RNS Number:1143E
Moydow Mines International Inc
19 September 2007
Second Quarter
Interim Report
Three Months Ended June 30, 2007
74 Haddington Road
Dublin 4, Ireland
Tel: (353) 1-667-7611
Fax: (353) 1-667-7622
Website: www.moydow.com
Suite 1220, 20 Toronto Street
Toronto Ontario M5C 2B8
Tel: (416) 703-3751
Fax: (416) 367-3638
E-mail : info@moydow.com
Message to Shareholders
Dear Shareholder,
Your Company has recently announced that it will commence drilling on the Dala
kimberlite licence in Angola in the next several weeks. A drill rig and
associated equipment for the programme have arrived in Angola and are currently
being mobilized to the property. Drilling contracts for this project have been
negotiated and signed, and a minimum of 5,000 meters will be drilled with an
option to drill another 5,000 meters if the results of the initial campaign are
as favourable as we believe they will be. This programme will use core drilling
to an average depth of 120 metres using both HQ and NQ size core. These core
sizes, which are 2.5 inches and 1.9 inches in diameter, respectively, will
result in a sample big enough to assess the diamond potential.
The initial thrust of the drilling programme will be to test the many "dipole"
anomalies which our geophysical surveys have identified on the Dala property.
In the broad geological setting of the Dala licence, this style of geophysical
anomaly is usually associated with kimberlite pipes, which are the host rock of
primary diamond deposits.
Once kimberlite has been recovered, the core will be sent for analysis for
diamond indicators, such as G10 garnets, and also for microdiamond occurrences.
It is unusual, though not unheard of, for macrodiamonds to be recovered in
initial drilling.
Results of the drilling and analysis will be announced on an on-going basis and
any follow up studies which may be necessitated will be initiated as soon as
possible after results have been analysed.
The Dala licence is one of the most prospective areas in the diamond rich
country of Angola and comprises some 3000 square kilometres located in the Lunda
Sul province of north-eastern Angola, immediately adjacent to the city of
Saurimo. The licence is bordered both to the west and east by the BHP/Petra
Diamonds' Alto Cuilo and Muriege diamond properties, respectively, and is 40
kilometres south of the Catoca Mine, the world's fourth largest producing
kimberlite diamond mine.
The Company has been active in Angola since 2004 when it initially obtained the
rights to exploit alluvial diamonds on the Dala licence and subsequently
obtained the rights to explore for kimberlitic diamonds on the property. During
the course of alluvial exploration, the Company encountered mounting evidence of
the existence of kimberlitic bodies within the licence area. In September 2005,
the Company flew an aeromagnetic survey of the property which identified several
significant magnetic anomalies that are considered very prospective. In a
follow-up to the airborne magnetic survey, in 2006 and 2007, 102 grids, each
approximately one square kilometre, were covered by ground magnetic surveys.
These have been interpreted by diamond exploration specialists, Scott Hogg &
Associates Ltd. of Toronto, Canada. This interpretation resulted in outlining
19 high priority targets and 15 medium priority targets.
The Company also holds a 2% net smelter return royalty on a portion of the
Newmont owned Ahafo mine in Ghana, which began production in mid-2006. The
agreement is that the Company receives the royalty on all recovered ounces of
gold and silver produced from the Ntotoroso property after the first 1.2 million
gold equivalent ounces. Since start up in mid-2006 to June 30, 2007 a total of
280,000 ounces has been recovered from the Ntotoroso property. Current
production is about 75,000 ounces per quarter and indications are that
production will increase over the next while to a steady state in excess of this
figure. The reserve on the Ntotoroso portion of Ahafo currently stands in
excess of 2.5 million ounces, which means that the cash value of the Moydow
royalty is at least US$17 million at today's gold price.
Newmont have also indicated that there may be significant upside available at
Ntotoroso, particularly on the Subika pit which is located 100% within the
royalty area. Newmont are investigating the potential for an underground mine
on this area and, following a site visit by our geologists in February 2007,
Moydow believes that there may be as much as 4 million ounces of gold available
from this pit and underground development. The value of the royalty is further
enhanced by the existence of two other pits which lie partially on the Ntotoroso
property and also by on-going exploration by Newmont in other areas adjacent to
the currently defined orebodies.
