UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACTO OF 1934
For the fiscal year ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to __________
Commission File Number: 333-5302-D
APEX MINERALS CORPORATION
(Exact name of Registrant as specified in charter)
Delaware 87-0543383
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
57 West 200 South, Suite 310, Salt Lake City, Utah 84101
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 359-9309
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None N/A
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
None N/A
Check whether the Issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such fling requirements for the past 90 days. (1) Yes
[X] No [ ] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $-0-
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days: The aggregate market value of the voting stock held
by non-affiliates of the Registrant computed by using the closing sale price
has been indeterminable within the past 60 days as there has been no market
for the stock.
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At October 1, 1997 there were
5,055,800 shares of the Registrant's Common Stock outstanding.
Documents Incorporated by Reference: Exhibits from the Registrant's
registration statement on Form SB-2 (file no. 333-5302-D) are incorporated by
reference into Part III hereof.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Apex Minerals Corporation (the "Company") was incorporated in the State
of Delaware on July 10, 1995. In June 1996 it exchanged and transferred all
of its ownership interest in certain mining claims for 90% of the outstanding
stock of Apex Minerals of Utah, Inc., a Utah corporation incorporated on June
7, 1996, a majority owned subsidiary of the Company (hereinafter the
"Subsidiary"). The Company's principal executive offices are located at 57
West 200 South, Suite 310, Salt Lake City, Utah 84101. Its telephone number
is (801) 359-9300.
In July and August 1995 the Company located 45 unpatented lode mining
claims known as the Dix-Apex #1 through #45, inclusive, in the Tutsagubet
Mining District in Washington County, Utah. An additional 25 unpatented lode
mining claims known as the Dix Apex #46 through #70, inclusive, in the same
mining district were located in December 1995 by the Company. These claims
were transferred to the Subsidiary in June 1996. Also in June 1996 the
Subsidiary acquired two Utah state mineral leases in the same mining
district. The state mining leases were purchased from Gaylon W. Hansen, a
principal shareholder of the Company, and an officer and a director of the
Subsidiary, in return for 5% of the outstanding common stock of the
Subsidiary. In November 1996 the Company located nine additional unpatented
lode claims known as the Dix Apex #71 through #79, inclusive, and a fraction
of #80, also located in the Tutsagubet Mining District in Washington County,
Utah. Since its inception, neither the Company nor its Subsidiary has
conducted any significant activities on these mining properties.
During the year ended June 30, 1997, the Company filed a registration
statement on Form SB-2 with the U.S. Securities and Exchange Commission to
raise up to $200,000 through the sale of up to 800,000 shares at $0.25 per
share. At June 30, 1997, none of the shares had been sold pursuant to such
offering. Following the year-end, and through the date of this report, the
Company has raised $76,450 through the sale of 305,800 shares.
Proposed Activities
The Company proposes to use the proceeds from its stock offering to
maintain the current mining properties owned by the Subsidiary and to seek
joint venture partners or others interested in exploring these properties for
possible germanium and gallium commercial mineralization. In addition, the
Company may seek to acquire additional mining claims either in the same mining
district or elsewhere in locations which management determines to be favorable
mining and/or exploration areas. The Company may perform certain limited
geophysical, geologic, and other testing and evaluation studies on theses
mining properties with a view to making further determinations as to the
prospects of placing such properties into eventual production. The Company
does not intend to participate significantly in any possible mining activities
on such properties, but rather will attempt to locate joint venture partners
and/or other interested parties to bring such properties into production. The
participation of the Company will depend upon the nature of the joint venture
or other arrangement; however, it is possible that one or more members of
management of the Company or its Subsidiary would be actively involved in the
mining activities of any such arrangement. However, in most instances, it is
anticipated that the Company will not be in a position to contribute to
significant exploration or mining activities on these properties. It may also
be possible that the Company would transfer its interest in the current
properties for a non-participating interest in any such possible mining
venture. For example, the Company may sell the properties for cash and/or
other consideration, which in turn may be used for other future exploration or
mining or other projects of the Company.
Management of the Company and the Subsidiary have and will continue to
review other geologic or geographic areas to locate and identify prospects
deemed to be favorable for possible exploration or mining activity. When and
if a favorable area has been located, management will determine whether such
properties may be available for exploration or mining activities.
Where federal land, that is, public domain, is involved, lode mining
claim location notices must be filed with the Office of the Bureau of Land
Management (the "BLM") in the state where the acreage is located. The claim
procedures for federal lode mining claims require that the locator distinctly
mark the location on the ground so that its boundaries can be readily traced
and making a record of the name or names of the locators, date of location,
and a description of the claim or claims located by reference to some natural
object or permanent monument that will identify the claim. Leases issued by
the BLM are perpetual so long as the locator pays the annual maintenance fee
of $100 per claim due by August 31st of each year, and makes the required
filings with the BLM and the county in which the claims are located.
State leasing programs, typically on sections of land reserved by the
federal government to support schools in the states. In the State of Utah
metalliferous mineral leases are granted for a base term of ten years, and for
as long thereafter as the leased substances are produced in commercial
quantities. The annual lease fee on Utah leases is $1.00 per acre, and for
each fractional part thereof, and the State of Utah is granted a royalty of 8%
for fissionable metalliferous minerals, and 4% on non-fissionable
metalliferous minerals, produced from the leased lands.
Fee exploration and/or mining leases on private and/or located on mineral
claim properties are obtained from the individual landowners pursuant to
negotiations. Generally, leases run from one to ten years, have a negotiated
royalty reserved to the landowners, and often involve an amount of first year
lease bonuses. In addition, fee leases many times require that the lessee
engage in exploration and/or mining activities on the acreage within a
specified time period.
