FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
GOLDEN QUEEN MINING CO. LTD.
(Exact name of registrant as specified in its charter)
Province of British Columbia 0-21777 Not Applicable
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Green Flag Building, Suite 211-A
104 South Freya
Spokane, Washington 99202
(Address of principal executive offices)
Registrant's telephone number, including area code: (509) 535-4022
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Common Stock,
without par value
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [X]
The number of outstanding shares of the issuer's common stock at April 30, 1997
was 22,208,400 shares.
Transitional Small Business Disclosure Format. Yes [ ] No [X]
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
TABLE OF CONTENTS
SAFE HARBOR STATEMENT
Page
PART I
Item 1: Financial Statements 1
Item 2: Management's Discussion and Analysis or
Plan of Operation 9
PART II
Item 1: Legal Proceedings 11
Item 2: Changes in Securities 11
Item 3: Defaults Upon Senior Securities 11
Item 4: Submission of Matters to a Vote of Security Holders 11
Item 5: Other Information 11
Item 6: Exhibits and Reports on Form 8-K 11
SIGNATURES
(i)
<PAGE>
Safe Harbor Statement
Except for the historical information contained herein, certain of the matters
discussed in this report are "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995, which involve risks and
uncertainties. Potential risks and uncertainties include, without limitation,
the likelihood of continued losses from operations pending development of the
Company's Soledad Mountain Project in Kern County, California, the need to
obtain significant additional financing in order to develop the project, risks
associated with the mining industry generally, environmental risks associated
with mining, fluctuating gold prices, and other factors that may affect future
results as described below.
The Company has no revenue from mining operations and has experienced losses
from operations for each of the last ten years. This trend is expected to
continue for at least the next two years and is expected to reverse only if, as
and when gold is produced from the Soledad Mountain Project.
No assurance can be given that the Soledad Mountain Project will be placed into
production. Based upon currently available information, the Company estimates
that it will need approximately $47,800,000 to begin production, which is
expected to come from additional sales of common stock and from bank borrowings
or other means. Alternatively, the Company may determine that it is in the
best interests of its shareholders to enter into a joint development or similar
arrangement with another mining company to develop the Soledad Mountain
Project.
The Company does not have a commitment for bank financing or for the
underwriting of additional shares of its common stock, and is not a party to
any agreement or arrangement providing for the joint development of the Soledad
Mountain Project. Whether and to what extent such financing can be obtained
will depend on a number of factors, not the least of which is the price of
gold. Gold prices fluctuate widely and are affected by numerous factors beyond
the Company's control, such as inflation, the strength of the United States
dollar and foreign currencies, global and regional demand, and the political
and economic conditions of major gold producing countries throughout the world.
As of April 30, 1997, world gold prices were approximately $340 per ounce, a
reduction of approximately 14% from prices at the end of 1996. If gold prices
do not strengthen, it may not be economical for the Company to place the
Soledad Mountain Project into production.
The Company is subject to all of the risks inherent in the mining industry,
including environmental hazards, industrial accidents, labor disputes, unusual
or unexpected geologic formations, cave-ins, flooding and periodic
interruptions due to inclement weather. These risks could result in damage to,
or destruction of, mineral properties and production facilities, personal
injury, environmental damage, delays, monetary losses and legal liability.
Although the Company maintains or can be expected to maintain insurance within
ranges of coverage consistent with industry practice, no assurance can be given
that such insurance will be available at economically feasible premiums.
Insurance against environmental risks (including pollution or other hazards
resulting from the disposal of waste products generated from exploration and
production activities) is not generally available to the Company. Were the
Company subjected to environmental liabilities, the payment of such liabilities
would reduce the funds available to the Company. Were the Company unable to
fund fully the cost of remedying an environmental problem, it might be required
to suspend operations or enter into interim compliance measures pending
completion of remedial activities.
(ii)
<PAGE>
PART I
Item 1. FINANCIAL STATEMENTS.
The unaudited consolidated financial statements of the Company for the periods
covered by this report are set forth at pages 2 through 8.
[The balance of this page has been intentionally left blank.]
