UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2008.
Commission File Number: 001-32558
IMA EXPLORATION INC.
--------------------------------------------------------------------------------
(Translation of registrant's name into English)
#709 - 837 West Hastings Street, Vancouver, British Columbia, V6C 3N6, Canada
--------------------------------------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F: FORM 20-F [X] FORM 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): _______
Indicate by check mark whether the registrant by furnishing the information
contained in this Form, is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
YES [ ] NO [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3- 2(b): 82-_____________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
IMA EXPLORATION INC.
-------------------------------------
Date: August 11, 2008 /s/ Joseph Grosso
------------------------------ -------------------------------------
Joseph Grosso,
President & CEO
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 2008 AND 2007
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED - PREPARED BY MANAGEMENT)
MANAGEMENT'S COMMENTS ON UNAUDITED
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements of IMA
Exploration Inc. for the six months ended June 30, 2008 have been prepared by
management and are the responsibility of the Company's management.
August 11, 2008
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
INTERIM CONSOLIDATED BALANCE SHEETS
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
JUNE 30, DECEMBER 31,
2008 2007
$ $
ASSETS
CURRENT ASSETS
Cash 198,460 183,628
Short-term investments (Note 4) 24,564,146 6,813,462
Marketable Securities (Note 5) 535,500 -
Amounts receivable, prepaids and deposits (Note 9) 291,474 627,400
Navidad interest (Note 2 ) - 18,500,000
------------ ------------
25,589,580 26,124,490
Mineral properties and deferred costs (Note 6) 35,587 -
------------ ------------
25,625,167 26,124,490
============ ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities (Note 9) 142, 714 105,724
------------ ------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (Note 7) 58,753,501 58,753,501
WARRANTS (Note 7) 1,281,946 1,281,946
CONTRIBUTED SURPLUS (Note 8) 6,157,412 6,157,412
ACCUMULATED OTHER COMPREHENSIVE INCOME (Note 5) 35,700 -
DEFICIT (40,746,106) (40,174,093)
------------ ------------
25,482,453 26,018,766
------------ ------------
25,625,167 26,124,490
============ ============
NATURE OF OPERATIONS (Note 1)
NAVIDAD INTEREST (Note 2)
COMMITMENTS (Note 9)
APPROVED BY THE BOARD
"DAVID HORTON" , Director
----------------------------------
"ROBERT STUART ANGUS" , Director
----------------------------------
The accompanying notes are an integral part of these
consolidated financial statements.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2008 2007 2008 2007
$ $ $ $
EXPENSES
Administrative and management services 68,924 66,157 117,352 152,585
Corporate development and investor relations 51,091 4,265 81,644 31,664
General exploration 63,578 241 82,456 3,707
Office and sundry 53,884 44,945 141,562 79,152
Professional fees 102,410 262,145 232,070 483,101
Rent, parking and storage 24,113 10,725 44,936 25,197
Salaries and employee benefits 71,070 50,711 142,276 125,497
Transfer agent and regulatory fees 9,555 1,341 60,013 65,256
Travel and accommodation 10,646 6,468 38,190 13,225
Navidad holding costs (Note 2) - 36,915 - 77,775
------------ ------------ ------------ ------------
455,271 483,913 940,499 1,057,159
------------ ------------ ------------ ------------
LOSS BEFORE OTHER ITEMS (455,271) (483,913) (940,499) (1,057,159)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Foreign exchange loss (10,243) (7,737) (13,984) (8,861)
Interest income 207,658 83,132 382,470 171,296
------------ ------------ ------------ ------------
197,415 75,395 368,486 162,435
------------ ------------ ------------ ------------
LOSS FOR THE YEAR (257,856) (408,518) (572,013) (894,724)
DEFICIT - BEGINNING OF PERIOD (40,488,250) (39,575,610) (40,174,093) (39,089,404)
------------ ------------ ------------ ------------
DEFICIT - END OF PERIOD (40,746,106) (39,984,128) (40,746,106) (39,984,128)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER COMMON SHARE (0.01) (0.01) (0.01) (0.02)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 52,132,064 52,120,164 52,132,064 52,066,614
============ ============ ============ ============
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
(UNAUDITED - EXPRESSED IN CANADIAN DOLLARS)
2008
----------------------------
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
$ $
LOSS FOR PERIOD (257,856) (572,013)
OTHER COMPREHENSIVE INCOME
Unrealized gain on available-for-sale
marketable securities 35,700 35,700
------------ ------------
COMPREHENSIVE LOSS FOR THE PERIOD (222,156) (536,313)
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
2008 2007 2008 2007
$ $ $ $
CASH PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES
Net loss for the period (257,856) (408,518) (572,013) (894,724)
Items not affecting cash
Accrued interest (184,202) (71,563) (350,684) (139,967)
------------ ------------ ------------ ------------
(442,058) (480,081) (922,697) (1,034,691)
Change in non-cash working capital balances (19,936) (431,734) 372,916 (357,492)
------------ ------------ ------------ ------------
(461,994) (911,815) (549,781) (1,392,183)
------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Expenditures on mineral properties and
deferred costs (35,587) - (35,587) -
Receipt of Navidad interest - - 18,500,000 -
Increase in marketable securities (499,800) - (499,800) -
Decrease (increase) in short-term investments 1,100,000 500,000 (17,400,000) 1,000,000
------------ ------------ ------------ ------------
564,613 500,000 564,613 1,000,000
------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Issuance of common shares - 59,500 - 59,500
------------ ------------ ------------ ------------
(DECREASE) INCREASE IN CASH (102,619) (352,315) 14,832 (332,683)
CASH - BEGINNING OF PERIOD 95,841 411,052 183,628 391,420
------------ ------------ ------------ ------------
CASH - END OF PERIOD 198,460 58,737 198,460 58,737
============ ============ ============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
SIX MONTHS ENDED JUNE 30,
----------------------------
2008 2007
$ $
SHARE CAPITAL
Balance at beginning of period 58,753,501 58,664,727
Exercise of options - 59,500
------------ ------------
Balance at end of period 58,753,501 58,724,227
------------ ------------
WARRANTS
Balance at beginning and end of period 1,281,946 1,281,946
------------ ------------
CONTRIBUTED SURPLUS
Balance at beginning and end of period 6,157,412 6,152,265
------------ ------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance at beginning of period - -
Net unrealized gain on available-for-sale
marketable securities 35,700 -
------------ ------------
Balance at end of period 35,700 -
------------ ------------
DEFICIT
Balance at beginning of period (40,174,093) (39,089,404)
Loss for the period (572,013) (894,724)
------------ ------------
Balance at end of period (40,746,106) (39,984,128)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 25,482,453 26,174,310
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
1. NATURE OF OPERATIONS AND CONTINGENCY
IMA Exploration Inc. (the "Company") is a natural resource company
engaged in the business of acquisition, exploration and development of
mineral properties. The Company presently has no proven or probable
reserves and on the basis of information to date, it has not yet
determined whether these properties contain economically recoverable
ore reserves. Consequently the Company considers itself to be an
exploration stage company. The amounts that were shown as mineral
properties and deferred costs represent costs incurred to date, less
amounts amortized and/or written off, and do not necessarily represent
present or future values. The Company considers that it has adequate
resources to maintain its core operations for the next fiscal year.
