Agoracom: Small Cap Investment - McFaulds Lake Area - FNC

Welcome to the McFaulds Lake HUB on AGORACOM

Discuss the various junior resource companies within the McFaulds Lake Area

ATTENTION MEMBERS:

Tonight, we're giving our website a serious makeover.

So if you can't access the site for a bit, don't worry, we're just sprucing things up for an even smoother experience.

In the event that you experience issues accessing the new site, please clear your browser's cookies and cache.

See You On The Other Side!

Reply New Message

Prev Message Back To Forum Threaded View Next Message

sparkligwatr

Rank: President [?]

Points: 2312 [?]

Votes: 123 Score: 3.7 [?]

Your Vote:

Please Log In to Vote

Did you know? You can earn activity points by filling your profile with information about yourself (what city you live in, your favorite team, blogs etc.)

FNC - MANAGEMENT DISCUSSION AND ANALYSIS

posted on Apr 03, 2009 08:49PM

MANAGEMENT DISCUSSION AND ANALYSIS

GENERAL

www.sedar.com

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 period ended January 31, 2009. 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 2, 2009. Additional information on the Company is available on SEDAR at

and the Company’s web site at www.fancampexplorationltd.ca.

Fancamp Exploration Ltd. is a development stage company in the business of mineral exploration.

OVERALL PERFORMANCE

The Company raised a total of $3,020,000 from September 19, 2008 to date, providing funds necessary to further the Company’s exploration programs.

The Company’s exploration activities were primarily focused on its 2,560 hectare McFauld’s Lake property. A substantial portion of the ultrabasic intrusive complex is located on the Company’s property. A reconnaissance drill program that begun in August, 2008 on the Company’s C-1, C-5 and C-6 targets was completed during the quarter. (See McFauld’s Lake Property under Mineral Properties section.)

The Company’s 48.7% owned subsidiary, The Magpie Mines Inc., also began a drill program which was completed on November 4, 2008. The results demonstrated that the historic zone projections were quite accurate on at least two of the profiles.

RESULTS OF OPERATIONS

The Company recorded a profit of $617,188 for the three months ended January 31, 2009, compared to a profit of $15,214 for the three months ended January 31, 2008. The Company earned $62,500 in mineral property option and royalty revenue. During the Quarter, the Company recorded into income the

estimated future income benefit on the renounciation of Canadian exploration expenditures. The loss in the third quarter resulted from the recording of $260,724 in stock based compensation.

Management fees remained relatively consistent quarter over quarter. See Note 7 "Related Party Transactions and Balances" attached to the financial statements.

MINERAL PROPERTIES

100% Owned McFaulds Fancamp Property, Ontario

During the Quarter, the Company completed the current drill programme on its McFauld’s Lake property.

Holes F-08-11 and F-08-12 were drilled to test the high mag feature located on the NE sector of the C -5 target. Both were drilled from the same setup, Hole 11 at 50 degrees NW and Hole 12 at 70 degrees NW, to 150 metres and 165 metres depth respectively. Both holes intersected a 25 metre wide zone of banded chert magnetite iron formation, lying on top of what is interpreted to be the pre McFauld’s granite basement, dipping at some 60 degrees to the SE. Minor sulphide replacement of the magnetite was noted and assay results of this material indicate geochemically anomalous copper and gold values.

Volcanics and volcanogenic sediments overlie the iron formations in the drill holes, and a large gravity high just SE of C-5 suggests the presence of chromite rich zones higher in this stratigraphic section.

The Company completed the first phase of the C-1 Target drilling. The high grade nickel mineralization seen over a narrow width in Hole No.2, was intersected again in Hole No.10 where massive sulphides were seen over very narrow widths again within a zone of less than a metre, some eight metres down dip of the original intersection at a vertical depth of about 40 metres. The local dip appears to be about 40 degrees to the west and, Holes 8 and 9, drilled at 45 degrees and 55 degrees respectively to the west (east of the No.1,2 collars) on the assumption the zone was near vertical, appear to have undercut it.

This mineralized zone, small though it appears, is open down dip and along strike. The nickel mineralization occurs close to the eastern granite contact of C-1. Geophysics suggests that this contact is highly irregular in a vertical sense, with granite "overhangs" and vertical walls at depth. Deep penetration TDEM suggests the existence of strong conductivity near this contact at depths on the order of 400-500 metres.

