Notice

NOTICE TO READER


ALMADEN

MINERALS LTD.

 

 

1103 - 750 West Pender St.

Vancouver, B.C.  V6C 2T8

Tel:   604 - 689 - 7644

Fax:   604 - 689 - 7645

Email: info@almadenminerals.com


 





NOTICE TO READER



In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the unaudited interim consolidated financial statements for the period ended March 31, 2004.




ALMADEN MINERALS LTD.

Consolidated Interim Balance Sheets

 

March 31, 2004 and December 31, 2003


  

March 31,

2004

 

December 31,

2003

  

(unaudited)

 

(audited)

ASSETS

    
     

CURRENT

    

    Cash and cash equivalents

$

4,706,710

$

4,838,914

    Accounts receivable and prepaid expenses

 

218,851

 

105,106

    Marketable securities (Note 3)

 

518,018

 

369,286

    Inventory (Note 4)

 

274,768

 

274,768

TOTAL CURRENT ASSETS

 

5,718,347

 

5,588,074

PROPERTY, PLANT AND EQUIPMENT

 

534,841

 

474,521

RECLAMATION DEPOSIT

 

81,500

 

81,500

MINERAL PROPERTIES (Note 5)

 

4,256,781

 

4,197,675

TOTAL ASSETS

$

10,591,469

$

10,341,770

     

LIABILITIES

    
     

CURRENT

    

    Accounts payable and accrued liabilities

$

69,630

$

 49,625

    Deferred exploration advances  (Note 6)

 

13,499

 

58,011

    Mineral taxes payable

 

379,653

 

379,653

TOTAL CURRENT LIABILITIES

 

462,782

 

487,289

     

SHAREHOLDERS’ EQUITY

    
     

Share capital

    

    Authorized

    

       100,000,000 common shares without par value

    

    Issued (Note 7)

    

        29,773,267 shares – March 31, 2004

    

        27,627,079 shares – December 31, 2003

 

23,749,772

 

21,476,722

    Subscription for shares (Note 7)

 

-

 

1,699,435

    Contributed surplus (Note 2)

 

399,334

 

374,525

Deficit accumulated during the exploration stage

 

(14,020,419)

 

(13,696,201)

TOTAL SHAREHOLDER’S EQUITY

 

10,128,687

 

9,854,481

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

10,591,469

$

10,341,770




ON BEHALF OF THE BOARD:


“Duane Poliquin”

                                                              

Duane Poliquin, Director



“James E. McInnes”

                                                               

James E. McInnes, Director



ALMADEN MINERALS LTD.

Consolidated Interim Statements of Operations and Deficit

 

Three month periods ended March 31, 2004 and 2003

(unaudited)


  

Three Months ended March 31,

  

2004

 

2003

     
     

REVENUE

    

    Mineral properties

$

19,866

$

-

    Interest income

 

24,985

 

11,707

    Other income

 

17,831

 

-

  

62,682

 

11,707

     

EXPENSES

    

    General and administrative expenses (Schedule)

 

159,979

 

110,766

    General exploration expenses

 

182,024

 

148,428

    Write-down of interests in mineral properties

 

13,003

 

3,618

    Stock option compensation (Note 7)

 

28,963

 

156,900

  

383,969

 

419,712

  

(321,287)

 

(408,005)

LOSS ON SECURITIES

 

(10,576)

 

(15,666)

FOREIGN EXCHANGE GAIN (LOSS)

 

7,645

 

(8,938)

NET LOSS

 

(324,218)

 

(432,609)

DEFICIT, ACCUMULATED DURING

  EXPLORATION STAGE, BEGINNING

  OF PERIOD

 



(13,696,201)

 



(12,207,896)

     

DEFICIT, ACCUMULATED DURING

  EXPLORATION STAGE, END OF PERIOD


$


(14,020,419)


$


(12,640,505)

     
     

NET LOSS PER SHARE

   Basic and diluted


$


(0.01)


$


(0.02)

     

BASIC AND DILUTED WEIGHTED AVERAGE

   NUMBER OF COMMON SHARES OUTSTANDING



29,310,332



21,970,200




ALMADEN MINERALS LTD.

