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NO SECURITIES COMMISSION OR OTHER SIMILAR AUTHORI1 MERITS OF THE SECURITIES OFFERED HEREUNDER, AND A^
NEW ISSUE:
31DI6SW87a0 63.4161 CAVENDISH
PROSPECTUS
of
MOUNTAINVIEW EXPLORATIONS INC.
(An Exploration Corporation)
Incorporated under the laws of Ontar
350,000 COMMON SHARES (without par value)
010
Per Common Share Total:
Firmly Underwritten
350,000
PRICE: 35C per share.
Price to Public
70C $2A5,000
Underwriter' s Commission
350 $122,500
Proceeds to (l Corporation^
$122,500
(1)
(2)
Before deducting the expensesof this issue estimated at $12,000.
The net amount received by the Corporation will not be less than 3QZ of the gross proceeds of the combined new issue and secondary offering.
PLAN OF DISTRIBUTION;
The Underwriter, acting as principal, will offer the underwritten shares over-the-counter in the Province of Ontario at the price set forth above. Sales of the underwritten shares may also be made through other registered dealers acting as agents who may be paid commissions not exceeding 252 of the selling price of the shares so offered.
PURPOSE OF OFFERING:
The purpose of this offering is to provide the Corporation with funds to defray its ordinary operating expenses and to pay the costs of carrying out exploration on its mining properties as recommended by its consulting engineer. See within under the captions "History and Business" page 4 and "Use of Proceeds" page 16. At least 30% of the total proceeds from the sale of the underwritten shares and the shares comprising the secondary offering must accrue to the treasury of the Corporation.
SECONDARY OFFERING
175,000 shares on the terms more particularly set forth herein under the caption "Secondary Offering". The proceeds from the sale of these shares will accrue to the Under writer and to the treasury of the Corporation. None of the aforementioned shares will be offered for sale until all of the 350,000 underwritten shares have been taken down, paid for and sold by the Underwriter.
The shares being offered hereunder by way of a secondary offering by the selling shareholder will be sold to the public at the best prices obtainable from time to time. It is present" ,intended that such shares will be sold in a range between 85c an^ 95C per share, and while t-uere is no present intention to do so, such shares may be offered at prices lower than that stated above. If a material change occurs in the affairs bf the Corporation that justifies an increase in the offering price of such shares, an amendment to this prospectus will be filed before the increase is implemented.
THERE IS NO MARKET FOR THE SHARES OF THE CORPORATION. A PURCHASER MAY NOT BE ABLE TO SELL SHARES PURCHASED HEREUNDER.
THESE SECURITIES ARE SPECULATIVE. See within under the captions "Risk Factors and Speculative Nature of the Offering", "History and Business", "Offering", "Interest of Management and Others in Material Transactions", and "Principal Holder of Shares".
UNDERWRITER
A. C. MacPherson & Co. Limited Suite 1004, 100 Adelaide Street West,
Toronto, Ontario.
The date of this Prospectus is March 3rd , 1980.
'l TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY.................................................. . l
The Corporation and its Properties................................. l
Use of Proceeds. .. . .. .. .... .... .... ... ............. ................ l
Offering and Secondary Offering.................................... 2
Management......................................................... 2
Risk Factors.....................................................~. 3
Issuance of Shares................................................. 3
HISTORY AND BUSINESS................................................. 4
MOSS TOWNSHIP, ONTARIO, PROPERTY............................. . .. . . . . . 4
Acquisition........................................................ 4
Location and Access................................................ 4
History and Previous Work.......................................... 5
Geologist's Report............................................... .. 6
Title.............................................................'. 7
PRIOR PROPERTY INTERESTS............................................. 8
CAPITAL STRUCTURE...................................... . .. . .. . . . . . . . . 9
Common Shares...................................................... 9
Preference Shares.................................................. 9
Warrants........................................................... 10
CAPITALIZATION....................................................... 11
DIVIDENDS............................................................ 12
AUDITORS............................................................. 12
SHARE REGISTRAR AND TRANSFER AGENT................................... 12
OFFERING............................................ . ................ 12
NEW ISSUE............................................................ 12
Secondary Offering................................................. 14
TABLE OF CONTENTS
(Continued)Page
ESCROWED SHARES................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
USE OF PROCEEDS................. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 16
PURCHASER 1 S STATUTORY RIGHT OF WITHDRAWAL AND RESCISSION............ 18
PRINCIPAL HOLDER OF SHARES....... . . . . . . ......... . . . . . . . . . . . . . . . . . . . . 20
SELLING SHAREHOLDER.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
RISK FACTORS AND SPECULATIVE NATURE OF OFFERING..................... 21
PROMOTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 23
MANAGEMENT...................... . . .. . . . .. . . . .. . .. .... . .. . . . .. . . . . . . .. 25
REMUNERATION OF MANAGEMENT.......................................... 26
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS.......... 2 7
PRIOR SALES......................................................... 28
MATERIAL CONTRACTS.................................................. 30
HISTORY OF PROMOTER................................................. 31
HISTORY OF MANAGEMENT............................ . . .. . . .. . . . . . . . . . . . 32
FINANCIAL STATEMENTS........................ .. . .. ..... . . . .. .. . .. .. . . 35 to 41
CERTIFICATE PAGE.................................................... 4 2
PROSPECTUS SUMMARY
) The following summary provides the principal features of the
offering covered by this prospectus. Reference should be made to further
and more detailed information contained elsewhere in the prospectus.
The Corporation and its Properties:
Mountainview Explorations Inc. (the "Corporation") is a public
company incorporated under the laws of the Province of Ontario. The
Corporation has acquired 13 unpatented mining claims in Moss Township,
District of Thunder Bay, Province of Ontario and intends to carry out a
program of exploration thereon for occurrences of gold bearing mineral
ization. Colin R. Bowdidge, M.A., Ph.D., has prepared a report on the
Moss Township property, and a summary of his conclusions and recommendations
for the work program are set forth under the caption "Geologist's Report"
on page 6. The estimated cost of the recommended program is $45,600.
In 1979 the Corporation carried out an exploration program
on a property on which it held an option, which property consists of 32
unpatented mining claims and is located in Cavendish Township, Eastern
Ontario Mining Division, Province of Ontario. The cost of the work was
approximately $36,000. The results were discouraging and the Corporation,
following the recommendation of its consulting engineer, does not intend
to carry out further work on the property and will allow its option to
lapse. Reference- is made to the caption "Prior Property Interests 11 ^"~^
on page 8 ,for particulars.
Use of Proceeds:
The net proceeds to be received by the Corporation from the
underwriting of its shares, after providing for the costs of this issue,
t:
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ill be approximately $110 / 500. The funds which will be received by
the Corporation will be used to pay the costs of carrying out the
programme of exploration recommended by Colin R. Bowdidge, M.A. Ph.D.
on the Corporation's property in Moss Township, District of Thunder Bay,
Ontario, referred to under the sub-caption "Geologist's Report" on
page 6, and estimated at $45 / 600. The estimated amount of expenses
per year for administration is S 12,000 and, in addition, the
Corporation will pay its technical co-ordinator the sum of $6,000
per year. Reference is made to the caption "Use of Proceeds" on page 16
for further particulars.
Offering and Secondary Offering:
A total of 350,000 common'shares of the Corporation are
being underwritten at the price of 35 cents per share to provide the
Corporation with $122,500. The secondary offering will be proceeded
with by the Underwriter only after the Underwriter has sold all of the
underwritten shares. None of the proceeds from the sale of the secondary
shares will accrue to the treasury of the Corporation. Reference is
made to the caption "Offering" on page 12 and sub-caption "Secondary
Offering" on page 14 for further particulars.