1
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
(a development stage company)
Consolidated Balance Sheets
(U.S. dollars)
March 31, 1997 December 31, 1996
(unaudited) (audited)
Assets
Current Assets
Cash and cash equivalents $ 2,750,352 $ 5,436,497
Accounts receivable 11,766 133,164
Prepaid expenses and other
current assets 31,316 55,603
---------- ----------
Total current assets $ 2,793,434 $ 5,625,264
Properties and equipment, net 1,146,833 683,310
Mineral properties 5,139,461 4,941,839
Deferred exploration and development 11,777,912 9,799,839
Other assets 353,500 353,500
---------- ----------
Total assets $21,211,140 $21,403,752
========== ==========
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 412,642 $ 507,713
Accrued liabilities 21,528 69,046
Current maturities of long-term debt 1,175,415 203,175
---------- ----------
Total current liabilities 1,609,585 779,934
Long-term debt, less current maturities 889,859 1,901,520
---------- ----------
Total liabilities $ 2,499,444 $ 2,681,454
---------- ----------
Shareholders' Equity
Preferred shares, without par,
3,000,000 shares authorized;
0 shares outstanding 0 0
Common shares, without par,
100,000,000 shares authorized
22,208,400 and 22,051,400
shares issued 21,043,281 20,886,029
Accumulated deficit (2,331,585) (2,163,731)
---------- ----------
Total shareholders' equity 18,711,696 18,722,298
Liabilities and shareholders' equity $21,211,140 $21,403,752
========== ==========
2
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
(a development stage company)
Consolidated Statements of Loss
(Unaudited)
Three Month Period Ended
<TABLE>
<CAPTION>
Cumulative Amounts
From Date of
Inception
(November 21, 1985)
through
(U.S. Dollars) March 31, 1997 February 29, 1996 March 31, 1997
- -------------------------------------------- ----------------- -------------------
<S> <C> <C> <C>
General and administrative
expenses $ 198,621 $ 111,637 $ 2,340,478
Interest expense 23,750 75 230,332
Interest income (54,970) (11,654) (765,990)
Other (income expense 453 0 6,822
Write-off of mineral properties 0 0 277,251
--------------------------------------------------
Net loss $ 167,854 $ 100,058 $ 2,088,893
==================================================
Net loss per share $ 0.01 $ 0.01 N/A
--------------------------------------------------
Weighted average shares
outstanding 22,187,622 16,215,181 N/A
</TABLE>
3
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
(a development stage company)
Consolidated Statements of Cash Flows
(Unaudited)
Three Month Period Ended
<TABLE>
<CAPTION>
Cumulative Amounts
From Date of
Inception
(November 21, 1985)
through
(U.S. Dollars) March 31, 1997 February 29, 1996 March 31, 1997
- -------------------------------------------- ----------------- -------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (167,854) $ (100,058) $ (2,088,893)
Adjustments to reconcile
net loss to cash used
in operating activities:
Write-off of mineral properties 0 0 277,251
Amortization and depreciation 13,585 2,630 55,495
Loss on disposition of property
and equipment 0 0 10,949
Changes in assets and liabilities:
Accounts receivable 121,398 (671) (11,766)
Prepaid expenses and other
current assets 24,287 (6,826) (31,316)
Accounts payable and accrued
liabilities (142,589) (86,141) 434,170
----------------------------------------------------
Cash used in
operating activities (151,173) (191,066) (1,354,110)
----------------------------------------------------
FINANCING ACTIVITIES:
Borrowing under long-term debt 0 9,000 2,681,669
Payment of long-term debt (39,421) (2,430) (888,946)
Issuance of common shares
for cash 157,252 214,178 10,647,351
Share issue costs 0 0 (242,692)
Issuance of special warrants 0 0 9,453,437
----------------------------------------------------
Cash provided by
financing activities 117,831 220,748 21,650,819
----------------------------------------------------
INVESTING ACTIVITIES:
Deferred exploration and
development expenditures (1,978,073) (439,675) (12,937,100)
Deposits on mineral properties 0 (250,000) (353,500)
Purchase of mineral properties (197,622) (99,305) (3,042,480)
Purchase of property
and equipment (477,108) (20,003) (1,221,769)
Proceeds from sale of assets 0 0 8,492
----------------------------------------------------
Cash used in investing
activities (2,652,803) (808,983) (17,546,357)
----------------------------------------------------
NET CHANGE IN CASH AND
CASH EQUIVALENTS (2,686,145) (779,301) 2,750,352
