During 2001, as outlined in last year’s annual report, Afri-Can completed successful prospecting surveys on marine concessions blocks B and J in Namibia, resulting in the delineation of numerous features that meet the models of existing diamond bearing entrapments mined elsewhere along the Namibian coast. These encouraging results have led Afri-Can to proceed with an initial sampling program in the block J concession, which was completed in December, 2001. The program succeeded in collecting 338 samples, surpassing its initial sampling target plan by 88 samples, from a total of 17 prospective features representing a variety of depositional environments.
The implementation of Afri-Can’s business strategy has placed the corporation among the active participants in the quest for diamonds in Namibia’s largely untapped offshore diamond areas. Afri-Can is now one of the largest marine concession holders and operators in Namibia with interests in 28 concessions totalling 26,500 square kilometres.
With these initial accomplishments in place, the road is now paved for the next stage of the company’s business plan — second stage prospecting of targeted areas to delineate diamond resources.
Results of operations: fiscal year 2001
For the fiscal year ended Aug. 31, 2001, the corporation incurred a net loss of $3,185,550 (six cents per share) compared with a net loss of $424,503 (one cent per share) for 2000. During 2001, Afri-Can recorded a non-recurring loss of $2,579,782 (five cents per share) from the writedown of the Kade concession investment in Ghana. General operating expenses during 2001 were $659,998 compared with $590,173 in 2000.
Mining properties
In accordance with its objective to find and develop world-class marine diamond resources and to control the largest marine exploration licence area off the coast of Namibia, the corporation has invested over $125,601 to increase its portfolio of marine concessions in Namibia.
The mining properties are valued at $5,856,026 as of Aug. 31, 2001 ($6,234,817 as of Aug. 31, 2000). The corporation’s major assets are 60-per-cent interest in the Namibian Gemstones EPL concessions joint venture (valued at $5,235,181 as of Aug. 31, 2001); 30-per-cent interest in the Woduna block J joint venture (valued at $372,408 as of Aug. 31, 2001); 30-per-cent interest in the Together Quando block B joint venture (valued at $160,705 as of Aug. 31, 2001); and 30-per-cent interest in the Karas block N joint venture (valued at $57,080 as of Aug. 31, 2001).
Exploration and development programs
In 2001, Afri-Can invested $1,104,265 in exploration, development and maintenance expenses to increase its geological understanding of its marine concessions in Namibia. Afri-Can completed regional marine delineation geophysical surveys on blocks J and B that identified numerous prospective diamond entrapment areas. These funds were invested as follows: $225,694 on the Namibian Gemstones joint venture for a total exploration and development investment and carrying value of $2,473,708 as of Aug. 31, 2001; $364,073 on the Woduna block J joint venture for a total exploration and development investment and carrying value of $626,503 as of Aug. 31, 2001; $342,857 on the Together Quando block B joint venture for a total exploration and development investment and carrying value of $361,127 as of Aug. 31, 2001; and $80,970 on the maintenance cost related to the company’s other Namibian joint ventures, giving these ventures a carrying value of $127,928 as of Aug. 31, 2001.
Financial and capital position
Afri-Can’s common shares increased from 42,922,900 (valued at $21,224,971) at the beginning of fiscal 2001 to 55,422,902 (valued at $23,941,861), representing $2,716,890 of net equity financing. During fiscal 2001, the corporation completed private placements totalling $2,568,520 resulting in the issuance of 11,574,287 common shares, issued 120,000 shares to increase the corporation’s property holdings and issued 805,715 common shares in exchange of a $282,000 convertible promissory note. As of Aug. 31, 2001, the corporation had $678,429 in its treasury.