Management:
The directors and officers of the Corporation have been
associated with a number of junior exploration companies over the years.
Reference is made to the captions "History of Promoter" on page 31
"History of Management" on page 32 for further details.
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Risk J Jtors:
Reference is hereby made to the caption "Risk Factors and
Speculative Nature of the Offering" on page 21. If a commercial ore
body is discovered, an investor may have substantial rewards;however, few
of the properties which are explored ultimately become producing mines.
If the Corporation's exploration program is not successful, a purchaser of
shares may lose his investment. Prospective investors should consider
these risks and a lack of a market through which he may sell his shares.
Purchasers of common shares will suffer an immediate dilution in their
investment.
Issuance of Shares:
After this offering, the Corporation will have issued 1,180,004
common shares which will be held by the public. Of this figure, 100,000
shares were allotted to No Name Mineral Consultants Ltd. (the "Vendor") as
consideration for the acquisition of the Moss Township mineral prospect.
A total of 35,000 of such 100,000 shares have been agreed to be sold by the
Vendor to the Underwriter at 35 cents per share. George F. Ross, the
President and a director and the promoter of the Corporation, holds
500,000 preference shares, each carrying one vote at meetings of shareholder;
thereby enabling him to control the Corporation. Reference is made to
the caption "Prior Sales" on page 28, "Capitalization" on page H,
"Principal Holders of Shares" on page 20, "Promoter" on page 23, and
"Interest of Management and Others in Material Transactions" on page 27
for further details regarding the foregoing information, including share
purchase warrants held by Mr. Ross enabling him to purchase common shares of
the Corporation in the future.
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HISTORY AND BUSINESS
Mountainview Explorations Inc. {the "Corporation") formerly
Superior Copper Mines Limited, was incorporated under The Business
Corporations Act (Ontario) by Letters Patent dated March 8, 1965, to
engage in the acquisition, exploration, development and operation of
mines, mineral lands and deposits. The Corporation was dissolved by
order dated March 14, 1978 for default in complying with filing
requirements regarding its financial statements, under Section 134 of
The Securities Act of Ontario. Under Section 251 (4) of The Business
Corporations Act, the Corporation applied for and-obtained an Order
reviving the Corporation, effective January 8th, 1979. By Articles
of Amendment effective March 6th, 1979, the Corporation changed its
name to Mountainview Explorations Inc. The head office of the Corporatior
is situate at Suite 1004, 6 Adelaide Street East, Toronto, Ontario.
MOSS TOWNSHIP, ONTARIO, PROPERTY
Acquisition:
By an agreement made as of the 15th day of January, 1980,
between the Corporation and No Name Mineral Consultants Ltd., of Toronto,
Ontario, as Vendor, the Corporation acquired 13 unpatented mining claims
located in Moss Township, District of Thunder Bay, Province of Ontario,
and numbered TB475163 to TB475174 inclusive, and TB475177 (hereinafter
called the "Moss Township Property"), in consideration of the issuance to
the Vendor of 100,000 common shares of the Corporation.
Location and Access:
The Moss Township Property, consisting of 520 acres, is
located 125 kilometres west of the City of Thunder Bay, and 8 kilometres
south west of the village of Burchell Lake. Burchell Lake is reached
30-kilometre gravel road, Highway No. 802, which connects with
Highway o. 31, the main road from Thunder Bay to Fort Frances.
Access is by f]oat-plane or ski-equipped light aircraft from
Burchell Lake. An o]d bush road also provides access to the Property
for drilling ctnd other heavy equipment, but is only suitable for tracked
vehicles as it crosses numerous swamps.
History and Previous Work:
3n the first recorded work on the Property in 1947, Airways
Exploration Ltd. found a gold showing. A diamond drill hole put
0.81 oz/ton gold over 12 feet from a depth of 28 to 40 feet, including a
section assaying 3.12 oz/ton gold over 3 feet from a depth of 33 to 36
feet. Other gold showings and a copper showing were also mentioned in
the old records. The Property was assigned to Greatlakes Copper Mines Ltd
which carried out a geological survey in 1952. The Property was then
optioned to Newkirk Mining Corporation which carried out a resistivity
survey in 1954 and located several anomalies. The Property subsequently
reverted to Greatlakes Copper Mines Ltd which carried out an electromagnetic
survey, and in 1956-57 drilled 15 holes totalling 5,477 feet. In 1958
the Property was acquired by Andover Mining and Exploration Ltd. Subsequent
work reported consists of geological mapjping by North Coldstream Mines
Ltd, an aeromagnetic survey in 1965 by Cominco, and a ground magnetic
survey in 1971 by Freeport Canadian Exploration Co.
During the spring of 1979, P.A.R. Brown carried out a horizontal
loop electromagnetic survey over the ice on Fountain Lake, locating
4 conductors. An analysis was made of the data by Norman R. Paterson,
Consulting Geophysicist who reported that conductors "C" and "D" are
probably caused by conductive overburden, possibly occupying bedrock
depressions, while conductors "A" and "B" have responses consistent with
shear or fault structures, without massive sulphides.
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1 s Report
The following is a summary of the conclusions and recommendations
of Colin R. Bowdidge, M.A. Ph.D., contained in his report dated December 19,
1979, which report is available for inspection at the offices of the
Ontario Securities Commission, 10 Wellesley Street East, Toronto, Ontario.
The Property is underlain largely by volcanic rocks of Archaean ac
The contact between an older felsic group and a younger mafic group runs
through the Property in a northeast-southwest direction. The Property
is located in a geological environment which is favourable for gold
mineralization. Two of the four conductors may be potential host
structures for gold mineralization. The diamond drilling carried out in
the vicinity of the old trench in 1947 is reported to have returned high-
grade gold assays of 0.81 oz/ton gold over 12 feet from a depth of 28 to 40
feet, including a three-foot section at 3.12 oz/ton from a depth of
33 to 36 feet. Mr. Browdidge made an examination of the trench which is
believed to have exposed the showing found in 1947. A three-metre width ,!
of highly schistose felsic volcanics striking at 105O and dipping at 80O
to the south, is exposed. This strike is highly discordant to the regional
strike, which is northeast-southwest, and may represent some sort of cross
cutting shear. Mineralization consists of a few per cent of disseminated
pyrite, evenly scattered throughout the rock. Three chip samples taken over
a one metre width assayed as follows:
Sample Number Gold Oz/Ton
F-l 0.004F-2 0.006F-3 0.033
A fourth sample taken from a small pyritic quartz stringer exposed at the ed
of Fountain Lake and assayed at 0.001 oz/ton gold.
The following development programme is recommended:
1. Conductors "A" and "B" should be drilled to intersect the conductor axes at a depth of 100 metres.
2.. Two shallow holes of 50 metres each should be drilled in the vicinity of the old trench in order to test the full width of the mineralized shear.
3. A soil geochemical survey should be carried out over the south-western p t of the Property, analyzing for gold and copper.
The estimated cost of the above program is $45,600, made
up as follows:
Line cutting, 6km @ $150/km 900
Sample collection, 240 samples @ $10 2,400
Analysis, 240 samples 8 $5 1,200
Mobilization S demob. 1,500
Diamond drilling, 400 m @ $80/m 32,000
38,000
Plus contingencies, 20% 7,600
Total $45,600
To the knowledge of the Corporation the only underground
exploration or development work that has been carried out on the
Property or any part thereof and the only surface exploration and
development, is the work referred to herein under the sub-caption
"History and Previous Work", on page 5. There is neither surface
nor underground plant or equipment located on the Property.