2. NAVIDAD INTEREST
As at December 31, 2007, the Company recorded a Navidad interest
balance of $18,500,000. The Company received $7.5 million on January 8,
2008 plus interest that had accrued in the amount of $341,380. The
balance of $11 million was received on February 11, 2008.
3. SIGNIFICANT ACCOUNTING POLICIES
The interim consolidated financial statements of the Company have been
prepared by management in accordance with Canadian generally accepted
accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying
notes. Actual results could differ from those estimates. The
consolidated financial statements have, in management's opinion, been
properly prepared using careful judgment within reasonable limits of
materiality. These interim consolidated financial statements should be
read in conjunction with the most recent annual consolidated financial
statements. The significant accounting policies follow that of the most
recently reported annual consolidated financial statements.
NEW ACCOUNTING POLICIES
Effective January 1, 2008, the Company adopted the following new
accounting standards issued by the Canadian Institute of Chartered
Accountants ("CICA"):
GENERAL STANDARDS ON FINANCIAL STATEMENT PRESENTATION
CICA Handbook Section 1400, General Standards on Financial Statement
Presentation, has been amended to include requirements to assess and
disclose a company's ability to continue as a going concern. The
changes are effective for interim and annual financial statements
beginning January 1, 2008. The adoption of this standard did not have
an effect on the Company for the six months ended June 30, 2008.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
CAPITAL DISCLOSURES
CICA Handbook Section 1535, Capital Disclosures, establishes standards
for disclosing information about the company's capital and how it is
managed. Under this standard the Company will be required to disclose
the following, based on the information provided internally to the
company's key management personnel:
(i) qualitative information about its objectives,
policies and processes for managing capital.
(ii) summary quantitative data about what it manages as
capital.
(iii) whether during the period it complied with any
externally imposed capital requirements to which it
is subject.
(iv) when the company has not complied with such
externally imposed capital requirements, the
consequences of such non-compliance.
This standard is effective for interim and annual financial statements
beginning on January 1, 2008. The adoption of this change on the
disclosure in the financial statements did not have an effect on the
Company for the six months ended June 30, 2008.
GOODWILL AND INTANGIBLE ASSETS
CICA Handbook Section 3064, Goodwill and Intangible Assets, establishes
revised standards for recognition, measurement, presentation and
disclosure of goodwill and intangible assets. Concurrent with the
introduction of this standard, the CICA withdrew EIC 27, Revenues and
Expenses during the preoperating period. As a result of the withdrawal
of EIC 27, companies will no longer be able to defer costs and revenues
incurred prior to commercial production at new mine operations. The
changes are effective for interim and annual financial statements
beginning January 1, 2009. The Company has not yet determined the
impact of the adoption of this change on the disclosure in our
financial statements.
FINANCIAL INSTRUMENTS DISCLOSURES
In March 2007, the CICA issued section 3862 FINANCIAL INSTRUMENTS -
DISCLOSURES and Section 3863 FINANCIAL INSTRUMENTS - PRESENTATION,
which together comprise a complete set of disclosure and presentation
requirements that revise and enhance current disclosure requirements.
Section 3862 requires disclosure of additional detail by financial
asset and liability categories. Section 3863 establishes standards for
presentation of financial instruments and non-financial derivatives.
The standard deals with the classification of financial instruments,
from the perspective of the issuer, between liabilities and equity, the
classification of related interest, dividends, losses and gains, and
the circumstances in which financial assets and financial liabilities
are offset. These sections are effective for interim and annual
financial statements beginning January 1, 2008. The adoption of this
change on the disclosure in the financial statements did not have an
effect on the Company for the six months ended June 30, 2008.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
In 2006, the Canadian Accounting Standards Board ("AcSB") published a
new strategic plan that will significantly affect financial reporting
requirements for Canadian companies. The AcSB strategic plan outlines
the convergence of Canadian GAAP with IFRS over an expected five year
transitional period. In February 2008 the AcSB announced that the date
for publicly-listed companies to use IFRS, replacing Canadian GAAP, is
for interim and annual financial statements relating to fiscal years
beginning on or after January 1, 2011. The transition date of January
1, 2011 will require the restatement for comparative purposes of
amounts reported by the Company for the year ended December 31, 2010.
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.