Management of the Company anticipates that the majority of the net
proceeds of its offering will be loaned to the Subsidiary for maintenance and
possibly limited exploitation of the properties. Such loans to the Subsidiary
will be evidenced by promissory notes secured by the interest of the
Subsidiary in the mining properties. The Subsidiary intends to reserve from
the proceeds sufficient funds to pay the annual maintenance fees on its
existing properties through August 1998. In addition, the Company intends to
repay loans to current officers and directors for previous location costs and
maintenance fees on its existing properties.
Management anticipates that a significant portion of the proceeds of its
offering will be used in reimbursing management for expenses involved in
locating suitable joint venture partners or locating other parties interested
in the properties. If only the minimum amount of proceeds is raised, the
Company and its Subsidiary will not maintain a separate office, but will use
the facilities of its secretary/treasurer, who has agreed to provide office
space for the Company and the Subsidiary at no cost until sufficient funds are
available to locate a separate office. The Company will reimburse such
officer for out-of-pocket expenses involved with the use of such office by the
Company and the Subsidiary such as long distance telephone expenses, copy
costs, etc. The office will be shared with other unrelated entities and
activities of such person. If sufficient funds in excess of the minimum
amount of its offering are raised, the Company and the Subsidiary intend to
seek and maintain a separate office for their activities.
Management anticipates that it will use its contacts in the mining
industry to locate potential joint venture partners or others interested in
the mining properties held by the Subsidiary. The Company will use the
proceeds from its offering to assemble geophysical surveys and other geologic
and other data on the properties and/or adjoining properties and present the
same to potential joint venture partners and others along with a proposal by
the Company relating to further disposition of the properties. In addition,
if sufficient funds are raised in excess of the minimum amount of proceeds, it
is anticipated that members of management will perform additional geologic
exploration on the properties, including limited exploration drilling
activities. The Subsidiary anticipates compensating such individuals at
competitive rates for any such labor performed, subject to approval of the
board of directors of the Subsidiary, excluding the vote of any interested
party.
Competition
The Company and the Subsidiary will compete with a number of mining and
exploration entities, most of whom have resources much greater than those of
the Company and the Subsidiary. In particular, the Properties adjoining those
held by the Subsidiary are held by Preussag Cominco, a company significantly
larger than the Company in resources and personnel. The Company believes that
the experience of its officers and directors, and the management of the
Subsidiary, in the mining industry will allow it to compete favorably with
such larger entities in locating suitable joint venture partners or others
interested in the properties, and in locating and acquiring additional mineral
properties of potential economic merit in the future.
Regulation
In order to commence mining operations on the Subsidiary's properties, an
operator would be required to file an application for and receive mining
permits from the BLM, the State of Utah, and other regulatory bodies before
mining operations could commence. Federal law requires that prior to
commencing operations, the operator must submit a reclamation plan which
includes an environmental assessment or an environmental impact statement
which sets forth the plan of operation, assesses the impact of the operations
on the local environment, and specifies the extent and type of reclamation
which would be required. Such plan would also require the posting of a bond.
No assurance can be given that a mining permit would be approved or issued for
any mining operations on the Subsidiary's properties. Compliance with such
requirements could be costly and time consuming.
Any future mining operations on the properties would also be subject to
existing federal, state, and local laws and regulations relating to employee
health and safety. The Company is unable to estimate the cost of such
compliance which would be borne by a joint venture partner or other operator.
In general, mining and milling operations are subject to compliance with the
regulations promulgated under the federal Mining and Minerals Policy Act of
1970 and the requirements of the federal Occupational Safety and Health
Administration (OSHA), as well as equivalent state regulations.
Management anticipates that in negotiations with potential joint venture
partners, such joint venture partners will be contractually obligated to bear
the cost of compliance with environmental laws, including the posting of a
bond, if required, for future reclamation work. However, if such entity is
unable to comply with such environmental laws, it is anticipated that the
Company would be responsible for such compliance, the cost of which could be
substantial depending upon the type of mining operation on such property.
Failure to comply with applicable governmental regulations could result
in enforcement proceedings by appropriate agencies. Compliance with existing
regulations and those that may come into existence in the future may have a
substantial impact upon the capital expenditures relating to operation of any
mining operation on the properties and could adversely affect its overall
operations.
Employees
At October 1, 1997, neither the Company nor its Subsidiary had any
employees, and management does not anticipate retaining any employees in the
immediate future. However, the Company may retain the services of some or
several of its officers and directors, or the management of the Subsidiary, to
perform geological and other services on an as-needed basis, for which the
Company intends to compensate such persons at market rates.
ITEM 2. DESCRIPTION OF PROPERTY
General
The Company has located 70 unpatented lode mining claims located on BLM
property in the Tutsagubet Mining District, Washington County, Utah. The
claims are designated as the Dix-Apex #1 through #70, inclusive. These claims
have been assigned to the Subsidiary. In addition, in January 1996, Gaylon
Hansen, an officer and director of the Subsidiary, and a principal shareholder
of the Company, acquired tow Utah state school trust lands metalliferous
leases in the same mining district. The state leases are designated as ML
47201 and ML 47202. These state leases have also been assigned to the
Subsidiary. The claims are located in the central Beaver Dam Mountains in
Washington County, Utah, approximately 10 air miles west of St. George, Utah.
The claims owned by the Company surround claims held by Preussag Cominco (see
Map 2). The following table sets forth the BLM serial number and the claim
name for each of the 70 BLM claims held by the Subsidiary:
BLM Serial Number Claim Name
UMC357712-728 Dix-Apex #1-#17
UMC357729 Dix-Apex Fraction #18
UMC357730-733 Dix-Apex #19-#22
UMC357734 Dix-Apex Fraction #23
UMC357735-740 Dix-Apex #24-#29
UMC357741 Dix-Apex Fraction #30
UMC357742-755 Dix-Apex #31-#44
UMC357756 Dix-Apex #45 Fraction
UMC359470 Dix-Apex Fraction #46
UMC359471-492 Dix-Apex Fraction #47-#68
UMC359493 Dix-Apex Fraction #69
UMC359494 Dix-Apex #70
UMC361376-384 Dix-Apex #71-#79
UMC361385 Dix-Apex Fraction #80
The property on which the Subsidiary's claims are located is without
known mineral ore reserves and the proposed program is exploratory in nature.
