Third Quarter Report
Skyharbour Resources Ltd. (the "Company") has released its BC Form 51-901F Third Quarter Report containing financial statements in Canadian funds, prepared by management, for the nine month period ended December 31, 2002 (the "Quarterly Report"). Pursuant to the requirements of National Instrument 54-102, this news release provides a summary of the information contained in the Quarterly Report. Concurrently with this news release the Company has filed the Quarterly Report with the regulatory authorities through SEDAR (www.sedar.com).
Skyharbour Resources Ltd. is a Canadian mineral exploration company focused on gold exploration in the Red Lake and Birch-Uchi gold belts, Ontario, and diamond exploration in the Coronation Gulf and Victoria Island, Nunavut.
The Company is primarily a junior exploration company whose activities include the process of exploring its mineral properties, reviewing and subsequently acquiring potential new mineral properties and conducting exploration programs to determine whether these properties contain ore reserves that are economically recoverable. The recoverability of amounts shown on the financial statement for the mineral properties and related deferred exploration costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the exploration of the property, and upon future profitable production.
Results of Operations
The Company has not had any sources of revenue to date and has financed its activities substantially through equity financing. During the current quarter, the Company incurred a net loss of $144,358 compared to $64,677 of the previous year and compared to the quarter ended September 30, 2002 of $145,829 as compared to $99,131 of the previous year. The increase in the current quarter's loss compared to the previous year's quarter is partly a result of the write off of the Ebby/Otto mineral properties and the related deferred exploration expenses. It is also a result of and increase of other administrative expenses relating to that of a company in mineral explorations compared to that of the previous year when the Company was involved in a full due diligence investigation into a wireless infrastructure in Cuba.
The Company has incurred net losses in each year since inception and as of December 31, 2002, has an accumulated deficit of $19,677,874.
Liquidity and Capital Resources
The Company has a shareholders' equity of $1,044,640 and a working capital of $388,272 compared to $991,064 and a working capital of $418,117 at September 30, 2002.
The Company has historically met all cash requirements for operation by equity financing. Future funding needs of the Company are dependent upon the Company's continued ability to obtain equity and/or debt financing to meet its financial obligations and to pursue further exploration on its properties.
Baird Township, Red Lake Area, Kenora Mining Division, Ontario
On November 19, 2002, Bayfield Ventures Corp. ("Bayfield") and the Company amended the terms of their Option Agreement dated May 14, 2002. The Company had been granted an option by Bayfield to acquire a 51% interest in a total of 6 mineral claim units (the "Claims") located in Baird Township, Red Lake District, Kenora Mining Division, Ontario.
Pursuant to the terms of the Option Agreement the Company was to complete a $250,000 work program on the Claims by December 31, 2002. Bayfield has agreed to grant the Company a six-month extension. As consideration for granting the extension, the Company issued Bayfield 100,000 common shares on December 11, 2002 at a deemed value of $10,000.
Grays Bay, Coronation Peninsula, Victoria Island Projects
On October 28, 2002, the Company entered into a proposed agreement subject to regulatory approval, with its joint venture partners, Hunter Exploration Group and Northern Empire Minerals Ltd. with respect to the Coronation Gulf Diamond District Properties located in Nunavut. The parties have agree to amend their existing option agreements as follows:
Option Agreement with The Hunter Group
The Company previously entered into a formal option agreement dated February 29, 2002 with the Hunter Group to acquire an 80% interest in a total of 1,100,000 acres (approximately) consisting of five separate areas comprising 23 Prospecting Permits located in the Coronation Gulf Diamond District, Nunavut. Pursuant to an amendment agreement (the "Amendment Agreement"), the parties have agreed to carry out a revised work schedule as follows:
(i) $75,000 on or before December 31, 2002; (which includes the work by Northern Empire)
(ii) $200,000 on or before December 31, 2003, of which $100,000 must be committed by July 31, 2003;
(iii) $425,000 on or before December 31, 2004;
(iv) $1,000,000 on or before December 31, 2005; and
(v) $2,300,000 on or before December 31, 2006.
In addition, the advanced royalty payment will be payable as to $12,500 by February 28, 2003 and the balance of $12,500 will be payable by October 31, 2003.
Option Agreement with Northern Empire Minerals Ltd.
The Company previously entered into a formal option agreement dated March 15, 2002 with Northern Empire Minerals Ltd. ("Northern Empire") wherein the Company granted an option to Northern Empire to acquire a 40% interest (50% of the Company's 80% interest) in a total of twelve prospecting permits aggregating 658,739 acres known as the Coronation Peninsula North and Coronation Peninsula South Permits. Pursuant to an Amendment Agreement, the parties have agreed to carry out a revised work schedule as follows:
(i) $75,000 on or before December 31, 2002;
(ii) $275,000 on or before December 31, 2003, of which $100,000 must be committed by July 31, 2003;
(iii) $500,000 on or before December 31, 2004; and
(iv) $1,150,000 on or before December 31, 2005.
East Humlin, McKenzie Island, Dome and Fairlie Townships, Red Lake Area, Kenora Mining Division, Ontario
On December 14, 2002, the Company and Cypress Development Corp. ("Cypress") amended the terms of their Option Agreement dated May 16, 2002 (the "Option Agreement") to which Cypress granted the Company the right to earn a 51% interest in and to one hundred and thirty (130) mineral claim units located in Dome, Heyson and Fairlie Townships, Red Lake District, Kenora Mining Division, Ontario (the "McKenzie Island Property").
Pursuant to the terms of the Amending Agreement Cypress and the Company agreed that, in consideration of the Company having completed the Phase I work program on the Property and in consideration of the Company having agreed to relinquish certain of its option rights under the Option Agreement, the Company has earned and is vested with a 20% percent interest in the McKenzie Island Property and that Cypress retains an 80% percent interest in the McKenzie Island Property.
Subsequent to the Amending Agreement, on December 15, 2002, the Company and Cypress entered into a Joint Venture Option Agreement with Orko Gold Corporation ("Orko").
Under the terms of the Joint Venture Option Agreement, Orko will have the right to earn a 60% interest in and to the McKenzie Island Property. The resulting interest will be Orko 60%, Cypress 20% and Skyharbour 20%.
In order for Orko to earn the 60% interest in the Property, Orko will pay Cypress $35,000, incur $500,000 of exploration expenditures on the Property by December 31, 2003, $250,000 of which must be expended by April 30, 2003 and issue 200,000 shares to Cypress and 100,000 shares to Skyharbour.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this news release.