-----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, Ju5NQ2EqVkxjPpqDo7R7h3Vf4ZuIIOi1COKy5DYSnqUKuA2UXEB7tvcAjvjeDLbx lFliGluQFYA2FGtCK8VLAg== 0000931731-05-000122.txt : 20050620 0000931731-05-000122.hdr.sgml : 20050617 20050620125251 ACCESSION NUMBER: 0000931731-05-000122 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050430 FILED AS OF DATE: 20050620 DATE AS OF CHANGE: 20050620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISCHER WATT GOLD CO INC CENTRAL INDEX KEY: 0000844788 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880227654 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17386 FILM NUMBER: 05905262 BUSINESS ADDRESS: STREET 1: 1621 NORTH 3RD STREET STREET 2: SUITE 1000 CITY: COEUR D'ALENE STATE: ID ZIP: 83814-3340 BUSINESS PHONE: 2086646757 MAIL ADDRESS: STREET 1: 1621 NORTH 3RD ST STREET 2: STE 1000 CITY: COEUR DALENE STATE: ID ZIP: 83814 FORMER COMPANY: FORMER CONFORMED NAME: FISCHER WATT GOLD CO INC DATE OF NAME CHANGE: 19920703 10QSB 1 fwgo-10qsb043005.txt FWGO 10QSB 043005 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) [X] THREE MONTHS REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Three month period ended April 30, 2005 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-17386 FISCHER-WATT GOLD COMPANY, INC. (Exact name of registrant as specified in its charter) Nevada 88-0227654 - -------------------------------- --------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 1410 Cherrywood Dr. Coeur d'Alene, ID 83814 (Address of principal executive office) (208)-664-6757 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of shares outstanding of each of Issuer's classes of common equity as of April 30, 2005. Common Stock, par value $.001 56,091,819 - ----------------------------- ---------------- Title of Class Number of Shares Transitional Small Business Disclosure Format Yes [ ] No [X] Index Exchange Rates................................................................3 Conversion Table..............................................................3 Forward Looking Statements....................................................3 Item 1 - Financial Statements.................................................4 1.1 Consolidated Balance Sheet........................................4 1.2 Consolidated Statements of Operation..............................5 1.3 Consolidated Statements of Cash Flow..............................6 1.4 Notes to Consolidated Financial Statements (Unaudited)............7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.....................8 2.1 Liquidity and Capital Resources...................................8 2.1.1 Short Term Liquidity..............................................8 2.1.2 Long Term Liquidity...............................................8 2.2 Results of Operations.............................................8 2.3 Revenues..........................................................8 2.4 Costs and Expenses................................................9 2.5 Commitments and Contingencies.....................................9 2.6 Foreign Currency Exchange.........................................9 2.7 Going Concern Consideration.......................................9 2.8 Other..............................................................10 2.9 Cautionary Note Regarding Forward-Looking Statements................14 Item 3 - Controls and Procedure..............................................15 3.1 Legal Proceedings.................................................15 3.2 Changes in Securities.............................................15 3.3 Default in Senior Securities......................................15 3.4 Submission of Matters to a vote of Security Holders...............15 3.5 Other Information.................................................15 3.6 Exhibits and Reports on Form 8-K..................................15 -2- Exchange Rates Except as otherwise indicated, all dollar amounts described in this Report are expressed in United States (US) dollars. Conversion Table For ease of reference, the following conversion factors are provided: ============================= ========= =================================== 1 MILE = 1.6093 KILOMETERS 1 METRIC TONNE = 2,204.6 POUNDS ----------------------------- --------- ----------------------------------- 1 foot = 0.305 meters 1 ounce (troy) = 31.1035 grams ----------------------------- --------- ----------------------------------- 1 acre = 0.4047 hectare 1 imperial gallon = 4.5546 liters ----------------------------- --------- ----------------------------------- 1 long ton = 2,240 pounds 1 liter = 1.057 U.S. quarts ============================= ========= =================================== Forward Looking Statements The Company desires to take advantage of the "safe harbor" provisions contained in Section 27A of the Securities Act of 1933, as amended (the "1933 Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is including this statement herein in order to do so: From time to time, the Company's management or persons acting on the Company's behalf may wish to make, either orally or in writing, forward-looking statements (which may come within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act), to inform existing and potential security holders regarding various matters including, without limitation, projections regarding financial matters, timing regarding transfer of licenses and receipts of government approvals, effects