Keep an eye on this........it could bolt quickly for a good 25 - 40 % gain.......American Goldfields Announces Agreement to Acquire Interest in Historic Gold Producer
Wednesday July 21, 4:34 pm ET
VANCOUVER, British Columbia--(BUSINESS WIRE)--July 21, 2004--American Goldfields Inc. (OTCBB: AGFL - News) announced that it has completed the formal agreement to acquire a 100% interest in a historic Nevada gold producing property, currently controlled by MinQuest Inc., a natural resource exploration company.
The Imperial Mine (the "Imperial") has a history dating back nearly 80 years, and has been estimated to have produced between 2,000 and 3,000 ounces of gold in the 1930's. However, more recent exploration work suggests the presence of several significant gold targets with Carlin-style mineralization. Sediment hosted gold deposits in certain parts of Nevada are referred to as Carlin-type deposits.
Regionally, the Imperial is located within the Walker Lane, which hosts several important gold and precious metals deposits such as Bullfrog, Goldfield, and Tonopah. The Goldfield District has produced nearly 5 million ounces, a large portion of which came from two claims comprising approximately 40 acres of ground. Exploration conducted to date by others has led management of American Goldfields to conclude that the Imperial contains significant concentrations of gold and is a property of merit.
The Imperial is located in Esmeralda County, NV, approximately 60 kilometers southwest of the town of Tonopah, and 300 kilometers northwest of Las Vegas, in the Railroad Springs mining district. The property consists of 22 mineral claims covering approximately 450 acres between the Montezuma Range to the northeast and the Silver Peak Range to the southwest.
Exploration work in the 1980's included trenching, sampling and approximately 8,700 feet of shallow drilling in 48 holes. Several reverse-circulation drill holes were drilled in 1983-84, of which 5 intercepted significant thicknesses of +0.03 ounces per ton oxide gold. The best hole drilled was a 30 meter intercept of 0.036 ounces per ton including 6 meters of 0.062 ounces per ton. Additional work carried out in 1987 defined a reserve of +0.05 ounce per ton gold and confirmed the presence of Carlin-style mineralization.
Several significant gold targets are present at Imperial, and the company is in the process of initiating a drill program. Management anticipates drills will be in place by mid-to-late August. The company will not release any corporate drill data until the first phase of exploration is well underway.
"The Imperial is an exciting mineral exploration property, in an area which we believe to be one of the highest-profile mineral regions in Nevada," said Donald Neal, President and CEO. "We believe that the Imperial, together with the highly-prospective Gilman project, comprise a significant foothold in what has historically been one of the most valuable and concentrated gold districts in the world."
Completion of the transaction is subject to certain conditions. Terms of the transaction are disclosed in the Company's EDGAR filings.
=========================
American Goldfields Announces Exploration Update for the Imperial Mine
Wednesday August 25, 4:00 pm ET
VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 25, 2004--American Goldfields Inc. (OTCBB:AGFL - News) announced today that exploration continues to progress on the Imperial Mine, a historic Nevada gold producing property in which American Goldfields has a formal agreement to acquire a 100% interest.
The Imperial Mine (the "Imperial") has been estimated to have produced between 2,000 and 3,000 ounces of gold several decades ago, however more recent exploration work has defined a resource of +0.05 ounce per ton gold and identified the presence of several significant gold targets with Carlin-style mineralization. Sediment hosted gold deposits in certain parts of Nevada are referred to as Carlin-type deposits.
Regionally, the Imperial is located within the Walker Lane, which hosts several important gold and precious metals deposits such as Bullfrog, Goldfield, and Tonopah. The Goldfield District has produced nearly 5 million ounces, a large portion of which came from two claims comprising approximately 40 acres of ground.
Management anticipates drills will be in place on the property this month. The company will not release any corporate drill data until the first phase of exploration is well underway.
"The Imperial is an exciting mineral exploration property, in an area which we believe to be one of the highest-profile mineral regions in Nevada," said Donald Neal, President and CEO. "We believe that the Imperial, together with the highly-prospective Gilman project, comprise a significant foothold in what has historically been one of the most valuable and concentrated gold districts in the world."
