Skyharbour Resources Ltd. (the "Company") has released its BC Form 51-901F First Quarter Report containing financial statements in Canadian funds, prepared by management, for the three-month period ended June 30, 2003 (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. Concurrent 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.
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 period, the Company incurred a net loss of $437,035 as compared to $165,209 of the previous year. The increase in the year to date figure is primarily the result of the write off of the Grays Bay mineral property in the amount of $186,500 and related deferred exploration expenditures of $105,979. The Company incurred a net loss of $262,664 during the quarter ended March 31, 2003, compared to $260,345 of the previous year and compared to the quarter ended December 31, 2002 of $157,800 as 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 Company has incurred net losses in each year since inception and as of June 30, 2003, has an accumulated deficit of $20,377,573.
Liquidity and Capital Resources
The Company has a shareholders' equity of $1,003,667 and working capital of $235,177 at June 30, 2003 compared to that of a shareholders' equity of $1,249,704 and a working capital of $470,936 at March 31, 2003.
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.
Heyson & Byshe Township, Red Lake District, Ontario
On May 6, 2003, the Company and ITL Capital Corporation ("ITL") amended the terms of their Option Agreement dated May 14, 2002. The Company was granted an option by ITL to acquire a 51% interest in a total of fifteen mineral claim units located in Heyson and Byshe Townships, Red Lake District, Ontario (the "HB Claims").
Pursuant to the terms of the Option Agreement, the Company was to have completed a $150,000 work program on the HB Claims by April 30, 2003. The parties have agreed to amend the Option Agreement by extending the term of the work commitment to December 31, 2003. In consideration for granting the extension, the Company issued on June 19, 2003, ITL a total of 200,000 shares at a deemed price of $0.14 per share. The shares are subject to a hold period until the expiry of September 30, 2003.
CD Claims, Dome Township, Red Lake District, Ontario
On May 12, 2003, the Company entered into an agreement with Carl D. Huston ("Huston") to purchase a 100% interest in and to three mineral claim blocks consisting of 4 units located in the Dome Township, Red Lake Mining District, Ontario, covering approximately 200 acres (the "CD Property"). The Company paid the sum of $1,500 and issued 20,000 common shares to Carl D. Huston as consideration for the CD Property.
Option Agreement with The Hunter Group
The Company issued 275,000 units on June 9, 2003, pursuant to an agreement dated February 28, 2002 between the Company and Hunter Exploration Group. Each unit consists of one share and one share purchase warrant. Each warrant entitles the holder to purchase an additional share of the Company at a price of $0.13 until May 30, 2004. The units were issued in connection with 23 prospecting permits located in the Coronation District, Nunavut. The shares and the shares to be issued upon exercise of the warrants are subject to a hold period until the expiry of September 30, 2003.
Management decided to relinquish its option on the Property and will not be proceeding with any further exploration.
Dent, Agnew and Uchi Townships, Red Lake District, Kenora Mining Division, Ontario
On June 11, 2003, the Company amended an option agreement dated May 22, 2003 with Carl D. Huston wherein the Company had been granted an option to earn a 100% interest in and to 6 claim blocks consisting of 51 units located in the Dent, Agnew and Uchi Townships, Red Lake District, Kenora Mining Division, Ontario. Pursuant to the terms of the Option Agreement, the Company was to pay the sum of $5,000 and issue 20,000 shares on or before June 21, 2003. The Option Agreement has been amended such that the Company paid the sum of $1,500 and issued 50,000 shares.
Black Bear 11 Claims, Ontario
The Company issued 20,000 common shares pursuant to an Option Agreement dated April 24, 2002 between the Company and 1304850 Ontario Inc on April 29, 2003. The shares were issued in connection with the Black Bear II Property comprised of 4 mineral claims consisting of 48 units located in Red Lake, Ontario. The shares are subject to a hold period until the expiry of August 22, 2003.
On May 14, 2003, the Company began its spring/summer mineral exploration program on its Black Bear 11/Sidace Lake Project. An aggressive and detailed till sampling program commenced immediately followed by geochemical and geophysical programs. Previous airborne magnetic data is being digitized by the Company to aid in the interpretation of known geologic structures. The company has defined a number of iron carbonate alteration zones within the known existing mafic volcanic structures on the property. Recent geologic studies of the area suggest that the property is potentially underlain with the Balmar and Confederation Assemblage rock types.
Black Bear 11 Claims, Ontario (continued...)
