GENERAL
FANCAMP EXPLORATION LTD. MANAGEMENT DISCUSSION AND ANALYSIS
The following discussion of performance, financial condition and future prospects should be read in conjunction with the financial statements of the Company and notes thereto for the three month period ended January 31, 2011. The Company’s financial statements are prepared in accordance with Canadian General Accepted Accounting Principles. The Company’s reporting currency is Canadian dollars. The date of this Management Discussion and Analysis is March 25, 2011. Additional information on the Company is available on SEDAR at www.sedar.com and the Company’s web site at www.fancampexplorationltd.ca.
NATURE OF BUSINESS
Fancamp Exploration Ltd. is an exploration stage company in the business of mineral exploration.
OVERALL PERFORMANCE
The Company is continuing its drill program on its 100% owned McFauld’s Lake Property in Ontario. This drill program will test the working hypothesis that Eagle One is a faulted offset of the Company’s previously drilled C-1 target, in a left lateral displacement along major NW trending faults and that the fragmentary high grade intersections encountered in Holes FN-08-02 and FN-08-10 are, in fact, fault slivers of the Eagle One mineralization itself. The VMS target on C-2, as well as the deep conductive target on C-6 will also be drill tested. The direction of this program is results dependent and expected to continue into the spring 2011.
Fancamp is currently one of the largest property owners in the Eastern Townships of Quebec. A 13,800 line kilometer VTEM Airborne EM survey is in the process of completion on the 25 properties held in the region and is being analyzed for identification of future drill targets. The 2,500 metre plus reconnaissance drill programme is continuing on the Stoke, Clinton and North Megantic properties.
One of the eighteen joint ventured Fermont iron properties (in all of which Fancamp holds a 17.5% working interest, together with a 1.5% NSR), the Fire Lake North, has undergone a preliminary economic assessment (PEA) performed by BBA Inc. of Montreal, an international multi-disciplinary engineering firm with expertise in mining and metallurgy. BBA's National Instrument ("NI") 43-101 Technical Report on the PEA can be found under Champion Minerals Inc. on SEDAR.
The PEA study shows a Net Present Value (NPV) of US$ 1.637 billion at a cash flow discount rate of 5% based on an Iron concentrate production rate of 7 million tonnes per year at a grade of 65% Iron. The internal rate of return ("IRR") for the project is 24.8%.
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On another of these properties, the Harvey-Tuttle property, a 43-101 compliant mineral resource estimate has been released. The total inferred mineral resource is estimated at 717 million tonnes grading 25.0% total iron at a 20% cut-off and 947 million tonnes grading 23.2% total iron at a 15% cut-off. This is in addition to the 43-101 inferred resource estimate of 215.1 million tonnes grading 28.7% total iron released on the Bellechasse property.
The Company is proceeding with the proposed roll out of the 48.64% held Magpie property into a separate entity through an Initial Public Offering to be conducted in 2011.
The Company continues to finance its activities through the issuance of shares, exercising of warrants and options and from property option and royalty revenue. Over $5.0M was raised during this quarter.
RESULTS OF OPERATIONS
The Company incurred a net loss of $321,028 for the three months ended January 31, 2011, compared to a net loss of $348,051 for the three months ended January 31, 2010. These losses can mainly be attributed to the recording of stock-based compensation during these periods.
SIGNIFICANT MINERAL PROPERTIES
ONTARIO PROPERTIES
100% Owned McFaulds Fancamp Property, Ontario
Drilling is still underway on the McFauld’s Lake Property with the intention of demonstrating that the Eagle One mineralized system is an extension of that to be found at depth on the Company’s C-1 target. The initial 3000 metres is nearing completion.
This drill programme is designed to test the working hypothesis that Eagle One is a faulted offset of C-1 in a left lateral displacement sense along major NW trending faults, and that the fragmentary high grade intersections seen in Holes FN-08-02 and FN-08-10 are, in this context, fault slivers of the Eagle One mineralization itself. (The original drill log of FN-08-02 describes the massive sulphide intersection as occurring “within a fault zone”.)
