Owner
Post by Franko10 ™ on Jan 9, 2006 19:38:16 GMT -5
16,273,505 common shares outstanding at year end.
FORWARD-LOOKING STATEMENTS
We caution you that certain important factors (including without limitation those set forth in this Form 20-F) may affect our actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 20-F annual report, or that are otherwise made by or on our behalf. For this purpose, any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “except,” “believe,” “anticipate,” “intend,” “could,” estimate,” or “continue,” or the negative or other variations of comparable terminology, are intended to identify forward-looking statements.
Risk factors
Any investment in our common shares involves a high degree of risk. You should consider carefully the following information before you decide to buy our common shares. If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer. In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares. In particular, you should consider carefully the following risk factors:
We have a history of losses.
We have incurred losses in our business operations since inception, and we expect that we will continue to lose money for the foreseeable future. From our incorporation to December 31, 2004, we have incurred losses totalling $1,990,564. Very few junior resource companies ever become profitable and typically incur large losses until they enter production or are able to sell a mineral property to a major resource company. Failure to achieve and maintain profitability may adversely affect the market price of our common shares.
Very few mineral properties are ultimately developed into producing mines.
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.
Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis. The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.
If we do not obtain additional financing, our business will fail.
Our current operating funds are less than necessary to acquire an interest in, and to conduct exploration on, a mineral property, and therefore we will need to obtain additional financing in order to complete our business plan. As at December 31, 2004, we had cash on hand of $433,617. Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims. We will require additional financing in order to complete these activities. In addition, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral property we acquire. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required.
We believe the only realistic source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.
Because management has only limited experience in resource exploration, the business has a higher risk of failure.
Our management, while experienced in business operations, has only limited experience in resource exploration. None of our directors or officers has any significant technical training or experience in resource exploration or mining. We rely on the opinions of consulting geologists that we retain from time to time for specific exploration projects or property reviews. As a result of our management’s inexperience, there is a higher risk of our being unable to complete our business plan.
Mineral exploration involves a high degree of risk against which we are not currently insured.
Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs. We have relied on and will continue to rely upon consultants and others for exploration expertise.
It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.
We may require permits and licenses that we may not be able to obtain.
Our operations may require licenses and permits from various governmental authorities. There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire.
Metal prices fluctuate widely.
Factors beyond our control may affect the marketability of any resource we discover. Metal prices have fluctuated widely, particularly in recent years. The effect of these factors cannot accurately be predicted.
The resource industry is very competitive.
The resource industry is intensely competitive in all its phases. We compete with many companies possessing greater financial resources and technical facilities than us for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.
Our operations may be adversely affected by environmental regulations.
Our operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner, which means that standards, enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations. We do not maintain environmental liability insurance.
The trading market for our shares is not always liquid.
Although our shares trade on the NASD OTC Bulletin Board, the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.
Our securities may be subject to penny stock regulation.
Our stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3151-1. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Our common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.
Our Registered Office in British Columbia is located at 2602 – 1111 Beach Avenue, Vancouver, British Columbia, Canada. Our head office and principal office is located at 614 – 475 Howe Street, Vancouver, British Columbia, Canada.
We were originally incorporated under the name, Entourage Holdings Ltd., pursuant to the Company Act (British Columbia) on June 16, 1995. On June 25, 1996, we changed our name to Entourage Mining Ltd.
On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia in British Columbia, Canada.
We have one subsidiary company, Entourage USA Inc., located at 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511. The subsidiary company will seek mineral prospects in the United States.
We are engaged in the business of acquiring and exploring resource properties.
We are a reporting issuer in the United States and our Annual Report and 6K filings can be found on the SEC’s EDGAR system at www.sec.gov. We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.
As our business has developed, we have acquired interests in four resource properties as follows:
The Finlayson Lake Emerald Project (the Yukon Property)
In March 2003, we entered into an agreement with the YK Group, a syndicate of unrelated third party comprised of Paul Shatzko, Maryl Shatzko, Carl Verley, Shirley Verley, William Weston and Margaret Weston, to acquire YK Group’s interest in an option agreement dated November 13, 2002, entered into between the YK Group and Expatriate Resources Ltd., a company traded on the TSX-Venture Exchange. Upon the payment of $60,000 and delivery of 6,000,000 common restricted shares of our common stock, the YK Group will assign its interest to us in the November 13, 2002 option agreement. Of the $60,000 to be paid, $20,000 was paid to Expatriate by a third party on the Company’s behalf. The Company now owes this third party, Carl Verley, the sum of $20,000.