However, beginning in 1984 several members of present management were
affiliated with various entities which conducted exploratory activities on the
current properties. Gaylon W. Hansen, an officer and a director of the
Subsidiary, and a principal shareholder of the Company, located a number of
claims, including the ones presently owned by the Company. In approximately
1986 such claims were transferred to a corporation of which Mr. Hansen was an
executive officer and a director. Mr. Gay, an officer and a director of the
Subsidiary, and Mr. Kastelic, an officer and a director of the Subsidiary and
the Company, were both affiliated with such entity and performed geologic
services on such properties, including the properties owned by the
Subsidiary. Funding for such entity was exhausted in 1987 and the claims were
returned to Mr. Hansen who transferred them to an unrelated entity in
approximately 1989. The claims were ultimately abandoned by such new entity
in approximately 1993 when the mining laws were amended to require the current
maintenance fees.
Access to the Property
Access to the property is by U.S. Highway 91, approximately 20 miles by
road westerly from St. George, Utah.
Geology
The property is located in the Beaver Dam Mountains in the southwest
region of the State of Utah, which trend toward the northwest from the Virgin
River. The property elevations are generally 4,000 to 5,000 feet high, but
some peaks reach a maximum of 7,700 feet. The rock formations of this
mountain range consist of Precambrian to Triassic in age and consist mainly of
sedimentary limestones and dolomites.
The oldest rocks are mica and hornblende schists cut by pegmatite dykes.
These are overlain by several hundred feet of red quartzite with beds of fine
conglomerate. Above this are several hundred feet of sandy shale, sandstone
and arenaceous limestone and then thick-bedded limestone (600 to 800 feet of
blue limestone and 600 to 800 feet of grey lime-stone). This sequence is
overlain by thin-bedded limestone and, finally, sandstone.
The sediments strike generally toward the northwest and dip shallowly to
the east and west. They are part of a basin and range fault block, that is,
faulted along the western margin and tilted toward the east. Major and minor
faulting is also present within the block. The sedimentary rock formations
have been folded into a major eroded anticlinal structure throughout the
mountain range of this district. The axis of this anticlinal structure trends
northwest and plunges gently to the southeast and northwest.
The property on which the claims of the Subsidiary are located contains
fault fissure veins which host the main type of mineralization in the
district. In addition to the vein type mineralization, there is a connected
bedding controlled type of mineralization, which occurs within the bedded
strata of the Pennsylvanian Callvile formation, which forms the principle rock
unit on the flanks of the anticlinal structure. This structure encompasses an
area of approximately 15 miles long and approximately 5 miles wide.
Certain fault fissure veins and bedded deposits which occur within the
anticlinal structures contain minerals such as copper, lead, zinc, silver,
germanium and gallium.
Mining history in the district includes production of copper as early as
1870 and more recently the production of germanium and gallium in the 1980s.
Notable in the district is the Apex Mine which is the first mine in the world
to be operated primarily for the production of germanium and gallium.
However, the Apex mine has been inactive since approximately 1991. Although
management does not have any direct knowledge of the specific reasons for such
closure, management believes that the principal reason that the mine has been
inactive since 1991 was because the current owner of the mine, at the time of
purchase, chose to close the mine and sell the operating plant because of the
lower price of gallium and germanium in the early 1990s. Mr. Lawrence R. Bernst
ein, a director of the Subsidiary, has had extensive experience in performing
research on the Apex Mine, particularly for the U.S. Geological Survey. (See
"Management.") In addition, Mr. Gaylon Hansen, an officer and director of the
Subsidiary, has performed significant independent geological work within the
mining district which includes the Apex mine. However, other than such
geological work performed for others or themselves, no officer or director of
the Company or the Subsidiary has had any relationship with, or interest in,
such mine or its owners or operators. Management believes that the
mineralization on the claims held by the Subsidiary are similar to the
mineralization of the Apex Mine which is surrounded by the Subsidiary's
claims. However, there is no assurance that commercial quantities of gallium
or germanium exist on the claims held by the Subsidiary.
Gallium
Gallium is a scarce element currently produced predominantly as a
byproduct of aluminum and zinc recovery. Its production is controlled by a
small number of companies worldwide. Gallium is probably best know for its
use in gallium arsenide and related semiconductors, as well as for medical
purposes. At present, new gallium supply (as opposed to recycled gallium) is
obtained predominately from the processing of bauxite to recover aluminum,
with a small amount coming from the processing of zinc ores. The supply of
gallium in the U.S. and Europe (and probably Japan) is currently dominated by
the French chemical company, Rhone-Poulenc, which probably controls well over
half of the supply in these areas. There has not been any domestic gallium
production in many years. However, two U.S. companies, Recapture Metals, Inc.
of Blanding, Utah, and Eagle-Picher Industries, Inc. of Quapaw, Oklahoma,
recover and process gallium from scrap or other sources.
About 95% of gallium n the U.S. is used in gallium arsenide and related
materials. In 1995, about 65% of gallium went into optoelectronic devices,
such as light emitting diodes (LEDs), laser diodes, photdetectors, and solar
cells. Integrated circuits used about 33%, with the remainder going into
research, alloys, pharmaceuticals, and other uses.
The published prices for gallium have risen sharply since 1995 due
primarily to increased demand of gallium in integrated circuits and LEDs, the
disrupted supply from the former Soviet Union, as well as the concentrated
control of the supply.
