SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of MAY , 2003.
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IMA EXPLORATION INC.
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(Translation of registrant's name into English)
#709 - 837 West Hastings Street, Vancouver, British Columbia, V6C 3N6, Canada
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
--------- ---------
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): _______
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): _______
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3- 2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
IMA Exploration Inc.
(Registrant)
Date May 28, 2003 By /s/ William Lee
------------------------------ -------------------------------------
(Signature)
William Lee, Director and Chief Financial Officer
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1 Print the name and title of the signing officer under his signature.
BC FORM 51-901F
QUARTERLY REPORT
Incorporated as part of: X Schedule A
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X Schedules B & C
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(place x in appropriate category)
ISSUER DETAILS:
NAME OF ISSUER IMA EXPLORATION INC.
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ISSUER ADDRESS #709 - 837 WEST HASTINGS STREET
VANCOUVER, BC V6C 3N6
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ISSUER TELEPHONE NUMBER (604) 687-1828
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ISSUER FAX NUMBER (604) 687-1858
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CONTACT PERSON MR. NIKO CACOS
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CONTACT'S POSITION CORPORATE SECRETARY
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CONTACT'S TELEPHONE NUMBER (604) 687-1828
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CONTACT'S E-MAIL ADDRESS info@imaexploration.com
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WEBSITE www.imaexploration.com
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FOR QUARTER ENDED MARCH 31, 2003
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DATE OF REPORT MAY 28, 2003
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CERTIFICATE
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THE THREE SCHEDULE(S) REQUIRED TO COMPLETE THIS QUARTERLY REPORT ARE ATTACHED
AND THE DISCLOSURE CONTAINED THEREIN HAS BEEN APPROVED BY THE BOARD OF
DIRECTORS. A COPY OF THIS REPORT WILL BE PROVIDED TO ANY SHAREHOLDER WHO
REQUESTS IT.
JOSEPH GROSSO /S/ Joseph Grosso 03/05/28
-------------------------- -------------------- ----------------------
NAME OF DIRECTOR SIGN (TYPED) DATE SIGNED (YY/MM/DD)
WILLIAM LEE /S/ William Lee 03/05/28
-------------------------- -------------------- ----------------------
NAME OF DIRECTOR SIGN (TYPED) DATE SIGNED (YY/MM/DD)
(Signatures for this Form should be entered in TYPED form)
BC FORM 51-901F SCHEDULE A
--------------------------------------------------------------------------------
IMA EXPLORATION INC.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2003
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited - Prepared by Management)
March 31, December 31,
2003 2002
$ $
(Audited)
A S S E T S
CURRENT ASSETS
Cash and cash equivalents 1,599,438 1,436,124
Amounts receivable and prepaids 161,844 79,661
Marketable securities 23,460 23,460
------------- -------------
1,784,742 1,539,245
PROPERTY, PLANT AND EQUIPMENT 41,925 45,517
MINERAL PROPERTIES AND DEFERRED COSTS (Note 3) 6,459,871 5,847,727
------------- -------------
8,286,538 7,432,489
============= =============
L I A B I L I T I E S
CURRENT LIABILITIES
Accounts payable and accrued liabilities 142,124 108,351
------------- -------------
S H A R E H O L D E R S ' E Q U I T Y
SHARE CAPITAL (Note 4) 22,484,131 21,354,823
CONTRIBUTED SURPLUS 128,260 128,260
DEFICIT (14,467,977) (14,158,945)
------------- -------------
8,144,414 7,324,138
------------- -------------
8,286,538 7,432,489
============= =============
APPROVED BY THE BOARD OF DIRECTORS
/s/ Joseph Grosso, Director
----------------------------
/s/ William Lee, Director
----------------------------
The accompanying notes are an integral part of these interim
consolidated financial statements.
