AAA.L Regulatory News (AAA)

16 Mar 2005 11:09

Adastra Minerals Inc16 March 2005 16 March 2005 ADASTRA MINERALS INC. Three months ended January 31, 2005 and 2004(Unaudited - Prepared by Management) MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis should be read in conjunction with theConsolidated Financial Statements of Adastra Minerals Inc. (the "Company") forthe three month periods ended January 31, 2005 and 2004, and related notes (the"Consolidated Financial Statements"). The following discussion and analysishighlights significant changes since the discussion and analysis in the 2004Annual Report, which should also be referred to for additional information. Thediscussion is based on events that have occurred up to March 4, 2005. Except asotherwise noted, all dollar amounts contained in this discussion and analysisand the Consolidated Financial Statements are stated in U.S. dollars.Additional information relating to the Company, including the Company's AnnualInformation Form ("AIF"), is available on SEDAR at www.sedar.com. Results of Operations The Company incurred a net loss for the three months ended January 31, 2005, of$741,817, or $0.01 per share, compared to a net loss of $713,881, or $0.01 pershare, for the three months ended January 31, 2004. The results for the three months ended January 31, 2005, reflect the followingfactors: • Administration expenses have remained relatively stable on an overall basis, compared to the first quarter ended January 31, 2004, with an increase of 3.9% to $901,893 for the quarter ended January 31, 2005, from $867,828 for the quarter ended January 31, 2004. The increase is principally due to increased levels of professional fees and regulatory authorities filing fees, partly offset by a reduction in stock-based compensation expense and salaries and wages. The increased administration costs are also the result of an approximately 7% weaker US dollar relative to the pound sterling for the quarter ended January 31, 2005, as compared to the quarter ended January 31, 2004. Many of these costs are incurred in pounds sterling. • The higher professional fees during the first quarter of 2005, compared to the corresponding period of 2004, are mainly due to fees associated with filing the Company's Annual Report on Form 20-F during the first quarter of 2005, whereas last year this form was filed in the following quarter. • The increase in regulatory authorities filing fees is mainly due to increases in Ontario Securities Commission and TSX fees, reflecting the Company's higher market capitalization. • The decrease in stock-based compensation in the quarter ended January 31, 2005, versus the corresponding quarter of 2004, is due to the decrease in the number of options granted during the period (30,000 options, compared to 650,000 options granted in the quarter ended January 31, 2004). Stock-based compensation expense of $419,053, recorded in the quarter ended January 31, 2005 (2004-$462,665), includes the expense for options granted in prior periods with vesting dates during this or future quarters. • Salaries and wages have decreased mainly because a higher proportion of salary costs have been capitalized to mineral properties and mineral property evaluation costs, due to employees spending more time on the mining projects than in the corresponding quarter in the previous year. • Higher interest rates obtained on cash balances resulted in higher interest income during the quarter, compared with the corresponding period of 2004. The Company holds some of these cash balances in Canadian dollars and pounds sterling in anticipation of expenditures to be incurred in these currencies. During the quarter ended January 31, 2005, the US dollar weakened against these other currencies and the Company recorded a foreign exchange gain of $49,904. Liquidity and Capital Resources As at January 31, 2005, the Company had cash and cash equivalents of$14,024,345, compared to $16,264,314 at October 31, 2004, and had workingcapital of $13,077,540, compared to $15,113,846 at October 31, 2004. The decreases in cash and cash equivalents and in working capital as at January31, 2005, compared to the balances as at October 31, 2004, mainly resulted fromexpenditures on mineral properties during the quarter and the loss fromoperations excluding the non-cash stock based compensation expense. Issued share capital has remained unchanged during the quarter, with 70,735,925common shares outstanding throughout. During the three months ended January 31,2005, the Company granted 30,000 options to purchase common shares, resulting in6,156,000 options outstanding as at January 31, 2005. Outstanding warrants topurchase common shares remained unchanged through the quarter at 1,679,656. The Company believes it has sufficient cash and cash equivalents on hand to fundits