|
||||||||||||||||||||||||||
| SEC Info℠ | | | Home | | | Search | | | My Interests | | | Help | | | Sign In | | | Please Sign In | |||||||
|
||||||||||||||||||||||||||
|
As Of Filer Filing For·On·As Docs:Size Issuer Agent 7/14/06 Augusta Resource Corp 40FR12B 7/13/06 61:4.7M Newsfile Corp/FA |
Document/Exhibit Description Pages Size
1: 40FR12B Registration Statement HTML 69K
2: EX-99.1 Annual Information Form for the Year Ended HTML 180K
December 31, 2005
11: EX-99.10 MD&A for the Six Months Ended June 30, 2005 HTML 120K
12: EX-99.11 First Quarter Report HTML 144K
13: EX-99.12 MD&A for the Three Months Ended March 31, 2005 HTML 80K
14: EX-99.13 Management Information Circular HTML 129K
15: EX-99.14 Form of Proxy HTML 34K
16: EX-99.15 Preliminary Assessment and Economic Evaluation HTML 373K
17: EX-99.16 Mineral Resource Estimate HTML 257K
18: EX-99.17 News Release Dated June 30, 2006 HTML 27K
19: EX-99.18 Material Change Report Dated June 26, 2006 HTML 22K
20: EX-99.19 Material Change Report Dated June 14, 2006 HTML 48K
3: EX-99.2 Annual Information Form for the Year Ended HTML 254K
December 31, 2004
21: EX-99.20 Material Change Report Dated June 5, 2006 HTML 21K
22: EX-99.21 Material Change Report Dated June 2, 2006 HTML 19K
23: EX-99.22 Material Change Report Dated May 18, 2006 HTML 25K
24: EX-99.23 Material Change Report Dated May 5, 2006 HTML 26K
25: EX-99.24 Material Change Report Dated April 27, 2006 HTML 19K
26: EX-99.25 Material Change Report Dated April 11, 2006 HTML 18K
27: EX-99.26 Material Change Report Dated April 7, 2006 HTML 26K
28: EX-99.27 Material Change Report Dated March 17, 2006 HTML 23K
29: EX-99.28 Material Change Report Dated March 6, 2006 HTML 20K
30: EX-99.29 Material Change Report Dated February 16, 2006 HTML 23K
4: EX-99.3 Audited Annual Financial Statements HTML 534K
31: EX-99.30 Material Change Report Dated January 26, 2006 HTML 31K
32: EX-99.31 Material Change Report Dated January 16, 2006 HTML 26K
33: EX-99.32 Material Change Report Dated January 16, 2006 HTML 30K
34: EX-99.33 Material Change Report Dated November 22, 2005 HTML 21K
35: EX-99.34 Material Change Report Dated November 11, 2005 HTML 28K
36: EX-99.35 Material Change Report Dated October 13, 2005 HTML 26K
37: EX-99.36 Material Change Report Dated September 29, 2005 HTML 22K
38: EX-99.37 Material Change Report Dated September 20, 2005 HTML 20K
39: EX-99.38 News Release Dated September 9, 2005 HTML 18K
40: EX-99.39 News Release Dated August 25, 2005 HTML 21K
5: EX-99.4 MD&A for the Years Ended December 31, 2005 and HTML 169K
2004
41: EX-99.40 Material Change Report Dated August 25, 2005 HTML 18K
42: EX-99.41 Material Change Report Dated July 12, 2005 HTML 23K
43: EX-99.42 Material Change Report Dated July 5, 2005 HTML 20K
44: EX-99.43 News Release Dated June 23, 2005 HTML 20K
45: EX-99.44 Material Change Report Dated June 14, 2005 HTML 20K
46: EX-99.45 News Release Dated June 9, 2005 HTML 19K
47: EX-99.46 Material Change Report Dated June 8, 2005 HTML 27K
48: EX-99.47 Material Change Report Dated May 13, 2005 HTML 23K
49: EX-99.48 Material Change Report Dated May 13, 2005 HTML 22K
50: EX-99.49 Material Change Report Dated March 29, 2005 HTML 21K
6: EX-99.5 First Quarter Report HTML 198K
51: EX-99.50 Material Change Report Dated March 4, 2005 HTML 22K
52: EX-99.51 News Release Dated March 4, 2005 HTML 24K
53: EX-99.52 News Release Dated March 1, 2005 HTML 26K
54: EX-99.53 News Release Dated February 17, 2005 HTML 18K
55: EX-99.54 News Release Dated February 11, 2005 HTML 18K
56: EX-99.55 News Release Dated February 8, 2005 HTML 21K
57: EX-99.56 Material Change Report Dated January 27, 2005 HTML 22K
58: EX-99.57 Consent of Expert in Connection With the Paee HTML 18K
Report
59: EX-99.58 Consent of Expert in Connection With the Rosemont HTML 18K
Property Report