Consolidated Interim Statements of Cash Flows

 

Three month periods ended March 31, 2004 and 2003

(unaudited)


  

Three Months Ended March 31,

  

2004

 

2003

     

OPERATING ACTIVITIES

    

    Net loss

$

(324,218)

$

(432,609)

    Items not affecting cash

    

      Depreciation

 

12,131

 

7,891

      Loss on securities

 

10,576

 

15,666

      Write-down of interests in mineral properties

 

13,003

 

 3,618

      Stock-based compensation

 

28,963

 

156,900

Change in non-cash working capital components

    

      Accounts receivable and  prepaid expenses

 

(113,745)

 

(31,622)

      Accounts payable and accrued liabilities

 

20,005

 

103,851

      Mineral taxes payable

 

-

 

(12,800)

      Deferred exploration advances

 

(44,512)

 

       -

  

(397,797)

 

(189,105)

     

FINANCING ACTIVITIES

    

    Issuance of shares - net of expenses

 

569,461

 

133,356

     

INVESTING ACTIVITIES

    

  Marketable securities

 

(138,156)

 

216,702

  Property, plant and equipment

    

     Purchases

 

(72,451)

 

(5,323)

  Mineral properties

    

     Costs

 

(93,261)

 

(195,803)

  

(303,868)

 

15,576

     

NET CASH (OUTFLOW) INFLOW

 

(132,204)

 

(40,173)

     

CASH AND CASH EQUIVALENTS,

  BEGINNING OF PERIOD

 


4,838,914

 


964,967

     

CASH AND CASH EQUIVALENTS,

  END OF PERIOD


$


4,706,710


$


924,794




ALMADEN MINERALS LTD.

Note to Consolidated Interim Financial Statements

 

March 31, 2004

(unaudited)



1.

BASIS OF PRESENTATION


These interim unaudited consolidated financial statements do not include all the disclosure required by Canadian generally accepted accounting principles for annual statements and should be read in conjunction with the annual audited financial statements for the year ended December 31, 2003, specifically the following Notes: Note 1 on the Nature of Operations; Note 2 on Significant Accounting Policies; Note 3 on Accounting Changes; and Note 16 on Contingency. These statements are prepared in accordance with recommendations for interim financial statements in conformity with Canadian generally accepted accounting principles.  They have been prepared using the same accounting policies and methods as those used in the December 31, 2003 accounts.



2.

ACCOUNTING CHANGES


At December 31, 2003, the Company adopted the fair value based method of accounting for stock-based compensation. This change has been applied retroactively and the interim financial statements for the three months ended March 31, 2003 have been restated. The effect of this change was to increase the net loss for the three months ended March 31, 2003 by $156,900 for a net loss of $432,609 and an increase in loss per share to $0.02. The contributed surplus balance at December 31, 2003 was $374,525 and at March 31, 2004 was $399,334.



3.

MARKETABLE SECURITIES


  

March 31,

 

December 31,

  

2004

 

2003

     

Money market investments

$

123,805

$

163,049

Equity securities

 

394,213

 

206,237

 

$

518,018

$

369,286


The market value of the investments as at March 31, 2004 was $1,079,265 (December 31, 2003 - $780,834).



4.

INVENTORY


Inventory consists of gold bullion which is valued at the lower of average cost of mining and estimated net realizable value. The market value of the gold at March 31, 2004 is $889,861 (December 31, 2003 - $859,681).



ALMADEN MINERALS LTD.

Note to Consolidated Interim Financial Statements

 

March 31, 2004

(unaudited)



5.

MINERAL PROPERTIES

  

March 31, 2004

 

December 31,

2003

Canada

    

Elk

  100% interest in mineral claims in British Columbia

  which includes the Siwash gold deposit



$



1,680,927



$



1,644,696

ATW

  Net 30% interest in mineral claims near Lac De Gras, Northwest Territories




183,943





171,461

PV

  100% interest in mineral claims in British Columbia

 


127,532

 


124,421

MOR

  100% interest in mineral claims in the Yukon Territory

 


31,735

 


62,024

Rock River Coal

  50% interest in 187,698 acre coal prospect in the Yukon Territory

 



43,707

 



43,707

Cabin Lake

  100% interest in mineral claims in the Yukon Territory

 


17,123

 


35,000

Caribou Creek

  100% interest in mineral claims in the Yukon Territory

 


22,800

 


35,000

     

Mexico

    

Caballo Blanco

  Option to purchase 100% interest in mineral claims in Veracruz State




494,711

 