CASH AND CASH EQUIVALENTS,
beginning balance 5,436,497 950,832 0
----------------------------------------------------
CASH AND CASH EQUIVALENTS,
ending balance $ 2,750,352 $ 171,531 $ 2,750,352
====================================================
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid for:
4
<PAGE>
NON-CASH FINANCING AND INVESTING
ACTIVITIES:
Exchange of notes for
common shares 0 0 $ 682,282
Exchange of note for future
royalty payments 0 0 $ 150,000
Shares for mineral property 0 0 $ 280,211
</TABLE>
5
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
(a development stage company)
Consolidated Statements of Changes in Shareholders' Equity
<TABLE>
<CAPTION>
Common Shares Accumulated
(U.S. Dollars) Shares Amount Deficit Total
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
November 21, 1985
Issuance of shares for cash 1,425,001 $ 141,313 $ (15,032) $ 141,313
Loss for the year (15,032)
-----------------------------------------------------------------
Balance, May 31, 1986 1,425,001 141,313 (15,032) 126,281
Issuance of shares
for cash 550,000 256,971 256,971
for property 25,000 13,742 13,742
Loss for the year (58,907) (58,907)
-----------------------------------------------------------------
Balance, May 31, 1987 2,000,00 1412,026 (73,939) 338,087
Issuance of shares - for cash 1,858,748 1,753,413 1,753,413
Earnings for the year 38,739 38,739
-----------------------------------------------------------------
Balance, May 31, 1988 3,858,749 2,165,439 (35,200) 2,130,239
Issuance of shares
for cash 1,328,750 1,814,133 1,814,133
for property 100,000 227,819 227,819
Loss for the year (202,160) (202,160)
-----------------------------------------------------------------
Balance, May 31, 1989 5,287,499 4,207,391 (237,360) 3,970,031
Issuance of shares
for cash 1,769,767 2,771,815 2,771,815
for property 8,875 14,855 14,855
Loss for the year (115,966) (115,966)
-----------------------------------------------------------------
Balance, May 31, 1990 7,066,141 6,994,061 (353,326) 6,640,735
Earnings for the year (28,706) ( 28,706)
-----------------------------------------------------------------
Balance, May 31, 1991 7,066,141 6,994,061 (324,620) 6,994,441
Loss for the year (157,931) (157,931)
-----------------------------------------------------------------
Balance, May 31, 1992 7,066,141 6,994,061 (482,551) 6,511,510
Loss for the year (285,391) (285,391)
-----------------------------------------------------------------
Balance, May 31, 1993 7,066,141 6,994,061 (767,942) 6,226,119
Issuance of shares
for cash 5,834,491 1,536,260 1,536,260
for property 128,493 23,795 23,795
Loss for the year (158,193) (158,193)
Share issue costs (18,160) ( 18,160)
-----------------------------------------------------------------
Balance, May 31, 1994 13,029,125 8,554,116 (944,295) 7,609,821
</TABLE>
6
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
(a development stage company)
Consolidated Statements of Changes in Shareholders' Equity
(Continued)
<TABLE>
<CAPTION>
Common Shares Accumulated
(U.S. Dollars) Shares Amount Deficit Total
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Issuance of shares
for cash 648,900
for property 182,866 182,866
Loss for the year (219,576) (219,576)
----------------------------------------------------------------
Balance, May 31, 1986 13,678,025 $8,736,982 $(1,163,871) $7,573,111
Issuance of common shares
for cash 2,349,160 2,023,268 0 2,023,268
Issuance of common shares
for debt 506,215 662,282 0 662,282
Issuance of 5,500,000
special warrants 0 9,453,437 0 9,453,437
Special warrants issue cost 0 0 (100,726) (100,726)
Net loss for the year 0 0 (426,380) (426,380)
----------------------------------------------------------------
Balance, May 31, 1996 16,533,400 20,875,969 (1,690,977) 19,184,992
Issuance of common shares
for cash 18,000 10,060 0 10,060
Issuance of common shares
for special warrants 5,500,000 0 0 0
Special warrants issue cost 0 0 (123,806) (123,806)
Net loss for the period 0 0 (348,948) (348,948)
----------------------------------------------------------------
Balance, December 31, 1996 22,051,400 20,886,029 (2,163,731) 18,722,298
Issuance of common shares
for cash 157,000 157,252 0 157,252
Net loss for the period 0 0 (167,854) (167,854)
----------------------------------------------------------------
Balance, March 31, 1997 22,208,400 $21,043,281 $(2,331,585) $18,711,696
</TABLE>
7
<PAGE>
GOLDEN QUEEN MINING CO. LTD.