short-term development activity. The Company will be required to raiseadditional financing in order to maintain its long-term development plans. Therecoverability of amounts shown for mineral properties and mineral propertyevaluation costs is dependent on the ability of the Company to obtain necessaryfinancing, and on other exploration and development and financing risk factorsdiscussed in the AIF, to which the reader is referred. During the quarter ended January 31, 2005, there have been no material changesin the contractual obligations and critical accounting estimates as compared tothose disclosed in the AIF, to which the reader is referred. Mineral Property Projects As at January 31, 2005, amounts capitalized in respect of mineral propertiesincreased to $13,815,499, from $12,129,625 at October 31, 2004, reflecting$1,658,287 in costs incurred on the Company's Kolwezi Project and $27,587 incosts on the Angola Project. Capitalized mineral property evaluation cost increased to $4,422,427, from$4,397,126 at October 31, 2004, reflecting $25,301 costs incurred on theCompany's Kipushi Project. Kolwezi Project, DRC During the quarter ended January 31, 2005, the Company primarily concentrated onprogressing its Kolwezi Project. The first phase of the Definitive FeasibilityStudy ("DFS") - a scoping study analyzing different production levels - wascompleted. It was concluded that the initial design capacity of the plantshould be to produce 5,500 tonnes of cobalt and 30,000 tonnes of copperannually, and work is now underway to complete the DFS on that basis. Workcontinued on the second stage of the Environmental and Social Impact Assessment("ESIA"), on negotiating long term sales agreements and marketing arrangementsfor the cobalt to be produced, and on preparations for project financing. In late November 2004, the Industrial Development Corporation of South AfricaLimited ("IDC") informed the Company that, subject to certain conditions,including receiving exchange control permissions from the South African ReserveBank, it would be exercising in full its option to acquire 10% of the Project.The IDC and the International Finance Corporation each has an option to acquirefrom the Company up to 10% of the Project on a farm-in basis, at a price relatedto the accumulated expenditures of the Company and its affiliate up to the timeof the exercise of the option. Subsequent to the quarter end, the Company appointed Sullivan & Cromwell toadvise on the legal aspects of the project financing. Kipushi Project, DRC In financial year 2003, the Company and Gecamines agreed that priority should begiven to finalizing the Kolwezi Contract of Association ("CoA"). Following theexecution of the CoA in March 2004, negotiations on the proposed revisions tothe Gecamines Agreement were planned to recommence. Meetings were, however,postponed until after the end of financial year 2004, pending Gecamines'detailed review of, and response to, the proposals previously submitted by theCompany. Gecamines' response was received during the quarter ended January 31, 2005, andnegotiations are now underway. Kumba Base Metals Limited, who, in accordancewith the Zincor Joint Venture Agreement, can earn a 50% shareholding in theCompany's interest in the Kipushi Project, is fully involved in thesenegotiations. Once agreement on the revisions has been reached and necessaryGDRC approvals have been obtained, the Company anticipates that the feasibilitystudy will commence. Angolan Projects During the year ended October 31, 2004, the Company found it impossible toprogress matters further with Endiama in relation to its rights with regard totwo mineral properties in Angola. In September 2004, it became clear thatEndiama had repudiated its contractual obligations. Consequently, the Companyannounced that it would be seeking legal redress. Filing of the suit in the USAhas, however, been temporarily postponed pending the outcome of representationsat senior government levels - thus far without response from Endiama. Related Party Transactions During the quarter ended January 31, 2005, the Company paid or accrued anaggregate of $57,453 (2004 - $27,195) for legal services to a law firm in whicha director of the Company is a partner. In addition, the Company has paid oraccrued $1,000 (2004 - $-nil) for consulting services to a non-executivedirector, and $5,860 (2004 - $-nil) for consulting services to a company inwhich a director has an interest. Risk Factors The risk factors affecting the Company are substantially unchanged from thosedisclosed in the annual Management's Discussion & Analysis contained in the AIF,to which the reader is referred. Summary of quarterly results A summary of quarterly results for each of the eight most recently completedquarters is as follows: 2005 2004 2003 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Interest