RNS Number:6209W
Moydow Mines International Inc
15 May 2007
Moydow Mines International Inc.
First Quarter
Interim Report
Three Months Ended March 31, 2007
Toronto Office
Suite 1220, 20 Toronto Street
Toronto, Ontario M5C 2B8
Tel : (416) 703-3751
Fax : (416) 367-3638
E-mail : info@moydow.com
Dublin Office
74 Haddington Road
Dublin 4, Ireland
Tel : (353) 1-667-7611
Fax : (353) 1-667-7622
E-mail : info@moydow.com
Message to Shareholders
Dear Shareholder,
Your Company continues to focus on those areas which management believe offer
the greatest potential for exploration success.
At the Dala diamond project in Angola, we continue to explore and our efforts
have resulted in the identification of numerous anomalous areas which merit
drill testing. A series of geophysical surveys, both airborne and ground based,
have resulted in a significant number of targets which bear all the hallmarks of
kimberlitic bodies in this highly prospective area.
During the first quarter of 2007, final permitting and ratification of the
kimberlite licence were received from the Government of Angola and Endiama, the
state diamond company. Now that all necessary legal structures are in place, a
drilling campaign has been planned to test the diamondiferous potential of a
number of the areas identified. A contract to drill in excess of 5,000 metres
has already been signed and a rig is currently being mobilised to the site. It
is currently expected that drilling will commence in the middle of June and will
continue for two to three months. Results of the drilling will be available on
an on-going basis during the course of the program and follow up analysis of the
drill core for micro diamonds and indicator minerals will take place
concurrently with the drilling campaign.
Moydow has continued to increase its holding in the Dala project and currently
has a 36% interest in the kimberlite licence.
One of the most significant assets of your Company is the 2% net smelter return
royalty which Moydow retains on any production in excess of 1.2 million gold
equivalent ounces from the Ntotoroso portion of the Newmont owned Ahafo project
in Ghana.
Production at Ahafo commenced in the second quarter of 2006 and Moydow has since
received quarterly updates on production. The most recent statement shows that
production on the Ntotoroso portion of the project alone is currently running at
in excess of 75,000 ounces per quarter and accounts for more 50% of the total
production at Ahafo. In just nine months, the Ntotoroso portion of Ahafo has
produced over 200,000 ounces of gold. If current rates of production are
maintained then it is expected that the royalty will become payable within the
next 3 years.
Although Newmont do not disclose reserve figures for the Ntotoroso licence
separately, the Subika pit is known to contain in excess of 2.5 million ounces
and possibly as much as 4 million ounces. At the very least, this means that
the royalty is worth, on a non-discounted basis, US$17 million at current gold
prices. .
Further growth in the value of this royalty is anticipated as Newmont has
publicly stated that it is examining the potential of a second stage underground
development at Subika. When Moydow drilled the depth extension of the Subika
deposit, results in the order of 10 grams of gold over 10 metres (100 gram
metres) were encountered. Newmont have subsequently encountered grades in the
order of 450 gram metres at depth on the deposit, pointing towards a large
upside potential at depth.
This royalty with its anticipated revenue stream, while not reflected fully in
the current share price, clearly underpins the value of the Company.
"Signed"
Brian Kiernan
President and CEO
May 11, 2007
Moydow Mines International Inc.
Management's Discussion and Analysis of Financial Condition
And Operating Results
General
This interim management discussion and analysis ("MD&A") is a review of Moydow's
financial and operating results for the first quarter ending March 31, 2007 and
is compared with those for the corresponding quarter of 2006. In order to
better understand the MD&A, it should be read in conjunction with the audited
consolidated financial statements of the Company and notes thereto for the year
ended December 31, 2006. The MD&A has been prepared as at May 9, 2007. The
consolidated financial statements have been prepared in accordance with Canadian
generally accepted accounting principles. The reporting currency for the
Company is the United States dollar, and all amounts in the following discussion
are in United States dollars unless otherwise noted. The attached financial
statements have not been reviewed by the Company's auditors.
Company Overview
Moydow Mines International Inc. ("Moydow" or the "Company") is an international
exploration company with primary interests in precious metals, diamonds and
industrial minerals. Exploration activities are focused principally in Africa.
