February 28, 2001
Report to Shareholders
Pacific Rim Mining Corp. (the “Company”) is pleased to provide the following update on
its activities during and subsequent to the Company’s third quarter of fiscal 2001
(November 1, 2000 to January 31, 2001).
Pacific Rim has concentrated its efforts during the quarter on identifying and evaluating
potential new opportunities. The Company is committed to building value for shareholders
and to this end has to date evaluated a large number of diverse ventures, the primary
criteria being a clear, demonstrated potential for exploration success or operating profit.
At present, a positive decision to go forward on any specific opportunity has yet to be
made. If, as and when any new business decisions are made, the Company will, as always,
inform its shareholders.
Pacific Rim is in the process of completing a negotiated settlement of all the Company’s
contingent liabilities flowing from outstanding lawsuits between the Company’s former
president and certain other parties (see news releases dated November 6, 1998, November
20, 1998 and disclosure in the Company’s 1999 and 2000 annual reports). While this
matter is not currently finalized, the Company is optimistic that its potential liability
arising from this issue will be removed imminently.
In order to reduce its overhead costs, Pacific Rim has made several staff layoffs and will
continue to reduce expenditures in the coming months including the relocation of its head
office premises. The Company has made these difficult decisions in order to preserve its
capital for the identification and evaluation of, and initial expenditures on potential new
acquisitions. Pacific Rim’s new head office address, effective March 28, 2001, is Suite
860 – 625 Howe St., Vancouver, BC, V6T 2T6. Telephone and fax numbers, and email
addresses do not change.
Management’s Discussion and Analysis (all amounts in Canadian dollars)
Liquidity
The cash balance increased from $1,347,676 to $1,849,950 from 30 April 2000 to 31 January
2001, a difference of $502,274. In the prior year the cash balance decreased from $7,592,577 to
$2,525,321 from 30 April 1999 to 31 January 2001, a difference of $5,067,256.
Operations
Loss from operations increased from $3,543,52 in 2000 to $9,239,206 in 2001. If the write-off
of mineral property costs ($2,949,121 in 2000 and $8,710,988 for 2001) is excluded, the loss
from operations has decreased from $594,400 in 2000 to $528,218 in 2001. Write-off of2
mineral property costs in 2001 consists of Luicho property costs ($6,610,209), Sol Brillante
property costs ($1,505,251) and the current period’s general exploration costs ($595,528),
whereas the write-off of mineral property costs in 2000 consisted of Cofradia property costs
($2,200,437), Fantasma property costs ($240,426) and general exploration costs ($508,258).
Included in the write-off of current year general exploration costs are severance payments made
to geologist staff of the company.
Wages and employee benefits increased from $272,366 in 2000 to $334,430 in 2001 due to
severance payments made to office administration staff. Travel increased from $21,556 in 2000
to $37,400 in 2001. The increase is related primarily to travel associated with attending investor
and mining conferences. The foreign exchange gain of $94,721 in 2001 is due to the
strengthening of the American dollar.
Investing and Financing
Total expenditures on properties increased from $4,502,569 in 2000 to $5,358,889 in 2001.
Expenditures on the Luicho claims increased from $1,271,770 in 2000 to $4,345,642 in 2001.
Expenditures on the Cofradia and La Espina claims decreased from $1,621,974 in 2000 to $nil
in 2001. Expenditures on the San Francisco claims decreased from $786,679 in 2000 to
$208,561 in 2001. Expenditures on the Prometedora claims increased from $73,462 in 2000 to
$117,504 in 2001. Investigative exploration costs increased from $508,258 in 2000 to $595,528
in 2001.
In 2001, 1,707,530 special warrants were issued for total proceeds of $7,329,493; financing
costs related to the special warrants were $695,493. In addition, 40,500 options were exercised
for cash of $61,560. In 2000, 36,200 options were exercised for cash of $38,942.
Forward-Looking Statements
Some of the statements contained in this quarterly report are forward-looking statements, such
as estimates and statements that describe the Company’s future plans, objectives or goals,
including words to the effect that the company or management expects a stated condition or
result to occur. Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties. Actual results in each case could
differ materially from those currently anticipated in such statements. |