income $ $ $ $ $ $ $ $ 110,172 101,794 99,765 111,048 51,962 13,821 3,007 1,864 Loss for period $ $ $ $ $ $ $ $ 741,817 429,328 601,173 2,465,791 713,881 2,112,281 407,712 546,618 Basic and diluted $ $ $ $ $ $ $ $loss per share 0.01 0.01 0.01 0.04 0.01 0.05 0.01 0.02 The main factors underlying the variations in these quarterly results relate tothe timing of the granting of options, exchange rate fluctuations (particularlyin the value of the U.S. dollar against the Canadian dollar and poundssterling), and the incurring of mineral property evaluation costs. The Companymade relatively large grants of options in the second quarter of fiscal 2004,and in the fourth quarter of 2003 modified its stock option plan to permitfuture "cashless" exercises. As a result, the Company recorded relativelyhigher administration costs and losses in those quarters. . Forward Looking Statements This discussion contains "forward-looking statements", within the meaning of theUnited States Private Securities Litigation Reform Act of 1995, concerning theCompany's plans for its Kolwezi Project, the Kipushi Project and its AngolanProjects and the resource size and economic potential of those projects. Theseforward-looking statements are subject to a variety of risks and uncertaintieswhich could cause actual events or results to differ materially from thosereflected in the forward-looking statements, including, without limitation,risks and uncertainties relating to political risks involving the Company'soperations and the policies of other nations and organizations towards companiesdoing business in such jurisdictions, the inherent uncertainty of production andcost estimates and the potential for unexpected costs and expenses, commodityprice fluctuations, the inability or failure to obtain adequate financing on atimely basis and other risks and uncertainties including those described in theAIF, the Company's Annual Report on Form 20-F for the year ended October 31,2004, and Reports on Form 6-K filed with the Securities and Exchange Commission. Contact us: London Tim Read Justine Howarth / Cathy MalinsChief Executive Officer Parkgreen CommunicationsT: +44 (0)20 7355 3552 T: +44 (0)20 7493 3713F: +44 (0)20 7355 3554 F: +44 (0)20 7491 3936E: london@adastramin.com E: justine.howarth@parkgreenmedia.com North America Martti KangasThe Equicom GroupT: +1 416 815 0700 x. 243 +1 800 385 5451 (toll free)F: +1 416 815 0080E: mkangas@equicomgroup.com Consolidated Financial Statements Three months ended January 31, 2005 and 2004 Adastra MINERALs INC.(Formerly America Mineral Fields Inc.) Consolidated Balance Sheets(Unaudited - Prepared by Management)(Expressed in United States dollars) January 31, October 31, 2005 2004Assets Current assets:Cash and cash equivalents $ 14,024,345 $ 16,264,314Amounts receivable and prepaid expenses 330,791 403,220 14,355,136 16,667,534 Equipment 86,977 84,609 Mineral properties (note 2) 13,815,499 12,129,625 Mineral property evaluation costs (note 3) 4,422,427 4,397,126 $ 32,680,039 $ 33,278,894 Liabilities and Shareholders' Equity Current liabilities:Accounts payable and accrued liabilities $ 1,277,597 $ 1,553,688 Non-controlling interest 8,750 8,750 Shareholders' equity:Share capital (note 4(a)) 67,069,511 67,069,511Contributed surplus (note 4(d)) 5,195,838 4,776,785Deficit (40,871,657) (40,129,840) 31,393,692 31,716,456 $ 32,680,039 $ 33,278,894 See accompanying notes to consolidated financial statements Adastra MINERALs INC.(Formerly America Mineral Fields Inc.) Consolidated Statements of Operations and Deficit(Unaudited - Prepared by Management)(Expressed in United States dollars) Three months ended January 31, 2005 and 2004 2005 2004Administration costs: Amortization $ 2,910 $ 3,787Bank charges and interest 1,566 2,007Investor relations 78,135 73,216Office and administration 92,002 87,256Professional fees 75,426 13,982Regulatory authorities filing fees 57,231 12,630Salaries and wages 167,151 206,285Stock-based compensation (note 4) 419,053 462,665Transfer agent 1,260 1,968Travel and accommodation 7,159 4,032 901,893 867,828 Other items:Interest income (110,172) (51,962)Mineral property evaluation costs - 731Foreign exchange gain (49,904) (102,716) (160,076) (153,947) Loss for the period (741,817) (713,881) Deficit, beginning of period (40,129,840) (35,919,667) Deficit, end of period $ (40,871,657) $ (36,633,548 Basic and diluted loss per share $ (0.01) $ (0.01) Weighted average number of common shares outstanding 70,735,925 63,319,679 See accompanying notes to consolidated financial statements Adastra MINERALs INC.