================================
10-Sep-2004
Quarterly Report
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of matters to a vote of Security Holders
Item 5. Other information
Item 6. Exhibits and reports on Form 8-K
Signatures
Contents
Financial Statements
Balance Sheets
Statements of Loss
Statements of Cash Flows
Notes to the Financial Statements
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)
April 30 January 31
2004 2004
-------------- ------------
Assets
CURRENT ASSETS
Cash $ 63,230 $ 12,104
Prepaid expenses 430 330
---------- ----------
Total current assets 63,660 12,434
Web-site development costs, net (note 2) 17,000 --
---------- ----------
Total Assets $ 80,660 $ 12,434
---------- ----------
Liabilities and Stockholders' Equity
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 21,046 $ 10,572
---------- ----------
Total current liabilities 21,046 10,572
---------- ----------
Stockholders' Equity
Common stock, $0.001 par value, 600,000,000 (January
31, 2004 -
100,000,000) shares authorized and 24,914,278
(January 31, 2004 - 53,914,278) shares issued and
outstanding at April 30, 2004 24,914 53,914
Additional paid-in capital 196,400 41,657
Accumulated deficit (161,700 ) (93,709 )
---------- ----------
Total stockholders' equity 59,614 1,862
---------- ----------
Total Liabilities and Stockholders' Equity $ 80,660 $ 12,434
---------- ----------
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Consolidated Statements of Loss
(Unaudited)
For the three-month periods ended April Inception
30 December 21,
----------------------------------------- 2001 to
2004 2003 April 30,2004
-------------------- -------------------- ---------------
Expenses
Mineral property acquisition and
exploration expenditures 32,400 -- 46,924
Office and sundry 11,893 225 15,068
Rent 814 150 2,754
Professional fees 16,724 1,051 81,529
Transfer agent fees 1,560 600 3,825
Amortization 1,000 -- 1,000
Directors fees -- -- 5,000
Consulting fees 3,600 -- 5,600
---------------- ---------------- -------------
Net loss for the period (67,991 ) (2,026 ) (161,700 )
---------------- ---------------- -------------
Basic and diluted loss per share
of common stock $ (0.00 ) $ (0.00 )
---------------- ---------------- -------------
Weighted average shares outstanding
- basic and diluted 43,603,167 53,914,278
---------------- ---------------- -------------
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Month Period Ended
April 30 Inception
--------------------------------- December 21,
2001 to April
2004 2003 30, 2004
----------------- --------------- ----------------
Cash provided by (used in):
Cash flows from operating activities
Net loss for the period $ (67,991 ) $ (2,026 ) $ (161,700 )
Adjustments to reconcile net loss to net
Cash used in operating activities:
Stock-based compensation 43,200 -- 43,200
Amortization 1,000 -- 1,000
Changes in assets and liabilities
Prepaid expenses (100 ) (183 ) (430 )
Accounts payable and accrued
liabilities 15,017 (640 ) 25,589
------------- ----------- --------------
Net cash from operating activities (8,874 ) (2,849 ) (92,341 )
Cash flows from financing activities
Proceeds from the issue of common stock -- -- 95,571
Proceeds from the exercise of stock
options 60,000 -- 60,000
------------- ----------- --------------
Net cash from financing activities 60,000 -- 155,571
------------- ----------- --------------
Increase (decrease) in cash 51,126 (2,849 ) 63,230
Cash, beginning of period 12,104 30,868 --
------------- ----------- --------------
Cash, end of period $ 63,230 $ 28,019 $ 63,230
------------- ----------- --------------
SCHEDULE OF NON-CASH ACTIVITIES
Settlement of accounts payable by
contribution
from a shareholder $ 4,543 $ -- $ 4,543
Web-site development costs related to non
-
Employee stock-based compensation $ 18,000 $ -- $ 18,000
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
April 30, 2004 and 2003
1. Basis of Presentation and Going Concern Considerations
The unaudited financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the Company's financial position and the results of its operations for the periods presented. This report on Form 10-QSB should be read in conjunction with the Company's financial statements and notes thereto included in the Company's Form 10-KSB for the fiscal year ended January 31, 2004. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company's Form 10-KSB for the fiscal year ended January 31, 2004 has been omitted. The results of operations for the three month period ended April 30, 2004 is not necessary indicative of results for the entire year ending January 31, 2005.