Title:
Title to the thirteen (13) raining claims comprising the
Property has been transferred to the Corporation. The Corporation
is required to keep the mining claims in good standing. In order to
keep unpatented claims in good standing in Ontario, during the first
year after recording twenty days work must be performed and recorded,
forty days work performed and recorded yearly for the next three years,
and sixty days work performed and recorded in the ensuing year. If
claims are brought to lease thereafter an annual rental of $1.00 per
acre is paid for the first year and subsequently 25* per acre payable
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annually. Where a lease is for mining rights only, the second and
suWequent years rental is at the rate of 10C per acre. The mining
claims ire recorded in the name of the Corporation on February 13, 1980.
In addition, by order of the Mining and Lands Commissioner recorded
February 13, 1980, the time for doing work on the claims has been extended
to December 31, 1980, the date to which the claims are accordingly in good
standing.
PRIOR PROPERTY INTERESTS
By an agreement made as of the 26th day of January, 1979,
(hereinafter referred to as the "Option Agreement") between the
Corporation and Bruce Davidson, lan Park and Colin Bowdidge, all of
Toronto, Ontario, {hereinafter referred to as the "Optionors") the
Optionors granted to the Corporation the sole, exclusive and irrevocable
right and option to acquire a 100% interest in 32 unpatented mining claims
(hereinafter called the "Claims") located in Cavendish Township, Eastern
Ontario Mining Division, Province of Ontario, and numbered E0520059 to
E0520072 inclusive, E0520074 to E0520078 inclusive, and E0520133 to
E0520145 inclusive, subject only to a royalty to the Optionor equal to 3%
of the returns on all ores, concentrates and minerals extracted and marketed
from the Claims.
-^ in 1979 the Corporation conducted a programme of preliminary
exploration on the Claims, consisting of linecutting, scintillometer and
soil radon gas survey, geological survey, bulldozing, rock trenching and
928 feet of diamond drilling in 5 drill holes. In his report dated November
27, 1979, P.A.R. Brown, B.Se., Consulting Geologist, reviewed the results
obtained from the above programme. He concluded that the drilling results
were discouraging and that, the grade is too low to be of economic importance
at tlffe time. In view of the disappointing results, the Corporation does
not intend to Jceep its option on the Claims and will allow same to lapse.
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CAPITAL STRUCTURE
Common Shares:
The common shares of the Corporation are without par value.
The holders of common shares are entitled:
to dividends if, as and when declared by the board of
directors; upon liquidation, dissolution or winding up of the
Corporation to receive those assets distributable to shareholders
subject to the prior rights of the holders of preference shares
described below; to receive notice of and to attend and vote at all
meetings of shareholders of the Corporation. Two shareholders
personally present and entitled to vote thereat constitute a quorum.
Resolutions at shareholders' meetings may be voted upon by a show of
hands unless a ballot is required by law or a poll is demanded by a
shareholder. On a show of hands every shareholder exercises one vote
whereas on a poll every shareholder exercises one vote for each share
held by him. In either case the chairman of the meeting has a second
or deciding vote in the event of a tie vote. There are no pre-emptive
or conversion rights. There are no indentures or agreements extant
or proposed limiting the payment of dividends. None of the shares
outstanding and none of the shares offered hereby will be subject to
call or assessment of any kind.
Preference Shares:
Pursuant to Articles of Amendment effective March 6 , 1979, the
Corporation increased its authorized capital by creating 500,000
preference shares with a par value of 1/lOth of 1C per share.
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The preference shares are not entitled to dividends at
any time; are entitled, in the event of the liquidation, dissolution
or wino-ng up of the Corporation to receive, in priority to the
common shares, a sum equal to the par value thereof, but are not
entitled to any further participation in the assets of the Corporation;
are redeemable by the Corporation at the par value thereof upon the
expiration of five years from the date of issuance thereof; are not
transferable without the prior written consent of the Ontario Securities
Commission; and, entitle the holders thereof to receive notice of all
meetings of shareholders and to one vote for each preference share held.
The number of issued preference shares outstanding at any time is limited
to 500,000 in number, and the present issued preference shares are not
subject to call or assessment.
Warrants:
The Corporation authorized the creation of warrants to
accompany the preference shares hereinbefore referred to. The
warrants permit the holder to subscribe for common shares on a warrant-
for-share basis. Not more than 500,000 preference shares may be
outstanding at any given time.
Warrants will be issued on the basis of one (1) warrant for
every four (4) shares issued pursuant to an underwriting.
Upon receiving the sum of $107,529 being the proceeds from
the underwriting of 350,000 shares of the Corporation covered in the
prospectus of the Corporation dated March 15, 1979, the Corporation issued
to George F. Ross warrants entitling him to purchase 87,500 common shares
of the Corporation at the price of 37.5 cents per share. To date,
Mr. Ross has not exercised any of the warrants. Mr. Ross subscribed
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for a-^ received from the Corporation 500,000 preference shares for an
aggregate consideration of $500, to which preference shares the warrants
are attached. Reference is hereby made to the caption "Interest of
Management and Others in Material Transactions" on page 27 for further
information in this regard. By virtue of the underwriting covered by
this prospectus, Mr. Ross is entitled to receive an additional
87,500 warrants entitling him to purchase a further 87,500 common shares
at 43.75 cents per share. Accordingly, when the proceeds from
the underwriting are received by the Corporation and the Corporation
thereupon issues to Mr. Ross such additional 87,500 warrants, Mr. Ross
will then hold 175,000 warrants of the total 500,000 warrants accompanying
the 500,000 preference shares. The warrants may be exercised during the
five-year period from the date of their respective issuance.
Warrants carry no voting rights and may not be transferred except
with the prior written consent of the Ontario Securities Commission.
CAPITALIZATION
Amount Outstanding
Amount Outstanding . if allDesignation of Amount as of October 31, securities being Security_____ Authorized _______1979____ issued are sold*
Common Shares 3,000,000 950,004 1,180,004(1)(2)(not to be (1237,504) .^318,004) issued for more than 53,000,000)
Preference 500,000 500,000 500,000
shares, par value ^500) ^500) ^500) (3) of 1/10 of 1C per share (with warrants attached, see below)
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Gives effect to the donation of 325,000 escrowed shares which, together with 25,000 issued treasury shares of the Corporation, form the 350,000 underwritten shares, the issuance of such 25,000 treasury shares, the issuance of 105,000 commission shares to the Underwriter, and 100,000 treasury shares to the Vendor of the Moss Township, Ontario, Property.
(2) The sale of the underwritten shares will create a contributedsurplus of $113,750 before costs, which when added to the previous contributed surplus of $100,085 at October 31, 1979, will create a total contributed surplus of approximately $213,835.
(3) 175,000 common shares are reserved for the exercise of warrants.
DIVIDENDS
No dividends have been paid by the Corporation to date.
AUDITORS
The auditors of the Corporation are Thorne, Riddell f
Chartered Accountants, Commercial Union Tower, Toronto-Dominion Centre,
Toronto, Ontario.
SHARE REGISTRAR AND TRANSFER AGENT
The Canada Trust Company, 110 Yonge Street, Toronto, Ontario,
M5C 1T4, is the share registrar and transfer agent of the Corporation.