The VMS target defined on C-2 will be drilled together with a deep conductive target on C-6 suggested by a recent detailed re-examination of the original VTEM data. Further drill testing is also planned for the major “chromite horizon” traversing the property for some 3.5 km, probable extensions of the Big Daddy deposit immediately to the NE.
The direction of this programme is very much results dependent and the Company has funding to allow it to be extended as required.
50% Owned Desolation Lake Property, Ontario
The Company has begun a Quantec Spartan ground MT Survey on the 50% owned (50% Sheridan Platinum), 19,200 acre Desolation Lake property located 60 kilometres NW of Attawapiskat in the James Bay Lowlands of Northern Ontario. This survey is a follow up to an airborne VTEM survey carried out in the spring of 2010 which confirmed the presence of major magnetic anomalies and zones of significant EM conductivity. Located approximately 215 km northeast of the Ring of Fire, the magnetics and EM conductivity may be indicative of nickel sulphide bearing targets.
The property covers the intersection of two major regional structures and hosts perhaps what is the strongest magnetic anomaly in the James Bay Lowlands. This area first attracted attention in the 1950’s following the early Federal airborne surveys. In 1957 Stadacona Rouyn Mines Limited conducted a drill program of 12 holes, all of which terminated in limestone and the deepest of which reached 500 feet. It is
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now estimated that the area is underlain by thicknesses of up to 300 metres of Paleozoic limestone, and the crystalline basement below the limestone has not yet been tested.
The purpose of the Quantec MT is to further refine drill target areas, and the survey, to consist of about 130 stations, will take about four weeks to accomplish. The Quantec MT survey is designed to search for conductive zones down to depths of 1.5 kms and will be most useful in planning a drill campaign at Desolation Lake later this year.
QUEBEC PROPERTIES
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100% Owned Lac Lamelee Property, Quebec
In February, 2011, the Company increased its interest in the Lac Lamêlée iron property located in the Fermont district of Quebec to 100% through the transfer of 375,000 shares of Champion Minerals Inc. to its partner who will retain a 1.5% NSR of which 0.5% can be bought back for $1.5M. An advance royalty of $100,000 per year is to be paid quarterly.
The property consists of 29 claims and covers 1537 hectares (3843 acres) and is centrally located, 10 km northwest of Arcelor Mittal’s operating Fire Lake mine and 5 km south of Consolidated Thompson’s Lamêlée deposit with its stated 43-101 compliant indicated resource of 641,719,200 tonnes @ 30.3% Fe oxide (Lamêlée-Peppler Iron Property 43-101 Technical Report August 29, 2009).
It is notable that Fancamp’s Lac Lamêlée property has an airborne magnetic signature similar in size and intensity to that seen over the Lamêlée deposit just described. Permit applications have been submitted for a drill program scheduled for the start of the field season at the end of June.
Champion Minerals Inc., Fancamp’s joint venture partner on 18 other properties in the region retains its right of first refusal on the property
QUEBEC EASTERN TOWNSHIP PROPERTIES
The Company is currently one of the largest property owners in the Eastern Townships of Quebec, holding twenty five properties. This includes control of a total of 128 miles (205 km) strike length of prospective structure and stratigraphy. A VTEM Airborne EM survey is presently being flown over this group. Ongoing compilation work has identified numerous gold and base metal showings. The properties which are currently being explored are outlined below:
100% Owned Beauce Property, Quebec
The Company is testing further targets on this property which includes the historic Gilbert River placer deposits, the site of Canada's first major gold rush in the 1840's and 50's. These placers, located in the small Gilbert River Valley, on the eastern side of the Chaudiere River 60 miles (96km) south of Quebec City, were characterized by the presence of large fist size nuggets. These placers of pre-glacial age are restricted to the valley itself and are in the Company's opinion locally derived. They can be considered, in a geochemical sense, to be a major gold anomaly. To date, no definite bedrock source has yet been identified, although the Company's reconnaissance drilling in the area last fall indicated the presence of highly prospective silicification and quartz vein systems. This property has been covered by the VTEM survey and further targets are being identified.