Organization
The Company was incorporated in the State of Nevada, U.S.A., on December 21, 2001. On February 24, 2004, the Company and a majority of the Company's stockholders authorized the changing of the Company's name to American Goldfields Inc. The name change became effective March 31, 2004.
Exploration Stage Activities
The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Upon location of a commercial minable reserve, the Company expects to actively prepare the site for its extraction and enter a development stage.
Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of $161,700 for the period from December 21, 2001 (inception) to April 30, 2004, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management is seeking additional capital through an equity financing. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
2. Web-site Development Costs
Web-site development costs represent capitalized costs of design, configuration, coding, installation and testing of the Company's web-site up to initial installation. The asset is being amortized over its estimated useful life of 3 years using the straight-line method. Ongoing web-site post-implementation costs will be charged to operations as incurred.
3. Common Stock
On February 23, 2004, the Company approved a 6:1 forward stock split. As a result of the stock split, an additional 44,928,565 shares of common stock were issued. The par value of the common stock remained unchanged at $0.001 per common share but the authorized number of common stock increased to 600,000,000 from 100,000,000.
--------------------------------------------------------------------------------
On March 31, 2004, the two Directors of the company each returned 15,000,000 shares (such number reflects the 6:1 stock split) of common stock to treasury for no proceeds.
4. Stock Options
The Company applies Accounting Principles Board Opinion No. 25 ("APB No. 25") and related interpretations in accounting for its employee common stock option plans. Accordingly, compensation costs are recognized as the difference between the exercise price of each option and the market price of the Company's stock at the date of each grant. The Company did not charge operations with any compensation expense in relation to employee stock option grants in either of the three-month periods ended April 30, 2004 or 2003.
The Company accounts for the grant of options to non-employees using the fair value-based method prescribed in Statement of Financial Accounting Standard ("SFAS") No. 123 (as amended by SFAS 143), using the Black-Scholes option pricing model. Compensation for unvested options is amortized over the vesting period. The Company granted 1,700,000 stock options to non-employees during the quarter ended April 30, 2004. These options were valued using the Black-Scholes option pricing model with the following assumptions: (1) dividend yield of 0%,
(2) expected volatility of 165%, (3) risk free interest rate of 3% and, (4) expected life of 1 year. The weighted average fair value of options granted for the three-months ended April 30, 2004 was $0.036. As a result of the recognition of stock-based compensation, the following amounts have been included in the Consolidated Statement of Loss at April 30, 2004:
Mineral property acquisition and exploration expenditures $ 32,400
Office and sundry 7,200
Consulting 3,600
--------
$ 43,200
--------
In addition, web site development costs in the amount of $18,000 have been capitalized pursuant to the granting of non-employee stock options.
In March 2004, the Board of Directors adopted the American Goldfields Inc.'s 2004 Stock Option Plan (the 2004 Plan) reserving 5,000,000 common shares for grant to employees, directors and consultants. Because additional stock options are expected to be granted in future periods, the above stock-based compensation expenses are not representative of the effects on reported financial results for future periods.
Activity under the 2004 Plan is summarized as follows:
Weighted
Average
Options Exercise
Outstanding Price
-------------- -----------
Balance, January 31, 2004 -- $ --
Options granted 1,700,000 $ 0.06
Options exercised (1,000,00 0) $ 0.06
----------- ---------
Balance, April 30, 2004 700,000 $ 0.06
----------- ---------
--------------------------------------------------------------------------------
The following table summarizes information concerning outstanding and exercisable common stock options under the 2004 Plan at April 30, 2004:
Weighted
Average
Remaining Weighted Number of Weighted
Range of Number of Contractual Average Options Average
Exercise Options Life Exercise Currently Exercise
Prices Outstanding (in Years) Price Exercisable Price
----------- -------------- ------------- ----------- -------------- -----------
$ 0.06 700,000 9.90 $ 0.06 700,000 $ 0.06
--------- ------------ ----------- --------- ------------ ---------
-- 700,000 -- -- 700,000 --
------------ ------------
5. Commitments
On April 7, 2004, the Company entered into a non-binding Letter of Intent ("LOI") with MinQuest Inc. ('Minquest') for an option to acquire a 100% interest in the Gilman Property located in Nevada, U.S.A. The LOI requires certain minimum annual property payments with a total of $70,000 required to be paid by the fourth anniversary of the signing of the final agreement. The LOI also requires minimum annual exploration expenditures with a grand total of $450,000 in expenditures required to be incurred on the property by the fifth anniversary of the signing of the final agreement. Under the LOI, the Company is subject to a 3% royalty payable to MinQuest with the Company being able to repurchase up to two-thirds of the royalty for $1,000,000 for each 1% repurchased.
