FORM 5 QUARTERLY LISTING STATEMENT. Name of CNQ Issuer: International Zimtu Technologies Inc. FINANCIAL STATEMENTS

Transcription

1 FORM 5 QUARTERLY LISTING STATEMENT Name of CNQ Issuer: International Zimtu Technologies Inc. (the Issuer ). Trading Symbol: ZMTU I N T L Z I M T U FINANCIAL STATEMENTS The interim financial statements for the second quarter ended August 31, 2004 are attached hereto as Schedule A. T E C H N O L O G I E S I N C. S u i t e W e s t P e n d e r S t 1. Related party transactions SUPPLEMENTARY INFORMATION The following is a description and approximate amount of transactions between the Issuer and Related Persons for the quarter ended August 31, 2004: V a n c o u v e r, B C. C a n a d a, V 6 C 1 H 2 t t f w w w. z i m t u. c o m a. Core Development Corp. ( Core ) is a private British Columbia company wholly owned by Shaun Ledding, a director of the Issuer. Core provides management services to Providence Diamond Corp., Evolving Gold Corp. and Solex Resources Corp., all of which are companies in which the Issuer has an interest. As at August 31, 2004, the Issuer held 157,919 common shares of Providence (2%), 157,919 common shares (2.5%) of Evolving and 1,930,420 Special Warrants (14%) of Solex Resources Corp. b. The Issuer has also entered into Administrative and Services Agreements with each of Cougar Minerals Corp and Doubloon Exploration Corp. for corporate, regulatory, and investor relations services. c. Bruce Bragagnolo, a director of the Issuer, is also the legal counsel of the Issuer. Mr. Bragagnolo did not stand for reappointment to the board at the Company s AGM and ceased to be a director on August 25, d. David Hodge, the President and a director of the Issuer, is paid a monthly salary of $6,500 by the Issuer pursuant to an employment agreement.

2 2. Summary of securities issued and options granted during the period a. The following is a summary of the securities issued/granted during the quarter ended August 31, Date of Issue Type of Security (common shares, convertible debentures, etc.) Type of Issue (private placement, public offering, exercise of warrants, etc.) Number Price Total Proceeds Type of Consideration (cash, property, etc.) Describe relationship of Person with Issuer (indicate if Related Person) 25/08/04 Common shares Exercise of warrants 160,000 $0.30 $48,000 Cash N/A Nil Commission Paid b. summary of options granted during the quarter ended August 31, No options were granted during the quarter ended August 31, Summary of securities as at the end of the reporting period. The following information details the outstanding share capital of the Issuer as at the first quarter ended August 31, 2004: Number $ Issued: Balance as at May 31, ,462,476 9,265,363 Issued for warrant exercise 160,000 48,000 Balance as at August 31, ,624,476 9,313, Directors and officers of the Issuer as at the date of this report. David Hodge President, Chief Executive Officer and a Director Shaun Ledding Director Jason Birmingham Director Alicia Cumming - Secretary MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis for the quarter ended August 31, 2004 is attached hereto as Schedule B.

3 Certificate Of Compliance The undersigned hereby certifies that: 1. The undersigned is a director and/or senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to sign this Quarterly Listing Statement. 2. As of the date hereof there is no material information concerning the Issuer which has not been publicly disclosed. 3. The undersigned hereby certifies to CNQ that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in National Instrument ) and all CNQ Requirements (as defined in CNQ Policy 1). 4. All of the information in this Form 5 Quarterly Listing Statement is true. Dated October 29, 2004 David Hodge Name of Director or Senior Officer David Hodge Signature President and Director Official Capacity Issuer Details Name of Issuer International Zimtu Technologies Inc. Issuer Address Suite 1450, 789 West Pender Street City/Province/Postal Code Vancouver, British Columbia V6C 1H2 Contact Name David Hodge Contact Address dhodge@zimtu.com For Quarter Ended August 31, 2004 Issuer Fax No. (604) Contact Position President Web Site Address Date of Report October 29, 2004 Issuer Telephone (604) Contact Telephone (604)

4 Schedule A INTERNATIONAL ZIMTU TECHNOLOGIES INC. INTERIM FINANCIAL STATEMENTS August 31, 2004 THE ACCOMPANYING FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2004 AND 2003 HAVE NOT BEEN REVIEWED OR AUDITED BY THE CORPORATION S AUDITORS.