Option to Acquire a 100% interest in the Stoke Mountain Property, Quebec
The Company has an option to acquire a 100% interest in 44 claim units of a prospective gold, copper and zinc property, located some 56 miles southwest of the Company’s Beauce gold property. The Company also acquired an additional 131 claim units by staking. The Company is undertaking a 2,500 metre plus reconnaissance drill program on this property and the Clinton Property.
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Activities to date have included geophysics, trenching, sampling and drilling. The results will permit the Company to focus on a more defined area to determine the nature, extent and quality of mineralization.
The discovery of angular boulders in the Spring of 2010 with grades up to 23.4%Zn and 2.74%Cu led the Company to execute a power stripping programme over some 150 metres strike length. This work exposed a distinctive, highly altered volcaniclastic unit showing numerous fragments of jasperoid, widespread disseminated sulphides and local bands of massive pyrite. The Company intends to focus future exploration activities on determining the source of the mineralized boulders. Channel sampling reported 1.32g/t gold over 4.0 m, including 4.0g/t gold and 0.61%Zn over 1.0 m. Assay results from hole ST-10-06, drilled some forty five metres beneath this occurrence, reported 6.21g/t Au over 4.2 m, including 22.4g/t Au, 7.73%Zn, 1.73%Cu, 2.62%Pb and 231 g/t Ag over 1.0 m. It is notable that high mercury, indium and tellurium values occur within this 1 metre interval and suggest epithermal mineral assemblages typical of many high grade Nevada gold deposits. The prospective VMS horizon has a strike length of about 1,200 metres and is the focus of current drilling. Previous exploration work by Phelps Dodge in the 1990’s,which reported 6.34%Cu over 5.1m in a shallow drill hole, provides additional evidence of the potential for a massive sulphide body, and the accompanying extensive black chlorite alteration together with a coincident strong Bouger gravity anomaly, supports this view. The first five holes of the programme, drilled on geophysical targets, did not intersect significant mineralization. Three of these holes are located 6.5 km NE of the main trench; two lie at either end of the 1,200 metre VMS horizon.
Option to Acquire a 100% interest in the Clinton VMS Prospects, Quebec
The Company has an option to earn a 100% interest in 117 claim units which include a prospective copper zinc VMS trend located approximately 54 miles south of the Company’s Beauce gold property. The north block contains six mineralized lenses spread out along a strike length of approximately 6 km as well as a further 10 km of favourable strike length to the southwest which has not previously been tested. The south block covers additional prospective stratigraphy. The Company also acquired an additional 235 claim units in this area by staking. A VTEM survey has been completed and a 2,500 metre plus reconnaissance drill program on this property and the Stoke Mountain Property is continuing.
Option to Acquire a 100% interest in the Brompton Copper Property, Quebec
The Company has acquired an option on the Brompton Copper Property, situated some 18km NE of Sherbrooke in Quebec’s Eastern Townships. This property contains an historic non 43-101 compliant resource of 371,187 tons of 1.95% Cu in the so called “north zone” and 90,700 tons grading 1.4% Cu in the “south zone” (GM 49121,23). The prospective ultrabasic host structure has some 3.4 km strike length on the property, and as yet only 0.6 km has been tested, mainly to depths of less than 200 metres. This property has been covered by the VTEM survey and ground geophysics is underway on newly identified conductive targets.
JOINT VENTURES
Champion Minerals Inc. – Fermont Property, Quebec
Fancamp maintains a 17.5% working interest in the current joint venture agreement with Champion Minerals Inc. (Champion) in the Mount Wright-Fermont Iron District of Quebec, where Champion has earned and purchased a total 82.5% interest in 18 separate Iron properties from Fancamp and its partner The Sheridan Platinum Group Ltd., who together retain an underlying 3% Net Smelter Returns royalty of which 1% may be bought back for $3.0M.