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
INTERIM CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited - Prepared by Management)
2003 2002
$ $
EXPENSES
Administrative and management services 59,250 58,700
Bank charges and interest 3,277 1,499
Corporate development and investor relations 73,142 50,940
Depreciation 5,546 4,892
General exploration 58,224 14,927
Office and sundry 7,975 8,790
Printing 7,036 4,555
Professional fees 27,944 3,007
Rent, parking and storage 13,862 17,880
Salaries and employee benefits 48,944 48,963
Telephone and utilities 10,424 6,839
Transfer agent and regulatory fees 4,538 6,522
Travel and accommodation 10,995 11,788
------------- -------------
LOSS BEFORE THE FOLLOWING (331,157) (239,302)
FOREIGN EXCHANGE 17,349 3,411
INTEREST AND MISCELLANEOUS INCOME 4,776 3,212
------------- -------------
LOSS FOR THE PERIOD (309,032) (232,679)
DEFICIT - BEGINNING OF PERIOD (14,158,945) (12,718,839)
------------- -------------
DEFICIT - END OF PERIOD (14,467,977) (12,951,518)
============= =============
BASIC AND DILUTED - LOSS PER COMMON SHARE $(0.01) $(0.01)
============= =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 27,158,205 18,981,497
============= =============
The accompanying notes are an integral part of these interim
consolidated financial statements.
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited - Prepared by Management)
2003 2002
$ $
OPERATING ACTIVITIES
Loss for the period (309,032) (232,679)
Item not involving cash
Depreciation 5,546 4,892
------------- -------------
(303,486) (227,787)
Decrease (increase) in amounts receivable and prepaids (82,183) 3,467
Increase in accounts payable and accrued liabilities 33,773 45,996
------------- -------------
(351,896) (178,324)
------------- -------------
INVESTING ACTIVITIES
Additions to property, plant and equipment (1,954) (791)
Expenditures on mineral properties and deferred costs (612,144) (344,353)
------------- -------------
(614,098) (345,144)
------------- -------------
FINANCING ACTIVITIES
Issuance of common shares 1,129,308 242,060
Share issue costs - (55,553)
------------- -------------
1,129,308 186,507
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 163,314 (336,961)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 1,436,124 755,765
------------- -------------
CASH AND CASH EQUIVALENTS - END OF PERIOD 1,599,438 418,804
============= =============
CASH AND CASH EQUIVALENTS IS COMPRISED OF:
CASH 794,569 418,804
TERM DEPOSIT 804,869 -
------------- -------------
1,599,438 418,804
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION
INTEREST PAID IN CASH - -
============= =============
INCOME TAXES PAID IN CASH - -
============= =============
The accompanying notes are an integral part of these interim
consolidated financial statements.
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(Unaudited - Prepared by Management)
1. NATURE OF OPERATIONS
The Company is in the process of exploring its mineral properties in South
America and evaluating other mineral properties. The Company presently has
no proven or probable reserves and on the basis of information to date, it
has not yet determined whether these properties contain economically
recoverable ore reserves. The amounts shown as mineral properties and
deferred costs represent costs incurred to date, less amounts amortized
and/or written off, and do not necessarily represent present or future
values. The underlying value of the mineral properties and deferred costs
is entirely dependent on the existence of economically recoverable
reserves, securing and maintaining title and beneficial interest in the
properties, the ability of the Company to obtain the necessary financing to
complete development, and future profitable production.
The Company considers that it has adequate resources to maintain its core
operations for the next year. See also Note 9.
2. SIGNIFICANT ACCOUNTING POLICIES
The interim consolidated financial statements of the Company have been
prepared by management in accordance with Canadian generally accepted
accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates. The consolidated
financial statements have, in management's opinion, been properly prepared
using careful judgement with reasonable limits of materiality. These
interim consolidated financial statements should be read in conjunction
with the most recent annual consolidated financial statements. The
significant accounting policies follow that of the most recently reported
annual consolidated financial statements.
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(Unaudited - Prepared by Management)
3. MINERAL PROPERTIES AND DEFERRED COSTS
March 31, 2003 December 31, 2002
---------------------------------------- ----------------------------------------
Deferred Deferred
Acquisition Exploration Acquisition Exploration
Costs Costs Total Costs Costs Total
$ $ $ $ $ $
Argentina:
Valle de Cura 661,635 1,879,077 2,540,712 661,635 1,879,040 2,540,675
Gualcamayo 85,621 16,240 101,861 85,621 16,240 101,861
NW San Juan 51,065 171,882 222,947 51,065 101,831 152,896
Chubut - 770,252 770,252 - 354,873 354,873
Other - 31,195 31,195 - 30,972 30,972
------------ ------------ ------------ ------------ ------------ ------------
798,321 2,868,646 3,666,967 798,321 2,382,956 3,181,277
Peru:
Rio Tabaconas 700,046 2,092,858 2,792,904 700,046 1,966,404 2,666,450
------------ ------------ ------------ ------------ ------------ ------------
1,498,367 4,961,504 6,459,871 1,498,367 4,349,360 5,847,727
============ ============ ============ ============ ============ ============
See also Note 9.
