SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 2O549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR l5(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 0-16097
BAY RESOURCES LTD
(Exact name of Registrant as specified in its charter)
Delaware 98-0079697
(State or other jurisdiction of (IRS Employer
incorporation or organisation) Identification No.)
210 Kings Way South Melbourne, Victoria, 3205 Australia
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 0ll (613) 9234 - 1100
Securities registered pursuant to Section 12(b) of the Act :
Title of each class Name of each exchange
on which registered
N/A N/A
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.0001 per share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements the past 90 days.
Yes X No
----------- -----------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the restraint has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes___________ No____________
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. There were 6,347,089
outstanding shares of Common Stock as of March 31, 2002.
PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTRODUCTION TO INTERIM FINANCIAL STATEMENTS.
The interim financial statements included here in have been prepared by
Bay Resources Ltd. (the "Company") without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (The "Commission").
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These interim financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30 2001.
In the opinion of management, all adjustments, consisting of normal
recurring adjustments and consolidating entries, necessary to present fairly the
consolidated financial position of the Company and subsidiaries as of March 31,
2002 and March 31, 2001, the results of its consolidated operations for the
three and nine month periods ended March 31, 2002 and March 31, 2001, and the
changes in its consolidated cash flows for the three and nine month periods
ended March 31, 2001 and March 31, 2000, have been included. The results of
consolidated operations for the interim periods are not necessarily indicative
of the results for the full year.
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION PRESENTED IS IN
AUSTRALIAN DOLLARS.
BAY RESOURCES LTD. AND SUBSIDIARY
Consolidated Balance Sheets
March 31, 2002 and June 30, 2001
and March 31, 2001
(Unaudited)
A $000's A $000's A $000's
Mar 31 June 30 Mar 31
2002 2001 2001
-------- -------- --------
ASSETS
Current Assets:
Cash $ 4 $ 1 $ 6
-------- -------- --------
Total Current Assets 4 1 6
-------- -------- --------
Other Assets:
Investments -- -- 49
Organisational Costs, net -- -- --
-------- -------- --------
Total Other Assets -- -- 49
-------- -------- --------
Total Assets $ 4 $ 1 $ 55
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 481 $ 264 $ 314
-------- -------- --------
Total Current Liabilities 481 264 314
-------- -------- --------
Long-Term Debt 746 641 627
-------- -------- --------
Total Liabilities 1,227 905 941
-------- -------- --------
Stockholders' Equity (Deficit):
Common Stock: $.0001 par value
25,000,000 shares authorised,
6,347,089 issued and outstanding 1 1 1
less Treasury Stock at Cost, 2,500 shares (20) (20) (20)
Additional Paid-in-Capital 25,175 25,175 25,175
Accumulated other Comprehensive Loss (1,989) (1,989) (6,456)
Retained Deficits (24,390) (24,071) (19,586)
-------- -------- --------
Total Stockholders' Equity (Deficit) (1,223) (904) (886)
-------- -------- --------
Total Liabilities and
Stockholders' Equity $ 4 $ 1 $ 55
======== ======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
BAY RESOURCES LTD. AND SUBSIDIARY
Consolidated Statements of Operations
Three Months Ended March 31, 2002 and 2001
and nine months ended March 31, 2002 and 2001
(Unaudited)
A$000's A$000's A$000's A$000's
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Mar 31 Mar 31 Mar 31 Mar 31
2002 2001 2002 2001
------- ------- ------- -------
Revenues:
Other Income: $ -- $ -- $ -- $ --
------- ------- ------- -------
Costs and Expenses:
Interest Expense: 23 22 64 51
Legal, Accounting & Professional 5 9 9 20
Administrative 68 87 246 367
------- ------- ------- -------
96 118 319 438
------- ------- ------- -------
Loss from Operations: (96) (118) (319) (438)
Foreign Currency Exchange Gain (Loss) -- -- -- --
------- ------- ------- -------
Income (Loss) before Income Tax (96) (118) (319) (438)
Provision for Income Tax -- -- -- --
------- ------- ------- -------
Net Income (Loss)
$ (96) $ (118) $ (319) $ (438)
------- ------- ------- -------
Earnings Per Common Equivalent Share From $ (.02) $ (.02) $ (.05) $ (.07)
------- ------- ------- -------
Weighted Number of Common Equivalent
Shares Outstanding 000's 6,347 6,347 6,347 6,347
------- ------- ------- -------
The accompanying notes are an integral part of these
consolidated financial statements.