6. Subsequent Events
On May 12, 2004 the company announced the completion of the formal agreement for an option to acquire a 100% interest in the Gilman Property. Concurrently, the company made the first $10,000 payment to Minquest. The Gilman property consists of 19 contiguous, unpatented mineral claims covering approximately 390 acres located in Lander County, Nevada. All of the claims are on Department of Agriculture, Forest Service administered lands, while access to the property is across Department of Interior, Bureau of Land Management land. On May 26, 2004, Mr. Richard Kern joined the Company's Board of Directors. Mr. Kern is also the President of Minquest.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Certain statements contained in this report, including statements regarding the anticipated development and expansion of the Company's business, the intent, belief or current expectations of the Company, its directors or its officers, primarily with respect to the future operating performance of the Company and the products it expects to offer and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act (the "Reform Act"). Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by or with the approval of the Company, which are not statements of historical fact, may contain forward-looking statements, as defined under the Reform Act. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. For a more detailed listing of some of the risks and uncertainties facing the Company, please see the 2004 Form 10-KSB filed by the Company with the Securities and Exchange Commission.
All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
--------------------------------------------------------------------------------
RESULTS OF OPERATIONS
We did not earn any revenues during the three months ended April 30, 2004. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.
During the three months ended April 30, 2004, we incurred a net loss of $67,991 compared to a net loss of $2,026 for the comparative period in 2003. Our year to date net loss for 2004 has increased substantially over 2003 due to the Company recording $43,200 in stock-based compensation in relation to options granted to non-employees for services provided to the Company. In addition, costs related to the restructuring of the Company included the relocation and setting-up of the Company's new office. The loss for the period ended April 30, 2004 consists primarily of stock-based compensation and professional fees related to regulatory filings as well as costs to relocate to our new office.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $63,230 as of April 30, 2004. We anticipate that we will incur the following through the next twelve months:
o $65,000 in connection with property payments and the initial exploration of the Gilman property;
o $70,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934.
Current cash on hand is insufficient for all of the Company's commitments. We anticipate that the additional funding that we require will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund additional phases of the exploration program, should we decide to proceed. We believe that debt financing will not be an alternative for funding any further phases in our exploration program. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing
Notwithstanding, we cannot be certain that any required additional financing will be available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures.
Net cash used in operating activities during the three months ended April 30, 2004 was $8,874 compared to $2,849 during the three months ended April 30, 2003. Although the net loss in 2004 ($67,991) was higher than in 2003 ($2,026), the change in cash from operations was not as large due to non-employee stock-based compensation of $43,200 and an increase in accounts payable and accrued liabilities of $15,017 in the current period compared to 2003.