of regulation and completion of work programs. Such forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believes," "expect," "anticipate," "goal" or other words that convey the uncertainty of future events or outcomes. Forward-looking statements by their nature are subject to certain risks, uncertainties and assumptions and will be influenced by various factors. Should one or more of these forecasts or underlying assumptions prove incorrect, actual results could vary materially. -3- Item 1 - Financial Statements 1.1 Fischer-Watt Gold Company, Inc. Consolidated Balance Sheet April 30, 2005 (Unaudited) ASSETS Current assets: Cash $ 9,378 Other 5,713 ------------ Total current assets $ 15,091 ============ LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities: Accounts payable $ 35,252 Notes payable - shareholders 285,500 Accounts payable and accrued expenses - shareholders 1,361,936 ------------ Total current liabilities 1,682,688 Stockholders' (deficit): Preferred stock, non-voting, convertible, $2 par value, 250,000 shares authorized, none outstanding -- Common stock, $.001 par value, 200,000,000 shares authorized, 56,091,819 shares issued and outstanding 56,092 Additional paid-in capital 15,880,683 Common stock subscriptions 78,480 Accumulated (deficit) (17,682,852) ------------ (1,667,597) ------------ $ 15,091 ============ See the accompanying notes to the consolidated financial statements. -4- 1.2 Fischer-Watt Gold Company, Inc. Consolidated Statements of Operations Three Months Ended April 30, 2004 and 2005 (Unaudited) 2004 2005 ------------ ------------ Revenue $ -- $ 43,954 ------------ ------------ Costs and expenses: Cost of sales -- 50,000 Exploration 46,540 7,930 General and administrative 129,327 55,745 ------------ ------------ 175,867 113,675 ------------ ------------ (Loss) from operations (175,867) (69,721) ------------ ------------ Other (income) and expense (Gain) on the write off of payables (49,587) -- Interest expense 1,375 2,319 ------------ ------------ (48,212) 2,319 ------------ ------------ Net (loss) $ (127,655) $ (72,040) ============ ============ Per share information - basic and fully diluted Net (loss) per share $ (0.00) $ (0.00) ============ ============ Weighted average shares outstanding 51,813,535 55,217,583 ============ ============ See the accompanying notes to the consolidated financial statements. -5- 1.3
Fischer-Watt Gold Company, Inc. Consolidated Statements of Cash Flows Three Months Ended April 30, 2004 and 2005 (Unaudited) 2004 2005 ----------- ----------- Cash flows from operating activities: Net cash (used in) operating activities $ (139,716) $ 8,457 ----------- ----------- Cash flows from investing activities: Net cash provided by (used in) investing activities -- -- ----------- ----------- Cash flows from financing activities: Net cash provided by financing activities 154,971 -- ----------- ----------- Increase in cash and cash equivalents 15,255 8,457 Cash and cash equivalents, beginning of period 20,942 921 ----------- ----------- Cash and cash equivalents, end of period $ 36,197 $ 9,378 =========== ===========
See the accompanying notes to the consolidated financial statements. -6- 1.4 FISCHER-WATT GOLD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS April 30, 2005 (UNAUDITED) (1) Basis Of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Item 310(b) of Regulation SB. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements of the Company as of January 31, 2005 and for the two years then ended, including notes thereto included in the Company's Form 10-KSB. The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Intercompany transactions and balances have been eliminated in consolidation. (2) Earnings Per Share The Company calculates net income (loss) per share as required by SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods presented common stock equivalents were not considered, as their effect would be anti-dilutive. (3) Stockholders' (Deficit) During the period ended April 30, 2005 the Company issued a third party 1,442,308 shares of common stock, which were subscribed for $149,971 cash in the prior year. In addition, the Company issued 675,000 shares of common stock for warrrants exercised in previous periods. The Company also issued 505,400 shares of common stock as payment for services rendered in a prior period. (4) Going Concern Consideration The Company has incurred substantial operating losses since inception aggregating $17,682,852 and has working capital and stockholders' deficits of $1,667,597 at April 30, 2005. In addition, the Company has no revenue producing operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company is attempting to develop mineral properties in Mexico as Mexico is supportive of the mining industry and NAFTA has made doing business there attractive. In addition, the Company has funded its operations from capital contributions from a shareholder. -7- The ability of the Company to achieve its operating goals and thus positive cash flows from operations is dependent upon the future market price of metals, future capital raising efforts, and the ability to achieve future operating efficiencies anticipated with increased production levels. Management's plans will require additional financing, reduced exploration activity or disposition of or joint ventures with respect to mineral properties. While the Company has been successful in these capital raising, endeavors in the past, there can be no assurance that its future efforts and anticipated operating improvements will be successful. