Wed Jan 28, 2004 Fourth Quarter Report ended September 30, 2003
Consolidated Abaddon Resources Inc. has released its BC Form 51-901F Fourth Quarter Report containing audited financial statements in Canadian funds for the year ended September 30, 2003 (the "Quarterly Report"). Pursuant to the requirements of National Instrument 54-102, this news release provides a summary of the information contained in the Quarterly Report. Concurrently with this news release the Company has filed the Quarterly Report with the regulatory authorities through SEDAR (www.sedar.com).
The Company is primarily a junior exploration company with no revenues from mineral producing operations. Activities include the process of exploring its mineral properties, reviewing and subsequently acquiring potential new mineral properties and conducting exploration programs to determine whether these properties contain ore reserves that are economically recoverable. The recoverability of amounts shown for the mineral properties and related deferred exploration costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the exploration of the property, and upon future profitable production.
Results of Operations
The Company has not had any sources of revenue to date and has financed its activities substantially through equity financing. The Company has incurred net losses in each year since inception and, as of September 30, 2003 has an accumulated deficit of $8,286,316.
For the year ended September 30, 2003 the Company incurred a net loss of $432,789 compared to a net loss of $113,277 in the previous year. The Company had a $90,828 gain on the sale of mineral properties in the prior year which decreased the loss during that year by this amount.
General and administrative expenses of $396,487 for the year ended September 30, 2003 were 93% higher compared to expenses of $205,448 in the previous year. The Company also became more active in the current year and consequently office and administration, accounting and rent increased quite significantly. Stock based compensation expense of $82,130, which related to stock options granted during the year, accounted for 43% of the increase in general and administrative expenses in the current year.
The Company incurred $12,944 in deferred exploration expenditures during the current year. $5,300 was received for the granting of an option and deferred exploration expenditures of $6,638 were written-off and charged to operations in the current year resulting in a net increase of $1,006 in deferred exploration expenditures over the previous year.
Liquidity and Capital Resources
As at September 30, 2003, the Company had a Shareholders' Equity of $49,946 and a working capital deficiency of $20,130 compared to a Shareholders' Equity of $65,443 and a working capital deficiency of $9,378 at year-end September 30, 2002.
The Company's cash position at year-end September 30, 2002 was $8,641. As a result of proceeds received from private placements and the exercise of options and warrants; expenditures incurred during the current year for general business, mineral properties, deferred exploration expenditures and accounts payable and accrued liabilities; the Company's cash position at year end September 30, 2003 was $10,262.
The Company's capital needs have been financed by equity subscriptions (September 30, 2003 - $239,500) (September 30, 2002 - $50,000), the exercise of warrants (September 30, 2003 - $47,500) (September 30, 2002 - $16,000) and the exercise of stock options (September 30, 2003 - $15,437) (September 30, 2002 - $10,453).
Gander River Property
The Company abandoned its property interest in the Botwood Basin area of Newfoundland.
Sidace Lake Property
On May 1, 2003, the Company and Skyharbour Resources Ltd. entered into an agreement pursuant to their joint venture agreement dated February 4, 2003.
Skyharbour, on behalf of the Joint Venture, staked two additional claims that are adjoining to, and now form part of, the Joint Venture's Sidace Lake property. The two additional claims are subject to a 2% net smelter return royalty in favour of Perry English. The Joint Venture also wishes to undertake an exploration program on the Sidace Lake Property in the amount of $40,000. Pursuant to the terms of the agreement, the Company and Skyharbour have agreed that the Company's share of the exploration expenditures ($20,000) and staking costs ($775) shall be satisfied by the Company issuing to Skyharbour a total of 200,000 common shares at a deemed price of $0.12 per share and that upon such share issuance, the Company shall maintain an undivided 50% interest in the Joint Venture. (Issued on August 20, 2003)
In late August 2003, Skyharbour Resources Ltd, (the operator) reported that it had completed a major till sampling program on the property. The joint venture's land position consists of approximately 9,000 acres and immediately adjoins the Planet / Goldcorp Sidace Lake new gold discovery on both the North East and South West projected strike extensions of the geological formations.