60: EX-99.59 Auditor's Consent (Ernst & Young LLP) HTML 17K
7: EX-99.6 MD&A for the Three Months Ended March 31, 2006 HTML 99K
61: EX-99.60 Auditor's Consent (Deloitte & Touche LLP) HTML 17K
8: EX-99.7 Third Quarter Report HTML 244K
9: EX-99.8 MD&A for the Nine Months Ended September 30, 2005 HTML 135K
10: EX-99.9 Second Quarter Report HTML 239K
| Filed by Automated Filing Services Inc. (604) 609-0244 - Augusta Resource Corporation - Exhibit 12 |
MANAGEMENT DISCUSSION AND ANALYSIS
Form 51-102F1
For the Period Ending
1.1 Date of Information
This report has taken into account information available up to and including May 26, 2005.
1.2 Overall Performance and Results of Operations
General
The following Management’s Discussion and Analysis (“MD&A”) of Augusta Resource Corporation, (the “Company”) should be read in conjunction with the accompanying unaudited interim financial statements for the three months ended March 31, 2005 and with the audited financial statements for the years ended December 31, 2004 and 2003, all of which are available at the SEDAR website at www.sedar.com.
All financial information in this MD&A is prepared in accordance with Canadian generally accepted accounting principles.
Forward-Looking Statements
Certain statements contained in the following Management’s Discussion and Analysis constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance of achievements of the corporation to be materially different from actual future results and achievements expressed or implied by such forward-looking statements, which speak only as of the date the statements were made, and readers are also advised to consider such forward-looking statements while considering the risks set forth below.
Description of Business
The Company is engaged in the exploration and development of mineral properties located in the Coronation Diamond District in Nunavut, Canada, White Pine County, in Nevada and at Lone Mountain, near the town of Silver City, New Mexico. These properties are in the exploratory and development stages and are thus non-producing and consequently do not generate any operating income or cash flows from operations.
Overview of Performance
Properties in the Coronation Diamond District, Nunavut, Canada
The Company has four separate option agreements with 4763 NWT Ltd. (“NWT”) to acquire working interests (“WI”) of 10% and 20% for 4 properties located in the Coronation Diamond District in Nunavut, Canada, which aggregate about 487,300 acres in the region.
The property agreements for the 4 properties require the Company to pay NWT cash amounts totaling $231,573. The terms of these agreements also require the Company to issue common shares to NWT totalling 116,670 common shares, of which 58,335 shares are to be issued within 10 days of the Approval Date, and 58,335 shares by the first anniversary date of the initial share issuance. The Company issued 58,335 shares at a deemed value of $0.28 for a total value of $16,334 to NWT on April 29, 2003.
For the four properties comprising 487,300 acres, in which the Company can earn a 10% or 20% WI, NWT has optioned 85% and 70% WI, respectively, in each of the four properties to various third party exploration companies (“Primary Optionees”), with the balance of the 5% and 10% WI, respectively, to be retained by NWT. The Primary Optionees earn their interests by completing work expenditures over a 3 to 4 year period, whereby the Company will in effect have carried interests in these properties pending the Primary Optionees earning their 85% and 70% WI. The Company has agreed to assume responsibility for NWT’s work expenditures relative to NWT’s 5% and 10% WI in these properties for an amount up to the work expenditures to be completed by the Primary Optionees on each of these four properties to earn their 85% and 70% WI, respectively.