OFFERING
A. NEW ISSUE:
By an agreement dated January 15 , 1980, (the "Underwriting
Agreement") between the Corporation and A. C. Macpherson fi Co. Limited,
Suite 1004, 100 Adelaide Street West, Toronto, Ontario, (the "Underwriter 1
the Underwriter acting solely on its own behalf, agreed to purchase the
following shares of the Corporation:
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Net Proceeds to Offering PriceNumber of Shares Price Per be received by of these Shares
Underwritten Share the Corporation to the Public
350,000 35C $122,500 70C
The Underwriter may terminate the Underwriting Agreement
prior to the date of acceptance for filing of this prospectus by the
Ontario Securities Commission (the "Effective Date") for any reason in its
sole discretion. Subject to the foregoing the Underwriter is obligated to
take up and pay for all of the underwritten shares within the following
times, calculated from the Effective Date:
Net Proceeds to be Time Within WhichReceived by the Payable from EffectiveCorporation______ Date——-—^^^—^^^————
$49 / 000 30 days$41,000 60 days$32,500 90 days
$122 / 500
There are no sub-underwriting or sub-option agreements
outstanding or proposed. In the event that there shall occur the
granting of a sub-underwriting or sub-option or an extension of any
of the present dates referred to in the agreement, an amendment to this
prospectus will be filed at the expense of the Undewriter within ten (10)
days thereof if the shares of the Corporation are then in the course of
public distribution.
The Underwriter/ acting as principal, will offer the
underwritten shares over-the-counter in the Province of Ontario at
the price set forth above. Sales of the underwritten shares may also
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e through its agents who will also be security dealers and will
be pa- a commission not to exceed 25% of the selling price of shares
so sold by them.
Secondary Offering:
In consideration of the Underwriter previously underwriting
a total of 350,000 shares of the Corporation for the purchase price of
$107,529, as covered in the prospectus of the Corporation dated
March 15, 1979, and agreeing to underwrite a further 350,000 shares of
the Corporation for the purchase price of $122,500, the Corporation has
agreed to pay the Underwriter a commission of $36,750 to be satisfied by
the issuance to the Underwriter of 105,000 fully paid and non-assessable
common shares (the "commission shares") of the Corporation following
receipt by the Corporation of payment in full for the 350,000 presently
underwritten shares. In addition, the Underwriter has agreed to
purchase 35,000 shares from the Vendor of the Corporation's Moss Township,
Ontario, Property, at the purchase price of 35 cents per share. The
105,000 commission shares, the 35,000 vendor shares, and a total of
35,000 previously issued shares of the Corporation of which 16,000
were previously purchased from George F. Ross and 19,000 were purchased
in the market by the Underwriter, for a total of 175,000 common shares,
will be offered for sale by the Underwriter by way of a secondary
offering, over-the-counter, after all of the underwritten shares have
been sold. Reference is hereby made to the caption "Prior Sales" on
page 28 for further particulars regarding the secondary shares.
The Underwriter anticipates that it will offer the 175,000
shares under the secondary offering at prices ranging from 85*? to 95*?
per share, with an average selling price not to exceed 90C per share.
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At ] .st 30% of the total proceeds from the sale of the underwritten
shares and the shares comprising the secondary offering must accrue
to the treasury of the Corporation.
If a material change occurs in the affairs of the Corporation
that justifies an increase in the then current secondary offering price
an amendment to this prospectus will be filed before such increase is
implemented.
The Underwriter may make such sales under the secondary
offering directly to the public or through other registered dealers
acting as its agents who may be paid commissions not exceeding 25% of
the selling price of the shares so offered.
As selling shareholder the Underwriter will pay a pro rata
share of the costs relative to the secondary offering.
With respect to the sale of the underwritten and secondary
shares offered by this prospectus, the Underwriter may be said to realize
a profit before expenses in an amount equal to the amount by which the
price paid for such shares is less than the price at which such shares
are sold to the public.
The Underwriter has agreed that if the sum of $122,500 is
less than 3 03, of the gross proceeds paid by the public for the shares
comprising the new issue and secondary offering, the Underwriter will
pay to the Corporation an amount which when added to the $122,500 will
yield a sum equal to 3 0^ o f such gross proceeds. The gross proceeds paid
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by the public for shares of the Corporation shall be the net total
amou.xc paid by the public to the Underwriter in the purchase of
common shares of the Corporation offered under this prospectus until
the Underwriter has ceased to engage in the distribution of such shares.
Reference is hereby made to the caption "Principal Holders of
Shares" on page 20 for particulars regarding the ownership of shares
of the Corporation.
ESCROWED SHARES
As a result of the release from escrow of 325,000 previously
donated shares of the Corporation, to form the substantial portion of
the 350,000 underwritten shares, there are no shares of the Corporation
being held in escrow by The Canada Trust Company. Reference is made
to the caption "Capitalization" on page 11 for further particulars.
USE OF PROCEEDS
The net proceeds receivable by the Corporation from the sale
of the underwritten shares will be approximately $110,500 after
payment of $12,000 to cover the estimated costs of this issue. In
the event the secondary offering of the shares of the Corporation
proceeds, the cost of this issue will be pro-rated between the
Corporation and the selling shareholder in proportion to the number
of shares sold by each. The funds which will be received by the
Corporation will be issued to defray ordinary operating expenses and
to pay the costs of carrying out the program of exploration recommended
by Colin R. Bowdidge, M.A., Ph.D., on the Corporation's Property in
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s Township, District of Thunder Bay, Ontario, referred to under
the sub-caption "Geologist's Report" on page 6 and estimated at
$45,600. The estimated amount of expenses per year for administration
is $12,000. In addition, George F. Ross, named throughout this
prospectus will be paid $6,000 per year for his services as technical
co-ordinator for the Corporation. Reference is hereby made to the
caption "Remuneration of Management" on page 26 for particulars.
The estimated working capital of the Corporation at December 31, 1979,
is $28,000.
Additionally, monies in the Corporation's treasury as available
may be used to defray programs of acquiring, staking, examining, exploring
and developing mining and/or oil and gas properties, either alone or
in concert with others, and to generally carry out exploratuon programs
as opportunity and finances permit, provided, however, that no new
properties will be acquired or expenditures made thereon without an
amendment of the Corporation's prospectus being filed if the shares
of the Corporation are still in the course of distribution to the public.
Monies not immediately required for the Corporation's purposes may
be deposited in interest bearing accounts with Canadian chartered banks
and/or trust companies. While there are no such immediate plans,
monies available in the Corporation's treasury, subject to the approval
of the shareholders of the Corporation, may be utilized to purchase
securities of other corporations but no such purchase will be made while
the securities offered hereunder are in the course of distribution to
the public.
- 18 -
Any corporate investments by the Corporation in securities
will be in securities in which insurance companies registered under
Part III of The Canadian and British Insurance Companies Act (Canada)
may invest their funds without availing themselves of the provisions
of Sub-section 4 of Section 63 of such Act.
PURCHASER'S STATUTORY RIGHT OF WITHDRAWAL AND RESCISSION
Sections 70, 126 and 135 of The Securities Act, 1978, (Ontario)
provide, in effect, that when a security is offered in the course of a
distribution to the public:
(a) a purchaser will not be bound by a contract for the purchase of
such security if written or telegraphic notice of his intention
not to be bound is received by the dealer from whom the purchaser
purchased the security not later than midnight on the second
business day after the latest prospectus and any amendment to the
prospectus offering such security is received or deemed to be
received by the purchaser or his agent, and
(b) if a prospectus together with any amendment to the prospectus
contains a misrepresentation, a purchaser who purchases a
security offered thereby during the period of distribution or
distribution to the public shall be deemed to have relied on
such misrepresentation if it was a misrepresentation at the
time of purchase, and subject to the limitations set forth in the
Act,
(1) has a right of action for damages against,
(i) the issuer or a selling security holder on whose behalf the distribution is made,
(ii) each underwriter required to sign the certificate
- 19 -
by section 58 of the Act,
(iii) every director of the issuer at the time the prospectus or amendment was filed,
(iv) every person or company whose consent has been filedpursuant to a requirement of the regulations under the Act but only with respect to reports, opinions or statements made by them, and
(v) every other person or company who signed the prospectus or the amendment,
but no action to enforce the right can be commenced by a
purchaser more than the earlier of 180 days after the purchaser
first had knowledge of the facts giving rise to the cause of
action or three years after the date of the transaction that
gave rise to the cause of action, or
(2) where the purchaser purchased the security from a person or
company referred to in (i) or (ii) above or from another under
writer of the securities, he may elect to exercise a right of
rescission against such person, company or underwriter, in
which case he shall have no right of action for damages against
such person, company or underwriter, but no action to enforce
this right can be commenced by a purchaser more than 180 days
after the date of the transaction that gave rise to the cause
of action.