5 TERRY AMISANO LTD. KEVIN HANSON, CA AMISANO HANSON CHARTERED ACCOUNTANTS NOTICE TO READER We have compiled the interim balance sheet of International Zimtu Technologies Inc. (formerly Zimtu Technologies Inc.) as at August 31, 2004 and the interim statements of loss, deficit and cash flows for the three and six months then ended from information provided by management. We have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information. Readers are cautioned that these statements may not be appropriate for their purposes. Vancouver, Canada October 13, 2004 Amisano Hanson Chartered Accountants 750 WEST PENDER STREET, SUITE 604 TELEPHONE: VANCOUVER CANADA FACSIMILE: V6C 2T7

6 INTERNATIONAL ZIMTU TECHNOLOGIES INC. INTERIM BALANCE SHEETS August 31, 2004 and February 29, 2004 August 31, February 29, ASSETS Current Cash $ 3,818 $ 3,366 Marketable securities 53, ,518 Accounts and advances receivable Note 7 48,617 5,810 Prepaid expenses 10,614 5,822 Due from related parties Note 7 24,957 38,872 Current portion of promissory notes receivable Note 5 51, , ,516 Capital assets 35,725 39,120 Promissory notes receivable Note 5 93,056 - Investments Note 4 66, ,118 Investment in Commerce Resource Corp. 258, ,631 Resource properties Note 3-82,500 $ 647,494 $ 653,757 LIABILITIES Current Accounts payable and accrued liabilities Note 7 $ 74,598 $ 130,673 GST payable 4,857 2,138 Deposits Note 7 34,110 - Advances payable 5,000 5,000 Due to related parties Note 7 30, , ,811 SHAREHOLDERS EQUITY Share capital Note 6 9,313,363 9,154,413 Share subscriptions - 145,650 Contributed surplus 154, ,450 Deficit (8,969,415) (8,936,567) 498, ,946 $ 647,494 $ 653,757 SEE ACCOMPANYING NOTES

7 INTERNATIONAL ZIMTU TECHNOLOGIES INC. INTERIM STATEMENTS OF LOSS for the three and six months ended August 31, 2004 and 2003 Three months ended August 31, Six months ended August 31, Administrative Expenses Accounting and legal $ 4,775 $ 26,240 $ 9,275 $ 26,240 Advertising and promotion 5,825 2,500 12,872 2,559 Amortization 3,198 3,198 6,395 6,395 Bank charges and interest Consulting fees 23,500 20,200 38,250 30,700 Equipment rental 1,614 1,102 3,273 2,754 Filing fees 5,476 5,218 12,384 8,040 Interest ,254 Investor relations 3,099-3,099 - Management fees Note 7-15,000-30,000 Office and miscellaneous 7,577 10,586 13,919 12,750 Printing and shareholder information ,294 1,292 10,891 Rent 12,030 2,768 23,123 5,973 Repairs and maintenance Stock-based compensation - 5,670 2,300 5,670 Telephone 2, ,389 3,426 Transfer agent 3,635 4,456 5,254 7,469 Travel - 10, ,064 Wages Note 7 50,274 21, ,331 42,662 Loss before other items: (124,281) (140,562) (238,173) (214,626) Other items Administrative fee income Note 7 81, ,500 - Management fee income Note 7 12,000 12,000 24,000 24,000 Gain on sale of equity investments 14, ,895 - Gain on sale of investment in Commerce Resources Corp. - 3,430-3,430 Interest income Gain (loss) on disposition of resource property Note 3 (9,125) 13,800 (9,125) 13,800 Gain (loss) on sale of marketable securities (1,535) 9,780 (12,757) 7,915 Other income - 9,083 10,236 Write-down of marketable securities (2,762) - (28,395) - 93,763 49, ,128 60,312 Net loss for the period $ (30,518) $ (91,538) $ (15,045) $ (154,314) Basic and diluted loss per share $ (0.01) $ (0.06) $ (0.01) $ (0.12) SEE ACCOMPANYING NOTES