BAY RESOURCES LTD. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
March 31, 2002 and June 30, 2001
and March 31, 2001
(Unaudited)
Accumulated
Common Treasury Paid in Other
Stock Stock at Capital Retained Comprehensive
Shares Amount Cost (Deficit) Earnings Loss
Total
-------- -------- -------- -------- -------- -------- --------
000's A$000's A$000's A$000's A$000's A$000's
Balance June 30, 2000 $ 6,347 $ 1 $ (20) $ 25,175 $(19,148) $ (6,456) $ (448)
Comprehensive Income
Net loss nine months ending
03-31-01 -- -- -- -- (438) -- (438)
--------
Total Comprehensive Income -- -- -- -- -- -- (438)
-------- -------- -------- -------- -------- -------- --------
Balance March 31, 2001 6,347 $ 1 $ (20) $ 25,175 $(19,586) $ (6,456) $ (886)
-------- -------- -------- -------- -------- -------- --------
Comprehensive income
Net loss three months
ending 6-30-01 -- -- -- -- (4,485) 4,516 31
Net unrealised loss on
marketable securities -- -- -- -- -- (49) (49)
--------
Total Comprehensive Income -- -- -- -- -- -- (18)
-------- -------- -------- -------- -------- -------- --------
Balance June 30, 2001 6,347 1 (20) 25,175 (24,071) (1,989) (904)
Comprehensive Income
Net loss nine months ending
03-31-02 -- -- -- -- (319) -- (319)
--------
Total Comprehensive Income -- -- -- -- -- (319)
-------- -------- -------- -------- -------- -------- --------
Balance March 31, 2002 6,347 $ 1 $ (20) $ 25,175 $(24,390) $ (1,989) $ (1,223)
-------- -------- -------- -------- -------- -------- --------
The accompanying notes are an integral part of these
consolidated financial statements.
BAY RESOURCES LTD. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Nine Months Ended March 31, 2002 and 2001
and Year Ended June 30, 2001
(Unaudited)
A $000's A $000's A $000's
Nine Months Year Nine Months
Ended Ended Ended
Mar 31 June 30 Mar 31
2002 2001 2001
------- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (319) $(4,923) $ (438)
Adjustments:
Permanent Decline of Investment -- 4,516 --
A/P and Accrued Liabilities 217 (21) 29
------- ------- -------
Net Cash Provided (Used) in Continuing Operations (102) (428) (409)
------- ------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Investment in Treasury Stock -- -- --
Investment in Subsidiary -- -- --
------- ------- -------
Net Cash Provided (Used) in Investing Activities -- -- --
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowing under Credit Line Arrangements -- -- --
Net Borrowing from Affiliates 105 427 413
------- ------- -------
Net Cash Provided by Financing Activities 105 427 413
------- ------- -------
Net Increase (Decrease) in Cash 3 (1) 4
Cash at Beginning of Year 1 2 2
------- ------- -------
Cash at End of Year $ 4 $ 1 $ 6
======= ======= =======
SUPPLEMENTAL DISCLOSURES:
Interest Paid (Net Capitalised) $ 64 $ 69 $ 51
Income Tax Paid $ -- $ -- $ --
The accompanying notes are an integral part of these
consolidated financial statements
BAY RESOURCES LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
March 31, 2002, June 30, 2001 and
March 31, 2001
(1) ORGANISATION
Bay Resources Ltd. (Bay Resources) is incorporated in the State of Delaware. The
principal shareholder of Bay Resources is Edensor Nominees Proprietary Limited
(Edensor), an Australian corporation. Edensor owned 78.8% of Bay Resources as of
March 31, 2002. Bay Resources acquired a controlling interest on September 3,
1987 in former subsidiary, Solmecs Corporation N.V. ("Solmecs") and 100%
ownership on January 2, 1992. Bay Resources sold its interest in Solmecs
effective June 5, 1998. During fiscal 1998, Bay Resources incorporated a further
subsidiary, Baynex.com Pty Ltd (formerly Bayou Australia Pty Ltd), under the
laws of Australia. Baynex.com Pty Ltd has not traded since incorporation.