(a development stage company)
Note to Consolidated Financial Statements
(Unaudited)
Note 1: Significant Accounting Policies
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instruction to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes thereto included in the
Company's 1996 annual report on Form 10-KSB. In the opinion of management, all
adjustments, consisting only of normal recurring accruals, considered necessary
for a fair presentation have been included. Operating results for the three
month period ending March 31, 1997 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1997.
During 1996, the Company elected to change its fiscal year end from May 31 to
December 31. Financial information presented in this Form 10-QSB for the
preceding fiscal year is for the three month period ended February 29, 1996.
In order to maintain consistency of financial information contained in
regulatory filings in both Canada and the United States, management of the
Company has elected not to recast its operations from the preceding fiscal year
to parallel the 1997 quarterly results. Management of the Company believes
there are no seasonal or other factors which would affect the comparability of
this information.
Note 2: Subsequent Event
In May 1997, the Company entered into an agreement with an underwriter
pursuant to which the underwriter has agreed to purchase, for resale on a
private placement basis, 3,000,000 special warrants at a price of C$2.20
(US $1.58) per special warrant. Each of the special warrants will be
exchangeable into one common share of the Company, subject to adjustment in
certain circumstances. Through this placement of special warrants, the
Company plans to raise proceeds of approximately C$6,600,000 (US $4,740,000).
The underwriter also has the option to purchase, for resale, up to an
additional 500,000 special warrants at the same price. This option to
purchase expires on the closing date of the special warrant issue. The
proceeds raised will be used to fund the ongoing capital expenditures at
the Soledad Mountain Project and for general corporate purposes. The closing
of the issue is scheduled for May 29, 1997 and is subject to certain
conditions, including the receipt of approval of The Toronto Stock Exchange
and the execution of a definitive underwriting agreement.
[The balance of this page has been intentionally left blank.]
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
RESULTS OF OPERATIONS.
OVERVIEW. During the periods indicated in the discussion which follows, the
Company has been in the exploration stage of its business and therefore has
earned no revenue from its operations. Variations in the level of expenses
between periods have been as a result of the nature, timing and cost of the
activities undertaken in the various periods. Financing of the continued
exploration of the Soledad Mountain Project during such periods has been
obtained through the sale of shares of common stock of the Company in
predominantly offshore transactions and through borrowings.
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED FEBRUARY 29,
1996. General and administrative expenses increased to $198,000 for the three
months ended March 31, 1997, from $112,000 for the three month period ended
February 29, 1996. The increase is primarily due to additional management
staffing added during 1996. Interest expense increased to $23,000 for the
three month period ended March 31, 1997, from zero for the three month period
ended February 29, 1996, as a result of borrowings made in 1996. Interest
income increased to $55,000 for the three months ended March 31, 1997, from
$12,000 for the three months ended February 29, 1996, primarily as a result of
a significant increase in the average balance of invested funds. As a result
of the foregoing factors, the Company incurred a net loss of $167,000 for the
three months ended March 31, 1997, versus a net loss of $100,000 for the three
month period ended February 29, 1996.
LIQUIDITY AND CAPITAL RESOURCES.
The Company acquired the Soledad Mountain Project in 1986 and since then has
been engaged in solidifying its land position and conducting several drilling
and sampling programs in order to delineate ore reserves on the project. The
Company continues to focus its attention on exploring and developing the
project, with a view toward commencing production in the second half of 1998.
During the three months ended March 31, 1997, the Company expended
approximately $2,653,000 on the Soledad Mountain Project. On a cumulative
basis since inception, the Company has expended approximately $17,546,000 on
the project.
As of March 31, 1997, the Company held approximately $2,750,000 in cash and
$1,184,000 in working capital. Based upon currently available information, the
Company estimates that it will need approximately $47,800,000 to begin
production at the Soledad Mountain Project. This financing is expected to be
derived from additional sales of common stock and from bank borrowings.