The results of an initial 43-101 compliant mineral resource estimate for the Harvey-Tuttle property has been released by Champion Minerals Inc. The total inferred mineral resources is estimated at 717 million tonnes grading 25.0 percent total iron at a 20 percent cut-off and 947 million tonnes grading 23.2 percent total iron at a 15 percent cut-off. Three of the Cluster 2 Fermont Properties, Fire Lake North, Bellechasse
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and Harvey-Tuttle, now contain a total 43-101 compliant inferred mineral resource of over 1.5 billion tonnes grading 25.4 percent iron.
A 60,000 metre drilling campaign planned for 2011 on the Fermont Properties has been outlined by Champion Minerals Inc., the operator and is currently underway. This drill program includes 12,500 metres of diamond drilling at Harvey-Tuttle to extend and delineate the known higher-grade areas. Fancamp will fund its proportionate interest in this program.
50% Owned Villebon Property, Quebec
The Company’s 50% held (50% Sheridan Platinum Group) nickel-copper-PGE project, known as the Villebon Property, in northern Quebec, has been optioned to LiteWave Corp. and St-Georges Minerals Inc.
To acquire up to 100% ownership in the property, St-Georges was to issue a total of 2,250,000 common shares to Fancamp and Sheridan. Litewave will be required pay the vendors $200,000 over two years and then an annual advance royalty payment of $20,000 at the end of the third year. The Property is subject to a 2% Net Smelter Return (“NSR”) on 18 claims and to a 1% NSR on the 5 claims covering the Villebon Zone. A total of 1% of the 2% NSR can be purchased for $1,000,000.
On December 10, 2009, St-Georges Platinum and Base Metals Ltd. (“SX”) entered into an acquisition agreement to acquire the properties of St-George Minerals Ltd. (“SGM”) whereby the shares of SX will be dividended to the shareholders of SGM whereby each holder of a share of SGM will receive 2 shares of SX. As a result, the Company has received a total of 2,250,000 common shares of SX.
Other Properties
See Note 5 – Mineral Properties Interests attached to the financial statements for the year ended January 31, 2011 for further information on the Company’s other mineral property holdings.
INVESTMENT IN THE MAGPIE MINES INC.
The Company has proposed that its 48.64% owned investment, The Magpie Mines Inc., be rolled out into a separate entity through an Initial Public Offering in 2011.
The Magpie Iron-Titanium property, which is 100% owned by The Magpie Mines Inc., is located in the North Shore area of the St. Lawrence River, about 130 kilometres (81 miles) north of tidewater, at a point approximately forty kilometres (25 miles) west of Havre St. Pierre in the Province of Quebec. The property itself consists of 99 claims with a total area of 5,316 hectares or 13,291 acres. The Iron-Titanium deposits are evidenced by outcrops in a series of prominent en echelon ridges in a corridor approximately 7.25kms (4.5 miles) long and 600 metres (2000 ft) wide. The ridges stand up to 250 metres (800 feet) above the surrounding country, lending themselves to low cost mining methods.
The Magpie Deposits are among the world's largest undeveloped titaniferous magnetite deposits with a historical non-43-101 compliant resource estimate totalling 1.1 B Tons @43% Fe and 11% TiO2 with subsidiary values of chromium and vanadium.
In late 2008, Fancamp and Sheridan completed three diamond drill holes on the Magpie Deposit # 2, a 3.52 km (2.2 mile) long section of the Magpie having a non-43-101 compliant historic resource of 912,474,000 tons grading 43.1% Fe and 10.6% TiO2. These holes were drilled from west to east, on two EW profiles, 600 metres (2000 ft) apart. Hole 1 was drilled at a dip of -50 degrees on the southern profile, and intersected massive titaniferous magnetite over 400 metres (1306 ft) in the hole. Holes 2 and 3 were drilled on the northern profile. Hole 2 drilled at a dip of -50 degrees intersected 290 metres (960 ft) of massive titaniferous magnetite. Hole 3, drilled from the same setup, at -70 degrees, intersected 70 metres (230 ft) of massive titaniferous magnetite and was terminated in that mineralization. This is the
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only section of the deposit with NI 43-101 reserves and consists of about one third of the strike length of Deposit #2.
