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| | Tue Aug 31, 2004
Summary of Interim Financial Results to June 30, 2004
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| | Hinterland Metals Inc. (TSXV: HMI) (the "Company") provides a summary of the interim financial results for the six months ended June 30, 2004 (the "Interim Period"). The Company is a mineral exploration company engaged in the acquisition, exploration and development of mineral resource properties. The Company is currently focusing its exploration activities on precious metal and gemstone projects located in Quebec, Ontario and Yukon and continues to evaluate and will acquire additional properties as capital and opportunities present themselves. The Company is a reporting issuer in British Columbia, Alberta and Quebec, and trades on the TSX Venture Exchange under the symbol "HMI".
Overall Performance
For the Interim Period, the Company had a net loss after tax of $114,317 ($0.007 per share) compared to $162,474 ($0.01 per share) for the same six-month period in 2003. The results include a loss on sale of investments of $350.
Operating expenses for the six-month period ended June 20, 2004 amounted to $148,212 compared to $169,866 for the same period in 2003. Accounting and audit fees for the Interim Period amounted to $10,685 compared to $5,748 in 2003. The Company was able to substantially reduce legal fees to $3,200 from $9,148 in 2003 due to Management taking a more active role in the legal affairs of the Company.
Investor relations, travel, entertainment and promotion costs amounted to $57,319 compared to $57,815 in 2003. Tangent Management Inc. provides investor relations services at $3,000 per month. Rent, amortization and all other general and administrative expenses for the Interim Period amounted to $12,658 compared to $15,804 for the same period in 2003. This decrease is a direct result of management changes, the Vancouver office closure and consolidation of operations in Val d'Or.
Management and consulting fees for the Interim Period amounted to $39,625 compared to $39,000 in 2003. Stock based compensation costs amounted to $9,619 and represent the fair value of options granted in the financial year ended December 31, 2002 that vested in the Interim Period. Transfer agent, filing and TSX Venture Exchange listing fees amounted to $15,106 for the Interim Period compared to $15,319 in 2003
Liquidity and Capital Resources
During the Interim Period, the Company spent $79,239 for acquisition of the Teck Property in Ontario. In Quebec, the Company spent $4,018 for staking the Carpiquet Property and incurred exploration expenditures of $156,480 on Lorraine, $5,643 on Plateau and $514 on Other Quebec properties. In Yukon, $24,996 was spent on exploration.
As at June 30, 2004, the Company has incurred all of the qualified exploration expenditures necessary to meet prior commitments to flow-through investors. It holds no cash restricted for payment of qualified exploration expenditures in accordance with applicable flow-through tax rules.
As at June 30, 2004, there were 16,582,358 common shares, 1,985,434 warrants (933,333 vested) and 1,050,000 incentive stock options (1,050,000 vested) outstanding for total fully diluted outstanding share capital of 19,617,792. Of these 3,028,500 shares are subject to a time release escrow agreement.
As at March 31, 2004, the Company had current assets of $583,198, including $403,988 in cash, and current liabilities of $53,430, for total working capital of $529,768. Net assets of $1,141,862 include $558,130 in mineral property interests. The Company is in the development stage and therefore has no regular cash flow. The Company anticipates through additional funds being raised from equity, debt or joint venture financing that it will have sufficient cash to fund its acquisition and exploration programs and operations.
Exploration Projects
Most of the Company's activity during the Interim Period was directed at exploration on the Lorraine Mine Property and acquisition of the Teck Property.
In February 2004, the Company completed a four hole, 1605 m diamond drilling program on the 30 claim (1267 ha) Lorraine Mine Property located in Quebec some 35 km northeast of Ville-Marie. Crone Transient Pulse Electromagnetic down-hole surveys were also completed in three holes. A coherent Cu/Ni-enriched structure was encountered in all four holes. In two of the holes the structure was found to have zones of elevated gold values. Platinum and palladium values are also erratically elevated within the Cu/Ni-enriched structure. It is apparent that highest metal values (including Au, Pt and Pd) are related to more massive chalcopyrite, pyrrhotite and/or pentlandite mineralization. The down-hole geophysical surveys suggest that drill holes L-01, L-02 and L-04 probably missed their intended targets. This is due to extreme deviation in the direction of the holes (e.g. 38° over 506 m in hole L-04). The Company is very encouraged by the results and it is anticipated that better results may be obtained along the Cu/Ni-enriched structure with the continued use of down-hole surveys to identify zones of massive sulphide mineralization.
On June 21, 2004, the Company announced that it had signed a letter of intent with CZM Capital Corp. ("CZM") to enter into an option agreement whereby CZM may earn a 51-per-cent undivided interest in the Lorraine Property for consideration of 500,000 treasury shares and $1-million of work expenditures scheduled over a four-year period. The Company expects that the final documentation concerning this option agreement will be submitted for approval to the TSX Venture Exchange in early September 2004.
Through a series of transactions, the Company has assembled the 42 claim (1070 ha) Teck Property in the prolific Kirkland Lake Gold Camp. The Camp has documented production of 24.1 million ounces gold at an average grade of 0.47 ounces per ton from eight mines during the period from 1917 to the present day. Very limited exploration work by previous workers has been documented within the present boundaries of the Teck Property. The Company is currently compiling data in anticipation of a work program to commence in September 2004. Limited prospecting work is in progress.
Further information
Shareholders and other interested parties may view further information concerning the Company and its projects at the Company's website www.hinterlandmetals.com
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For more information please contact:
Mark Fekete, President at 1-877-874-8182
or
Steve Smith, Investor Relations at 1-866-345-0115
E-mail: info@hinterlandmetals.com
Website: www.hinterlandmetals.com
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Hinterland relies on litigation protection for "forward-looking" statements. |
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