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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 AND 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Period __April 2004 _____ | File No: ____0-30720_____ |
Radius Explorations Ltd.
(Name of Registrant)
355 Burrard Street, Suite 830, Vancouver, B.C. V6C 2G8, Canada
(Address of principal executive offices)
1.
News Release dated April 13, 2004
2.
News Release dated May 19, 2004
3.
Interim Financial Statements (Unaudited) for the Period Ended March 31, 2004.
Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
FORM 20-F XXX FORM 40-F ____
Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _____
No XXX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Radius Explorations Ltd.
(Registrant)
Dated: June 16, 2004 | Signed: /s/ Simon Ridgway President and Director |
PILAGOLD
RADIUS
INC.
EXPLORATIONS LTD.
NR 2004-05
NR 2004-05
355 Burrard Street, Suite 830, Vancouver, BC, V6C 2G8, Canada
Tel: 604-801-5432 • Fax: 604-662-8829 • Toll-Free: 1-888-627-9378
NEWS RELEASE
April 13, 2004
Radius / PilaGold Announce Banderas Drill Results
& Provide Merger Update
Vancouver, April 13, 2004. PilaGold Inc. (“PilaGold”) and Radius Explorations Ltd. (“Radius”) are pleased to announce results from the second phase of diamond drilling at the Banderas project in Eastern Guatemala.
Highlights of the recently completed drilling include intersections of 11.6 g/t Au equivalent over 2.2m in hole BDD-014; 8.5 g/t Au equivalent over 2.6m in hole BDD-019 including 16.1 g/t Au equivalent over 1.2m; and 5.2 g/t Au equivalent over 6.7m in hole BDD-022, including 13.3 g/t Au equivalent over 0.9m. Detailed assay results from the second phase of drilling are tabulated below together with the intercepts from the first stage of drilling in 2003. An updated drill plan can be found at the PilaGold web site (www.pilagold.com).
Banderas is held under a joint-venture agreement whereby PilaGold can earn a 60% interest in the property from Radius through exploration expenditures (see below). The property hosts a classic epithermal gold vein system: Gold and silver bearing quartz-carbonate veins and breccias are hosted by felsic to intermediate flows and tuffs which comprise a volcanic dome field. Parallel vein structures have been traced in outcrop and float up to 2,500m along strike, and at least 5 vein systems have been identified on the property to date.
The 12 hole (1,643m) core drilling program was completed in mid-March, and was designed to test for strike and dip extensions to known mineralization on the main Pyramid Hill and M28 trends. Significant intercepts have now been defined 1,500m along strike on the Pyramid Hill zone. Previous phase 1 core drilling consisted of 902m in 10 holes, completed in October 2003.
The main M28 vein structure has now been drill tested over 350m strike length on 3 sections, up to 180m down dip. The 130-140º trending vein is generally 2-5m wide and dips 30-40º to the west, occurring at the contact between basement andesites and overlying rhyo-dacites flows. In this case the structure appears to be sub-horizontal, or may have been disrupted by “east side down” normal faulting, to produce vein intercepts which step down to the east.
The Pyramid Hill vein structure has been drill tested over 1,500m strike on 3 sections, up to 90m down dip. This 130-140º trending structure dips sub-vertically, with multiple vein intercepts in a structural zone up to 50m wide on one section. Again, the veins occur along the contact between andesites and overlying rhyo-dacites flows.
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Gold and silver mineralization in both zones is generally associated with banded white chalcedonic quartz and black (silver sulphide) “ginguro” bands. Significant gold values generally fall in the 2-12 g/t range with local high grade values up to 18.7 g/t (over 1.5m).
The full results of the Phase 1 and 2 drill programs are currently being compiled. The drilling completed to date has demonstrated that a substantial strike length of mineralized vein system exits at Banderas. Interestingly, the source (or sources) of a number of extremely high hypogene-grade float samples (which returned values of up to 374 g/t Au and 3,524 g/t Ag in one particular sample) has yet to be identified in drilling.
In light of this, additional trenching and prospecting are now underway at Banderas with the aim of following up several untested high grade float discoveries on the western and southern margins of the property, and a third round of drilling is being planned for Banderas for later this year.
Table 1: Banderas Drilling: Second Stage Results
Zone | Hole | From (m) | To (m) | Interval (m) | Au (g/t) | Ag (g/t) | Au Eq.* |
Knob Hill | BDD-011 | No significant results | |||||
Knob Hill | BDD-012 | 91.1 | 93.1 | 2.0 | 4.4 | 31.9 | 5.0 |
Knob Hill | BDD-013 | No significant results | |||||
Pyramid Hill | BDD-014 | 56.3 | 58.5 | 2.2 | 6.9 | 261.9 | 11.6 |
|
| 70.1 | 71.6 | 1.5 | 4.2 | 232.0 | 8.4 |
Pyramid Hill | BDD-015 | 65.5 | 67.0 | 1.5 | 3.8 | 9.8 | 4.0 |
Pyramid Hill | BDD-016 | 154.5 | 156.1 | 1.6 | 5.0 | 4.3 | 5.1 |
Pyramid Hill | BDD-017 | Hole abandoned | |||||
Knob Hill | BDD-018 | 67.9 | 71.6 | 3.7 | 3.9 | 99.3 | 5.7 |
| Including | 67.9 | 68.5 | 0.6 | 12.1 | 28.1 | 12.6 |
Knob Hill | BDD-019 | 86.9 | 89.6 | 2.6 | 6.8 | 94.8 | 8.5 |
| Including | 88.4 | 89.6 | 1.2 | 14.0 | 103.0 | 16.1 |
Cerro Golera | BDD-020 | No significant results | |||||
Creek Zone | BDD-021 | No significant results | |||||
Stone wall | BDD-022 | 62.5 | 69.2 | 6.7 | 3.9 | 69.8 | 5.2 |
| Including | 66.8 | 67.7 | 0.9 | 11.8 | 90.5 | 13.3 |
*Au equivalency calculated using 1:55 price ratio between $8 Ag and $420 Au.