(Formerly America Mineral Fields Inc.) Consolidated Statements of Cash Flows(Unaudited - Prepared by Management)(Expressed in United States dollars) Three months ended January 31, 2005 and 2004 2005 2004Cash provided by (used in): Operations:Loss for the period $ (741,817) $ (713,881)Items not involving cash:Amortization 2,910 3,787Stock-based compensation 419,053 462,665 (319,854) (247,429) Changes in non-cash operating working capital:Decrease in amounts receivable and prepaid expenses 72,429 33,943Decrease in accounts payable and accrued liabilities (276,091) (198,343) (523,516) (411,829) Investments:Purchase of property, plant and equipment (6,414) (26,996)Expenditures on mineral properties (1,684,798) (843,358)Expenditures on mineral property evaluation costs (25,241) (9,593) (1,716,453) (879,947) Financing:Issue of share capital for cash, net - 6,553,929 Increase (decrease) in cash (2,239,969) 5,262,153 Cash, beginning of period 16,264,314 19,267,489 Cash, end of period $ 14,024,345 $ 24,529,642 Cash is defined as cash and cash equivalents. Supplementary disclosure:Interest received, net $ 110,172 $ 51,962Non-cash investing and financing activities:Stock-based compensation for mineral property expenditures - 2,980 See accompanying notes to consolidated financial statements Adastra MINERALs INC.(Formerly America Mineral Fields Inc.) Notes to Consolidated Financial Statements(Unaudited - Prepared by Management)(Expressed in United States dollars) Three months ended January 31, 2005 and 2004 1. Significant accounting policies: These consolidated financial statements of Adastra Minerals Inc. (the "Company")do not include all disclosures required by Canadian generally acceptedaccounting principles for annual financial statements, and, accordingly, theseconsolidated financial statements should be read in conjunction with theCompany's most recent annual consolidated financial statements. Theseconsolidated financial statements follow the same accounting policies andmethods of application used in the Company's annual audited consolidatedfinancial statements as at, and for the year ended, October 31, 2004. 2. Mineral properties: Amounts deferred in respect of mineral properties consist of the following: Zambia DRC Kolwezi Angola Solwezi Total Balance, October 31, 2004 $ 11,007,601 $ 1,122,023 $ 1 $ 12,129,625 Amortization 1,077 - - 1,077Consulting 881,123 300 - 881,423Geology 111,296 - - 111,296Interest received (7,429) - - (7,429)Legal 90,371 - - 90,371Exploration office and accounting 118,954 7,002 - 125,956Salaries 296,729 18,185 - 314,914Site management 446 - - 446Travel 165,720 2,100 - 167,820 1,658,287 27,587 - 1,685,874 Balance, January 31, 2005 $ 12,665,888 $ 1,149,610 $ 1 $ 13,815,499 (a) Kolwezi: Since October 1998, the Company's wholly-owned subsidiary, Congo MineralDevelopments Limited ("CMD"), has signed and/or initialled various agreementswith La Generale des Carrieres et des Mines ("Gecamines") and/or the Governmentof the Democratic Republic of Congo ("GDRC"), governing the terms of the KolweziTailings Project (the "Project"). In March 2004, CMD, GDRC and Gecamines signeda Contract of Association (the "CoA") governing the Project and the ownershipand management of Kingamyambo Musonol Tailings S.A.R.L. ("KMT"), the companyincorporated earlier that month in the Democratic Republic of Congo to own themining title to the tailings and develop the Project. 2. Mineral properties (continued): (a) Kolwezi (continued): The CoA recognizes the framework agreement entered into by the Company inFebruary 2003 for the International Finance Corporation ("IFC") and theIndustrial Development Corporation of South Africa Limited ("IDC") toparticipate in the Project. Under the framework agreement, each of IFC and IDChas an option to acquire from the Company up to 10% of the Project on a farm-inbasis. The price of the farm-in will be related to the accumulated expendituresof the Company and its affiliate up to the time of the exercise of the option.If one of IFC or IDC does not exercise its option, the other will have a rightof first refusal over that option. In November 2004, the IDC informed theCompany that, subject to certain conditions, including receiving exchangecontrol permissions from the South African Reserve Bank, it would be exercisingin full its option to acquire 10% of KMT. In accordance with the CoA, the Tailings Exploitation Rights to the Project havebeen transferred to KMT. CMD owns 82.5% of KMT (which will reduce to 72.5% ifthe IDC completes the exercise of its option, as mentioned above; and wouldreduce to 62.5% if, in addition, the IFC also exercises its option in full), andGecamines and GDRC own 12.5% and 5.0%, respectively. Under the CoA, KMT is topay Gecamines a total of $15,000,000, as consideration for the TailingsExploitation Rights ("TER"). Of this amount, $5,000,000 was paid following thetransfer to KMT of the TER on May 27, 2004, and $10,000,000 will be paidfollowing the completion of all financing arrangements for the Project. The$15,000,000 is to be provided to KMT by CMD and/or IFC and IDC (or otherparticipating