522,756

El Pulpo

  100% interest in mineral claims in Sinaloa State

 


55,787

 


95,203

San Carlos / San Jose

  100% interest in the San Carlos and San Jose mineral claims   in Tamaulipas State

 



258,452

 



244,590

Galeana

  Option to purchase 100% interest in mineral claims in

  Chihuahua State

 



93,502

 



118,272

Yago / La Sarda

  100% interest in mineral claims in Nayarit State

 


848,975

 


799,505

Fuego

  100% interest in mineral claims in Oaxaca State

 


100,547

 


30,372

     

Interests in various other mineral claims

 

297,040

 

270,668

 

$

4,256,781

$

4,197,675





ALMADEN MINERALS LTD.

Note to Consolidated Interim Financial Statements

 

March 31, 2004

(unaudited)



5.

MINERAL PROPERTIES (Continued)


(a)     Fuego


During the first three months ended March 31, 2004, the Company entered into an agreement with Horseshoe Gold Mining Inc. (“Horseshoe”). To earn an initial 50% interest, Horseshoe must maintain the property in good standing, incur exploration expenditures totalling US$2,000,000 and issue 1,000,000 shares to the Company by December 31, 2006. Horseshoe can increase its interest to 60% by incurring an additional $1,000,000 of exploration expenditures by December 31, 2007.


(b)     San Carlos


During the first three months ended March 31, 2004, the Company entered into an agreement with Hawkeye Gold & Diamond Inc. (“Hawkeye”). To earn an initial 51% interest, Hawkeye must maintain the property in good standing, incur exploration expenditures totalling US$2,000,000 by March 15, 2008 and issue 500,000 shares to the Company by March 15, 2007. Hawkeye can increase its interest to 60% by incurring an additional $2,000,000 of exploration expenditures by March 15, 2011 and issuing a further 300,000 shares to the Company by March 15, 2010.


(c)     Guadalupe


During the first three months ended March 31, 2004, the Company entered into an agreement with Grid Capital Corporation (“Grid”). To earn an initial 50% interest, Grid must maintain the property in good standing, incur exploration expenditures totalling US$1,000,000 and issue 400,000 shares to the Company by June 30, 2007. Grid can increase its interest to 60% by incurring an additional $1,000,000 of exploration expenditures and issuing a further 100,000 shares to the Company by December 31, 2008.


(d)     PV and Nic


During the first three months ended March 31, 2004, the Company entered into an agreement with Consolidated Spire Ventures Ltd. (“Spire”). To earn a 60% interest, Spire must incur exploration expenditures totalling US$1,300,000 by December 31, 2007 and issue 600,000 shares to the Company by January 10, 2007.



6.

DEFERRED EXPLORATION ADVANCES


At March 31, 2004, the Company has deferred $13,499 received from BHP Billiton World Exploration Inc. in advance of exploration.  These funds will be used for further exploration in eastern Mexico.




ALMADEN MINERALS LTD.

Note to Consolidated Interim Financial Statements

 

March 31, 2004

(unaudited)



7.  

SHARE CAPITAL


The changes in issued shares since December 31, 2003 to March 31, 2004 are as follows:


 

Number

 

Amount

    

Balance, December 31, 2003

27,627,079

$

21,476,722

For cash pursuant to private placement

1,300,000

 

1,699,435

For cash on exercise of share purchase warrants

786,188

 

545,211

For cash on exercise of stock options

60,000

 

28,404

Balance, March 31, 2004

29,773,267

$

23,749,772


On January 12, 2004, the Company completed a private placement of 1,300,000 common shares at a price of $1.32 per share, after incurring share issue costs of $16,565.  These funds were received by the Company prior to December 31, 2003 and were recorded as a subscription for shares.


Warrants


 

Number of

Warrants

 


Expiry Date

 

Exercise

Price Range

      

Outstanding,

  December 31, 2003


3,324,544

 

March 13, 2004 to

   September 18, 2008

 


$0.47 to $2.25

Exercised

(786,188)

 

-

 

$0.60 to $1.60

Outstanding,

  March 31, 2004


2,538,356

 

October 1, 2004 to

   September 18, 2008

 


$0.47 to $2.25


At March 31, 2004, the following share purchase warrants were outstanding:


Number of

Warrants

 


Expiry Date

 

Exercise

Price Range

1,729,000

 

September 18, 2004/2005/

   2006/2007/2008

 

$         1.25/1.50/

1.75/2.00/2.25

450,450

 

October 1, 2004

 

0.47

19,300

 

October 15, 2004

 

0.70

27,501

 

October 28, 2004

 

1.60

103,750

 

August 7, 2005

 

0.80

140,000

 

December 30, 2005

 

1.85

68,355

 

December 30, 2005

 

2.25

2,538,356

    


At March 31, 2004, 77,000 of the warrants outstanding are held by directors (2003 – 77,000).