Reference should be made to The Securities Act, 1978, (Ontario) for
the complete texts of the provisions under which the foregoing rights
are conferred. The foregoing summary is subject to the express
provisions thereof.
- 20 -
PRINCIPAL HOLDER OF SHARES
A. The following sets forth the principal holder of shares
of the Corporation, being the only owner of record or known by the
Corporation to own beneficially, directly or indirectly, more than
lOli of the presently issued shares of the Corporation: (1)
Name and Designation of No. of Shares Percentage Address Class________ ____Owned___ of Class
George F. Ross Preference 500,000 100%{2)14 Wilgar Road SharesToronto,Ontario.
(1) Does not give effect to the proposed offering of common shares referred to on the face page and under the caption "Offering" on page 12.
(2) George F. Ross holds warrants entitling him to purchase anaggregate of 87,500 common shares of the Corporation. Reference is made to the captions "Capitalization" on page 11 and "Interest of Management and Others in Material Transactions" on page 27 for further particulars. After the completion of the underwriting covered by this prospectus, Mr. Ross will hold additional warrants entitling him to purchase up to a further 87,500 common shares of the Corporation.
The following sets forth the percentage of shares of the
Corporation beneficially owned, directly or indirectly, by all
directors and senior officers of the Corporation as a group:
Designation of Percentage Class_____ of Class
Common Shares Less than IS; (1) without par value
Preference Shares 100% (2)
(1) Does not give effect to the ownership by No Name Mineral Consultants Ltd. of 65,000 vendor shares remaining in its hands after selling 35,000 of the original 100,000 vendor shares to the Underwriter. Brian P. McDonough, a director of the Corporation, is the President, Sole director and shareholdei of No Name Mineral Consultants Ltd.
(2)
- 21 -
George F. Ross holds all 500,000 preference shares.
B. Selling Shareholder:
As disclosed in this prospectus, a total of 175,000 shares
will be offered hereunder by way of a secondary offering by the
Underwriter as follows:
No. of Shares Offered
175,000 (2)
No. of Shares to be owned after OfferingQ)
400
Percentage of ClassQ)
.003%
Name and Address
A.C. Macpherson(1) S Co. Limited, Suite 1004,100 Adelaide Street W. TORONTO, Ontario.
(1) The only persons having a greater than 5 * interest in theUnderwriter are Bruce M. Young, 480 Brookdale Avenue, Toronto, Ontario, and Mildred Gerlock and Alfred B. Gerlock, both of 44 Jackes Avenue, Apartment 1213, Toronto, Ontario.
(2) The 175,000 common shares are comprised of 105,000 commission shares issued to the Underwriter by the Corporation, 35,000 vendor shares to be purchased by the Underwriter at 35 cents per share from No Name Mineral Consultants Ltd., and 35,000 previously issued shares owned by the Underwriter.
(3) Assumes the sale of all shares offered hereunder.
RISK FACTORS AND SPECULATIVE NATURE OF OFFERING
The shares of the Corporation being offered under this
prospectus should be considered as an investment involving risk and
are speculative. None of the mining claims comprising the Corporation's
Moss Township, Ontario, Property, contains a known body of commercial
ore, and the program to be conducted thereon is an exploratory search
for ore. If the recommended program is successful, additional funds
- 22 -
will be needed in excess of those presently in the Corporation's
trea~~ry and those to be provided by this offering, for further
exploration work to prove an economic ore body and to bring such ore
body to production. The only source of future funds presently available
to the Corporation is through the sale of equity capital.
As indicated on the cover of this prospectus, SOS; of the
monies paid by investors to purchase the underwritten shares will accrue
to the Corporation and 50*1 will accrue to the Underwriter. The following
table reflects the distribution of the proceeds received from the sale
of the shares comprising the secondary offering assuming an average
selling price of 90C per share:
7, of SalesNo. of Z Sales Proceeds Proceeds Shares Received Received
Received by Underwriters 140,000 80% $145,250 92.2ZReceived by Vendor (1) 35,000 2 07, $ 12,250 7 .82
175,000 5157,500
(1) The 35,000 shares received by the Vendor will be sold to the Underwriter at 35 cents per share.
Upon completion of this offering, and after deducting
anticipated expenses, the net proceeds to be received by the Corporation
are estimated at $110,500, and the net tangible book value of the
1,180,004 common shares then outstanding would be 18C per share
calculated on the basis of current working capital of $28 / 000
and assigning a book value of $35,000 to the Moss Township, Ontario,
Property (100,000 common shares issued and arbitrarily valued at 35C per
share).
- 23 -
Purchasers of common shares will accordingly suffer an
immediate dilution, the effect of which will depend upon whether an
investor purchases underwritten shares at the offering price of 7OC
per share or shares under the secondary offering. The following tables
summarize the information concerning dilution (excluding the exercise of
Warrants), the second table assuming a secondary offering price of 90C
per share:
PURCHASE OF UNDERWRITTEN SHARES
Public offering price per share............................70^Tangible book value per share after offering.............. .iscDilution per share to investors............................52^
PURCHASE OF SECONDARY SHARES
Public offering price per share.............................90CTangible book value per share after offering................-^Dilution per share to investors.............................72^
PROMOTER
George F. Ross, P. Eng., the President and a director of
the Corporation, and referred to throughout this prospectus, may be
regarded as the promoter of the Corporation. Reference is made to the
caption "History of Promoter" on page 31 for particulars regarding the
companies promoted by Mr. Ross, and to the caption "History of Management'
on page 32 for particulars regarding Mr. Ross' association with junior
resource companies during the past ten years.
On the 26th day of January, 1979, pursuant to an agreement
of the same date between the Corporation and Mr. Ross, Mr. Ross
subscribed for and agreed to purchase 500,000 preference shares of the
Corporation at par for the sum of $500. Pursuant to the said agreement
- 24 -
the Corporation, subject to earlier redemption as hereinafter described,
will redeem these preference shares at par on the expiration of 5 years
from the date of issue of the said shares, unless such redemption is
extended with the written concurrence of the Ontario Securities Commission.
The Corporation has agreed to make application to extend the redemption
date if requested by Mr. Ross. The preference shares shall be redeemed
at an earlier date at par on the basis of one share to be redeemed for each
common share of the Corporation purchased pursuant to the warrants referred
to hereunder. Under the agreement, the Corporation also agreed to issue
warrants to Mr. Ross entitling him to purchase 87,500 common shares of the
Corporation at 37.5C per share exercisable not later than 5 years after
their date of issue, but any shares purchased pursuant to the said warrants
may not be offered for sale until six months after the date of the receipt
of the Ontario Securities Commission for this prospectus. The Corporation
also agreed with Mr. Ross, to the extent the Corporation thereafter received
funds from the sale of its common shares/ exclusive of the common shares
being purchased by the Underwriter from the Corporation, to issue to Mr. Ross
additional warrants to a maximum of 412,500 warrants entitling him to
purchase, not later than 5 years after the date of issue of the said warrants
common shares of the Corporation. As a result of the present underwriting
by which 350,000 shares will be sold to the Underwriter by the Corporation,
the Corporation has agreed to issue to Mr. Ross additional warrants
entitling him to purchase a further 87,500 common shares at 43.75 C per share.