parties) based on their pro rata ownership of the Project,excluding Gecamines and GDRC's percentage ownership. Gecamines is to receive anannual dividend of the greater of its ordinary dividend and 2.5% of free cashflow (as defined) for each year from start-up, until senior debt andsubordinated loans have been fully reimbursed. Thereafter, Gecamines will beentitled to an annual dividend based on 10% of the average price realized forcobalt sold in a year in excess of $10.00 per pound (adjusted for inflation), inaddition to any ordinary dividend received by Gecamines, providing that ordinarydividends are paid in such year. CMD and the participating parties are to complete feasibility studies, carry outan environmental impact study, draw up an environmental management plan, andobtain commitments for financing the Project by November 27, 2007 (a time periodof three years and six months from transfer date of the mining rights). 2. Mineral properties (continued): (b) Angola: During the year ended October 31, 2001, the Government of Angola awarded twolicences to Endiama E.P. ("Endiama"), the Angola state mining company, forproperties to be explored and developed with the Company's wholly ownedsubsidiary, IDAS Resources N.V. ("IDAS"), a Netherlands Antilles company. Theseproperties are a prospecting licence that comprises approximately 2,690 km2 inthe Cuango River floodplain and an adjacent exploitation licence ("Camutue")that comprises approximately 246 km2. Both licences are in the Provinces ofLuanda-Norte and Malange, Angola. During the year ended October 31, 2002, IDAS entered into a Heads of Agreementwith Endiama and Twins Ltd. ("Twins"), a company representing private sectorAngolan interests. The Heads of Agreement governed the ownership structurerelating to the two licences in Angola and the obligations of the parties. Theparties agreed to the formation of a new company (later agreed to be called "Luminas") which would exercise the mining rights. The financing of the projectwas to be undertaken by IDAS. IDAS was to own 51% of the share capital ofLuminas for the period of time that any loans to Luminas by IDAS remainedoutstanding. Endiama was to own 38% and Twins 11%. Once the loans had beenrepaid in full, IDAS was to own 49%, Endiama 38% and Twins 13%. IDAS alsoverbally agreed, and subsequently completed, formal drafting of, arrangementswith Twins to ensure IDAS' continued voting control of Luminas. The Heads ofAgreement and a subsequent agreement entered into by the parties set out therepayment terms of the loans from cash flows and called for a minimum investmentof $1,500,000 by IDAS for each of the two licences. IDAS was to pay 10% of itsdividends to Endiama during the first eighteen months of production. The boardof directors of Luminas was to be comprised of five members, of whom three wereto be nominated by IDAS. However, IDAS was unable to progress matters further,and, in September 2004, Endiama made it clear that it had repudiated itscontractual obligations. Consequently, the Company announced that it would beseeking legal redress. Filing of the suit in the United States has, however,been temporarily postponed pending the outcome of representations at seniorgovernment levels. IDAS is obliged to pay a net profits interest equal to 20% of the profits, to amaximum of $56,000,000, resulting from IDAS' share of income from operations ofthe Angola mineral properties. "Profits" means the actual and distributableproceeds received by IDAS from the properties, and will be calculated based oninternational generally accepted accounting principles. 3. Mineral property evaluation costs: Amounts deferred in respect of mineral property evaluation costs consist of thefollowing: Democratic Republic of Congo - Kipushi evaluation costs: Amount Balance, October 31, 2004 $ 4,397,126 Amortization 60Legal 38Exploration office and accounting 2,772Salaries 19,970Travel 2,461 25,301 Balance, January 31, 2005 $ 4,422,427 During the year ended October 31, 1996, the Company entered into a two yearexclusive framework agreement (the "Gecamines Agreement") with Gecaminesrelating to the rehabilitation of the Kipushi zinc and copper mine (the "KipushiProject"), in the southern region of the Democratic Republic of Congo. Duringthe year ended October 31, 1998, the Company received confirmation fromGecamines that, because delays have occurred in the research of the definitionof the mining and metallurgical treatment phase of the project, requirements forthe completion of feasibility studies by the Company would be delayed until upto 12 months after the completion of this definition phase, such starting dateto be agreed upon by the Company and Gecamines. This starting date has not yetcommenced. As part of the Gecamines Agreement, the Company has agreed to prepare, at itsexpense, feasibility