Altius-Overview of Activities ALTIUS MINERALS CORP
("ALS-V;ATUSF-0") - Management Discussion For The Nine Months Ended January 31, 2002 Management Discussion and Analysis
1. Introduction
The Company is an active explorer for commercially exploitable mineral deposits. All of its current properties are located in the Province of Newfoundland and Labrador, Canada. Financing for the exploration of the Company's mineral properties is sourced through a combination of equity placements and earn-in / joint venture agreements with other exploration and mining companies.
2.Results Of Operations
Net of recoveries (option payments and government grants totalling $245,188), the Company expended $229,273 for the nine months ended January 31, 2002 on mineral exploration and acquisitions. Interest income for the nine months ended January 31, 2002
is $25,261. For the nine months ended January 31, 2002, total expenses were $177,606, general and administrative costs were $168,276, mineral property write-downs were $2,416 and amortization costs were $6,914. The net loss for the nine months is $152,345 (.01 per share).
3. Related Party Transactions
VMS Consultants Inc., controlled by director Geoff Thurlow, provided $66,013 in geological consulting services to the Company during the nine months ended January 31, 2002. The services were mainly provided towards those properties being funded by various joint venture partners. Director John Baker is a Partner of the legal firm White Ottenheimer and Baker. This firm provided legal services relating to various acquisition and joint venture agreements as well as other corporate and administrative matters that cost $13,008 during the year.
4. Liquidity and Capital Resources
As at January 31, 2002 the Company had working capital on hand of $1,038,234. A total of $96,992 is currently posted with the Province of Newfoundland and Labrador as security deposits against exploration work to be conducted on various mineral claims. These security deposits are refundable upon completion of adequate assessment work, should it occur. During the quarter ended January 31, 2002, a total of 1,015,000 common share purchase warrants were exercised at $0.45 (for proceeds of $456,750) and subsequent to the quarter, a further 590,000
warrants were exercised at $0.45 (for proceeds of $265,500). An employee exercised 5000 stock options during the quarter for proceeds of $2,200. A non-brokered private placement of 200,000 "flow through" units was completed during the quarter. Each unit consists of 1 share priced at $1.00 (for proceeds of $200,000) and 1 warrant exercisable at $1.20 for two years. Insiders of the Company subscribed for the majority(185,000) of these units. 25,000 shares were issued under the terms of a property acquisition agreement during the quarter and a further 5,000 shares were issued subsequent to the quarter end under a separate acquisition agreement. Subsequent to the quarter end a director exercised 35,000 stock options at $0.20 per share. A very significant source of funding for the Company's exploration programs are its earn-in / joint venture agreements with several mining industry partners. These partners are funding the exploration of individual properties, or groups of properties, in exchange for direct
ownership interest in the properties, should all vesting conditions be met. Annual cash payments to the Company are often a component of these agreements. Details of earn-in / joint venture agreements completed or terminated during and subsequent to the quarter are presented below. The Company anticipates that it can continue to access grant funding under the Province of Newfoundland and Labrador's Junior Company Exploration Assistance Program (JCEAP). Under JCEAP, planned property exploration programs are reviewed for eligibility and if approved are eligible for reimbursement of up to 50% of costs incurred, to a maximum of $100,000 per program. During the nine months ended January 31, 2002, the Company received grant payments of $85,635 in relation to its Robert's Arm property, $86,325 in relation to the Moosehead property and $7,490 in relation to the South Tally pond property. Subsequent to the quarter end, a further grant of up to $51,000 was approved for the Moosehead property.
5. Acquisition and Abandonment of Resource Properties
See the Consolidated Schedule of Mineral Properties and Deferred Exploration Costs, which is included within the Consolidated Financial Statements.
6.Property Agreements and Exploration
During the third quarter ended January 31, 2002 Inmet Mining Corporation funded the deepening of a drill hole on the Company's South Tally Pond property. However it elected not to exercise its option to enter a JV agreement concerning the property. During the quarter, the Company signed an agreement to acquire a 100% interest in the north part of the past-producing Rambler copper-gold property in exchange for payments to arm's length private company Ming Minerals Ltd. of 200,000 of its shares (25,000 due on signing
have been paid) over four years. It must also make exploration expenditures of $500,000 in stages over the period. Ming has also granted the Company a first right of refusal to acquire the south part of the Rambler property (Rambler South), including the mineral
processing facilities located thereon. The property has been assigned to a newly formed, wholly owned subsidiary company. During the quarter, Barrick Gold Corporation ("Barrick") entered into an agreement concerning six of the Company's properties located
in central Newfoundland. Under the agreement, Barrick may earn a 75% interest by funding all exploration costs and making annual cash payments ($15,000 in year 1, $35,000 in year 2 and $25,000 per year thereafter) until a production decision has been made. The Company will manage the exploration programs for at least the first two years
of the agreement. Following a production decision, the Company can elect to have Barrick arrange its share of any required mine development financing in exchange for an additional 5% interest in the properties. The Mustang and Swiss Lake properties, as well as four newly staked licences, have been included in the agreement. Exploration will target sedimentary rock-hosted, or "Carlin-Type", gold deposits along a regional geological feature that has been termed the Mustang Trend.
7.Exploration Outlook
As outlined above, considerable exploration activity, including diamond drilling, is planned at several properties during the remainder of the calendar year. Joint venture funding agreements are in place for several of the Company's properties and new earn-in / joint venture agreements are expected to be signed during the coming months. Discussions with potential partners are currently underway with respect to Rambler, Rocky Brook, and several gold properties located in the vicinity of the Mustang Trend and the Moosehead property. New property acquisitions, covering a variety of commodity
targets, are also expected.
8. Investor Relations Activities
The Company was an exhibitor and presenter at investment and geological conferences in San Francisco and Vancouver during the quarter. Subsequent to the quarter end the Company was a presenter and an exhibitor at Prospectors and Developers Association of Canada convention in Toronto. Nexus Consultants Inc. (Deborah Thiel) provided investor relation services to the company during the year. Nexus was paid $7,083 during the period for ongoing communication with existing and potential shareholders, assistance with the design of investor relation materials and organization of the Company's participation in various investment conferences. During the second quarter, the Company and Nexus elected not to renew the service contract due to an increase in Ms. Thiel's other business responsibilities.
9.Risks and Unc