8 INTERNATIONAL ZIMTU TECHNOLOGIES INC. INTERIM STATEMENTS OF DEFICIT for the six months ended August 31, 2004 and Deficit, beginning of the period $ (8,936,567) $ (8,561,294) Net loss for the period (15,045) (154,314) Dividends paid: By the distribution of 119,581 shares of Providence Diamond Corp. (2,428) - By the distribution of 119,581 shares of Evolving Gold Corp. (1,949) - By the distribution of 519,581 shares of Solex Resources Corp. (11,118) - By cash (2,308) - Deficit, end of the period $ (8,969,415) $ (8,715,608) SEE ACCOMPANYING NOTES

9 INTERNATIONAL ZIMTU TECHNOLOGIES INC. INTERIM STATEMENTS OF CASH FLOWS for the three and six months ended August 31, 2004 and 2003 Three months ended August 31, Six months ended August 31, Operating Activities: Net loss for the period $ (30,518) $ (91,538) $ (15,045) $ (154,314) Add (deduct) items not involving cash: Amortization 3,198 3,198 6,395 6,395 Stock-based compensation - 5,670 2,300 5,670 Write-down of marketable securities 2,762-28,395 - Loss (gain) on sale of resource property 9,125 (13,800) 9,125 (13,800) Less non-cash consideration - (10,000) - (10,000) Gain on sale of investment in Commerce Resources Corp. - (3,430) - (3,430) Loss (gain) on sale of marketable securities 1,534 (9,780) 12,757 (7,915) Gain on sale of investments, at equity (14,180) - (109,895) - Write-off of advances receivable (27,579) (119,680) (65,468) (177,394) Changes in non-cash working capital items related to operations: GST receivable - (3,014) - (4,729) Accounts and advances receivable (42,127) - (43,307) 22,379 Prepaid expenses and deposits (7,000) 638 (4,792) 1,623 Accounts payable and accrued liabilities 19,348 13,624 (21,980) (56,891) Deposits (7,640) - 34,110 - GST payable 1,078-2,719 - (63,920) (108,432) (98,718) (215,012) Investing Activities: Proceeds from sale of investment in Commerce Resources Corp. - 11,030-11,030 Proceeds from sale of resource property - 17,000-17,000 Acquisition of investments (15,001) (26,200) (46,001) (26,200) Proceeds from sale of marketable securities 30,666 28,730 49, ,315 Acquisition of resource properties - (39,600) (720) (39,600) Acquisition of marketable securities (28,350) - (28,470) - Acquisition of capital assets (3,000) - (3,000) - Repayment of promissory notes 31,529 32,529-15,844 (9,040) 4,032 84,545 SEE ACCOMPANYING NOTES

10 INTERNATIONAL ZIMTU TECHNOLOGIES INC. INTERIM STATEMENTS OF CASH FLOWS for the three and six months ended August 31, 2004 and 2003 Continued Three months ended August 31, Six months ended August 31, Financing Activities: Share subscriptions (utilized) - (32,531) - 39,793 Shares issued for cash 48, ,863 53, ,863 Advances from (to) related parties 13,295 (74,730) 44,146 (138,842) Advances repaid (9,000) Dividends paid (2,308) - (2,308) - 49,987 86,602 95,138 94,814 Increase (decrease) in cash for the period 1,911 (30,870) 452 (35,653) Cash, beginning of period 1,907 38,134 3,366 42,917 Cash, end of period $ 3,818 $ 7,264 $ 3,818 $ 7,264 Supplemental disclosure of cash flow information: Cash paid for: Interest $ - $ - $ - $ - Income taxes $ - $ - $ - $ - Non-cash transactions Note 2 SEE ACCOMPANYING NOTES