Moydow Mines' common shares are listed on both the Toronto Stock Exchange and
the Alternative Investment Market ("AIM") of the London Stock Exchange (symbol "
MOY"). For further information on the Company please visit our website at
www.moydow.com or view our public filings on the SEDAR website at www.sedar.com.
Subsidiaries and affiliated companies of Moydow are organized internationally so
that each has a specific geographic area or mineral project interest. Moydow
provides administrative, technical and financial assistance to these companies.
Forward-Looking Statements
This MD&A contains "forward-looking statements" that are subject to a number of
known and unknown risks, uncertainties and other factors that may cause actual
results to differ materially from those anticipated in our forward looking
statements. Factors that could cause such differences include: changes in metal
prices, equity markets, results of exploration and related expenses, drilling
activity, sampling and other data, currency exchange rates, change in
governments, ability to raise finances and changes to regulations affecting the
mining industry. Such forward-looking statements involve known and unknown
risks and uncertainties that could cause actual events or results to differ
materially from estimated or anticipated events or results implied or expressed
in such forward-looking statements.
Disclosure Controls and Procedures
As at March 31, 2007, an evaluation was carried out under the supervision of and
with the participation of the Company's management, including the Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
Company's disclosure controls and procedures. Based on that evaluation, the
Chief Executive Officer and the Chief Financial Officer concluded that the
design and operation of these disclosure controls and procedures were effective
as at March 31, 2007, to provide reasonable assurance that material information
relating to the Company and its consolidated subsidiaries would be made known to
them by others within those entities.
Application of Critical Accounting Estimates
Moydow's accounting policies are described in note 2 to the Consolidated
Financial Statements for the year ended December 31, 2006. Set out below is a
discussion of the application of Moydow's critical accounting policies that
require the Company to make assumptions about matters that are uncertain at the
time the accounting estimate is made, and where different estimates that could
reasonably have been used in the current period, or changes in the accounting
estimate that reasonably likely to occur from period to period would have a
material impact on Moydow's financial statements.
Carrying value of mineral properties
Acquisition costs of mineral properties, together with direct exploration and
development expenses incurred thereon, are deferred and capitalized on a
property by property basis. Upon reaching commercial production, these
capitalized costs are transferred from exploration properties to producing
properties on the consolidated balance sheets and are amortized into operations
using the unit-of-production method over the estimated useful life of the
estimated related ore reserves.
In the event that the long-term expectation is that the net carrying amount of
these capitalized exploration costs will not be recovered, the carrying amount
is written down accordingly and the write-down amount charged to operations.
Such would be indicated where:
* Exploration activities have ceased;
* Exploration results are not promising such that exploration
will not be planned for the foreseeable future;
* Lease ownership rights expire; or
* Insufficient funding is available to complete the exploration
program.
The amount shown for mineral properties represents costs incurred to date net of
recoveries from option or joint venture participants and write-downs, and does
not necessarily reflect present or future values.
Overview of Exploration Activities, Contractual Obligations and Commitments
Dala project, Angola
The Company is party to two separate exploration projects with the same partners
on the Dala property in Angola, relating to the exploration for alluvial and
kimberlite diamonds.
Alluvial diamonds
On October 1, 2004, the Company signed an agreement with Empressa Nacional De
Diamantes De Angola (Endiama), the Angolan state diamond mining company and
Cimader-Comercio Geral Limitada (Cimader), a local Angola company, to explore
for alluvial diamonds on the Dala concession, located near the town of Saurimo,
in north-east Angola. The concession comprises 3,000 square kilometres. To
obtain a 33% interest, the Company will have to incur expenditures of not less
than $5,000,000 on or before October 1, 2007. Cimader and Endiama have a free
carried interest in the exploration phase of the project.
The Company entered into a separate agreement with Concord Minerals LLC
(Concord), a private Nevada company, whereby Concord was granted the right to
earn up to 50% of Moydow's interest in the concession by funding exploration
expenditures under Moydow's agreement with Endiama and Cimader. However,
Concord has not exercised this right in full and it presently holds a 10%
interest in the Moydow-Concord agreement.