(2) INVESTMENT SECURITIES
The following is a summary of Investment Securities at March 31, 2002, June 30,
2001 and March 31, 2001:
A$000's A$000's A$000's
Mar 31 June 30 Mar 31
2002 2001 2001
------- ------- -------
Investment Cost Method $ 4,516 $ 4,516 $ 4,516
Trading Securities:
Marketable Equity
Securities, at cost -- -- --
Gross Realised Loss or impairment (4,516) (4,516) (4,467)
Gross Unrealised Losses
------- ------- -------
Marketable Equity Securities,
at fair value -- -- 49
======= ======= =======
The investment using this cost method is carried at cost. Dividends received
from the investment carried at cost are included in other income. Dividends
received in excess of the Company's proportionate share of accumulated earnings
("return of capital dividends") are applied as a reduction of the cost of the
investment. No securities were sold during 2001 and 2000 and all securities were
treated as available for sale for 2001 and 2000. At June 30, 2001 the Company
determined that the decline in value of its investment was permanent and has
recorded a realised loss in the amount of A$4,516.
(3) SHORT TERM AND LONG TERM DEBT
The following is a summary of Bay Resources' borrowing arrangements as of March
31, 2002, June 30, 2001 and March 31, 2001.
A$000's A$000's A$000's
Mar 31 June 30 Mar 31
Long-Term 2002 2001 2001
--------- ---- ---- ----
Loan from corporations affiliated with the
President of Bay Resources. Interest accrues at
the ANZ Banking Group Limited rate
+ 1% for overdrafts over $100,000.
Repayment of loan not required
before March 31, 2002 (1)(2) $746 $641 $627
---- ---- ----
Total Long-Term $746 $641 $627
==== ==== ====
(1) An amount of $7000 was repaid on January 20, 2000 partly through the
issuance of 8,000,000 options to purchase shares of the Company. Both
issuances were to a company affiliated with the President of Bay
Resources.
BAY RESOURCES LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
March 31, 2002, June 30, 2001 and
March 31, 2001
(4) AFFILIATE TRANSACTIONS
Bay Resources advances to and receives advances from various affiliates. All
advances between consolidated affiliates are eliminated on consolidation. At
March 31, 2002, Bay Resources had no outstanding advances to or from
unconsolidated affiliated companies. $418,000 $185,000 and $276,000 of accounts
payable for the periods shown is due to an affiliated management company.
(5) GOING CONCERN
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of Bay Resources and Solmecs as a going concern. However, Bay
Resources has sustained recurring losses. In addition, Bay Resources has no net
working capital, which raises substantial doubts as to its ability to continue
as going concerns. Bay Resources anticipates that it will be able to defer
repayment of certain of its short term loan commitments until it has sufficient
liquidity to enable these loans to be repaid or other arrangements to be put in
place. In addition Bay Resources has historically relied on loans and advances
from corporations affiliated with the President of Bay Resources. Based on
discussions with these affiliate companies and the President. Bay Resources
believes this source of funding will continue to be available. Other than the
arrangements noted above, Bay Resources has not confirmed any other arrangements
for ongoing funding. As a result Bay Resources may be required to raise funds by
additional debt or equity offerings in order to meet its cash flow requirements
during the forthcoming year.
(6) SALE OF SOLMECS
Pursuant to a stock purchase agreement dated as of June 5, 1998, the Company
acquired 499,701 shares in SCNV Acquisition Corp ("SCNV"), representing
approximately 24% of the issued and outstanding share capital of SCNV, in return
for the whole of the share capital of Solmecs Corporation N.V., a Netherlands
Antilles company which prior to the exchange was formerly a wholly owned
subsidiary of the Company. The 499,701 shares has been valued at US$2,800,000 or
A$4,516,000 and will be accounted for using the cost method because the Company
does not exercise significant influences over SCNV's operating and financial
activities (see note 4). The sale resulted in a gain of $5,899,000 which is
included in other income.
