UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F/A
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934. OR
|x| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended November 30, 2003. OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________to ______________________
Commission file number 0-29986
WEALTH MINERALS LTD.
(Formerly Triband Enterprise Corp.)
(Exact name of Registrant as specified in its charter)
Alberta, Canada
(Jurisdiction of incorporation or organization)
#903 - 1485 W. 6th Ave., Vancouver, B.C., V6H 4G1
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
__________Common Shares Without Par Value___________
(Title of Class)
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report. 7,634,435
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. |X| Yes No |_|
Indicate by check mark which financial statement item the registrant has elected
to follow. |X| Item 17 Item 18
Index to Exhibits found on page 37
FORWARD LOOKING STATEMENTS
Forward-Looking Information is Subject to Risk and Uncertainty. When used in
this Annual Report, the words "estimate," "project," "intend," "expect,"
"anticipate" and similar expressions are intended to identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this Annual
Report. These statements are subject to risks and uncertainties that could cause
actual results to differ materially from those contemplated in such
forward-looking statements. Such risks and uncertainties include, but are not
limited to, those identified under the heading Item 3 "Risk Factors".
2
GLOSSARY OF TERMS
AG chemical symbol for silver
AMPHIBOLITE a type of metamorphic rock formed by high
temperature and pressure from an original
iron magnesium rich igneous rock
ANTIMONY a chemical element, chemical symbol Sb
ARABLE LAND land which is suitable for the cultivation
of crops (farm land)
ARGILLIC CLAY FORMATION clay minerals formed by alteration of
original rock
ARGILLITE a sedimentary rock comprised of siltstone,
claystone or shale that has been compacted
ARSENIC a chemical element, chemical symbol As
ARSENOPYRITE a mineral composed of iron, arsenic and
sulfur (FeAsS)
AS chemical symbol for arsenic
AU chemical symbol for gold
BA Chemical symbol for barium
BARITE a mineral composed of barium, sulfur and
oxygen (BaSO4)
BATHOLITH a granatic body made up of multiple
intrusions of igneous rock
BI Chemical symbol for bismuth
BIOTITE GRANITE a granitic igneous rock containing large
amounts of biotite
BISMUTH a chemical element, chemical symbol Bi
CADMIUM a chemical element, chemical symbol Cd
CALCARENITE clastic sedimentary rock containing calcium
carbonite
CALC-SILICATE MINERALS a term referring to a group of minerals
containing calcium and silica formed in a
carbonate rock
CARBONATE-MUSCOVITE a mixture of calcium carbonate and
illite-muscovite clays in altered rocks
CHALCOPYRITE a mineral composed of copper, iron and
sulfur (CuFeS2)
CHLORITE a greenish, platy, mica-like mineral
containing iron, magnesium, aluminum and
silica.
CU chemical symbol for copper
EPIDOTE a calcium, aluminum silica mineral, common
in metamorphic rocks
FEOX general chemical term for group of minerals
containing iron and oxygen and/or water
FLUORITE a mineral composed of calcium and fluorine
(CaF2)
GRANITE an igneous rock consisting of quartz and
orthoclase with ~ornblende or biotite as
mafic constituents.
GRANODIORITE a plutonic igneous rock consisting of
quartz, calcic feldspar, and orthoclase with
biotite, hornblende or pyroxene as mafic
constituents
3
GREENSTONE iron and magnesium rich igneous rock whose
composition has been changed in a sequence
of sedimentary rocks.
HEMATITE a mineral composed of iron and oxygen
(Fe2O3)
HG chemical symbol for mercury
HYDROTHERMAL a term applied to heated water or fluid
JAROSITE a mineral composed of potassium iron, sulfur
and oxygen (K, Fe3 (SO4)(OH)6
LIMONITE a generic term for brown hydrous iron oxide,
not specifically identified
LITHOCAP altered host rock
LOWER TERTIARY AGE the early part of the Tertiary geological
time period spanning 66 to 44 million years
before the present
MESOTHERMAL conditions of ore deposition of intermediate
temperatures and depths
MESOZOIC Era of geologic time spanning 245 to 66
million years before the present
METASOMATISM introduction of a fluid into a rock which
totally changes the composition of the rock
MICROCRYSTALLINE QUARTZ small crystals of the mineral quartz
MINERALS means a homogeneous naturally occurring
chemical substance
ORE means a mineral or aggregate of minerals
which can be mined at a profit
MA chemical symbol for magnesium
MO chemical symbol for molybdenum
PALAEOZOIC Era of geologic time spanning 570 to 245
million years before the present
PB chemical symbol for lead
PLUTONIC ROCKS igneous rocks formed below the earth's
surface
PORPHYRY a rock composed of prominent crystals
PPB an abbreviation for units of measure in
parts per billion
PPM abbreviation for units of measure in parts
per million
PRE-TERTIARY a term applied to rocks of geological events
older than Tertiary Age (more than 66
million years before the present.
PRODUCT means a metallic or non-metallic substance
extracted from ore.
PYRITE a mineral composed of iron and sulfur (FeS2)
PYRITIZATION formation of the mineral pyrite in rocks
PYRRHOTITE a mineral composed of iron and sulfur (FeS)
QUARTZ DIORITE a plutonic igneous rock similar to
granodiorite but with larger amounts of
mafic constituents.
QUARTZ-ANKERITE a mixture of quartz (SiO2) and ankerite (Ca,
Fe, Mg) CO3 in altered rocks
QUATERNARY AGE a period of geologic time from 1.6 million
years ago to the present
SB chemical symbol for antimony
SELENIUM a chemical element, chemical symbol Se
SILICIFICATION the introduction of or replacement by silica
4
STOCKWORK metalliferous deposit characterized by the
impregnation of the mass of rock with small
veins or nests irregularly grouped
TM Thematic mapping of ground in infared
portion of the electromagnetic spectrum
THALLIUM a chemical element, chemical symbol Tl
ULTRAMAFICS group of igneous rocks containing very small
amounts of silica and large amounts of
magnesium and iron
VESICULAR BASALT FLOWS a surface flow of dark gray volcanic rocks
of mafic composition with open voids from
gas bubbles
VUGGY SILICA advanced argillic alteration
ZN chemical symbol for zinc
5
TABLE OF CONTENTS
PART I
PAGE
ITEM 1 Identity of Directors, Senior Management and Advisors. 7
ITEM 2 Offer Statistics and Expected Timetable 7
ITEM 3 Key Information 7
ITEM 3.A Selected Financial Information 8
ITEM 3.B Risk Factors 9
ITEM 4 Information on the Company 12
ITEM 4.A History and Development of the Company 12
ITEM 4.B Business Overview 12
ITEM 4.C Intercorporate Relationships 14
ITEM 4.D Property, Plants and Equipment 14
ITEM 5 Operating and Financial Review and Prospects 18
ITEM 5.A Results of Operations 18
ITEM 5.B Liquidity and Capital Resources 21
ITEM 5.C Off Balance Sheet Arrangements 22
ITEM 5.D Tabular Disclosure of Contractual Obligations 22
ITEM 6 Directors, Senior Management and Employees 23
ITEM 6.B Compensation of Directors and Officers 23
ITEM 6.C Board Practices 27
ITEM 7.A Major Shareholders 27
ITEM 7.B Related Party Transactions 27
ITEM 8 Financial Information 27
ITEM 8.A Consolidated Statements and Other Financial Information 27
ITEM 8.B Significant Changes 27
ITEM 9 The Offer and Listing 28
ITEM 10 Additional Information 29
ITEM 10.B Articles, Memorandum, and By-Laws of the Corporation 29
ITEM 10.C Material Contracts 29
ITEM 10.D Exchange Controls 30
ITEM 10.E Taxation 30
ITEM 11 Quantitative and Qualitative Disclosures About Market Risk 34
ITEM 12 Description of Securities Other than Equity Securities 34
PART II
ITEM 13 Defaults, Dividend Arrears and Delinquencies 34
ITEM 14 Material Modifications to the rights of Security
Holders and Use of Proceeds 34
ITEM 15 Controls and Procedures 34
ITEM 16A Audit Committee Financial Expert 35
ITEM 16B Code of Ethics 35
ITEM 16C Principal Accountant Fees and Services 35
PART III
ITEM 17 Financial Statements 35
ITEM 18 Financial Statements 36
ITEM 19 Financial Statements and Exhibits 36
6
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
Not Applicable
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable
ITEM 3. KEY INFORMATION
CURRENCY AND EXCHANGE RATES
All dollar amounts set forth in this report are in Canadian dollars, except
where otherwise indicated. The following tables set forth (i) the rates of
exchange for the Canadian dollar, expressed in U.S. dollars, in effect at the
end of each of the periods indicated; (ii) the average exchange rates in effect
on the last day of each month during such periods; (iii) the high and low
exchange rate during such periods, including the last six months in each case
based on the noon buying rate in New York City for cable transfers in Canadian
dollars as certified for customs purposes by the Federal Reserve Bank of New
York. Prices based on the Corporation's fiscal year end (November 30), and
quoted in U.S. Dollars.
2003 2002 2001 2000 1999
Rate at end of Period $0.7700 $0.6397 $0.5717 $06678 $0.6862
Average Rate During Period $0.7600 $0.6400 $0.5477 $0.6579 $0.6718
High Rate $0.7700 $0.6651 $0.5922 $0.6695 $0.6535
Low Rate $0.7500 $0.6189 $0.5032 $0.6411 $0.6890
Mar. 2004 Apr. 2004 May 2004 June 2004 July 2004 Aug. 2004
High $0.7646 $0.7638 $0.7365 $0.7460 $0.7633 $0.7633
Low $0.7421 $0.7296 $0.7159 $0.7261 $0.7518 $0.7575
The end of day rate at the close of business on September 22, 2004 was $0.7789.
3.A SELECTED FINANCIAL INFORMATION
The selected historical financial information presented in the table below for
each of the years ended November 30, 2003, 2002, 2001, 2000 and 1999 is derived
from the audited consolidated financial statements of the Company The audited
financial statements for the Company for the years ended November 30, 2003,
2002, and 2001 are included in this Filing. The selected historical financial
information for the years ended November 30, 2000 and 1999 presented in the
table below are derived from audited financial statements of the Company that
are not included in this Filing. The selected financial information presented
below should be read in conjunction with the Company's consolidated financial
statements and the notes thereto (Item 17) and the Operating ad Financial Review
and Prospects (Item 5) elsewhere in this Filing.
7
The selected consolidated financial data has been prepared in accordance with
Canadian Generally Accepted Accounting Principals (GAAP) and in accordance with
Canadian and United States Generally Accepted Accounting Standards (GAAS).
Selected financial data has also been provided under United States GAAP to the
extent that amounts are different. The consolidated financial statements
included in Item 17 in this Filing are also prepared under Canadian GAAP and
Canadian and United States GAAS. Included within these consolidated financial
statements in Note 11 is reconciliation between Canadian and United States GAAP.
SELECTED FINANCIAL DATA, CANADIAN GAAP
SELECTED FINANCIAL DATA (CANADIAN GAAP)
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
2003 ($) 2002 ($) 2001 ($) 2000 ($) 1999 ($)
-------- -------- ------- ------- -------
Revenues - - - - -
Exploration Expenses $27,783 57,664 19,293 88,823 224,791
Depletion, Depreciation
and Amortization $2,974 3,047 3,097 4,376 212
General and
Administrative Expenses $233,344 253,549 225,434 280,157 280,430
Other Income 902 1,092 1,892 194,209 11,818
Net Income (Loss) (263,199) (315,085) (679,437) (1,114,168) (970,345)
Per Share (0.03) (0.06) (0.24) (0.42) (0.39)
Working Capital 79,317 144,385 82,049 160,558 445,643
Deferred
Exploration Expenses 19,293 88,823 224,791
Other Assets 37,735 40,709 38,920 27,565 147,649
Long-Term Liabilities - - - - -
Shareholders Equity 117,052 185,094 118,964 613,144 2,635,401
8
SELECTED FINANCIAL DATA US GAAP
SELECTED FINANCIAL DATA, US GAAP
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Revenues - - - -
Exploration Expenses 27,783 57,664 19,293 88,823 224,791
Depletion, Depreciation 2,974 3,047 3,097 4,376 212
and Amortization
General and 233,344 253,549 225,434 704,826 403,901
Administrative Expenses
Other Income 902 1,092 1,892 7,424 11,818
Basic Net Income (Loss) (263,199) (388,085) (679,437)(1,274,379) (1,115,822)
Per Share (0.03) (0.07) (0.24) (0.48) (0.39)
Working Capital 79,317 144,385 82,049 160,558 445,643
Deferred Exploration - - - - -
Expenses
Other Assets 37,735 40,709 36,915 452,586 147,649
Long-Term Liabilities - - - -
Shareholders Equity 117,052 185,094 14,355 568,772 593,292
3.B RISK FACTORS
CERTAIN RISKS OF OPERATION
Our business is subject to a number of material risks which may affect the
Company's future financial performance, including risks customarily encountered
by early-stage mining companies.
