Cypress Development Corp. has released its BC Form 51-901F First Quarter Report containing unaudited financial statements in Canadian funds, for the three months ended March 31, 2004 (the "Quarterly Report"). Pursuant to the requirements of National Instrument 54-102, this news release provides a summary of the information contained in the Quarterly Report. Concurrent with this news release, the Company has filed the Quarterly Report with the regulatory authorities through SEDAR (www.sedar.com).
The Company is primarily a junior exploration company. Activities include the process of exploring its mineral properties, reviewing and subsequently acquiring potential new mineral properties and conducting exploration programs to determine whether these properties contain ore reserves that are economically recoverable. The recoverability of amounts shown for the mineral properties and related deferred exploration costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the exploration of the property, and upon future profitable production.
The Company closed a 4,000,000 unit brokered private placement at $0.10 per unit on February 26, 2004. Each unit consists of one share and one share purchase warrant entitling the holder to purchase one share at a purchase price of $0.10 per share until February 26, 2005. The Agent received a finder's fee of $40,000 cash, an administration fee of $2,000 and 800,000 Agents' Warrants. The shares and any shares acquired upon exercise of the share purchase warrants are subject to a hold period until June 27, 2004.
The Company also closed a 1,250,000 unit non-brokered private placement at $0.10 per unit. (780,000 units on February 16, 2004 and 470,000 units on February 18, 2004). The 780,000 units are subject to a hold period until June 17, 2004 and the share purchase warrants expire on February 16, 2005. The 470,000 units are subject to a hold period until June 19, 2004 and the share purchase warrants are exercisable until February 18, 2005.
The Company intends to utilize the proceeds of the private placement for general working capital purposes and a Phase I work program to commence in spring 2004 on the Company's Gunman Nevada property.
The Company granted the following incentive stock options:
Date of Grant # of Stock Options Exercise Price Expiry Date
January 7/2004 211,590 $0.14 January 7, 2006
February 18, 2004 135,000 $0.12 February 18, 2006
February 26, 2004 570,000 $0.14 February 26, 2006
Dome Township, Red Lake Area, Ontario
The Company entered into an Acquisition Agreement dated March 25, 2004 with Dan Patrie Exploration Ltd. to acquire a 100% interest in and to one (1) mineral claim consisting of 6 units (approximately 240 acres) located in the Dome Township, Red Lake Area, Kenora Mining Division, Ontario. The consideration payable to Patrie for the mineral claim is the sum of $3,000 and the issuance of 65,000 common shares. (issued on April 1, 2004) A 2% net smelter return royalty is reserved in favour of Patrie. Regulatory approval was received on April 1, 2004. This acquisition will form part of the McKenzie Island property of which Skyharbour Resources Ltd. has a 20% interest. As per the Second Agreement dated April 16, 2004, Skyharbour was vested with a 20% interest in this property for the sum of $2,400.
East Humlin Claims, Ontario
The Company issued 25,000 common shares on March 5, 2004 in connection with the Company's 3rd tranche issuance pursuant to the terms of an Option Agreement dated February 21, 2002. The Company had been granted an option in and to the East Humlin Group Property, which forms part of the Company's jointly held McKenzie Island property, in Red Lake, Ontario. The shares will be subject to a hold period and shall not trade before July 6, 2004.
South Voisey Bay Project, Labrador
On April 16, 2004, Donald Huston, President, reported that the Company has been advised that Falconbridge Limited will not be pursuing its option to earn a 50% interest in the South Voisey Bay Nickel Co. Ltd property. Cypress and its South Voisey Bay Project partners continue to believe that the project has the potential to host a major nickel sulphide deposit and will continue to investigate various means to move the SVB project forward. Cypress holds an 11.4% interest in the South Voisey Bay Nickel Co. Ltd. that owns over 1,000 sq km of land holdings in northern Labrador.
White Pine Claims, Nevada
The Company commissioned a geological report on its Gunman Project. The report on the property, entitled "Exploration Recommendations" dated January 15, 2004, was prepared by Robert D. Marvin, B.Sc., Geologist, of Red Rock Exploration Services, Reno, Nevada. The report presents a project summary and the results of exploration planning done to guide a recommended, aggressive drilling program to be commenced in Spring 2004. Drilling and other project work would occur in three phases and result in total expenditures of approximately $600,000 USD.
In early April 2004, the Company received confirmation that all permits were now in place. The first phase of the reverse circulation and diamond drilling program, which includes a minimum of 7,300 feet (18 holes), started on April 24, 2004 and is expected to take approximately 6 weeks to complete. The Gunman property consists of 120 Federal lode claims totaling 2,400 acres, located on the east flank of the Diamond Range, White Pine County, approximately 40 miles NNE of Eureka, Nevada.
The goal of the three phase 2004 drill programs will be to delineate extensions to the known high-grade oxide zinc-silver ore zone, the RH Zone, discovered during the 2000-2001 drill programs.
Resignations and Appointments
Derek Huston resigned as Vice President of Communications and Mr. David Goldman was appointed in his place on February 18, 2004. The Company also announced that Nancy Ackerfeldt resigned as Secretary of the Company and that Mr. Derek Huston has been appointed in her place.
The Company renewed its consulting services agreement with R.J.P. Enterprises Ltd. (Robert Paul) for a further term of one year to January 31, 2005. The Company also renewed its office space and support services agreement with 98 Corporate Group Resources Ltd. for one year to December 31, 2004.
Results of Operations
For the quarter ended March 31, 2004 the Company incurred a net loss of $164,998 compared to a net loss of $108,647 in the same quarter of the previous year. The increase of $56,351 or approximately 51.9% in the current year resulted from the $69,468 in stock-based compensation expense resulting from the granting of stock options. The expenses without the $69,468 would have been consistent with the prior year's quarter. (2004 - $96,400) (2003 - $98,530)
Liquidity and Capital Resources
Working capital was $622,968 at March 31, 2004 compared to a working capital of $71,921 at December 31, 2003.
The Company's unrestricted cash position at December 31, 2003 was $153,575. As a result of expenditures incurred during the current period for general business expenses; gross proceeds of $525,000 received from private placements and $185,000 received from the exercise of warrants; the increase in mineral properties of $8,000, in deferred exploration expenditures of $10,298 and in accounts payable and accrued liabilities of $37,297, the Company's unrestricted cash position at March 31, 2004 was $681,193.
The Company has historically met all cash requirements for operation by equity financing. Future funding needs of the Company are dependent upon the Company's continued ability to obtain equity and/or debt financing to meet its financial obligations and to pursue further exploration on its properties.
White Pine Claims, Nevada
In early May 2004, the Company announced that they have drilled 5 holes that step out approximately 1,600 feet to determine the NNW extension of the RH Zone. All holes, to date, have encountered the same highly oxidized carbonate replacement host rock as found in the RH Zone. This drilling could increase the potential size and scale of the RH Zone. The Company has been permitted for 18 drill holes in this phase and drilling is continuing with assays pending by the end of the month.
ON BEHALF OF THE BOARD OF DIRECTORS
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
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