11 INTERNATIONAL ZIMTU TECHNOLOGIES INC. NOTES TO THE INTERIM FINANCIAL STATEMENTS August 31, 2004 Note 1 Interim Reporting While the information presented in the accompanying interim six month financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented. These interim financial statements follow the same accounting policies and methods of their application as the Company s February 29, 2004 financial statements. It is suggested that these interim financial statements be read in conjunction with the company s February 29, 2004 annual financial statements. Note 2 Non-cash Transactions Investing and financing activities that do not have an impact on current cash flows are excluded from the statement of cash flows. During the period ended August 31, 2004, the following transactions have been excluded from the statement of cash flows: the Company received promissory notes of $177,250 as consideration on the sale of investments. the Company issued 123,278 common shares at $0.90 per share for total proceeds of $110,950. As at February 29, 2004, the Company had received $105,650 toward this private placement which was included in share subscriptions. the Company paid dividends of $15,496 by the distribution of 758,743 common shares of investments held. the Company recovered resource property costs of $74,095 on the cancellation of share subscriptions of $40,000 and liabilities of $34,095. Note 3 Resource Properties Balance, Balance, February 29, Additions August 31, Louise Property 2004 (Recovered) Written-Off 2004 Acquisition costs $ 72,500 $ (66,970) $ (5,530) $ - Finders fees 7,500 (7,125) (375) - 80,000 (74,095) (5,905) - Deferred exploration costs Staking 2,500 - (2,500) - Mineral title search (720) - 2, (3,220) - $ 82,500 $ (73,375) $ (9,125) $ -

12 International Zimtu Technologies Inc. Notes to the Interim Financial Statements August 31, 2004 and 2003 Page 2 Note 3 Resource Properties (cont d) Louise Property, British Columbia By a property purchase agreement dated January 21, 2004, the Company agreed to purchase a 100% undivided interest in twelve mineral claims located in the Greenwood Mining District of British Columbia. During the period ended August 31, 2004, the Company abandoned this property and cancelled share subscriptions of $40,000, reversed accrued liabilities of $34,095 and wrote-off costs incurred of $9,125. Note 4 Investments Note 8 Balance, Dividends Balance, February 29, and August 31, 2004 Additions Disposals 2004 Solex Resources Corp. $ 36,583 $ - $ (11,119) $ 25,464 Providence Diamond Corp. 41,724 - (41,724) - Evolving Gold Corp. 31,811 5,000 (36,811) - Ordorado Resources Corp. - 22,000-22,000 Cougar Minerals Corp. - 19,000-19,000 Gold Mountain $ 110,118 $ 46,001 $ (78,535) $ 66,465 Solex Resources Corp. As at August 31, 2004, the Company owned 1,930,420 special warrants of Solex Resources Corp. ( Solex ) which, after conversion, represents a 14% of Solex. These special warrants were converted into common shares for no additional consideration subsequent to August 31, 2004 after Solex received a receipt for its final prospectus qualifying the special warrants. Ordorado Resources Corp. As at August 31, 2004, the Company owned 1,120,000 special warrants of Ordorado Resources Corp. ( Ordorado ) which, after conversion represents a 45% interest in Ordorado. These special warrants will be convertible into common shares for no additional consideration within five days of Ordorado receiving a receipt for its final prospectus qualifying the special warrants. The Company's interest may be further diluted after Ordorado completes its public offering.