GENERAL EXPLORATION AND MINING RISKS
OPERATING RISKS
The exploration and, if warranted, development of mining properties is a
high-risk industry. Presently, none of our properties have a known body of
commercial ore. Unusual or unexpected formations, formation pressures, fires,
power outages, labor disruptions, flooding, explorations, cave-ins, landslides,
and the inability to obtain adequate machinery, equipment or labor are all risks
involved in the operation of mines and the conduct of exploration programs. We
rely significantly on independent consultants and other professionals for
exploration and development expertise.
RISKS RELATED TO OPTION AGREEMENT
The Company has entered into an option assignment agreement (the "Option
Agreement") with Minera Koripampa del Peru S.A. ("Koripampa") whereby the
Company has obtained the right to acquire a 100% interest in certain mineral
rights in Peru (the "Amata Property") which were originally granted to Koripampa
by Rio Tinto Mining and Exploration Limited ("Rio Tinto") pursuant to a Letter
of Understanding (the "LOU") between Koripampa and Rio Tinto.
There can be no guarantee that Rio Tinto will accept the assignment of the Amata
option from Koripampa to Wealth Minerals. Furthermore, if the Company fails to
complete the required work commitments or make the required payments to Rio
Tinto pursuant to the LOU, it will lose its option to acquire the Amata
Property. There can be no further guarantee that Rio Tinto Mining and
Exploration Limited will abide by the original terms and conditions of the
Letter of Understanding between Rio Tinto Mining and Exploration Limited and
Minera Koripampa del Peru.
CAPITAL EXPENDITURES
We will require substantial resources to establish ore reserves, develop
metallurgical processes to extract metal from the ore, and develop mining and
processing facilities at a given site. There can be no assurances that
sufficient quantities of minerals with a sufficient average grade will justify
commercial development of any such site.
9
VOLATILITY IN MINERAL PRICES
The cost of developing gold and other mineral properties is affected by the cost
of operations, variations in ore grade, fluctuations in metal markets and the
cost of processing equipment.
REGULATORY AND GOVERNING JURISDICTION RISKS
Government regulations regarding prices, taxes, royalties, allowable production,
importing and exporting of minerals, land use, land tenure and environmental
protection also affect economic viability.
EMPLOYMENT CONTRACTS/RELIANCE UPON OFFICERS
The Company has not entered into an employment contract with all of its
executive officers. The company is largely dependent upon the personal efforts
and abilities of its corporate officers. The loss or availability to the Company
of these individuals may have materially adverse effects upon the Company's
business.
LEGAL PROCEEDINGS AGAINST FOREIGN DIRECTORS
The Company is incorporated under the laws of the Province of Alberta, Canada,
and some of its directors and officers are residents of Canada. Consequently, it
may be difficult for United States investors to effect service of process within
the United States upon the Company or upon those directors and officers who are
not residents of the United States, or to realize in the United States upon
judgments of United States courts predicated upon civil liabilities under the
United States Securities and Exchange Act of 1934 as amended. Furthermore, it
may be difficult for investors to enforce judgments of the United States Courts
based upon civil liability provisions of the United States Federal securities
laws in a Canadian court against the Company or any of the Company's non-United
States resident officers or directors. There is substantial doubt whether an
original lawsuit could be brought successfully in Canada against any of such
persons or the Company predicated solely upon civil liabilities.
EFFECT OF FUTURE FINANCINGS
The Company has historically raised capital through a series of equity
offerings. The ability for the Company to continue is dependent upon its ability
to raise additional capital. There can be no assurances that the current issued
capital and the shareholders thereof, will not be partially or substantially
diluted by further equity offerings.
CLASSIFICATION OF THE COMMON STOCK AS PENNY STOCK
In October 1990, Congress enacted the "Penny Stock Reform Act of 1990." "Penny
Stock" is generally any equity security other than a security (a) that is
registered or approved for registration and traded on a national securities
exchange or an equity security for which quotation information is disseminated
by The National Association of Securities Dealers Automated Quotation ("NASDAQ")
System on a real-time basis pursuant to an effective transaction reporting plan,
or which has been authorized or approved for authorization upon notice of
issuance for quotation in the NASDAQ System, (b) that is issued by an investment
company registered under the Investment Company Act of 1940, (c) that is a put
or call option issued by Options Clearing Corporation, (d) that has a price of
five dollars or more, or (e) whose issuer has net tangible assets in excess of
$2,000,000, if the issuer has been in continuous operation for at least three
years, or $5,000,000 if the issuer has been in continuous operation for less
than three years, or average revenue of at least $6,000,000 for the last three
years.
Our Common Shares are presently considered "penny stock" under these criteria.
Therefore, the Common Shares are subject to Rules 15g-2 through 15g-9 (the
"Penny Stock Rules") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Penny Stock Rules impose additional reporting, disclosure
and sales practice requirements on brokers and dealers before they can recommend
the Common Shares for purchase by their customers, and require that such brokers
and dealers must make a special suitability determination of each purchaser and
must have received the purchaser's written consent to the transaction prior to
the sale. Consequently, the Penny Stock Rules may affect the ability of brokers
and dealers to sell the Common Shares and may affect the ability of purchasers
to sell any of the Shares acquired hereby in the secondary markets.
10
So long as the Common Shares are within the definition of "Penny Stock" as
defined in Rule 3a51-1 of the Exchange Act, the Penny Stock Rules will continue
to be applicable to the Common Shares. Unless and until the price per share of
Common Shares is equal to or greater than $5.00, the Common Shares will be
subject to substantial additional risk disclosures and document and information
delivery requirements on the part of brokers and dealers effecting transactions
in the Common Shares. Such additional risk disclosures and document and
information delivery requirements on the part of such brokers and dealers may
have an adverse effect on the market for and/or valuation of the Common Shares.
STAGE OF DEVELOPMENT
We have no production revenue. We do not have an operating history upon which
investors may rely. Moreover, we have no commercially viable properties at this
time.
We have limited financial resources, with no assurance that sufficient funding
will be available for future exploration and development or to fulfill our
obligations under current agreements. There is no assurance that we will be able
to obtain adequate financing in the future or that the terms of such financing
will be favorable. Failure to obtain such additional financing could result in
delay or indefinite postponement of further exploration and development of its
projects. Our accumulated deficit as at November 30, 2003 was $4,919,008.
METAL PRICES
Metal prices have fluctuated widely in recent years, and are affected by
numerous factors beyond our control. International economic and political
trends, expectations of inflation, currency exchange fluctuations, interest
rates, global or regional consumption patterns, speculative activities and
worldwide production levels all may affect metal prices.
COMPETITION
The mineral industry is very competitive. We must compete with other companies
possessing superior financial resources and technical facilities. This
competition is not only for the acquisition of mining interests, but also for
retention of the services of qualified employees.
NO ASSURANCE OF TITLES
Our mineral property interests may be subject to prior unregistered agreements,
transfers or native land claims and title may be affected by undetected defects.
Substance and continuity of title may also be affected by political instability
and the vagaries of law as they exist and are applied in foreign jurisdictions.
Surveys have not been carried out on all of our mineral properties and
therefore, in accordance with the laws of the jurisdiction in which such
properties are situated, their existence and area could be in doubt.
GENERAL OPERATING HAZARDS
PERMITS AND LICENSES
Our operations require licenses and permits from various governmental
authorities. There can be no assurance that we will be able to obtain all
necessary licenses and permits that may be required to carry out exploration,
development and mining operations at the Company's projects.
Our properties in the State of Nevada consist of 23 Bet claims located by the
Corporation. We currently have licenses, issued by the Nevada Department of
Mining, to conduct geological, geochemical and geophysical investigations and
sample drilling at the 23 BET claims for a period of one year until September,
2004. The license may be renewed on a yearly basis by submitting the yearly
filing fees to the appropriate Land Claims Offices in the state. The yearly
filing fee for our property is as follows: $2,875 USD for the 23 BET claims. We
also maintain the BET 1-23 Claims with the Lander County Recorder for a yearly
fee of $199.00 (USD) renewable in September 2004. We are currently in good
standing with the Nevada Department of Mining. Additional licenses will be
required to extract minerals, if found. Surface rights for mining operations are
available upon application for licenses to extract minerals.
11
All license fees with respect to the Amata Property are currently in compliance.
(Please see the letter from Koripampa attached).
PRICE FLUCTUATIONS, SHARE PRICE VOLATILITY
Securities markets in Canada and the United States have experienced a high level
of price and volume volatility in recent years, with many resource companies
experiencing wide price fluctuations not necessarily related to operating
performance or underlying asset values of such companies. Our Common Shares
traded between $0.08 and $0.13 in 2001 and between $0.10 and $0.46 in 2002 and
between $0.10 and $0.37 in 2003. No assurances can be made that our share price
and volume will not continue to fluctuate materially.
SIGNIFICANT UNCERTAINTIES
We currently do not have any producing mineral properties but are seeking
mineral property prospects. These projects may be subject to substantial
regulatory requirements, financing needs, and economic uncertainties. There is
no assurance that we can raise the additional funds necessary to complete the
development work and, if warranted, bring the property into production. There is
also no assurance that the property will prove to be profitable if it is brought
into production.
ENVIRONMENTAL REGULATIONS
All phases of our operations are subject to environmental regulations
promulgated by government agencies from time to time. Environmental legislation
is evolving in a manner which means stricter standards, enforcement; and fines
and penalties for non-compliance. Environmental assessments of proposed projects
carry a heightened degree of responsibility for companies and directors,
officers and employees. There is no assurance that future changes in
environmental regulation, if any, will not adversely affect our operations.
We are in compliance with all applicable environmental laws and regulations in
Nevada, USA and in Arequipa, Peru.
ITEM 4 INFORMATION ON THE COMPANY
4. A HISTORY AND DEVELOPMENT OF THE COMPANY
Wealth Minerals Ltd. (the "Corporation") was incorporated under the laws of the
Province of Alberta on October 7, 1994 under the name of 627743 Alberta Ltd. On
February 10, 1995, 627743 Alberta Ltd. changed its name to Triband Capital Corp.
On July 18, 1996 Triband Capital Corp. changed its name to Triband Resource
Corporation to reflect its business in mineral exploration. On August 22, 2002,
the Corporation changed its name to Triband Enterprise Corp. as it was
contemplating business acquisitions which were not associated with mineral
exploration. On January 14, 2004, the Corporation changed its name to Wealth
Minerals Ltd. to reflect its renewed focus on mineral exploration. The
authorized capital consists of an unlimited number of common shares ("Common
Shares") and an unlimited number of preferred shares, without par value. As of
the fiscal year end, November 30, 2003, there were 7,634,435 Common Shares
issued and outstanding and no preferred shares issued and outstanding. In
January of 2004, the Company underwent a four old for one new reverse stock
split resulting in 1,908,608 common shares being issued and outstanding. Since
January, 7,094,454 shares have been issued by either private placement, exercise
of stock options. As of August 27th, 2004 there are 9,003,062 shares
outstanding.
The registered office is located at 2300 Western Gas Tower, 530- 8th Ave., S.W.,
Calgary, Alberta, T2P 3S8 and the head office is located at #1901- 1177 W.
Hastings St. Vancouver, British Columbia, V6E 2K3 (604) 331-0096.
4 B. BUSINESS OVERVIEW
DESCRIPTION AND GENERAL DEVELOPMENT
We are a natural resource corporation currently engaged in the acquisition and
exploration of mineral properties. We presently have no producing properties,
and there can be no assurance that a commercially viable body of ore (a reserve)
exists in any of our properties until appropriate drilling and/or underground
testing is done. A comprehensive evaluation based upon unit cost, grade
recoveries and other factors determines economic feasibility.
12
Prior to August 22, 1996, we conducted no business operations of any kind other
than those acts consistent with our attempts to acquire commercially viable
business interests in the natural resource industry.
During the five preceding fiscal years we have pursued our operations through
the acquisition and exploration of mineral properties in the United States.
Until July of 2004, our principal mineral property which was in the exploration
stage was located in Whisky Canyon, Nevada. We no longer have any interest in
the Whisky Canyon and Betty O'Neal claims in Nevada and no longer have any
interest in mining properties in the Standard Creek property in British
Columbia. As at December 1, 1999 we wrote off the $422,682 expended on the
Standard Creek property. We are conducting no further exploration activities in
British Columbia at this time. In 2000, we wrote off $783,717 expended on the
IP, PW and Whisky Canyon Nevada properties.
In June of 2004, the Company entered into an option assignment agreement (the
"Option Agreement") with Minera Koripampa del Peru S.A. ("Koripampa") whereby
the Company has obtained the right to acquire a 100% interest in certain mineral
rights in Peru (the "Amata Property") which were originally granted to Koripampa
by Rio Tinto Mining and Exploration Limited ("Rio Tinto") pursuant to a Letter
of Understanding (the "LOU") between Koripampa and Rio Tinto.