Going Concern Consideration
As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of $161,700 for the period from December 21, 2001 (inception) to April 30, 2004, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
There is substantial doubt about our ability to continue as a going concern. Accordingly, our independent auditors included an explanatory paragraph in their report on the January 31, 2004 financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
==============================
13-Sep-2004
Quarterly Report
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of matters to a vote of Security Holders
Item 5. Other information
Item 6. Exhibits and reports on Form 8-K
Signatures
Contents
Financial Statements
Balance Sheets
Statements of Loss
Statements of Cash Flows
Notes to the Financial Statements
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)
July 31 January 31
2004 2004
-------------- ------------
Assets
CURRENT ASSETS
Cash $ 18,700 $ 12,104
Prepaid expenses 430 330
---------- ----------
Total current assets 19,130 12,434
Reclamation deposit (note 2) 13,256 --
Web-site development costs, net (note 3) 15,500 --
---------- ----------
Total Assets $ 47,886 $ 12,434
---------- ----------
Liabilities and Stockholders' Equity
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 6,071 $ 10,572
Loan payable (note 4) 60,000 --
---------- ----------
Total current liabilities 66,071 10,572
---------- ----------
Stockholders' Equity
Common stock, $0.001 par value, 600,000,000 (January
31, 2004 -
100,000,000) shares authorized and 24,914,278
(January 31, 2004 - 53,914,278) shares issued and
outstanding at July 31, 2004 24,914 53,914
Additional paid-in capital 196,400 41,657
Accumulated deficit (239,499 ) (93,709 )
---------- ----------
Total stockholders' equity (18,185 ) 1,862
---------- ----------
Total Liabilities and Stockholders' Equity $ 47,886 $ 12,434
---------- ----------
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Consolidated Statements of Loss
(Unaudited)
Three-Months Ended Six-Months Ended Inception
July 31 July 31 December 21,
------------------------------- ------------------------------- 2001
to July
2004 2003 2004 2003 31,2004
--------------- --------------- --------------- --------------- ------------
Expenses
Mineral property
acquisition and
exploration
expenditures $ 70,000 $ 7,600 $ 102,400 $ 7,600 $ 116,924
Office and sundry 4,188 225 16,081 450 19,256
Rent 1,231 150 2,045 300 3,985
Professional fees 230 5,500 16,954 6,551 81,759
Transfer agent fees 370 -- 1,930 600 4,195
Amortization 1,500 -- 2,500 -- 2,500
Directors fees -- -- -- -- 5,000
Interest 153 -- 153 -- 153
Consulting fees 127 -- 3,727 -- 5,727
------------ ------------ ------------ ------------ ----------
Loss for the period $ (77,799 ) $ (13,475 ) $ (145,790 ) $ (15,501 ) $ (239,499 )
------------ ------------ ------------ ------------ ----------
Basic and diluted loss per
share
of common stock $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 )
------------ ------------ ------------ ------------
Weighted average shares
outstanding
- basic and diluted 24,914,278 53,914,278 34,156,036 53,914,278
------------ ------------ ------------ ------------
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
Three-Months Ended Six-Months Ended Inception
July 31 July 31 December 21,
------------------------- -------------------------- 2001
to July 31,
2004 2003 2004 2003 2004
------------ ------------ ------------- ------------ -------------
Cash provided by (used in):
Cash flows from operating activities
Net loss for the period $ (77,799 ) $ (13,475 ) $ (145,790 ) $ (15,501 ) $ (239,499 )
Adjustments to reconcile net loss
to net
Cash used in operating
activities:
Stock-based compensation -- -- 43,200 -- 43,200
Amortization 1,500 -- 2,500 -- 2,500
Changes in assets and
liabilities
Prepaid expenses -- 183 (100 ) -- (430 )
Accounts payable and accrued
liabilities (14,975 ) 10,220 42 9,580 10,614
--------- --------- ---------- --------- -----------
Net cash from operating
activities (91,274 ) (3,072 ) (100,148 ) (5,921 ) (183,615 )
Cash flows from financing activities
Proceeds from loan 60,000 -- 60,000 -- 60,000
Proceeds from the issue of common
stock -- -- -- -- 95,571
Proceeds from the exercise of
stock options -- -- 60,000 -- 60,000
--------- --------- ---------- --------- -----------
Net cash from financing
activities 60,000 -- 120,000 -- 215,571
Cash flows from investing activities
Reclamation deposit (13,256 ) -- (13,256 ) -- (13,256 )
--------- --------- ---------- --------- -----------
Net cash from investing
activities (13,256 ) -- (13,256 ) -- (13,256 )
--------- --------- ---------- --------- -----------
Increase (decrease) in cash (44,530 ) (3,072 ) 6,596 (5,921 ) 18,700
Cash, beginning of period 63,230 28,019 12,104 30,868 --
--------- --------- ---------- --------- -----------
Cash, end of period $ 18,700 $ 24,947 $ 18,700 $ 24,947 $ 18,700
--------- --------- ---------- --------- -----------
SCHEDULE OF NON-CASH ACTIVITIES
Settlement of accounts payable by
contribution
from a shareholder $ -- $ -- $ 4,543 $ -- $ 4,543
Web-site development costs
related to non-
Employee stock-based
compensation $ -- $ -- $ 18,000 $ -- $ 18,000
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
American Goldfields Inc.