We again thank our loyal shareholders for your support.
"Signed"
Brian Kiernan
President and CEO
August 13, 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 the
Moydow Mines International Inc. ("Moydow" or "the Company") financial and
operating results for the second quarter ending June 30, 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 August 13, 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. is an international exploration company with
primary interests in precious metals, industrial minerals and diamonds.
Exploration activities are focused principally in Africa. Moydow Mines' common
shares are listed on both the Toronto Stock Exchange and the AIM Market 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 June 30, 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 June 30, 2007, to provide reasonable assurance that material information
relating to the Company and its consolidated subsidiaries would be made known to
them by others operating 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 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 June 30, 2007,
amounted to $3,915,813 of which $346,727 was incurred during the second quarter
2007.
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 $1m with the Angolan
government. The deposit was made in 2006 and may be refunded provided that
Moydow meets 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 June 30,
2007, amounted to $2,691,574 of which $547,290 was incurred during the second
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.
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. In the event that the licence is not renewed, the company will be
required to write-off its investment in this project. Work continues on
reviewing the various options to advance the property.
Cumulative expenditures by the company to June 30, 2007, amounted to $2,868,427
of which $149,059 was incurred in the second 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 of $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 in mid-2006 and to June 30, 2007 had produced a
total of 280,000 ounces of gold equivalent ounces.
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 minimum exploration
expenditures required to maintain the licence are $0.52 million of which $0.50
million had been spent as at June 30, 2007.
Commitments
The Company, either directly or through certain joint ventures, has obligations
to expend various amounts on its mineral properties and projects in order to
keep its mineral property rights in good standing. All agreements are in the
normal course of business.
Payments due ($ 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 June 30, 2007, was $0.36 million or $0.007 per
share compared to a loss of $0.33 million in same period in 2006 or $0.011 per
share.
General and administrative expenses were $0.30 million during the second quarter
of 2007 as compared with $0.19 million in the same period of 2006.
The foreign exchange loss for the period ended June 30, 2007, was $0.06 million
compared to a gain of $0.20 million in the same period of 2006. The foreign
exchange gain resulted from the movements in exchange rates between operating
currencies and the United States dollar.
The Company earned deposit interest income of $0.001 million and $0.002 million
in the second quarter of 2007 and 2006, respectively.
The Company's revenues are derived from: interest 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.
Net losses for the six months ended June 30, 2007, was $0.63 million or $0.014
per share compared to a loss of $0.30 million in the same period in 2006 or
$0.010 per share.
During the six month period ended June 30, 2006, the Company sold its remaining
45,000 Newmont common shares for proceeds of $2.53 million. The Company
recognized a gain of $0.31 million on the sale of these shares.
General and administrative expenses were $0.56 million during the first six
months of 2007 as compared with $0.43 million in the same period of 2006. The
increase in 2007 as compared to 2006 is a result of additional professional
fees, associated with the issue of capital stock.
The foreign exchange loss in the first six months of 2007 was $0.06 million
compared to a gain of $0.20 million in the same period of 2006. The foreign
exchange gain 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 period
ended June 30, 2007 and 2006, respectively. The dividend income was received
from the Company's shareholding in Newmont.
The Company earned deposit interest income of $0.001 million and $0.001 million
during the first half 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.
As at June 30, 2006, the Company recorded a provision for income taxes in the
sum of $0.18 million and a recovery of future income taxes in the sum of $0.16
million. The net effect was a provision for income taxes of $0.02 million.
Liquidity and Capital Resources
At June 30, 2007, the Company had negative working capital of $1.59 million
(December 31, 2006 - $2.24 million). Cash and cash equivalents at June 30, 2007
amounted to $0.83 million compared to cash and cash equivalents as 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 was 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$1.62 million of debts owed for loans by 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 June 30, 2007, the Company had an excess of
current liabilities over current assets of $1.59 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.
Cash Flow Statements
Cash flow provided in operating activities for the three months ended June 30,
2007, including changes in non-cash working capital of $0.72 million, totalled
$0.35 million as compared to cash flow used of $0.24 million in the second
quarter of 2006. In the three months ended June 30, 2007, cash used in
investing activities was $1.04 million (2006-$0.88 million) which was expended
on exploration of mineral properties principally in Angola and Sierra Leone.