In consideration of the assignment of this option to Wealth Minerals, Wealth
Minerals has paid $100,000 (USD) in May, 2004 and issued 200,000 common shares
upon closing of the agreement in June, 2004. A further 200,000 common shares
will be issued one year after the closing of the agreement in June of 2005.
Further work commitments and payments are required under this Option Assignment
Agreement and are detailed in Section 4.D , "Property Acquisition, Amata
Project".
As of August, 2004 the only property interests the Company has are its ownership
of the BET 1-23 Claims in Lander County, Nevada and its interest in the Amata
Project in Peru.
The table below illustrates our expenditures on development and exploration
activities for the last three fiscal years. The figures below have been prepared
in accordance with generally accepted accounting principles ("GAAP") in Canada.
Under Canadian generally accepted accounting principles the costs of acquiring
and exploring mineral properties are capitalized prior to commercial feasibility
and written down if the properties are abandoned, sold or if management decides
not to pursue the properties. Under United States generally accepted accounting
principles, exploration and prospecting costs are charged to expense as
incurred, as are development costs for projects not yet determined by management
to be commercially feasible. Except as stated above and explained in Note 11 of
our financial statements, the figures below are consistent with U.S. GAAP.
2004 2003 2000 2001
General Exploration 120,875 27,783 57,664 19293
Mineral Properties - -
We have not prepared a budget for all our properties. The cost of developing
gold and other mineral properties is affected by the cost of operations,
variations in ore grade, fluctuations in metal markets and the cost of
processing equipment. Government regulations regarding prices, taxes, royalties,
allowable production, importing and exporting of minerals, land use, land tenure
and environmental protection also affect economic viability.
We employ certified independent geological consultants to extract samples from
the properties who utilize certified independent laboratories for the testing of
samples taken from the Nevada and Peruvian properties in order to ensure the
validity and integrity of samples taken. We utilize the services of a director
and of independent certified geologists to review the laboratory results and
order additional tests from independent laboratories to verify results.
13
CHANGE OF BUSINESS
During the fiscal year 2003 there was no change of business contemplated.
In April 2000, the Company decided to change its business focus to internet or
high tech ventures and completed a filing with the Canadian Venture Exchange
regarding our intention to change our business. The results of the Company's due
diligence indicated that it was not feasible for the Company to change its
business direction and accordingly focused on mineral exploration since December
2000.
We intend to continue to review potential business opportunities in mining
exploration.
INVESTMENTS
In June of 2004, the Company has entered into an option assignment agreement
(the "Option Agreement") with Minera Koripampa del Peru S.A. ("Koripampa")
whereby the Company has obtained the right to acquire a 100% interest in certain
mineral rights in Peru (the "Amata Property") which were originally granted to
Koripampa by Rio Tinto Mining and Exploration Limited ("Rio Tinto") pursuant to
a Letter of Understanding (the "LOU") between Koripampa and Rio Tinto.
In consideration of the assignment of this option to Wealth Minerals, Wealth
Minerals has paid $100,000 (USD) payable in May, 2004, and issued 200,000 common
shares issued upon closing of the agreement in June, 2004. A further 200,000
common shares will be issued one year after the closing of the agreement in June
of 2005. Further work commitments and payments are required under this Option
Assignment Agreement and are detailed in Section 4.D , "Property Acquisition,
Amata Project".
4.C INTERCORPORATE RELATIONSHIPS
We have one wholly owned, direct subsidiary: Triband Resource US Inc., a
corporation incorporated under the laws of the State of Nevada on November 5,
1997. The registered office of Triband Resource US Inc. is located at, 6121
Lakeside Dr., Suite 260 Reno, Nevada.
4.D PROPERTIES, PLANTS AND EQUIPMENT
In the period 2001 to 2002 we abandoned certain claims in the Battle Mountain
and Whisky Canyon area in Nevada for economic reasons. The Company felt that
further exploration work on these claims would not be economically feasible as
it was determined that exploration work on these claims would not yield any
significant results. The Company decided to concentrate on the Betty O'Neal
claims at that time as exploration and mining activity in this area had shown
some positive results in the past. The only obligation we had was to the Battle
Mountain State Mortgage Bank with respect to the lease of the Betty O'Neal
claims until July of 2004. We were obliged to pay the Battle Mountain State
Mortgage Bank a total of $18,000 USD per year in $9,000 USD increments, due in
July and February of each year. In May of 2004 the Company notified the Battle
Mountain State Mortgage Bank that it did not intend to renew its obligations
with respect to the Betty O'Neal Claims. A further US$25,000 due July 9, 2004
was not paid at that time and the Company terminated its intent to earn an
interest in the claims. The Company continues to maintain the BET 1-23 claims;
however, there is no exploration work on these claims contemplated at this time.
We are in the exploration stage and the properties are presently without a known
body of commercial ore. Our principal mineral properties are the following.
The Company owns 23 BET Claims it located in 1997 bordering the Betty O'Neal
patented claims on the Whisky Canyon property which the Company had under option
until July of 2004. The Company did not renew its option on the Whisky Canyon
property in July of 2004. The Company maintains full ownership in the BET 1-23
Claims. The Company also owns a 100% interest in the Amata Project located 50
kilometers northeast of Arequipa City in the Coalaque district in the department
of Moquegua, Peru.
14
BET CLAIMS 1 - 23 - LANDER COUNTY, NEVADA, USA
LOCATION AND INTRODUCTION
The BET Claims 1 - 23 ("the BET Claims") are located along the northwest flank
of the Shoshone Range approximately 12 miles southeast of Battle Mountain,
Lander County, Nevada, USA. Much of the Claims occur in steep topography between
6000 feet and 8000 feet in elevation. Access is relatively difficult and is
limited to a few steep, narrow and poorly preserved drill roads.
MINING AND EXPLORATION HISTORY
Prospecting for and limited mining of high grade veins in the district began in
the late 1870's. The Betty O'Neal Mine which the BET Claims border was worked
extensively for silver beginning in about 1880. It was reportedly mined
intermittently until about 1936 and was the only major producing mine in the
vicinity of the Whisky Canyon Property upon which the Company had an option
until July, 2004. Recorded production for the period of 1902-1936 from the Betty
O'Neal totals about 4.2 million ounces of silver from ores with grades averaging
between 25 to 30 ounces per ton. No production records exist for the period
between 1880-1902. Numerous other showings small high grade mines of limited
production occur in adjoining Rocky Canyon and in the surrounding area.
Porphyry copper-molybdenum exploration was focused in Rocky Canyon and nearby
Pipe Canyon in an active way during the early to mid -1970's. Several deep
(greater than 2000 foot) core holes encountered deep, low grade, Cu-Mo
mineralization beneath the breccia pipes and magmatic centers in both Rocky and
Pipe Canyons. No further copper exploration has been done in the district.
Recent gold exploration began in the district during 1879 and continued
intermittently through the early 1900's. Noranda Exploration ("Noranda")
conducted the first phase of modern exploration beginning in late 1979 and
continued through early 1981. Their work included geologic mapping, geochemical
sampling, and exploration drilling (4 diamond core and 15 rotary holes). Noranda
elected to terminate the project even though their drilling intersected
gold-mineralization in the Whisky Canyon vicinity.
Following Noranda, Draco Minerals Ltd. ("Draco Minerals") explored the Rocky
Canyon area for precious metals but drilled only 14 shallow reverse circulation
holes. St. George acquired both the Whisky Canyon Property and the Rocky Canyon
property from the underlying owners and Draco Minerals, respectively, along with
other ground in the district. St. George and their subsequent partners drilled
at least 16 reverse circulation holes in the Whisky-Rocky Canyon area and
numerous holes to the west along the range front zone. Cameco Gold U.S. acquired
ground along the range front near the mouth of Rocky Canyon and the Lucky Rocks
area by claim location and an option agreement with St. George. The Cameco
program which began in 1996, included core drilling, and continues at present.
PROPERTY ACQUISITION
The BET Claims 1 - 23 were claimed by the Company in 1997.
We currently own the BET 1-23 Claims. We maintain our interest in the BET claims
via yearly payments of $2,875 to the Bureau of Land Management in Battle
Mountain, Nevada payable in September of each year and payments of $199 to the
Lander County Recorder to hold the claims each year in September. We have no
further work commitments on the BET 1-23 claims.
GEOLOGY - BET CLAIMS
The geology of the northwestern portion of the Shoshone Range is very complex.
The BET Claims area is comprised of a complexly thrust faulted stack of
siliceous and lesser carbonate rocks that were subsequently juxtaposed into
complex contact relationships by several prominent sets of high-angle faults.
Thrust faulting occurred during the Antler and Sonoman Orogenies and resulted in
low-angle zones of intense shearing and fracturing developed within the
pre-Tertiary siliceous rocks. Caldera development and subsidence overprints
pre-Oligocene structures and was the focus of more recent high and low-angle
faulting of Tertiary age. High-angle faulting is intense in the district and is
comprised of several distinct sets, including those trending; 1) N10E to N10W,
2) N60-75W, 3) N20-30W, 4) East-West, 5) N60E and 6) N30E. The faults trending
N60-75W seem to be the most favorable focus of gold-bearing quartz and sulfide
mineralization.
15
Most of the northern part of the range is made up of chert and siliceous clastic
rocks that comprise the upper plate of the Roberts Mountains allochthon. This
sequence of rocks was emplaced along the major, regional Roberts Mountain Thrust
zone during the Devonian-Mississippian Antler Orogeny. Lower plate carbonate
rocks located below the thrust zone are not exposed in the district. A large
portion of the Whisky Canyon Property is underlain by a thick upper plate
sequence consisting of quartzite, chert, argillite and greenstone of the
Ordovician Valmy Formation. In Rocky Canyon, a thick section consisting to
interbedded calcareous siltstone and fine-grained sandstone, believed to be
upper plate Silurian Elder Formation, is tectonically inter-leaved with the
Valmy Formation. The Pennsylvanian-Permian Antler Sequence consisting of Battle
Formation and Antler Peak Limestone, was deposited directly on upper plate Valmy
rocks and is exposed in Whisky Canyon. Antler Sequence rocks are an important
host for gold mineralization in the Battle Mountain district at the Fortitude,
Tomboy and Minnie deposits and the Lone Tree and Marigold deposits.
During the Permian-Triassic Sonoma Orogeny, the Havallah Sequence rocks were
tectonically emplaced along the Golconda Thrust above the Roberts Mountains
Allochton and Antler Sequence rocks. The Havallah Sequence consists of
fine-to-medium-grained, locally calcareous, siliceous clastic rocks.These rocks
are well exposed at the head of Whisky Canyon. A sequence of debris flows and
limestone-rich conglomerate with silty, sandy, and shaly matrix, believed to be
the Triassic Panther Canyon Formation, was deposited on pre-Triassic rocks and
is also exposed at the head of Whisky Canyon.
The pre-Tertiary sedimentary rocks are intruded and overlain by an Oligocene-age
sequence of volcanic flows, tuffs, tuff breccias, intrusive breccia pipes, dikes
and irregular intrusive masses ranging in composition from rhyolite to latite. A
quartz monzonite porphyry intrudes the slightly older volcanic sequence and
sedimentary rocks along the east margin of the property. The Tertiary magmatic
event is believed to have resulted from a large caldera that occupies the
northwest flank of the range. Within this topographic zone, several large areas
of volcanic rocks, abundant dikes, small intrusions and three breccia pipes are
preserved.
ALTERATION - BET CLAIMS
Hydrothermal alteration features of varying types and intensities are widespread
throughout the Whisky Canyon area. The alteration types include: 1)
silicification, 2) quartz veining and stockwork zones, 3) sulfide
mineralization, 4) sericitic and argillic clay alteration, 5) calc-silicate
mineral formation in calcareous rocks, and 6) supergene oxidation of sulfides.
The introduction of quartz as the groundmass of various types of rocks and in
more coarsely crystalline veins is the most important alteration feature
associated with hydrothermal mineralization. Fine-grained quartz replaced
sedimentary rocks along fracture and shear zones. The intensity of
silicification is variable and ranges from complete jasperoidal replacement to
silicification mixed with sericitic and argillic clays and quartz veinlets. The
silicified zones commonly contain sulfide minerals including pyrite, pyrrhotite,
arsenopyrite and the copper-bearing minerals chalcopyrite and tetrahedrite. In
surface outcrops the sulfide minerals are commonly altered to iron oxide
minerals. Calcite, quartz and barite gangue minerals occur with the quartz.