We have received an assignment of YK Group’s interest in the option agreement although we have not paid the YK Group $60,000.
By completing the YK Group’s obligations under the terms and conditions of the option agreement, we may acquire a 60% interest in and to the Finlayson Properties.
Because we assumed the obligations of the YK Group under its agreement with Expatriate, we are obligated to pay to Expatriate, CDN$80,000 in cash and to expend CDN$500,000 on the properties. Payment of the cash is as follows:
On or before November 1, 2003 $ 10,000 (paid)
On or before November 1, 2004 $ 10,000 (paid)
On or before November 1, 2005 $ 15,000
On or before November 1, 2006 $ 15,000
On or before November 1, 2007 $ 30,000
Aggregate (total) expenditures on the properties are as follows:
On or before November 1, 2003 $ 100,000 (completed)
On or before November 1, 2004 $ 150,000 (completed)
On or before November 1, 2005 $ 200,000 (completed)
On or before November 1, 2006 $ 250,000 (completed)
On or before November 1, 2007 $ 500,000
Upon completion of the foregoing payments and expenditures, we will be assigned a 60% interest in and to the Finlayson properties. If the payments or expenditures do not occur at the precise time set forth therein, the agreement will be terminated.
The option agreement between YK Group and Expatriate grants the right to explore for gem materials on Expatriate’s claims. The extent of the exploration tenure will be reduced in time from the present 2976 claims to 200 claims in 5 years; in November 2004, the Company elected to reduce its option holdings to the Finlayson Lake Properties only and thereby informed Expatriate that the Light claims would no longer be included in the option agreement.
Expatriate has changed its name to “Yukon Zinc Corporation”.
The Black Warrior Project (the Nevada Property)
In June 2004, we entered into an option agreement (the “Black Warrior Agreement”) with Goodsprings Development Corp., a Nevada based corporation, whereby we may earn a 100% undivided interest in the Black Warrior project in Esmeralda County, Nevada.
To earn a 100% undivided interest in the Black Warrior project, Entourage Mining Ltd. (Lessee) shall make $USD payments to Goodsprings Development Corp (the “Lessor”) and Apex Deep Mines (the “Owner”) as described below:
Goodsprings Development Corp.
Date Rental Payment Amount
On execution of the Black Warrior Agreement $ 15,000.00 (paid)
June 1, 2005 $ 15,000.00 (paid)
June 1, 2006 $ 20,000.00
June 1, thereafter $ 25,000.00
Apex '76' Deep Mines
September 4, 2004 $ 4,000.00 (paid)
February 10, 2005 $ 5,000.00 (paid)
February 10, 2006 $ 7,500.00
February 10, thereafter $ 10,000.00
Under the terms of the Black Warrior Agreement, Entourage may elect at any time to purchase the property for $400,000 USD and any Rental Payments paid shall be credited against the Purchase Price. There is no work commitment by the Company nor is there any share issuance in consideration of the Option in the Black Warrior Agreement.
All additional cash payments and work commitments are optional. However, if Entourage fails to make any cash payment on or before the times required as set out in the above table, the Option of Entourage to acquire the Black Warrior project shall terminate.
Upon Entourage completing the cash payments, Entourage shall have exercised the Option and shall have acquired a 100% undivided unencumbered beneficial interest in and to the Property subject only to a reserved 3% net smelter return royalty reserved unto Goodsprings. Entourage shall have the right to buy one-third of the foregoing 3% NSR for a one-time cash payment of $1,000,000 USD.
On April 21, 2005, the Company entered into agreement with United Carina Resources Corp. and CM KM Diamon ds Inc. whereby each of these two companies can acquire a 10% interest in the Black Warrior Project by paying to the Company the sum of $40,000 and making exploration expenditures of $85,000.
The Doran Uranium Property
In March 2005, Entourage Mining entered into an option agreement with Fayz Yacoub, a professional geologist and entrepreneur from Vancouver, British Columbia, to acquire a 100% undivided beneficial right, title and interest in 44 mineral claims known as the Doran Uranium Property situated in southeast Quebec approximately 85 kilometers east of Havre St. Pierre in the Baie Johan Beetz area of Costebelle Township. The claims encompass approximately 24.73 sq. km (2473.3 hectares). The Company can earn a 100% interest in the property by making cash payments of $35,000 (which has been done) and 125,000 shares in the first year (which shares have been issued) and a total of $220,000 and 750,000 shares over 4 years, expending $1,000,000 over three years in work commitments. The property is subject to a 2.5% net smelter royalty. The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1750,000.