13 International Zimtu Technologies Inc. Notes to the Interim Financial Statements August 31, 2004 and 2003 Page 3 Note 4 Investments Note 8 (cont d) Cougar Minerals Corp. As at August 31, 2004, the Company owned 700,000 special warrants of Cougar Minerals Corp. ( Cougar Minerals ) which, after conversion represents a 38% interest in Cougar. These special warrants will be convertible into common shares for no additional consideration within five days of Cougar receiving a receipt for its final prospectus qualifying the special warrants. The Company's interest will be further diluted after Cougar completes its public offering. Note 5 Promissory Notes Receivable During the period ended August 31, 2004, the Company received promissory notes valued at $177,250 as consideration for the sale of common shares of Providence Diamond Corp. and Evolving Gold Corp (the Shares ). These notes are non-interest bearing and are payable when the Shares are released from escrow. The Shares are released as to 10% on public listing and 15% every six months thereafter. In the event that the issuer does not pay a portion of the amount due on the due date, the issuer must transfer the common shares of the investee company represented by the defaulted payment back to the Company. Any common shares transferred back to the Company shall be fully paid and non-assessable common shares of the company, free and clear of any liens, charges, encumbrances and hold periods. There is currently $3,275 in default on these notes and the Company is negotiating extensions on these repayment terms. Note 6 Share Capital (c) Authorized: 300,000,000 common shares without par value 2004 (b) Issued: Number $ Balance, beginning of the period 2,339,198 9,154,413 Issued for cash: - pursuant to a private placement at $ , ,950 - pursuant to the exercise of warrants at $ ,000 48,000 Balance, end of the period 2,622,476 9,313,363

14 International Zimtu Technologies Inc. Notes to the Interim Financial Statements August 31, 2004 and 2003 Page 4 Note 6 Share Capital (cont d) (c) Commitments: Share Purchase Options The Company has a share purchase option plan which authorizes the board of directors to grant shares as incentive stock options to directors, officers and employees all of which vest immediately. The exercise price of the options is determined by the market value of the shares at the closing price on the date prior to date of the grant. During the six months ended August 31, 2004, the changes in share purchase options outstanding were as follows: Weighted Average Exercise Shares Price Outstanding beginning of period 233,000 $0.65 Granted 5,000 $0.93 Options outstanding and exercisable at end of period 238,000 $0.66 As at August 31, 2004, there were 238,000 employee and director share purchase options outstanding. Each option entitles the holders thereof the right to purchase one common share. Number Exercise Expiry of Shares Price Date 10,000 $0.40 April 28, ,000 $0.44 June 17, ,000 $0.72 December 30, ,000 $0.93 April 26, ,000

15 International Zimtu Technologies Inc. Notes to the Interim Financial Statements August 31, 2004 and 2003 Page 5 Note 6 Share Capital (cont d) (c) Commitments: - (cont d) Share Purchase Options (cont d) The fair value of the stock-based compensation of $2,300 for the six months ended August 31, 2004 has been determined, using the Black-Scholes option pricing model with the following assumptions: Expected dividend yield 0.0% Expected volatility 0.898% Risk-free interest rate 3.00% Weighted average expected term in years 2 years The Black-Scholes option pricing model requires the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate and therefore the Black- Scholes model does not necessarily provide a reliable single measure of the fair value of the Company s share purchase options. Share Purchase Warrants At August 31, 2004, the Company had 967,416 share purchase warrants outstanding entitling the holder the right to purchase one common share for each warrant held as follows: Number Exercise Price Expiry Date 619,886 $0.30 June 11, ,252 $0.75 October 22, ,278 $1.10 March 1, ,416

16 International Zimtu Technologies Inc. Notes to the Interim Financial Statements August 31, 2004 and 2003 Page 6 Note 7 Related Party Transactions During the three and six months ended August 31, 2004 and 2003, the Company incurred the following with a director of the Company, companies having common directors and companies of which the Company has a 10% or greater equity interest in: Three months ended August 31, Six months ended August 31, Administrative fee income $ (40,500) $ - $ (72,000) $ - Management fee income (12,000) (12,000) (24,000) (24,000) Management fees - 15,000-30,000 Wages 19,500 19,500 39,000 39,000 $ (33,000) $ 22,500 $ (57,000) $ 45,000 These items were measured by the exchange amount which is the amount agreed upon by the transacting parties. Included in accounts payable and accrued liabilities at August 31, 2004 is $5,443 (February 29, 2004: $5,443) owing to a law firm of which a director of the Company is a partner. Included in deposits at August 31, 2004 is $34,110 paid in advance for administrative services by companies for which the Company has more than a 10% equity interest in. Included in accounts and advances receivable at August 31, 2004 is $13,500 due for administrative services owing from a company for which the Company owns more than a 10% equity interest in. Amounts due to and from related parties, consisting of advances owing from and to directors of the Company and companies with a common director, are unsecured, noninterest bearing and have no specific terms of repayment.