The quartz veins and stockwork veinlet zones contain individual sulfide-rich
veins ranging in width from less than 1 mm to several tens of meters. The quartz
is fine-grained, gray and glassy, and contains ubiquitous sulfide-sulfosalt
minerals. Pyrite, pyrrhotite, and arsenopyrite are most abundant within the
mineralized veined zones. Base metal sulfide and sulfosalt minerals are less
common and include: chalcopyritre, sphalerite, galena. The vein mineralization
is discussed in more detail below in the section of mineralization.
Sericitic and argillic clay alteration commonly occur with both groundmass and
vein-type hydrothermal silicification. The siliceous clastic host rocks are
commonly bleached and variably altered to secondary clays. Sericitic alteration
is most common closest to the most intense zones of silicification and because
it contains introduced quartz and pyrite, it is very similar to the phyllic
alteration zones related to porphyry-style mineralization. Argillic clays are
intermixed with silica in less strongly altered areas and are commonly crosscut
by quartz microveinlets and contain both disseminated and massive concentrations
of secondary iron oxide minerals.
Calc-siliciate minerals are well developed in the calcareous clastic rocks
exposed in Rocky Canyon and to a lesser degree in Whisky Canyon to the north.
Most of the exposed rocks are calc-silicate hornfels that consist of
recrystallized host rocks containing quartz, diopside, epidote and fine-grained
actinolite (+tremolite) in fractures and in veins in association with calcite
and quartz.
16
MINERALIZATION - BET CLAIMS
Two main types of mineralization are present on the BET Claims 1 - 23: 1) a
silver-base metal type, and 2) a gold-silver-arsenic type with minor base
metals. The two types show an apparent regional zonation. Type 1 is most common
and strongest or best developed from the BET Claims. The type 2 is prominent at
the BET Claims and southward into Rocky Canyon.
The silver-dominant mineralization was the focus of most of the historic mining
activity and was centered at the Betty O'Neal mine and surrounding area. Silver
mineralization occurs in quartz-calcite-barite-sulfide veins ranging from less
than 1 cm to tens of meters in width. Many of the veins were hundreds to
thousands of feet long and were worked down-dip for many hundreds of feet.
Well-defined, prominent, structurally-controlled veins eventually exhibit a
transition along strike and down-dip into thin, poorly-defined veins that
commonly grade into quartz-calcite stringer or stockwork zones before
disappearing altogether. Most veins exhibit a crude banding, with calcite and
barite in contact with the wallrocks and milky white massive to colorless
crystallized quartz in the center of the veins. The internal quartz zone
commonly is brecciated and contains open spaces lined with crystallized quartz
and sulfide minerals. Almost all of the sulfide minerals are restricted to the
quartz portion of the veins. The sulfide mineralogy includes: pyrite,
tetrahedrite (freibergite), galena, sphalerite, chalcopyrite, stephanite and
stibnite.
Gold mineralization occurs in veins, fault breccia zones, and low-angle shear
zones and is most abundant at the head of Whisky Canyon formerly optioned by the
Company. Similar mineralization is also exposed south of Whisky Canyon in the
Rocky Canyon drainage and in the Lucky Rocks area. Most of the early exploration
for gold and production from high grade ore took place between the late 1880's
and 1920's. The Celestine O'Neal mine at the head of Whisky Canyon was the site
of intermittent mining through about 1923.
The gold mineralized zones occur as steeply-dipping high-angle veins and fault
breccias and as low angle-shear-breccia zones. Most mineralized veins and
high-angle breccias zones are relatively narrow (less than 1 to about 20 feet in
width), while the low-angle shear-breccia zones are typically 2 to 50 feet
thick. The vein and steeply-dipping fault breccia mineralization consists of
varying mixtures of quartz and calcite gangue containing abundant sulfide
minerals. The sulfide minerals include pyrite, arsenopyrite, chalcopyrite,
sphalerite and tetrahedite. Secondary copper minerals occur in oxidized zones
with iron oxide minerals and scorodite. Low angle zones contain mineralization
that is generally less distinctive and contains abundant clay minerals. Most of
the shear zone mineralization is more intensely oxidized relative to the vein
mineralization. The silver content of the veins is variable. Values up to
several ounces silver per ton are common.
GEOCHEMISTRY - BET CLAIMS
Amounts of gold (greater than 1 gram per ton) occur in both rock and soil
samples east of the drilled area in Whisky Canyon. The anomaly extends east for
at least 2500 feet from the drilled zone. The size of the anomaly is poorly
defined because of limited rock and soil sampling completed in this area to
date. The eastward extension significantly increases the size of the known area
of anomalous gold mineralization.
PROPERTY ACQUISITION, AMATA PROJECT
In June 2004 the Company entered into an option assignment agreement (the
"Option Agreement") with Minera Koripampa del Peru S.A. ("Koripampa") whereby
the Company obtained the right to acquire a 100% interest in certain mineral
rights approximating 10,300 hectares and situated in the Department of Moquegua,
Coalaque District, Peru (the "Amata Property") originally granted to Koripampa
by Rio Tinto Mining and Exploration Limited ("Rio Tinto") pursuant to a Letter
of Understanding ("LOU") between Koripampa and Rio Tinto. Pursuant to the Option
Agreement, the Company has assumed all of the rights and obligations under the
LOU. In order to exercise its option to acquire the Amata Property, the Company
must complete work expenditures and submit payments in accordance with the
following table:
17
PERIOD WORK EXPENDITURE US$
------------------------------------- --------------------------
Year to first anniversary of the LOU $200,000
Year to second anniversary of the LOU $500,000
TOTAL $700,000
During the Option term, payments to Rio Tinto or to Rio Tinto's affiliates as
per Rio Tinto's instructions in accordance with the following table:
DUE DATE PAYMENT US$
------------------------------------- --------------------------
On signing the LOU $100,000(paid)
1 June, 2005 $150,000
1 June 2006 $750,000
1 June 2007 $1,000,000
1 June 2008 $2,00,000
TOTAL $4,000,000
Pursuant to the LOU, Rio Tinto has the right to accelerate compliance with the
required levels of work expenditures on the Property. Any excess in the required
level of Work Expenditures in a given year will be carried forward and credited
towards Work Expenditures of the following year. Should the Company fail to
comply with the annual Work Expenditures in a given year, the Option Agreement
will automatically terminate and the Company will have no further right or
obligation to the property.
Pursuant to the Option Agreement and in consideration thereof, The Company paid
$100,000 (USD) and issued 200,000 common shares of the Company to Koripampa and
will issue an additional 200,000 common shares to Koripampa in June of 2005.
After the work expenditures have been completed, the Company is obliged to
deliver notice in writing to Rio Tinto that it has complied with the work
expenditure program. Rio Tinto will then have a period of sixty (60) days from
the date of receipt of such notice in which to elect to either: (1) enter into
an incorporated joint venture agreement and/or the incorporation of a new
company vehicle to which the Property shall be transferred after considering the
most tax efficient method of so doing, or; (2) not to enter into a joint venture
and/or incorporation of a new company vehicle, in which case the Option to
acquire the Property will continue to effect the transfer of the Amata Property
to the Company. The LOU and Option Agreement are attached to this 20-F as
Exhibit 4.3.
PROPERTY DESCRIPTION, AMATA PROJECT
The Amata Project consists of 10,300 hectares in the Coaluque district in
Moquegua, Peru. The project hosts potential copper-gold-silver mineralization
and was the subject of a 15 hole drill program conducted by Rio Tinto in
2002/2003. The Company plans to re-compile historical data and initiate a
geological sampling and mapping program.
EXPLORATION SUMMARY - AMATA PROJECT
In 2001, Rio Tino Exploration (RTE) secured 100% mineral rights over the
prospect area which totaled 10,300 hectares and commenced exporation in the same
year. Detailed geological mapping, systematic rock chip sampling and ground
magnetics identified a large 10 X 4 kilometer area of high sulphidation
epithermal alteration with underlying porphyry type intrusives. High Ag, Mo, Cu,
Au and Hg values in rock samples helped identify at least six different drill
targets (Cerro, Amata, Tinacocha, Cayrane, Tacune, Trinchera and Palcamayo).The
first round of drilling began in December 2002 with nine reconnaissance diamond
holes totaling 3,866 meters drilled within the six target areas.
After a small CSAMT survey and further geochemistry, a second round of drilling
began in September 2003 with six holes totaling 2,291 meters drilled, including
1,512 meters RC and 779 meters as diamond tails to these RC holes.
The two drill programs totaled 15 wide spaces holes.
Not all targets have been tested within the prospect area and some of the
targets have only been tested with very wide spaced drill holes. There are
significant chances of identifying more mineralization and zones of high grade
precious metals in the epithermal lithocap or copper in the underlying porphyry.
18
GEOLOGY AND MINERALIZATION - AMATA PROJECT
The oldest rocks in the area correspond to rocks of the costal batholith (544
Ma) which are overlain by Yura group sediments. The prospect is situated within
the volcanic complex of Cerro Blanco-Cerro Saltaoco in the Barroso group
(Pleistocene) which border the batholith and overly the Yura group. The prospect
was identified during the follow up of TM color anomalies. The anomaly
corresponded to a large volcanic complex with four volcanic edifices aligned
NE-SE over an are of 10 X 4 kilometers.
The alteration is typical of high suphidation epithermal alteration
characterized by zones of vuggy silica and hydrothermal breccias borded by zones
of advanced argillic (silica-alunite), argillic (quartz, kaolinite and dickite)
and propytlitic alteration (epidote, chlorite). The breccias are strongly
anomalous in Ag (up to 2400 g/t). Au (up to 7.2 g/t), Hg (up to 144 ppm), AS (up
to 10000 ppm). The litocap is up to 400 meters thick and at Cerro Amata a
breccia pipe holds potential for a bulk mineable Ag (Au) resource. In the
Heurtas Valley area, steep-dipping silica ledges with anomalous gold have only
been tested twith one hole at at Tincacocha the copper is still open to the
north. Magnetic anomalies also remain untested as is the large silica body with
anomalous geochemistry to the north at Apacheta. There are also two zones of
quartz stockwork anomalus in Mo which contain an advanced argilic overprint
representing the halo to two Cu-Au-Mo porphyry systems (Tacune and Cayrane)
again with limted drilling
ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A RESULTS OF OPERATIONS
The discussion and analysis in this section compares the operating results of
the year ended November 30, 2003 to the year ended November 30, 2002, and the
year ended November 30, 2002 to the year ended November 30, 2001, and should be
read in conjunction with the Consolidated Financial Statements and the related
Notes thereto provided at Item 17, Financial Statements. At the present time the
Company's expenditures consist of general and administrative costs, and
exploration expenditures. The Company presently has no production from its
interest in exploration concessions and has no significant revenue items.
We are involved in mineral exploration activities in Nevada, USA and Peru. To
date, we have no revenue from operations. Expenditures related to mineral
exploration and corporate overhead generated items are expensed. Exploration and
overhead expenditures fluctuate depending on the exploration stage of our
various projects and on the amount of available working capital. We are not
restricted in our ability to transfer funds to our subsidiaries.
The Corporation did not engage, does not currently engage, nor does it expect to
engage, in any hedging transactions to protect against fluctuations between
Canadian and U.S. currencies. The Corporation's expenses are denominated in both
Canadian and U.S. currencies.
The following discussion of the operating results and financial position should
be read in conjunction with the consolidated financial statements (and related
notes).
19
YEAR ENDED NOVEMBER 30, 2003
Net loss for the year ended November 30, 2003 under US GAAP was $270,999 ( 2002
- $388,185 2001 - $265,899). The comparison of loss per Canadian GAAP was
calculated as follows:
2003 2002 2001
---- ---- ----
Loss for the year per
Canadian GAAP $263,199 $315,085 $679,437
Compensation expense on
Granting Stock Options (1) $350,111 $73,100 -
Acquisition of
Mineral Properties(2) - $ 20,186 -
Write off of mineral
Properties under CDN
GAAP - - $433,724
--------
Loss for the year
Under US GAAP $270,999 $388,185 $265,899
======== ======== ========
(1) Statement of Financial Accounting Standards No 123 ("SFAS No.
123"), entitled "Accounting for Stock Based Compensation",
published by the U.S. Financial Accounting Standards Board,
requires a company to establish a fair market value based
methods of accounting for stock based compensation plans.
Canadian generally accepted accounting principles do not
require the reporting of any stock based compensation expense
in the Company's financial statements.
For compliance with United States generally accepted
accounting principles, the company uses the Black Scholes
Option Pricing model to determine the fair market of all
incentive stock options at the grant date.
(2) Under Canadian generally accepted accounting principles, the
costs of acquiring and exploring mineral properties are
capitalized prior to commercial feasibility and written down
if the properties are abandoned, sold or if management decides
not to pursue the properties. Under United States generally
accepted accounting principles, exploration and prospecting
costs are charged to expense as incurred, as are development
costs for projects not yet determined by management to be
commercially feasible.