Table 2: Banderas Drilling: First Stage Results
Zone | Hole | From (m) | To (m) | Interval (m) | Au (g/t) | Ag (g/t) | Au Eq.* |
M28 | BDD-001 | 13.8 | 14.3 | 0.5 | 6.2 | 99 | 8.0 |
M28 | BDD-002 | 28.5 | 30.3 | 1.8 | 2.9 | 57 | 3.9 |
M28 | BDD-003 | 28.9 | 30.7 | 1.8 | 7.2 | 123 | 9.4 |
M28 | BDD-004 | 53.9 | 58.2 | 4.3 | 6.0 | 72 | 7.3 |
| Including | 53.9 | 54.6 | 0.7 | 14.8 | 5 | 14.9 |
M28 | BDD-005 | 29.0 | 30.5 | 1.5 | 7.4 | 84 | 8.9 |
M28 | BDD-006 | 48.8 | 50.5 | 1.7 | 6.0 | 76 | 7.4 |
M28 | BDD-007 | 77.7 | 79.3 | 1.6 | 7.5 | 33 | 8.1 |
M28 | BDD-008 | 86.9 | 90.5 | 3.6 | 9.3 | 41 | 10.0 |
| Including | 89.0 | 90.5 | 1.5 | 18.8 | 64 | 20.0 |
M28 | BDD-009 | 44.2 | 45.7 | 1.5 | 3.1 | 31 | 3.7 |
M28 | BDD-010 | 67.1 | 68.6 | 1.5 | 1.9 | 2.0 | 1.9 |
*Au equivalency calculated using 1:55 price ratio between $8 Ag and $420 Au.
Background Information
PilaGold is earning a 60% interest in Banderas project from Radius Explorations Ltd. To exercise the Banderas option, PilaGold must spend CAD$4.0-million in exploration expenditures on the Project over a three year period.
Qualified Persons
Peter Thiersch, M.Sc. P.Geo. is the Qualified Person as defined by National Instrument 43-101 responsible for the design and management of the Banderas exploration program. The geological and assay data reported in this news release was communicated to Radius by PilaGold. Radius has not independently verified the assay or geological information. Harmen Keyser, P.Geol., a Director of Radius, is the Qualified Person as defined in NI 43-101, and has verified that the results presented in this release have been accurately summarized from the information provided to Radius by PilaGold.
Radius Explorations Ltd. / PilaGold Inc. Merger
In other news, the preparation of documentation pertaining to the Plan of Arrangement for the proposed merger between Radius and PilaGold is proceeding satisfactorily.
A Fairness Opinion on the proposal for Radius shareholders was commissioned by the Radius Board from Ross Glanville Associates of Burnaby, BC (“RGA”). RGA concluded that the proposed terms of amalgamation are fair and reasonable, from a financial point of view, to the shareholders of both parties. Subsequently, the Glanville report was reviewed on behalf of the PilaGold Board by B.J. Price Geological Consultants Inc., who concluded that the proposed merger would be fair to the shareholders of PilaGold.
The Boards of Radius and PilaGold have set the date of May 25th, 2004 for their respective Extraordinary Shareholders Meetings at which shareholders will be requested to vote to approve the proposed merger.
On completion, the merged company - which will be named Radius Gold Inc. - will be the Central American gold exploration leader with approximately 50-million shares issued, and close to Cdn$20-million cash in the treasury with which to conduct its exploration programs.
For further information on PilaGold or Radius Explorations, please call toll free 1-888-627-9378 or visit our web sites (www.pilagold.com and www.radiusgold.com).
The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
ON BEHALF OF THE BOARD
“signed”
“signed”
Simon Ridgway, President
Simon Ridgway, President
PILAGOLD INC.
RADIUS EXPLORATIONS LTD.
Symbol:
TSXV-PRI
Symbol:
TSXV-RDU
Shares Issued:
23.1 million
Shares Issued:
40.3 million
PILAGOLD
RADIUS
INC.
EXPLORATIONS LTD.
NR 2004-06
NR 2004-06
355 Burrard Street, Suite 830, Vancouver, BC, V6C 2G8, Canada
Tel: 604-801-5432 • Fax: 604-662-8829 • Toll-Free: 1-888-627-9378
NEW RELEASE
May 19, 2004
Radius Explorations / PilaGold
Merger Plans & Exploration Update
Radius Explorations Ltd. (RDU) and PilaGold Inc. (PRI) are pleased to announce that the Extraordinary General Meetings of each company at which shareholders will be invited to vote to approve the proposed merger have been scheduled for June 1st, 2004. If the merger is approved by the shareholders of each company, and following court approval on June 14th, it is anticipated that the new entity, Radius Gold Inc., will commence trading on the TSX Venture exchange by June 15th.
