UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended December 31, 1994
OR
[ ] 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 : 1-9904
VANDERBILT GOLD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 88-0224117
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4625 Wynn Road, Suite 103, Las Vegas NV 89103
(Address of principal executive offices) (Zip Code)
(702) 362-3152
(Registrant's telephone, including area code)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (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.
[X] Yes [ ] No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not 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-K or any amendment to the
Form 10-K.
[ ]
The aggregate market value of the common stock held by non-affiliates of the
Registrant as of March 22, 1995, based upon a price of $.25 per share, the
average of the bid and ask quotations as of such date was $7,244,053. As of
March 22, 1995 there were 28,976,210 issued and outstanding shares of common
stock of the registrant.
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PART I
Item 1. Description of Business.
General Development of Business
The Registrant, Vanderbilt Gold Corporation, a Delaware corporation
("Registrant", the "Company" or "Vanderbilt"), is in the business of acquiring,
developing, and producing precious metals properties. The Registrant has one
wholly-owned subsidiary --- Star Mining Corporation, a Nevada Corporation.
Vanderbilt and its subsidiary are hereinafter referred to as "Vanderbilt".
Vanderbilt is engaged in the mining business, primarily in the Western United
States and Mexico, with its principal operation at the Morning Star Mine
("Morning Star") which is located in San Bernardino County, California.
Morning Star is a gold and silver property which has produced significant
quantities of these precious metals. Vanderbilt has operated this mine
continuously since 1973. See "Properties."
In January 1995, Vanderbilt entered into a purchase and/or option agreement
covering approximately 67,000 acres in the western area of the State of
Durango, Mexico. Preliminary exploration indicates that the mineralization
contains gold, silver and copper in commercially mineable quantities. See
"Properties and Management's Discussion And Analysis".
Narrative Description of Business
Vanderbilt is a production oriented gold and silver mining company. Its
business activities include property evaluation, exploration, and if warranted,
acquisition, development, construction of facilities, and the mining,
processing, and sale of metals, principally gold and silver in the form of dore
bullion. All dore bullion is sold to outside companies for final processing.
Vanderbilt may enter into joint ventures or partnerships with other business
entities to accomplish these same purposes.
Morning Star Mine
The Morning Star Mine produces gold and silver dore bullion.
From 1973 through 1984, the Morning Star was developed and operated as an
underground mine. The ore was processed at a mill owned by Vanderbilt located
about 17 miles from the minesite. During late 1984, the Morning Star was
converted to an open pit operation and the ore was processed by heap leaching
commencing in 1985. In June, 1987, Management decided to add a fine crushing
plant to the facility in order to increase gold recovery rates. In March,
1990, production problems began which resulted in a sharp drop off in the
amount of gold and silver being recovered from the ores on the heap leach pads.
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As a result, Management suspended mining operations, except for the crushing of
previously mined ore, and concentrated its attention on the gold recovery
problems. The resultant drop in cash flows and liquidity caused the Company to
curtail its other activities, lay off personnel, defer payments to vendors, and
continue the moratorium on mining activity at Morning Star. Working capital
dried up and for two years the Company survived on loans and other extensions
of credit from the Company's President and others. During the three years
ended December 31, 1993, efforts at the Morning Star were directed to
reclamation and remediation. During that time, heap leach pad #1 was
detoxified (the cyanide was removed) and final reclamation commenced.
In late 1994 as funds became available, the Morning Star was made ready for
increasing levels of operations, equipment was tested and brought on-line, the
assay lab was equipped, stocked with supplies and staffed, and the solution in
the remaining heap leach pad (#2) started through the gold recovery and
detoxification system. During the first quarter of 1995, the Company removed
about 40 ounces of gold recovered in the carbon recovery tanks and delivered it
to market.
Sources and Availability of Raw Materials
The ultimate realization of value from Vanderbilt's properties is dependent
upon the existence of economically producible quantities of ore containing
significant amounts of precious metals, gold and silver. These quantities of
ore may be considered Vanderbilt's raw materials. The Registrant's continuing
search for suitable mining properties is subject to numerous uncertainties such
as locating commercially viable deposits, competition from other companies and
the ability to negotiate leases and other contracts with property owners on
terms favorable to Vanderbilt. Increased governmental regulation(s) as to the
location, exploration, and development of mineral prospects coupled with the
trend toward increased withdrawal of lands from mineral entry could possibly
limit Vanderbilt's access to both the source and availability of suitable
mineral prospects.
Seasonal Nature of Business
Vanderbilt's business is generally not seasonal in nature except for certain
times when weather conditions may adversely affect access to and operations of
its properties.
Major Customers
Vanderbilt sells the gold and silver dore bullion produced at the Morning Star
Mine to Englehard Industries West, Inc., Gerald Metals, Inc. and G D Resources,
Inc. Vanderbilt does not believe that the loss of these customers would
adversely affect its business since there are several other potential customers
for its products. Vanderbilt also may enter into forward sales contracts with
gold merchants, users and others.
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Competitive Conditions
Vanderbilt considers the exploration for, development, and acquisition of
precious metals and other mineable properties to be intensely competitive.
Companies with greater financial resources, existing staff and