ALMADEN MINERALS LTD.

Note to Consolidated Interim Financial Statements

 

March 31, 2004

(unaudited)



7.  

SHARE CAPITAL (Continued)


Options


The Company has a fixed stock option plan which permits the issuance of options up to 10% of the Company’s issued share capital.  The maximum number of shares reserved for issuance under this plan is 2,000,000.  At March 31, 2004, the Company has reserved 1,955,000 stock options that may be granted.  The exercise price of an option cannot be less than the closing price of the common shares on the Toronto Stock Exchange on the day immediately preceding the grant of the option and the maximum term of all options is ten years.  The Company also has stock options outstanding relating to the period before the introduction of the fixed stock option plan.


The Board of Directors determines the term of the option (to a maximum of 5 years) and the time during which any option may vest.  All options granted during the three months ended March 31, 2004 vested on the date granted.


The following table presents the outstanding options as at March 31, 2004 and changes during the period:




Fixed Options

 

 

Shares

 

Weighted

Average

Exercise

Price

     

Outstanding at December 31, 2003

 

3,075,783

 

$ 0.53    

Granted

 

35,000

 

2.35    

Exercised

 

(60,000)

 

0.40    

Outstanding at March 31, 2004

 

3,050,783

 

$0.53    

Options exercisable at March 31, 2004

 

3,050,783

  


The following table summarizes information about stock options outstanding at March 31, 2004:

Options Outstanding and Exercisable

Number

 

Expiry

 

Exercise

of  Shares

 

Date

 

Price

     

77,000

 

May 4, 2005

 

$                 0.49

35,000

 

January 28, 2006

 

2.35

640,000

 

March 1, 2006

 

0.30

91,092

 

August 23, 2006

 

0.27

905,000

 

February 28, 2007

 

0.55

379,000

 

February 26, 2008

 

0.80

75,000

 

April 7, 2008

 

0.74

50,000

 

September 26, 2008

 

1.37

644,691

 

October 7, 2008

 

0.45

154,000

 

December 1, 2009

 

0.39

3,050,783

    




ALMADEN MINERALS LTD.

Note to Consolidated Interim Financial Statements

 

March 31, 2004

(unaudited)



7.  

SHARE CAPITAL (Continued)


The weighted-average grant date fair value assigned to stock options granted during the three months ended March 31, 2004 was $0.83.  The fair value of these options were determined on the date of the grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


Risk free interest rate

2.6%

Expected life

2 years

Expected volatility

61%

Expected dividends

$Nil



8.         RELATED PARTY TRANSACTIONS


A company controlled by the founding shareholder of the Company was paid $27,600 for technical services and website management during the three months ended March 31, 2004.  


A company controlled by a relative of the founding shareholder of the Company was paid $20,606 for geological services during the three months ended March 31, 2004.


An officer of the Company was paid $15,613 for professional services rendered during the three months ended March 31, 2004.


9.         COMPARATIVE FIGURES


Certain of the March 31, 2003 comparative figures have been reclassified to conform with the financial statement presentation adopted at December 31, 2003.




ALMADEN MINERALS LTD.

Consolidated Interim Schedule of General and Administrative Expenses

 

Three month periods ended March 31, 2004 and 2003

(unaudited)


  

Three Months Ended March 31,

  

2004

 

2003

     

Bank charges and interest

$

2,265

$

1,657

Consulting

 

    1,500

 

2,500

Depreciation

 

12,131

 

7,891

Insurance

 

1,634

 

1,484

Office and licenses

 

25,855

 

24,345

Professional fees

 

46,697

 

32,627

Rent

 

24,195

 

19,606

Stock exchange fees

 

13,425

 

11,245

Telephone

 

3,752

 

3,519

Transfer agent fees

 

3,387

 

1,587

Travel and promotion

 

25,138

 

4,305

 

$

159,979

$

110,766