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Gold/Mining/Energy : MILL CITY MIY-V -- Ignore unavailable to you. Want to Upgrade?

To: eyewatch who wrote (581)	6/3/2002 12:43:09 PM
From: eyewatch	Respond to of 707

MILL CITY INTERNATIONAL INC - Management Discussion May 31, 2002 12:44pm Vancouver, BC, May 31, 2002 (Market News Publishing via COMTEX) -- During the first quarter of fiscal 1998, the Company, together with Tanqueray Resources Ltd. ("Tanqueray") and Cypango Ventures Ltd. ("Cypango") entered into a Letter of Intent with SouthernEra Resources Ltd. ("SouthernEra") pursuant to which SouthernEra had the right to acquire a 51% undivided interest in the 152,506 acre Yamba Lake Claim Block, which claims are located adjacent to and north of the DiaMet/BHP property in the Northwest Territories. During the third quarter the Company finalized negotiations with SouthernEra, Tanqueray and Cypango resulting in all of the parties entering into a new agreement with SouthernEra pursuant to which SouthernEra has the right to acquire up to a 60% undivided interest in the Yamba Lake Property conditional upon SouthernEra providing a bankable feasibility study on or before December 31, 2006. SouthernEra advised the Company that it would be commencing its winter exploration program on the Yamba Lake Property in April as soon as weather permitted the commencement of drilling. During the second quarter the Company has been actively pursuing the purchase of a private company whose primary business is in the security business and specifically has developed various encryption products. As part of pursuing this potential purchase the Company has incurred significant third party consulting costs as part of a technological evaluation and financial valuation of this particular business. Following extensive review and analysis by our business valuators it appears the vendors advised they were not be prepared to proceed with any sale to the Company as the value is less than anticipated by the Vendors. As a consequence of the vendors not proceeding the Company was issued common shares of the private company equal to what is then 10% of the issued and outstanding shares of the private company. Based upon the valuation obtained, the value of these shares issued to Mill City is approximately $80,000. Subsequent to the end of the quarter and on April 22, 2002, the Company entered into an arm's length agreement to acquire 188 claims (approximately 8,788 hectares) in the Otish Mountains Area, Quebec. Pursuant to the agreement that has been entered into and subject to regulatory and shareholder approval, the Company is required to make a cash payment of $90,000 and issue 1,250,000 common shares from Treasury. Subsequent to the end of the quarter and on May 24, 2002 the Company entered into arm's length letter agreement with E3 Energy Ltd. ("E3") and Pantera Enterprises Inc. ("Pantera") invovling a pending reorganization of the Company. Pursuant to the agreements, the Company has agreed to complete a share exchange with the shareholders of E3 pursuant to which the Company will acquire E3 in exchange for the issuance of that number of common shares which will result in the former E3 shareholders holding 49% of the issued and outstanding common shares of the Company. The Company will then convey all of its assets to a wholly owned subsidiary ("Newco") in return for Newco issuing 13,668,413 common shares of Newco (the "Newco Shares") to the Company which will dividend out, or otherwise distribute, the Newco Shares to the shareholders of the Company. The Newco Shares will then be exchanged for common shares of Pantera, a CPC company, on a one for one basis. Upon completion of the reorganization, the Company will be renamed "E3 Energy Corporation" and its shares will be consolidated on a 1 for 12 basis. At the time of closing, E3 will have been capitalized for not less than $600,000. As part of the reorganization, E3 has also agreed to use its reasonable best efforts to complete a financing of flow through shares of the Company of at least $5,000,000.00 to finance what will then be oil and gas activities of the Company. To complete the overall corporate reorganization of the Company, the Newco Shares which are dividended, or otherwise distributed to the shareholders of the Company, will be exchanged for common shares of Pantera ("Pantera Shares") at a deemed price of $0.20 per Pantera Share with a deemed value of approximately $2,750,000.00 for all of the Newco Shares. Upon completion of the reorganization, Pantera will be renamed and its officers and directors will be replaced with the current officers and directors of the Company. Completion of the reorganization transactions will be conditional on greater than 50% of the Company and Pantera Shareholders voting in favour of the reorganization and will be subject to all requisite regulatory approvals and other customary conditions, including the approval of the TSX Venture Exchange." Your Company continues to review and evaluate other opportunities that may be available to enhance shareholder value. During the quarter and up to present, the Company has not entered into any investor relations agreements or contracts. The Company's investor relations personnel, directors and officers communicated with private individuals and stock brokers, talking about the merits of our Company's future that promote or could be reasonably expected to promote the purchase or sale of securities of the Company. CONTACT: TEL: (403) 640-0110 Mill City International Inc. Advertisement: Explore Within This Space FAX: (406) 640-4024 Email: millcity@cadvision.com Website: www.millcitygold.com URL: www.millcitygold.com