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 2.1 Liquidity and Capital Resources 2.1.1 Short Term Liquidity As of April 30, 2005 the Company had $ 9,378 in cash and accounts payable and accrued expenses of $1,397,188. On April 30, 2005 the Company's current ratio of current assets to current liabilities was less than 1:1. A current ratio of less than 1:1 indicates that the Company does not have sufficient cash and other current assets to pay its bills and other liabilities incurred at the end of its fiscal year and due and payable within the next fiscal year. The Company incurred a net loss of $72,040 for the three-month period ending April 30, 2004 compared to $127,655 for the previous year. The loss was due to the lack of income producing operations and costs related to the development of the Mexican property. On April 30, 2005 the accumulated deficit was $17.682,852. 2.1.2 Long Term Liquidity It is likely that the Company will need to supplement anticipated cash from operations with future debt or equity financing and dispositions of or joint ventures with respect to mineral properties to fully fund its future business plan that includes exploration projects and property development. While the Company has been successful in capital raising endeavors in the past, there can be no assurance that its future efforts will be successful. There can be no assurance that the Company will be able to conclude transactions with respect to its mineral properties or additional debt or equity financing or that such capital raising opportunities will be available on terms acceptable to the Company, or at all. 2.2 Results of Operations The Company had net loss of $72,040 as compared to net loss of $127,655 for the comparable period in the prior year. 2.3 Revenues The Company had sales of 43,954 during the period. -8- 2.4 Costs and Expenses Abandonment's are a natural result of the Company's ongoing program of acquisition, exploration and evaluation of mineral properties. When the Company determines that a property lacks continuing economic value, it is abandoned. It cannot be determined at this time when or if any of the Company's current property interests will be abandoned. The Company incurred no abandonment costs in the periods presented. Selling, general and administrative costs decreased to $55,745 from $129,327 for the comparable period of the prior year. Selling, general and administrative expenses consisted principally of accrued officer salaries and professional fees related to the preparation and filing of required periodic reports. Exploration expense decreased from $46,540 to $7,930 for the 2005 comparable period. All exploration costs been incurred at the La Balsa property in Mexico. 2.5 Commitments and Contingencies Management is currently unaware of any legal action against the Company. 2.6 Foreign Currency Exchange The Company accounts for foreign currency translation in accordance with the provisions of Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS No.52"). The assets and liabilities of foreign operations are translated at the rate of exchange in effect at the balance sheet date. Income and expenses are translated using the weighted average rates of exchange prevailing during the period. The related translation adjustments are reflected in the accumulated translation adjustment section of shareholders' equity. 2.7 Going Concern Consideration As the independent certified public accountants have indicated in their report on the financial statements for the year ended January 31, 2005, and as shown in the financial statements, the Company has experienced significant operating losses that have resulted in an accumulated deficit of $17,682,852. These conditions raise doubt about the Company's ability to continue as a going concern. The ability of the Company to achieve its operating goals and thus positive cash flows from operations is dependent upon the future market price of gold, future capital raising efforts, and the ability to achieve future operating efficiencies anticipated with increased production levels. Management's plans will require additional financing, reduced exploration activity, or disposition of or joint ventures with respect to mineral properties. While the Company has been successful in these capital-raising endeavors in the past, there can be no assurance that its future efforts, and anticipated operating improvements will be successful. The Company does not currently have adequate capital to continue its contemplated business plan beyond 2005 The Company is presently investigating all of the alternatives identified above to meet its short-term liquidity needs. The Company believes that it can arrange a transaction or transactions to meet its short-term liquidity needs, however there can be no assurance that any such transactions will be concluded or that if concluded they will be on terms favorable to the Company. -9- 2.8 Other Oronorte On November 21, 2000, the Company announced that it had signed a letter on intent to sell the Oronorte operations to Grupo de Bullet, a Colombian Company. This sale included the El Limon mine and its related support facilities as well as all of the Company's exploration and development properties in the country. The sale price was US$3.7 million, which will be paid as a 3% Net Smelter