The Joint Information Circular relating to the proposed amalgamation has been completed and distributed to shareholders. Shareholders of either company who have not received a copy of the merger document but would like to, can contact Ralph Rushton (1-888-627-9378) at the head office of the company.
The combination of the businesses will have the following advantages to the shareholders of both companies:
•
The consolidation of the landholdings and treasuries will result in a Nicaraguan portfolio second to none in the most prospective country in the region, managed by a single, well financed company.
•
The formation of a focused and dedicated management team and the elimination of any perceived conflicts of interest.
•
The reduction of administrative and regulatory compliance costs.
Exploration Update
El Pavon, Nicaragua
In Central Nicaragua Radius continues to focus on the Pavon epithermal discovery. To date, exploration at Pavon has identified at least five significant quartz-adularia veins hosted by a package of volcanic rocks. The main Pavon vein has been identified for a strike length of >4 km. Over 30 hand-dug trenches have been completed on this vein by Radius geological staff. The weighted average of all of these trenches is 6.7 g/t gold over 3.5m. Trenching on the parallel Las Brisas, Manzaris and Las Vallas veins is returning similar grades and thicknesses. This work is ongoing.
Recent prospecting on the property has also identified broader areas of quartz stockworking –up to 100s of meters in strike length- associated with what appear to be conjugate vein splays off the main trends. For example, at the Pavon North Splay and Astrid zone, broader stockwork zones exist with samples returning grades in the 1g/t to 5g/t range associated with micro-fractures, quartz veining and pervasive silicification.
Radius has assembled an extensive 100% owned land package in the area, comprised of three granted exploration licenses and five applications, covering a total area of approximately 210,000 hectares. In all, Radius’ management consider that the project is developing exceptionally well, and drilling is expected to start later in the year.
New Prospects in Nicaragua
Elsewhere in Nicaragua follow-up of geochemical anomalies has identified new vein systems at El Castillo and at San Pedro in north-central Nicaragua. At Castillo, chip samples ranging from trace gold up to 61.5g/t gold over 1m have been returned from banded quartz veins traceable in float and outcrop for roughly 5km. At San Pedro, banded quartz float has been found over a strike length of 4km associated with strongly anomalous stream sediment geochemistry. First-phase detailed work is continuing on these prospects.
Kuikuinita, Nicaragua
The Kuikuinita concession lies in northeastern Nicaragua, 250 km by road from Managua and 35 km southwest of the "Golden Triangle" district (5-million oz historic production). PilaGold originally acquired 28,600 hectares, which has since been expanded to 139,000 hectares.
Intrusive-related gold mineralization occurs in altered rocks over an area of 5km by 5km representing a significant bulk tonnage, low grade gold target. Trenching at Lomas Los Indios, one of the more significant geochemical and geophysical anomalies, indicates that gold mineralization is hosted by stocks and dykes cutting ophiolitic ultramafics and volcanic wall rocks affected by pervasive quartz-sericite-pyrite alteration.
Drilling is underway at Kuikuinita with 15 holes planned in this first stage program.
Banderas, Guatemala
The Banderas property hosts a classic low sulphidation epithermal vein system associated with the emplacement of rhyolitic to dacitic volcanic domes. Gold and silver bearing quartz-carbonate veins and breccias are hosted by felsic to intermediate flows and tuffs. Individual vein structures have been traced in outcrop, float and by drill holes for up to 2,500m along strike.
Two rounds of drilling totaling 22 holes (< 2,545m) have been completed on the property using a man portable rig. Although drill results to date have been mixed, management believes further work is warranted on this prospect: the mineralized footprint is large and exceptional grades have been obtained from float samples. A work program will be prepared post merger.
Tambor Properties, Guatemala
This property is located on the south side of the Motagua fault zone in central Guatemala. The Tambor Properties host an orogenic lode gold belt, containing 216,000 ounces of gold in inferred resources and 57,800 ounces in indicated resources in high-grade veins, according to the independent resource estimate prepared by Chlumsky, Armbrust and Meyer LLC (CAM) of Lakewood Colorado.
Significantly, there are at least two major gold-in-soil anomalies (over 14 linear kilometers) with associated anomalous rock samples that have yet to be drill tested. Recently geophysics has been completed over the resource area and structural/geological studies are underway prior to planning for further drilling at Tambor.
Negotiations are underway with potential joint-venture partners on several other properties owned by the Companies and announcements are expected shortly.
Qualified Persons
Peter Thiersch, M.Sc., P.Geol. is the Qualified Person as defined by National Instrument 43-101 with respect to PilaGold’s exploration programs. Harmen Keyser, P.Geol. is the Qualified Person with respect to Radius’s exploration programs.
For further information on Radius or PilaGold, please call toll free 1-888-627-9378 or visit our web sites at www.radiusgold.com and www.pilagold.com.
ON BEHALF OF THE BOARD
ON BEHALF OF THE BOARD
“signed”
“signed”
Simon Ridgway, President
Simon Ridgway, President
PILAGOLD INC.