4. SHORT-TERM INVESTMENTS
As at June 30, 2008 and December 31, 2007, the Company held short-term
investments comprised of the following:
JUNE 30, 2008
------------------------------------
MATURITY PRINCIPAL AND
ACCRUED INTEREST
$
12 month term deposit
- 4.45% annual interest rate ($6,100,000 principal amount) August 13, 2008 6,355,497
12 month term deposit January 6, 2009 7,064,127
- 3.45% annual interest rate ($7,000,000 principal amount)
12 month term deposit
- 3.45% annual interest rate ($10,000,000 principal amount) February 10, 2009 10,131,384
12 month term deposit
- 3.45% annual interest rate ($1,000,000 principal amount) February 10, 2009 1,013,138
------------
24,564,146
=============
DECEMBER 31, 2007
------------------------------------
MATURITY PRINCIPAL AND
ACCRUED INTEREST
$
12 month term deposit
- 4.45% annual interest rate ($6,700,000 principal) August 13, 2008 6,813,462
============
All term deposits are fully redeemable in full or portion at the
Company's option without penalty. Interest is paid on amounts redeemed
subsequent to 30 days from the date of investment. The principal and
interest are unconditionally guaranteed by the Bank of Montreal.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
5. MARKETABLE SECURITIES
During the period, the Company purchased 3,570,000 common shares of a
public corporation, which have common directors, for $499,800. As at
June 30, 2008, the 3,570,000 common shares had a quoted market value of
$535,500. The Company has designated its marketable securities as
financial assets available-for-sale and accordingly, changes to their
fair value are recorded in other comprehensive income in the period
they occur.
6. MINERAL PROPERTIES
The Company has entered into a binding Letter of Intent with Western
Copper Corporation ("Western Copper") and is preparing an Option
Agreement to further explore and develop the Hushamu Property and in
which the Company has the right to acquire up to a 70% interest. The
Hushamu porphyry style copper-molybdenum-gold deposit is located on
northern Vancouver Island, B.C.
The Company has agreed to expend a minimum of $1.9 million in the first
year of a three year option period. Over years two and three the
Company will spend an additional $13.1 million on drilling,
metallurgical, and engineering studies in the completion of a
pre-feasibility report on the Hushamu deposit. This expenditure, a
total of $15 million, and the completion of a pre-feasibility report
will earn the Company a 49% interest in the project (Option 1). The
Company can earn an additional 16% by funding a subsequent feasibility
study by the fourth year (Option 2) and an additional 5% can be earned
upon completion of mine permitting (Option 3) for a total interest of
70% with Western Copper retaining a 30% participating interest in the
joint venture.
During the period the Company capitalized mineral property expenditures
of $35,587, which relate to the preliminary work done for the work
program scheduled to commence this Fall.
7. SHARE CAPITAL
Authorized - unlimited common shares without par value
- 100,000,000 preferred shares without par value
Issued - common shares JUNE 30, 2008 DECEMBER 31, 2007
---------------------------- ----------------------------
NUMBER $ NUMBER $
Balance, beginning of period 52,132,064 58,753,501 52,013,064 58,664,727
Exercise of options - - 119,000 59,500
Contributed surplus reallocated on
exercise of options - - - 29,274
------------ ------------ ------------ ------------
Balance, end of period 52,132,064 58,753,501 52,132,064 58,753,501
============ ============ ============ ============
(a) Stock options and stock-based compensation
The Company has established a rolling stock option plan (the
"Plan"), in which the maximum number of common shares which
can be reserved for issuance under the Plan is 10% of the
issued and outstanding shares of the Company. The exercise
price of the options is set at the Company's closing share
price on the grant date, less allowable discounts in
accordance with the policies of the TSX Venture Exchange. The
stock options granted are subject to a four month hold period
and exercisable for a period of five years.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
7. SHARE CAPITAL (continued)
A summary of the changes in the number of stock options
outstanding and exercisable for the six months ended June 30,
2008 is as follows:
WEIGHTED
AVERAGE
EXERCISE
NUMBER PRICE
$
Balance, beginning of period 4,330,000 2.72
Cancelled /forfeited (95,000) 3.32
Expired (325,000) 0.90
------------ ----
Balance, end of period 3,910,000 2.86
============ ====
Stock options outstanding and exercisable at June 30, 2008 are
as follows:
EXERCISE
NUMBER PRICE EXPIRY DATE
$
1,170,000 1.87 August 27, 2008
1,272,000 3.10 March 24, 2009
765,000 4.16 March 16, 2010
380,000 2.92 November 16, 2010
223,000 3.21 June 22, 2011
100,000 0.47 October 23, 2012
------------
3,910,000
============
(b) Warrants
A summary of the changes in warrants for the six months ended
June 30, 2008 is as follows:
WEIGHTED
AVERAGE
EXERCISE
NUMBER PRICE
$
Balance, beginning of period 3,271,070 3.62
Expired (1,604,400) 3.80
------------ ----
Balance, end of period 1,666,670 3.45
============ ====
Common shares reserved pursuant to warrants and agent warrants
outstanding at June 30, 2008 are as follows:
EXERCISE
NUMBER PRICE EXPIRY DATE
$
1,666,670 3.45 September 14, 2009
============
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
8. CONTRIBUTED SURPLUS
A continuity summary of contributed surplus is presented below:
JUNE 30, DECEMBER 31,
2008 2007
$ $
Balance, beginning of period 6,157,412 6,152,265
Contributed Surplus as a result of
stock options granted - 34,421
Contributed Surplus reallocated on
exercise of stock options - (29,274)
------------ ------------
Balance, end of period 6,157,412 6,157,412
============ ============
9. RELATED PARTY TRANSACTIONS
(a) The Company engages Grosso Group Management Ltd. (the "Grosso
Group") to provide services and facilities to the Company. The
Grosso Group is a private company owned by the Company, Golden
Arrow Resources Corporation, Amera Resources Corporation and
Blue Sky Uranium Corp., each of which owns one share. The
Grosso Group provides its shareholder companies with
geological, corporate development, administrative and
management services. The shareholder companies pay monthly
fees to the Grosso Group. The fee is based upon a pro-rating
of the Grosso Group's costs including its staff and overhead
costs among each shareholder company with regard to the
mutually agreed average annual level of services provided to
each shareholder company. During the six months ended June 30,
2008, the Company incurred fees of $225,048 (2007 - $181,947)
to the Grosso Group: $229,338 (2007 - $252,338) was paid in
monthly payments and $4,290 (2007 - $70,391) is included in
other receivables, prepaids and deposits as a result of a
review of the allocation of the Grosso Group costs to the
member companies for the period. Also included in accounts
receivable, prepaids and deposits is a $205,000 (2007 -
$205,000) deposit to the Grosso Group for the purchase of
equipment and leasehold improvements and for operating working
capital.
