|Tue Sep 2, 2003|
Sultan Minerals Second Quarter Results
|THE KENA GOLD PROPERTY, BC:|
In 2002 exploration on the Kena Property was focused on the Gold Mountain Zone where the occurrence of porphyry related gold mineralization was identified by diamond drilling in 2001. Field programs were designed to test the Gold Mountain Zone and surrounding areas for both high grade and low grade bulk tonnage mineralization with a combination of geology, geochemistry, geophysics followed by diamond drilling. During the six months ended June 30, 2003, compilation of the data obtained in the above programs was completed and exploration programs for 2003 planned.
A two-phase exploration program is recommended for the Kena Property in 2003. The Phase I trenching is completed, detailed geological mapping and ground magnetometer surveying are underway, to be followed by trenching in the South Gold and Starlight Zones and diamond drilling in the Gold Mountain, South Gold and Great Western Zones. Preliminary work has also been recommended for three additional gold targets, the Tough Nut, Euphrates and Athabasca Zones. This initial phase of the exploration program is budgeted at $30,000 of which $7,346 has been expended to June 30, 2003. Costs relating to the trenching and other activities continued into the third quarter of fiscal 2003 and have not been fully tabulated. Phase II will consist of additional trenching and drilling, and is contingent upon the results of Phase I. Due to extreme forest fire hazards throughout southern British Columbia, any work on the project is temporarily suspended.
In fiscal 2003 Sultan incurred a loss of $207,857 ($0.01 per common share), compared to $207,323 ($0.01 per common share) in the six months ended June 30, 2002 ("fiscal 2002"). Sultan has working capital of $579,180 as at June 30, 2003.
General and administrative expenses totalled $227,766 in fiscal 2003 as compared to $211,780 in fiscal 2002. Legal, accounting and audit expenses increased from $16,212 in fiscal 2002 to $25,764 in fiscal 2003. Office and administration costs have increased from $6,717 in fiscal 2002 to $18,517 in fiscal 2003. Salaries and benefits have increased from $88,044 in fiscal 2002 to $96,214 in fiscal 2003. Shareholder communications costs have decreased from $85,457 in fiscal 2002 to $60,977 in fiscal 2003. In fiscal 2002, Sultan hired a media relations consultant to assist with the increased media attention related to the exploration on the Kena Property located near Ymir, British Columbia at a cost of $22,880 to the Company. There was no comparative expenditure in fiscal 2003. In fiscal 2003 the Company hired an investor relations company to provide investor relations services and $18,235 was expended on this, with no comparative expenditure in fiscal 2002. These expenditures are included in shareholder communications, along with transfer agent and filing fees of $13,853 in fiscal 2003, compared with $17,698 in fiscal 2003.
Sultan has recovered overhead of $6,671 from Kinross in fiscal 2003 for acting as the operator for the 2002-2003 work program. There was no comparable recovery in the same period in fiscal 2002. Sultan acted as project operator and manager and received a fee of 10% of the direct costs incurred over the period to June 2003 when Sultan and Kinross agreed to discontinue the Agreement entered into in September 2002. In order to facilitate the continued exploration and development of the Kena Property, Sultan and Kinross mutually agreed to terminate the Agreement.
During the three months ended June 30, 2003, Sultan completed a brokered private placement of 2,500,000 units at a price of $0.20 per unit, for net proceeds of $428,650. Each unit is comprised of one common share and a one-half of a non-transferable share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one additional common share of the Company until September 30, 2004, at an exercise price of $0.25. In consideration for arranging the private placement, the agent received a $45,000 commission, a $5,000 administration fee and a corporate finance fee of 50,000 common shares, at a value of $10,500. The agent also received non-transferable agent's warrants exercisable to purchase up to 375,000 common shares at an exercise price of $0.25 until September 30, 2004.
Chief Financial Officer
For further information please contact:
Investor Relations at the Lang Mining Group
Tel: (604) 687-4622, Fax: (604) 687-4212
Toll Free: 1-888-267-1400 Email: Investor@langmining.com
No regulatory authority has approved or disapproved the information contained in this news release.
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