4. SHARE CAPITAL
Authorized: 99,708,334 common shares without par value
Issued:
March 31, 2003 December 31, 2002
-------------------------- --------------------------
Shares Amount Shares Amount
$ $
Balance, beginning of period 26,550,606 21,354,823 18,592,219 18,090,497
------------ ------------ ------------ ------------
Issued during the period for:
Private placements - - 5,703,026 2,552,870
Exercise of warrants 2,333,799 1,115,308 2,085,361 837,512
Exercise of options 35,000 14,000 170,000 68,000
Less: Share issue costs - - - (194,056)
------------ ------------ ------------ ------------
2,368,799 1,129,308 7,958,387 3,264,326
------------ ------------ ------------ ------------
Balance, end of period 28,919,405 22,484,131 26,550,606 21,354,823
============ ============ ============ ============
See also Note 9.
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(Unaudited - Prepared by Management)
5. STOCK BASED COMPENSATION
During the three months ended March 31, 2003, the Company granted stock
options to its employees and directors to purchase up to 223,500 shares of
the Company. The options are exercisable at $0.84 per share and have a 5
year term to expiry.
As the Company did not adopt the fair value method of accounting for stock
options granted to employees and directors, Section 3870 requires
disclosure of pro forma amounts that reflect the impact as if the Company
had adopted the fair value based method of accounting. Had compensation
costs for the Company's stock options granted to employees and directors
been accounted for under the fair value method, the Company's net loss and
loss per share would have increased as follows:
$
Net loss for the period
- as reported (309,032)
- compensation expense (113,985)
------------
- pro-forma (423,017)
============
Basic and diluted loss per share
- as reported $(0.01)
- pro-forma $(0.02)
The fair value of stock options granted to employees and directors was
estimated on the date of grant using the Black-Scholes option pricing model
with the following assumptions used for the grants made during the period:
Risk-free interest rate 4.37%
Estimated volatility 104%
Expected life 2.5 years
The weighted average fair value per share of stock options, calculated
using the Black-Scholes option pricing model, granted during the period to
the Company's employees, directors and consultants was $0.51 per share.
Option-pricing models require the use of estimates and assumptions
including the expected volatility. Changes in the underlying assumptions
can materially affect the fair value estimates and therefore, existing
models do not necessarily provide reliable measure of the fair value of the
Company's stock options.
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(Unaudited - Prepared by Management)
6. RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2003, the Company:
(i) paid $40,025 to companies controlled by certain directors and
officers of the Company for management and consulting services
provided;
(ii) paid $15,231 for rent to a company owned by the President of the
Company and his wife; and
(iii) received $6,000 from a private company with a common director for
shared rent and administration.
7. SEGMENTED INFORMATION
The Company's principal activities are the exploration of mineral
properties in Argentina and Peru. Management reviews the financial results
according to expenditures by property.
Segment assets by geographical location are as follows:
March 31, 2003
---------------------------------------------------------
Canada Argentina Peru Total
$ $ $ $
Property, plant and equipment 30,854 5,817 5,254 41,925
Mineral properties and deferred costs - 3,666,967 2,792,904 6,459,871
------------ ------------ ------------ -----------
30,854 3,672,784 2,798,158 6,501,796
============ ============ ============ ===========
December 31, 2002
---------------------------------------------------------
Canada Argentina Peru Total
$ $ $ $
Property, plant and equipment 34,323 5,817 5,377 45,517
Mineral properties and deferred costs - 3,181,277 2,666,450 5,847,727
------------ ------------ ------------ -----------
34,323 3,187,094 2,671,827 5,893,244
============ ============ ============ ===========
BC FORM 51-901F SCHEDULE A
IMA EXPLORATION INC.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(Unaudited - Prepared by Management)
8. FAIR VALUES OF FINANCIAL INSTRUMENTS
The fair value of the Company's financial instruments consisting of cash
and cash equivalents, amounts receivable and prepaids and accounts payable
and accrued liabilities approximate their carrying values, due to their
short-term nature. As of March 31, 2003, the market value of marketable
securities was $95,795.