On May 23, 2003, the Company and Consolidated Abaddon Resources Inc. ("Abaddon") (the "Joint Venture") entered into an agreement. The Company, on behalf of the Joint Venture, staked two additional claims, which are adjoining to, and now form part of, the Joint Venture's Black Bear 11 property (the "Black Bear 11 Property"). The two additional claims are subject to a 2% net smelter return royalty in favour of Perry English. The Joint Venture also wishes to undertake an exploration program on the Sidace Lake Property in the amount of $40,000. Pursuant to the terms of the agreement, Abaddon and the Company have agreed that Abaddon's share of the exploration expenditures ($20,000) and staking costs ($775) is satisfied by Abaddon issuing to the Company a total of 200,000 common shares at a deemed price of $0.12 per share and that upon such share issuance, Abaddon shall maintain an undivided 50% interest in the Joint Venture.
East Humlin, McKenzie Island, Dome and Fairlie Townships, Red Lake Area, Kenora Mining Division, Ontario
On April 15, 2003, the results received to date from the drilling carried out on its McKenzie Island Joint Venture with Cypress Development Corp. in the Red Lake District, Northwestern Ontario were released. Orko Gold has the right to earn a 60% interest in the property by spending $500,000 in exploration expenses in 2003. The program was designed to test geophysical and geochemical targets as defined from previous Skyharbour fieldwork. The Phase 1 diamond drill program included 8 drill holes located in the MacAndrew geological trend plus 5 additional drill holes located on the NMI zone, which are situated off the north shore of McKenzie Island. The drilling program consisting of 2081.5 meters (6828.3 feet) in 13 holes have now been completed.
Eight of the drill holes tested .5 kilometer of strike length along the MacAndrew trend. The gold values encountered here are generally associated with sheared and altered margins of a quartz diorite body that has intruded the Dome Stock. Numerous anomalous gold values have been encountered in this trend.
Results to date have indicated minor gold values in the system and that the area warrants additional exploration.
The area off the north shore of McKenzie Island (NMI zone) was drilled with a total of 5 holes testing an area of indicated structural disturbance along the contact between the volcanic formations and sedimentary formations. These holes targeted structural zones interpreted from previous magnetic data. All of the structural zones encountered were confirmed as carbonate shear/breccia zones with associated anomalous gold values.
An overburden-drilling program has also been carried out on a portion of McKenzie Island and to the south in St. Paul's Bay area. The base of till was sampled at 133 sites with 2990 feet of overburden drilling. Numerous elevated gold values were identified in tills from both areas. These anomalous gold values correspond well with the large till sampling program carried out by Skyharbour in 2002. Results to date from both the diamond drill program and the overburden drill program are continuing to be compiled.
Gold assay samples were prepared and assayed by TSL Laboratories of Saskatoon, Saskatchewan, using industry standard fire assay geochemical and/or gravimetric methods. Standard samples were submitted with each sample batch. The McKenzie Island Phase 1 drill program was carried out and supervised by David Busch, PGeo, a qualified person.
The Company issued 100,000 common shares on May 20, 2003, pursuant to an Option Agreement dated May 14, 2002 between the Company and Cypress Development Corp. The shares are subject to a hold period until the expiry of September 12, 2003.
Baird Township, Red Lake Area, Kenora Mining Division, Ontario
On June 26, 2003, the Company announced that its spring (2003) drilling program has been completed. A total of 3068 meters (10,062 feet) were drilled on the property. This drill program has been a collaboration with the Company (operator), Bayfield Ventures and Placer Dome (CLA) Ltd. (optionee). The program was designed to systematically section the property at 200-meter intervals. The drill program was intended to define the extent and character of previously identified gold mineralization, alteration, and structures. The drilling targeted a broad, known deformation zone interpreted from airborne geophysical data.
Skyharbour and Bayfield are very encouraged with the results received to date from the drilling program, which has confirmed the presence of gold mineralization within broad zones of quartz carbonate alteration. The quartz carbonate alteration system was significantly expanded by the Phase 1 drilling program. Gold values encountered in B03-9 were in an entirely new geological setting. This setting includes veins and veining in mafic / ultramafic flows and subvolcanics and is 400m west of any previously known gold values. The planar nature of gold bearing veins in this setting indicates a strong likelihood of lateral continuity.
This geological setting is interpreted as displaying many similarities to the known major gold deposits that have been developed in heart of the Red Lake gold belt. (Placer Dome's Campbell Mine and Goldcorp's Red Lake mine as examples). It is believed sufficient data was obtained from the current program to effectively target new and prospective settings for further drilling.
Placer Dome has provided the funding necessary for the drill program as part of an earn-in option agreement. (see news release March 21, 2003). Follow up exploration programs on the property will focus on further delineating the gold bearing zones and targeting higher-grade gold bearing shoots within these zones.
Gold assays were by metallic screen fire assays as carried out by TSL Laboratories Inc. of Saskatoon, Saskatchewan. Industry standards and blanks were incorporated into each sample batch to ensure quality control of the assaying. These results have been prepared under the direct supervision of Mr. David Busch, P Geo., who is designated a Qualified Person with the ability and authority to attest to the authenticity and validity of this data.