Return royalty. If Grupo de Bullet vends the property to a third party within two years the full amount will be due upon sale, less a sales commission. La Balsa In August 2000, the Mexican government issued the Minera Montoro, a 65% owned subsidiary of the company, the rights to a series of contiguous mining concessions. The concessions cover approximately 500 hectares and are located 12 kilometers north of Lazaro Cardenas, Michoacan. Work done by previous concession holders included 42 diamond drill holes, 35 percussion drill holes and a preliminary feasibility study. In October 2000 the Company retained K D Engineering, Tucson, Arizona, to perform a pre-feasibility study on the Balsa project. Simultaneously, Mintec, Inc., Tucson, Arizona, was retained to determine the ore reserves and complete a mine design. K D Engineering subcontracted the geotechnical portion of the study to the Tucson office of Golder Associates. The pre-feasibility study was completed on January 4, 2001 and is summarized below. Class Type Tonnes Cu% - -------------------------------------------------------------------------- Measured Clay Oxide 556,447 0.998 Rock Oxide 2,081,640 0.878 Sulphide 6,481,094 2.677 ---------------- ---------------- Sub Total 9,119,181 2.164 Indicated Clay Oxide 103,041 0.939 Rock Oxide 1,246,182 0.548 Sulphide 2,147,934 0.206 ---------------- ---------------- Sub Total 3,497,157 0.349 Inferred Clay Oxide 3,221 0.728 Rock Oxide 186,425 0.442 Sulphide 11,684,788 0.154 --------------- ---------------- Sub Total 11,874,434 0.159 Total Clay Oxide 662,709 0.99 Rock Oxide 3,514,247 0.74 Sulphide 20,313,816 0.96 --------------- ---------------- Total 24,490,772 0.93 Class Type Tonnes Cu% - -------------------------------------------------------------------------- Measured Clay Oxide 659,488 0.989 and Rock Oxide 3,327,822 0.754 Indicated Sulphide 8,629,028 2.062 ----------------- ------------------ Sub Total 12,616,338 1.661 - -------------------------------------------------------------------------- -10- Total Tonnes mined 3.5 million Average Grade of Ore Mined 1.42% Cu Striping Ratio (Waste to Ore) 0.68:1 Ton per day of refined copper 14 Process SX-EW Type of Copper Produced Electrolytic Total Capital Requirement $10 million (Approximately) Project Life 7.5 years Cash Cost per Lb of Cu $0.54 Revenue @ $0.85 per Lb of Cu $66 million In August 2001 Mexican authorities notified the Company that the challenges to the title had been resolved in the Company's favor. Titles were issued the same month. On September 28, 2001 the Company began a drilling program at the La Balsa project. This program was initiated to confirm and expand the reserves, provide a better understanding of the geology, and to provide material for additional metallurgical testing. The drilling consisted of 435 meters of core. The work was preformed by B.D.W. Drilling, Guadalajara, Jalisco and supervised by Resource Geosciences de Mexico, Hermosillo, Sonora. The samples from the drilling were sent to the laboratory of Bondar Clegg, Vancouver, B.C. for assay. The results of the drilling are shown below.
LA BALSA SIGNIFICANT DRILL INTERCEPTS - ------------ ---------------- ------------- ------------ ----------- ----------------- --------- ----------- --------- Hole # Inclination Azimuth From Meters To Meters Vertical Total Ore Type Zone Degrees Degrees Thickness Cu % - ------------ ---------------- ------------- ------------ ----------- ----------------- --------- ----------- --------- 101 - 90 0 13.5 18.0 4.5 1.31 Oxide West 102 - 90 0 33.0 40.5 7.5 0.99 Sulfide West 103 - 50 030 0.00 10.5 8.0 3.79 Oxide West 18.0 28.5 8.0 2.08 Sulfide West 104 - 90 0 9.0 39.0 30.0 3.87 Oxide East 39.0 58.5 19.5 2.09 Sulfide East 105 -45 090 9.0 51.0 29.7 2.13 Oxide East 106 - 45 315 40.3 60.0 13.9 1.11 Sulfide East* 107 - 45 135 8.0 52.5 31.5 2.78 Oxide East 108 - 45 045 12.0 30.0 12.7 1.20 Oxide East - ------------ ---------------- ------------- ------------ ----------- ----------------- --------- ----------- ---------
*Considered very important for porphyry potential. This hole ended in ore grade mineralization outside the current reserve area. -11- Concurrent with this work, Seegmiller and Associates, an internationally recognized slope stability firm based in Salt Lake City, Utah, performed various rock mechanic studies and slope stability analysis. Aguayo and Associates of Hermosillo, Sonora, performed environmental testing for potential acid rock drainage on representative samples. During the above mentioned drill program it was noted that several of the drill holes had terminated in porphyry-style, high grade, copper sulfide mineralization or favorable altered host rocks. This same bornite mineralization and porphyry association had also been noted in the drill logs of some of the 70 holes drilled previously by other companies. Fischer-Watt therefore contracted La Cuesta International, Inc. to determine the potential, and to make specific recommendations for future exploration, of this deeper, primary sulfide, target. In its conclusions, La Cuesta International noted that some of the drill holes beneath Zone C had intersected the throat of an important, well mineralized, copper-bearing porphyry intrusive and that "The La Balsa project is a porphyry hosted, bornite dominated, copper-silver-gold mineral system". This system may be a member of the "diorite-type" porphyry copper model but additional work is needed in order to verify