Prior to June 30, 2004, the Company held two additional option agreements with NWT to acquire a 100% working interest in the AW and BH properties, aggregating 241,300 acres. Those agreements required the Company to pay NWT cash amounts totalling $293,132 and to issue 200,000 common shares, of which 33,334 were to be issued within 10 days of the approved sale, 33,334 were to be issued by the first anniversary date of the initial share issuance, and 66,667 shares each by the second and third anniversaries. The Company issued 33,334 at a deemed value of $0.11 per share for a total value of $3,667 on May 7, 2003. In 2002, the Company entered into an option and joint venture agreement on the two properties, with Ashton Mining (Northwest Territories) Ltd. (“Ashton”), a wholly owned subsidiary of Ashton Mining of Canada Inc. Under terms of the agreements, the Company was to fund a Phase 1 exploration program, aggregating $207,000, that Ashton would conduct during the 2003 exploration season. In July 2004, the Company received results from the 2003 summer exploration program conducted on the properties. Ashton notified the Company that it was terminating the agreements on both properties and the Company decided to not proceed any further with the properties and, effective June 30, 2004, has written off $296,799 in Mining Properties and $212,355 in Deferred Exploration Expenses.
As at March 31, 2005, the Company had paid $469,705 to NWT in acquiring working interests in six properties in the Coronation Diamond District, incurred $215,949 in relation to deferred exploration expenditures related to these properties, issued 33,334 shares at a deemed price of $0.11 per share and 58,335 shares at $0.28 per share, and accrued an amount of $55,000 to NWT included in accounts payable, which is to be settled by the issuance of shares of the Company, subject to regulatory approval.
Properties in White Pine County, Nevada
In late 2004, the Company announced the signing of an agreement to acquire a 100% interest in the Mount Hamilton Gold Project, located in White Pine County, Nevada. The project is located approximately 45 miles east of Eureka, Nevada and 50 miles west of Ely, Nevada and is accessible from Highway 50 over good all-weather gravel roads. The White Pine Mining District has a long history of silver and gold mining, dating back to the first gold discovery in 1865.
Mount Hamilton has multiple exploration targets including surface bulk mineralization as well as high grade vein style mineralization. Six separate high priority areas have been identified. An extensive amount of exploration and drilling information on these areas is included in the acquisition. On March 4, 2005, the Company announced that the TSX Venture Exchange has given conditional approval for the acquisition of the Mount Hamilton Gold Project. The terms of the acquisition are $3,600,000 USD payable in cash over two years ($3,000,000) and stock (3,750,000 units). The units consist of one share and one warrant, with each warrant entitling the holder to purchase one common share at $0.16 for a period of two years. The acquisition closed on May 6, 2005.
On January 26, 2005, the Company announced the signing of agreements to acquire the Shell Deposit in White Pine County, Nevada. The Shell Deposit, located nearby the Mount Hamilton property, was subject to past exploration programs, with results indicating that the property hosted molybdenum and gold mineralization. The Company is acquiring a 100% working interest, subject to an underlying Net Smelter Royalty ranging from 0.5% - 4.5%, for cash payment of $120,000 US, and annual advance royalty payments commencing at $80,000 US on first anniversary increasing by $20,000 per year until production commences.
Property near Silver City, New Mexico
On March 1, 2005, the Company announced the signing of an agreement to acquire the Lone Mountain project in New Mexico. The Property is approximately 5 miles from the town of Silver City, New Mexico, 9 miles southwest of Phelps Dodge’s Chino mine and 5 miles northwest of Phelps Dodge’s Hurley smelter. The Company is acquiring a 100% working interest, subject to an underlying Net Smelter Royalty ranging from 2.0% - 3.0%, minimum exploration commitments of US$4,850,000 and payments of US$1,000,000 cash and 325,000 common shares over a 3 year period. In addition, until the property is in commercial production, the Company will make payment of US$400,000 cash and 100,000 common shares on the fourth and each subsequent anniversary.