An immediate focus for Fancamp in the new year is the NE sector of the C-1 target along its eastern granite contact from the Noront boundary for some 300 metres to the SE. JVX-MLEM (moving loop EM) has indicated a zone of very low resistivity along this part of the contact at a vertical depth of 400-500 metres. The occurrence of high grade nickel bearing sulphides in Holes 2 and 10 adjacent to this contact attests to its prospectivity

50% Owned Villebon Property

See Note 5 – Mineral Properties Interests attached to the financial statements for the period ended January 31, 2009, for further information on the Company’s other mineral property holdings.

The Company’s 48.7% owned subsidiary, The Magpie Mines Inc., completed an 800 metre drill programme on its titaniferous magnetite deposit located on Quebec’s North Shore, some eighty miles north of the coast near Longue Pointe de Mingan. Three holes were drilled on the Magpie deposit # 2, a 2.2 mile long section of the Magpie. These holes were drilled from west to east, on two EW profiles, 2000 ft apart, at dips of 50 degrees. Hole 1 was drilled on the southern profile, and intersected massive titaniferous magnetite over 1306 ft in the hole. Holes 2 and 3 were drilled on the northern profile. Hole 2 intersected 960 ft of massive titaniferous magnetite. Hole 3, drilled from the same setup, at 70 degrees, intersected 230 ft of massive titaniferous magnetite and was stopped in that material.

The purpose of this programme was to confirm historical grades and continuity to depth.

SUMMARY OF QUARTERLY RESULTS

Selected financial information for the quarter ended January 31, 2009 and the preceding 7 quarters:

Summary of Quarterly Results

INVESTMENT IN THE MAGPIE MINES INC.

	Quarter	4th	1st	2nd	3rd

Three Months Ended		Apr-08	Jul-09	Oct-09	Jan-09
Mineral Property Option and Royalty Revenue		$594,521	$35,370	$32,500	$62,500
Net Income (Loss)		$235,796	($1,294,585)	$2,259,638	$617,188
Income (Loss) Per Share		$0.01	($0.05)	$0.03	$0.02
Fully Diluted Income (Loss) Per Share		$0.01	($0.04)	$0.03	$0.02


Three Months Ended		Apr-07	Jul-07	Oct-07	Jan-08
Mineral Property Option and Royalty Revenue		$525,504	$166,384	$100,000	$46,342
Net Income (Loss)		$500,194	$146,072	($2,686,609)	$15,214
Income (Loss) Per Share		$0.02	$0.01	($0.11)	$0.00
Fully Diluted Income (Loss) Per Share		$0.02	$0.01	($0.10)	$0.00

The Company had working capital of $3,287,312 as at January 31, 2009.

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 the Sheridan Platinum Group.

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.

The net profit for the current quarter can be mainly attributed to the recording of $894,132 in estimated future income tax benefit on the renounciation of exploration expenditures. The net loss incurred in the quarters ended July 31, 2008 and October 31, 2007 were the result of costs attributed to stock based compensation. The Company has achieved net income in most of the other periods from mineral property option payments and royalty revenue. $2,264,751 of income recorded in the second quarter ended October 31, 2008 resulted from the sale of the Company’s interest in certain mineral properties.

LIQUIDITY AND CAPITAL RESOURCES

Fancamp Exploration Ltd. is a development 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 and joint venture option payments.

Other Properties

Subsequent to the end of the quarter, the Company announced that its 50% held (50% Sheridan Platinum Group) nickel-copper-PGE project, known as the Villebon Property, in northern Quebec, had been optioned to LiteWave Corp. and St-Georges Minerals Inc.

To acquire up to 100% ownership in the property, St-Georges will issue a total of 2,250,000 common shares to Fancamp and Sheridan within six months. Litewave will be required pay the vendors $200,000 Cdn. over two years and then an annual advance royalty payment of $20,000 Cdn. The Property is subject to a 2% Net Smelter Return ("NSR") on 18 claims and to a 1% NSR on 5 claims covering the Villebon Zone. A total of 1% of the 2% NSR can be purchased for $1,000,000 Cdn. LiteWave will assume a remaining property payment of $80,000 Cdn. on the Villebon Zone 5 claims to Tectonic Resources as well as an existing 2% NSR, of which 1% can be purchased for $1,000,000 Cdn.