Such warrants will be issued on the basis of one warrant for
every four common shares sold by the Corporation, and the price at which
common shares may be purchased thereunder will be equal to 125% of the price
received by the Corporation incidental to the sale of its common shares with
respect to which such warrants are issued.
- 25 -
MANAGEMENT
The names and home addresses of the directors and officers
of the Corporation and the positions presently held by them are as
follows:
Name
George F. Ross, P. Eng., 14 Wilgar Road, Toronto, Ontario.
Brian P. McDonough,88 Teddington Park Avenue,Toronto,Ontario
William R.L. Torrance 5 Lament Avenue, Agincourt, Ontaro.
Position
President and a Director
Director
Director
Fred Munger 52 Albertus Avenue, Toronto, Ontario.
Secretary-Treasurer
Mr. Ross is a self-employed geologist, professional engineer,
and mineral management consultant.
Mr. McDonough has been a self-employed metallurgical engineer
for the past ten years. He has also been a sales representative with
V. Campbell Real Estate Limited for the past five years.
Mr. Torrance has been a self-employed consulting geophysicist
for the past ten years.
- 26 -
Mr. Munger is an accountant employed since March, 1974,
by Sprucedale Holdings Limited, and from February, 1972 to March, 1974
by Newton Holdings Limited. Prior thereto he was an accountant employed
by Louada Holdings Limited until 1970 and by Sprucedale Holdings Limited
until February, 1972. Mr. Munger is the sole director and officer of
Sprucedale Holdings Limited which provides the Corporation with
accounting, administration and corporate secretarial services.
Reference is made to the caption "History of Management"
on page 32 for further particulars concerning the association of the
foregoing officers and directors with various junior resource companies
during the past ten years.
REMUNERATION OF MANAGEMENT
The aggregate remuneration paid by the Corporation to the
directors and senior officers for the year ended October 31, 1979,
was 5350. Directors and senior officers are entitled to receive 5100.00
for each meeting attended by them.
A monthly fee not exceeding 5400.00 will be paid to
Sprucedale Holdings Limited, Suite 432, 12 Richmond Street East,
Toronto, Ontario, to cover routine secretarial, accounting and administrative
services. Mr. Fred Munger, the Secretary-Treasurer of the Corporation,
is the sole director and shareholder of Sprucedale Holdings Limited.
A monthly fee of 5100 will be paid to No Name Mineral Consult
ants Ltd, for head office accommodation. Mr. Brian McDonough, a director
of the Corporation, is the President, sole director and sole shareholder of
No Name Mineral Consultants Ltd.
- 27 -
George F. Ross, P. Eng. , the President, a director and
the technical co-ordinator of the Corporation, and referred to throughout
this prospectus, will be paid $500 monthly for his services as
technical co-ordinator, and may, in addition, be called upon to provide
field examination for the Corporation for which he will be paid at
applicable rates as prescribed by the Association of Professional
Engineers of Ontario.
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Reference is made to the caption "Promoter" on page 23
for particulars concerning the issuance of 500,000 preference shares
and warrants entitling him to purchase 175,000 common shares of the
Corporation to George F. Ross, the President and a director of the
Corporation, and its promoter. Brian P. McDonough, a director of the
Corporation is the President, sole director and shareholder
of No Name Mineral Consultants Ltd., the vendor to the Corporation of
the Moss Township, Ontario, Property. As consideration for such
acquisition, the Corporation issued 100,000 common shares to the vendor,
whereof the vendor has agreed to sell 35,000 shares to the Underwriter
at 35 cents per share, and will retain the balance of 65,000 shares.
The 35,000 vendor shares will form part of the secondary offering under
this prospectus. Reference is made to the sub-captions "Moss Township,
Ontario, Property", on page 4 and "Secondary Offering" on page 14
for further particulars in this regard.
- 28 -
PRIOR SALES
By an underwriting agreement made with the Corporation
on January 26, 1979, A. C. Macpherson S Co. Limited, the Underwriter
under this prospectus, purchased 350,000 shares of the Corporation at
the price of 30 cents per share, thereby providing the Corporation with
$107,529. The Underwriter sold such 350,000 shares to the public under
the prospectus of the Corporation dated March 15, 1979, together with
100 shares of the 175,000 shares comprising the secondary offering, at
the price of 60 cents per share during the months of March to June
inclusive, of 1979, and received as total proceeds therefrom
the sum of $105,600 (after deducting the cost of purchasing such shares
from the Corporation).
In addition to the sale of such 350,000 underwritten shares,
and the 100 secondary shares as aforesaid, the Underwriter, as selling
security holder under the prospectus, dated March 15, 1979, sold to the
public by way of a secondary offering, during June and July, 1979,
174,900 previously issued shares of the Corporation, being the balance of
the 175,000 secondary shares, and received as total proceeds therefrom
the sum of $139,420 being 92,450 shares at 75 cents per share, and 82,450
shares at 85 cents per share.
The 175,000 shares sold under the secondary offering were
acquired by the Underwriter from George F. Ross, the President and a
director of the Corporation, and named throughout this prospectus, by
agreement dated Januay 18, 1979. The actual total number of shares
purchased by the Underwriter from Mr. Ross for the sum of $12,800 was
191,000 shares. The balance of 16,000 shares was not included in the
secondary offering under the prospectus dated March 15, 1979, but will
- 29 -
form part of the secondary offering under this prospectus.
A total of 175,000 shares will be offered by way of a secondary
offering under this prospectus by the Underwriter and consist of 105,000
commission shares issued by the Corporation to the Underwriter, the 16,000
shares originally purchased from Mr. Ross as aforesaid, 35,000 vendor
shares purchased from the Vendor of the Moss Township, Ontario, Property,
by the Underwriter, and 19,000 previously issued shares purchased in the
market by the Underwriter at ah average price of 33 cents per share.
- 30 -
MATERIAL CONTRACTS
'he only material contracts entered into by the Corporation
within the last two years, copies of which may be inspected at the head
office of the Corporation during normal business hours while the shares
offered hereunder are in the course of public distribution, are as
follows:
1. Agreement made as of the 26th day of January, 1979, between
Bruce Davidson, lan Park and Colin Bowdidge, as Optionors and the
Corporation covering the option on the Cavendish Township, Ontario,
Property and referred to under the caption "Prior Property Interests"
on page 8.
2. Underwriting agreement made as of the 26th day of January, 1979,
between the Corporation and A.C. Macpherson fi Co. Limited and
referred to under the caption "Offering" on page 12.
3. Agreement made as of the 26th day of January, 1979, between the
Corporation and George F. Ross, P. Eng., respecting his subscription
for preference shares of the Corporation and the issuance to him of
warrants, and referred to under the captions "Capital Structure"
on page 9 and "Promoter" on page 23.
4. Agreement made as of the 15th day of January, 1980, between No
Name Mineral Consultants Inc. as Vendor, and the Corporation as
purchaser, covering the acquisition of the Moss Township, Ontario,
Property, and referred to under the sub-caption "Moss Township, Ontario,
Property" on page 4.