RADIUS EXPLORATIONS LTD.
Symbol:
TSXV-PRI
Symbol:
TSXV-RDU
Shares Issued:
23.1 million
Shares Issued:
40.3 million
RADIUS EXPLORATIONS LTD.
(A Development Stage Company)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(Unaudited – Prepared by Management)
(Expressed in Canadian Dollars)
RADIUS EXPLORATIONS LTD.
(A Development Stage Company)
INTERIM CONSOLIDATED BALANCE SHEETS
AS AT MARCH 31, 2004
(Unaudited - Prepared by Management)
(Expressed in Canadian Dollars)
March 31,
December 31,
2004
2003
ASSETS
CURRENT Cash and short-term deposits | $13,437,389 | $14,784,487 |
Advances and other receivables | 99,945 | 73,150 |
Due from related parties (Note 5) | 179,157 | 385,061 |
Prepaid expenses and deposits | 178,714 | 54,541 |
13,895,205 | 15,297,239 | |
CAPITAL ASSETS | 241,047 | 152,902 |
DEFERRED EXPLORATION COSTS | 10,147,414 | 7,657,963 |
$24,283,666 | $23,108,104 | |
CURRENT Accounts payable and accrued liabilities | LIABILITIES $168,112 | $226,174 |
Due to related party | $ - | $275,812 |
$168,112 | $501,986 | |
SHARE CAPITAL | SHAREHOLDERS' EQUITY | 27,539,692 |
29,521,270 | ||
CONTRIBUTED SURPLUS | 356,158 | 234,500 |
29,877,428 | 27,774,192 | |
DEFICIT | (5,761,874) | (5,168,074) |
24,115,554 | 22,606,118 | |
$24,283,666 | $23,108,104 |
APPROVED BY THE DIRECTORS:
"signed"
, Director Simon Ridgway
"signed"
, Director Mario Szotlender
RADIUS EXPLORATIONS LTD.
(A Development Stage Company)
INTERIM CONSOLIDATED STATEMENT OF DEFICIT
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2004
(Unaudited - Prepared by Management)
(Expressed in Canadian Dollars)
Three Month Period Ended March 31, | ||
2004 | 2003 | |
DEFICIT - BEGINNING OF PERIOD | $5,168,074 | $3,446,011 |
Net loss for the period | 593,800 | 142,647 |
DEFICIT - END OF PERIOD | $5,761,874 | $3,588,658 |
RADIUS EXPLORATIONS LTD.
(A Development Stage Company)
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2004
(Unaudited - Prepared by Management)
(Expressed in Canadian Dollars)
Three Month Period Ended March 31, | ||
2004 | 2003 | |
REVENUE Interest income | $14,235 | $3,896 |
EXPENSES Amortization | 6,634 | 5,420 |
Bank charges and interest | 1,359 | 634 |
Consulting fees | 16,305 | 806 |
Foreign currency exchange | 19,711 | 8,711 |
Legal and accounting fees | 19,954 | 469 |
Management fees | 7,500 | 7,500 |
Non-cash compensation charge (Note 6) | 121,658 | - |
Office and miscellaneous | 6,593 | 4,487 |
Public relations | 306,177 | 74,122 |
Regulatory and stock exchange fees | 15,331 | 2,892 |
Rent and utilities | 7,879 | 6,438 |
Repair and maintenance | 1,411 | 1,389 |
Salaries and wages | 42,572 | 18,062 |
Telephone and fax | 2,181 | 892 |
Transfer agent fees | 1,721 | 2,839 |
Travel and accommodation | 31,049 | 11,882 |
608,035 | 146,543 | |
NET LOSS FOR THE PERIOD | $(593,800) | $(142,647) |
LOSS PER SHARE | $(0.02) | $(0.01) |
RADIUS EXPLORATIONS LTD.
(A Development Stage Company)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED MARCH 31,2004
(Unaudited - Prepared by Management)
(Expressed in Canadian Dollars)
Three Month Period Ended March 31, | ||
2004 | 2003 | |
OPERATING ACTIVITIES Net loss for the period | $(593,800) | $(142,647) |
Items not involving cash Amortization | 6,634 | 5,420 |
Non-cash compensation charge | 121,658 | - |
(465,508) | (137,227) | |
Changes in non-cash working capital items | 121,679 | 99,342 |
(343,829) | (37,885) | |
FINANCING ACTIVITIES Proceeds on issuance of common shares | 46,388 | 1,490,317 |
Share subscriptions converted to common shares | - | (500,000) |
Issue costs of common shares | (1,809) | (71,555) |
44,579 | 918,762 | |
INVESTING ACTIVITIES Advances for exploration costs | (332,383) | (174,540) |
Due from related parties | (69,908) | 2 |
Expenditures on deferred exploration costs | (552,451) | (313,536) |
Purchase of capital assets | (93,106) | (5,400) |
(1,047,848) | (493,474) | |
INCREASE (DECREASE) IN CASH | (1,347,098) | 387,403 |
Cash - beginning of period | 14,784,487 | 1,858,623 |
CASH - END OF PERIOD | $13,437,389 | $2,246,026 |
RADIUS EXPLORATIONS LTD.