Effective May 31, 2008 Astral withdrew as a shareholder of
Grosso Group and discontinued the use of the services and
facilities provided.
(b) During six months ended June 30, 2008, the Company paid
$185,000 (2007 - $159,400) to companies controlled by
directors and officers of the Company, for accounting,
management and consulting services provided.
(c) Effective January 1, 2008 the Company entered into a
consulting agreement with a company controlled by a director
of the Company for a fee of $10,000 per month plus
reimbursement for out-of-pocket expenses. Discretionary
bonuses may also be paid if approved by the compensation
committee. Accordingly, the total compensation paid to the
director in the six months ended June 30, 2008 was $60,000.
This amount is included in the total amount paid to directors
and officers discussed in Note 9(b) above.
The Company may terminate this agreement by giving the
director thirty day written notice. In the event the Company
terminates this agreement the director may be entitled to
receive the discretionary bonus.
(d) The President of the Company provides his services on a
full-time basis under a contract with a private company
controlled by the President for an annual fee of $250,000.
Accordingly, the total compensation paid to the President in
the six months ended June 30, 2008 was $125,000 (2007 -
$125,000). This amount is included in the total amount paid to
directors and officers discussed in Note 9(b) above.
IMA EXPLORATION INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(UNAUDITED - PREPARED BY MANAGEMENT)
(EXPRESSED IN CANADIAN DOLLARS)
9. RELATED PARTY TRANSACTIONS (continued)
In the event the contract is terminated by the Company or as a
result of a change of control, a payment is payable to the
President consisting of (i) any monthly compensation due to
the date of termination, (ii) options as determined by the
board of directors (iii) three years of monthly compensation
(which may be adjusted annually) and (iv) bonus of $461,500.
If the termination had occurred on June 30, 2008, the amount
payable under the contract would be $1,211,500. In the event
the contract is terminated by the Company as a result of the
President's death or permanent disability while providing
services to the Company, a bonus in the amount of $461,500 is
payable.
Effective May 1, 2007, the Company negotiated agreements with
the four other shareholder companies of the Grosso Group for
the President of the Company to provide services for a monthly
fee. The agreements may be terminated at any time at the other
companies' discretion upon 30 days written notice. The Company
reserves its right to restrict services provided by the
President to the other shareholder companies based on its own
requirements for the President's services, at which time the
fee would be adjusted accordingly. For the period ended June
30, 2008, the Company has accrued a total of $38,292 from the
other shareholder companies which has been recorded as a
reduction in Administrative and management services expense.
The fees will be reviewed and adjusted on a periodic basis.
All of the related party transactions and balances in these
consolidated financial statements arose in the normal course of
operations and are measured at the exchange amount, which is the amount
of consideration established and agreed to by the related parties.
10. SEGMENTED INFORMATION
The Company is involved in mineral exploration and development
activities. The Company is in the exploration stage and, accordingly,
has no reportable segment revenues or operating results for the six
months ended June 30, 2008.
The Company's total assets are segmented geographically as follows:
JUNE 30, 2008
--------------------------------------------
CANADA ARGENTINA TOTAL
$ $ $
Current assets 25,587,493 2,087 25,589,580
Mineral Properties and
deferred costs 35,587 - -
------------ ------------ ------------
25,623,080 2,087 25,625,167
============ ============ ============
DECEMBER 31, 2007
--------------------------------------------
CANADA ARGENTINA TOTAL
$ $ $
Current assets 26,102,160 22,330 26,124,490
------------ ------------ ------------
26,102,160 22,330 26,124,490
============ ============ ============
IMA EXPLORATION INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 2008
INTRODUCTION
The following management discussion and analysis and financial review, prepared
as of August 11, 2008, should be read in conjunction with the Company's
unaudited interim consolidated financial statements for the six months ended
June 30, 2008 and audited annual consolidated financial statements and related
notes for the year ended December 31, 2007. The consolidated financial
statements have been prepared in accordance with Canadian generally accepted
accounting principles ("Canadian GAAP"). Except as otherwise disclosed all
dollar figures in this report are stated in Canadian dollars. Additional
information relevant to the Company can be found on the SEDAR website at
www.sedar.com.
FORWARD LOOKING STATEMENTS
Certain of the statements made and information contained herein is
"forward-looking information" within the meaning of the Ontario Securities Act
or "forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934 of the United States. Forward-looking statements
are subject to a variety of risks and uncertainties which could cause actual
events or results to differ from those reflected in the forward-looking
statements, including, without limitation, risks and uncertainties relating to
foreign currency fluctuations; risks inherent in mining including environmental
hazards, industrial accidents, unusual or unexpected geological formations,
risks associated with the estimation of mineral resources and reserves and the
geology, grade and continuity of mineral deposits; the possibility that future
exploration, development or mining results will not be consistent with the
Company's expectations; the potential for and effects of labour disputes or
other unanticipated difficulties with or shortages of labour; the inherent
uncertainty of future production and cost estimates and the potential for
unexpected costs and expenses, commodity price fluctuations; uncertain political
and economic environments; changes in laws or policies, foreign taxation, delays
or the inability to obtain necessary governmental permits; and other risks and
uncertainties, including those described under Risk Factors Relating to the
Company's Business in the Company's Annual Information Form and in each
management discussion and analysis. Forward-looking information is in addition
based on various assumptions including, without limitation, the expectations and
beliefs of management, that the Company can access financing, appropriate
equipment and sufficient labour. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in forward-looking
statements. Accordingly, readers are advised not to place undue reliance on
forward-looking statements.