As at March 31, 2005, the Company’s capitalized costs on its mining assets were as follows:
| Deferred | ||||||
| Exploration | ||||||
| Acquisition Cost | Expenses | |||||
| Coronation Diamond District properties | $ | 247,907 | $ | 3,594 | ||
| Mt. Hamilton property | 37,157 | 32,360 | ||||
| Lone Mountain property | 24,993 | - | ||||
| Shell property | - | 12,789 | ||||
| $ | 310,057 | $ | 48,743 |
Results of Operations
The following table shows the operating results for the period ending March 31, 2005 and 2004.
| March 31 | March 31 | ||||||||
| (INCREASE)/ | |||||||||
| 2005 | 2004 | DECREASE | |||||||
| EXPENSES | |||||||||
| Administration | 7,500 | 7,500 | - | ||||||
| Filing and regulatory | 38,495 | 3,440 | (35,055 | ) | |||||
| Fiscal and advisory services | 517 | - | (517 | ) | |||||
| Foreign exchange (gain) | 192 | 673 | 481 | ||||||
| Interest and finance charges | (3,063 | ) | 2,576 | 5,639 | |||||
| Legal fees | 105 | - | (105 | ) | |||||
| Office and sundry | 29,949 | 653 | (29,296 | ) | |||||
| Promotion | 193,331 | - | (193,331 | ) | |||||
| Recruitment fees | 45,174 | - | (45,174 | ) | |||||
| Salaries and benefits | 56,320 | 43,907 | (12,413 | ) | |||||
| Stock based compensation | 937,202 | - | (937,202 | ) | |||||
| Travel | - | 1,755 | 1,755 | ||||||
| Loss from operations | (1,305,722 | ) | (60,504 | ) | (1,245,218 | ) |
Operating loss for the three-month period ending March 31, 2005 was $1,305,722, $1,245,218 higher than the loss of $60,504 for the same period in 2004. The variance is primarily due to stock based compensation, the computed cost of stock options granted during the period of $937,202, promotional expenses incurred of $193,331 for increasing investor awareness of the Company, recruitment fees of $45,174, filing and regulatory fees of $35,055 due to increased activities and $29,296 office and sundry for rent and common costs shared with related companies.
The Company will continue to research additional opportunities to enhance shareholder value.
1.3 Select Annual Information
| 2004 | 2003 | 2002 | |||||||
| Total Revenue | nil | nil | nil | ||||||
| Loss before extraordinary items | (356,903 | ) | (298,933 | ) | (520,877 | ) | |||
| Loss per share before extraordinary items | (0.03 | ) | (0.04 | ) | (0.10 | ) | |||
| Diluted loss per share before extraordinary items | (0.03 | ) | (0.04 | ) | (0.10 | ) | |||
| Total net loss | (866,057 | ) | (298,933 | ) | (520,877 | ) | |||
| Total net loss per share | (0.06 | ) | (0.04 | ) | (0.10 | ) | |||
| Total diluted net loss per share | (0.06 | ) | (0.04 | ) | (0.10 | ) | |||
| Total assets | 1,365,194 | 722,175 | 537,506 | ||||||
| Total long-term financial liabilities | 32,997 | 32,353 | 30,901 | ||||||
| Cash dividends declared per share | nil | nil | nil |
1.4 Summary of Quarterly Results
Selected financial information for each of the eight most recently completed quarters of fiscal 2005, 2004 and 2003 are as follows:
| 2005 | 2004 | 2003 | ||||||
| Mar | Dec | Sep | Jun | Mar | Dec | Sep | Jun | |
| Revenue | nil | nil | nil | nil | nil | nil | nil | nil |
| Net Loss | 1,305,722 | 97,916 | 130,313 | 577,324 | 60,504 | 21,482 | 65,424 | 58,328 |
| Net loss per share basic & diluted | 0.06 | 0.01 | 0.01 | 0.07 | 0.01 | 0.00 | 0.01 | 0.01 |
The Company’s operations are dependant upon its ability to raise funds.
1.5 Liquidity
The Company’s mineral exploration and development activities have provided the Company with no sources of income and a history of losses, working capital deficiencies and capital deficiencies. However, given the nature of its business, the results of operations as reflected in the net losses and losses per share do not provide meaningful interpretation of the Company’s performance and valuation.
The Company’s working capital as at March 31, 2005 was $845,406 compared with a working capital of $502,874 as at December 31, 2004. It’s cash position as of March 31, 2005 was $1,063,395 in comparison to $989,799 as of December 31, 2004.
The Company has $32,997 due in long-term liabilities.
1.6 Capital Resources
The Company’s primary capital assets are mineral property assets which are discussed in detail in section 1.2 Overall Performance.