The Hatchet Lake Uranium Properties
In April, 2005 the Company entered into an option with United Carina Resources Corp., a Saskatchewan company, to acquire a 20% interest in 4 uranium claim blocks situated in the Athabaska Basin of north-central Saskatchewan (the “Hatchet Lake Property”) for a cash payment of $40,000 (unpaid) and a work commitment of $100,000 per year for two years. The annual payments of $100,000 are to be made on a quarterly basis at $25,000 per quarter with the first payment due by June 30, 2005.
No work has yet been completed on the Hatchet Lake Property by the Company.
Competition
The mineral property exploration business, in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered, a profitable market will exist for sale of same. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may make it difficult for us to receive an adequate return on investment.
We will compete with many companies possessing greater financial resources and technical facilities for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.
Regulations
The Company is subject to the various environmental and business regulations of the jurisdictions in which it conducts mineral exploration.
These regulations can be onerous and, in some cases, expensive to comply with. In particular, the Company may be required to expend funds to reclaim or restore land disturbed by mineral exploration.
It is possible that the Company may not be able to afford to comply with various environmental and business regulations in the jurisdictions in which it conducts mineral exploration and would, as a result, have to curtail or cease operations and exploration.
The jurisdictions in which the Company is presently operating are, in the Company's view, known as jurisdictions which are friendly to mining activity and the Company believes that it can meet applicable regulatory requirements.
Management & Employees
We do not have any employees other than our directors and officers.
Our President and Chief Executive Officer, Gregory F. Kennedy, devotes approximately 50% of his business time to our affairs. We have a management agreement with Mr. Kennedy which is described in the “Related Party Transactions” section of this Annual Report.
Where necessary, we employ consultants, who in turn employ labourers, to further exploration on our mineral resource properties.
Office Space
We utilize about 600 square feet of office space in Vancouver, British Columbia. Our rent and related office expenses total approximately $1,400 per month.
FORWARD-LOOKING STATEMENTS
We caution you that certain important factors (including without limitation those set forth in this Form 20-F) may affect our actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 20-F annual report, or that are otherwise made by or on our behalf. For this purpose, any statements contained in this annual report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “except,” “believe,” “anticipate,” “intend,” “could,” estimate,” or “continue,” or the negative or other variations of comparable terminology, are intended to identify forward-looking statements.
Risk factors
Any investment in our common shares involves a high degree of risk. You should consider carefully the following information before you decide to buy our common shares. If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer. In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares. In particular, you should consider carefully the following risk factors:
We have a history of losses.
We have incurred losses in our business operations since inception, and we expect that we will continue to lose money for the foreseeable future. From our incorporation to December 31, 2004, we have incurred losses totalling $1,990,564. Very few junior resource companies ever become profitable and typically incur large losses until they enter production or are able to sell a mineral property to a major resource company. Failure to achieve and maintain profitability may adversely affect the market price of our common shares.
Very few mineral properties are ultimately developed into producing mines.
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.
Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining.
Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis. The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.
If we do not obtain additional financing, our business will fail.
Our current operating funds are less than necessary to acquire an interest in, and to conduct exploration on, a mineral property, and therefore we will need to obtain additional financing in order to complete our business plan. As at December 31, 2004, we had cash on hand of $433,617. Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims. We will require additional financing in order to complete these activities. In addition, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral property we acquire. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required.
We believe the only realistic source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.
Because management has only limited experience in resource exploration, the business has a higher risk of failure.
Our management, while experienced in business operations, has only limited experience in resource exploration. None of our directors or officers has any significant technical training or experience in resource exploration or mining. We rely on the opinions of consulting geologists that we retain from time to time for specific exploration projects or property reviews. As a result of our management’s inexperience, there is a higher risk of our being unable to complete our business plan.
Mineral exploration involves a high degree of risk against which we are not currently insured.
Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs. We have relied on and will continue to rely upon consultants and others for exploration expertise.
It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.
We may require permits and licenses that we may not be able to obtain.
Our operations may require licenses and permits from various governmental authorities. There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire.
Metal prices fluctuate widely.
Factors beyond our control may affect the marketability of any resource we discover. Metal prices have fluctuated widely, particularly in recent years. The effect of these factors cannot accurately be predicted.