17 International Zimtu Technologies Inc. Notes to the Interim Financial Statements August 31, 2004 and 2003 Page 7 Note 8 Subsequent Events Note 4 Subsequent to August 31, 2004: a) the Company issued 90,000 common shares pursuant to the exercise of 82,000 share purchase warrants at $0.30 each and 8,000 share purchase warrants at $0.75 each, for total proceeds of $ 30,600; b) the Company purchased an additional 26,000 series B Special Warrants at $0.05 and 1,670,000 series A Special Warrants at $0.01 of Cougar Minerals for a total cost of $18,000. c) the Company announced its intention to declare a dividend of shares of Cougar Minerals to shareholders of Zimtu on record as of September 17, Each shareholder owning at least 2,000 common shares of the Company will receive one common share of Cougar for every four common shares held. Shareholders owning less than 2,000 common shares of Zimtu will receive a cash equivalent of $0.01 for every four common shares held.

18 Schedule B International Zimtu Technologies Inc. Management Discussion and Analysis for the three months ended August 31, 2004 The following discussion and analysis of the operations, results, and financial position of the Company for the three months ended August 31, 2004 should be read in conjunction with the August 31, 2004 interim financial statements and the related Notes. The effective date of this report is October 28, The Company International Zimtu Technologies Inc. (the Company ) is an early stage mineral exploration company with a focus on building shareholder value through ownership and investment in a diversity of mineral exploration properties and equity. During the three months ended August 31, 2004, the Company was granted approval by the Canadian Trading and Quotation System Inc. (the CNQ ) for the listing of its common shares. The Company delisted its common shares from the TSX Venture Exchange Inc. on June 17, 2004, and began trading on the CNQ under the trading symbol ZMTU on June 18, The Company currently owns or has an interest in the following properties and companies: Allan Lake Claims: The Issuer has a 100% interest in a mineral property located in the Cameron River area of the Northwest Territories, more particularly known as the Allan Lake Property. The property is currently in a preliminary stage of exploration. During the period ended August 31, 2004, there was no exploration expenditures incurred on the property. Louise Property: The Issuer had acquired a 100% interest in 12 mineral claims located in the Greenwood Mining Division of British Columbia, more particularly known as the Princess Properties. In June, 2004, the Issuer entered into an agreement with Gold Mountain Resources Corp. ( Gold Mountain ) pursuant to which Gold Mountain can acquire a 70% interest in the Louise Property in exchange for the issuance of 1,550,000 special warrants, payment of $28,750 cash (in stages) and incurring $50,000 in exploration expenditures on the properties prior to August 31, No exploration expenditures were incurred on the property during the three and six months ended August 31, The Company s interest in this property was terminated on August 30, 2004 and the Company has written-off all expenditures and costs related to the property. Frank Claims: The Issuer has a 30% interest in a mineral property located in the Cameron River area of the Northwest Territories, more particularly known as the Frank Property. A 70% interest in the Frank Property was optioned to Providence Diamond Corp., a CNQ listed company (CNQ: DMND). In order to acquire the 70% interest, Providence must incur a total of $250,000 of exploration expenditures on the property over the next two years