(A Development Stage Company)
INTERIM CONSOLIDATED SCHEDULE OF DEFERRED EXPLORATION COSTS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2004
(Unaudited - Prepared by Management)
(Expressed in Canadian Dollars)
Guatemala | Nicaragua | Three Month Period Ended Mar. 31, 2004 | Year Ended Dec. 31, 2003 | ||
JV Project PilaGold | Other | ||||
Marimba Other | |||||
BALANCE - BEGINNING OF PERIOD | $112,241 | $6,875,681 | $670,041 | $7,657,963 | $5,504,170 |
ACQUISITION COSTS Cash |
- | 1,077,504 | |||
Shares | 1,937,000 | 1,937,000 | |||
EXPENDITURES DURING THE PERIOD Automobile | - | 12,586 | 15,714 | 28,300 | 48,181 |
Camp, food and supplies | - | 10,268 | 10,369 | 20,638 | 66,620 |
Drafting, maps and printing | - | 69 | 7,648 | 7,717 | 10,000 |
Drilling | - | 20,077 | - | 20,077 | 6,356 |
Equipment | - | 246 | 1,396 | 1,642 | - |
Equipment rental | - | 3,289 | 1,042 | 4,331 | 6,141 |
Exploration administration | - | 905 | 6,988 | 7,893 | 145,046 |
Geochemistry | - | 7,543 | 37,803 | 45,346 | 53,126 |
Geological consulting | - | 54,908 | 142,184 | 197,093 | 456,589 |
Geophysics | - | 35,637 | - | 35,637 | 6,254 |
Legal and accounting | - | 1,116 | 4,027 | 5,143 | 51,127 |
Licenses, rights and taxes | - | 22,592 | 14,673 | 37,265 | 106,953 |
Materials | - | 9,785 | 8,281 | 18,066 | 19,772 |
Medical expenses | - | 1,954 | 4,264 | 6,218 | 26,906 |
Property payments | - | 14,976 | 8,989 | 23,965 | - |
Rent and utilities | - | 14,009 | 5,635 | 19,643 | - |
Repair and maintenance | - | 570 | 400 | 970 | - |
Salaries and wages | - | 16,224 | 23,152 | 39,376 | 113,080 |
Shipping | - | 1,856 | 1,221 | 3,077 | 1,452 |
Foreign Exchange | - | 33 | (4,701) | (4,668) | - |
Telephone and communications | - | 3,707 | 3,793 | 7,500 | 29,768 |
Travel and accommodation | - | 4,470 | 22,752 | 27,223 | 55,796 |
236,821 | 315,630 | 552,451 | 1,203,167 | ||
EXPENDITURES RECOVERED | - | - | - | - | (18,546) |
WRITTEN-OFF DURING THE PERIOD | - | - | - | - | (108,332) |
BALANCE - END OF PERIOD | $112,241 | $9,049,502 | $985,671 | $10,147,414 | $7,657,963 |
Radius Explorations Ltd.
Notes to the Interim Consolidated Financial Statements
(Unaudited — Prepared by Management)
Three Month Period Ended March 31, 2004
1.
Basis of Presentation
The consolidated financial statements contained herein include the accounts of Radius Explorations Ltd. and its wholly-owned subsidiaries located in Guatemala, Nicaragua and Panama.
The interim period consolidated financial statements have been prepared by the Company in accordance with Canadian generally accepted accounting principles. All financial summaries included are presented on a comparative and consistent basis showing the figures for the corresponding period in the preceding year. The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the annual financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These interim period statements should be read together with the audited financial statements and the accompanying notes included in the Company's latest annual report. In the opinion of the Company, its unaudited interim consolidated financial statements contain all adjustment necessary in order to present a fair statement of the results of the interim periods presented.
2.
Nature of Operations
The Company was incorporated on September 9, 1997 and is or has been engaged in acquisition and exploration of mineral properties in Guatemala and Nicaragua. The amounts shown for the mineral properties represent costs incurred to date and do not reflect present or future values. The Company is in the process of exploring its mineral properties and has not yet determined whether the properties contain reserves that are economically recoverable. Accordingly, the recoverability of these capitalized costs is dependant upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete their development and upon future profitable production.
3.
Stock-Based Compensation
The Company grants options in accordance with the policies of the TSX Venture Exchange ("TSX-V"). Effective January 1, 2002, the Company adopted the new CICA Handbook Section 3870 "Stock-Based Compensation and Other Stock-Based Payments", which recommends the fair value-based methodology for measuring compensation costs. The new section also permits, and the Company has adopted, the use of the settlement method, which recognizes compensation cost for awards to employees only when the market price exceeds the exercise price at date of grant, but requires pro-forma disclosure of earnings and earnings per share as if the fair value method had been adopted.
4.
Loss Per Share
The basic loss per share is based on the weighted average number of shares outstanding. The fully diluted loss per share is not presented as it would be anti-dilutive.
5.
Due From Related Parties
The amounts are due from companies related by common directors and are for the sharing of office space and administrative overhead. These amounts are non-interest bearing and have no fixed repayment terms.
Radius Explorations Ltd.
Notes to the Interim Consolidated Financial Statements
(Unaudited - Prepared by Management)
Three Month Period Ended March 31, 2004 - Page 2
6.