The resource industry is very competitive.
The resource industry is intensely competitive in all its phases. We compete with many companies possessing greater financial resources and technical facilities than us for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.
Our operations may be adversely affected by environmental regulations.
Our operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner, which means that standards, enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations. We do not maintain environmental liability insurance.
The trading market for our shares is not always liquid.
Although our shares trade on the NASD OTC Bulletin Board, the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.
Our securities may be subject to penny stock regulation.
Our stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3151-1. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Our common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities. Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.
INFORMATION ON THE COMPANY
Our Registered Office in British Columbia is located at 2602 – 1111 Beach Avenue, Vancouver, British Columbia, Canada. Our head office and principal office is located at 614 – 475 Howe Street, Vancouver, British Columbia, Canada.
We were originally incorporated under the name, Entourage Holdings Ltd., pursuant to the Company Act (British Columbia) on June 16, 1995. On June 25, 1996, we changed our name to Entourage Mining Ltd.
On February 18, 1998, we became a reporting Issuer as defined under the Securities Act of the Province of British Columbia in British Columbia, Canada.
We have one subsidiary company, Entourage USA Inc., located at 6121 Lakeside Drive, Suite 260, Reno, Nevada 89511. The subsidiary company will seek mineral prospects in the United States.
We are engaged in the business of acquiring and exploring resource properties.
We are a reporting issuer in the United States and our Annual Report and 6K filings can be found on the SEC’s EDGAR system at www.sec.gov. We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.
As our business has developed, we have acquired interests in four resource properties as follows:
The Finlayson Lake Emerald Project (the Yukon Property)
In March 2003, we entered into an agreement with the YK Group, a syndicate of unrelated third party comprised of Paul Shatzko, Maryl Shatzko, Carl Verley, Shirley Verley, William Weston and Margaret Weston, to acquire YK Group’s interest in an option agreement dated November 13, 2002, entered into between the YK Group and Expatriate Resources Ltd., a company traded on the TSX-Venture Exchange. Upon the payment of $60,000 and delivery of 6,000,000 common restricted shares of our common stock, the YK Group will assign its interest to us in the November 13, 2002 option agreement. Of the $60,000 to be paid, $20,000 was paid to Expatriate by a third party on the Company’s behalf. The Company now owes this third party, Carl Verley, the sum of $20,000.
We have received an assignment of YK Group’s interest in the option agreement although we have not paid the YK Group $60,000.
By completing the YK Group’s obligations under the terms and conditions of the option agreement, we may acquire a 60% interest in and to the Finlayson Properties.
Because we assumed the obligations of the YK Group under its agreement with Expatriate, we are obligated to pay to Expatriate, CDN$80,000 in cash and to expend CDN$500,000 on the properties. Payment of the cash is as follows:
On or before November 1, 2003 $ 10,000 (paid)
On or before November 1, 2004 $ 10,000 (paid)
On or before November 1, 2005 $ 15,000
On or before November 1, 2006 $ 15,000
On or before November 1, 2007 $ 30,000
Aggregate (total) expenditures on the properties are as follows:
On or before November 1, 2003 $ 100,000 (completed)
On or before November 1, 2004 $ 150,000 (completed)
On or before November 1, 2005 $ 200,000 (completed)
On or before November 1, 2006 $ 250,000 (completed)
On or before November 1, 2007 $ 500,000
Upon completion of the foregoing payments and expenditures, we will be assigned a 60% interest in and to the Finlayson properties. If the payments or expenditures do not occur at the precise time set forth therein, the agreement will be terminated.
The option agreement between YK Group and Expatriate grants the right to explore for gem materials on Expatriate’s claims. The extent of the exploration tenure will be reduced in time from the present 2976 claims to 200 claims in 5 years; in November 2004, the Company elected to reduce its option holdings to the Finlayson Lake Properties only and thereby informed Expatriate that the Light claims would no longer be included in the option agreement.
Expatriate has changed its name to “Yukon Zinc Corporation”.
The Black Warrior Project (the Nevada Property)
In June 2004, we entered into an option agreement (the “Black Warrior Agreement”) with Goodsprings Development Corp., a Nevada based corporation, whereby we may earn a 100% undivided interest in the Black Warrior project in Esmeralda County, Nevada.
To earn a 100% undivided interest in the Black Warrior project, Entourage Mining Ltd. (Lessee) shall make $USD payments to Goodsprings Development Corp (the “Lessor”) and Apex Deep Mines (the “Owner”) as described below:
Goodsprings Development Corp.