The Company's cumulative expenditures on the alluvial licence to March 31, 2007
amounted to $3,569,086 of which $313,476 was incurred during the first quarter
2007. In addition, Concord's cumulative expenditures to March 31, 2007 amounted
to $688,797.
Kimberlite
On December 16, 2005, the Company signed another agreement with Endiama and
Cimader to explore for kimberlite (primary) diamonds on the Dala concession.
Under the terms of the agreement, the Company can earn a 40% interest in the
concession with the remaining percentages held by Endiama and Cimader. To
obtain its interest, the Company will have to incur expenditures of not less
than $10,000,000 on or before January 14, 2009. Cimader and Endiama have a free
carried interest in the exploration phase of the project. The granting of the
licence was ratified by the Angolan Council of Ministers on October 18th, 2006
and was subject to the Company making a deposit of $1 million with the Angolan
government. The deposit was made in 2006 and may be refunded provided that
Moydow meet certain conditions. The deposit has been included as a component of
the cost to acquire an interest in the Dala project.
The Company also has an agreement with Concord, whereby Concord was granted the
right to earn up to 50% of Moydow's interest in the kimberlite concession, by
funding exploration expenditures under Moydow's agreement with Endiama and
Cimader. As in the case of the alluvials, Concord has not exercised its right
in full and its interest presently stands at 10% in the Moydow-Concord
agreement.
The Company's cumulative expenditures on the kimberlite licence to March 31,
2007 amounted to $2,144,284 of which $480,641 was incurred during the first
quarter of 2007.
Port Loko property, Sierra Leone
The Company has a 50% interest in the Port Loko bauxite exploration project in
Sierra Leone, West Africa. The other 50% interest in the project is held by
Gondwana Investments Limited (Gondwana), a company incorporated in Luxembourg.
On December 13, 2006 Gondwana and Moydow agreed to allow Titanium Resource
Group, Ltd. ("TRG") the right to acquire a one-third interest in the project by
submitting a bankable feasibility study on or before December 31, 2007 and
expending on the project an amount not less than $2,538,996.
Since the licence expires in November 2007, the Company has applied to the
Sierra Leone government for a renewal of its licence in respect of its activity
at Port Loko and expects to receive the licence in mid 2007. In the event that
the licence is not renewed, the Company will be required to write-off its
investment in this project.
Cumulative expenditures by the Company to March 31, 2007 amounted to $2,719,368
of which $132,873 was incurred in the first quarter of 2007.
Ntotoroso property, Ghana
On December 8, 2003, the Company sold its wholly owned subsidiary, Moydow
Limited (Isle of Man), which, following an internal restructuring, owned the
Company's 50% joint venture interest in the Ntotoroso gold property in Ghana but
no other mineral properties, to Newmont Mining Corporation ("Newmont").
In connection with the sale, the Company entered into a royalty agreement
whereby the Company acquired the right to a net smelter return royalty of 2% on
all recovered ounces of gold and silver produced from the Ntotoroso property
after the first 1.2 million gold equivalent ounces for a consideration for $0.25
million. No value has been ascribed to the royalty rights acquired by the
Company due to the uncertainty associated with this asset. Newmont commenced
production on this property during 2006.
Hwidem property, Ghana
On October 3, 2005, the Company was granted a two-year extension to its
prospecting licence with respect to the Hwidem property, by the Minister for
Lands, Forestry and Mines in Ghana. The licence area covers 24.7 square
kilometres and it adjoins the Kenyase-Ntotoroso area currently under lease to
Rank Mining Company Limited, a subsidiary of Newmont. The Company incurred
exploration expenditures on this property of $0.06 million during 2005.
Cumulative exploration expenditures to maintain the licence are $0.51 million of
which $0.02 million was incurred in the first quarter of 2007. If gold
mineralization does not exist in sufficient quantities in the area to warrant
completion of the work program, the Company is not liable for any shortfall on
the minimum exploration expenditures.
Okumpreko property, Ghana
On September 17, 2004, the Company signed an agreement with PW Limited, an
international engineering and mining contractor. Under the terms of the
agreement, the Company can earn a majority interest in the Nyaduom and Kushea
mining leases, which are collectively known as the Okumpreko gold project. On
January 23, 2007, the Minerals Commission cancelled the mining lease for
non-performance. The Company wrote off its investments in the amount of
$404,222 in December 2006.
