October 29, 2004
|2nd Quarter Report to Shareholders - 2005
International Northair Mines Ltd. (TSXV:INM) has filed its interim consolidated financial statements and the Management Discussion and Analysis (Form 51-102F) for the six months ended August 31, 2004 with the regulatory authorities through SEDAR (www.sedar.com) and has mailed them to shareholders whose names appear on its Supplemental List. The interim financial statements were prepared by management in accordance with Canadian generally accepted accounting principles and were not reviewed by INM’s auditors. This news release is being issued pursuant to National Instrument 54-102.
Northair’s principal operating segment is the acquisition, exploration and development of natural resource properties primarily in Mexico.
In addition Northair provides management and administrative services to other resource companies, including but not limited to, NDT Ventures Ltd, Stornoway Diamond Corporation, Sherwood Mining Corporation, Tenajon Resources Corp. and Troon Ventures Ltd. (collectively referred to herein as the “Northair Group” or the “Group”). Each company within the Group is related to the Northair through directors and/or shareholders in common. (See “Transactions with Related Parties”).
Results of Operations
- A generative exploration program continues in Western Mexico.
- An ongoing program at the El Tesoro Project, including: mechanical trenching, stream sediment and soil sampling surveys. During the period, the Company constructed an access road to the G Zone to facilitate mechanical trenching and further exploration. Results of the trenching at the G Zone were released in July. In September initial property wide stream sediment and soil sampling surveys revealed a number of new gold and silver anomalies indicating the potential for the discovery of zones of mineralization in addition to the seven zones currently defined.
- The receipt of additional exploration results from the Las Moras Project. The “La Ventana Zone” was further explored. A reconnaissance soil sampling program was conducted over an approximate 75 by 150 metre area surrounding La Ventana. Four pits were also manually excavated, with one representative sample taken from each pit. The results of the soil sampling and pit excavation program imply that the zone could be larger than exposed in the La Ventana outcrop. Results warrant further exploration.
The Company’s loss for the six months ended August 31, 2004 was $317,778, a loss of $0.02 per share, as compared to a loss of $13,371, or a loss of $0.01 per share, for the six months ended August 31, 2003. The sizable increase in the loss from period-to-period is attributable to several factors. During the six months ended August 31, 2004, the Company wrote-off capitalized resource costs of $148,528 as compared to a write-off of $82,442 in the same period last year. The Company recognized a gain on the sale of securities of $116,208 in the prior period which significantly reduced the loss for that period. In comparison, the Company realized a gain of only $65 from the sale of securities in the current period. In addition, the Company’s general and administrative expenses increased to $358,036 in the current period (2003 - $251,922) while administrative recoveries declined in the current period to $173,075 (2003 - $202,173).
Liquidity & Capital Resources
Working capital as at August 31, 2004 was $1,366,189 as compared to $2,000,105 at the year end and $608,642 as at August 31, 2003. Cash and cash equivalents decreased by $794,358 to $1,229,214 during the first six months of the year. This compares to an ending cash balance of $2,023,572 as at the year-end and $427,656 as at August 31, 2003.
At August 31, 2004, Northair’s share capital was $21,471,736 as compared to $21,310,139 at the year-end and $18,971,344 at August 31, 2003 representing 13,027,172 (29 February 2004 – 12,831,347; 2003 – 8,782,611) common shares without par value. The deficit was $18,721,733 (29 February 2004 - $18,403,955; 2003 - $18,003,198) as at August 31, 2004. After adjusting for contributed surplus of $116,448, shareholders’ equity was $2,866,451 at August 31, 2004 as compared to shareholders’ equity of $3,022,632 as at the year end and $1,084,594 for the same period in 2003. As at August 31, 2004, the Company had 1,315,000 outstanding stock options with exercise prices that ranged from $0.15 to $1.20 and 1,858,847 warrants that can be exercised at prices between $0.60 and $0.80 per share prior to September 30, 2004. On September 30, 2004, a total of 364,916 warrants exercisable at $0.60 expired without exercise. In October, the Company received regulatory approval to extend the expiry date of certain warrants issued pursuant to a Short Form Offering Document for one year, from September 30, 2004 to September 30, 2005. The exercise price was not amended. A total of 2,987,862 warrants exercisable to acquire 1,493,931 common shares of the Company at $0.80 were affected.