19 During the three months ended August 31, 2004, the Company completed the dividend distribution of common shares of Providence Diamond Corp. to its shareholders. No exploration expenditures were incurred on the property during the three months ended August 31, Murray Claims: The Issuer has a 30% interest in a mineral property located in the Cameron River area of the Northwest Territories, more particularly known as the Murray Property. A 70% interest in the Murray Property was optioned to Evolving Gold Corp., a CNQ listed company (CNQ: GOLD). In order to acquire the 70% interest, Evolving must incur a total of $250,000 of exploration expenditures on the Property over the next two years. During the three months ended August 31, 2004, the Company completed the dividend distribution of common shares of Evolving Gold Corp. to its shareholders. No exploration expenditures were incurred on the property during the three months ended August 31, On October 1, 2004, the Company was informed that Evolving Gold Corp. has filed registration statements with the U.S. Securities and Exchange Commission. This is the first step enabling Evolving Gold Corp. to become a foreign issuer on the OTCBB. Cougar Minerals Corp. On August 10, 2004, Zimtu announced that it has entered into an agreement with Cougar Minerals Corp. ("Cougar Minerals") whereby Zimtu will assist Cougar Minerals with the company's corporate and regulatory filings, and the identification of a shareholder base. Cougar Minerals is a mineral exploration company with a specific focus on the precious metals gold, silver, and copper. In the event that Cougar Minerals becomes a reporting issuer, Zimtu will issue common shares of Cougar Minerals to the shareholders of Zimtu. It is proposed that shareholders will receive a dividend of one common share of each subsidiary for every 4 common shares of Zimtu owned, provided the shareholder owns 2,000 shares or more. Shareholders owning less than 2,000 shares will receive a cash equivalent of one cent ($0.01) for each 4 shares of Zimtu owned. The dividend record date to determine the shareholders of Zimtu entitled to the dividend will be September 17, In addition, shareholders of Zimtu will benefit from a retained equity ownership in Cougar Minerals. In May 2004, Cougar Minerals entered into an option agreement with New Cantech Ventures Inc. (TSX-V: NCV) whereby Cougar Minerals may acquire a 100% interest in the IXL Property located in the historic Franklin Mining Camp, approximately 55km north of Grand Forks in British Columbia. The IXL Property is an exploration stage prospect with good potential for bulk tonnage copper-gold mineralization. Following the option agreement with New Cantech, Cougar Minerals completed a geological report compliant with National Instrument Subsequent to the report, Cougar Minerals began an initial exploration program which includes surveying, trenching, and sampling.

20 Doubloon Exploration Corp. On August 31, 2004, the Company announced that it has entered into an agreement with Doubloon Exploration Corp. ("Doubloon Exploration") whereby Zimtu will assist Doubloon with the company's corporate and regulatory filings, and the identification of a shareholder base. Doubloon Exploration is a mineral exploration and development company whose focus is on exploring for gold and silver in south-central Ecuador at its Ganarin property. In the event that Doubloon Exploration becomes a reporting issuer, Zimtu will issue common shares of Doubloon Exploration to the shareholders of Zimtu under terms which will be disclosed when the record date is announced. Marketable Securities As at October 28, 2004, the Company had investments in the following companies: Public Companies Name Class Number Share Price Market Value Commerce Resources Corp. Common 2,931,416 $0.135 $395,741 Providence Diamond Corp. Common 200,000 $0.25 $50,000 Evolving Gold Corp. Common 200,000 $0.175 $35,000 Solex Resources Corp. Common 1,200,000 $0.17 $204,000 Candorado Operating Company Common 88,000 $0.245 $21,560 First Fortune Investments Inc. Common 230,000 $0.095 $21,850 Private Companies Cougar Minerals Corp. Special Warrants 700,000 private n/a Ordorado Resources Corp. Special Warrants 1,120,000 private n/a Selected Annual Information The following is a summary of the financial data of the Company for the last three completed fiscal year ends: Fiscal Year ended February 28: Total Revenues $0 $20,215 $38,263 Income (loss) from continuing operations ($360,633) ($121,293) ($1,551,536) Income from continuing operations (per share) $(0.20) $(0.00) ($0.01) Income from continuing operations (per share, fully diluted) $(0.20) $(0.00) ($0.01) Net Income (loss) from continuing operations ($360,633) $121,293 ($1,551,536) Net Income (loss) from continuing operations (per share) $(0.20) $(0.00) ($0.03) Net income (loss) from continuing operations (per share, fully diluted) $(0.20) $(0.00) ($0.03) Total Assets $653,757 $479,276 $484,071 Total long term financial liabilities $0.00 $0.00 $0.00 Cash dividend declared per share $0.00 $0.00 $0.00