In a 43-101 compliant report prepared by Genivar LP of Val D’Or, Québec and GeoForbes Services Inc., of Sept-Iles, Québec, dated July 2009, the authors report an indicated resource of 84 M tonnes @42.4%Fe, 10.7%TiO2 and 1.6% Cr and an inferred resource of 201 M tonnes of 42.1% Fe,10.6% TiO2 and 1.5% Cr. This report has been filed on SEDAR and is also available on the Fancamp website.
SUMMARY OF QUARTERLY RESULTS
Selected financial information for the quarter ended January 31, 2011 and the preceding 7 quarters:
Three Months Ended
Mineral Property Option and Royalty Revenue Net Income (Loss) Income (Loss) Per Share Fully Diluted Income (Loss) Per Share
Three Months Ended
Mineral Property Option Revenue Net Income (Loss) Income (Loss) Per Share Fully Diluted Income (Loss) Per Share
4th Quarter April 30, 2010
$311,853 $676,337 $0.01 $0.01
4th Quarter April 30, 2009
($60,369) ($1,127,373) ($0.04) ($0.04)
1st Quarter July 31, 2010
$1,100,500 $1,0 55,38 4 $0.0 2 $0.0 2
1st Quarter July 31, 2009
$ 38,98 1 $548 $0.0 0 $0.0 0
2nd Quarter October 31, 2010
$87,500 $ 2,667 $0.00 $0.00
2nd Quarter October 31, 2009
$2 5,000 ($21,616)
$0.01 $0.01
3rd Quarter January 31, 2011
$12,500 ($328,028) ($ 0.01) ($ 0.01)
3rd Quarter January 31, 2010
$114,500 ($348,051) ($ 0.01) ($ 0.01)
The net income for the current quarter is from advance royalty payments. Net income in other periods resulted from a combination of property option and royalty payments, while the losses incurred are mainly due to the costs attributed to stock based compensation.
LIQUIDITY AND CAPITAL RESOURCES
The Company is an exploration stage company in the business of mineral exploration. It is in the process of exploring its mineral properties interests and has not yet determined whether these properties contain ore reserves that are economically recoverable. With no producing properties, the Company has no current operating income or cash flow. All of the Company’s short and medium-term operating and exploration cash flow is derived through external financing, joint venture option and royalty payments.
The Company had working capital of $13,607,386 as at January 31, 2011 (2010 - $6,471,438). Also see Note 9 “Contingencies” attached to the financial statements. OFF BALANCE SHEET ARRANGEMENTS The Company has no off balance sheet arrangements.
RELATED PARTY TRANSACTIONS
See Note 7 “Related Party Transactions and Balances” attached to the financial statements. In addition, the Company has a number of joint ventures with Sheridan Platinum Group.
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SUBSEQUENT EVENTS
See Note 10 “Subsequent Events” attached to the financial statements.
RISK AND UNCERTAINTIES
The Company is in the mineral exploration and development business and as such, is exposed to a number of risks and uncertainties inherent in this business. The industry is capital intensive and subject to fluctuations in metal prices, market sentiment, foreign exchange and interest rates. There is no certainty that properties which the Company has deferred as assets on its balance sheet will be realized at the amounts recorded.
The only source of future funds for further exploration programs or for the development and commercial production of economic ore bodies are the sale of equity capital or the offering by the Company of an interest in its properties to be earned by another party carrying out further exploration or development. There is no assurance that such sources of financing will be available, however, management feels that it can achieve success in this area for the near future.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses for the period. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in operations in the period in which they become known.
In accordance with CICA Handbook Section 3870 (“Section 3870”), Stock-Based Compensation and Other Stock-Based Payments, the Company recognizes stock-based compensation expense for the estimated fair value of equity-based instruments granted to both employees and non-employees. Compensation costs attributable to stock options or similar equity instruments granted to employees are measured at the fair value at the grant date, and expensed over the expected vesting period. Transactions in which goods or services are received from non-employees in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.