Total assets of the Corporation decreased from $185,094 as at November 30, 2002
to $117,052 as at November 30, 2003. During the year, the Corporation received
$0 from the sale of marketable securities, $107,500 from a private placement,
$33,750 from the exercise of warrants and $44,250 from exercise of stock
options.
In 2003, the Corporation expended a total of $27,783 on exploration programs on
the Whisky Canyon, and Bet properties in Nevada as compared to $57,664 in 2002.
YEAR ENDED NOVEMBER 30, 2002
Net loss for the year ended November 30,2002 under Canadian GAAP was $315,085 as
compared to $679,437 for the year ended November 30, 2001. The decrease in
losses is mainly due to the decreased cost in the acquisition of mineral
properties and decreased exploration costs.
The net loss for the twelve months ended November 30, 2002 was $315,085 or $0.06
per share in comparison with $679,427 or $0.24 per share for the same period
ending November 30, 2001. The increase in loss is due to the write off of
exploration costs of the Standard Creek property and the write off of mineral
properties. Fully diluted income (loss) per share for the year ended November
30, 2002 was ($0.06) compared to ($0.24) for the previous year ending November
30, 2001.
20
During the year ended November 30, 2002, the Corporation used $256,596 of its
cash resources for operating activities and $57,664 in its investing activities.
Included in the investing activities was $0 for mineral properties $57,664 for
exploration costs, and $0 in costs incurred in investigating potential
investments. These activities were funded by the initial cash balance on hand at
the beginning of the year plus funds raised during the year. During the fiscal
year, the Corporation received $330,500 from private placements $180,250 from
the exercise of warrants and $12,750 from the exercise of incentive stock
options. As a result, the Corporation had a negative cash flow of $315,085 and a
cash balance of $126,202 as at November 30, 2002.
YEAR ENDED NOVEMBER 30, 2001
During the year ended November 30, 2001, the Corporation used $151,574 of its
cash resources for operating activities and $42,215 in its investing activities.
Included in the investing activities was $20,186 for mineral properties, $19,293
for exploration costs, and $1,772 in costs incurred in investigating potential
investments. These activities were funded by the initial cash balance on hand at
the beginning of the year plus funds raised during the year. During the fiscal
year, the Corporation received $125,000 from a private placement As a result the
Corporation had a negative cash flow of $679,437 and a cash balance of $59,833
as at November 30, 2001.
OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES
As at February 27, 2002 we cancelled all previously outstanding stock options
and issued rights to purchase or acquire an aggregate of 505,000 Common Shares
pursuant to stock options and other outstanding rights to purchase securities,
including the warrants listed in Item 6.B "Director and Employee Stock Options".
The closing market price of the Common Shares on November 30, 2003 on the TSX
Venture Exchange was $0.17. In February, 2004, the Company re-priced all
existing stock options to $0.25 per share. In February, 2004, the Company issued
120,000 stock options exercisable at $0.25 per share to directors, officers and
a consultant of the Company.
5.B LIQUIDITY AND CAPITAL RESOURCES
Our primary source of funds since incorporation has been from the sale of our
Common Shares through private placements and the exercise of incentive stock
options and share purchase warrants. We have no revenue from mining to date and
do not anticipate mining revenues in the foreseeable future. We believe that we
have adequate working capital to proceed with the Company's planned exploration
programs.
We have no loan agreements or other current financing plans to raise additional
capital. However, the Board of Directors may seek to increase the exploration
budget through private placements if we receive positive geological results
warranting future exploration.
The Corporation does not know of any trends, demands, commitments, events or
uncertainties that will result in, or that are reasonably likely to result in,
the Corporation's liquidity either materially increasing or decreasing at
present or in the foreseeable future. Material increases or decreases in the
Corporation's liquidity are substantially determined by the success or failure
of the Corporation's exploration programs or the future acquisition of projects.
From the beginning of fiscal 2004 to August, 2004, the Company has received
$2,295,000 from private placements, $347,950 from the exercise of warrants and
$0 from the exercise of stock options. The private placements consist of the
issuance of 850,000 common shares at $0.24 and 850,000 share purchase warrants
exercisable at $0.35 which expire August 2006; the issuance of 2,500,000 common
shares at $0.24 and 1,250,000 common share purchase warrants exercisable at
$0.35 which expire March 2006; and, the issuance of 3,000,000 common shares at
$0.54 per share and 1,500,000 common share purchase warrants exercisable at
$0.80 which expire in May of 2006.
During the year ended November 30 2003, we used $136,418 of our cash resources
for operating activities and $27,783 in investing activities. These activities
were funded by initial cash balances on hand at the beginning of the year and
funds raised during the year. During the fiscal year we received $107,500 from a
private placement, in which 225,000 common shares were issued at $0.30 per share
with warrants to purchase a further 225,000 shares at $0.42 which expire in
November of 2005. $33,750 was received from the exercise of warrants and $44,250
from the exercise of options.
21
During the fiscal year 2002, the Corporation received $330,500 from private
placements $180,250 from the exercise of warrants and $12,750 from the exercise
of incentive stock options. The private placements consisted of the issuance of
212,000 common shares at $0.92 per share and 212,000 common share purchase
warrants exercisable a $1.20 which warrants expired in June of 2004. A further
issuance by way of private placement consisted of the issuance of 62,500 common
shares at $0.48 and 62,500 common share purchase warrants exercisable at $0.60
which warrants expire in November 2004.
During the fiscal year 2001, the Corporation received $125,000 from a private
placement. This private placement consisted of the issuance of 375,000 common
shares at $0.40 per share and 375,000 common share purchase warrants exercisable
at $0.48 which warrants expired in September, 2002.
5.C OFF BALANCE SHEET ARRANGEMENTS
Not Applicable
5.D TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
Payments Due by Period
Less than 1 - 3 3-5 More Than
one Year Years Years 5 yrs
Contractual Obligations N/A N/A N/A N/A
Capital (Finance) Lease Obligations N/A N/A N/A N/A
Purchase Obligation See Note 1 See Note 1 N/A
Other Long Term Liabilities Reflected
In the Company's Balance Sheet under
GAAP of the primary financial statements N/A N/A N/A N/A
Note 1. The Company is obliged to pay 200,000 common shares at a deemed price of
$1.22 (CDN) per share to the principal of Minera Koripampa del Peru company in
consideration of the Company's purchase of the Amata Project in Peru. These
shares will be paid in July of 2005. The Company is also obliged to make certain
option payments and work commitments until 2008, which payments are detailed in
Item 4.D "Property Acquisition, Amata Project".
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The following table sets forth the names and addresses of each of our directors
and officers, their principal occupations and their respective date of
commencement of their term. All directors and officers hold office until the
next annual general meeting of our shareholders or until successor can be
appointed.
22
NUMBER OF
COMMON SHARES OF
THE CORPORATION
BENEFICIALLY OWNED PERCENTAGE OF
NAME, OR DIRECTLY/ ISSUED SHARE
MUNICIPALITY OF RESIDENCE PRINCIPAL OCCUPATION DURING THE INDIRECTLY CAPITAL (3)
AND POSITION WITH CORPORATION PAST FIVE YEARS CONTROLLED (2) (3)
------------------------------------- ------------------------------------- ------------------------ ---------------
GARY FREEMAN President and Director of Wealth 308,807 direct 11.5%
Vancouver, British Columbia Minerals Ltd. from March, 2000 to 720,557 indirect
Canada present. Mr. Freeman has been in
President, CEO and Director the investment community for over
18 years and has been responsible
for the financing of many public
companies, such as Lion Lake
Resources, Palmer Resources and
Indico Technologies. He has
worked in the development and the
structuring of projects from early
stages. Mr. Freeman began working
with Wealth Minerals Ltd. in 1996
and had worked as project
co-coordinator on a contract
basis.
------------------------------------- ------------------------------------- ------------------------ ---------------
JERRY G. POGUE Past President of Wealth Minerals 361,405 5.9%
Vancouver, British Columbia Ltd. Mr. Pogue is a self-employed
Canada business consultant and has been a
Director financier since 1994. Mr. Pogue
was previously the President, CEO,
Chairman and a Director of Palmer
Resources Ltd. from May, 1996 to
February, 1999; Prior to 1994 was a
Registered Representative with
National Securities Corp., Seattle,
WA, USA from 1981 to 1993
------------------------------------- ------------------------------------- ------------------------ ---------------
GIL ATZMON, (1) Director and Corporate Secretary of Nil N/A
San Antonio, Texas the Company since February, 2003.
Mr. Atzmon is presently an independent
Corporate Finance Consultant. In the
past, Mr. Atzmon has served as the VP of
Corporate Development for two publicly
listed companies, Ivanhoe Mines and
Dayton Mining, both located in
Vancouver, BC. Mr. Atzmon has worked in
the investment community as a mining
equity portfolio manager and in
institutional sales. Mr. Atzmon holds a
Masters in Energy and Mineral Resources
from the University of Texas at Austin
and a Bachelors in Geology and Geography
from Columbia University.
23
------------------------------------- ------------------------------------- ------------------------ ---------------
MICHAEL BARTLETT President and Owner of Leisure Nil N/A
Florida, USA Capital & Management Inc., a
Director company which specializes in the
pre-development, start-ups in innovative
strategic, conceptual, economic and
financial solutions from 1989 to present;
from 1998 director, chairman and President
of Indico Technologies Corporation, a
public company trading on the TSX Venture
Exchange; from 1996 to present, President
& CEO of Creative Entertainment &
Technologies, Inc., a public company
trading on the TSX Venture Exchange; from
January 1995 to 1996 President and CEO of
National Maritime Authority
------------------------------------- ------------------------------------- ------------------------ ---------------
JON LEVER (1) Mr. Lever has been a Certified 45,833 .005%
VANCOUVER, B.C., Management Accountant since October
CHIEF FINANCIAL OFFICER 1991. President, Lever Capital
Corporation since September 1995, a
private company providing financial and
operations management, and regulatory and
internal financial reporting for public
companies. CFO of Lalo Ventures Limited
since February 20, 2004, and CFO of
Tournigan Gold Corporation since April 1,
2004. Both companies are involved in
mineral exploration and are listed on the
TSX Venture Exchange. Former director of
Finance, Digital Pioneer Technologies
Corp., a private technology equipment
manufacturer, from April 2000 to April
2002. Former director of Consolidated
Agarwal Resources Ltd., a public issuer
not currently trading, from February 26,
2001 to December 31, 2003. Former director
of Player Petroleum Corporation, a public
oil and gas producer, from January 1996 to
March 1999.
------------------------------------- ------------------------------------- ------------------------ ---------------
(1) Member of the Audit Committee of the Corporation
(2) Common shares and options beneficially owned, directly or
indirectly, or over which control or direction is exercised, as at
the date hereof, based upon information furnished to the Corporation
by individual directors and officers. Unless otherwise indicated,
such shares or options are held directly. These figures do not
include shares that may be acquired on the exercise of any share
purchase warrants held by the respective directors and officers.
Details of options held by the directors and officers are set forth
under "Options and Other Rights to Purchase Shares - Outstanding
Stock Options".
(3) The directors, officers and other members of management of the
Corporation, as a group beneficially own, directly or indirectly,
1,436,602 Common Shares of the Corporation, representing 18.19% of
the total issued and outstanding Common Shares of the Corporation as
at Sept. 22nd , 2004.
MANAGEMENT
At the Annual General Meeting held on August 13, 2003, Gary Freeman, Michael
Bartlett, Gil Atzmon , and Jerry Pogue were elected as directors of the Company.
Mr. Freeman was elected to the office of President at that time.
Gary Freeman provides his services as President to the Company on a full time
basis. The Company has no other full or part time employees and hires
consultants on an as needed basis.
INVESTOR RELATIONS
We have no investor relations agreements in place.
6. B COMPENSATION OF DIRECTORS AND OFFICERS
The following tables set forth all annual and long term compensation for
services in all capacities to the Corporation and its subsidiaries for each of
the past three completed fiscal years in respect of the Company's directors and
members of its administrative, supervisory or management bodies.