On February 11, 2005, the Company announced a private placement of up to 2,000,000 units at $1.00 for total proceeds of $2,000,000. Each unit is comprised of one common share and one half share purchase warrant, with each full warrant entitling the subscriber to purchase an additional common share for $1.25 for a period of one year. The private placement was closed in April 2005 for a total of 1,954,250 units for proceeds of $1,954,250 with 977,125 warrants issued, expiring April 15, 2006. Finder’s fees of $118,947.50 cash and 30,015 broker’s warrants on the same terms as those issued to the placees, were paid.
On February 17, 2005, the Company announced a private placement of up to 2,000,000 units at $2.00 for total proceeds of $4,000,000. Each unit is comprised of one common share and one half share purchase warrant, with each full warrant entitling the subscriber to purchase an additional common share for $2.50 for a period of one year. The private placement was closed in April 2005 for a total of 1,544,250 units for proceeds of $3,088,500 with 772,125 warrants issued, expiring April 15, 2006. Finder’s fees of $186,795 cash and 60,030 broker’s warrants on the same terms as those issued to the placees, were paid.
The Company historically has relied upon equity subscriptions to satisfy its capital requirements. The Company will continue to depend upon equity capital to finance its activities. There are no assurances that capital requirements will be met by this means of financing as inherent risks are attached therein including commodity prices, financial market conditions, and general economic factors. Management continues with its efforts to secure additional financing arrangements for the Company and the support of its creditors.
1.7 Off Balance-Sheet Arrangements
The Company does not utilize off-balance sheet arrangements.
1.8 Transactions with Related Parties
As of March 31, 2005, the Company incurred expenses of $7,500 (2004 - $7,500) for administrative services provided by a company in which a director of the Company has a 25% interest. As of March 31, 2005, the Company incurred salaries of $37,500 (2004 - $25,000) to the Chairman of the Company and $18,750 (2004 - $18,750) to a director. At March 31, 2005, included in accounts receivable is an amount of $74,861 (2004 - $450,946 in accounts payable) due from (2004 – due to) directors and related companies, which share certain common directors with the Company.
1.11 Proposed Transactions
There are no transactions that will materially affect the performance of the Company.
1.12 Critical Accounting Estimates
Not applicable.
1.13 Changes in Accounting Policies including Initial Adoption
On January 1, 2004, the Company adopted the revised CICA Handbook Section 3870 Stock-based Compensation and Other Stock.
In March 2005, 450,000 stock options with an exercise price of $2.05 were issued to a certain director and officer of the Company resulting in a fair value at the date of grant of $937,202. The fair value of stock compensation issued to the employee was determined using the Black-Scholes valuation model assuming a volatility factor of 191%, a risk free interest rate of 3.78% and an expected life of five years.
1.14 Financial Instruments and Other Instruments
The carrying values of cash, accounts receivable, accounts payable and accrued liabilities, note payable and loans and advances as reflected in the balance sheet approximate their fair values. The Company has no significant concentrations of credit risk.
1.15 Other MD&A Requirements
SHARE CAPITAL
| (a) | Authorized: Unlimited number of common shares without par value. | |
| (b) | Issued: | |
| Changes in the Company’s share capital were as follows: |
| Number of | |||||||
| Shares | Amount | ||||||
| Common shares, Balance at December 31, 2004 | 19,764,555 | $ | 4,611,331 | ||||
| Issued for cash | 3,875,000 | 1,087,500 | |||||
| Common shares, Balance at March 31, 2005 | 23,639,555 | $ | 5,698,831 |
| (c) |
Options | |
|
On March 31, 2005, certain directors and officers of the Company hold 979,333 stock options, and certain consultants and employees of the Company hold 125,000 stock options to purchase common shares of the Company. | ||