9. SUBSEQUENT EVENTS
During the three months ended March 31, 2003, the Company:
(a) completed a brokered private placement for 2,900,000 units at a price
of $0.90 for cash proceeds of $2,497,248, net of commission costs of
$112,752. Each unit consisted of one common share of the Company and
one-half non-transferable common share purchase warrant. One whole
warrant entitles the holder to purchase one common share for the
exercise price of $1.10 on or before April 28, 2004. In addition, the
Company granted the agent an option to purchase 195,750 units on the
same basis as the private placement;
(b) issued 302,000 shares for $136,800 on the exercise of options. In
addition, the Company issued 561,280 shares for $303,836 on the
exercise of warrants and agents warrants;
(c) agreed, subject to regulatory approvals, to farm out its Mogote
Property in the NW San Juan Region of Argentina to Amera Resources
Corporation ("Amera"), a private company which has a common director.
Amera has the option to earn a 51% interest in the 8,009 hectare
Mogote Property by issuing 1,650,000 common shares of Amera to the
Company and by incurring US$1.25 million of expenditures, including
work programs and underlying option payments, all over a five year
period; and
(d) agreed, subject to regulatory approvals, to sell a 100% undivided
interest in three mineral properties, comprising 24,280 hectares (the
"Chubut Properties"), located in Chubut Province, Argentina, for
500,000 common shares of Amera. In addition, in the event that a
decision is made to place the Chubut Properties into commercial
production, Amera will pay the Company a bonus of US$250,000 and a 3%
net smelter returns royalty.
BC FORM 51-901F SCHEDULE B
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE THREE MONTHS ENDED MARCH 31, 2003
1.(a)GENERAL AND ADMINISTRATIVE EXPENSES
$
Administrative and management services 59,250
Bank charges and interest 3,277
Corporate development and investor relations 73,142
Depreciation 5,546
Office and sundry 7,975
Printing 7,036
Professional fees 27,944
Rent, parking and storage 13,862
Salaries and employee benefits 48,944
Telephone and utilities 10,424
Transfer agent and regulatory fees 4,538
Travel and accommodation 10,995
------------
272,933
============
1.(b)MINERAL PROPERTIES AND DEFERRED COSTS
Argentina Peru
-------------------------------------------------------------------- ------------
Valle NW Rio
de Cura Gualcamayo San Juan Chubut Other Tabaconas Total
$ $ $ $ $ $ $
Balance, beginning
of period 2,540,675 101,861 152,896 354,873 30,972 2,666,450 5,847,727
------------ ------------ ------------ ------------ ------------ ------------ ------------
Expenditures during
the period
Assays - - 7,823 24,243 - 1,580 33,646
Drilling - - - 248,044 - - 248,044
Environmental - - - - - 59,801 59,801
Field supplies - - 6,938 10,475 - 4,558 21,971
Field workers - - - - - 3,566 3,566
Geological - - 50,293 97,503 - 39,137 186,933
Office - - 2,019 5,254 - - 7,273
Other 37 - 2,476 1,703 223 - 4,439
Travel - - - 19,561 - 16,821 36,382
Vehicles - - 502 8,596 - 991 10,089
------------ ------------ ------------ ------------ ------------ ------------ ------------
37 - 70,051 415,379 223 126,454 612,144
------------ ------------ ------------ ------------ ------------ ------------ ------------
Balance, end of
period 2,540,712 101,861 222,947 770,252 31,195 2,792,904 6,459,871
============ ============ ============ ============ ============ ============ ============
BC FORM 51-901F SCHEDULE B
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE THREE MONTHS ENDED MARCH 31, 2003
1.(c)GENERAL EXPLORATION EXPENSES
$
Bank fees 3,476
Consulting 27,656
Geological 17,809
Office 5,302
Vehicles 3,981
---------
58,224
=========
2.(a)RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2003, the Company:
(i) paid $40,025 to companies controlled by certain directors and
officers of the Company for management and consulting services
provided; and
(ii) paid $15,231 for rent to a company owned by the President of the
Company and his wife; and
(iii) received $6,000 from a private company with a common director for
shared rent and administration.
