For those of you still interested in BSW :
Black Swan Gold Mines Ltd.
REPORT TO THE SHAREHOLDERS
Your Company is at present concentrating on the problems and opportunities that have arisen as a result of the continuing low price of gold. Relative to many other companies in the gold sector, Black Swan is at an advantage due to its sound financial position.
A message being given by the market at present is that it prefers companies with current or imminent positive cash flows from production and Black Swan is reviewing ways of responding to this.
The current period of difficulty for the industry just could be a time of exceptional opportunity. During this period, it is recognized that the outlay of funds on Brazilian exploration must become even more focused. Joint venture partners will now be sought for the larger and more advanced exploration projects; and will be welcome in the future as our exploration programs establish the potential of other projects. It is believed that this route will help accelerate the eventual development of operations in Brazil. Opportunities that could lead to near term production and cash flows outside of Brazil are being examined at present.
While the Company believes its gold and diamond properties have excellent potential, its activities at the Cata Preta and other gold projects in Brazil are being reduced at present, in response to the current market conditions. Plans are being developed for bulk sampling at certain of the diamond projects.
The Company's affiliate, Lysander Gold Corporation, has focused its efforts on its Jajay Project in British Columbia, Canada. It completed a successful drill program in the December quarter and will shortly publish data regarding the extent of the copper/gold mineralization established to date.
FINANCIAL
In the nine months ended December 31, 1997, Black Swan recorded a net loss of $482,000 before the write-down of an investment and of $909,000 after that write-down. In the same period of the previous year the net loss recorded was $559,000.
Whereas the 1996 period had benefited from a $500,000 gain on sale of investments and had minor other revenues, the income for the 1997 period included $1,111,000 of interest income and foreign exchange gains. Year 1997 also benefited from lower costs of investor relations, but absorbed $321,000 of property investigation and exploration costs in respect of various diamond and other exploration projects outside of its principal area of interest in the State of Minas Gerais. The costs absorbed included the investigation of a project in northwest Brazil, a Brazilian diamond operation and costs relative to a bid for an Angolan diamond project. The 1997 period also bore $66,000 of capital taxes, reflecting the significant increase in capital employed over the previous year.
The Company's cash balances declined by $6.5 million during the period, of which $4.2 million was expended on mineral properties, $0.6 million on acquiring a 19.7% equity interest in Lysander Gold Corporation and $1.7 million on other corporate activities including $1.2 million in respect of working capital.
Cash balances at December 31 totalled $14.8 million as compared to $1.0 million a year earlier.
"Arthur T. Fisher"
Arthur T. Fisher
President
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I like what I see.
Have a very nice day.
Pierre |
