Ashton Mining of Canada Inc.: Results for the Six Months Ended June 30, 2004.VANCOUVER, British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Ashton Mining of Canada Inc. ("Ashton" or the "Corporation") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ACA ACA - Application Control Architecture ) made significant progress on the Quebec project during the second quarter. Accomplishments include completing the winter phase of the Renard bulk sampling program, initiating the analysis of the resulting 220 tonnes of material, announcing further encouraging diamond results and recovering large diamonds from another Renard mini-bulk sample. In addition, in early July we announced the discovery of additional kimberlitic boulders that significantly expand the width of the Lynx lynx, name given to several related small, ferocious members of the cat family. All have small heads, tufted ears, and heavy bodies with long legs and short tails. All are primarily terrestrial, although they are able to climb trees. Anomaly Abnormality or deviation. Pronounced "uh-nom-uh-lee," it is a favorite word among computer people when complex systems produce output that is inexplicable. See software conflict and anomaly detection. on the Foxtrot foxtrot one of the two artificial gaits of the five-gaited horse. A four-beat gait midway in speed between a walk and a trot. There is a great deal of similarity with several other gaits such as amble, fadge, slow pace, stepping pace, running walk, jog, hound jog. property. The information set out below is provided pursuant to National Instrument 54-102 and unless otherwise indicated reflects the Corporation's results and activities to July 29, 2004. RESULTS OF OPERATIONS Exploration Activities Including the contribution of the Corporation's joint venture partners, gross exploration costs in the second quarter were $2.2 million (2003 - $2.6 million). Ashton's share of these expenditures was $1.2 million (2003 - $1.6 million). In the first half of the year, Ashton's total exploration expenses amounted to $4.7 million (2003 - $3.4 million). Quebec Winter field programs on the Quebec project were completed early in the second quarter and processing of mini-bulk samples from the Renard bodies continued throughout the same period. The level of activity in the second quarter was greater than that during the same period in 2003. However, exploration costs incurred in Quebec during the quarter were offset to a greater extent by a provincial government refund of $591,000 (2003 - $255,000) than during the corresponding period one year earlier. The Quebec program has continued to focus on the Foxtrot property in the Otish Mountains where a 600 tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. bulk sample is being collected from Renard 2, 3, 4 and 65, four of the nine diamondiferous kimberlitic bodies that constitute the Renard cluster. During the winter portion of the program, approximately 40 tonnes of kimberlitic material was collected by core drilling, and additional material having an approximate calculated weight of 180 tonnes was extracted by large diameter reverse circulation ("RC") drilling. Further bulk sampling is now underway in order to collect a further 380 tonnes of material from the four bodies before the end of the summer field season. The 40 tonnes of core collected this winter is being processed using Ashton's newly commissioned five tonne per hour dense media separation ("DMS (1) (Document Management System) See document management. (2) (Defense Messaging System) An X.500-compliant messaging system developed by the U.S. Dept. of Defense. ") plant in North Vancouver North Vancouver, city (1991 pop. 38,436), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver, of which it is a suburb. Shipbuilding, woodworking, and the shipping of grain, lumber, and ore are the chief industries. . The RC material was processed in July at a commercial facility in Thunder Bay Thunder Bay, city (1991 pop. 113,946), SW Ont., Canada, on Thunder Bay inlet of Lake Superior. The city was created in 1970 by the amalgamation of the twin cities of Fort William and Port Arthur and two adjoining townships. , Ontario, that incorporates a DMS plant having a larger capacity. The Corporation expects to announce the diamond results from these analyses during the third quarter starting in early August. Laboratory activities at Ashton's North Vancouver facilities in the second quarter also included the processing of 5.1 tonnes of kimberlitic material collected from Renard 3 in 2003. This material returned 7.81 carats of diamonds to give the sample an estimated diamond content of 154 carats per hundred tonnes. The two largest stones recovered weigh 1.82 and 1.01 carats respectively. In addition, the laboratory completed the analysis by caustic caustic, any strongly corrosive chemical substance, especially one that attacks organic matter. A caustic alkali is a metal hydroxide, especially that of an alkali metal; caustic soda is sodium hydroxide, and caustic potash is potassium hydroxide. dissolution of small samples of Renard 10 kimberlitic material and kimberlitic boulders collected on surface within the 4.5 km wide Lynx indicator mineral anomaly (the "Lynx Anomaly"). Both sets of samples were confirmed to be diamondiferous. The Lynx Anomaly is located approximately two km west of the Renard cluster and hosts the Lynx and Lynx North kimberlitic intrusions. The two occurrences are separated by a distance of 1.2 km. Each is represented by two zones of narrow dykes. During the summer field season, Ashton and its joint venture partner, SOQUEM INC., will continue to investigate known indicator mineral anomalies on the Foxtrot property using the additional geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. data acquired during the winter portion of the 2004 program, indicator mineral sampling results, prospecting, geological mapping and drilling. Nunavut and Northwest Territories Northwest Territories, territory (2001 pop. 37,360), 532,643 sq mi (1,379,028 sq km), NW Canada. The Northwest Territories lie W of Nunavut, N of lat. 60°N, and E of Yukon. During the second quarter of 2004, Ashton initiated ground and airborne geophysical surveys Geophysical survey refers to the systematic collection of geophysical data for spatial studies. Geophysical surveys