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HEDMAN MINES LIMITED
Financial Statements For the Six Months Ended
January 31st, 1974
(unaudited)
UCC 007529
H ED M AN M IN E S L IM IT E D
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UCC 007530
HEDMAN MINES LIMITED
STATEMENT OF DEFICIT
FOR THE SIX MONTHS ENDED JANUARY 31, 1974 (unaudited)
DEFICIT--BEGINNING OF PERIOD Loss for the period
DEFICIT--END OF PERIOD
STATEMENT OF EARNINGS
FOR THE SIX MONTHS ENDED JANUARY 31, 1974 ' (unaudited)
.
PRODUCTION FROM MILL
COSTS RELATED TO MILL Mining Milling General and Administration
'
SELLING, GENERAL AND ADMINISTRATION EXPENSES GROSS OPERATING INCOME
OTHER EXPENSES
Net interest expense Municipal taxes Depreciation and amortization expense
LOSS FCR THE PERIOD
(
1974
733,166 60,805 , 793,971
1973 $
606,105 66,753
672,858
1974 $
267,804
27,807 147,378
8,025 183,210
31,468 214,678
53,126
1973 $
220,079
25,914 117,797
3,091 146,802
56,773 203,575
16,504
59,829 6,107 47,995 113,931
60,805
34.347 2,546
46,364 83.347
66,753
STATEMENT OF SOURCE AND USE OF FUNDS
FOR THE SIX MONTHS ENDED JANUARY 31, 1974 (unaudited)
1974
$
SOURCE OF FUNDS Increase in long-term liability Reduction in Deposits for Power
50,660 215
50,875
USE OF FUNDS Loss for the Period Deduct: Charges not requiring a cash outlay
60,805 47,995
12,810
INCREASE IN WORKING CAPITAL WORKING CAPITAL - BEGINNING OF PERIOD WORKING CAPITAL - END OF PERIOD
38,065 70,816 108,881
1973
$
35,342
35,342
66,753 46,364 20,389
14,953 25,921 40,874
UCC 007531
HEDMAN MINES LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 1974
1. INVENTORIES
Inventories consist of: Stores - at cost Stockpile of broken ore - at cost
Fibre inventory - at approximate realizable value
1974 1973 $$
34,960 29,115 27,047
91,122
28,861 23,823 27,047
79,731
BUILDINGS AND EQUIPMENT
Buildings Equipment
*
Cost $
653,929 1,491.021
2,144.950
Accumulated depreciation
$
19.618 89.461
109,079
Net book value $
634,311 1.401,560
2,035,871
Buildings and equipment are depreciated on a straight-line basis over periods of 50 years and 25 years respectively, commencing August 1, 1972.
3. VALUES The amount shown for mining claims represents cost to date and is not intended to reflect present or future value.
4. DEFERRED EXPENDITURES
The amount shown for deferred expenditures represents costs to date less accumulated amortization. Deferred expend itures are being amortized on a tons of fibre produced basis, commencing in 1972. Accumulated amortization at January 31.. 1974 amounts to $33,400.
5. DUE TO ASSOCIATED COMPANIES
Under the terms of an agreement dated March 31, 1967, Gulf & Western Industries Inc. agreed to lend the company up to U.S. $500,000 or arrange such loan to complete the development programme and to provide adequate working capital. As at January 31, 1974 the company had received Canadian $799974. The Loan is due September 1, 1974 and bears interest at 6ci to August 31, 1969. Commencing September 1, 1969 interest was accrued monthly at T; over the prime commercial lending rate in New York computed monthly until February 28, 1970. Since that date interest has been accrued monthly on a compound basis.
Additional loans in the amounts of $35,000 and $3,656 bearing interest at 7" were secured from Gulf & Western i Can ada! Limited and Hook-Flex Canadian Ltd. respectively, Effective August 1, 1973, Interest rates will be at 1<; over the prime rate as established by the Royal Bank of Canada.
6. CAPITAL STOCK Since the incorporation on August 10, 1956, the company has issued the following shares:
For cash
For mill circuit design and research
For claims
Number of shares
2,200 000 50,000
750,000
3,000,000
Par value $
2,200,000 50,000 750.000
3,000,000
Premium or (discount)
$
325,871 50,000 (708,750)
(332,879 i
Net $
2,525.871 100,000 41,250
2,667,121
7. PRODUCTION PLANT
The company operated a temporary pilot mill up to January 1969 in the course of developing markets and preparing a production plant. Although the production plant has been completed the development of markets for the product has not been finalized and therefore the plant is not yet producing up to its planned capacity.
No depreciation and amortization had been made prior to August 1, 1972 (notes 2 and 4).
8. REMUNERATION OF DIRECTORS AND SENIOR OFFICERS
The aggregate direct remuneration paid to directors and senior officers 'as defined by The Ontario Business Corpora tions Act, which includes the five highest paid employees) was $34,199 for the period ended January 31, 1974.
9. MUNICIPAL TAX
The municipality of Black River-Matheson appealed a unanimous decision of the Ontario Court of Appeals to the Su preme Court of Canada Involving 1971 and 1972 taxes on Hedman buildings. The potential liability estimated at $26,900 has not been recorded in these financial statements.
10. Certain 1973 figures have been reclassified for comparative purposes.
11. The foregoing statements are subject to year end audit and adjustment.
UCC 007532