Germanium
Although originally used in certain electronic applications, germanium is
currently used primarily in fiber optics, infrared optics, catalysts,
phosphors, and medicinal compounds. Germanium is a very scarce element and is
produced almost entirely as a byproduct of zinc recovery. The price of
germanium has increased more than 500% in the last year. This increase is
believed due to increased demand, particularly for fiber optics and catalysts,
and the exhaustion of stockpiles and disruption of supply from countries of
the former Soviet Union.
Production of germanium is mainly from the U.S., China, France, and
Germany. In the U.S. germanium concentrates are produced by Savage Zinc, Inc.
from its Tennessee mines, and from the RedDog Mine in Alaska by Cominco.
Several companies produce germanium from scrap or other secondary sources.
Title
The owner of an unpatented mining claim holds possessory title to the
claim. Possessory title is not legal title in the usual sense of that term,
nor does it arise out of any instrument or grant by the United States or out
of any action taken by any officer or agency of the state or federal
governments. Only when a claim is patented is there any affirmative
government grant under which legal title vests in the usual concept of
property ownership. Possessory title arises as a matter of law out of the
performance by the locator of the claim of certain acts of location, including
the staking of claim boundaries and the making of certain record filings in
compliance with the requirements of federal and state laws. The validity of
an unpatented mining claim cannot be conclusively determined by an inspection
of public records. It is dependent upon the legal availability of the lands
at the time the location is made and the validity of the mineral discovery
within the boundaries of each claim, in compliance with federal, state and
local laws relative to location procedures. Prior to 1992 possessory title
was maintained against subsequent location by the annual performance of labor
or improvements on or for the benefit of each mining claim. Since 1992
possessory title for persons holding ten or more claims is maintained by
payment of an annual claim fee of $100. The Company believes it has met these
requirements.
The Company believes the unpatented mining claims it holds have been
located in compliance with the applicable state and federal mining laws and
generally accepted standards in the mining industry. The Company is not aware
at the present time of any material conflicts with other parties concerning
the claims and believes it has valid possessory right in those claims.
Maps
The following maps appear after this page:
1. A map indicating the location of the claims in the State of
Utah.
2.A land status map showing the various lode claims and leases comprising
the property.
Map 2 shows the claims held by the Subsidiary, as well as claims held by
other entities. The claims held by the Subsidiary should not be confused with
the other claims which are owned and operated by other entities in which
neither the Company nor the Subsidiary has any interest.
ITEM 3. LEGAL PROCEEDINGS
Neither the Company, any of its properties, nor its Subsidiary is a party
to any material pending legal proceedings or government actions, including any
material bankruptcy, receivership, or similar proceedings. Management of the
Company does not believe that there are any material proceedings to which any
director, officer or affiliate of the Company or its Subsidiary, any owner of
record of beneficially of more than five percent of the common stock of the
Company, or any associate of any such director, officer, affiliate of the
Company, or security holder is a party adverse to the Company or its
Subsidiary or has a material interest adverse to the Company or its
Subsidiary.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the fiscal year ended June 30, 1997.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is presently no public trading market for the common stock of the
Company, and there has been no reported bid price of the Company's common
stock.
Since its inception the Company has not paid any dividends on its common
stock and the Company does not anticipate that it will pay dividends in the
foreseeable future.
At October 1, 1997, the Company had approximately 18 shareholders of
record. The Company acts as its own transfer agent.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has had no material revenues from operations since its
inception in July 1995. During the year ended June 30, 1997, the Company
generated no revenue. Although the Company may conduct studies or perform
research and consulting services for other mining companies in the future, it
is not anticipated that such revenues will be material to the operations of
the Company.
Management believes that the equity funding received by the Company
through its offering will allow the Company to operate through August 1998.
Except for the previous loans and services by shareholders in the aggregate
amount of $41,100, the sole fixed obligation of the Company is the payment of
the annual maintenance fees to the BLM and the State of Utah which would equal
approximately $15,000 through August 1998. The Company does not anticipate
the need to raise additional funds in the next 12 months. If sufficient funds
in excess of the minimum amount of its offering are raised, the Subsidiary
intends to seek additional mining properties and/or conduct limited geologic
evaluation of the current or additional mining properties in the form of a
limited drilling program or otherwise. Other than the purchase of office
equipment and furniture from the funds in excess of the minimum amount raised,
if any, the Company anticipates no additional purchases of equipment.
Management anticipates that the $27,500 allocated from the use of
proceeds will be adequate to provide the operating capital necessary to locate
a suitable joint venture partner or other party interested in the mining
properties.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately
following the signature page of this annual report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Orton & Company, P.C. were previously the principal accountants for the
Company. On September 23, 1997, the Board of Directors approved the
engagement of the firm of Crouch, Bierwolf, & Chisholm to replace Orton &
Company, PC, which declined to stand for reelection as the Certifying
Accountants for the Company.
In connection, with the audit of the previous fiscal year ended June 30,
1996, there were no disagreements with Orton & Company on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved to their
satisfaction would have caused them to make reference in connection with their
opinion to the subject matter of the disagreement, and said firm has not
advised the Company of any reportable events.
The accountants' report of Orton & Company on the consolidated financial
statements of the Company and subsidiary as of and for the year ended June 30,
1996 did not contain any adverse opinion or disclaimer of opinion, nor were
they qualified as to uncertainty, audit scope, or accounting principles.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
General
The officers and directors of Apex Minerals Corporation are as follows:
William R. Kastelic President and Director
Howard M. Oveson Secretary/Treasurer and Director
The officers and directors of the Subsidiary, Apex Minerals of Utah,
Inc., are as follows:
William R. Kastelic President and Director
S. Parker Gay, Jr. Vice-president and Director
Gaylon W. Hansen Secretary/Treasurer and Director
Lawrence R. Bernstein, Ph.D. Director
Set forth below is the business experience and biographical information
on each of the executive officers and directors of Apex Minerals Corporation
and Apex Minerals of Utah, Inc.:
WILLIAM R. KASTELIC, has been a director of Apex Minerals Corporation
since February 1996, and has been President since June 1996. He has also been
a director and the president of Apex Minerals of Utah, Inc. since its
inception in June 1996.Since 1988 Mr. Kastelic has been self-employed as an
independent consultant in areas of geology, mining, metallurgy, project
evaluation, and environmental compliance. He received a bachelor of science
degree in geological engineering in 1953 from the University of Utah, and a
business administration degree in business administration in 1970 from the
same university. Age 71.