(formerly Baymont Corporation)
(An Exploration Stage Company)
Notes to the Financial Statements
(Unaudited)
July 31, 2004 and 2003
1. Basis of Presentation and Going Concern Considerations
The unaudited financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the Company's financial position and the results of its operations for the periods presented. This report on Form 10-QSB should be read in conjunction with the Company's financial statements and notes thereto included in the Company's Form 10-KSB for the fiscal year ended January 31, 2004. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company's Form 10-KSB for the fiscal year ended January 31, 2004 has been omitted. The results of operations for the three and six month periods ended July 31, 2004 are not necessary indicative of results for the entire year ending January 31, 2005.
Organization
The Company was incorporated in the State of Nevada, U.S.A., on December 21, 2001. On February 24, 2004, the Company and a majority of the Company's stockholders authorized the changing of the Company's name to American Goldfields Inc. The name change became effective March 31, 2004.
Exploration Stage Activities
The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Upon location of a commercial, minable reserve, the Company expects to actively prepare the site for its extraction and enter a development stage.
Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of $239,499 for the period from December 21, 2001 (inception) to July 31, 2004, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management is seeking additional capital through an equity financing. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
2. Reclamation Deposit
The Company has applied for a drilling permit with the state of Nevada for the Imperial Property. As part of the application process, the Company paid a refundable deposit with the state for the estimated reclamation costs associated with the planned drill program. Upon completion of any required reclamation, the Company will receive a refund of the deposit.
--------------------------------------------------------------------------------
3. Web-site Development Costs
Web-site development costs represent capitalized costs of design, configuration, coding, installation and testing of the Company's web-site up to initial installation. The asset is being amortized over its estimated useful life of 3 years using the straight-line method. Ongoing web-site post-implementation costs will be charged to operations as incurred.
4. Loan Payable
On July 5, 2004 the Company entered into a loan agreement with a minority shareholder. The total proceeds of the loan of $60,000 were used by the Company to make the initial $60,000 Imperial Property payment (note 7) to Minquest Inc. The loan bears interest at the Bank of Canada Prime Lending Rate plus 1% and is repayable on or before July 5, 2005. The Company has the option of repaying the loan earlier without penalty. No security was provided for the loan.
5. Common Stock
On February 23, 2004, the Company approved a 6:1 forward stock split. As a result of the stock split, an additional 44,928,565 shares of common stock were issued. The par value of the common stock remained unchanged at $0.001 per common share but the authorized number of common stock increased to 600,000,000 from 100,000,000.
On March 31, 2004, the two Directors of the company each returned 15,000,000 shares (such number reflects the 6:1 stock split) of common stock to treasury for no proceeds.
6. Stock Options
The Company applies Accounting Principles Board Opinion No. 25 ("APB No. 25") and related interpretations in accounting for its employee common stock option plans. Accordingly, compensation costs are recognized as the difference between the exercise price of each option and the market price of the Company's stock at the date of each grant. The Company did not charge operations with any compensation expense in relation to employee stock option grants in either of the six or three-month periods ended July 31, 2004 or 2003.
The Company accounts for the grant of options to non-employees using the fair value-based method prescribed in Statement of Financial Accounting Standard ("SFAS") No. 123 (as amended by SFAS 143), using the Black-Scholes option pricing model. Compensation for unvested options is amortized over the vesting period. The Company granted 1,700,000 stock options to non-employees during the quarter ended April 30, 2004. The Company did not grant any stock options during the quarter ended July 31, 2004. The options were valued using the Black-Scholes option pricing model with the following assumptions: (1) dividend yield of 0%,
(2) expected volatility of 165%, (3) risk free interest rate of 3% and, (4) expected life of 1 year. The weighted average fair value of options granted for the three-months ended April 30, 2004 was $0.036. There were no stock options granted for the three-months ended July 31, 2004. As a result of the recognition of stock-based compensation, the following amounts have been included in the Consolidated Statement of Loss at July 31, 2004:
Mineral property acquisition and exploration expenditures $ 32,400
Office and sundry 7,200
Consulting 3,600
--------
$ 43,200
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In addition, web site development costs in the amount of $18,000 have been capitalized pursuant to the granting of non-employee stock options.