Long-lived assets of the Company are reviewed when changes in circumstances suggest their carrying value has become impaired. Management considers assets to be impaired if the carrying value exceeds the estimated undiscounted future projected cash flows to result from the use of the asset and its eventual disposition. If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.
Future income tax assets and liabilities are recorded where the accounting net book value of assets and liabilities differ from their corresponding tax bases. The benefit of future income tax assets is only recognized when their realization is considered more likely than not.
The Company recognizes into income a future income tax benefit on the renouncement of Canadian exploration expenditures to its flow-through share investors.
CHANGES IN AND ADOPTION OF ACCOUNTING POLICIES
The Company did not make any changes to its accounting policy during the year.
NEW ACCOUNTING PRONOUNCEMENTS
The following pronouncement recently issued by the Canadian Institute of Chartered Accountants (“CICA”) will likely impact the Company’s future accounting policies:
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In January 2009, the CICA issued Section 1582 “Business Combinations” to replace Section 1581. Prospective application of the standard is effective January 1, 2011, with early adoption permitted. This new standard effectively harmonizes the business combinations standard under Canadian GAAP with International Financial Reporting Standards (“IFRS”). The new standard revises guidance on the determination of the carrying amount of the assets acquired and liabilities assumed, goodwill and accounting for non-controlling interests at the time of a business combination.
The CICA concurrently issued Section 1601 “Consolidated Financial Statements” and Section 1602 “Non- Controlling Interests” which replace Section 1600 “Consolidated Financial Statements. Section 1601 provides revised guidance on the preparation of consolidated financial statements and Section 1602 addresses accounting for non-controlling interests in consolidated financial statements subsequent to a business combination. These standards are effective January 1, 2011, unless they are early adopted at the same time as Section 1582 “Business Combinations”.
In January 2009, the CICA issued EIC Abstract 173, “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities”. The EIC requires the Company to take into account the Company’s own credit risk and the credit risk of the counterparty in determining the fair value of financial assets and financial liabilities, including derivative instruments. The abstract applies to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2010. The Company is currently assessing the impact of the new standard on its financial statements.
In December 2009, the CICA issued EIC 175, Multiple Deliverable Revenue Arrangements, replacing EIC 142, Revenue Arrangements with Multiple Deliverables. This abstract was amended to: (1) provide updated guidance on whether multiple deliverables exist, how the deliverables in an arrangement should be separated, and the consideration allocated; (2) require, in situations where a vendor does not have vendor specific objective evidence (“VSOE”) or third-party evidence of selling price, that the entity allocate revenue in an arrangement using estimated selling prices of deliverables; (3) eliminate the use of the residual method and require an entity to allocate revenue using the relative selling price method; and (4) require expanded qualitative and quantitative disclosures regarding significant judgments made in applying this guidance.
The accounting changes summarized in EIC 175 are effective for fiscal years beginning on or after January 1, 2011, with early adoption permitted. Adoption may either be on a prospective basis or by retrospective application. If the Abstract is adopted early, in a reporting period that is not the first reporting period in the entity’s fiscal year, it must be applied retroactively from the beginning of the Company’s fiscal period of adoption.
In February 2008 the Canadian Accounting Standards Board announced 2011 as the changeover date for publicly listed companies to use IFRS, replacing Canada’s own generally accepted accounting principles. The specific implementation is set for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The transition date of May 1, 2011 will require restatement for comparative purposes of amounts reported by the Company for the year ended April 30, 2011. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.
The Company’s conversion plan to transition from Canadian GAAP to IFRS consists of three phases:
• Phase 1 (Scoping and diagnostic) – A preliminary diagnostic review which included the determination, at a high level, of the financial reporting differences and options under IFRS and the key areas that may be impacted was completed in 2010.
• Phase 2 (Impact analysis, quantification and evaluation) – In this phase, the Company will perform a detailed assessment and technical analysis of each area identified from Phase 1 that will result in the conclusion of IFRS transitional adjustments, decisions on accounting policy choices and the drafting of
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accounting policies. The Company has started this second phase with completion expected in the second quarter of 2011.
