EL CALLAO MINING CORP - Management Discussion For The Quarter Ended June 30, 2001
Vancouver, BC, Aug 27, 2001 (Market News Publishing via COMTEX) -- MANAGEMENT DISCUSSION AND ANALYSIS
On February 26, 2001, the Take-Over Bid was closed and Crystallex International Corporation (" Crystallex") became the majority shareholder of the Company, holding approximately 80% of the issued and outstanding common shares of the Company. Concurrently with the closing of the Take-Over Bid, Bema Gold Corporation (" Bema") and Crystallex closed the various transactions they entered into on September 12, 2000 relating to the purchase of assets and debt of the Company held by Bema and the assignment by Bema to Crystallex of a loan agreement between the Company and Bema dated June 30, 2000 (the "Loan Agreement"). Bema also assigned to Crystallex the Management Services Agreement and Exploration Agreement related to the Company and the Property. The existing members of the Board of Directors resigned, effective February 26, 2001, and were succeeded and replaced by nominees of Crystallex.
The Company anticipates that Crystallex through its Management Services Agreement and Exploration Agreement will develop resources at the Property with a view to recovering its debt due from the Company. The said debt matured on March 31, 2001 and, in accordance with the terms of the Loan Agreement, had been converted to a demand security.
For the six month period ended June 30, 2001 and 2000, the Company reported a net loss of $1,336,596 or $.03 per share and $997,657 or $.02 per share, respectively.
Upon completion of the Take-Over Bid and acquisition of the Bema debt and royalty, Crystallex also assumed the obligation of Bema under the Loan Agreement. Since the date of closing, the Company had been economically dependent and continues to be economically dependent upon Crystallex to fund its ongoing operations. As at June 30, 2001, under the terms of the Loan Agreement, the Company owed to Crystallex the sum of $23,737,866, bearing interest at the Bank's prime lending rate plus 2%.
The debt to Crystallex, by its terms, became due on March 31, 2001, and the Company had not made payment. As a result, Crystallex had given notice to the Company to treat the entire loan as an interest-bearing demand loan.
CONTACT: Tel: (604) 683-0672 El Callao Mining Corp.
Fax: 1,604,688-3128
Website: www.elcallao.comURL: www.elcallao.com
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