3.(a)SECURITIES ISSUED DURING THE PERIOD ENDED MARCH 31, 2003
Date Type of Total Type of
of Issue Security Type of Issue Number Price Proceeds Consideration Commission
-------- -------- ------------- --------- ------- ----------- ------------- ----------
$ $ $
Jan. 2003 Common Warrants 13,500 0.45 6,075 Cash N/A
Feb. 2003 Common Options 10,000 0.40 4,000 Cash N/A
Feb. 2003 Common Warrants 400,000 0.45 180,000 Cash N/A
Feb. 2003 Common Warrants 112,015 0.54 60,488 Cash N/A
Mar. 2003 Common Options 25,000 0.40 10,000 Cash N/A
Mar. 2003 Common Warrants 2,000 0.75 1,500 Cash N/A
Mar. 2003 Common Warrants 11,111 0.53 5,889 Cash N/A
Mar. 2003 Common Warrants 1,330 0.50 665 Cash N/A
Mar. 2003 Common Warrants 1,206,500 0.45 542,926 Cash N/A
Mar. 2003 Common Warrants 527,343 0.54 284,765 Cash N/A
Mar. 2003 Common Warrants 60,000 0.55 33,000 Cash N/A
BC FORM 51-901F SCHEDULE B
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE THREE MONTHS ENDED MARCH 31, 2003
3.(b)OPTIONS GRANTED DURING THE PERIOD ENDED MARCH 31, 2003
Date Number Type Exercise
Granted of Shares of Option Name Price Expiry Date
------------ --------- --------- -------------- ----- ------------
$
Mar. 7, 2003 50,000 Employee K. Patterson 0.84 Mar. 7, 2008
Mar. 7, 2003 30,000 Employee D. Charchaflie 0.84 Mar. 7, 2008
Mar. 7, 2003 21,500 Employee J.C. Beretta 0.84 Mar. 7, 2008
Mar. 7, 2003 25,000 Employee M. Saldana 0.84 Mar. 7, 2008
Mar. 7, 2003 25,000 Employee N. Demare 0.84 Mar. 7, 2008
Mar. 7, 2003 50,000 Director W. Lee 0.84 Mar. 7, 2008
Mar. 7, 2003 15,000 Employee A. Sanchez 0.84 Mar. 7, 2008
Mar. 7, 2003 7,000 Employee M. Briones 0.84 Mar. 7, 2008
-------
223,500
=======
4.(a)AUTHORIZED AND ISSUED SHARE CAPITAL AS AT MARCH 31, 2003
Issued
--------------------------------
Authorized
Class Par Value Number Number Amount
------ --------- ---------- ---------- -----------
Common WPV 99,708,334 28,919,405 $22,484,131
4.(b)OPTIONS AND WARRANTS OUTSTANDING AS AT MARCH 31, 2003
Exercise Expiry
Security Number Price Date
-------- --------- -------- --------------
$
Options 1,380,500 0.40 Jul. 19, 2006
Options 510,000 0.50 May 02, 2007
Options 540,000 0.50 Sept. 23, 2007
Options 223,500 0.84 Mar. 07,2008
----------
2,654,000
==========
BC FORM 51-901F SCHEDULE B
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE THREE MONTHS ENDED MARCH 31, 2003
4.(b) OPTIONS AND WARRANTS OUTSTANDING AS AT MARCH 31, 2003 (continued)
Exercise Expiry
Security Number Price Date
-------- --------- -------- -------------------
$
Warrants 1,556,000 0.75 Sept. 15, 2004
Warrants 637,000 0.75 Apr. 19, 2005
Warrants 1,397,167 0.90 Mar. 16, 2005
Warrants 205,278 0.54 Apr. 09, 2003
Warrants 73,448 0.54 Apr. 09, 2003
Warrants 55,555 0.53 May 23, 2003
Warrants 1,722,222 0.53/0.60 May 23, 2003/2004
Warrants 1,494,915 0.55/0.60 Sept. 27, 2003/2004
Warrants 36,166 0.50 Sept. 27, 2003
----------
7,177,751
==========
4.(c)SHARES IN ESCROW OR SUBJECT TO POOLING AS AT MARCH 31, 2003
There were no shares subject to escrow or pooling as at March 31, 2003.
5.(a)LIST OF DIRECTORS AND OFFICERS AS AT MARCH 31, 2003
Directors:
Gerald Carlson
Joseph Grosso
William Lee
Sean Hurd
Robert Brown
Nikolaos Cacos
Officers:
Gerald Carlson (Chairman)
Joseph Grosso (President & Chief Executive Officer)
William Lee (Chief Financial Officer)
Nikolaos Cacos (Secretary)
BC FORM 51-901F SCHEDULE C
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED MARCH 31, 2003
MANAGEMENT DISCUSSION & ANALYSIS
--------------------------------
INTRODUCTION
The following management's discussion and analysis and financial review should
be read in conjunction with the Company's consolidated financial statements and
related notes.