OVERVIEW
The Company is a natural resource company engaged in the business of
acquisition, exploration and development of mineral properties. At present, the
Company has no producing properties and consequently has no current operating
income or cash flows. As of this date the Company is an exploration stage
company and has not generated any revenues. The Company is entirely dependent on
the equity market for its source of funds. There is no assurance that a
commercially viable mineral deposit exists on any of the properties. Further
evaluation and exploration will be required before the economic viability of any
of the properties is determined.
During the first quarter, the Company was paid $18,500,000 as consideration for
the Navidad interest. The Company received the $7.5 million held in trust on
January 8, 2008 plus interest that had accrued in the amount of $341,380. The
balance of $11 million was received on February 11, 2008.
On May 12, 2008 the Company announced that it entered into a binding Letter of
Intent with Western Copper Corporation ("Western Copper") to further explore and
develop the Island Copper Property in which the Company has the right to acquire
up to a 70% interest. The Island Copper Property, which includes the Hushamu
porphyry style copper-molybdenum-gold deposit is located on northern Vancouver
Island, B.C., approximately 25 kilometers southwest of Port Hardy, B.C.
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The Hushamu deposit hosts a NI 43-101 compliant measured and indicated resource
of 230.9 million tonnes grading 0.28% Cu and 0.31 g/t Au, containing 2.08
million ounces of gold and 1.39 billion pounds of copper, as well as an inferred
resource of 52.8 million tonnes grading 0.28% Cu, 0.38 g/t Au, containing 327
million pounds of copper and 0.59 million ounces of gold. The deposit also
contains unclassified molybdenum mineralization.
Table 1 summarizes the April 2005 mineral resource estimate at 0.10%, 0.20% and
0.30% Cu cut-offs. Additional infill and step out drilling is required to define
the molybdenum, silver, and rhenium content and define the extent of
mineralization.
TABLE 1: SUMMARY OF RESOURCE ESTIMATION FOR THE HUSHAMU COPPER-GOLD DEPOSIT
--------------------------------------------------------------------------------
TONNAGE ABOVE
CLASS CU CUT-OFF CUT-OFF GRADE CU GRADE AU
(%) MILLION TONNES (%) (G/T)
--------------------------------------------------------------------------------
Measured 0.10 87.7 0.21 0.206
--------------------------------------------------------------------------------
Indicated 0.10 495.8 0.20 0.240
--------------------------------------------------------------------------------
Measured + Indicated 0.10 583.5 0.20 0.240
--------------------------------------------------------------------------------
Inferred 0.10 151.9 0.19 0.274
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Measured 0.20 39.2 0.29 0.309
--------------------------------------------------------------------------------
Indicated 0.20 191.7 0.27 0.309
--------------------------------------------------------------------------------
Measured + Indicated 0.20 230.9 0.28 0.309
--------------------------------------------------------------------------------
Inferred 0.20 52.8 0.28 0.377
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Measured 0.30 14.0 0.37 0.411
--------------------------------------------------------------------------------
Indicated 0.30 49.7 0.37 0.411
--------------------------------------------------------------------------------
Measured + Indicated 0.30 63.7 0.37 0.411
--------------------------------------------------------------------------------
Inferred 0.30 18.2 0.35 0.480
--------------------------------------------------------------------------------
At least 5 additional copper-molybdenum-gold porphyry targets and more than 15
poly-metallic volcanic and sediment hosted targets occur within the property and
the Company considers the overall property to host an extensive exploration
upside. The Company's technical team will be focused on infill drilling to
upgrade the deposit as well as implementing an aggressive exploration strategy
to test the numerous exploration targets in and around the known deposit. Drill
permitting and surface exploration programs will commence shortly.
In 2005 Lumina Resources, later acquired by Western Copper, conducted the first
major exploration in the area since 1994 that comprised historic data
compilation, airborne geophysics (2,687 line kilometers), diamond drilling
(3,155 m in 18 holes), geological mapping, prospecting, geochemical surveys
(3,842 soil samples), and alteration studies. Lumina discovered porphyry style
copper-gold molybdenum mineralization in the NW Expo zone (hole EC-228
intersected 1.0 g/t Au and 0.17% Cu over 95 m). In 2007 Western Copper further
tested the NW Expo target with 2 drillholes and intersected two mineralized
horizons. The drillholes cut an upper zone of mineralization containing 82.6
meters of 0.033% molybdenum and 0.14 g/t gold and a deeper mineralized interval
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of 182.5 meters grading 0.58 g/t gold and 0.013% molybdenum. The second
drillhole intersected the upper zone over an interval of 27.4 meters containing
0.022% molybdenum and 0.13 g/t gold and the deeper zone intersected 204.2 meters
grading 0.74 g/t gold and 0.012% molybdenum (refer to Western Copper press
release April 2007).
The Island Copper Property, owned 100% by Western Copper, consists of 216
mineral claims (approximately 42,669 hectares) located in a known
copper-porphyry mining camp and surrounds the formerly producing Island Copper
Mine of BHP-Utah. During Island Copper's operation from 1971 to 1995, the mine
produced 345 million tonnes of ore with average metal grades of 0.41% Cu, 0.017%
Mo and 0.19 g/t Au. The rhenium content of the molybdenum concentrate was an
important by-product. The demand for rhenium has driven prices to $10,550 per
kilogram.
The Company has agreed to expend a minimum of $1.9 million in the first year of
a three year option period. Depending on initial results the Company will spend
an additional $13.1 million in years two and three on drilling, metallurgical,
and engineering studies in the completion of a pre-feasibility report on the
Hushamu deposit. This expenditure, a total of $15 million, and the completion of
a pre-feasibility report will earn the Company a 49% interest in the project
(Option 1). The Company can earn an additional 16% by funding a subsequent
feasibility study by the fourth year (Option 2) and an additional 5% can be
earned upon completion of mine permitting (Option 3) for a total interest of 70%
with Western Copper retaining a 30% participating interest in the joint venture.