SCNV is a Delaware corporation established May 1997 to select, develop and
commercially exploit proprietary technologies, in various stages of development,
invented primary by scientists who immigrated to Israel from and by scientists
and institutions in Russia and other countries that formerly comprised the
Soviet Union. Simultaneously with the SCNV stock acquisition by the Company,
SCNV completed an initial public offering of common stock and warrants which
resulted in gross proceeds of approximately US$5,900,000.
The Company has been granted certain demand and "piggyback" registration rights
with respect to the SCNV shares. Notwithstanding the foregoing, the Company has
agreed not to sell, grant options for sale or assign or transfer any of the SCNV
shares, for a period of 24 months from the closing of the ("Lock-up") agreement,
which expired in June 2000. Bay Resources has requested SCNV to take the
necessary steps to register Bay Resources shareholding in SCNV.
(7) INCOME TAXES
Bay Resources files its income tax returns on an accrual basis. Bay Resources
has carry forward losses of approximately US$17.5 million as of June 30, 2001
which expire in the years 1999 through 2012. Bay Resources will need to file tax
returns for those years of the NOL carryforwards. Due to the uncertainty as to
realisation of these losses, a valuation allowance of US$6.0 million has been
recorded to off set the tax benefit of the carry forward losses. During the year
ended June 30, 2001, Bay Resources provided an additional valuation allowance of
US$1.0 million. Due to the uncertainty as to realisation of these losses, a
valuation allowance of US$4.7 million has been recorded to off set the tax
benefit of the carry forward losses.
(8) NEW BUSINESS OPPORTUNITY
In March 2002, Bay Resources reached an agreement with Tahera Corporation
("Tahera") to explore for gold on Tahera's extensive properties on the Slave
Craton in northern Canada. Tahera is a diamond exploration company listed on the
Toronto Stock Exchange and is engaged in diamond exploration in the northern
Slave Craton. Tahera has developed an extensive database to explore for diamonds
and under the terms of the agreement, Bay Resources will use the database and
geochemical samples to explore for gold.
Tahera will retain a two percent net smelter return royalty on any production
from deposits discovered as a result of Bay Resources using the Tahera samples
and database.
BAY RESOURCES LTD. AND SUBSIDIARY
Notes to Consolidated Financial Statements
March 31, 2002, June 30, 2001 and
March 31, 2001
(8) NEW BUSINESS OPPORTUNITY (CONT'D)
Tahera's diamond exploration data that Bay Resources will have access to
includes electromagnetic and magnetic geophysical surveys, overburden and
bedrock mapping, overburden sampling and drilling data. The Tahera overburden
samples cover some 60,000 square kilometres of the northern Slave Craton with
some 17,000 samples being potentially available for gold and base-metal
analysis. The overburden samples have been taken on a reconnaissance scale with
line intervals at 2.5 - 5.0 kilometers with some detailed surveys at
50-100 meter sample spacings. The Tahera samples cover areas of known gold
mineralisation including in the vicinity of the Lupin and Ulu gold deposits.
Tahera's Jericho and Contwoyto properties lie in close proximity to the Lupin
gold mine, which is a large, high grade, gold deposit (some three million ounce
gold endowment produced to date), currently operated by Echo Bay Mines Ltd. Bay
Resources considers there to be significant potential for gold mineralization,
similar to that found at Lupin, on Tahera's Jericho and Contwoyto properties.
Utilising the Tahera database in conjunction with existing public data, Bay
Resources's objective for the coming year is to delineate new areas of gold
mineralization on the northern Slave Craton that could lead to a multi-million
ounce gold discovery. Bay Resources will also continue to look for further
mineral exploration opportunities in North America.
The president of Tahera, Mr. Joseph Gutnick is also the chairman and president
of the Company, and the Company's principal stockholder, Edensor Nominees Pty
Ltd., is also a significant stockholder of Tahera.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FUND COSTS CONVERSION
The consolidated statements of income and other financial and operating data
contained elsewhere here in and the consolidated balance sheets and financial
results have been reflected in Australian dollars unless otherwise stated.