OVERVIEW
After carrying out a successful Phase I exploration program on Las Bayas during
the fall of 2002, the Company during the first quarter of 2003 completed a 1,953
metre, 20 hole drill program on the Las Bayas property, completed a detailed
Phase II surface exploration program on its 100 % owned Mogotes property and
completed the preliminary mapping, rock sampling and grid soil sampling on the
Silver-copper-lead property at its Navidad project in Chubut Province, all of
which are located in Argentina. The results of the follow up exploration program
on the Navidad project significantly expanded the potential size of the
bonanza-grade silver-copper-lead mineralization zone as did the work on Mogotes.
The Company and Amera Resources Corporation a private company which has a common
director entered into agreements to option or sell, subject to TSX Exchange
approval, interest in various mineral concessions located in Argentina on March
6, 2003 as follows:
i) letter of intent for Amera to earn a undivided 51 % interest to
further explore the Arturo Property (Mogotes). To earn a 51 %
interest in the property, Amera must issue 1,650,000 common shares
to the Company and incur US $1.25 million of expenditures, including
work programs and underlying option payments, all over five years.
ii) property purchase agreement to sell a 100 % undivided interest in
three mineral properties, comprising 24,280 hectares (the "Chubut
Properties"), located in Chubut Province, Argentina, for 500,000
common shares of Amera. In addition, in the event that a decision is
made to place the properties into commercial production, the Company
will receive a bonus of US $250,000 an a 3 % net smelter returns
royalty.
During the quarter, Barrick and the Company agreed to extend the Selection
Notice Period in the option agreement from November 30,2002 to December 30,2003.
In return for the extension Barrick paid US $65,000 which will be used to make
payments to maintain the option properties in good standing.
SUMMARY OF FINANCIAL RESULTS
The Company reported a consolidated loss of $309,032 ($0.01 per share) for the
period ended March 31,2003, an increase of $76,353 from the loss of $232,679
($0.01 per share) in 2002. The increase in the loss experienced by the Company
in 2003, compared to 2002, was attributed to certain operating expenditures such
as $22,202 for increase in Corporate development and Investor relations cost ,
$43,297 for increase in General Exploration and $24,937 for increase in
Professional fees and an increase in non- operating items of $15,502 as a result
of a favourable foreign exchange rate and increased interest income.
BC FORM 51-901F SCHEDULE C
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED MARCH 31, 2003
MANAGEMENT DISCUSSION & ANALYSIS (continued)
-------------------------------------------
RESULTS OF OPERATIONS
CORPORATE COSTS AND OTHER INCOME
There were increases in to the following expenses: (i) Administration and
management services - $550; (ii) Amortization and depreciation - $654; (iii)
Bank charges and interest - $1,778; (iv) Corporate development and investor
relations - $22,202 of which $15,000 was for an investor relation consultant and
$7,202 for various media advertising; (v) General exploration - $43,297 as a
result of additional examination of grassroots properties mainly in the
Patagonia region in Argentina and in Peru ; (vi) Printing - $2,481 mainly for
investor presentation material; (vii) Professional fees - $24,937 which relates
to the ongoing North America and European market awareness program; ( viii )
Telephone and utilities - $ 3,585 due to the increase in correspondence with
Europe, North America and South America.
The following expenses decreased for the year (i) Office and sundry - $815 as a
result of cost recovery from a private company sharing office space; and (ii)
Rent, parking and storage - $4,018 as a result of cost recovery from a private
company sharing office space; (iii) Salaries and employee benefits - $19; (iv)
Transfer agent and regulatory fees -$1,984; (v) Travel and accommodation - $793.
During the period ended March 31,2003 and 2002 the Company did not write-off any
mineral claims and deferred costs.
Interest and miscellaneous income reported for the period ended March 31,2003
was $4,776 an increase of $1,564 from $3,212 reported in 2002 as a result of
more funds on deposit.
During the period ended March 31,2003 and 2002, the Company did not dispose of
any Viceroy common shares.
LIQUIDITY AND CAPITAL RESOURCES
At March 31,2003 the Company had working capital of $1,642,618 compared to
$346,974 at March 31,2002. As at March 31, 2003, the Company had cash and cash
equivalents on hand of $1,599,438 (2002 - $418,804).
Subsequent to the period ended March 31,2003, the Company completed a private
placement of 2,900,000 units at $0.90 per unit for a total amount of $2.61
million. Each unit consists of one common share and one half of one common share
purchase warrant. Each full warrant will entitle the holder thereof to purchase
one additional common share in the capital of the Company for one year at $1.10
per share. The funds will be used on its properties in South American and
general working capital.