- 31 -
5. Underwriting agreement made as of the 15th day of January,
1980, between A.C. Macpherson S Co. Limited and the Corporation,
and referred to under the caption "Offering" on page 12.
6. Share purchase agreement made as of the 15th day of January,
1980, between No Name Mineral Consultants Inc. and A.C. Macpherson
S Co. Limited, and referred to under the sub-caption "Secondary
Offering" on page 14.
HISTORY OF PROMOTER
Reference is made to the caption "Promoter" on page 23,
George F. Ross, P. Eng., referred to throughout this prospectus is the
promoter of the Corporation and has acted as promoter for certain junior
resource companies. Particulars concerning the various companies are as
follows:
Bonnacord Explorations LimitedUnderwriter T.A. Richardson S Co. Ltd.,
Underwriting proceeds $185,000 Field Expenses $82,200 Date 1973 - 1974
Northern Atlas Explorers Limited Private Placement 251360 Investment Co.Ltd.,
Principal M. Ross BearBest Efforts Distribution Goodwin Harris, Co. Ltd., Underwriting Proceeds $334,000 Field Expenses $237 f 480 Date 1972
La-Chib Mines Limited Norwich Investments Limited Underwriters Rosmar Corporation Limited
Durham Securities Corporation Limited
Underwriting proceeds $180,000 Field Expenses $36,755 Date 1977 - 1978
Spanex Resources LimitedUnderwriters J. Appleby Securities LimitedUnderwriting Proceeds $150,000Field Expenses $61,273Date 1978 and 1979
-32-
HISTORY OF MANAGEMENT\
A - Active Exploration CompanyGC - Corporate Charter CancelledCT - Subject to a Cease Trading OrderD - Dormant Exploration CompanyI - Inactive Exploration CompanyM - MergedU - Status Unknown
The association of the directors and officers of the
Corporation during the past ten years with junior resource companies
are as follows:
Mr. Ross has been a director and/or officer of the following
junior resource companies: Bonnacord Explorations Limited, CC; Canada
Costa Rica Mines Limited, I; Chukuni Gold Mines Limited, I; La Chib
Mines Limited, A; Mount Pleasant Mines Limited, A; Northern Atlas
Explorers Limited, CT; Spanex Resources Limited, A.
Mr. McDonough has been a director and/or officer of the
following junior resource companies: Aumac Explorations Limited, D;
Coulee Lead and Zinc Mines Limited, D; Chukuni Gold Mines Limited, I;
Firespur Explorations Ltd., A; Headway Red Lake Mines Limited, CC;
Spanex Resources Limited, A: Ville Marie Explorations Limited, D.
Mr. McDonough was also promoter of Cable Copper Mines Limited.
Mr. Torrance has been a director and/or officer bf the
following junior resource company: Saskuran Exploration Inc, I.
- 33 -
Mr. Munger has been a director and/or officer of the
following junior resource companies: Cable Copper Mines Limited,
A; Canabec Explorations Limited, A; Claymac Mines Limited, D;
Consolidated Louanna Gold Mines Limited, A; Consolidated Summit
Mines Limited, A; Deer Horn Mines Limited, GC: Forefront Consolidated
Explorations Ltd., A; Frankfield Explorations Limited, A; Frodac
Consolidated Energy Resources Ltd., A; Gambit Consolidated
Explorations Limited, A; Gold Ridge Mines Inc., A; Great Bear Silver
Mines Limited, A; Great Pine Mines Limited, CC; Gull Lake Energy
Resources Ltd., A; Hubert Lake Ungava Nickel Mines Limited, D; La Chib
Mines Limited, A; Marmac Resources Limited, A; Melrose Explorations
Ltd., A; Merit Explorations Inc., A; Mid-West Energy Inc., A;
Milner Consolidated Silver Mines Limited, A; Minedel Mines Limited,
A; Patricia Silver Mines Limited, CC; Pine Ridge Exploration Company
Ltd., A; Rado Reef Resources Inc., A; Rich Point Mines Limited, A;
Royco Mines S Energy Limited, A; Silver Leader Mines Limited, A;
Silver Shield Mines Inc., CT; Silver Town Mines Limited, CC; Solo
Resources S Energy Inc., A; Spanex Resources Limited,A; Triangle
Explorations Ltd., A; Trinova Resource Explorations Ltd., A;
Us-Ca-Mex Explorations Limited, A; and Zarina Explorations Ltd., A;
It is ordinarily unnecessary for the directors and/or
officers to devote more than 5?; of their time to managing the affairs
of any of the foregoing companies. However, the directors and/or
officers are available and carry out their duties and responsibilities
whenever the affairs of any particular company requires. The lists of
companies referred to above are complete to the best of the directors'
- 34 -
know"1 ige and belief.
-35-
Thorne F' ideUS CO, CHARTERED ACCOUNTANTS
AUDITORS' REPORT
To the Directors ofMountainview Explorations Inc.
We have examined the balance sheet of Mountainview Explorations Inc. as
at October 31, 1979 and the statements of administrative expenses and deficit,
deferred exploration and development expenditures and changes in financial
position for the five years then ended. Our examination was made in accordance
with generally accepted auditing standards, and accordingly included such tests
and other procedures as we considered necessary in the circumstances.
In our opinion, these financial statements present fairly the financial
position of the company as at October 31, 1979 and the results of its operations
and the changes in its financial position for the five years then ended in
accordance with generally accepted accounting principles applied on a consistent
basis .
Toronto, CanadaMarch 3, 1980 Chartered Accountants
Offices across Canada: internationally McLmtock Main Lafrcntz fi Co.
- 36 -
MOUNTAINVIEW EXPLORATIONS INC.
(Incorporated under the laws of Ontario)
BALANCE SHEET AS AT OCTOBER 3 1, 1979
ASSETS
CURRENT ASSETS Cash Accounts receivable
FURNITURE AND FIXTURES, at cost net of accumulated
depreciation of $522
MINING PROPERTIES AND RELATED EXPENDITURES (notes l and 4)
Mining claims, at cost Deferred exploration and development expenditures
$ 34,48514,177 $48,662
2,089
5,00028,793 33,793
LIABILITIES
CURRENT LIABILITIESAccounts payable and accrued liabilities
SHAREHOLDERS' EQUITY
CAPITAL STOCK (notes 2, 3 and 4) Authorized
500,000 voting preference shares, redeemable
at par value of l/10th of l cent per share
five years from the date of issuance
3,000,000 Common shares without par value
Issued500,000 Preference shares 950,004 Common shares
CONTRIBUTED SURPLUS (note 3(a))
DEFICIT
$ 9,151
500237,504238,004
100,085
(262,696) 75,393
Approved by/the Board
/f
Director
Director
- 37 -
MOUNTAINVIEW EXPLORATIONS INC.
STATEMENT OF ADMINISTRATIVE EXPENSES AND DEFICIT
_________Year ended October 31,1979 1978 1977 1976 1975
Administrative expensesBad debts $ 1,441 Legal and audit $ 5,539 600 General 1,398 $ 50 $ 58 827 Accounting, secretarial and
corporate services 1,900Travel (recovery) (4,956) 1,007 781 Remuneration of director and
senior officer 350Rent (recovery) (200) (5,200) 2,400 2,400 Government fee 503Transfer agent's fees (recovery) 2,472 (2,070) 1,000 1,466 $ 500 Shareholders' information ____244 - - ______ ______ _____
12,206 (12,176) 4,465 7,515 500Interest income 2,261 ______ ______ ______ ^^^^^
9.945 (12,176) 4.465 7,515 500
Incorporation expense written off 1,000 Mining claims and related
expenditures written down l 226,157Property investigation expenses 3,548 _______m
3,549 227,157 _____ _____ ——-^13,494 214,981 4,465 7,515 500
DEFICIT AT BEGINNING OF YEAR 249,202 34,221 29,756 22,241 21,741
DEFICIT AT END OF YEAR $262,696 $249,202 334,221 S29,756
- 38 -
MOUNTAINVIEW EXPLORATIONS INC.