The following table shows the average rate of exchange of the Australian dollar
as compared to the US dollar during the periods indicated:
9 months ended March 31, 2002 A$1.00 = U.S. $.5282
9 months ended March 31, 2001 A$1.00 = U.S. $.4856
RESULTS OF OPERATION
Three Months ended March 31, 2002 vs Three Months ended March 31, 2001.
The Company did not have any revenues in either the three months ended March 31,
2002 or the three months ended March 31, 2001.
Costs and expenses decreased from A$118,000 during the three months ended March
31, 2001 to A$96,000 during the three months ended March 31, 2002. The decrease
is a result of the decrease in administrative costs including salaries from
A$87,000 in the three months ended March 31, 2001 to A$68,000 in the three
months ended March 31, 2002. In the prior period costs were incurred in the due
diligence on St. Andrew which included consultants and travel and accommodation
and there were no comparable costs in this period.
As a result of the foregoing, the loss from operations decreased from A$118,000
for the three months ended March 31, 2001 to A$96,000 for the three months ended
March 31, 2002. There was no provision for income tax in either period.
The net loss was A$96,000 for the three months ended March 31, 2002 compared to
a net loss of A$118,000 for the three months ended March 31, 2001.
NINE MONTHS ENDED MARCH 31, 2002 VS. NINE MONTHS ENDED MARCH 31, 2001.
The Company did not have any revenues in either the nine months ended March 31,
2002 or the nine months ended March 31, 2001.
Costs and expenses decreased from A$438,000 in the nine months ended March 31,
2001 to A$319,000 in the nine months ended March 31, 2002. The decrease is a net
result of:
a) an increase in interest expense from A$51,000 for the nine months ended
March 31, 2001 to A$64,000 for the nine months ended March 31, 2002 as
a result of an increase in long term interest bearing debt which was
offset by the reduction in interest rates.
b) the decrease in legal, accounting and professional costs from A$20,000
in the nine months ended March 31, 2001 to A$9,000 in the nine months
ended March 31, 2002. In the prior period legal fees were incurred as
part of the due diligence on St. Andrews and there were no comparable
costs in this period.
c) the decrease in administrative costs including salaries from A$367,000
in the nine months ended March 31, 2001 to A$246,000 in the nine months
ended March 31, 2002. In the prior period substantial costs were
incurred in the due diligence on St Andrew which included consultants
and travel & accommodation and there were no comparable costs in this
period.
As a result of the foregoing, the loss from operations decreased from A$438,000
for the nine months ended March 31, 2001 to A$319,000 for the nine months ended
March 31, 2002. There was no provision for income tax in either period.
The net loss was A$319,000 for the nine months ended March 31, 2002 compared to
a net loss of A$438,000 for the nine months ended March 31, 2001.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2002 the Company had short-term obligations of A$481,000
comprising accounts payable and accrued expenses and long-term debt of A$746,000
consisting of loans from corporations affiliated with the president of the
Company.
The Company anticipates that it will be able to defer repayment of certain of
its short term loan commitments until it has sufficient liquidity to enable
these loans to be repaid which there can be no assurance. In addition the
Company has historically relied upon loans and advances from affiliates to meet
a significant portion of the Company's cash flow requirements which the Company
believes based on discussions with such affiliates will continue to be available
during fiscal 2002 and 2003.
Other than the arrangements above the Company has not confirmed any further
arrangements for ongoing funding. As a result the Company may be required to
raise funds from additional debt or equity offerings and/or increase the
revenues from operations in order to meet its cash flow requirements during the
forthcoming year.
CAUTIONARY SAFE HARBOR STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
Certain information contained in this Form 10-Q is forward looking information
within the meaning of the Private Securities Litigation Act of 1995 (the "Act")
which became law in December 1995. In order to obtain the benefits of the "safe
harbor" provisions of the act for any such forwarding looking statements, the
Company wishes to caution investors and prospective investors about significant
factors which among others have affected the Company's actual results and are in
the future likely to affect the Company's actual results and cause them to
differ materially from those expressed in any such forward looking statements.