SELECTED QUATERLY FINANCIAL INFORMATION AND FIRST QUARTER DISCUSSION
The following selected consolidated financial information is derived from the
unaudited consolidated interim financial statements of the Company. The
information has been prepared in accordance with Canadian GAAP.
----------------------- ------------------------------------------------- -----------------------
FISCAL 2008 FISCAL 2007 FISCAL 2006
----------------------- ------------------------------------------------- -----------------------
JUN 30 MAR 31 DEC 31 SEP 30 JUN 30 MAR 31 DEC 31 SEP 30
$ $ $ $ $ $ $ $
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Revenues Nil Nil Nil Nil Nil Nil Nil Nil
Net Income (Loss) (257,856) (314,157) 325,822 (515,787) (408,518) (486,206) (1,126,568) (836,136)
Net Income (Loss) per Common
Share - Basic and Diluted (0.01) (0.01) 0.01 (0.01) (0.01) (0.01) (0.02) (0.02)
----------------------- ------------------------------------------------- -----------------------
SUMMARY OF FINANCIAL RESULTS
For the three months ended June 30, 2008, the Company reported a consolidated
loss of $257,856 ($0.01 per share), a decrease of $150,662 from the loss of
$408,518 ($0.01 per share) for the three months ended June 30, 2007. The
decrease in the loss in the 2008 period, compared to the 2007 period, can
primarily be attributed to a $28,642 decrease in operating expenses and $122,020
increase in other income items.
RESULTS OF OPERATIONS
The Company's operating expenses for the six months ended June 30, 2008 were
$940,499, a decrease of $116,660 from $1,057,159 in the 2007 period as a result
of the following:
(i) Administrative and management services decreased by $35,233 primarily
as a result of a portion of these fees being recovered from other
shareholder companies of Grosso Group Management Ltd. ("Grosso Group")
(see discussion on related party transactions below).
(ii) Corporate development and investor relations costs of $81,644, compared
to $31,664 during 2007, mainly due to increased costs associated with
advertising and attendance to investor conferences.
(iii) General exploration increased by $78,749 mainly as the Company
continues to expense costs associated with exploration that are not
related to specific projects or properties. The costs primarily relate
to the Company's exploration activities in Argentina.
(iv) Office and sundry increased by $62,410 as a result of increased
activity during the period.
(v) Professional fees decreased by $251,031 due to reduced legal fees.
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(vi) Travel and accommodation increased to $38,190 in the 2008 period
compared to $13,225 due to the Company actively seeking out new
exploration projects in the period.
(vii) Navidad holding costs were $Nil in the 2008 period compared to $77,775
in the 2007 period due to the Company transferring control of the
Navidad project to Aquiline.
In the 2008 period the Company recorded interest income of $382,470 compared to
171,296 in the 2007 period as a result of an increase in short-term investments.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position at June 30, 2008 was $198,460, an increase of
$14,832 from December 31, 2007. Short-term investments increased by $17,750,684
to $24,564,146 at June 30, 2008 from $6,813,462 at December 31, 2007. Total
assets at June 30, 2008 were $25,625,167, a decrease of $499,323 from
$26,124,490 at December 31, 2007.
The Company has received $Nil from the exercise of options and warrants from
January 1, 2008 to August 11, 2008. As at August 11, 2008, the Company had
working capital of approximately $25,400,000.
The Company considers that it has adequate resources to maintain its operations
for the next fiscal year. The funds on hand will allow the Company proceed with
its plans for the island Copper Project and to acquire viable advance stage
exploration assets. The Company will continue to rely on successfully completing
additional equity financing to further exploration and development of mineral
exploration projects as needed. There can be no assurance that the Company will
be successful in obtaining the required financing.
Except as disclosed the Company does not know of any trends, demand,
commitments, events or uncertainties that will result in, or that are reasonably
likely to result in, its liquidity either materially increasing or decreasing at
present or in the foreseeable future.
The Company does not now and does not expect to engage in currency hedging to
offset any risk of currency fluctuations.
OPERATING CASH FLOW
Cash outflow from operating activities for the six months ended June 30, 2008
was $549,781, compared to cash outflow for the 2007 period of $1,392,183
primarily as a result of decreased operating activities and the collection of
receivables in the 2008 period.
FINANCING ACTIVITIES
During the six months ended June 30, 2008 there were no cashflows from financing
activities. During the six months ended June 30, 2007, the Company received $Nil
from the proceeds of private placements and $59,500 on the exercise of options.
INVESTING ACTIVITIES
Investing activities generated cash of $564,613 during the six months ended June
30, 2008, compared to $1,000,000 for the 2007 period. In the 2008 period this
was a result of expenditures on mineral properties, collection of the Navidad
interest, increase in marketable securities and an increase in short-term
investments. In 2007, this was a result of funds being withdrawn from short-term
investments.
RELATED PARTY TRANSACTIONS
The Company engages Grosso Group Management Ltd. (the "Grosso Group") to provide
services and facilities to the Company. The Grosso Group is a private company
owned by the Company, Golden Arrow Resources Corporation, Amera Resources
Corporation and Blue Sky Uranium Corp., each of which owns one share. The Grosso
Group provides its shareholder companies with geological, corporate development,
administrative and management services. The shareholder companies pay monthly
fees to the Grosso Group. The fee is based upon a pro-rating of the Grosso
Group's costs including its staff and overhead costs among each shareholder
company with regard to the mutually agreed average annual level of services
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provided to each shareholder company. During the six months ended June 30, 2008,
the Company incurred fees of $225,048 (2007 - $181,947) to the Grosso Group:
$229,338 (2007 - $252,338) was paid in monthly payments and $4,290 (2007 -
$70,391) is included in other receivables, prepaids and deposits as a result of
a review of the allocation of the Grosso Group costs to the member companies for
the period. Also included in accounts receivable, prepaids and deposits is a
$205,000 (2007 - $205,000) deposit to the Grosso Group for the purchase of
equipment and leasehold improvements and for operating working capital.
