of First Point Minerals Corp., certify that:
1. | I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings) of First Point Minerals Corp., (the issuer) for the interim period ending June 30, 2004; | |
2. | Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with the respect to the period covered by the interim filings; | |
3. | Based on my knowledge, the interim financial statement together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings. |
Date: August 25, 2004
/s/ | Peter M.D. Bradshaw |
Executive Chairman and Chief Executive Officer |
Interim Certificate
I, J. Christopher Mitchell, President and Chief Financial Officer of First Point Minerals Corp., certify that:
1. | I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings) of First Point Minerals Corp., (the issuer) for the interim period ending June 30, 2004; | |
2. | Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with the respect to the period covered by the interim filings; | |
3. | Based on my knowledge, the interim financial statement together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings. |
Date: August 25, 2004
/s/ | J. Christopher Mitchell |
President and Chief Financial Officer |
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