Kanyankaw property, Ghana
On October 3, 2005, the Company was granted a two-year extension to its
prospecting licence with respect to the Kanyankaw property, by the Minister for
Lands, Forestry and Mines in Ghana. The carrying value of the Kanyankaw
property was written off in 2005 in the amount of $0.33 million as exploration
results are not promising such that exploration will not be planned for the
foreseeable future.
Commitments
The Company, either directly or through certain joint ventures, has obligations
to expend various amounts on its mineral properties and projects in order to
keep its mineral property rights in good standing. All agreements are in the
normal course of business.
Payments due ($ thousand) Total Less than 1 year 1 to 3 years
Exploration and development $15,523 $523 $15,000
Segmented Information
The Company has one reportable operating segment, being exploration of mineral
properties in geographic areas disclosed in note 3.
Results of Operations
Net loss for the quarter ended March 31, 2007 was $0.26 million or $0.007 per
share compared to a earnings of $0.03 million in same period in 2006 or $0.001
per share.
During the first quarter of 2006, the Company sold 45,000 Newmont common shares
for proceeds of $2.52 million. The Company recognized a gain of $0.31 million
on the sale of these shares.
General and administrative expenses were $0.26 million in the first quarter of
2007 as compared with $0.25 million in same period of 2006.
The foreign exchange loss for the period ended March 31, 2007 was $0.003 million
compared to a loss of $0.008 million in the same period of 2006. The foreign
exchange loss resulted from the movements in exchange rates between operating
currencies and the United States dollar.
The Company earned dividend income of $nil and $0.001 million during the first
quarter of 2007 and 2006, respectively. The dividend income was received from
the Company's shareholding in Newmont. During 2006, the Company disposed of its
shares in Newmont.
The Company earned deposit interest income of $0.001 million and $0.005 million
in the first quarter of 2007 and 2006, respectively.
The Company's revenues are derived from: interest and dividend income, which is
dependent on available cash balances and prevailing interest rates and returns
on investments which are dependent on the prevailing market at the time of sale.
In the first quarter of 2006, the Company recorded a provision of income taxes
in the sum of $0.02 million.
Liquidity and Capital Resources
At March 31, 2007, the Company had negative working capital of $1.82 million
(December 31, 2006 - $2.24 million). Cash and cash equivalents at March 31,
2007 amounted to $0.04 million compared to cash and cash equivalents at the end
of 2006 of $0.14 million.
During 2006, the Company entered into an unsecured loan agreement with certain
parties. The Company was advanced $1.43 million (including $0.13 million for
related parties) which is repayable on demand. The loan is non-interest
bearing. On March 30, 2007, the Company closed a private placement of 9,547,186
common shares of the Company at a price of Cdn$0.20 per share in settlement of
US$1.6 million of debts owed for loans to the Company.
These financial statements have been prepared using Canadian generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and settlement of liabilities in the normal course of
business as they come due. As at March 31, 2007, the Company had an excess of
current liabilities over current assets of $1.82 million (December 31, 2006 -
$2.24 million) and has recorded losses and net cash outflows from operations for
the past two years. The Company is also required to make expenditures in the
near term to keep its mineral property rights in Angola. The Company will have
to secure additional financing to meet its required commitments. These
circumstances lend substantial doubt as to the ability of the Company to meet
its obligations as they come due and, accordingly, the appropriateness of the
use of accounting principles applicable to a going concern.
In recognition of these circumstances, the Company is exploring various
initiatives to secure capital so that Moydow can continue as a going concern.
It is not possible to determine, with any certainty, the success, adequacy or
sufficiency of these initiatives.
Cash Flow Statements
Cash flow provided in operating activities for the year ended March 31, 2007,
including changes in non-cash working capital of $0.75 million, totalled $0.49
million as compared to cash flow used of $1.00 million in the first quarter of
2006. In the three months ended March 31, 2007 cash used in investing
activities was $0.94 million (2006 - $1.62 million), which was expended on
exploration of mineral properties incurred principally in Angola and Sierra
Leone (2006 - $0.9 million). During 2006, the Company received $2.52 million
from the sale of 45,000 Newmont common shares.