may use a great variety of sensing instruments, and data may be collected from above or below the Earth's surface or from aerial or marine platforms. on the Kim, Vic and Ric properties in the Coronation Gulf Coronation Gulf () lies between Victoria Island and mainland Nunavut in Canada. To the northwest it connects with Dolphin and Union Strait and thence the Arctic Ocean; to the northeast it connects with Dease Strait and thence Queen Maud region of Nunavut. The lower expenditure levels for the quarter reflect the fact that, unlike the corresponding period in 2003, no drill programs were carried out. During the quarter, the Ashton laboratory continued to analyze the indicator mineral samples collected in 2003. Field activities in Nunavut and the Northwest Territories commenced in July and will focus on indicator mineral sampling. Alberta Expenditures for the quarter were not significant due to limited fieldwork field·work n. 1. A temporary military fortification erected in the field. 2. Work done or firsthand observations made in the field as opposed to that done or observed in a controlled environment. 3. that largely consisted of ground geophysical surveys. Work programs for the summer are currently being finalized See finalization. . Corporate Expenses The loss for the three and six months ended June 30, 2004 amounted to $1.4 million (2003 - $2.0 million) or $0.02 per share (2003 - $0.04) and $1.9 million (2003 - $2.5 million) or $0.03 per share (2003 - $0.04) respectively. Excluding deferred exploration costs written off during the period, total corporate expenses incurred during the second quarter of 2004 are 23 percent higher compared to those incurred during the same period in 2003. The increased costs are primarily attributable to the expense incurred to participate, for corporate communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. purposes, in a mining investment conference in early June, and to consulting fees paid in relation to the search for the Corporation's seventh director who was appointed as of July 1. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with specific policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental , Ashton reviews the status of its exploration projects and properties on an ongoing basis. Deferred exploration costs attributable to projects and properties that are abandoned or no longer deemed to be significant with respect to their mineral potential are written off when that determination is made. During the second quarter, deferred exploration costs written off to operations amounted to $1.0 million (2003 - $1.7 million). The majority of these charges relate to the expenditures incurred on past target drilling programs that did not result in the discovery of diamondiferous kimberlites. Investment income is affected by the magnitude of funds under management in a given period and the interest rates that prevail from time to time. The Corporation's cash resources during the second quarter of 2004 were larger than those held in 2003 and investment income was correspondingly greater. Summary of Quarterly Results The table below provides, for each of the most recent eight quarters, a summary of exploration costs on a project-by-project basis together with a summary of corporate expenses.
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(amounts in Nunavut and Corporate
thousands of Northwest Expenses
dollars) Alberta Territories Quebec Others (Note 1)
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2002
Third Quarter $ 64 $ 1,123 $ 784 $ 89 $ 414
Fourth Quarter 135 371 426 78 474
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2003
First Quarter 335 403 1,060 17 493
Second Quarter 66 1,010 524 12 459
Third Quarter 201 992 1,548 70 377
Fourth Quarter 257 211 650 23 1,246
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2004
First Quarter 117 90 3,190 49 493
Second Quarter 48 642 489 32 563
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Note 1: Corporate expenses exclude the write-off of deferred
exploration costs
Ashton explores in remote areas across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. . The timing and scope of exploration activities are influenced, among other factors, by the prevailing weather and ground conditions in a project area and by management's assessment of the prospectivity of each project and current results. Exploration expenditure levels can therefore vary significantly from quarter to quarter. Overall, the Corporation has increasingly focused its exploration efforts on the Quebec project. During the past three years, this project has advanced from a grassroots exploration program to the bulk sampling stage. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , exploration activities in Alberta, Nunavut and the Northwest Territories projects, previously the subject of higher levels of activities, have reverted re·vert intr.v. re·vert·ed, re·vert·ing, re·verts 1. To return to a former condition, practice, subject, or belief. 2. Law To return to the former owner or to the former owner's heirs. to the grassroots exploration and initial discovery stages. Corporate costs have not varied significantly over time except for two periods, first, the fourth quarter of 2003 as a result of the application of new accounting standard for stock-based compensation ($745,000) and second, during the second quarter of 2004 for the reasons outlined above. The new accounting policy for stock-based compensation is discussed in the Corporation's 2003 Management Discussion and Analysis dated February 19, 2004 (the "Annual MD&A") that forms part of the 2003 annual report mailed to shareholders in March of this year. FINANCIAL CONDITIONS AND LIQUIDITY Cash on hand at June 30, 2004 was approximately $15.4 million (December 31, 2003 - $21.6 million) and working capital was $15.6 million (December 31, 2003 - $21.2 million). The Annual MD&A accurately describes the current financial commitments of the Corporation. CAPITAL RESOURCES Capital expenditures during the second quarter of 2004 relate primarily to the purchase of field equipment ($59,000) and the upgrade of laboratory equipment ($92,000). SHARE CAPITAL During the second quarter, the exercise of stock options resulted in the issuance of 208,275 common shares. |
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