Capital Stock
a) b) | Authorized: | Price | $ | |
100,000,000 common shares without par value | ||||
Issued: | Number of Shares | |||
Balance: December 31, 2000 | 10,550,500 | 4,197,496 | ||
Exercise of warrants | 1,797,500 | 0.80 | 1,438,000 | |
Issued for cash | 1,373,334 | 0.60 | 824,000 | |
Exercise of stock options | 55,000 | 0.60 | 33,000 | |
Issued for cash | 3,904,762 | 1.05 | 4,100,000 | |
Exercise of stock options | 25,000 | 0.85 | 21,250 | |
Issued for mineral property option | 100,000 | 1.00 | 100,000 | |
Exercise of stock options | 105,000 | 0.35 | 36,750 | |
Less: issue costs | - | (49,618) | ||
Balance December 31, 2001 | 17,911,096 | 10,700,879 | ||
Issued for cash | 4,794,800 | 0.20 | 958,960 | |
Less: issue costs | - | (7,074) | ||
Balance December 31, 2002 | 22,705,896 | 11,652,765 | ||
Issued for cash | 1,000,000 | 0.50 | 500,000 | |
Exercise of stock options | 275,000 | 0.60 | 165,000 | |
Exercise of stock options | 155,000 | 0.65 | 100,750 | |
Exercise of stock options | 255,000 | 0.68 | 173,400 | |
Exercise of stock options | 30,000 | 0.90 | 27,000 | |
Exercise of stock options | 20,000 | 0.94 | 18,800 | |
Exercise of stock options | 20,000 | 0.95 | 19,000 | |
Exercise of stock options | 130,000 | 0.99 | 128,700 | |
Exercise of stock options | 40,000 | 1.00 | 40,000 | |
Exercise of stock options | 10,000 | 1.01 | 10,100 | |
Exercise of stock options | 50,000 | 1.25 | 62,500 | |
Exercise of stock options | 170,000 | 1.35 | 229,500 | |
Exercise of warrants | 1,123,334 | 0.74 | 831,267 | |
Exercise of warrants | 2,145,000 | 0.25 | 536,250 | |
Exercise of warrants | 738,750 | 0.55 | 406,313 | |
Exercise of warrants | 2,982,262 | 1.25 | 3,727,828 | |
Private placement | 6,545,000 | 1.50 | 9,817,500 | |
Less: issue costs | - | (906,980) | ||
Balance December 31, 2003, 2003 | 38,395,242 | 27,539,692 | ||
Exercise of warrants | 11,250 | 0.55 | 6,188 | |
Exercise of warrants | 25,000 | 0.25 | 6,250 | |
Issued for property acquisition | 1,300,000 | 1.49 | 1,937,000 | |
Exercise of stock options | 25,000 | 0.95 | 23,750 | |
Exercise of stock options | 15,000 | 0.68 | 10,200 | |
Less: issue costs | - | (1,809) | ||
Balance March 31, 2004 | 39,771,492 | 29,521,270 | ||
Radius Explorations Ltd.
Notes to the Interim Consolidated Financial Statements
(Unaudited — Prepared by Management)
Three Month Period Ended March 31, 2004 — Page 3
6.
Capital Stock (cont'd)
Escrow Shares
As at March 31, 2004, there are 750,000 common shares held in escrow, the release of which is subject to regulatory approval.
Stock Options
The Company has established a formal stock option plan in accordance with the policies of the TSX-V under which it is authorized to grant options up to 10% of its outstanding shares to officers, directors, employees and consultants. The exercise price of each option equals the market price of the Company's stock as calculated on the date of grant. The options are for a maximum term of five years.
March 31, 2004
March 31, 2003
Number of Weighted Average
Weighted Average
Options Exercise Price Number of Options Exercise Price
Outstanding, beginning year
2,220,000 $0.91
1,530,000 $0.90
Cancelled
Granted
250,000
1.30
940,000
0.68
425,000
1.32
200,000
0.90
270,000
0.99
10,000
1.01
(15,000)
0.68
(45,000)
0.65
(25,000)
0.95
(185,000)
0.60
(20,000)
0.94
Outstanding, end of period 2,855,000 $1.01
2,700,000
$0.86
Radius Explorations Ltd.
Notes to the Interim Consolidated Financial Statements (Unaudited — Prepared by Management)
Three Month Period Ended March 31, 2004 — Page 4
6.