21 Summary of Quarterly Results The following is a summary of the results from the eight previously completed financial quarters: August 31,2003 May 31, 2004 February 29, 2004 November 30, 2003 August 31, 2003 May 31, 2003 February 28, 2003 November 30, 2002 Revenues $Nil $Nil $Nil $Nil $Nil $Nil $Nil $Nil Income (loss) before discontinued and extraordinary items (Total) Income (loss) before discontinued and extraordinary items (Per share) Income (loss) before discontinued and extraordinary items (diluted per share) Net income (loss) (total) Net income (loss) (per share) Net income (loss) (diluted per share) $(30,518) $15,473 $(151,890) ($54,429) ($91,538) ($62,776) ($7,600) ($38,917) $(0.01) $0.01 $(0.07) $(0.03) $(0.06) $(0.06) $(0.00) $(0.00) $(0.01) $0.01 $(0.07) $(0.03) $(0.06) $(0.06) $(0.00) $(0.00) $(30,518) $15,473 $(151,890) ($54,429) ($91,538) ($62,776) ($7,600) ($38,917) $(0.01) $0.01 $(0.07) $(0.03) $(0.06) $(0.06) $(0.00) $(0.00) $(0.01) $0.01 $(0.07) $(0.03) $(0.06) $(0.06) $(0.00) $(0.00) Additional Disclosure for Venture Issuers without Significant Revenue As the Company has not had significant revenue from operations in either of its last two financial years, the following is a breakdown of the material costs incurred: Capitalized or Expensed Exploration and Development Costs Six months ended August 31, 2004 Financial year ended February 29, 2004 $3,220 $2,500 Expensed Research and Development Costs $9,125 $Nil Deferred Development Costs $Nil $2,500 General and Administration Expenses $238,173 $581,920 Any Material Costs (capitalized, deferred or expensed) not referred to above Equity share of investment loss $Nil $189,745 - Gain on sale of equity investments $109,895 $Nil

22 Disclosure on Outstanding Share Data The following information details the outstanding share capital of the Company as at the three months ended August 31, 2004: Results of Operations August 31, 2004 Common shares 2,622,476 Incentive Stock Options 238,000 Share Purchase Warrants 967,416 As the Company is a junior natural resource company, its capital resources are limited. The Company has had to rely upon the sale of equity securities for the cash required for capital acquisitions, exploration and development, and administration, among other things. During the six months ended August 31, 2004, the Company generated revenue of $177,250 from the sale of equity investments. For the six months ended August 31, 2004, the Company reported net loss of $15,045. Administrative expenses for the six months were $238,173 compared to $214,626 for the six months ended August 31, The Company received management fee income of $24,000 and administrative fee income of $139,500 of which $72,000 came from companies which the Company is a significant shareholder. Liquidity and Solvency As at August 31, 2004, the Company had working capital of $44,821 compared to a working capital deficiency of $13,295 at February 29, As well, during the three months ended August 31, 2004, no incentive stock options were granted. No incentive stock options or share purchase warrants were exercised during this period. Capital Resources The Company has had to and will continue to rely upon the sale of equity securities for the cash required for capital acquisitions, exploration and development, and administration, among other things. The Company will have to continue to rely on equity and debt financing in order to meet its ongoing obligations. There can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms satisfactory to the Company. The Company s revenues, if any, are expected to be, in part, derived from the extraction and sale of base and precious metals from its properties, such as gold. The price of those commodities has fluctuated widely, particularly in recent years, and is affected by numerous factors beyond the Company s control such as including international, economic and political trends, expectations of inflation, currency exchange fluctuations

23 and interest rates. Additional sources of revenues for the Company will include the sale of equity securities. Transactions with Related Parties There have been no transactions between the Company and any director or senior officer of the Company, any principal shareholder, and their associates or affiliates during the three and six months ended August 31, 2004 other than as disclosed in Note 7 to the financial statements. Proposed Transactions and Subsequent Events Subsequent to August 31, 2004, the Company completed the dividend distribution to shareholders of common shares of Solex Resources Corp., a mineral exploration company listed on the CNQ under the trading symbol SOLX. Additional Information Additional information about the Company can be found on