24
SUMMARY COMPENSATION TABLE
--------------------- ------------------------------------------------- ------------------------------------ --------------
Annual Compensation Long Term Compensation
Awards Payouts
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
Common
Shares Restricted
Under Shares or All other
Other Options\ Restricted LTIP Compensation
Name and Principal Fiscal Salary Bonus Annual Comp SARs granted Share Payout ($)
Position Year End ($) ($) ($) (#) Units ($) ($)
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
Gary R. Freeman, Nov 30/03 $60,000 Nil Nil 35,000(2)
Director, President
Nov 30/02 $60,000 Nil Nil 250,000 Nil Nil Nil
Nov 30/01 $60,000 Nil $30,000
Nov 30/00 $60,000 Nil Nil
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
Jerry G. Pogue Nov. 30/03 Nil Nil Nil 25,000(2) N/A N/A N/A
Director,
Nov. 30/02 Nil Nil Nil 90,000 N/A N/A N/A
Nov 30/01 Nil Nil Nil 45,000 N/A N/A N/A
Nov 30/00 $51,250 N/A N/A 45,000
Nov 30/99 $55,000 Nil Nil Nil Nil Nil Nil
Nov.30/98 $46,000 Nil Nil Nil Nil Nil Nil
Nov.30/97 Nil Nil Nil 100,000 Nil Nil Nil
Nov.30/96 Nil
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
William R. Green, Nov 30.02 Nil Nil $31,400 50,000
Director (3)
Nov30/01 Nil $10,000 20,000 NA N/A N/A
Nov 30/00 $6,787
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
Michael Bartlett, Nov 30/03 Nil Nil Nil 20,000(2) N/A N/A N/A
Director
Nov 30/02 Nil Nil Nil 50,000 N/A N/A N/A
Nov 30/01 Nil Nil Nil 20,000 N/A N/A N/A
Nov 30/00 Nil Nil Nil
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
Gil Atzmon, Nov 30.03 Nil Nil Nil 20,000(2) N/A N/A N/A
Director(1)
--------------------- -------------- ------------ -------- ------------ ------------- ----------- ---------- --------------
(1) Member of the Audit Committee
(2) Options were granted in February, 2004 after a reverse stock split
of four old shares for one new share January 14, 2004..
(3) William Green resigned as a director in December, 2002.
No other executive officer received direct or indirect compensation from any
source for services provided to the Corporation during the most recently
completed financial year.
25
From the beginning of fiscal 2004 to present , G. F. Consulting, a private
corporation owned by Gary Freeman participated in a private placement whereby
G.F. Consulting Corp. purchased 300,000 common shares at a price of $0.27 per
share and 150,000 warrants exercisable at $0.35. These warrants expire in August
2005.
From the beginning of fiscal 2004 to present, Amergold Investments Inc., a
private corporation owned by Gary Freeman participated in a private placement
whereby Amergold Investments Inc. purchased 200,000 common shares at a deemed
price of $0.54 per share and 100,000 share purchase warrants exercisable at
$0.80. These warrants expire in May, 2006.
In May, 2004, Gil Atzmon, a director of the Corporation participated in a
private placement whereby he purchased 15,000 common shares at $0.54 and 7,500
share purchase warrants exercisable at $0.80 until May, 2006.
During fiscal 2003, G.F. Consulting Corp., a private corporation wholly owned by
Gary Freeman, participated in a private placement whereby G.F. Consulting Corp.,
purchased 200,000 common shares at a price of $0.07 per share and 200,000 common
share purchase warrants exercisable at $0.105. These warrants expire in November
2005.
During fiscal 2003, Jerry Pogue, a director of the Company, participated in a
private placement and purchased 200,000 common shares at a price of $0.07 per
share and 200,000 common share purchase warrants exercisable at $0.105. These
warrants expire in November, 2005.
During fiscal 2002, G.F. Consulting Corp. ,participated in two private
placements whereby G.F. Consulting Corp. purchased 150,000 common shares at
$0.10 per share and 238,000 common shares at $0.23 per share and 150,000 common
share purchase warrants exercisable at $0.15 and 238,000 common share purchase
warrants exercisable at $0.30. These warrants expire in October, 2004.
OUTSTANDING EMPLOYEE AND DIRECTOR STOCK OPTIONS AS AT SEPTEMBER 9, 2004
--------------------------- ------------------ ----------------- ---------------- ------------------ -------------------
NO. OF
COMMON EXERCISE MARKET VALUE ON
SHARES SUBJECT DATE OF GRANT/ PRICE DATE OF
NAME OF OPTIONEES TO OPTION (#) REPRICED $ EXPIRY DATE GRANT/REPRICED
--------------------------- ------------------ ----------------- ---------------- ------------------ -------------------
Jerry Pogue 90,000 March 1, 2002 $0.17 March 1, 2007 $16,150
--------------------------- ------------------ ----------------- ---------------- ------------------ -------------------
Gary Freeman 250,000 March 1, 2002 $0.17 March 1, 2007 $34,000
--------------------------- ------------------ ----------------- ---------------- ------------------ -------------------
Gary Freeman 35,000 Feb. 9, 2004 $0.25 Feb. 9, 2009 $8,750
Jerry Pogue 25,000 Feb. 9, 2004 $0.25 Feb. 9, 2009 $6,250
Gil Atzmon 20,000 Feb. 9, 2004 $0.25 Feb. 9, 2009 $5,000
Michael Bartlett 20,000 Feb. 9, 2004 $0.25 Feb. 9, 2009 $5000
St. Andrew's Finance (1) 20,000 Feb. 9, 2004 $0.25 Feb. 9, 2009 $5000
TOTAL 625,000 $105,650
--------------------------- ------------------ ----------------- ---------------- ------------------ -------------------
(1) St. Andrew's Finance is a privately owned British Columbia corporation
controlled by Kathleen Martin, a contractor to the Company.
All issuances of shares for the past three years are represented in the
Company's financial statements incorporated by reference herein.
OUTSTANDING WARRANTS FROM PREVIOUS PRIVATE PLACEMENTS
26
As of January, 2004, there were warrants outstanding to purchase 115,917 common
shares exercisable at a price of $0.30 per share until June 5, 2004. 59,500 of
these warrants were exercised in June of 2004, for proceeds of $71,400. The
balance of these warrants expired in June, 2004 As at August, 2004 37,500
warrants exercisable at $0.60 until December 2004 remain outstanding. As at
August 2004 a further 225,000 warrants exercisable at $0.42 remain outstanding
until November, 2005. A further 400,000 warrants exercisable at $0.35 remain
outstanding until August 26, 2005. 400,000 warrants exercisable at $0.35 remain
outstanding until March 2006 and 1,500,000 warrants exercisable at $0.80 remain
outstanding until May, 2006. G.F. Consulting Corp. a private corporation owned
by Gary Freeman owns 150,000 warrants exercisable at $0.35 until March 2006.
Amergold Investments, a private corporation owned by Gary Freeman owns 100,000
share purchase warrants exercisable at $0.80 until May, 2006. Gil Atzmon, a
director of the Corporation owns 7,500 share purchase warrants exercisable at
$0.80 until May, 2006. Jon Lever, an officer of the Company owns 12,500 warrants
exercisable at $0.80 until May 2006. All other remaining warrants are owned by
private individuals or corporations not related to Wealth.
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
We have no defined benefit or actuarial plans.
TERMINATION OF EMPLOYMENT, CHANGES IN RESPONSIBILITY AND EMPLOYMENT CONTRACTS
We do not presently have any outstanding employment contracts.
MANAGEMENT AND CONSULTING CONTRACTS
We have utilized the services of Dr. William R. Green, a former director of the
Corporation to provided geological and consulting services to the Corporation
with respect to its existing properties and in identifying other properties of
potential interest. The Company will continue to utilize Dr. Green's services as
the need arises. We compensate Dr. Green by payment to Mines Management Inc., a
company owned by Dr. Green and his associates. The compensation paid to Dr.
Green is comparable to that which would have been paid for services rendered by
unaffiliated parties.
Pursuant to a Letter of Engagement dated February 18, 1997 ("Letter of
Engagement") the Corporation engaged the geological services of Mr. Timothy J.
Percival. Under the Letter of Engagement the Corporation compensates Mr.
Percival at a rate of $350.00 USD/day which is billed on a monthly basis. The
Corporation has also agreed to reimburse Mr. Percival for all reasonable out of
pocket expenses which is also billed on a monthly basis. In addition the
Corporation has also agreed to reimburse Mr. Percival a total of $395.00
USD/month towards office expenses. In accordance with the Letter of Engagement
the Corporation has agreed to pay a Finder's Fee if the Corporation acquires,
either by location or by negotiated agreement, a property recommended by Mr.
Percival as a result of data or general information supplied by Mr. Percival.
Pursuant to an agreement made in July, 2002, Mr. Percival's services were no
longer required and a payment of USD$10,000 was made to Mr. Percival with
respect to any Finder's Fee payable to Mr. Percival for any past or future
acquisitions we may make.
During fiscal 2003, 628894 B.C. Ltd., a private British Columbia Company owned
by Kathleen Martin was compensated for administrative and supervisory work in
connection with the Company's regulatory filings, audit and quarterly report
preparation and filings and business affairs. This compensation did not exceed
$20,000 (CDN).
COMPENSATION OF DIRECTORS
Except as described below, we have no arrangements, standard or otherwise,
pursuant to which directors are compensated by the Company for their services in
their capacity as directors, or for committee participation, involvement in
special assignments or for services as consultant or expert during the most
recently completed financial year or subsequently.
None of our directors have received any manner of compensation for services
provided in their capacity as directors during the most recently completed
financial year with the exception of stock options granted to our directors.
PROPOSED COMPENSATION
We have determined the amount of compensation to be granted to directors for the
12 months beginning December 1, 2003 as follows:
27
MONTHLY YEARLY
CDN. CDN.
--------------------------------------------------------------------------------
Gary Freeman $5,000 $60,000
Except as disclosed above, we have no standard arrangement pursuant to which
officers or directors are compensated for their services, except for the
granting from time to time of incentive stock options in accordance with
policies of the TSX Venture Exchange.
6.C BOARD PRACTICES
The Audit Committee consists of Jon Lever, CFO and chairman of the Audit
Committee, and Gil Atzmon. The Company does not currently have any other
committees. The Audit Committee reviews all financial statements and
communicates revisions to the Board prior to any acceptance of the financial
statements and filing of the statements with the Regulatory Authorities.
ITEM 7. A MAJOR SHAREHOLDERS
The Company currently has a total of 12 shareholders who are resident in the
United States. These shareholders own a total of 717,422 shares representing
eight percent (8%) of the issued common shares.
Gary Freeman owns directly and indirectly a total of 11.5% of the issued common
shares. Mr. Freeman's subscription to private placements, exercise of stock
options and exercise of common share purchase warrants are attributable to Mr.
Freeman's percentage share ownership of the common shares of the Company.
7.B RELATED PARTY TRANSACTIONS
Please see Item 6.B for a summary of private placements in which certain of the
Company's officers and directors were involved.
We pay G.F. Consulting Corp., a company wholly owned by Gary Freeman, for rent
and communication expenses. The compensation paid to Mr. Freeman is comparable
to that which would have been paid for services rendered by unaffiliated
parties.
We paid a total of $ 18,750 during the 1999 fiscal period to Mr. Gary Freeman in
consulting fees. Mr. Gary Freeman also has two separate Stock Option Agreements
with the Corporation, one dated June 10, 1998 for the right to purchase 20,000
common shares at the exercise price of $0.15 per share and the other dated April
4, 2000 for the right to purchase 70,000 common shares at the price of $0.52 per
share. These options were cancelled February, 2002.
ITEM 8 FINANCIAL INFORMATION
ITEM 8.A CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
See Item 17
There are currently no legal or arbitration proceedings which may have a
significant effect on the Company's financial position or profitability.
The Company does not pay dividends on the issued common shares and does not
intend to pay dividends on the listed common shares in the foreseeable future.
The Company does not have any preference shares issued and as such pays no
dividends on any preferred shares.
8.B SIGNIFICANT CHANGES
28
Other than the issuance of common shares by way of private placement, the
granting of incentive stock options and the payment of $100,000 (US) and the
issuance of 200,000 common shares to Minera Koripampa del Peru for the
acquisition of the Amata project, there have been no significant changes since
the date of the Financial Statements
ITEM 9. THE OFFER AND LISTING
The Corporation was incorporated on October 7, 1994. The Company's Common Shares
were listed and posted for trading on the junior capital pool board of the
Alberta Stock Exchange on September 22, 1995 and are currently trading on the
TSX Venture Exchange under the trading symbol "WML". Except for a period
commencing August 11 to present, the Company's shares have traded on NASD's
OTCBB since 1995. The Company's common shares currently trade on the Pink
Sheets. From 2001 to January, 2004 the Company traded under the symbol TRDBF on
the OTCBB. From January 2004 to August 11, 2004, the Company's shares were
traded on the OTCBB under the symbol "WMLLF" Prior to 2001, the Company traded
under the symbol TRBPF on the OTCBB. On August 22, 1996, the Corporation
acquired the Standard Creek Property in British Columbia (the "Major
Transaction"). Upon completion of the Corporation's Major Transaction, the
Corporation was no longer considered a junior capital pool corporation pursuant
to the Alberta Stock Exchange Junior Capital Pool Policies, so its Common Shares
thereafter traded on the Alberta Stock Exchange, now the TSX Venture Exchange as
a normal course issuer.