STATEMENT OF DEFERRED EXPLORATION AND DEVELOPMENT EXPENDITURES
______Year ended October 31,1979 1978 1977 1976 1975
Cavendish Township, OntarioDiamond drilling $18,000 Government fees 530 Engineering 2,500 Supervision 4,350 Line cutting, clearing and surveys 9,071 Supplies and general 175 Depreciation 522 Assays 324 Travel 706
36,178 Deduct
Government exploration assistance 12,38523,793
Property InvestigationEngineering 1,800Travelling 1,526Assays and general ___222
3,548 Other properties $ 126 $ 126 $ 126 $ 126
Technical co-ordinator 5,000 _____ _____ _____ , w- .32,341 126 126 126 126
Balance at beginning of year Nil 40,325 40,199 40,073 39,94732,341 40,451 40,325 40,199 40,073
Deduct amounts written offProperty investigation costs 3,548Expenditures on properties . m_____ 40,451 _____ _____ —-^—.
Balance at end of year S28.793 Nil S40.325 S40.199 S40.073
- 39 -
MOUNTAINVIEW EXPLORATIONS INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
_________Year ended October 31,1979 1978 1977 1976 1975
WORKING CAPITAL DERIVED FROM Decrease in amount due from
former parent company $ 1,441 $ 126
Increase in amount due to director 5 1,141 951
Administrative expenses recovered(net) less item not involvingworking capital $ 7,346
Deferred exploration anddevelopment expendituresrecovered 1,793
Proceeds on issue of preferenceshares ? 500
Proceeds on sale and issue ofcommon shares (net) 100,089 ______ _____ _____ - .
100,589 9,139 1,141 2,392 126
WORKING CAPITAL APPLIED TOAcquisition of mining claims 5,000 Deferred exploration and development
expenditures less depreciationwhich does not involve workingcapital 31,819 126 126 126 126
Acquisition of fixed assets 2,611 Reduction in due to director 4,000Administrative expenses 9,945 4,465 7,515 500
Decrease in deferred liabilties ______ ______ _____ _____ 7,53253,375 126 4,591 7,641 8,158
INCREASE (DECREASE) IN WORKINGCAPITAL POSITION 47,214 9,013 (3,450) (5,249) (8,032)
WORKING CAPITAL (DEFICIENCY) ATBEGINNING OF YEAR (7,703) (16,716) (13,266) (8,017) ____15
WORKING CAPITAL (DEFICIENCY) ATEND OF YEAR $ 39,511 S (7,703) S16.716 $13,266 $ 8,017
- 40 -
MOUNTAINVIEW EXPLORATIONS INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1979
OPTION ON MINING CLAIMSBy an agreement dated January 26, 1979 the company acquired an option
on 32 unpatented mining claims in Cavendish Township, Province of Ontario.
The option extends for a period of 24 months from March 15, 1979. The
company paid $5,000 and also commenced an exploration and development
program. The option requires additional payments of $5,000 each to be
made within 12 months and 24 months from the acceptance date. In the
event the option is exercised the company will acquire a 1 007. interest in the claims subject only to a 3% royalty to the optionors.
ARTICLES OF AMENDMENTPursuant to Articles of Amendment effective March 6, 1979 the company changed
its name from Superior Copper Mines Limited to Mountainview Explorations Inc.
and increased its authorized capital by creating 500,000 preference shares
with a par value of l/lOth of l cent per share redeemable at the par value
five years from date of issuance.
The company has authorized the creation of warrants to accompany the preference
shares. The warrants, which permit the holder to subscribe for common
shares on a share for warrant basis, may be exercised during the five year period following the issuance of the preference shares. As warrants
are exercised the underlying preference shares shall be redeemed by the company on a share for warrant exercised basis.
CAPITAL STOCK(a) Of the 950,004 issued shares of the company 325,000 shares are held in
escrow by a trustee for the benefit of the company and its shareholders (see note 4(b)). Originally 675,000 shares were held by the trustee.
However, during the year the company sold 350,000 shares for $107,529
less issue expenses of $7,444 which consideration, was credited to contributed surplus.
(b) During 1979 the company issued:
(i) 500,000 preference shares for a cash consideration of $500.
(ii) 4 common shares for a cash consideration of $l per share.
(c) Pursuant to an agreement dated January 26, 1979 between the company
and its President, the President purchased from the company 500,000
preference shares for $500 and the company:
(i) Issued warrants to the President entitling him to purchase within five years 87,500 common shares of the company at 37.5 cents per share. This number of common shares have been reserved for exercise of the warrants.
(ii) Agreed that to the extent that it receives funds from the sale of its common shares, it will issue to the President additional warrants to a maximum of 412,500 entitling him to purchase common shares. Such warrants will be issued on the basis of one warrant for every four common shares sold by the company and the price at which common shares may be purchased thereunder will be equal to one and one- quarter times the price received by the company from the sale of its common shares with respect to which such warrants are issued.
- 41 -
MOUNTAINVIEW EXPLORATIONS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
OCTOBER 3 1, 1979
4. SUBSEQUENT EVENTS(a) Pursuant to an agreement dated January 15, 1980 the company will
acquire 13 unpatented mining claims in Moss Township, Province of
Ontario in consideration for issuing 100,000 common shares. The acceptance date for this agreement is three business days following the date on which the Ontario Securities Commission issues its final receipt for a prospectus of the company.
(b) By an agreement dated January 15, 1980 between the company and an underwriter, the underwriter agreed to subscribe for 350,000 common shares of the company at 35 cents per share, of which 325,000 shares
will be allotted from the donated shares held by a trustee for the benefit of the company (see note 3(a)) and 25,000 shares will be allotted and issued from treasury.
The underwriter is obligated to pay for the underwritten shares as
follows:
140,000 shares within 30 days from acceptance date.117,143 shares within 60 days from acceptance date.92,857 shares within 90 days from acceptance date.
In consideration for this underwriting and a previous underwriting
by the underwriter of 350,000 shares, the company agreed to issue
to the underwriter 105,000 shares ("bonus shares") which will be issued as the underwritten shares are taken down and paid for by
the underwriter.
The acceptance date of the agreement is the date on which the Ontario Securities Commission issues its final receipt for a prospectus of
the company.
-42-
There are no other material facts,
DATED this 3rd day of March, 1980.
The foregoing constitutes full, true and plain disclosure of all
material facts relating to the securities offered by this prospectus
as required by Part XIV of The Securities Act 1978 (Ontario) and the
regulations thereunder.
GEORGE F.Chief Executive Officer
V FRED MONGER,,Chief Financial Officer
BRIAN MCDONOUGH, Director
WILLIAM R.L. TORRANCE Director
PROMOTER-A ̂ ~7xyi/
GEORGE ROSS
UNDERWRITER
To the best of our knowledge, information and belief,
the foregoing constitutes full, true and plain disclosure of all
material facts relating to the securities offered by this prospectus
as required by Part XIV of The Securities Act 1978 (Ontario) and the
regulations thereunder.
DATED this 3rd day of March, 1980.
A.C. MacPHERSON & CO.LIMITED
Per: "Bruce M. YoungJ] ,
6
383/218 3832191f ' J
l y 288296