Effective May 31, 2008 Astral withdrew as a shareholder of Grosso Group and
discontinued the use of the services and facilities provided.
During six months ended June 30, 2008, the Company paid $185,000 (2007 -
$159,400) to companies controlled by directors and officers of the Company, for
accounting, management and consulting services provided.
Effective January 1, 2008 the Company entered into a consulting agreement with a
company controlled by a director of the Company for a fee of $10,000 per month
plus reimbursement for out-of-pocket expenses. Discretionary bonuses may also be
paid if approved by the compensation committee. Accordingly, the total
compensation paid to the director in the six months ended June 30, 2008 was
$60,000.
The Company may terminate this agreement by giving the director thirty day
written notice. In the event the Company terminates this agreement the director
may be entitled to receive the discretionary bonus.
The President of the Company provides his services on a full-time basis under a
contract with a private company controlled by the President for an annual fee of
$250,000. Accordingly, the total compensation paid to the President in the six
months ended June 30, 2008 was $125,000 (2007 - $125,000).
In the event the contract is terminated by the Company or as a result of a
change of control, a payment is payable to the President consisting of (i) any
monthly compensation due to the date of termination, (ii) options as determined
by the board of directors (iii) three years of monthly compensation (which may
be adjusted annually) and (iv) bonus of $461,500. If the termination had
occurred on June 30, 2008, the amount payable under the contract would be
$1,211,500. In the event the contract is terminated by the Company as a result
of the President's death or permanent disability while providing services to the
Company, a bonus in the amount of $461,500 is payable.
Effective May 1, 2007, the Company negotiated agreements with the other
shareholder companies of the Grosso Group for the President of the Company to
provide services for a monthly fee. The agreements may be terminated at any time
at the other companies' discretion upon 30 days written notice. The Company
reserves its right to restrict services provided by the President to the other
shareholder companies based on its own requirements for the President's
services, at which time the fee would be adjusted accordingly. For the period
ended June 30, 2008, the Company has accrued a total of $38,292 from the other
shareholder companies which has been recorded as a reduction in Administrative
and management services expense. The fees will be reviewed and adjusted on a
periodic basis.
All of the related party transactions and balances in these consolidated
financial statements arose in the normal course of operations and are measured
at the exchange amount, which is the amount of consideration established and
agreed to by the related parties.
CRITICAL ACCOUNTING ESTIMATES AND RECENT ACCOUNTING PRONOUNCEMENTS
The preparation of financial statements in conformity with Canadian GAAP
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the period. Actual results may differ from these
estimates.
Reference should be made to the Company's significant accounting policies
contained in Note 3 of the Company's consolidated financial statements for the
years ended December 31, 2007, 2006 and 2005. These accounting policies can have
a significant impact of the financial performance and financial position of the
Company.
- 5 -
NEW ACCOUNTING POLICIES
Effective January 1, 2008, the Company adopted the following new accounting
standards issued by the Canadian Institute of Chartered Accountants ("CICA"):
(a) GENERAL STANDARDS ON FINANCIAL STATEMENT PRESENTATION
CICA Handbook Section 1400, General Standards on Financial Statement
Presentation, has been amended to include requirements to assess and
disclose a company's ability to continue as a going concern. The
changes are effective for interim and annual financial statements
beginning January 1, 2008. The adoption of this standard did not have
an effect on the Company for the six months ended June 30, 2008.
(b) CAPITAL DISCLOSURES
CICA Handbook Section 1535, Capital Disclosures, establishes standards
for disclosing information about the company's capital and how it is
managed. Under this standard the Company will be required to disclose
the following, based on the information provided internally to the
company's key management personnel:
(i) qualitative information about its objectives,
policies and processes for managing capital.
(ii) summary quantitative data about what it manages as
capital.
(iii) whether during the period it complied with any
externally imposed capital requirements to which it
is subject.
(iv) when the company has not complied with such
externally imposed capital requirements, the
consequences of such non-compliance.
This standard is effective for interim and annual financial statements
beginning on January 1, 2008. The adoption of this change on the
disclosure in the financial statements did not have an effect on the
Company for the six months ended June 30, 2008.
(c) GOODWILL AND INTANGIBLE ASSETS
CICA Handbook Section 3064, Goodwill and Intangible Assets, establishes
revised standards for recognition, measurement, presentation and
disclosure of goodwill and intangible assets. Concurrent with the
introduction of this standard, the CICA withdrew EIC 27, Revenues and
Expenses during the preoperating period. As a result of the withdrawal
of EIC 27, companies will no longer be able to defer costs and revenues
incurred prior to commercial production at new mine operations. The
changes are effective for interim and annual financial statements
beginning January 1, 2009. The Company has not yet determined the
impact of the adoption of this change on the disclosure in our
financial statements.
(d) FINANCIAL INSTRUMENTS DISCLOSURES
In March 2007, the CICA issued section 3862 FINANCIAL INSTRUMENTS -
DISCLOSURES and Section 3863 FINANCIAL INSTRUMENTS - PRESENTATION,
which together comprise a complete set of disclosure and presentation
requirements that revise and enhance current disclosure requirements.
Section 3862 requires disclosure of additional detail by financial
asset and liability categories. Section 3863 establishes standards for
presentation of financial instruments and non-financial derivatives.
The standard deals with the classification of financial instruments,
from the perspective of the issuer, between liabilities and equity, the
classification of related interest, dividends, losses and gains, and
the circumstances in which financial assets and financial liabilities
are offset. These sections are effective for interim and annual
financial statements beginning January 1, 2008. The adoption of this
change on the disclosure in the financial statements did not have an
effect on the Company for the six months ended June 30, 2008.