Cash flow from financing activities for the period ended March 31, 2007, was
$0.35 million, principally from the issue of 9,547,186 shares for cash in the
amount of $1.62 million (2006 cash flow from financing activities - $nil ).
During 2006, the Company was advanced $1.43 million (including $0.13 million for
related parties) which is repayable on demand. The loan is non-interest
bearing. On March 30, 2007, Moydow closed a private placement of 9,547,186
common shares of the Company at a price of Cdn$0.20 per share in settlement of
$1.62 million of debts owed for loans to the Company.
Use of Financial Instruments
The Company has not entered into any specialized financial agreements to
minimize its investment risk, currency risk or commodity risk. There are no
off-balance sheet arrangements.
Changes in Accounting Policies
There was no change in accounting policies during the first quarter of 2007 and
2006.
Outstanding Share Data
As at May 9, 2007, the Company has 47,822,904 common shares in issue. Holders
of common shares are entitled to one vote on any ballot at meetings in respect
of each common share held. The Company has 1,600,000 stock options outstanding
at a weighted average price of Cdn$0.33.
Transactions with Related Parties
Related party transactions relate primarily to the payment of fees under
contracts for services with companies in which a Moydow director is a
shareholder and director. The Company was charged a total of $0.13 million
during the first three months of 2007 (2006 - $0.14 million) with respect to
drilling and administration services.
The Company's primary legal counsel is a firm in which directors of the Company
are partners. The Company was charged $nil million during the first quarter of
2007 (2006 - $0.10 million) for legal services provided by this firm.
These transactions are made in the normal course of business.
Selected Consolidated Annual Financial Information
Set forth below is certain financial data for the last three completed financial
years:
December 31,2006 December 31,2005 December 31,2004
$ $ $
Total revenue - -
Basic and diluted (loss) earning per share (0.03) (0.05) (0.07)
Total assets 8,358,027 6,334,596 9,296,704
(Loss) net income for the year (1,060,179) (1,612,359) (1,938,765)
Total long term financial liabilities - - -
Dividends declared - - -
Quarterly Information
The following table summaries the results of the Company for each of the most
recent eight quarters:
March March June June Sept Sept Dec Dec
2007 2006 2006 2005 2006 2005 2006 2005
$ $ $ $ $ $ $ $
Revenues - - - - - - - -
Net profit/ -262,548 33,490 -331,574 -678,423 -335,633 -735,771 -426,462 331,297
(loss)
Basic and -0.007 0.001 -0.011 -0.023 -0.01 -0.025 -0.011 0.011
diluted
(loss)/
earnings per
Common share
Total assets 9,150,435 6,841,872 7,110,675 6,821,886 8,931,585 6,662,268 8,358,027 6,334,596
Number of 47,822,904 30,620,575 30,620,575 28,964,382 38,275,718 30,620,575 38,275,718 30,620,575
common shares
outstanding
Regulatory, Environmental and Other Risk Factors
The Company intends to fulfil all statutory commitments on its current licences
over the next year and will apply for licence renewals in the normal course of
business.
The Company's operating income and cash flow are affected by changes in the U.S.
/Canadian dollar exchange rate together with movement in the local currencies in
Angola, Sierra Leone, Ghana, and Ireland, as a portion of the Company's costs
are incurred in these currencies.
The profitability of any mining operation will be significantly affected by
changes in the market price of commodities. Commodity prices fluctuate on a
daily basis and are affected by numerous factors such as world supply, Central
Bank selling, stability of exchange rates, forward sales and inflationary
forces, among other factors beyond Moydow's control.
Exploration companies are subject to various laws and regulations including but
not limited to environmental and, health and safety matters together with
political risks which are outside the Company's control. Moydow is committed to
a program of environmental protection at all of its projects and exploration
sites.
The financial statements of the Company have been prepared on the basis that the
company will continue as a going concern which presumes that it will be able to
realize its assets and discharge its liabilities in the normal course of
business. The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern. If
management is unsuccessful in securing capital, the Company's assets may not be
realized or its liabilities discharged at their carrying amounts and these
differences could be material.
Outlook
The Company will focus its efforts on securing capital to continue to add value
to its diamond property in Angola, complete the feasibility study on the bauxite
property in Sierra Leone and evaluate new opportunities.