Cash flow from financing activities for the three months ended June 30, 2007,
was $1.48 million, principally from the issue of 8,750,000 shares for cash in
the amount of $1.64 million (2006 cash flow from financing activities - $nil
million ). During 2006, the Company was advanced $1.43 million (including $0.13
million for related parties) which was repayable on demand. The loan was
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 by the Company.
Cash flow provided for operating activities for the six months ended June 30,
2007, including increases in non-cash working capital of $1.47 million, totalled
$0.84 million as compared to cash flow used in operating activities of $0.24
million in the same period of 2006. During the six months ended June 30, 2007
cash used in investing activities was $1.99 million which was expended on
exploration of mineral properties, principally on the Dala diamond project in
Angola and Port Loko bauxite property in Sierra Leone. During the six months
ended June 30, 2006, cash used in investing activities was $0.26 million
representing the proceeds from the sale of 45,000 Newmont common shares in the
sum of $2.52 million less $2.78 million expended on exploration of mineral
properties, principally on the Port Loko bauxite property in Sierra Leone and
the Dala diamond project in Angola.
Cash flow from financing activities for the six months ended June 30, 2007, was
$1.83 million representing $3.26 million, being the proceeds from the issue of
18,297,186 common shares in the Company (2006 cash flow from financing
activities - $nil million ) less the repayment of loans in the amount of $1.43
million. During 2006, the Company was advanced $1.43 million (including $0.13
million for related parties) which was repayable on demand. The loan was
non-interest bearing.
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 second quarter of 2007 and
2006.
Outstanding Share Data
As at August 11, 2007, the Company has 56,572.904 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 4,900,000 stock options
outstanding at a weighted average exercise price of Cdn$0.24.
On July 13, 2007, 2.6 million options were granted to Directors of the Company
of which 1.4 million were granted vesting on July 13, 2007, to purchase common
shares of the Company at Cdn$0.20 per share for a five year period expiring on
July 13, 2012 and 1.2 million were granted vesting on July 13, 2008 to purchase
common shares of the Company at Cdn$0.33 per share for a five period expiring on
July 13, 2012.
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 $0.14 million
during the three months ended June 30, 2007, (2006 - $0.24 million) 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 $0.06 million during the three months
ended June 30, 2007, (2006 - $nil 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 December December
31,2006 31,2005 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 - - -
Quarterly Information
The following table summaries the results of the Company for each of the most
recent eight quarters:
June March Dec Sept June March Dec Sept
2007 2007 2006 2006 2006 2006 2005 2005
$ $ $ $ $ $ $ $
Revenues - - - - - - - -
Net profit/
(loss) (363,490) (262,548) (426,462) (335,633) (331,574) 33,490 331,297 (735,771)
Basic and diluted
(loss)/ earnings
per Common share (0.007) (0.007) (0.011) (0.010) (0.011) 0.001 0.011 (0.025)
Total assets 10,973,189 9,150,435 8,358,027 8,931,585 7,110,675 6,841,872 6,334,596 6,662,268
Number of common
shares
outstanding 56,572,904 47,822,904 38,275,718 38,275,718 30,620,575 30,675,575 30,620,575 30,620,575
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)
December 31
June 30, 2006
2007
(unaudited) (audited)
Assets
Current assets
Cash and cash equivalents $830,383 $143,046
Accounts receivable and prepaid expenses 41,643 99,245
Current income taxes recoverable 101,641 101,641
973,667 343,932
Mineral properties (Note 3) 9,979,852 7,993,987
Other assets 19,670 20,108
10,973,189 8,358,027
Liabilities
Current liabilities
Accounts payable and accrued liabilities 2,560,191 1,148,007
Loan - 1,433,601
2,560,191 2,581,608
Shareholders' Equity
Capital stock (Note 4) 21,276,980 18,014,363
Contributed surplus 414,726 414,726
Deficit (13,278,708) (12,652,670)
8,412,998 5,776,419
10,973,189 8,358,027
Nature of operations and going concern (note 1)
MOYDOW MINES INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(expressed in United States dollars, unless otherwise stated)