On July 22, 2003, the Company closed its 2,500,000 unit private placement. Each unit consists of one share and one share purchase warrant which entitles the holder to purchase an additional share of the Company at a price of $0.10 per share until July 16, 2005. In addition, the Company issued 43,750 Units and paid the sum of $4,875 as compensation in connection with its private placement. The shares and any shares to be issued upon exercise of the warrants will be subject to a hold period and shall not trade until the expiry of November 16, 2003.
On July 31, 2003, the Company closed its 1,000,000 flow-through unit private placement. Each unit consists of one flow-through share and one share purchase warrant which entitles the holder to purchase an additional flow-through share of the Company at a price of $0.15 per share until July 28, 2005. The Company also issued Canaccord Capital Corporation 41,250 non flow-through units and paid the sum of $5,362.50 as compensation in connection with its private placement. The shares and any shares to be issued upon exercise of the warrants will be subject to a hold period and shall not trade until November 28, 2003.
Heyson & Byshe Township, Red Lake District, Ontario
The Company commissioned a Geological Report on its HB Claims on July 14, 2003. An Evaluation Report dated December 13, 2002 was prepared by David J. Busch B.A. (hons), PGEO. The report documents preliminary exploration results on the property and recommended an exploration program consisting of diamond drilling, over burden drilling, till sampling and outcrop stripping at an estimated cost of $358,600.
On July 23, 2003, the Company staked an additional claim block, consisting of approximately 600 acres, contiguous to its HB Claims. This new claim block was staked on behalf of ITL Capital Corp. and the Company. The recently completed drill program that tested the Sully Creek Till Anomaly was located in the southeast quadrant of the property in close proximity to the eastern boundary. This newly acquired claim block is tied on to the southeastern boundary of the property and is on strike with the Sully Creek Till Anomaly.
On July 31, 2003, the Company completed a drill program on the Heyson/Byshe (HB) Property and has intersected zones of gold mineralization while drilling the Sully Creek gold-in-till anomaly. Five holes (1100 Meters) were drilled to test this gold-in-till anomaly with the objective of gaining a better understanding of the local geology and structural controls that may be responsible for the high levels of gold found in the tills. This large till anomaly was defined by our 2002 till sampling program. Multiple bedrock sources along a 1.5 km strike length were interpreted. There were no verifiable gold occurrences in the area of the till anomaly prior to drilling. Rocks of the area are believed to be felsic volcanics and mafic intrusives of the Confederation assemblage.
Heyson & Byshe Township, Red Lake District, Ontario (continued...)
To date, the Company has completed 5 widely spaced reconnaissance diamond drill holes on the Property testing various parts of the eastern half of the till anomaly. Two of the five holes have encountered gold values over 0.5 grams per ton, one of which contained visible gold.
Hole H03-1 encountered 0.63 g/t Au over 1.3 meters. Values occur at the bottom of the hole in a zone of sulfide veins and veinlets in otherwise unaltered felsic volcanics.
Hole H03-3 encountered a high-grade gold intercept (visible gold) of 59.4 g/t Au over 0.4 meters. This intercept occurs in veining in a highly altered zone of fracturing and brecciation in the upper part of a shallow dipping diorite body. The alteration is approximately 15 meters thick. Alteration associated with the gold intercept in hole H03-3 is pervasive hematite-magnitite-epidote with extensive fracturing and brecciation. While not a common alteration associated with deposits in the Red Lake Camp, the alteration assemblage is typical of a number of gold mines in the Canadian Archean.
Hole H03-4 intersected 45 meters of 3% disseminated sulphides in felsic volcanics with slightly elevated gold values flanking a diorite intrusive body.
This discovery is the result of the rigorous application of an exploration model as opposed to a geological model. A program consisting of a 43-kilometer ground grid is being cut over the area to be followed with geophysics.
On August 21, 2003, the Company announced that a magnetometer and gradiometer geophysical survey performed on the jointly held HB Property is now complete. The Company established a 45 km grid on the property and then proceeded to conduct a detailed geophysical program over the previously known mineralized zones. The data obtained from this survey will help to further delineate proposed drill targets for the upcoming phase 2 of drilling.
The Companies next phase of drilling commenced August 24, 2003. This program will consist of up to 1500 meters of drilling to test the extension of the high grade zone as well as to test potential new targets as identified by surface geology and the magnetic survey.
Black Bear 11 Claims, Ontario
On August 25, 2003, the Company reports that it has now completed a major till sampling program on its Black Bear 11 / Sidace Lake property.
The till sampling program is the beginning of the Phase 1 work program initiated by the Skyharbour / Abaddon joint venture for the summer of 2003. Several hundred till samples have been submitted for assaying with Overburden Management. The Company reports that several "gold in till anomalies" are now evident from the assays received to date. The Company is still awaiting additional till assays, which are now being processed by the lab. Data compilation and geological mapping continues on the Sidace Lake property at this time.
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