HOWARD M. OVESON, has been a director and the secretary/treasurer of Apex
Minerals Corporation since July 1995. Since 1980 Mr. Oveson has been
self-employed as a business consultant to private and public companies. He is
also a director of Yellow Gold of Cripple Creek, Inc., a Colorado corporation,
and Golden Maple Mining and Leaching Company, Inc., a Montana corporation,
both of which companies are reporting companies. Age 64.
GAYLON W. HANSEN, was a director and the president of Apex Minerals
Corporation from July 1995 until June 1996. He has been a director and the
secretary/treasurer of Apex Minerals of Utah, Inc. since its inception in June
1996. Since 1984 Mr. Hansen has been self-employed as an independent
geologist, engaged in identifying and acquiring selected high technology
mineral deposits, and especially including the identification of gallium and
germanium mineral occurrences and their ore deposits. He received a bachelor
of science degree in geology in 1960 from Westminster College, Salt Lake City,
Utah. Age 64.
LAWRENCE R. BERNSTEIN, was a director of Apex Minerals Corporation from
May 1996 until June 1996. He has been a director of Apex Minerals of Utah,
Inc. since its inception in June 1996. Since 1992 he has been the director of
Terrametrix, Menlo Park, CA, where he has performed chemical, geological,
biomedical, and materials research and analysis. Also since 1992 he has been
employed as the minerals editor for the International Centre for Diffraction
Data, Newtown Square, PA, where he is the editor for scientific publications
and an international database. From 1990 to 1992 he was employed as a senior
research scientist and laboratory director for Yaskawa Electric Manufacturing
Company, Inc., Mountain View, CA, where he performed materials science
research. Dr. Bernstein graduated from Harvard University, Cambridge,
Massachusetts, with a bachelor of arts degree in geology (highest honors) in
1977 and a master of arts degree in geology in 1978. He received a doctorate
degree in geology in 1985 from Stanford University, Stanford, CA. Dr.
Bernstein is the author of numerous articles, including the following relating
to gallium and germanium: Geology and Mineralogy of the Apex Mine, Washington
County, Utah. U.S. Geological Survey Open File Report 85-511 (1985);
Germanium Geochemistry and Mineralogy. Geochimica et Cosmochimica Acta, 49,
2409-2422 (1985); and Geology and Mineralogy of the Apex Germanium-Gallium
Mine, Washington County, Utah. U.S. Geological Survey Bulletin 1577 (1986).
Dr. Bernstein is a member of the Mineralogical Society of America; Sigma Xi;
and the American Geophysical Union. Age 40.
S. PARKER GAY, JR., was a director of Apex Minerals Corporation from
February 1996 until June 1996. He has been a director and a vice-president of
Apex Minerals of Utah, Inc. since its inception in June 1996. Since 1971 he
has been the owner and operator of Applied Geophysics, Inc., Salt Lake City,
Utah, involved in uranium, base metal, iron ore, and oil and gas exploration,
utilizing air, ground, and helicopter geophysical methods in the U.S., Mexico,
and Central and South America. Mr. Gay received a bachelor of science from
the Massachusetts Institute of Technology in 1952, and a master of science
degree in geophysics from Stanford University, Stanford, CA, in 1961. Mr. Gay
is the author of numerous articles and three books on geology. He is a member
of the Society of Exploration Geophysicists (Vice-president, 1974-1975); the
European Association of Exploration Geophysicists; the American Institute of
Mining Engineers (Geophysical Unit Chairman, 1969); the Utah Geological
Association; the Utah Geophysical Society (President, 1971-1973); the
Geological Society of Peru (Director, 1962-1964); and the New Basement
Tectonics Committee. Age 65
Each director of the Company is elected to hold office until the next
annual meeting of the shareholders and until his or her successor is elected
and duly qualified. Each officer of the Company is appointed to hold office
until the first meeting of the Board of Directors immediately following the
annual meeting of shareholders. There are no family relationships among any
of the directors or executive officers of the Company or its Subsidiary.
Compliance with Section 16(a) of the Exchange Act
The Company's common stock is not registered pursuant to Section 12(g) of
the Securities Exchange Act of 1934, as amended, and therefore no disclosure
is required pursuant to this item.
ITEM 10. EXECUTIVE COMPENSATION
There has been no compensation awarded to, earned by, or paid to any of
the executive officers of the Company or its Subsidiary during the years ended
June 30, 1997 or 1996, except that Mr. Gay, Mr. Bernstein, and Mr. Kastelic
each received 150,000 shares of common stock of the Company in partial
consideration of accepting appointments as officers and/or directors of the
Company or the Subsidiary during the year ended June 30, 1996.
Neither the Company nor its Subsidiary has a written employment contract
with any of its officers.