The till sampling program is the beginning of the Phase 1 work program initiated by the Skyharbour/Abaddon joint venture for the summer of 2003. Several hundred till samples have been submitted for assaying with Overburden Management. The company is pleased to report that several "gold in till anomalies" are now evident from the assays received to date. The company is still waiting on additional till assays, which are now being processed by the lab.
Data compilation and geological mapping continues on the Sidace Lake property at this time. The Sidace Lake property is believed to be underlain by similar structures and lithologys associated to those hosting the new gold discovery on the Planet / Goldcorp ground.
The Sidace Lake area is considered to be the northern extension of the prolific Red Lake Greenstone belt. All Sidace Lake results have been prepared under the guidance of consultant geologist Mr. David Busch, P.Geo, who is designated as a qualified person with the ability to verify the authenticity and validity of this data.
Stock Options Granted
The Company granted incentive stock options to directors and management company employees entitling the holders thereof to purchase up to an aggregate of 236,931 shares of the Company at a price of $0.25 per share, exercisable for a period of two years, expiring on September 4, 2005.
Sidace Lake Property
The Company announced on October 8, 2003 that it has commissioned an updated Geological Report on its Sidace Lake and Black Bear II Properties located in the Sobeski Lake and Black Bear Lake Areas, Red Lake District, Kenora Mining Division in the Province of Ontario.
The Company entered into an agreement with Skyharbour Resources Ltd. pursuant to which the parties agreed to form a joint venture and merge the Sidace Lake property with Skyharbour's Black Bear II property. The Black Bear II property consists of 4 mineral claim blocks comprising 48 units (1,920 acres) located in the Black Bear area and the Sidace Lake Property consists of 6 mineral claim blocks comprising 84 units (3,360 acres) located in the Sobeski Lake Area.
No mineral reserves or production are currently known on the Sidace Lake and Black Bear II properties.
David J. Busch B.A. B.Sc., PGEO, prepared an Evaluation Report dated September 15, 2003 on the Sidace Lake and Black Bear II properties. The report recommends an initial Phase I program consisting of overburden drilling, line cutting and geophysics at an estimated cost of $100,625. Depending on the results of the initial program, a Phase II program is recommended consisting of diamond drilling at an estimated cost of $220,000.
Under the terms of the original option agreement dated July 10, 2002, as amended March 6, 2003, the Company granted West Hawk an option to earn a 60% interest in the Birch-Uchi Lake property in consideration of the Company issuing 200,000 common shares and incurring $100,000 of exploration expenditures on the property prior to December 31, 2003. On December 15, 2003, the Company and West Hawk Development Corp. entered into an amending agreement to extend the date to carry out the exploration expenditures to December 31, 2004.
On November 12, 2003, the Company closed its non-brokered private placement of 1,000,000 units at a price of $0.20 per unit. Each unit consists of one share and one share purchase warrant entitling the holder to acquire one share of the Company at $0.20 per share until November 12, 2004. The Company also paid the sum of $5,000 to Haywood Securities Ltd. and paid the sum of $5,000 and issued 25,000 units to Canaccord Capital Corporation. The shares and any shares to be issued upon exercise of the share purchase warrants are subject to a hold period expiring on March 12, 2004.
The Company announced in November 2003 that it had granted incentive stock options to purchase up to an aggregate of 45,900 shares and 102,500 shares of the Company at $0.25 per share and $0.24 per share respectively, to certain of its employees and directors. The options will be exercisable for a period of two years and are subject to regulatory approval.
Share Purchase Warrants
The Company issued 325,000 common shares pursuant to the exercise of warrants.
Investor Relations Agreement
The Company and Tangent Management Ltd. entered into an Investor Relations Agreement effective December 1, 2003. Tangent will receive $15,000 to provide the Company with investor relation services over a three-month term.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
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