In addition the Company issued 302,000 shares for $136,800 on the exercise of
options and 561,280 shares for $303,836 on the exercise of warrants.
BC FORM 51-901F SCHEDULE C
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED MARCH 31, 2003
MANAGEMENT DISCUSSION & ANALYSIS (continued)
-------------------------------------------
The Company considers that it does have adequate resources to maintain its
ongoing operations and property commitments for the year. The Company may
require additional financing if it proceeds with further planned exploration and
property acquisitions for the remainder of fiscal 2003. The Company will
continue to rely on successfully completing additional equity financing and/or
conducting joint venture arrangements to further exploration on its properties.
There can be no assurance that the Company will be successful in obtaining
additional financing or negotiating joint venture agreements.
OPERATING CASH FLOW
Cash outflow from operating activities for the period end ed March 31,2003, was
$351,896 or $0.01 per share compared to cash outflow in 2002 of $178,324 or
$0.01 per share. The cash outflows for 2003 were largely due to increase in
corporate development and investor relations, general exploration and
professional fees.
FINANCING ACTIVITIES
Cash flow from financing activities for the period ended March 31,2003 generated
$1,129,308 (2002 - $186,507) which included $14,000 from the exercise of 35,000
stock options and $1,115,308 from the exercise of 2,333,799 warrants.
INVESTING ACTIVITIES
Cash flow from investing activities required $614,098 for the period ended March
31,2003 (2002 - $345,144), these investing activities were primarily for
additions of $70,051 to NW San Juan Properties and $415,379 to Chubut and other
properties in Argentina and $126,454 to the Rio Tabaconas project in Peru and
$1,954 to office equipment.
CRITICAL ACCOUNTING POLICIES
Reference should be made to the Company's significant accounting policies
contained in note 2 of the interim consolidated financial statements. These
accounting policies can have a significant impact of the financial performance
and financial position of the Company.
USE OF ESTIMATES
The preparation of financial statements in conformity with Canadian GAAP
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the period. Significant areas requiring the use of
management estimates relate to the determination of environmental obligations
and impairment of mineral properties and deferred costs. Actual results may
differ from these estimates.
BC FORM 51-901F SCHEDULE C
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED MARCH 31, 2003
MANAGEMENT DISCUSSION & ANALYSIS (continued)
-------------------------------------------
MINERAL PROPERTIES AND DEFERRED COSTS
Consistent with the Company's accounting policy disclosed in Note 3 of the
annual consolidated financial statements, direct costs related to the
acquisition and exploration of mineral properties held or controlled by the
Company have been capitalized on an individual property basis. It is the
Company's policy to expense any exploration associated costs not related to
specific projects or properties. Management of the Company periodically reviews
the recoverability of the capitalized mineral properties. Management takes into
consideration various information including, but not limited to, results of
exploration activities conducted to date, estimated future metal prices, and
reports and opinions of outside geologists, mine engineers and consultants. When
it is determined that a project or property will be abandoned or its carrying
value has been impaired, a provision is made for any expected loss on the
project or property.
RISK FACTORS
The Company's operations and results are subject to a number of different risks
at any given time. These factors, include but are not limited to disclosure
regarding exploration, additional financing, project delay, titles to
properties, price fluctuations and share price volatility, operating hazards,
insurable risks and limitations of insurance, management, foreign country and
regulatory requirements, currency fluctuations and environmental regulations
risks. For a full understanding of these risks and others, reference should be
made to the Company's "Annual Information Form".
OUTLOOK
BONANZA-GRADE SILVER DISCOVERY AT NAVIDAD, PATAGONIA, ARGENTINA
At the beginning of the quarter, IMA announced that it had staked a new
silver-copper-lead discovery at Navidad in Chubut Province, Argentina. This
discovery, made by IMA geologists while conducting grassroots regional
exploration in the district, includes two distinct styles of mineralization:
bonanza silver- copper-lead and replacement silver-lead.
Subsequent work on the Navidad project in Patagonia has achieved the following:
- Doubled the strike length of the mapped bonanza-grade
silver-copper-lead mineralization at Navidad Hill.
- Significantly expanded the size of replacement-style silver-lead
mineralization which has clear bulk tonnage potential.