Under Utah law the Company is entitled to pay compensation to its
directors, unless the articles or bylaws provide otherwise. The Company has
not adopted a policy of compensating its directors, and neither the Company's
Articles of Incorporation, nor the current Bylaws prohibit such payments. The
Company and the Subsidiary have agreed to reimburse their officers and
directors for out-of-pocket expenses relating to their activities as officers
or directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by current
management concerning the ownership of common stock of the Company as of
October 1, 1997, of (i) each person who is known to the Company to be the
beneficial owner of more than 5 percent of the Common Stock; (ii) all
directors and executive officers; and (iii) directors and executive officers
of the Company as a group:
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership<F1> Percent of
Class
Howard M. Oveson<F2> 1,650,000 32.64%
57 West 200 South
Suite 310
Salt Lake City, Utah 84101
Gaylon W. Hansen 1,650,000 32.64%
1780 Shaleh Meadows Road
#6-C
Salt Lake City, UT 84117
Ronald N. Vance 1,000,000 19.78%
57 West 200 South
Suite 310
Salt Lake City, UT 84101
William R. Kastelic 150,000 2.97%
7124 Brent Lane
Salt Lake City, UT 84121
S. Parker Gay, Jr. 150,000 2.97%
3801 Barbara Way
Salt Lake City, UT 84117
Lawrence R. Bernstein 150,000 2.97%
107 Gilbert Avenue
Menlo Park, CA 94025
Executive Officers and
Directors as a Group
(2 Persons) 1,800,000 35.6%
Unless otherwise indicated, this column reflects amounts as to which the
beneficial owner has sole voting power and sole investment power.
In addition, Mr. Oveson beneficially owns 300 shares, or 3%, of the
outstanding shares of common stock (no par value) of Apex Minerals of Utah,
Inc., the majority owned Subsidiary of the Company.
There are no arrangements, known to the Company, the operation of which
may at a subsequent date result in a change of control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The founders of the Company were Gaylon W. Hansen, a current officer and
director of the Subsidiary, and a principal shareholder of the Company, and
Howard M. Oveson, an officer, a director, and a principal shareholder of the
Company. On or about July 11, 1995, each of the organizers of the Company
paid $1,650 cash consideration for 1,650,000 shares each of the Common Stock
of the Company.
In June 1996 the Subsidiary acquired two Utah mineral leases from Mr.
Hansen, who had received such leases from the State of Utah in January 1996.
In return, the Subsidiary issued 500 shares, or 5%, of its authorized and
outstanding stock to Mr. Hansen in return for such leases. The Board of
Directors of the Subsidiary determined that the consideration for such the
issuance of such stock was adequate. Mr. Hansen had a cost basis in such
claims of approximately $1,250. (See Item 2. Description of Properties.)
Mr. Hansen may perform geologic services for the Subsidiary pertaining to
its properties, for which he will be paid market rates, subject to the
approval of the Board of Directors of the Subsidiary, excluding the vote of
Mr. Hansen as a director.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. The following financial statements are
included in this report:
Report of Crouch, Bierwolf & Chisholm, Certified Public Accountants
Balance Sheet at June 30, 1997
Statements of Operations for the fiscal years ended June 30, 1997
and 1996, and for the period from inception (July 10, 1995)
through June 30, 1997
Statements of Stockholders' Equity from July 10, 1995, through June
30, 1997
Statement of Cash Flows for the fiscal years ended June 30, 1997
and 1996, and for the period from inception (July 10, 1995)
through June 30,1997
Notes to Financial Statements
(a)(2) Exhibits. The following exhibits are included as part of this
report:
Exhibit No. Description of ExhibitPage
3.1 Certificate of Incorporation *
3.2 By-Laws of the Company currently in effect *
4.1 Form of certificate evidencing shares of Common Stock *
10.1 Quit Claim Deed dated June 18, 1996 transferring the
BLM mining claims to the Subsidiary *
10.2 Utah Mineral Lease No. 47201 *
10.3 Utah Mineral Lease No. 47202 *
10.4 Utah Mineral Lease Assignment re ML 47201 *
10.5 Utah Mineral Lease Assignment re ML 47202 *
10.6 Amended Utah Mineral Lease Assignment re ML 47201 *
10.7 Amended Utah Mineral Lease Assignment re ML 47202 *
16.1 Letter on change in certifying accountant **
23.1 Consent of Crouch, Bierwolf & Chisholm
*Incorporated by reference from the Company's registration statement
on Form SB-2 filed with the Securities and Exchange Commission, file
no.333-5302-D.
**Incorporated by reference from the Company's Current Report on
Form 8-K dated September 23, 1997.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
forth quarter of the fiscal year ended June 30, 1997. However, a report dated
September 23, 1997, was filed in connection with the change of accountants.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Apex Minerals Corporation
Date: October 10, 1997
By: /s/ William R. Kastelic
William R. Kastelic, President and
Chief Executive Officer
By: /s/ Howard M. Oveson
Howard M. Oveson, Chief Financial
Officer
In accordance with the Exchange Act, this report has been signed below by
the following person on behalf of the registrant and in the capacitates and on
the dates indicated.
By: /s/ William R. Kastelic October 10, 1997
William R. Kastelic, Director
By: /s/ Howard M. Oveson October 10, 1997
Howard M. Oveson, Director
<PAGE>
APEX MINERALS CORPORATION AND SUBSIDIARY
(a development stage company)
Consolidated Financial Statements
June 30, 1997
<PAGE>
C O N T E N T S
Independent Auditors' Report 3
Consolidated Balance Sheet 4
Consolidated Statement of Operations 6
Consolidated Statement of Stockholders' Equity 7
Consolidated Statement of Cash Flows 8
Notes to the Consolidated Financial Statements 10
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Apex Minerals Corporation
We have audited the accompanying consolidated balance sheet of Apex Minerals
Corporation (a Delaware Corporation) and subsidiary (a development stage
company) as of June 30, 1997 and the related consolidated statement of
operations, stockholders' equity and cash flows for the year then ended and
for the period from inception (July 10,1995) to June 30, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. The financial statements of Apex
Minerals Corporation and subsidiary as of June 30, 1996, were audited by other
auditors whose report dated July 8, 1996, expressed an unqualified opinion on
those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Apex
Minerals Corporation and subsidiary as of June 30, 1997 and the results of its
operations and its cash flows for the year then ended and for the period from
inception (July 10, 1995) to June 30, 1997, in conformity with generally
accepted accounting principles.