(E) INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
In 2006, the Canadian Accounting Standards Board ("AcSB") published a
new strategic plan that will significantly affect financial reporting
requirements for Canadian companies. The AcSB strategic plan outlines
the convergence of Canadian GAAP with IFRS over an expected five year
transitional period. In February 2008 the AcSB announced that the date
- 6 -
for publicly-listed companies to use IFRS, replacing Canadian GAAP, is
for interim and annual financial statements relating to fiscal years
beginning on or after January 1, 2011. The transition date of January
1, 2011 will require the restatement for comparative purposes of
amounts reported by the Company for the year ended December 31, 2010.
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.
In addition to the above, reference should be made to the recent accounting
pronouncements in Canada and in United States that are described in Note 11 of
the Company's consolidated financial statements for the years ended December 31,
2007, 2006 and 2005.
FINANCIAL INSTRUMENTS
The Company's financial instruments as at June 30, 2008 consist of cash,
marketable securities, short-term investments, amounts receivable and deposits
and accounts payable and accrued liabilities. For discussion of the valuation of
these financial instruments for financial reporting purposes, refer to the
Critical Accounting Estimates and Recent Accounting Pronouncements section
above.
RISK FACTORS
The Company's operations and results are subject to a number of different risks
at any given time. These factors, include but are not limited to litigation,
disclosure regarding exploration, additional financing, project delay, titles to
properties, price fluctuations and share price volatility, operating hazards,
insurable risks and limitations of insurance, management, foreign country and
regulatory requirements, currency fluctuations and environmental regulations
risks. Exploration for mineral resources involves a high degree of risk. The
cost of conducting programs may be substantial and the likelihood of success is
difficult to assess. For a more complete discussion of these risks and others,
reference should be made to the December 31, 2007 Management Discussion and
Analysis.
DISCLOSURE CONTROL AND PROCEDURES
Management has designed disclosure controls and procedures, or has caused them
to be designed under its supervision, to provide reasonable assurance that
material information relating to the Company, is made known to management by
others within those entities, particularly during the period in which the annual
filings are being prepared. Management has also designed such internal control
over financial reporting, or caused it to be designed under management's
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and preparation of the financial statements for the six
months ended June 30, 2008 in accordance with Canadian Generally Accepted
Accounting Principles. There has been no change in the Company's disclosure
controls and procedures or in the Company's internal control over financial
reporting that occurred during the completed year that has materially affected,
or is reasonably likely to materially affect, the Company's disclosure controls
and procedures or internal control over financial reporting.
SHARE DATA INFORMATION
As of August 11, 2008 there were 52,132,064 common shares, 1,666,670 warrants
and 3,910,000 stock options outstanding.
INVESTOR RELATIONS
The Company currently does not engage any outside investor relations
consultants. Mr. Sean Hurd is the Company's Vice-President, Investor Relations
and coordinates investor relations' activities. The Company maintains a website
at www.imaexploration.com.
- 7 -
FORM 52-109F2 CERTIFICATION OF INTERIM FILINGS
I, Joseph Grosso, President and Chief Executive Officer of IMA Exploration Inc.,
certify that:
1. I have reviewed the interim filings (as this term is defined in
Multilateral Instrument 52-109 Certification of Disclosure in Issuers'
Annual and Interim Filings) of IMA Exploration Inc. (the issuer) for
the interim period ending June 30, 2008;
2. Based on my knowledge, the interim filings do not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated or that is necessary to make a statement not misleading in
light of the circumstances under which it was made, with respect to the
period covered by the interim filings;
3. Based on my knowledge, the interim financial statements together with
the other financial information included in the interim filings fairly
present in all material respects the financial condition, results of
operations and cash flows of the issuer, as of the date and for the
periods presented in the interim filings;
4. The issuer's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures and
internal control over financial reporting for the issuer, and we have:
(a) designed such disclosure controls and procedures, or caused
them to be designed under our supervision, to provide
reasonable assurance that material information relating to the
issuer, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which the interim filings are being prepared; and
(b) designed such internal control over financial reporting, or
caused it to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with the issuer's GAAP; and
5. I have caused the issuer to disclose in the interim MD&A any change in
the issuer's internal control over financial reporting that occurred
during the issuer's most recent interim period that has materially
affected, or is reasonably likely to materially affect, the issuer's
internal control over financial reporting.
Date: August 11, 2008
/s/ Joseph Grosso
-----------------------------------
Joseph Grosso,
President & Chief Executive Officer
FORM 52-109F2 CERTIFICATION OF INTERIM FILINGS
I, Arthur Lang, Chief Financial Officer of IMA Exploration Inc., certify that:
1. I have reviewed the interim filings (as this term is defined in
Multilateral Instrument 52-109 Certification of Disclosure in Issuers'
Annual and Interim Filings) of IMA Exploration Inc. (the issuer) for
the interim period ending June 30, 2008;
2. Based on my knowledge, the interim filings do not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated or that is necessary to make a statement not misleading in
light of the circumstances under which it was made, with respect to the
period covered by the interim filings;
3. Based on my knowledge, the interim financial statements together with
the other financial information included in the interim filings fairly
present in all material respects the financial condition, results of
operations and cash flows of the issuer, as of the date and for the
periods presented in the interim filings;
4. The issuer's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures and
internal control over financial reporting for the issuer, and we have:
(a) designed such disclosure controls and procedures, or caused
them to be designed under our supervision, to provide
reasonable assurance that material information relating to the
issuer, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which the interim filings are being prepared; and
(b) designed such internal control over financial reporting, or
caused it to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with the issuer's GAAP; and
5. I have caused the issuer to disclose in the interim MD&A any change in
the issuer's internal control over financial reporting that occurred
during the issuer's most recent interim period that has materially
affected, or is reasonably likely to materially affect, the issuer's
internal control over financial reporting.
Date: August 11, 2008
/s/ Arthur Lang
------------------------------------
Arthur Lang, Chief Financial Officer