MOYDOW MINES INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(expressed in United States dollars, unless otherwise stated)
March 31, December 31
2007 2006
(unaudited) (audited)
Assets
Current assets
Cash and cash equivalents $35,322 $143,046
Accounts receivable and prepaid expenses 52,397 99,245
Current income taxes recoverable 101,641 101,641
189,360 343,932
Mineral properties (Note 3) 8,940,967 7,993,987
Other assets 20,108 20,108
9,150,435 8,358,027
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,852,963 1,148,007
Loan 159,101 1,433,601
2,012,064 2,581,608
Shareholders' Equity
Capital stock (Note 4) 19,638,863 18,014,363
Contributed surplus 414,726 414,726
Deficit (12,915,218) (12,652,670)
7,138,371 5,776,419
9,150,435 8,358,027
Nature of operations and going concern (note 1)
MOYDOW MINES INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF EARNINGS
(expressed in United States dollars, unless otherwise stated)
For the three months ended March 31, 2007 2006
(unaudited) (unaudited)
Expenses
General and administrative expenses $259,845 $246,880
Foreign exchange loss 3,003 7,991
262,848 254,871
Other income and expenses
Interest income 300 4,686
Gain on Newmont common shares (note 2) - 306,882
Dividend income - 850
300 312,418
Net (loss)/ profit before income taxes (262,548) 57,547
Income tax (provision)/recovery
Current - (184,223)
Future - 160,166
Total provision for income taxes - (24,057)
Net (loss) earnings for the period (262,548) 33,490
Basic and diluted (loss)/ earnings per common share $(0.007) $0.001
Weighted average number of common shares outstanding 38,381,798 30,620,575
For the three months ended March 31, 2007 2006
(unaudited) (unaudited)
Consolidated statements of deficit
Deficit, beginning of period $(12,652,670) $(11,592,491)
Net profit/(loss )for the period (262,548) 33,490
Deficit, end of period $(12,915,218) $(11,559,001)
MOYDOW MINES INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(expressed in United States dollars, unless otherwise stated)
For the three months ended March 31,(unaudited) 2007 2006
Cash provided by (used in)
Operating activities
Net earnings/(loss) for the period $(262,548) $33,490
Adjustments for non-cash items:
(Gain) on Newmont common shares - (306,882)
Future Income taxes - (160,166)
(262,548) (433,558)
Changes in non-cash working capital:
Accounts receivable and prepaid expenses 46,848 (207,952)
Accounts payable and accrued liabilities 704,956 633,952
Deposit - (1,000,000)
751,804 (574,000)
489,256 (1,007,558)
Investing activities
Proceeds from sale of Newmont shares - 2,520,882
Exploration of mineral properties (946,980) (903,147)
(946,980) 1,617,735
Financing activities
Proceeds from issue of capital stock 1,624,500 -
Loan (1,274,500) -
350,000 -
Increase/(decrease) in cash and cash equivalent (107,724) 610,177
Cash and cash equivalents-Beginning of period 143,046 18,344
Cash and cash equivalents-End of period 35,322 628,521
MOYDOW MINES INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in United States dollars, unless otherwise stated)
1) Nature of operations and going concern
Moydow Mines International Inc. (Moydow or the Company) is an international
exploration company with primary interests in precious metals, diamonds and
industrial minerals. Moydow's common shares are listed on both the Toronto
Stock Exchange and the Alternative Investment Market of the London Stock
Exchange.
The Company is exploring its mineral properties and, as at March 31, 2007, had
not determined the existence of economically recoverable reserves (note 3). The
recoverability of the amounts shown for mineral properties is dependent upon the
existence of economically recoverable mineral reserves, the preservation of the
Company's interest in the underlying mineral claims, the ability to obtain
necessary financing, to obtain government approval and to attain profitable
production or, alternatively, upon the Company's ability to profitably dispose
of its interests.
These financial statements have been prepared using Canadian generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and settlement of liabilities in the normal course of
business as they come due. As at March 31, 2007, the Company had an excess of
current liabilities over current assets of $1,822,704 and has recorded losses
and net cash outflows from operations for the past two years. The Company is
also required to make expenditures in the near term to keep its mineral property
rights in Angola. The Company will have to secure additional financing to meet
its required commitments. These circumstances lend substantial doubt as to the
ability of the Company to meet its obligations as they come due and,
accordingly, the appropriateness of the use of accounting principles applicable
to a going concern.