HISTORICAL STOCK PRICES ON TSXV (IN CANADIAN DOLLARS)
PRICE 1999 2000 2001 2002 2003
----- ---- ---- ---- ---- ----
HIGH $1.09 $0.75 $0.15 $0.46 $0.37
LOW $0.19 $0.13 $0.08 $0.10 $0.10
HISTORICAL STOCK PRICES ON TSXV (IN CANADIAN DOLLARS) QUARTERLY FROM 2002
PRICE Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004
---------- -------- ---------- ---------- ---------- ---------- --------- --------- ---------- --------- ---------
HIGH $0.32 $0.46 $0.46 $0.35 $0.50 $0.30 $0.29 $0.20 $0.15 $1.20
LOW $0.10 $0.24 $0.27 $0.12 $0.315 $0.175 $0.20 $0.09 $0.09 $0.335
HISTORICAL PRICES ON TSXV (IN CANADIAN DOLLARS) MONTHLY FROM FEBRUARY 2004 TO
PRESENT
PRICE FEB. 2004 MAR. 2004 APR. 2004 MAY 2004 JUN. 2004 JUL. 2004
----- ---------- --------- --------- -------- --------- ---------
HIGH $0.35 $0.66 $1.20 $1.50 $1.35 $1.25
LOW $0.335 $0.43 $0.64 $0.93 $1.18 $0.78
HISTORICAL PRICES ON OTCBB (IN U.S. DOLLARS)
PRICE * 2001 2002 2003
------- ---- ---- ----
HIGH $0.07 $0.32 $0.245
LOW $0.02 $0.109 $0.07
29
* the Company's stock was traded on the OTCBB from 1995 to 2001 under the symbol
TRBPF; however, we are unable to access historical pricing information prior to
2001.
HISTORICAL PRICES ON OTCBB( IN U. S. DOLLARS) QUARTERLY FROM 2002
PRICE Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ----------
HIGH $0.25 $0.25 $0.32 $0.155 $0.245 $0.19 $0.16 $0.11 $0.07 $1.00
LOW $0.11 $0.15 $0.15 $0.109 $0.13 $0.13 $0.11 $0.07 $0.07 $0.48
HISTORICAL PRICES ON OTCBB (IN U.S. DOLLARS) MONTHLY FROM FEBRUARY 2004 TO JULY
31, 2004.
PRICE FEB. 2004 MAR. 2004 APR. 2004 MAY 2004 JUN. 2004 JUL. 2004
----- --------- --------- --------- -------- --------- ---------
HIGH N/A N/A $0.87 $0.85 $1.00 $0.85
LOW N/A N/A $0.65 $0.48 $0.845 $0.85
There were no trades recorded on the OTCBB in February, and March of 2004. The
Company has not traded on the OTCBB during the months of August and September.
The closing price of the Company's shares on the TSX Venture Exchange on
September 22nd, 2004 was $0.70 (CDN).
ITEM 10. ADDITIONAL INFORMATION
10.B ARTICLES, MEMORANDUM AND BY-LAWS OF THE CORPORATION
The Memorandum and Articles of Incorporation, outlining all classes of shares,
shareholder rights, alteration of rights, privileges, directors' powers,
borrowing powers of the directors and their ability to bind the corporation,
sinking fund provisions, meetings of shareholders and shareholder rights in the
event of liquidation of the Company's assets are attached as an Exhibit and are
incorporated herein by reference.
There are currently no anti-takeover, poison pill or shareholder rights
protections in the event of a takeover bid in place.
The by-laws of the Company restrict a director's power to vote on matters in
which the director is materially invested. The directors may vote for
compensation to themselves in the absence of a regular quorum; however, they are
bound by the guidelines of the TSX Venture Exchange as to the amount any one
director may receive as compensation as a director of a Tier 2 listed company. A
director of a Tier 2 listed company may not be compensated by salary any more
than $5,000 per month. The directors are not restricted in their borrowing
powers. There is no requirement for directors to own shares of the Company in
order to act as directors.
The authorized capital consists of an unlimited number of common shares ("Common
Shares") and an unlimited number of preferred shares, without par value.
A duly called and properly constituted meeting of the shareholders is required
in order to change any of the rights attached to the ownership of the Company's
shares.
30
In order for a shareholder's meeting to be properly constituted, sufficient
notice must be given to the shareholders, an information circular and proxy form
must be sent to each shareholder and a quorum of 5% of the issued shares must be
present by proxy or in person in order for any shareholder resolutions to pass.
10.C MATERIAL CONTRACTS
In June 2004 the Company entered into an Option Agreement whereby it acquired
the option to obtain 100% interest in certain mineral rights in Peru. For a
discussion of the terms of the Option Agreement, see Item 4.D, "Property
Acquisition, Amata Project".
10.D EXCHANGE CONTROLS
There are no laws or legislation which may effect the import or export of
capital including the availability of cash or cash equivalents to be used by the
Company. Other than the standard withholding tax, there are no other laws that
affect the remittance of dividends, interest, or other payments to non-resident
holders of the Company's shares.
10.E TAXATION
ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CCONSEQUENCES OF PURCHASING THE COMMMON SHARES
CERTAIN CANADIAN FEDERAL INCOME TAX CONSEQUENCES TO UNITED STATES INVESTORS
The following is a summary of the principal Canadian federal income tax
consequences to a shareholder of acquiring, holding and disposing of common
share where, for the purposes of the ITA, the holder (a) is not resident in
Canada, (b) does not, and is not deemed to, carry on business in Canada, (c)
holds common shares as capital property, and (d) is the beneficial owner of the
common shares, and where, for the purposes of the Canada-United States Income
Tax Convention (1980) (the "Convention"), the shareholder is resident in the
United States.
The summary is based on the current provisions of the ITA and the regulations
thereunder and on the Company's understanding of the current administrative
practices of Canada Customs and Revenue Agency. The provisions of the ITA are
subject to the provisions of the Convention. The summary also takes into account
all specific proposals to amend the ITA and the regulations thereunder publicly
announced by the Minister of Finance of Canada through November 1997. The
summary does not otherwise take into account or anticipate any changes in law,
whether by legislative, governmental or judicial decision or action, nor does it
take into account or consider any provincial, territorial or foreign income tax
considerations. The summary is of a general nature only and is not a substitute
for independent advice from a shareholder's own tax advisors.
DIVIDENDS ON COMMON SHARES
Under the ITA, a nonresident of Canada is generally subject to Canadian
withholding tax at the rate of 25% on the gross amount of dividends paid or
credited to him by a corporation resident in Canada. The Convention limits the
rate to 15% of the gross amount of the dividends if the shareholder is resident
in the United States and the dividends are beneficially owned by him. The
Convention further limits the rate to 10% of the gross amount of the dividends
if the shareholder is also a corporation that beneficially owns at least 10% of
the voting stock of the payor corporation.
The Convention generally exempts from Canadian withholding tax dividends paid to
a religious, scientific, literary, educational or charitable organization or to
an organization exclusively administering a pension, retirement or employee
benefit fund or plan, if the organization is resident in the United States and
exempt from income tax under the laws of the United States. However, the payor
of such dividends may still be required to withhold and remit tax to Canada
Customs and Revenue Agency (which is refundable upon application by the
organization) unless the organization has obtained a valid letter of exemption
from Canada Customs and Revenue Agency. Organizations in possession of a valid
letter of exemption are normally listed in Revenue Canada's annual publication,
"List of United States Organizations Exempt from Canadian Non-Resident Tax under
Article XXI (1) of the Canada-United States Tax Convention."
31
DISPOSITION OF COMMON SHARES
The proceeds of disposition to a nonresident of Canada from the disposition of
common shares will be the sale price therefore. However, if common shares are
purchased by the Company from a nonresident of Canada other than in an open
market in the manner in which shares would normally be purchased by the public,
the proceeds of disposition to the shareholder will generally be the paid-up
capital of the common shares and the balance of the price received will be
deemed to be a dividend and taxable as described under "Dividends on common
shares."
Under the ITA only capital gains and capital losses realized on the disposition
of `taxable Canadian property" are taken into account by a nonresident of Canada
in computing income. The common shares will constitute taxable Canadian property
to a nonresident of Canada in a particular time, if any time in the preceding
five year, 25% or more of the issued shares of any class or series of the
capital stock of the Company belonged to the non-resident person, to persons
with whom the non-resident person did not deal at arm's length or to the
non-resident person and persons with whom he did not deal at arm's length.
The capital gains (or capital loss) of a non-resident of Canada from the
disposition of common shares that are "taxable Canadian property" will be the
amount, if any, by which his proceeds of disposition, less any costs of
disposition, exceed (or are far less than) the adjusted cost base of the common
shares to the holder immediately prior to the disposition. The portion of a
capital gain (the "taxable capital gain") and the portion of a capital loss (the
"allowable capital loss") required to be taken into account currently is as
follows:
July 1, 1999 - February 27, 2000 - 75%
February 28, 2000 - October 17, 2000 - 66 2/3%
October 18, 2000 - December 31, 2000 - 50%
Any allowable capital loss realized by the shareholder will, subject to the
rules in the ITA which deny or restrict the ability to utilize losses, be
deductible from taxable capital gains realized by the shareholder in the current
tax year, the three preceding taxation years or future taxation years.
The Convention relieves Unites States residents from liability for Canadian tax
on capital gains derived from a disposition of common shares unless:
(a) their value is derived principally from real property in Canada;
(b) the holder was resident I Canada for 120 months during any period 20
consecutive years preceding, and at any time during the 10 years
immediately preceding, the disposition and the common shares (or, in
certain circumstances, property for which the common shares were
substituted) were owned by him when he ceased to be resident in
Canada; or,
(c) they formed part of the business property of a permanent
establishment the holder has or had within the 12 months preceding
disposition, or pertained to a fixed base the holder has or had in
Canada, or was available to the United States resident in Canada for
purposes of performing independent personal services within the 12
month preceding the disposition.
We do not believe that the value of our shares is derived principally from real
property in Canada.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO UNITED STATES INVESTORS
The following general discussion sets forth a summary of the material Unites
States federal income tax consequences that are applicable to the following
persons who invest in and hold common shares as capital assets ("U.S.
Shareholders"): (i) citizens or residents (as specifically defined for federal
income tax purposes) of the United States, (ii) corporations or partnerships
created or organized in the United States or under the laws of the Unites States
or of any state and (iii) estates or trusts the income of which is subject to
Unites States federal income taxation regardless of its source. This discussion
does not deal with (a) all aspects of federal income taxation that may be
relevant to a particular U.S. Shareholder based on such U.S. Shareholder's
particular circumstances (including potential application of the alternative
minimum tax), (b) certain U.S. shareholders subject to special treatment under
the federal income tax laws or foreign individuals or entities, (c) U.S.
Shareholders owning directly or by attribution 10% or more of the common shares,
or (d) any aspect of state, local or non-United States tax laws. Additionally,
the following discussion assumes that the Company will not be classified as a
"foreign personal holding company" under the Internal Revenue Code of 1986, as
amended (the "Code")
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PASSIVE FOREIGN INVESTMENT COMPANY
For any taxable year of the Company, if 75% or more of the Company's gross
income is "passive income" (as defined in the Code) or if at least 50% of the
Company's assets, by average fair market value (or by adjusted income tax bases
if the Company elects), are assets that produce or are held for the production
of passive income, the Company will be a Passive Foreign Investment Company
("PFIC"). The Company may be a OFIC and, if so, may continue to be a PFIC for
the foreseeable future.
A U.S. Shareholder of a PFIC is subject to special U.S. federal income tax rules
in Sections 1291 to 1297 of the Code. As described below, these provisions set
forth two alternative tax regimes at the election of each such U.S. Shareholder,
depending upon whether the U.S. Shareholder elects to treat the Company as a
"qualified electing fund" (a "QEF Election")
U.S. SHAREHOLDERS ARE STRONGLY URGED TO CONSIDER MAKING A QEF ELECTION TO AVOID
CERTAIN POTENTIALLY SIGNIFICANT ADVERSE U.S. TAX CONSEQUENCES
1. The QEF Election Alternative
Each U.S. Shareholder is strongly urged to consider making a QEF Election
because of the potential benefits of such election that are discussed below and
because the Company anticipates that it will not have any earnings and profits
(as computed for United States federal income tax purposes) for the current
taxable year and little, if any, earnings and profits for any future taxable
year in which the Company is a PFIC. (There can be no assurance, however, that
this will be the case.) Accordingly, the timely making of the QEF Election as
discussed below, generally should, subject to the discussion below under "Other
"PFIC Rules", avoid any significant adverse United States federal income tax
consequences resulting form any classification of the Company as a PFIC,
although this may depend on a particular U.S. Shareholder's particular
circumstances.
A U.S. Shareholder who elects in a timely manner to treat the Company as a QEF
(an "Electing U.S. Shareholder") will be subject under Section 1293 of the Code,
to current federal income tax for any taxable year in which the Company is a
PFIC (or is treated as a PFIC with respect to the U.S. shareholder) on such
Electing U.S. Shareholder's pro rata share of the Company's (i) "net capital
gain" (the excess of net long term capital gain over net short-term capital
loss), which will be taxed as long-term capital gain to the Electing U.S.