In March 2004, the Board of Directors adopted the American Goldfields Inc.'s 2004 Stock Option Plan (the 2004 Plan) reserving 5,000,000 common shares for grant to employees, directors and consultants. Because additional stock options are expected to be granted in future periods, the above stock-based compensation expense is not representative of the effects on reported financial results for future periods.
Activity under the 2004 Plan is summarized as follows:
Weighted
Average
Options Exercise
Outstanding Price
-------------- -----------
Balance, January 31, 2004 -- $ --
Options granted 1,700,000 $ 0.06
Options exercised (1,000,000 ) $ 0.06
------------ ---------
Balance, July 31, 2004 700,000 $ 0.06
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The following table summarizes information concerning outstanding and exercisable common stock options under the 2004 Plan at July 31, 2004:
Weighted
Average
Remaining Weighted Number of Weighted
Range of Number of Contractual Average Options Average
Exercise Options Life Exercise Currently Exercise
Prices Outstanding (in Years) Price Exercisable Price
----------- -------------- ------------- ----------- -------------- -----------
$ 0.06 700,000 9.65 $ 0.06 700,000 $ 0.06
--------- ------------ ----------- --------- ------------ ---------
700,000 700,000
------------ ------------
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7. Commitments
IMPERIAL PROPERTY GILMAN PROPERTY
Property Exploration Property Exploration
Payments Expenditures Payments Expenditures
---------- --------------- ---------- ---------------
Year 1 $ 20,000 $ 75,000 $ 15,000 $ 50,000
Year 2 $ 20,000 $ 100,000 $ 15,000 $ 75,000
Year 3 $ 20,000 $ 100,000 $ 15,000 $ 100,000
Year 4 $ 20,000 $ 100,000 $ 15,000 $ 100,000
Year 5 -- $ 125,000 -- $ 125,000
-------- ------------- -------- -------------
$ 80,000 $ 500,000 $ 60,000 $ 450,000
On May 7, 2004, the Company completed the formal agreement with Minquest Inc. ('Minquest') for an option to acquire a 100% interest in the Gilman Property. Concurrently, the company made the first $10,000 payment to Minquest. The Gilman property consists of 19 contiguous, unpatented mineral claims covering approximately 390 acres located in Lander County, Nevada, U.S.A. The agreement requires certain minimum annual property payments with a total of $70,000 required to be paid by May 15, 2008. The agreement also requires minimum annual exploration expenditures with a grand total of $450,000 in expenditures required to be incurred on the property by May 15, 2009. The agreement is subject to a 3% royalty payable to MinQuest with the Company being able to repurchase up to two-thirds of the royalty for $1,000,000 for each 1% repurchased.
On June 30, 2004, the Company entered into an agreement with Minquest for an option to acquire a 100% interest in the Imperial Property. The company made the first scheduled payment of $60,000 upon signing the agreement (note 4). The Imperial Property consists of 22 contiguous, unpatented mineral claims covering approximately 450 acres located in Esmeralda County, Nevada, U.S.A. The agreement requires certain minimum annual property payments with a total of $140,000 required to be paid by July 1, 2008. The agreement also requires minimum annual exploration expenditures with a grand total of $500,000 in expenditures required to be incurred on the property by the July 1, 2009. The property option agreement is subject to a 3% royalty payable to MinQuest.
8. Related Party Transactions
On May 26, 2004, Mr. Richard Kern joined the Company's Board of Directors. Mr. Kern is also the President of Minquest. The Imperial Property option agreement requires the Company to use Minquest as the primary contractor for exploration activity undertaken on the property. All exploration work undertaken on either the Imperial or Gilman Properties will be at the direction and discretion of the Company. For the six-months ended July 31, 2004, the Company paid Minquest a total of $70,000 related to the initial property payments for the Imperial ($60,000) and Gilman Properties ($10,000). As of July 31, 2004, no property exploration expenditures on these properties have been incurred.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Certain statements contained in this report, including statements regarding the anticipated development and expansion of the Company's business, the intent, belief or current expectations of the Company, its directors or its officers, primarily with respect to the future operating performance of the Company and the products it expects to offer and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act (the "Reform Act"). Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by or with the approval of the Company, which are not statements of historical fact, may contain forward-looking statements, as defined under the Reform Act. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. For a more detailed listing of some of the risks and uncertainties facing the Company, please see the 2004 Form 10-KSB filed by the Company with the Securities and Exchange Commission.