• Phase 3 (Implementation phase) – This phase includes the collection of financial information necessary to compile IFRS compliant financial statements and the preparation of the opening balance sheet as at May 1, 2010 and will be carried out in the second half of its fiscal year 2011.
The Company will also continue to monitor standards development as issued by the IASB and the AcSB as well as regulatory developments as issued by the Canadian Securities Administrators, which may affect the timing, nature or disclosure of its adoption of IFRS.
The Company is currently assessing the future impact of these amendments on its financial statements and has not yet determined the timing and method of its adoption but believes that changes will be minimal and that the systems and processes can accommodate any necessary changes.
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The information provided in this report, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the financial statements.
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by the annual filings, that the Company’s disclosure controls and procedures as of the end of such period are effective to provide reasonable assurance that material information related to the Company, is made known to them by others within those entities. It should be noted that while the Company’s Chief Executive Officer and Chief Financial Officer believe that the Company’s disclosure and controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the disclosure controls and procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
INTERNAL CONTROLS OVER FINANCING REPORTING
The Chief Executive Officer and the Chief Financial Officer of the Company are responsible for designing a system of internal controls over financial reporting, or causing them to be designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with Canadian generally accepted accounting principles. We have designed and implemented a system of internal controls over financial reporting which we believe is effective for a company of our size. During the review of the design of the Company’s control system over financial reporting it was noted that due to the limited number of staff, there is an inherent weakness in the system of internal controls due to our inability to achieve appropriate segregation of duties. The limited number of staff may also result in identifying weaknesses with respect to accounting for complex and non-routine transactions due to a lack of technical resources, and a lack of controls governing our computer systems and applications within the Company. While management of the Company has put in place certain procedures to mitigate the risk of a material misstatement in the Company’s financial reporting, it is not possible to provide absolute assurance that this risk can be eliminated.
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CAUTION REGARDING FORWARD LOOKING STATEMENTS
Statements contained in this document, which are not historical facts, are forward looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. Factors that could cause differences include, but are not limited to, are volatility and sensitivity to market prices for base metals, environmental and safety issues, changes in government regulations and policies and significant changes in the supply- demand fundamentals for base metals that could negatively affect prices. Although the Company believes that the assumptions used are reasonable, these statements should not be heavily relied upon. The Company disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise.
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CORPORATE INFORMATION – AS AT JANUARY 31, 2011
TSX Venture Exchange
Authorized Capital: Shares Outstanding: Fully Diluted Shares Outstanding:
Head Office:
Regional Office:
Transfer Agent:
Auditor:
Legal Counsel:
Directors:
Advisory Board:
Field Staff:
Trading Symbol: FNC
Unlimited common shares 62,962,509 common shares 80,506,472 common shares
7290 Gray Avenue Burnaby, B.C., V5J 3Z2 Telephone: 604-434-8829 Facsimile: 604-434-8823
340 Victoria Avenue Westmount, Quebec, H3Z 2M8 Telephone: 514-481-3172 Facsimile: 514-481-8943
Computershare 2nd Floor, 510 Burrard Street Vancouver, B.C., V6C 3B8
Chang Lee LLP 606-815 Hornby Street Vancouver, B.C., V6Z 2E6
Paul Bowes Salley Bowes Harwardt LP 1750-1185 West Georgia Street Vancouver, B.C., V6E 4E6
Robert Granger Q.C., Director, Chairman Peter H. Smith, PhD., P.Eng., Director, CEO, President Debra Chapman, Director, CFO, Secretary Gilles Dubuc, Director Michael Sayer, Director Fouad Kamaleddine, PhD., P.Eng., Director Mel De Quadros, PhD., P.Eng., Director
Mackenzie I. Watson, P.Eng Edward G. Thompson, P.Eng. John Harvey, P.Eng. Mark Billings, MBA
Mike Flanagan, M.Sc.A., P.Geo. Jean Bernard, B.Sc. Jean Laforest, B.Sc.A., P.Geo
For further information see the Company’s website: www.fancampexplorationltd.ca
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