Year end results
Antares Mining and Exploration Corp ANZ
Shares issued 18,992,219 Jul 21 close $0.21
Tue 21 Jul 98 Company Review
Mr. Dennis Gray reviews the company
During 1997 Antares raised over $21-million in cash from issuance of
shares.
OJOLALI GOLD AND SILVER PROPERTY
Antares has completed over 16,000m of core drilling on the Ojolali property
to date as a result of which a preliminary resource of 34.7 million ounces
of silver and 340,702 ounces of gold has been identified to date in two
zones which, on a silver to gold equivalent basis of 50:1, approximates
1,034,621 equivalent ounces of gold. The value of silver contained in the
resource identified to date far exceeds the value of gold with silver
accounting for 67 per cent of the precious metal value of the resource
versus 33 per cent for gold. Aeromagnetic surveying of the property has
identified the presence of 34 zones. Only nine zones have been partially or
totally drill tested to date, of which two zones, the Tambang and Jambi
zones, have contributed the 1,034,621 equivalent ounces of preliminary gold
resource. Geological mapping of the central 2,244 hectares area of the
property has been completed and will commence on the 29,760 hectares
portion of the property when a Contract of Work covering this area is
granted.
During the past year, six drill rigs operated on the property. In early
February, the number of drill rigs was reduced to two, partly to reduce
cash outlay and partly because the company has now assembled sufficient
knowledge of the property to allow concentration on those parts of the
property where the most potential exists to add shareholder value.
During November 1997 Antares increased its ownership of the Ojolali
property from 45 per cent to 76.5 per cent by paying $1,800,000 (U.S.) and
$100,000 (Canadian) in cash, together with 2,414,288 additional Antares
shares to the Indonesian owners of the property; and $500,000 (Canadian) to
Coleville Resources, a Canadian owner of the property, by means of the
purchase of a Coleville share and warrant issue. As a result of the
aforementioned transaction, ownership of the Ojolali property is now as
follows: Antares - 76.5 per cent; Coleville - 13.5 per cent and 10 per cent
is held by Indonesian interests. Arising out of this restructuring, Antares
assumed full control of the joint venture management committee.
Two COW applications have been made with respect to the Ojolali property
which Antares is endeavouring to be combined into one COW for
administrative efficiency.
TOODOGGONE GOLD PROPERTY
On July 9, 1997 Antares and AGO Americas Gold Corp. entered into a mineral
property earn-in agreement regarding AGC's original 28,748 hectares of
mineral interests in the Toodoggone area of northern British Columbia. As
part of this agreement, Antares earned an option to acquire up to a 55 per
cent interest in these properties by spending up to $5.0-million, of which
$3.6-million had been spent by year end to secure a 39.6 per cent interest.
On the expenditure of the first $1.5-million, Antares became operator of
the project. As part of the agreement, Antares purchased $500,000 of AGC's
treasury shares.
Since starting work on the property in the spring of 1997, 10,640m of
diamond drilling has been completed. Additional staking to protect strike
extensions to target areas has been completed involving 2,587 hectares
bringing the total Toodoggone land position to 31,335 hectares. A large
amount of information was collected during the 1997 program. This, together
with an immense amount of historical information, was analyzed in a major
winter research project. Arising out of this research project a resource of
67,175 ounces of gold was determined to date, represented by 485,900 tonnes
of resource grading 4.3 grams of gold per tonne. This resource excludes any
resource existing in the Creek zone due to the limited number of holes
drilled to date on this zone.
A great deal of the winter research project was devoted to the implications
of the discovery hole CZ97-08 on the Creek zone which was the final hole
drilled in 1997. The major controlling structure on the Creek zone appears
to be a high angle fault approximately 700m long with possible further
extensions.
Drill targets for the 1998 season have been established with the highest
priority attaching to the Creek zone discovery area with its high grade
gold values, together with associated significant silver and base metal
values. Antares believes that a major mineralized structure has been
identified by hole CZ97-08 at the Creek zone. Consequently, a first
priority of the 1998 drill season will be the completion of a series of
drill fences on this target to define the true extent of the anomaly and
replicate the exciting values.
RAPPA HOLDINGS (PROPRIETARY) LTD.
Antares and Stanvest, a division of the Standard Bank of South Africa Ltd.,
together own a 50 per cent ownership position in South African based Rappa,
of which Antares' beneficial ownership is 24.75 per cent. During March 1997
Antares reached an agreement with Stanvest to increase its beneficial
ownership of Rappa to 50 per cent by acquiring Stanvest's remaining
interest, however, the South African Reserve Bank declined Stanvest's
application to transfer the interest to Antares on the grounds that the
consideration to be provided by Antares consisted partly of Antares shares.