Three months ended Six months ended
June 30,2007 June 30,2006 June 30,2007 June 30,2006
$ $ $ $
Expenses
Due diligence 346,863 346,863
General and administrative 303,421 186,412 563,266 433,292
Amortization of property, plant and equipment 663 663
Foreign exchange loss/(gain) 59,557 -199,795 62,560 -191,804
363,641 333,480 626,489 588,351
Other income and expenses
Gain on Newmont common shares, net 306,882
Interest income 151 1,906 451 6,592
Dividend income 850
151 1,906 451 314,324
Loss before income taxes -363,490 -331,574 -626,038 -274,027
Income tax provision -24,057
Loss for the period -363,490 -331,574 -626,038 -298,084
Basic and diluted loss per common share -0.007 -0.011 -0.014 -0.010
Weighted average number of common shares outstanding
(basic and diluted) 48,976,750 30,620,575 43,708,542 30,620,575
$ $ $ $
Deficit, beginning of period -12,915,218 -11,559,001 -12,652,670 -11,592,491
Loss for the peroid -363,490 -331,574 -626,038 -298,084
Deficit, end of period -13,278,708 -11,890,575 -13,278,708 -11,890,575
MOYDOW MINES INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(expressed in United States dollars, unless otherwise stated)
Three months ended Six months ended
June 30,2007 June 30,2006 June 30,2007 June 30,2006
$ $ $ $
Cash provided by (used in)
Operating activities
Loss for period -363,490 -331,574 -626,038 -298,084
Adjustments for non-cash items
Amortization of property, plant and equipment 438 438
Gain on Newmont common shares, net -306,882
-363,052 -331,574 -625,600 -604,966
Changes in non-cash working capital
Accounts receivable and prepaid expenses 10,754 244,405 57,602 36,453
Accounts payable and accrued liabilities and income taxes 707,228 -149,623 1,412,184 324,163
717,982 94,782 1,469,786 360,616
354,930 -236,792 844,186 -244,350
Investing activities
Proceeds from sale of Newmont common shares 2,520,882
Exploration of mineral properties -1,038,885 -876,637 -1,985,865 -2,779,784
-1,038,885 -876,637 -1,985,865 -258,902
Financing activities
Proceeds from issue of capital stock 1,638,117 3,262,617
Loan -159,101 750,000 -1,433,601 750,000
1,479,016 750,000 1,829,016 750,000
Increase in cash and cash equivalents 795,061 -363,429 687,337 246,748
Cash and cash equivalents-Beginning of peroid 35,322 628,521 143,046 18,344
Cash and cash equivalents-End of peroid 830,383 265,092 830,383 265,092
Supplemental information
Cash income taxes paid - - - -
Cash interest paid - - - -
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 and industrial minerals
and diamonds. Moydow's common shares are listed on both the Toronto Stock
Exchange and the AIM Market of the London Stock Exchange.
The Company is exploring its mineral properties and, as at June 30, 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 June 30, 2007, the Company had an excess of
current liabilities over current assets of $1,586,524 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 June 30, 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
Write down of remaining Newmont shares to market at March 31, - -
Gain 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
June 30, 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
Cost-June 30, 2007 894,017 149,059 - 4,191 1,038,885
Balance-June 30, 2007 6,607,387 2,868,427 504,038 9,979,852
4) Capital stock
Authorized
Unlimited number of common shares
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
Issue of shares-June 18, 2007 8,750,000 1,638,117
Balance-June 30, 2007 56,572,904 21,276,980
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 $140,815 during
the quarter June 30, 2007 (2006 - $241,389) 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 $60,581 during the quarter June 30, 2007
(2006 - $nil) 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
Michael E. Power - Director, Vice President & Secretary
J. Joseph Breen - Director & COO
Albert Gourley - Director
Richard Linnell - Director
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
Dublin Office
74 Haddington Road
Dublin 4, Ireland
Tel: (353) 1 667 7611 Fax: (353) 1 667 7622
Accra Office
13 Shippi Link,
East Cantonments
Accra, Ghana
Tel: (233) 21 772516 Fax: (233) 21 777247
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: 56,572,904
Shares fully diluted: 61,472,904
To contact the Company
In order to contact the company 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
IR EAANNFLXXEFE
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