Salt Lake City, Utah
October 9, 1997
<PAGE>
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Balance Sheet
June 30, 1997
ASSETS
CURRENT ASSETS
Cash $ 247
Prepaid mining leases (Note 1) 1,612
Total Current Assets 1,859
OTHER ASSETS
Mining claims (Note 1) 10,569
Organizational costs (Note 1) 534
Prepaid offering costs (Note 5) 3,947
Total Other Assets 15,050
TOTAL ASSETS $ 16,909
See Accountants' Report and Notes to Financial Statements
(continued)<PAGE>Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Balance Sheet (Continued)
June 30, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party (Note 2) $ 41,100
Accrued expenses and accounts payable 2,430
Total Current Liabilities 43,530
Minority interests 338
STOCKHOLDERS' EQUITY
Common stock, authorized 50,000,000 shares
at $.001 par value; 4,750,000 shares issued and
outstanding 4,750
Capital in excess of par value 1,863
Retained deficit (accumulated during the development
stage) (33,572)
Total Stockholders' Equity (26,959)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 16,909
<PAGE>Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Statement of Operations
For the
Period from
July 10, 1995
(Inception)
For the year ended June 30, to June 30,
REVENUE 1997 1996 1997
Consulting Revenue $ - $ 7,250 $ 7,250
Total Revenue - 7,250 7,250
EXPENSES
General and Administrative
Expense 27,913 17,650 45,563
Total Expenses 27,913 17,650 45,563
OTHER INCOME (EXPENSES)
Loss attributable to
minority interests 864 48 912
Gain on Sale of Stock (Note 2) - 4,129 4,129
864 4,177 5,041
Net (loss) before provision
for taxes (27,049) (6,223) (33,272)
Provision for Taxes (Note 1) 150 150 300
Net income (loss) $ (27,199) $ (6,373) $ (33,572)
Loss Per Share (Note 1)
$ (.01) $ (.00) $ (.01)
Average shares
outstanding 4,750,000 3,533,333 4,141,666
<PAGE>
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Statement of Stockholders' Equity
Capital
in
Common Stock Excess of Retained Minority
Shares Amount Par Value (Deficit) Interests
Balance, July 10,
1995 - $ - $ - $ - $ -
Issuance of
shares for cash
at $.001 3,300,000 3,300 - - -
Issuance of
shares for
services at
$.001 (Note 2) 1,300,000 1,300 - - -
Issuance of
shares for
services at
$.0134 (Note 2) 150,000 150 1863 - -
Issuance of
subsidiary stock
for services &
state mining
claims (Note 2) - - - - 1,250
Net (loss) for
the year - - (6,373) (48)
Balance,
June 30, 1996 4,750,000 4,750 1,863 (6,373) 1,202
Net (loss) for
the year - - - (27,199) (864)
4,750,000 $ 4,750 $ 1,863 $ (33,572) $ 338
<PAGE>
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Statement of Cash Flows
For the Period Ended
For the period
July 10, 1995
CASH FLOWS FROM to
OPERATING ACTIVITIES June 30, 1997 June 30, 1996 June 30, 1997
Net income (loss) $ (27,199) $ 6,373) (33,572)
Items not requiring cash
flow:
Amortization 161 111 272
Increase in accrued
expenses and accounts
payable 17,330 100 2,430
Issuance of stock for
services - 3,688 3,688
Minority share of net
loss (864) (48) (912)
Net Cash (Used) by
Operating Activities (10,572) (2,522) (28,094)
CASH FLOWS FROM
INVESTING ACTIVITIES
Cash paid for:
Mining claims - (9,944) (9,944)
Prepaid mining leases (299) (1,313) (1,612)
Organization costs - (557) (557)
Prepaid offering costs (3,947) - (3,947)
Net cash (used) by
Investing Activities (4,246) (11,814) (16,060)
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common stock - 3,300 3,300
Loans from related parties 11,100 15,000 41,100
Net Cash provided by
Financing Activities 11,100 18,300 44,400
NET INCREASE (DECREASE) IN CASH (3,717) 3,964 247
CASH AT BEGINNING OF PERIOD 3,964 - -
CASH AT END OF PERIOD $ 247 $ 3,964 $ 247
(continued)<PAGE>
Apex Minerals Corporation and Subsidiary
(a development stage company)
Consolidated Statement of Cash Flows (continued)
For the Period Ended
For the Period
July 10, 1995
to
Supplemental Cash Flow
Information June 30, 1997 June 30, 1996 June 30, 1997
Cash paid for:
Interest $ - $ - $ -
Taxes 50 50 100
Non Cash Flow Information
Stock issued for:
Services $ - $ 3,688 $ 3,688
Organization costs - 250 250
Mining claims - 625 625
<PAGE>
Apex Minerals Corporation and Subsidiary
(a development stage company)
Notes to the Consolidated Financial Statements
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in the State of Delaware on July 10, 1995 for the
primary purpose of acquiring mining claims. In July and August 1995 the
Company located 45 unpatented lode mining claims known as the Dix Apex #1
through #45 inclusive, in the Tutsagubet Mining District in Washington County,
Utah. An additional 25 unpatented lode mining claims known as the Dix Apex
#46 through #70 inclusive, were located in the same mining district in
December 1995. Another ten claims (#71 to #80) were added in December 1996.
The Company's 90% owned subsidiary, Apex Minerals of Utah, Inc. was
incorporated in June 1996 for the purpose of holding title to the Utah mining
claims. These claims were transferred in June 1996.
The Company exchanged all of its interest in the mining claims and the prepaid
mining leases for 9,000 shares of the subsidiary. Another 1,000 shares were
issued to other parties for various services rendered and two state mining
leases (See Note 2).