Subsequent to the Reserve Bank's decision, Antares and Stanvest continued
to work closely together to add value to their Rappa investment with the
objective of divesting this asset for value.
LADY LINA MINE
During the year ended Jan. 31, 1998, 19,222 tonnes of ore were milled by
the joint venture from which 2,483 ounces of gold were recovered, a
recovery rate of 4.01 grams/tonne. In addition, 7,822 tonnes of ore were
sold to Forbes and Thompson for recovery in their mill. To reduce milling
costs, in response to the decline in the gold price, since Oct. 1, 1997 the
joint venture has sold its production in the form of ore to Forbes and
Thompson for processing at the Forbes and Thompson mill. Current strategy
involves continuing cost reduction and the accessing of higher value ore
from the Susanna zone and drifting towards this zone is underway. During
the year ended Jan. 31, 1998, Antares experienced an operating cash flow
deficit of $275,144 related to the Lady Lina mine.
During the year, 2,132m of underground development work were completed on
the Lady Lina mine compared with 1,430m in the previous year. As a result
of this and earlier exploration and development, total proven and probable
sulphide reserves at year end on the Lady Lina mine were 102,145 tonnes
grading 6.28 grams per tonne. Total possible and inferred sulphide reserves
were 342,188 tonnes grading 7.04 grams per tonne. Additional sulphide
mineralization of 1,005,016 tonnes grading 3.62 grams per tonne has also
been identified.
Additional exploration targets within the Lady Lina property were
identified during the year by means of satellite imagery interpretation. Of
the total 9.1km strike length of the Lady Lina property, only 4.2km of the
property have been intensively drilled to date, the undrilled portion
containing several dormant mines. Antares is considering various strategies
aimed at turning the latent value of the undrilled areas to account.
Over the past year, Antares received $83,580 under a Canadian International
Development Agency program to refurbish a milling facility to process Lady
Lina ore. Approximately 118 persons were employed at the Lady Lina mine at
year end.
During the year, discussions were started with the company's joint venture
partner with a view to increasing its interest in the Lady Lina mine from
36.5 per cent to 49 per cent, however, this goal was not achievable on
mutually satisfactory terms. During the current year, emphasis will be
placed on reducing mining costs and increasing ore output by bringing the
higher grade Susanna zone into production. In the longer term, as the Lady
Lina operation is possibly too small to be included in Antares' portfolio,
the company will consider divesting this asset for value and the
redeployment of the proceeds.
During the past 12 months over $21-million of Antares shares were issued
for cash in two private placements. This cash was used as follows:
Millions
Opening cash $0.4
Funds raised 21.7
To obtain a 76.5% interest in
the Ojolali property (4.9)
To acquire treasury shares and
warrants of Coleville Resources (0.5)
To undertake drilling and
exploration on the Toodoggone
property (3.4)
To acquire treasury shares of
AGC Americas Gold (0.5)
Underwriting fees and costs of
share issues (1.7)
Net corporate expenses (0.9)
-----
Closing cash and bankers'
acceptance $6.2
At year end, Antares had $6.2-million in cash and a bankers' acceptance.
The bankers' acceptance was a $5.6-million loan to McDonald's Restaurants
of Canada, which was repaid in full on Feb. 6, 1998.
Greg Mills resigned from Antares' board in February 1998, and David Gray
resigned in May 1998. Dale Hendrick joined Antares' board in February 1998.
STATEMENT OF EARNINGS
Year ended Jan. 31
1998 1997
Operating
revenue $ 490,497 $ 495,138
----------- -----------
Direct costs
Wages and
salaries 370,543 185,412
Amortization 277,128 189,984
Utilities and
rent 199,492 135,675
Materials 195,606 351,186
----------- -----------
1,042,769 862,257
----------- -----------
Earnings (loss)
on mining
operations (552,272) (367,119)
----------- -----------
Share of income
of Cangold 135,282 77,420
Unrealized
losses on
short term
investments (632,051) -
Other income 377,899 62,810
----------- -----------
(118,870) 140,230
----------- -----------
(671,142) (226,889)
----------- -----------
Expenses
Professional and
consulting fees 704,383 408,359
Administration 649,339 222,936
Amortization 196,610 132,833
Travel 74,348 64,920
----------- -----------
1,624,680 829,048
----------- -----------
Net earnings
(loss) $(2,295,822) $(1,055,937)
=========== ===========
Earnings (loss)
per share (9 cents) (7 cents)
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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