Alternatively, the Company may determine that it is in the best interests of
its shareholders to enter into a joint development or similar arrangement with
another mining company to develop the Soledad Mountain Project.
As is disclosed in Note 2 to the financial statements accompanying this report,
and in Item 5 of this report, in May, 1997, the Company entered into an
agreement with an underwriter pursuant to which the underwriter has agreed
to purchase, for resale on a private basis, 3,000,000 special warrants at a
price of C$2.20 (US $1.58) per special warrant. Each of the special warrants
will be exchangeable into one common share of the Company, subject to
adjustment in certain circumstances. Through this placement of special
warrants, the Company plans to raise proceeds of approximately $6,600,000
(US $4,740,000). The underwriter also has the option to purchase, for
resale, up to an additional 500,000 special warrants at the same price. This
option to purchase expires on the closing date of the special warrant issue.
The proceeds raised will be used to fund the ongoing capital expenditures
at the Soledad Mountain Project and for general corporate purposes. The
closing of the issue is scheduled for May 29, 1997 and is subject to certain
conditions, including the receipt of approval of The Toronto Stock Exchange
and the execution of a definitive underwriting agreement.
The Company does not have any other commitment for bank financing or for the
underwriting of additional shares of its common stock, and is not a party to
any agreement or arrangement providing for the joint development of the Soledad
Mountain Project. Whether and to what extent additional or alternative
financing options are pursued by the Company will depend on a number of
important factors, including: the results of further development activities at
the Soledad Mountain Project, management's assessment of the financial markets,
the overall capital requirements for development of the project, and the price
of gold. Gold prices fluctuate widely and are affected by numerous factors
beyond the Company's control, such as inflation, the strength of the United
States dollar and foreign currencies, global and regional demand, and the
political and economic conditions of major gold producing countries throughout
the world. As of April 30, 1997, world gold prices were approximately $340 per
ounce, a reduction of approximately 14% from prices at the end of 1996. If
gold prices do not strengthen, it may not be economical for the Company to
place the Soledad Mountain Project into production.
PLAN OF OPERATIONS.
The Company has substantially completed its exploration of the Soledad Mountain
Project and intends to develop the project as an open pit gold and silver
mining and cyanide heap leach recovery operation. The Company's plans include
the construction of facilities, mining by open pit methods and processing
precious metals ores at a rate of up to 3.6 million tonnes (4 million tons) per
year for at least seven years. This will be followed by heap detoxification
and reclamation of the project site. The Company expects to begin producing
gold and silver from the project in the second half of 1998.
The total capital cost of the Soledad Mountain Project is estimated to be
$59,500,000, consisting of an initial capital component and a future component
covering deferred and replacement capital, including reclamation. Initial
capital costs required to put the project into production are estimated to be
$47,800,000. This estimate is based on a 12-month construction period starting
immediately after permits are received. The estimate includes purchases of all
equipment and facilities, including mobile equipment. Deferred and replacement
capital costs required to complete all facilities to accommodate life-of-mine
ore production are estimated to be $11,700,000, including continuation of land
acquisition payments, leach pad additions, equipment replacement and/or major
overhauls and heap rinse down. Reclamation occurring during mine operation
will be carried as an operating expense.
Based on a stripping ratio of 2.49 to 1, the Company estimates total operating
costs of $5.92 per tonne ($5.36 per ton) of ore processed, comprised of mining
costs of $2.79 per tonne ($2.53 per ton), processing costs of $2.59 per tonne
($2.34 per ton) and general and administrative costs of $0.55 per tonne ($0.50
per ton). The feasibility report prepared for the Company by Pincock, Allen &
Holt described below concludes that these proposed operating costs have been
estimated in accordance with industry practice. The Company estimates that
94,300 ounces per year of gold equivalent can be produced at a direct cash cost
of $223 per ounce and a total operating cost, including royalties and local
taxes, of $245 per ounce. Total production cost, including capital but
excluding sunk cost, is estimated at $334 per ounce of gold equivalent.