this determination. In addition, JRA Geophysics, Inc. reviewed geophysical surveys over La Balsa that had been carried out previously by others. The regional airborne magnetic survey indicates that the main La Balsa mineralization lies in an area where a north-south fault intersects an ENE - WSW striking, regional magnetic high feature. The induced polarization survey data over this area suggests that a 600 meter long sulfide bearing zone exists along the ENE - WSW axis. The zone remains open to the west, north, south and to depth. Locating the primary source of mineralization at La Balsa could generate tremendous upside potential for Fischer-Watt. This exploration work will not, however, impede the preparation and implementation of the feasibility study for the mining of the surface oxide zones. Metallurgical testing was commenced at Mountain States R&D International, Inc. in Vail, Arizona and was completed, as scheduled, by the end of June, 2002. The core from the various mineralized zones was characterized into three distinct ore types, namely oxide ore, transitional ore and primary sulfide ore. The head grades of the samples were representative of each of the ore types, namely, oxide ore at 2.75% copper, transitional ore at 1.78% copper and primary sulfide ore at 1.09% copper. Two sets of samples were prepared, one at a crush size of minus 1 inch and the other at minus 1/2 inch. These two sets of samples were column leached for 100 days. The minus 1/2 inch samples returned the best results. The copper recovery in both the oxide and transitional ores was excellent and acid consumption was low in both cases. The recovery curves for the minus 1/2 inch samples showed good leaching characteristics with a total recovery of 93.9% of the copper in the oxide ore and 92.4% of the copper in the transitional ore. Leach, Inc. evaluated the data from the column leach tests for the purpose of projecting copper recoveries under various commercial operating scenarios. The test data indicated that copper recovery is controlled by the availability of the leaching reagents and it was calculated that 90 to 92 percent of the copper could be solubilized in 123 days of leaching using typical heap leach operating -12- parameters. Copper recoveries would be somewhat lower than this in practice due to normal inventory builds up in the leach heaps and because of operating inefficiencies. Comparable recoveries can be attained in the period between 76 and 245 days of leaching by varying the operating parameters. The precise operating parameters have not yet been established and will be the subject of the engineering design program currently being planned. The third ore group, the primary sulfide ore, is derived from the deeper La Balsa porphyry mineralization. At the present time this primary sulfide resource represents the second phase of mining that would take place at the property after the oxide and transitional ores have been mined. Copper recovery of 41.7% was much lower in this ore, as expected, and acid consumption was high. However, some interesting metallurgical opportunities were brought to light during the testing. For example, preliminary testwork has indicated that Heavy Media Separation can significantly upgrade this primary sulfide ore prior to flotation. In this way some of the gangue, or waste material, is separated from the ore minerals in a pre-concentration step thereby reducing the quantity of material that has to be treated in the following stage. This reduction would likely appreciably lower the capital cost of the processing plant. There are other options available also for treating the primary sulfide ore and they will be examined as the development of the oxide and transitional sulfide ore moves forward. Additional concessions, Balsa 7 through 11, have been filed contiguous to the original La Balsa land and at the present time the property is made up of 940.26 hectares. Fischer-Watt Gold (FWGO) has received the "Project Review & Resource Assessment II" of the La Balsa project from Mintec, Inc. The conclusions of this report are as follows: "As it presently stands, the La Balsa project is a small, high-grade deposit with oxide copper and mixed oxide-sulfide copper mineralization amenable to recovery by leaching. It is located in an area with very good infrastructure. It is within 15 kilometers from the industrial town of Lazaro Cardenas, which also has a major seaport. Geologically, it has the potential for additional reserves in a bulk-tonnage porphyry copper environment. The rocks in the area are highly suggestive of the presence of a mineralized porphyry copper system. Exploration drilling has been limited both in area and at depth. A number of existing drill holes bottomed in ore-grade material. At this point in the life of the project, this study confirms that the project area contains a resource totaling of 63.6 million tonnes of all classes of resources material at an average 0.245% total copper grade. Included in these total resources are approximately 30.9 million tonnes of measured and indicated resources with an average total copper grade of 0.332%. The Lerchs-Grossman economic analysis identified approximately 4.89 million tonnes of measured and indicated resources material at a cutoff of $0.01 profit per tonne with an average grade of 1.218% total copper as reserves. The designed pits mined 4.86 million tonnes of ore at an average total copper grade of 