This Form 10-Q report contains forward looking statements relating to future
financial and business results. Actual results may differ as a result of factors
over which the Company has no control including without limitation, the risks of
exploration and development stage projects, political risks of development in
foreign countries, risks associated with environmental and other regulatory
matters, mining risks and competition and the volatility of gold prices.
Additional information which could affect the Company's financial results is
included in the Company's Form 10-K on file with the Securities and Exchange
Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company is exposed to interest rate risk primarily through loans and
advances from affiliates. The Company utilizes these borrowings to meet its
working capital needs.
At March 31, 2002, the Company had outstanding long term borrowings of
approximately $746,000. In the event that interest rates associated with these
borrowings were to increase 100 basis points, the impact on future cash flows
would be a decrease of approximately $7,460 annually.
PART II
Item 1. LEGAL
Not Applicable
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
(i) Appointment of Director
Mr Hugo Dummett was appointed a Non-Executive Director of the
Corporation on 19 April 2002. Mr Dummett holds a geology degree from
the University of Witwatersrand in South Africa and is one of Canada's
most prominent and knowledgeable mining and exploration industry
professionals. Mr Dummett is currently Chief Executive Officer of
African Minerals Limited. From 1989 to 2000, Mr Dummett was employed
with BHP Minerals, serving as Vice President and Senior Vice President
Exploration from 1994 to 2000. Mr Dummett's appointment will bring
further experience to Bay Resources, particularly his experience in
Canada.
(ii) New Business Opportunity
In March 2002, Bay Resources reached an agreement with Tahera
Corporation ("Tahera") to explore for gold on Tahera's extensive
properties on the Slave Craton in northern Canada. Tahera is a diamond
exploration company listed on the Toronto Stock Exchange and is engaged
in diamond exploration in the northern Slave Craton. Tahera has
developed an extensive database to explore for diamonds and under the
terms of the agreement, Bay Resources will use the database and
geochemical samples to explore for gold.
Tahera will retain a two percent net smelter return royalty on any
production from deposits discovered as a result of Bay Resources using
the Tahera samples and database.
Tahera's diamond exploration data that Bay Resources will have access
to includes electromagnetic and magnetic geophysical surveys,
overburden and bedrock mapping, overburden sampling and drilling data.
The Tahera overburden samples cover some 60,000 square kilometres of
the northern Slave Craton with some 17,000 samples being potentially
available for gold and base-metal analysis. The overburden samples have
been taken on a reconnaissance scale with line intervals at 2.5 - 5.0
kilometers with some detailed surveys at 50-100 meter sample spacings.
The Tahera samples cover areas of known gold mineralisation including
in the vicinity of the Lupin and Ulu gold deposits.
Tahera's Jericho and Contwoyto properties lie in close proximity to the
Lupin gold mine, which is a large, high grade, gold deposit (some three
million ounce gold endowment produced to date), currently operated by
Echo Bay Mines Ltd. Bay Resources considers there to be significant
potential for gold mineralization, similar to that found at Lupin, on
Tahera's Jericho and Contwoyto properties.
Utilising the Tahera database in conjunction with existing public data,
Bay Resources's objective for the coming year is to delineate new areas
of gold mineralization on the northern Slave Craton that could lead to
a multi-million ounce gold discovery. Bay Resources will also continue
to look for further mineral exploration opportunities in North America.
This is an exciting development and signifies the commencement of an
important new phase for Bay Resources that is aimed at providing
significant returns to shareholders.
The president of Tahera, Mr. Joseph Gutnick is also the chairman and
president of the Company, and the Company's principal stockholder,
Edensor Nominees Pty Ltd., is also a significant stockholder of Tahera.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports
The Company did not file any Report on Form 8-K during the
three months ended March 31, 2002.
(b) Exhibits
Agreement with Tahera Corporation.
(FORM 10-Q)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereinto duly authorised.
BAY RESOURCES LTD.
By:
/s/ Joseph I. Gutnick
------------------------------------
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
Dated: May 15, 2002 By:
/s/ Peter Lee
----------------------------------
Peter Lee, Director, Secretary and
Chief Financial Officer
(Principal Financial Officer)