In addition, the Company had budgeted $5,400,000 for additional on-going
drilling to further delineate ore at the Soledad Mountain Project. These
proposed drilling activities include: a $2,200,000 deep drilling program to
determine whether substantial minable reserves, estimated on the basis of
underground cross-cut assays from the 1930s and 1940s to be approximately 13.6
million tonnes (15.0 million tons), exist at 152 to 366 meters (500 to 1,200
feet) below the surface of the project; a $300,000 drilling program to further
delineate ore at the stockworks area of the proposed mine; a $1,400,000 in-fill
drilling program to be conducted during the first two years of mine production
to facilitate detailed mine planning; and a $1,500,000 program to explore the
south-east extension of one identified ore vein to determine whether there is a
continuation of the structure.
The following table summarizes the activities proposed to be undertaken by the
Company during the twelve-month period commencing January 1, 1997, and the
estimated costs of such activities.
Underground drilling $2,000,000
Surface drilling 1,000,000
Engineering design 2,400,000
Permitting and feasibility study 1,000,000
---------
Total $6,400,000
=========
The Company has expended approximately $2,000,000 to complete a final bankable
feasibility study prepared by Pincock, Allen & Holt of Lakewood, Colorado in
December 1996. This expenditure was necessary to complete the design of the
crushing plant, or heap, solution handling systems, haul roads and associated
surface infrastructure at the Soledad Mountain Project. The bankable
feasibility study is now at a level of accuracy deemed appropriate for project
financing purposes. An internal preliminary feasibility study was prepared by
the Company and reviewed by Pincock, Allen & Holt in early 1996; that report,
however, was a study of the project generated solely for internal purposes, to
ascertain the economic viability of the project. It was not prepared for
purposes of obtaining bankable feasibility.
PART II
Item 1. LEGAL PROCEEDINGS.
Neither the Company nor its subsidiary, Golden Queen Mining Company, Inc., is a
party to, nor are they threatened by, any material legal proceeding as of the
date of this report.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company's shareholders during the
first quarter of 1997.
Item 5. OTHER INFORMATION.
In May 1997, the Company entered into an agreement with an underwriter
pursuant to which the underwriter has agreed to purchase, for resale on a
private placement basis, 3,000,000 special warrants at a price of C$2.20
(US $1.58) per special warrant. Each of the special warrants will be
exchangeable into one common share of the Company, subject to adjustment in
certain circumstances. Through this placement of special warrants, the
Company plans to raise proceeds of approximately C$6,600,000 (US $4,740,000).
The underwriter also has the option to purchase, for resale, up to an
additional 500,000 special warrants at the same price. This option to
purchase expires on the closing date of the special warrant issue. The
proceeds raised will be used to fund the ongoing capital expenditures at the
Soledad Mountain Project and for general corporate purposes. The closing of
the issue is scheduled for May 29, 1997 and is subject to certain conditions,
including the receipt of approval of The Toronto Stock Exchange and the
execution of a definitive underwriting agreement.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS. A financial data schedule is filed as Exhibit No. 27 to this
report. No other exhibits are filed as part of this report.
FORM 8-K REPORTS. The Company filed no reports on Form 8-K during the first
quarter of 1997.
11
<PAGE>
SIGNATURES
In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GOLDEN QUEEN MINING CO. LTD.
By: /s/ Bernard F. Goodson
---------------------------------
its Vice President of
Administration
and Controller
May 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM the
Company's unaudited consolidated financial statements for the three-month period
ended March 31, 1997, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,750,352
<SECURITIES> 0
<RECEIVABLES> 11,766
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,793,434<F1>
<PP&E> 18,417,706<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,211,140
<CURRENT-LIABILITIES> 1,609,585
<BONDS> 0
0
0
<COMMON> 21,043,281
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 21,211,140
<SALES> 0
<TOTAL-REVENUES> 54,970<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 199,074<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,750
<INCOME-PRETAX> (167,854)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (167,854)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
<FN>
<F1>Includes prepaid expenses and other current assets of $31,316.
<F2>Consists of: properties and equipment, net of depreciation, of $1,146,833;
mineral properties of $5,139,461; deferred exploration and development of
$11,777,912; and other assets of $353,500.
<F3>Consists of interest income.
<F4>Consists of general and administrative expenses of $198,621 and other expenses
of $453.
</FN>
</TABLE>