Capital Stock (cont'd) Stock Options (cont'd)
The following stock options were outstanding and exercisable at March 31, 2004:
Number | Exercise Price | Expiry Date | |
77,000 | 0.65 | Oct. 31, 2004 | |
40,000 | 0.65 | Dec. 12, 2004 | |
64,000 | 0.60 | Nov. 15, 2005 | |
54,000 | 0.68 | Jan. 11, 2006 | |
125,000 | 0.85 | Jan. 24, 2006 | |
180,000 | 1.00 | July 10, 2006 | |
670,000 | 0.68 | Jan. 7, 2008 | |
170,000 | 0.90 | Jan. 15, 2008 | |
140,000 | 0.99 | Jan. 27, 2008 | |
30,000 | 0.95 | April 2, 2008 | |
300,000 | 1.10 | August 7, 2008 | |
150,000 | 1.30 | Jan. 14, 2005 | |
100,000 | 1.30 | Jan. 14, 2009 | |
425,000 | 1.32 | Feb. 26, 2009 | |
330,000 | 1.35 | June 14, 2004 | |
2,855,000 |
Warrants
The following share purchase warrants were outstanding at March 31, 2004:
Number | Exercise Price | Expiry Date | |
2,624,800 | 0.25 | December 19, 2004 | |
458,150 | 1.50 | May 13, 2005 | |
3,272,500 | 1.75 | November 13, 2005 | |
6,355,450 |
Stock-Based Compensation
The Company uses the settlement method of accounting for share options granted to directors, officers and employees. If the fair value method had been used to determine compensation cost for share options granted after January 1, 2002 to directors, officers and employees, the Company's net loss and loss per share for the three month period ended March 31, 2004 would have been as follows:
Mar 31, 2004 | Mar 31, 2003 | ||
Net Loss for the period | $ (593,800) | $ (142,647) | |
Fair value of options granted | $ (308,144) | $ (709,931) | |
Pro-forma loss | $ (901,944) | $ (852,578) | |
Basic loss per share | $(0.02) | $(0.03) |
Radius Explorations Ltd.
Notes to the Interim Consolidated Financial Statements (Unaudited — Prepared by Management)
Three Month Period Ended March 31, 2004 — Page 5
6.
Capital Stock (cont'd)
Stock-Based Compensation (cont'd)
A non-cash compensation charge of $121,658, associated with the granting of options to a consultant, has been recognized in the financial statements for the three months ended March 31, 2004. The compensation charge associated with directors' and employees' options in the amount of $308,144 is not recognized in the financial statements, but included in the pro forma amounts above. These compensation charges have been determined under the fair value method using the Black-Scholes option pricing model with the following assumptions:
Risk-free interest rate | 2.25% | |
Expected stock price volatility | 64.00% | |
Expected term in years | 5 | |
Expected dividend yield | 0.0% | |
7. | Related Party Transactions |
During the three month period ending March 31, 2004 the Company entered into the following transactions with related parties:
a.
Paid $16,500 (March 3, 2003 - $16,500) in geological consulting fees to a company controlled by a director.
b.
Paid $7,500 (March 31, 2003 - $7,500) in management fees to a company controlled by a director.
c.
Advances and other receivables include $20,000 due from a director and arose from advances for travel costs incurred on behalf of the company.
d.
Due from related parties include $179,157 (March 31, 2003 $385,061) due from companies which have a common director with the company and arose from shared administrative costs.
8.
Segmented Information
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operation decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. All of the Company's operations are within the mining sector relating to gold exploration. Due to the geographic and political diversity, the Company's exploration operations are decentralized whereby exploration managers are responsible for business results and regional corporate offices provide support to the exploration programs in addressing local and regional issues. The Company's operations are therefore segmented on a district basis. The Company's resource properties are located in Guatemala and Nicaragua.
Radius Explorations Ltd.
Notes to the Interim Consolidated Financial Statements (Unaudited — Prepared by Management)
Three Month Period Ended March 31, 2004 — Page 6
8.
Segmented Information (cont'd)
Details of identifiable assets by geographic segments are as follows:
Period Ended
Year Ended
March 31, 2004
December 31, 2003
Total Assets | ||
Canada | $13,781,878 | $14,119,950 |
Guatemala | 9,284,181 | 7,904,303 |
Nicaragua | 1,086,522 | 952,766 |
Panama | 131,085 | 131,085 |
$24,283,666 | $23,108,104 | |
Capital Assets Canada | $11,763 | $3,913 |
Guatemala | 114,041 | 126,242 |
Nicaragua | 115,244 | 22,747 |
$241,047 | $152,902 | |
Resource Properties Canada | $0 | $0 |
Guatemala | 3,014,504 | 1,077,504 |
Nicaragua | 0 | - |
$3,014,504 | $1,077,504 | |
Deferred Exploration Costs Canada | $0 | $0 |
Guatemala | 6,147,239 | 5,910,418 |
Nicaragua. | 985,671 | 670,041 |
$7,132,910 | $6,580,459 |
9.
Non-cash Transaction
During the three month period ended March 31, 2004 the Company issued 1,300,000 common shares with a value of $1,937,000 as payment on the El Tambor Project.
RADIUS EXPLORATIONS LTD.
(the “Company”)
MANAGEMENT’S DISCUSSION AND ANALYSIS
First Quarter Report – March 31, 2004
General
This Management’s Discussion and Analysis (“MD&A”) supplements, but does not form part of, the unaudited interim consolidated financial statements of the Company for the three months ended March 31, 2004. The following information, prepared as of May 27, 2004, should be read in conjunction with the March 31, 2004 financial statements, which have been prepared in accordance with Canadian generally accepted accounting principles. All amounts are expressed in Canadian dollars unless otherwise indicated. The March 31, 2004 financial statements have not been reviewed by the Company’s auditors.
The Company is in the business of acquiring, exploring and developing mineral properties in Central America and has a portfolio of projects in Nicaragua and Guatemala.
As more particularly described in the Joint Information Circular dated April 30, 2004 (which is available for viewing at www.sedar.com), the Company has called an extraordinary general meeting of its shareholders to consider a proposed amalgamation of the Company and PilaGold Inc. The combination of the businesses will have the following advantages to the shareholders of both companies:
·
The consolidation of the landholdings in Nicaragua will result in a formidable exploration entity in the most prospective country in the region.