All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
RESULTS OF OPERATIONS
We did not earn any revenues during the six or three months ended July 31, 2004. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.
For the six months ended July 31, 2004 and 2003 we had a net loss of $145,790 and 15,501 respectively. During the three months ended July 31, 2004, we incurred a net loss of $77,799 compared to $13,475 for the comparative period in 2003. Our year to date net loss for 2004 has increased substantially over 2003 as a result of the Company making payments totaling $70,000 with respect to the Imperial and Gilman Property option agreements. In the prior six month period, property expenditures of $7,600 were incurred on the Company's former joint venture, the Bor claims. In addition, in the current six-month period the Company recorded $43,200 in stock-based compensation in relation to options granted to non-employees for services provided to the Company. Also, costs to restructure the Company including the relocation and setting-up of the Company's new office were incurred in the current period but not in the prior period. The increase in the loss for the three months ended July 31, 2004 relates primarily to the property payments.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $18,700 as of July 31, 2004 and negative working capital of ($46,941). We anticipate that we will incur the following in the next 12 months:
o $160,000 in connection with property payments and the initial exploration of the Imperial and Gilman Properties;
o $70,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934.
Current cash on hand is insufficient for the Company's existing commitments. We anticipate that the additional funding that we require will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund the exploration program, should we decide to proceed. We believe that debt financing will not be an alternative for funding any further phases in our exploration program. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing
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Notwithstanding, we cannot be certain that any required additional financing will be available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures.
Net cash used in operating activities during the six months ended July 31, 2004 was $100,148 compared to $5,921 during the six months ended July 31, 2003. The increased cash used in operations was primarily due to an increase in the net loss in 2004 ($145,790) compared to 2003 ($15,501). The effect of the higher loss was partially offset by two non-cash items included in the loss from . . .
==============================
American Goldfields Announces Phase I Drill Program now Underway on Imperial Mine
Friday September 24, 5:19 pm ET
VANCOUVER, British Columbia--(BUSINESS WIRE)--Sept. 24, 2004--American Goldfields Inc. (OTCBB:AGFL - News) announced today that Phase I of its drill program is now underway on the Imperial Mine, a historic Nevada gold producing property in which American Goldfields has a formal agreement to acquire a 100% interest.
The Imperial Mine (the "Imperial") has been estimated to have produced between 2,000 and 3,000 ounces of gold several decades ago, however more recent exploration work has defined a resource of +0.05 ounce per ton gold and identified the presence of several significant gold targets with Carlin-style mineralization. Sediment hosted gold deposits in certain parts of Nevada are referred to as Carlin-type deposits.
Regionally, the Imperial is located within the Walker Lane, which hosts several important gold and precious metals deposits such as Bullfrog, Goldfield, and Tonopah. The Goldfield District has produced nearly 5 million ounces, a large portion of which came from two claims comprising approximately 40 acres of ground.
"The Imperial is an exciting mineral exploration property, in an area which we believe to be one of the highest-profile mineral regions in Nevada," said Donald Neal, President and CEO. "We believe that the Imperial, together with the highly-prospective Gilman project, comprise a significant foothold in what has historically been one of the most valuable and concentrated gold districts in the world."
Disclaimer: This announcement may contain forward-looking statements which involve risks and uncertainties that include, among others, limited operating history, limited access to operating capital, factors detailed in the accuracy of geological and geophysical results including drilling and assay reports; the ability to close the acquisition of mineral exploration properties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. More information is included in the company's filings with the Securities and Exchange Commission, and may be accessed through the SEC's web site at http://www.sec.gov.
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Contact:
American Goldfields Inc.
Terry Rajan
Investor Relations
Toll Free: 1-800-942-2201
Email: info@americangoldfields.com
Website: www.americangoldfields.com
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