- Demonstrated the potential for additional discoveries within an 8
kilometre by 3 kilometre area of favourable geology and anomalous
geochemistry.
BC FORM 51-901F SCHEDULE C
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED MARCH 31, 2003
MANAGEMENT DISCUSSION & ANALYSIS (continued)
-------------------------------------------
Ongoing work at Navidad included detailed mapping and sampling, infill soil
sampling, geophysical surveys including induced polarization and gravimetrics
with the goal of defining drill targets.
The results of the recently completed soil sampling survey to date are very
encouraging as it continues to meet and exceed expectations of IMA's Technical
Team. Significant naturally-occurring metal anomalies in soils have now been
extended to an overall strike length of 5.8 km.
Highlights of the soil survey include a 1,700 by 300 metre silver-copper-lead
anomaly over the Navidad Hill and Galena Hill areas. This strong soil anomaly,
which IMA Geologists believe to be very significant, is defined by greater than
2 grams per tonne (g/t) silver and generally greater than 100 ppm copper. Within
this zone there is a central core of greater than 10 g/t silver in soils
(includes values of up to 298 g/t Ag) of approximately 600 by 200 metres.
Portions of this central core correlate with the outcropping bonanza-grade
mineralization at Navidad Hill and these soil results demonstrate the potential
to expand this zone significantly.
Significant soil anomalies also exist at Barite and Calcite Hills. Silver values
of up to 531 g/t have been received from outside areas of known high-grade
mineralization and show excellent potential for additional discoveries. Lead
values are consistently elevated and correlate well with silver over the entire
5.8 kilometre survey length. Samples of greater than 500 ppm lead have been
returned from every line within the survey area. A total of 958 soil samples
have now been collected on the Navidad project at 50 metre sample spacing on
lines spaced 100 metres and 50 metres apart in key areas.
The first phase of detailed 1:500 and 1:1,000 scale mapping and sampling in the
Navidad, Galena, and Barite Hill areas was completed and 824 rock chip samples
have been collected. Results will be released over the next few weeks, once they
are received and reviewed by IMA geologists. In addition, Quantec Geoscience
Argentina S.A. is currently collecting IP/Resistivity data over a 2.5 by 7.0
kilometre area at Navidad. Preliminary results indicate significant anomalies
over areas of known bonanza-grade structures and known galena matrix breccia,
anomalies have also been defined in new areas that are completely soil covered.
Final results from this survey are expected in mid to late June. It is
anticipated that drilling will commence in the Patagonian Spring (approximately
September) of 2003.
BARRICK OPTION AGREEMENT
IMA and Barrick Gold Corporation have agreed to extend the Selection Notice
Period in the Exploration and Option Agreement dated August 17, 1999 by an
additional year from November 30, 2002 to December 31, 2003. By that time,
Barrick can select if it will continue with an option to earn an interest in
either the Potrerillos or the Rio de las Taguas property. No further exploration
work will be carried out on the Potrerillos and Rio de las Taguas properties
until December 31,2003.
Both properties have confirmed drill targets and are located in close proximity
to Barrick's Pascua and Veladero gold discoveries in, a world class gold mining
district containing over 38 million ounces of gold and 780 million ounces of
silver.
BC FORM 51-901F SCHEDULE C
IMA EXPLORATION INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED MARCH 31, 2003
MANAGEMENT DISCUSSION & ANALYSIS (continued)
-------------------------------------------
The Company has no exploration budget commitment for the Valle del Cura region
in Argentina, the Gualcamayo region, and the NW San Juan region as it is
focusing on its highest priority projects for 2003. The Company plans to expend
approximately US$500,000 in Argentina on surface work at the Navidad project, an
additional US$1,500,000 on drill programs at the Navidad project and US$593,000
on the Rio Tabaconas project (formerly known as Tamborapa project) in Peru from
March 31, 2003 to December 31, 2003. In addition, minimum property payments of
approximately US $225,000 are required to maintain all of the existing property
holdings.
FORWARD LOOKING STATEMENTS
Certain information contained in the Management's Discussion and Analysis
constitutes "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1955. Forward-looking statements are subject
to risks and uncertainties, which could cause actual results to differ
materially from those in such forward-looking statements. The Company assumes no
obligation to update its forward -looking statements to reflect actual results,
changes in assumptions or changes in other risk factors affecting such
statements.
INVESTOR RELATIONS
Activities during the quarter ended March 31, 2003 consisted of investor
mailings and shareholders communications by Company personnel.