studies covering the rehabilitation and resumption ofproduction at the Kipushi mine, various options for processing the copper-zincore, and an examination of the viability of the re-treatment of existingtailings. The Gecamines Agreement gives the Company the exclusive right toexamine the Kipushi mine, to enter into joint ventures for ore processing andtailings processing, and to make suitable arrangements for the resumption ofproduction. The Gecamines Agreement does not give the Company any interests inthe Kipushi mine. The Company will only acquire interests in the Kipushi mineif satisfactory results are obtained from the feasibility studies and ifagreements, both satisfactory and conforming with the New Mining Code, can benegotiated with Gecamines and the GDRC. The agreement also specifies that the Company and Gecamines will collaborate onexploration and development over the area of certain Gecamines concessions. 3. Mineral property evaluation costs (continued): On July 17, 2000, the Company entered into an option agreement (the "OptionAgreement") with the Zinc Corporation of South Africa Limited, since renamedKumba Base Metals Limited ("Kumba"). Pursuant to the Option Agreement, Kumbahad an option to elect to earn up to a 50% interest in the Kipushi Project.During the year ended October 31, 2001, following the performance of duediligence, Kumba exercised its option to participate in the Kipushi Project. Onexecution of the option, Kumba deposited the option fee of $100,000 into a jointaccount to meet expenditures incurred in negotiating commercial agreementsbetween the Company, Kumba and Gecamines. On January 30, 2002, the Company signed, and in November 2004 amended, a jointventure agreement with Kumba whereby Kumba can earn up to 50% of the Company'sinterest in the Kipushi Project by incurring $3,500,000 of expenditures on theproject, including the conducting of feasibility studies. Kumba is not obligedto conduct the feasibility studies until commercial agreements for therehabilitation and resumption of the Kipushi mine have been entered into betweenthe Company, Kumba and Gecamines, security of tenure is achieved via anagreement with Gecamines, and Governmental approval is received. During 2003,Kumba deposited a further $100,000 into the joint venture account to meetexpenditures incurred towards achieving such an agreement. Kumba will berequired to fund the $3,500,000 of expenditures, less already recognizedexpenditures of $300,000 by Kumba, over a 28 month period commencing with thecompletion of these items, which must be no later than March 31, 2005, or theagreement will terminate. 4. Share capital: (a) Share capital: Number of shares Amount Balance, October 31, 2004 and January 31, 2005 70,735,925 $ 67,069,511 (b) Share purchase warrants: Warrants outstanding at January 31, 2005: Balance Balance October 31, January 31, 2004 Issued Exercised 2005 Exercise price Expiry date 1,679,656 - - 1,679,656 CDN$0.75 February 12, 2008 4. Share capital (continued): (c) Share options: Weighted average price (CDN $) Options outstanding, October 31, 2004 6,126,000 $ 1.46Granted 30,000 1.95Cancelled / expired - -Exercised - - Options outstanding, January 31, 2005 6,156,000 $ 1.46 On January 4, 2005, the Company granted 30,000 options exercisable at CDN$1.95per share expiring January 3, 2010. A total of 15,000 options vestedimmediately, with the remaining amounts vesting one year from the date of grant. For the 30,000 options granted during the quarter, the Company has recordedstock-based compensation expense of $15,460. The fair value of each optiongrant has been calculated using the Black-Scholes option pricing model with anexpected life of three years, volatility of 101%, no dividend yield, and a riskfree interest rate 3.25%. In addition to the expense recorded on the options granted during the quarter,the Company recorded stock-based compensation expense of $403,593 as a result ofthe vesting of options granted in previous periods. (d) Contributed surplus: Balance, October 31, 2004 $ 4,776,785Stock-based compensation (note 4(c)) 419,053 Balance, January 31, 2005 $ 5,195,838 5. Segmented information: The Company's operations are primarily directed towards the acquisition,exploration and development of mineral resource properties and represent asingle reportable segment. All material revenues of the Company areattributable to the corporate head office. Property, plant and equipment, including mineral properties and mineral propertyevaluation costs, by geographic area are as follows: January 31, October 31, 2005 2005 Capital assets by geographic area:Democratic Republic of Congo $ 17,136,947 $ 15,448,141Angola 1,149,610 1,122,023United Kingdom 38,345 41,195Zambia 1 1 $ 18,324,903 $ 16,611,360 This information is provided by RNS The company news service from the London Stock Exchange