1.221%, recovered copper grade of 0.906% an at a strip ratio of 0.6 tonnes of waste per tonne of ore. Approximately 2.92 million tonnes of waste material is produced during mining. Areas close to the mining can accommodate the generated waste volume. Approximately 97.14 million pounds of copper may be recovered from the mined ore at an average recovery of 78.2%. Based on the mining schedule, the mining plan spans over 7 years. The total net revenue is approximately $63.5 million. At a 15% discount rate, the accumulative net present value of the project is $40.3 million before any capital expenditures and debt interest". Processing of the copper rich leach solutions from the La Balsa was originally going to be through the use of solvent extraction and electro-winning (SX/EW) to produce cathode copper. -13- Discussions with people in the industry have indicated that for an oxide copper project the size of La Balsa; the capital cost of an (SX/EW) plant would be unattractive to investors. Therefore it has been decided that the leach solution at La Balsa will be mixed with shredded iron from tin cans to produce a product called cement copper. This cement copper, which will contain between 85% to 90% metallic copper will be air dried on site, placed in large bags and sent to the deep-water port at Lazaro Cardenas. A metal trader has submitted a purchase proposal for the cement copper under these conditions. It is estimated that going to cement copper processing will reduce the total project capital cost by 60%. As of April 30 2005, the Company is in negotiations with two companies regarding a joint venture on the La Balsa property. 2.9 Cautionary Note Regarding Forward-Looking Statements In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby providing cautionary statements identifying important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of the Company herein or orally, whether in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will result", "are expected to", "will continue", "is anticipated", "estimated", "projection" and "outlook") are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions, and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Such uncertainties include, among other, the following: (i) the Company's ability to obtain additional financing to implement its business strategy; (ii) adverse weather conditions and other conditions beyond the control of the Company; (iii) imposition of new regulatory requirements affecting the Company; (iv) a downturn in general or local economic conditions where the Company operates; (v) effect of uninsured loss and (vi) other factors which are described in further detail in the Company's filings with the Securities and Exchange Commission. The Company cautions that actual results or outcomes could differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors. Further, management cannot assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. -14- Item 3. CONTROLS AND PROCEDURES Regulations under the Securities Exchange Act of 1934 require public companies to maintain "disclosure controls and procedures," which are defined to mean a company's controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company's Chief Executive Officer, based on his evaluation of the Company's disclosure controls and procedures, concluded that the Company's disclosure and procedures were effective for this purpose. Changes in Internal Controls. There were no significant changes in the Company's internal controls or, to the Company's knowledge, in other factors that could significantly affect these controls subsequent to the date of their evaluation. 3.1 Legal Proceedings None 3.2 Changes in Securities and Use of Proceeds None 3.3 Defaults in Senior Securities None 3.4 Submission of Matters to a Vote of Security Holders. None 3.5 Other Information None 3.6 Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No 31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit No 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K None -15- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FISCHER-WATT GOLD COMPANY, INC. Date: June 17, 2005 By: /s/George Beattie -------------------------------- George Beattie, President, Chief Executive Officer (Principal Executive Officer) -16- EX-31 2 ex31-1.txt CERT 302 - CEO, CFO Exhibit 31.1 CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER PURSUANT TO 18 U.S.C 1350, AS ADOPTED, AND THE REQUIREMENTS OF SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, George J. Beattie certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Fischer-Watt Gold Company, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and -1- 5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: June 17, 2005 /s/ George J. Beattie - ------------------------------- George J. Beattie Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer -2- EX-32.1 3 ex32-1.txt CERT 906 - CEO, CFO Exhibit 32.1 CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO ss. 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-QSB of Fischer-Watt Gold Company, Inc. (the Company) for the quarterly period ending April 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the Report), George J. Beattie, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, to the best of his/her knowledge, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ George J. Beattie - --------------------------------- Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----