Shareholder and (ii) "ordinary earnings" (the excess of earnings and profits
over net capital gain), which will be taxed as ordinary income to the Electing
U.S. Shareholder, in each case, for the shareholder's taxable year in which (or
with which) the Company's taxable year ends, regardless of whether such amount
actually are distributed. An Electing U.S. Shareholder, however, would not take
into account any income with respect to any taxable year of the Company for
which it has no earnings and profits. Adjustments are provided generally to
prevent double taxation at the time of later distributions on or dispositions of
common shares.
The QEF election also allows the electing U.S. Shareholder to (i) generally
treat any gain realized on the disposition of common shares (or deemed to be
realized on the pledge of such shareholder's common shares) as capital gain;
(ii) treat such shareholder's share of the Company's net capital gain, if any,
as long-term capital gain instead of ordinary income; (iii) probably (although
in the absence of regulations this matter is not free from doubt) retain the
case of an individual Electing U.S. Shareholder, the "step-up" in the tax basis
of common share to the fair market value of such shares on the date of such
Electing U.S. Shareholder's death (which would otherwise not be retained); and
(iv) generally avoid interest charges resulting from PFIC status altogether.
In the event the Company is deemed a PFIC, the Company intends to comply with
the reporting requirements prescribed by Treasury regulations. In particular,
the Company will maintain information so that the ordinary earnings and net
capital gain of the Company may be determined. However, future regulations may
contain reporting and record-keeping requirements that are so onerous that it
would not be practicable for the Company to comply. If, after review of the
requirements, the company decides not to comply with the PFIC record-keeping
requirements, the company will so notify its shareholders.
33
A QEF election must be made by attaching the following document to the timely
filed US. Federal income tax return for the first taxable year of the U.S.
Shareholder in which or with which a taxable year of the company during which
the Company was a PFIC and the U.S. Shareholder held (or was considered to have
held) common shares ends: (i) a "Shareholder Section 1295 Election Statement"
executed by the U.S. Shareholder, (ii) a "PFIC Annual Information Statement"
received by the U.S. Shareholder from the Company, and (iii) a Form 8621. In
addition, the Electing U.S. Shareholder must file a copy of the Shareholder
Section 1295 Election Statement with the Internal Revenue Service Center, P.O.
Box 21086, Philadelphia, PA 19114. In the case of common shares owned through a
U.S. entity, the election is made at the entity level.
The following three paragraphs apply to Electing U.S. Shareholders:
Dividends Paid on Common shares. Dividends paid on common shares (including any
Canadian taxes withheld) to an Electing U.S. Shareholder will be treated as
ordinary dividend income for United States federal income tax purposes to the
extent of the Company's current and accumulated earnings and profits (as
computed for U.S. federal income tax purposes) unless paid out of earnings and
profits that were taxed to the Electing U.S. Shareholder under the QEF rules.
Such dividends generally will not qualify for the dividends-received deduction
available to corporation. Amounts in excess of such earnings and profits will be
applied against the Electing U.S. Shareholder's tax basis in the common shares,
and to the extent in excess of such tax basis, will be treated as gain from the
sale or exchange of such common shares.
Credit for Canadian Taxes withheld. Subject to the limitations set forth in
Section 904 of the Code (which generally restricts the availability of foreign
tax credits to a U.S. Shareholder's tax liability attributable to foreign source
income of the same type as the income with respect to which the tax was imposed,
as determined under complex U.S. tax rules), the Canadian tax withheld or paid
with respect to dividends on the common shares generally may be taken as a
foreign tax credit again United States federal income taxes by an Electing U.S.
Shareholder who chooses to claim such a credit for the taxable year. Electing
U.S. Shareholders who do not choose to claim foreign tax credits for a taxable
year may claim a United States Tax deduction for such Canadian tax in such
taxable year.
Disposition of common shares. Any gain or loss on a sale or exchange of common
shares by an Electing U.S. Shareholder will be capital gain or loss, which will
be long-term capital gain or loss if the common shares have been held for more
than one year, and otherwise will be short-term capital gain or loss. The sale
of common shares through certain brokers may be subject to the information
reporting and back-up withholding rules of the Code.
2. The Non-QEF Alternative
If a U.S. Shareholder does not timely make a QEF election for the first taxable
year of the Company during which he holds (or is considered to hold) the common
shares in questions and the Company is a PFIC (a "Non-electing U.S.
Shareholder"), then special rules under Section 1291of the Code will apply to
(i) gains realized on the disposition (or deemed to be realized by reason of a
pledge) of common shares, and (ii) certain "excess distributions" (as defined in
the Code) by the Company. The Company has never made any distributions with
respect to the common shares and it does not anticipate making any such
distributions in the foreseeable future. A non-electing U.S. Shareholder
generally would be required to pr-rate all gains realized on the disposition of
common shares and all excess distributions over such shareholder's entire
holding period of the common shares. All gains or excess distributions allocated
to prior years of the U.S. Shareholder (provided that such periods are not prior
to the first day of the first taxable year of the Company during such U.S.
Shareholder's holding period and beginning after December 31, 2986 for which it
was a PFIC) would be taxed at the highest tax rates for each such prior year
applicable to ordinary income. (Special foreign tax credit rules apply with
respect to withholding taxes imposed on amounts that are treated as excess
distributions.) the Non-electing U.S. Shareholder also would be liable for
interest on the foregoing tax liability for each such prior year calculated as
if such liability had be due with respect to teach such prior year. A
non-electing U.S. Shareholder that is not a corporation must treat this interest
charge as "personal interest" which is non-deductible. The balance of the gain
or the excess distribution will be treated as ordinary income in the year of the
disposition or distribution and no interest charge will be incurred with respect
to such balance.
If the company is a PFIC for any taxable year during which a Non-electing U.S.
Shareholder holds (or is considered to hold) common shares, then the Company
will continue to be treated as a PFIC with respect to such common shares, even
if it is no longer definitely a PFIC. A Non-electing U.S. Shareholder may
terminate this deemed PFIC status by electing to recognize gain (which will be
taxed under the rules discussed above for Non-electing U.S. Shareholders) as if
such common shares had been sold on the last day of the last taxable year for
which it was a PFIC. Certain other elections are also available to Non-electing
U.S. Shareholders.
34
Other PFIC Rules:
Certain special, generally adverse, rules will apply with respect to the common
shares while the Company is a PFIC, regardless of whether the common shares are
held (or considered to be held) by an Electing or Non-electing U.S. Shareholder.
For example, under Section 1297(b)(6) of the Code, a U.S. Shareholder who uses
PFIC stock as security for a loan (including a margin loan) will, except as may
be provided in regulations, be treated as having made a taxable disposition of
such stock. In addition, under Section 1291(f) of the Code, the Treasury has the
authority to issue regulations that would treat as taxable certain transfers
that are generally not so treated, such as gifts, exchanges, pursuant to
corporate reorganizations, and transfers at death, although it is not clear that
such authority extends to transfers by Electing U.S. Shareholders.
FUTURE DEVELOPMENTS
The foregoing discussion is based on existing provisions of the Code, existing
and proposed regulations thereunder, and current administrative rulings and
court decisions, all of which are subject to change. Any such changes could
affect the validity of this discussion. In addition, the implementation of
certain aspects of the PFIC rules requires the issuance of regulations which in
many instances have not yet been promulgated and which may have retroactive
effect. Furthermore, legislation has bee proposed which would replace the PFIC
provisions with a consolidated anti-deferral regime. While this legislation was
vetoed, it may be re-introduced in subsequent years.
ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not Applicable
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES
Not Applicable
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
Not Applicable
ITEM 15. CONTROLS AND PROCEDURES
Gary Freeman, President and CEO of the Company, and Jon Lever,, CFO of the
Company, after evaluating the effectiveness of the Company's disclosure controls
and procedures (as defined in U.S. exchange Act Rule 13a-14(c)) as of the end of
the period covered by this form 20-F, have concluded that, as of such date, the
Company's disclosure controls and procedures were effective to ensure that
material information relating to the Company was made known to them by others
within the Company during the period in which this Form 20-F was being prepared.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date
Messrs Freeman and Lever completed their evaluation, nor were there any
significant deficiencies or material weaknesses in the Company's internal
controls requiring corrective actions.
35
ITEM 16. A AUDIT COMMITTEE FINANCIAL EXPERT
Jon Lever is our audit committee financial expert. Mr. Lever is independent of
the Company as he does not serve on its Board of Directors. Since Mr. Lever's
appointment as CFO, in September 2004 he has received no compensation for his
services to the Company as the CFO. His compensation for financial services in
fiscal 2003 did not exceed $10,000. He has received compensation for financial
services to the Company in the amount of $7,900 CDN from the end of fiscal 2003
to date.
16 B. CODE OF ETHICS
The Company has prepared a code of ethics for its CEO, CFO, Directors and
Officers which is included herein as Exhibits.
16 C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The nature of the services provided by Sadovnick, Telford and Skov under each of
the categories indicated in the table is described below.
Principal Accountant Service For the fiscal year ended November For the fiscal year ended 2002
30, 2003
------------------------------ --------------------------------------- --------------------------------------
Audit Fees $21,400.00 $16,050.00
------------------------------ --------------------------------------- --------------------------------------
Audit Related Services
------------------------------ --------------------------------------- --------------------------------------
Tax Fees $9,195.00 $7,169.00
------------------------------ --------------------------------------- --------------------------------------
All Other Fees $5,350.00
AUDIT FEES
Audit fees were for professional services rendered by Sadovnick, Telford and
Skov for the audit of the Registrant's annual consolidated financial statements
and services provided in connection with statutory and regulatory filing or
engagements.
AUDIT RELATED FEES
Audit related fees were for assurance and related services reasonably related to
the performance of the audit or review of the annual consolidated statements or
bi-annual states that are not reported under "Audit Fees" above.
TAX FEES
Tax fees were for tax compliance, tax advice and tax planning professional
services. These services consisted of: tax compliance including the review of
tax returns, and tax planning and advisory services relating to common forms of
domestic and international taxation (i.e. income tax, capital tax, goods and
services tax, payroll tax and value added tax).
ALL OTHER FEES
Fees disclosed in the table above under the item "all other fees" were incurred
for services other than the audit fees, audit-related fees and tax fees
described above. These services consist of assistance in the review and
documentation of processes and controls.
PRE-APPROVED POLICIES AND PROCEDURES
It is within the mandate of the Registrant's Audit Committee to approve all
audit and non-audit related fees. The Audit Committee has pre-approved
specifically identified non-audit related services, including tax compliance,
review of tax returns and documentation of processes and controls as submitted
to Audit Committee from time to time. The auditors also present the estimate for
the annual audit related services to the Committee for approval prior to
undertaking the annual audit of the consolodated financial statements.
36
PART III
ITEM 17. FINANCIAL STATEMENTS
The following financial statements are attached and incorporated herein:
DESCRIPTION OF STATEMENT
Consolidated Balance Sheets, Statements of Loss and Deficit Statement of
Resource Properties, Statement of Changes in Financial Position and Notes to
Consolidated Financial Statements, all for years ended November 30, 2003 and
2002 and 2001
ITEM 18. FINANCIAL STATEMENTS
See Item 17
ITEM 19. EXHIBITS
EXHIBIT NUMBER
PAGE
1.1 Certificates of Name Change dated July 18, 1996 and October 17, 1996. *
1.2 Certificate of Incorporation dated October 7, 1994. *
1.3 Articles (Bylaws) of the Corporation *
1.4 Amendments to Articles of the Corporation, dated July 18, 1996 and
October 16, 1996 *
2.1 Option Agreements between the Corporation and Management, Employees
and Director. *
4.1 Mining Lease and Option Agreement between St. George Metals, Inc.
and Triband Resource US Inc. dated June 29,1998 *
4.2 Letter of Engagement dated February 18, 1997 between the Corporation
and Timothy J. Percival. *
37
4.3 Option Assignment Agreement between Minera Koripampa del Peru S.A.
and Wealth Minerals dated July 6, 2004
4.4 CEO Code of Ethics
4.5 CFO Code of Ethics
4.6 Directors and Officers Codes of Ethics
5.1 Certificate of Name Change and Amendment to Articles of the
Corporation dated August 22, 2001 *
5.2 Certificate of Amendment and Name Change of the Corporation dated
December 12, 2003 *
12.1 President 302 Certification
12.2 Director 302 Certification
13.1 President 906 Certification
13.2 Director 906 Certification
14.1 Koripampa Letter
14.2 Amata Agreement
* The exhibits included in the Registrant's original Form 20-F are hereby
incorporated by reference.
38
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
WEALTH MINERALS CORP.
By: /s/ Gary R. Freeman
-----------------------
Gary R. Freeman,
President
Date: May 27 2004.
Amended September 22, 2004.
39