Date Rental Payment Amount
On execution of the Black Warrior Agreement $ 15,000.00 (paid)
June 1, 2005 $ 15,000.00 (paid)
June 1, 2006 $ 20,000.00
June 1, thereafter $ 25,000.00
Apex '76' Deep Mines
September 4, 2004 $ 4,000.00 (paid)
February 10, 2005 $ 5,000.00 (paid)
February 10, 2006 $ 7,500.00
February 10, thereafter $ 10,000.00
Under the terms of the Black Warrior Agreement, Entourage may elect at any time to purchase the property for $400,000 USD and any Rental Payments paid shall be credited against the Purchase Price. There is no work commitment by the Company nor is there any share issuance in consideration of the Option in the Black Warrior Agreement.
All additional cash payments and work commitments are optional. However, if Entourage fails to make any cash payment on or before the times required as set out in the above table, the Option of Entourage to acquire the Black Warrior project shall terminate.
Upon Entourage completing the cash payments, Entourage shall have exercised the Option and shall have acquired a 100% undivided unencumbered beneficial interest in and to the Property subject only to a reserved 3% net smelter return royalty reserved unto Goodsprings. Entourage shall have the right to buy one-third of the foregoing 3% NSR for a one-time cash payment of $1,000,000 USD.
On April 21, 2005, the Company entered into agreement with United Carina Resources Corp. and CM KM Diamon ds Inc. whereby each of these two companies can acquire a 10% interest in the Black Warrior Project by paying to the Company the sum of $40,000 and making exploration expenditures of $85,000.
The Doran Uranium Property
In March 2005, Entourage Mining entered into an option agreement with Fayz Yacoub, a professional geologist and entrepreneur from Vancouver, British Columbia, to acquire a 100% undivided beneficial right, title and interest in 44 mineral claims known as the Doran Uranium Property situated in southeast Quebec approximately 85 kilometers east of Havre St. Pierre in the Baie Johan Beetz area of Costebelle Township. The claims encompass approximately 24.73 sq. km (2473.3 hectares). The Company can earn a 100% interest in the property by making cash payments of $35,000 (which has been done) and 125,000 shares in the first year (which shares have been issued) and a total of $220,000 and 750,000 shares over 4 years, expending $1,000,000 over three years in work commitments. The property is subject to a 2.5% net smelter royalty. The Company has the right to purchase up to three-fifths of the NSR, or 1.5%, for $1750,000.
The Hatchet Lake Uranium Properties
In April, 2005 the Company entered into an option with United Carina Resources Corp., a Saskatchewan company, to acquire a 20% interest in 4 uranium claim blocks situated in the Athabaska Basin of north-central Saskatchewan (the “Hatchet Lake Property”) for a cash payment of $40,000 (unpaid) and a work commitment of $100,000 per year for two years. The annual payments of $100,000 are to be made on a quarterly basis at $25,000 per quarter with the first payment due by June 30, 2005.
No work has yet been completed on the Hatchet Lake Property by the Company.
Competition
The mineral property exploration business, in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered, a profitable market will exist for sale of same. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may make it difficult for us to receive an adequate return on investment.
We will compete with many companies possessing greater financial resources and technical facilities for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.
Regulations
The Company is subject to the various environmental and business regulations of the jurisdictions in which it conducts mineral exploration.
These regulations can be onerous and, in some cases, expensive to comply with. In particular, the Company may be required to expend funds to reclaim or restore land disturbed by mineral exploration.
It is possible that the Company may not be able to afford to comply with various environmental and business regulations in the jurisdictions in which it conducts mineral exploration and would, as a result, have to curtail or cease operations and exploration.
The jurisdictions in which the Company is presently operating are, in the Company's view, known as jurisdictions which are friendly to mining activity and the Company believes that it can meet applicable regulatory requirements.
Management & Employees
We do not have any employees other than our directors and officers.
Our President and Chief Executive Officer, Gregory F. Kennedy, devotes approximately 50% of his business time to our affairs. We have a management agreement with Mr. Kennedy which is described in the “Related Party Transactions” section of this Annual Report.
Where necessary, we employ consultants, who in turn employ labourers, to further exploration on our mineral resource properties.
Office Space
We utilize about 600 square feet of office space in Vancouver, British Columbia. Our rent and related office expenses total approximately $1,400 per month.
