| | | December 24, 2004
Financial Results For Nine Months Ended October 31 2004
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| | MBMI RESOURCES INC. (MBR-TSXV) "MBMI" has released its unaudited quarterly financial results for the nine month period ended October 31, 2004. Full results and additional information relating to the Company may be found on SEDAR at www.sedar.com, or the Company's website www.mbmiresources.com .
Highlights during the quarter include:
- On September 9 the Company signed a Joint Venture Agreement with Olympic Mines and Development Corp (Olympic) comprising three nickel laterite properties on Palawan Philippines. The agreement enables MBMI to hold an initial 60% interest in the joint venture. The Company will be responsible for project funding, and may dilute Olympic to a royalty interest of 2.5% net revenue return. MBMI will focus on the potential for Direct Shipping Ore (DSO) nickel laterite material from these projects; a strategy the Company believes will allow it to generate cash flow with minimal capital cost. Two of the projects being acquired, (the Rio Tuba properties), are contiguous to Sumitomo Metal Mining Co. Ltd's "Coral Bay" project which has been operating a successful direct shipping ore facility for over 20 years. MBMI believes the location of these properties presents an excellent opportunity for a cooperative resource development with the Coral Bay mining consortium.
- On October 25 MBMI entered into an Option and Joint Venture Agreement on the Company's McMillan Gold Mine Property with Young Shannon Gold Mines, Limited whereby the optionee is to pay $75,000, 650,000 shares, and fund $900,000 in exploration costs in order to earn a 50% interest. Young Shannon can earn an additional 10% by spending an additional $400,000 and issuing an additional 250,000 shares. (note 3 of financial statements)
- On September 21 the Company closed a non-brokered Private Placement financing of 2,000,000 Units at $0.10 per Unit for gross proceeds of $200,000, and 641,667 flow-through units at $0.12 per Unit for gross proceeds of $77,000
Operating Activities
The Company recorded a net loss for the first nine months of $106,146 ($0.01 per share), vs. a net loss of $305,840 in 2003($0.04) per share. The change in this loss is related to a write off of accounts payable and accrued liabilities in respect of the Philippine operations of $230,147, and write off of payable to shareholder of $259,515. Overall, expenses increased by $128,999 mainly due to an increase of travel expenses of $69,926 over the comparable period as a result of increased time spent in the Philippines pursuant to an attempt at restructuring the Company's Celestial project, and the acquisition of the 3 Olympic nickel properties. Accounting and legal costs have been reduced primarily due to completion of reactivating the Company in prior years. Consulting fees have increased by $51,100, due to increased financing and exploration activities. Management fees have increased to $86,500 due in part to reclassification of consulting fees paid to directors from administration expenses and as a result of an increase in fees paid to Directors that reflected an increased volume of work performed over the comparable period subsequent to the reactivation of the Company. General exploration expenses have decreased to nil due to the deferral of $209,176 of exploration costs expended on specific properties.
Deferred expenditures on mineral properties increased during the 3rd quarter of 2005 to $360,592 from $177,752 at January 31, 2004 due to the McMillan Gold Mine property exploration program, and the acquisition of the Olympic properties. The Company entered into a memorandum of understanding directly with
CNMEC dated February 5, 2004, however, the Company has been unable to negotiate the terms of a commercially acceptable Joint Venture Agreement and during the second quarter the Company suspended the maintenance payments on the basis that CNMEC has failed to negotiate in good faith. The Company is seeking a legal remedy to clarify its claim to the property.
As at October 31, 2004, the Company has a working capital surplus of $82,224 (including cash of $123,772, of which 95,966 is restricted), whereas at January 31, 2004 the Company's working capital deficiency was $181,844. The accumulated deficit increased to $9,722,989 from $9,616,843. The most significant components of the change in working capital was the write down of accounts payable due in respect to the Philippine operation ($230,147), and payable to shareholder ($259,515), and write off of deferred Celestial property costs of $119,280. Cash decreased to $123,772 from $469,816.
Subsequent Events
On November 25, 2004, the Company closed a private placement financing consisting of 1,013,333 units at $0.12 per unit for gross proceeds of $121,600. Each unit consists of one common share and one common share purchase warrant entitling the holder to purchase one common share for a period of two years at a price of $0.15 in the first year and $0.25 in the second year. Finders fees of $11,040 and 25,000 broker warrants were paid. All securities are subject to a hold period of four months, expiring on March 25, 2005.
On November 1, 2004, the Company announced that it had signed a memorandum of understanding with Goldspring Inc., a US OTC corporation, to joint venture and acquire an interest of 50% in the Big Mike Copper Project in Nevada, USA. The transaction is subject to due diligence and regulatory approval. The Company's share of exploration and development costs are estimated to be US$1,250,000 to US$1,500,000.
A 10 hole, 772 meter drilling program on the Copper Prince property in Sudbury, Ontario was completed in mid December. The program costing approximately $90,000 was designed to test near surface geophysical copper/gold and platinum group metals targets. Assay results are pending.
For further information:
David G. Tafel - VP Corporate Development
Tel: 604-683-1991; Fax: 604-683-8544; Toll free: 1-877-399-1991
Email: mbr@mbmiresources.com
Website: www.mbmiresources.com
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. |
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