|
The following table summarizes the status of the Company’s stock option plans as at March 31, 2005: |
| 2005 | |||||||
| Number of | |||||||
| Shares | Exercise Price | ||||||
| Outstanding at beginning of year | 1,096,000 | $ | 0.15 | ||||
| Granted | 450,000 | $ | 2.05 | ||||
| Exercised | (275,000 | ) | $ | 0.12 | |||
| Expired | (16,667 | ) | $ | 0.45 | |||
| Cancelled | (150,000 | ) | $ | 0.10 | |||
| Outstanding at March 31. 2005 | 1,104,333 | $ | 0.87 | ||||
| Options exercisable at March 31, 2005 | 716,833 | ||||||
The following table summarizes information about stock options outstanding at March 31, 2005:
| Options Outstanding and Exercisable | ||||||
| Number | Weighted | Weighted | Number | Weighted | ||
| Outstanding | Average | Average | Exercisable at | Average | ||
| Exercise | at March 31, | Remaining | Exercise | March 31, | Exercise | |
| Prices | 2005 | Contractual Life | Prices | 2005 | Prices | |
| $ 0.30 | 162,666 | 0.8 Years | $ 0.30 | 162,666 | $ 0.30 | |
| $ 0.33 | 66,667 | 2.1 Years | $ 0.33 | 66,667 | $ 0.33 | |
| $ 0.10 | 50,000 | 4.5 Years | $ 0.10 | 0 | $ 0.10 | |
| $ 0.10 | 375,000 | 4.7 Years | $ 0.10 | 375,000 | $ 0.10 | |
| $ 2.05 | 450,000 | 5.0 Years | $ 2.05 | 112,500 | $ 2.05 | |
| 1,104,333 | 716,833 | |||||
| (d) |
Warrants | |
|
As at March 31, 2005, the Company had the following warrants outstanding. Each warrant is exercisable into one common share. |
| Number of Shares | Exercise Price and Expiry Dates | ||
| Outstanding at beginning of period | 2,800,000 | $0.10 until Nov 26, 2005 | |
| Exercised | 125,000 | ||
| Outstanding at end to period | 2,675,000 | ||
| Outstanding at beginning of period | 7,660,000 | $0.10 until May 6, 2006 | |
| Exercised | 200,000 | ||
| Outstanding at end to period | 7,460,000 | ||
| Outstanding at beginning of period | 0 | ||
| Issued | 1,750,000 | $0.45 until Mar 3, 2006 | |
| Outstanding at end to period | 1,750,000 | ||
| Total outstanding at March 31, 2005 | 11,885,000 |
The warrants attributable to the Private Placements announced on February 11 and February 17, which closed in April 2005 are not included. With these accounted for, an additional 1,839,295 warrants would be outstanding. With 1,007,140 exercisable at $1.25 expiring on April 15, 2006 and 832,155 exercisable at $2.50 expiring on April 15, 2006.
|
The warrants attributable for the agreement to purchase Mount Hamilton are also not included. As of the May 6, 2005 closing date, 3,750,000 warrants, exercisable at $0.16 US, expiring May 6, 2007 have been issued. | ||
| (e) |
Contributed Surplus | |
|
On March 31, 2005, the contributed surplus was as follows: |
| 2005 | |||
| Balance - Beginning of year | 104,500 | ||
| Stock-based compensation retroactive adjustment (note 2) | - | ||
| Stock-based compensation expense for the year | 937,202 | ||
| Balance - End of year | 1,041,702 |
SUBSEQUENT EVENTS
On April 13, 2005, the Company announced the appointment of Mr. Mike Clarke as Vice President Exploration. Mr. Clarke has a Ph.D. in Geology and over thirty years of international industry experience in the US, Mexico, Russia, Canada, Saudi Arabia and western Africa. For the past year, Mr. Clarke was Country Manager, Exploration for First Quantum Minerals Ltd. in Mauritania where he was responsible for exploration for the Guelb Moghrein Copper-Gold deposit. For the prior four and three quarter years, he was Director of Exploration for the Saudi Arabian Mining Company where, under his direction, the company made several large discoveries totalling in excess of several million ounces of contained gold.
| This ‘40FR12B’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 5/6/07 | ||||
| Filed as of: | 7/14/06 | F-X | ||
| Filed on: | 7/13/06 | F-X | ||
| 5/6/06 | ||||
| 4/15/06 | ||||
| 5/26/05 | ||||
| 5/6/05 | ||||
| 4/13/05 | ||||
| 3/31/05 | ||||
| 3/4/05 | ||||
| 3/1/05 | ||||
| 2/17/05 | ||||
| 2/11/05 | ||||
| 1/26/05 | ||||
| 12/31/04 | ||||
| 6/30/04 | ||||
| 3/31/04 | ||||
| 1/1/04 | ||||
| 12/31/03 | ||||
| 5/7/03 | ||||
| 4/29/03 | ||||
| List all Filings | ||||