In recognition of these circumstances, the Company is exploring various
initiatives to secure capital so that Moydow can continue as a going concern.
It is not possible to determine, with any certainty, the success, adequacy or
sufficiency of these initiatives.
The Company's ability to continue as a going concern is dependent upon its
ability to fund its working capital and exploration requirements and eventually
to generate positive cash flows, either from operations or sale of a property.
These financial statements do not reflect the adjustments to the carrying values
of assets and liabilities and the reported expenses and balance sheet
classifications that would be necessary were the going concern assumption
inappropriate. These adjustments could be material.
Operating results for the periods ended March 31, 2007 are not necessarily
indicative of the results that may be expected for the full year ended December
31, 2007. For further information, see the Company's consolidated financial
statements including the notes thereto included in the Annual Report for the
year ended December 31, 2006.
2) Newmont common shares
Loss on Newmont common shares comprises: 2007 2006
$ $
Gain on sale of 45,000 shares - 306,882
- (194,400)
Gain/(loss) on Newmont common shares for the three months to March 31,
- 306,882
The Company's investment in Newmont common shares is carried at the lower of
cost and market value. The market value of the Newmont common shares held at
March 31, 2007 and 2006 was $nil.
3) Mineral properties
The Company, either directly or through certain joint ventures, has obligations
to expend various amounts on its mineral properties and projects in order to
keep its mineral property rights in good standing. All agreements are in the
normal course of business.
Mineral exploration properties in Africa are recorded with their carrying values
as follows:
Angola Sierra Leone Ghana Total
$ $ $ $
Balance-December 31, 2006 4,919,253 2,586,495 488,239 7,993,987
Costs-March 31, 2007 794,117 132,873 19,990 946,980
Balance-March 31, 2007 5,713,370 2,719,368 508,229 8,940,967
4) Capital stock
Authorized
Unlimited number of common shares
Issued
Number of $
shares
Balance - December 31, 2006 38,275,718 18,014,363
Issue of shares - March 30, 2007 9,547,186 1,624,500
Balance - March 31, 2007 47,822,904 19,638,863
On March 30, 2007, Moydow closed a private placement of 9,547,186 common shares
of the Company at a price of Cdn$0.20 per share in settlement of US$1,624,500 of
debts owed for loans to the Company.
5) Related party transactions
Related party transactions relate primarily to the payment of fees under
contracts for services with companies in which a Moydow Mines' director is a
shareholder and director. The Company was charged a total of $126,179 during
the quarter March 31, 2007 (2006 - $137,183) with respect to drilling and
administration services.
The Company's primary legal counsel is a firm in which a director of the Company
is a partner. The Company was charged $nil during the quarter March 31, 2007
(2006 - $101,846) for legal services provided by this firm.
These transactions are made in the normal course of business.
Corporate Information.
Directors and Officers
Noel P. Kiernan - Director, Chairman
Brian P. Kiernan - Director, President & CEO
Peter Villani - Director
Michael E. Power - Director, Vice President & Secretary
J. Joseph Breen - COO
Rosemary G. O'Mongain - CFO
Toronto Office
12th Floor
20 Toronto Street
Toronto, Ontario
Canada, M5C 2B8
Tel: (416) 703 3751 Fax: (416) 367 3638
Registered Office
Suite 2100, 1075 Georgia Street West
Vancouver, British Columbia V6E 3G2
Dublin Office
74 Haddington Road
Dublin 4, Ireland
Tel: (353) 1 667 7611 Fax: (353) 1 667 7622
Transfer Agent
Computershare Trust Company of Canada
100 University Avenue, 8th Floor
Toronto, Ontario
Canada, M5J 2YI
Exchange Listing
The Toronto Stock Exchange
Symbol: MOY
CUSIP: 62472V 100
Shares outstanding: 47,822,904
Shares fully diluted: 49,422,904
To contact the Company
In order to contact the Cmpany or to request to be added to our mailing list
please email info@moydow.com
website: www.moydow.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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