In the future, the Company will recognize it's revenues from the sale of
mineral and mining claims and may conduct studies and perform research and
consultation from time to time.
Loss Per Share
The computations of loss per share of common stock are based on the weighted
average number of shares outstanding at the date of the financial
statements.
Provision for Income Taxes
The Company adopted Statement of Financial Standards No. 109 "Accounting for
Income taxes" in the fiscal year ended June 30, 1996.
Statement of Financial Accounting Standards No. 109 " Accounting for Income
Taxes" requires an asset and liability approach for financial accounting and
reporting for income tax purposes. This statement recognizes (a) the amount
of taxes payable or refundable for the current year and (b) deferred tax
liabilities and assets for future tax consequences of events that have been
recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the recognition of
accounting transactions for tax and financial reporting purposes. There were
no temporary differences at June 30, 1997 and earlier years; accordingly, no
deferred tax liabilities have been recognized for all years.
<PAGE>
Apex Minerals Corporation and Subsidiary
(a development stage company)
Notes to the Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Provision for Income Taxes
The Company has cumulative net operating loss carryforwards of approximately
$33,000 at June 30, 1996. No effect has been shown in the financial
statements for the net operating loss carryforwards as the likelihood of
future tax benefit from such net operating loss carryforwards is not presently
determinable. Accordingly, the potential tax benefits of the net operating
loss carryforwards, estimated based upon current tax rates of $11,000 at June
30, 1997 have been offset by valuation reserves of the same amount. The net
change in deferred tax asset and offsetting valuation reserve amounted to $0
for 1997.
The Company has available $33,000 in net operating loss carryforwards that
will begin to expire in the year 2011.
Cash and Cash Equivalents
For the purposes of the statements of cash flows, cash and cash equivalents
are defined as demand deposits at banks and certificates of deposits with
maturities less than three months.
Consolidation
The consolidated financial statements as of June 30, 1997 include the accounts
of the parent company, Apex Minerals Corporation, and its majority owned
subsidiary Apex Minerals of Utah, Inc. All significant intercompany
transactions and accounts have been eliminated.
Organization Costs
Organization costs of the Company are being amortized over 60 months. Total
amortization costs for the year 1997 was $161.
Development Stage Company
The Company has yet to fully develop any material income from its stated
primary objective and it is classified as a development stage company. All
income, expenses, cash flows and stock transactions are reported since
inception.
Mining Claims
The Company has acquired several mining claims in Washington county in the
state of Utah. The Company has expended funds in staking the claims and
making the proper filings with the appropriate county, state and federal
agencies.
<PAGE> Apex Minerals Corporation and Subsidiary
(a development stage company)
Notes to the Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Prepaid Mining Leases
Each year, the Bureau of Land Management charges $100 per mining claim which
is to be paid in advance for the fiscal year September 1 to August 31. The
Company has prepaid its lease on the mining claims to August 31, 1997. The
State of Utah also charges for leases on mining claims within the state.
State leases are prepaid through December 31, 1997.
NOTE 2 - RELATED PARTY TRANSACTIONS
During 1997, two shareholders have provided loans and legal services for the
Company. Total contributions made to the Company during 1997 was $26,100
($15,000 in services and $11,100 in cash). The loan is non-interest bearing
and payable on demand.
During 1996, 450,000 shares of the parent corporation (Apex) and 800 shares of
the subsidiary corporation (Apex-Utah) were issued to various officers and
directors for services rendered including the staking of two state mining
leases in the same district as the BLM mining claims. 300,000 shares of Apex
were issued at a stated value of $.001 for total consideration of $300 for
services rendered and 150,000 shares were issued at a stated value of $.0134
for total consideration of $2,013 for services rendered. The fair value of
the services rendered was the estimated value of the stock issued. The 800
shares of Apex-Utah were issued at a value of $1.25 per share, the same value
placed on the 9,000 shares issued for the mining claims and prepaid leases
(book value).
During the year ended June 30, 1996, a shareholder/officer/director sold stock
to the Company for total consideration of $100. The Company sold the stock
for $4,229.
NOTE 3 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. In these financial
statements, assets, liabilities and earnings involve extensive reliance on
management's estimates. Actual results could differ from those estimates.
Apex Minerals Corporation and Subsidiary
(a development stage company)
Notes to the Consolidated Financial Statements
NOTE 4 - FAIR VALUES OF FINANCIAL INSTRUMENTS
The following listing of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, "Disclosure About
Fair Value of Financial Instruments", The carrying amounts and fair value of
the Company's financial instruments at June 30, 1997 and June 30, 1996 are as
follows:
June 30, 1997 June 30, 1996
Carrying Amounts Fair Values Carrying Amounts Fair Values
Cash and Cash
Equivalents $ 247 $ 247 $ 3,964 $ 3,964
Accounts Payable
Including Current
Maturities 41,100 40,089 15,000 14,631
The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:
Cash and Cash Equivalents
The carrying amounts reported on the balance sheet for cash and cash equivalents
approximate their fair value.
Notes Payable
The fair values of notes payable are estimated using discounted cash flow
analyses (90 days) based on the Company's incremental borrowing rate as the
discount rate (10%).
NOTE 5 - SUBSEQUENT EVENT
In August 1997, the Company completed a public offering of 300,000 shares at
$0.25 per share for total consideration of $75,000. The Company expended
$3,947 in accounting, legal, registration and other miscellaneous costs in
preparation of the registration.
ACCOUNTANT'S CONSENT
We hereby consent to the use of our audit report of Apex Minerals Corporation
and subsidiary dated October 9, 1997 for the year ended June 30, 1997 in the
10 - KSB annual report.
/s/ Crouch, Bierwolf, & Chisholm
October 9, 1997
Salt Lake City, Utah