·
The reduction of administrative and regulatory compliance costs.
·
The formation of a focused and dedicated management team and the elimination of any perceived conflicts of interest.
The resulting entity will be named Radius Gold Inc. The board of directors of Radius Gold will be a combination of the existing Radius and PilaGold directors, with Simon Ridgway remaining as President and CEO of the resulting entity.
Results of Operations
For the three months ended March 31, 2004, the Company had a consolidated net loss of $593,800 ($0.02 per share) compared to a net loss of $142,647 ($0.01 per share) in 2003. Interest income increased for 2004 as compared to 2003 due to a greater amount of funds invested. Public relations costs have increased significantly in 2004 as compared to 2003 as a result of printing and distributing marketing materials to at least 500,000 persons.
Salaries and legal and regulatory fees have increased for 2004 as compared to 2003 as a result of a higher number of corporate transactions. During the quarter, stock options to consultants vested resulting in the Company recording a stock-based compensation expense of $121,658 ($Nil in the first quarter 2003).
Quarterly Information
First Qtr | Fourth Qtr | Third Qtr | Second Qtr | First Qtr | Fourth Qtr | Third Qtr | Second Qtr | |
2004 | 2003 | 2003 | 2003 | 2003 | 2002 | 2002 | 2002 | |
Total Income | 14,235 | 39,378 | 17,881 | 10,994 | 3,896 | 18,275 | - | 12,793 |
Net Loss | 593,800 | 1,155,510 | 200,823 | 223,083 | 142,647 | 263,507 | 140,428 | 122,760 |
Net Loss per share | 0.02 | 0.06 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 |
Liquidity and Capital Resources
The Company’s cash resources have decreased slightly from $14.8 million at December 31, 2003 to $13.4 million as of March 31, 2004. During the first quarter of 2004, the Company’s interest income and proceeds on issuance of shares provided additional cash of $58,814, which partially offset the operating expenses for the quarter of $608,035. The Company also increased its prepaid expenses in the first quarter 2004 as compared to 2003, due to the prepayment of the cost of promotional programs to be conducted over the next six months.
Management expects that the Company will have sufficient working capital to meet its corporate and exploration commitments over the next 24 months. Actual funding requirements may vary from those planned due to a number of factors, including the progress of exploration and development activity. Management believes it will be able to raise equity capital as required in the long term, but recognizes the uncertainty attached thereto. The Company continues to use various strategies to minimize its dependence on equity capital, including the securing of joint venture partners where appropriate.
Mineral Properties
During the quarter ended March 31, 2004, approximately $237,000 was spent on the Company’s mineral properties in Guatemala. Of that amount, the major expenditure categories include approximately $54,900 for geological consulting fees, $35,600 for geophysics, $22,600 for licences and taxes, and $20,100 for drilling related costs. Approximately $315,600 was spent in Nicaragua. Of that amount, the major expenditure categories include approximately $142,200 for geological consulting fees, $37,800 for geochemistry, $23,200 for salaries, and $22,800 for travel costs.
During the quarter the Company increased its interest in the Tambor property by issuing to Gold Fields 1,300,000 shares at a deemed value of $1.49 per share. This is following Gold Fields’ incurring US$3,500,000 in property development.
Proposed Transactions
At the Company’s extraordinary general meeting to be held on June 1, 2004, shareholders will be asked to approve the proposed amalgamation of the Company and PilaGold Inc. Details of this transaction are set forth in the Joint Information Circular dated April 30, 2004, which is available for viewing at www.sedar.com.
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Other Data
Additional information related to the Company is available for viewing at www.sedar.com.
Share Position
The Company’s outstanding share position is 40,306,492 common shares.
Outstanding Warrants and Options
The Company’s outstanding share purchase warrants and incentive stock options are as follows:
Type of Security | Number | Exercise Price | Expiry Date |
Warrants | 2,089,800 | $0.25 | Dec. 19, 2004 |
Warrants | 458,150 | $1.50 | May 13, 2005 |
Warrants | 3,272,500 | $1.75 | Nov. 13, 2005 |
Options | 77,000 | $0.65 | Oct. 31, 2004 |
Options | 40,000 | $0.65 | Dec. 12, 2004 |
Options | 64,000 | $0.60 | Nov. 15, 2005 |
Options | 54,000 | $0.68 | Jan. 11, 2006 |
Options | 125,000 | $0.85 | Jan. 24, 2006 |
Options | 180,000 | $1.00 | July 10, 2006 |
Options | 670,000 | $0.68 | Jan. 7, 2008 |
Options | 170,000 | $0.90 | Jan. 15, 2008 |
Options | 140,000 | $0.99 | Jan. 27, 2008 |
Options | 30,000 | $0.95 | April 2, 2008 |
Options | 300,000 | $1.10 | Aug. 7, 2008 |
Options | 150,000 | $1.30 | Jan. 14, 2005 |
Options | 100,000 | $1.30 | Jan. 14, 2009 |
Options | 425,000 | $1.32 | Feb. 26, 2009 |
Options | 330,000 | $1.35 | June 14, 2004 |
Forward Looking Information
Certain statements contained in this MD&A and elsewhere 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 company to materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth below.