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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE OF 1934
For the fiscal year ended December 31, 1999
NEW JERSEY MINING COMPANY
--------------------------
(Name of small business issuer in its charter)
IDAHO 82-0490295
- --------------------------- -----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
P.O. Box 1019
(Street: 89 Appleberg Road)
Kellogg, Idaho 83837
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(Address of principal executive offices) (Zip Code)
(208)783-3331
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Issuer's telephone number
Securities registered under Section 12(b) of the Act: None
- ------------------- ------------------------------
Title of each class Name of each exchange on which registered
Securities registered under Section 12(g) of the Act:
Common Stock- No Par Value
--------------------------
Title of Class
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 filing requirements for the past 90
days. Yes XX No
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definite proxy or information
statements incorporated in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. XX
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State issuer's revenues for its most recent fiscal year. $ 24,036
---------------
The aggregate market value of the registrant's voting common stock held by non-
affiliates was $327,564 as of February 25, 2000 based on the average of the bid
and ask prices quoted on the OTC Bulletin Board. As of February 25, 2000, the
number of shares of common stock outstanding was 11,510,190.
<PAGE>
TABLE OF CONTENTS
Page
Glossary of Significant Mining Terms 2
PART I
Item 1. Description of Business. 4
Item 2. Description of Property. 6
Item 3. Legal Proceedings. 9
Item 4. Submission of Matters to a Vote of Security Holders. 9
PART II
Item 5. Market for Common Equity and And Related Stockholder Matters. 9
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations. 10
Item 7. Financial Statements. 11
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure. 17
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act. 17
Item 10. Executive Compensation. 19
Item 11. Security Ownership of Certain Beneficial Owners. 19
Item 12. Certain Relationships and Related Transactions. 21
Item 13. Exhibits and Reports on Form 8-K. 21
GLOSSARY
Ag- Silver.
Au- Gold.
Alluvial- Adjectivally used to identify minerals deposited over time by
moving water.
Argillites- Metamorphic rock containing clay minerals
Arsenopyrite- An iron-arsenic sulfide. Common constituent of gold
mineralization.
Bedrock- Solid rock underlying overburden.
CIL- A standard gold recovery process involving the leaching with cyanide in
agitated tanks with activated carbon. CIL means "carbon-in-leach."
Crosscut- A nominally horizontal tunnel, generally driven at right angles to
the strike of a vein.
Deposit- A mineral deposit is a mineralized body which has been intersected
by sufficient closely-spaced drill holes or underground sampling to support
sufficient tonnage and average grade(s)of metal(s)to warrant further
exploration or development activities.
Development Stage- As defined by the SEC- includes all issuers engaged in the
preparation of an established commercially mineable deposit (reserves) for its
extraction which are not in the production stage.
<PAGE>
Drift- A horizontal mine opening driven on the vein. Driving is a term
used to describe the excavation of a tunnel.
Exploration Stage- As defined by the SEC- includes all issuers engaged in the
search for mineral deposits (reserves) which are not in either the development
or production stage.
Fault- A fracture in the earth's crust accompanied by a displacement of one
side of the fracture with respect to the other and in a direction parallel to
the fracture.
Galena- A lead sulfide mineral. The most important lead mineral in the
Coeur d'Alene Mining District.
Grade- A term used to assign the concentration of metals per unit weight
of ore. An example - ounces of gold per ton of ore (opt). One ounce per ton
is 34.28 parts per million.
Mineralization-The presence of minerals in a specific area or geologic
formation.
Ore- A mineral or aggregate of minerals which can be mined and treated at a
profit. A large quantity of ore which is surrounded by non-ore ore sub-ore
material is called an orebody.
Production Stage- As defined by the SEC - includes all issuers engaged in the
exploitation of a mineral deposit (reserve).
Pyrite- An iron sulfide. A common mineral associated with gold mineralization.
Quartz- Crystalline silica (SiO2). An important rock-forming and gangue
material in gold veins.
Quartzites- Metamorphic rock containing quartz.
Raise- An opening driven upward generally on the vein.
Reserves- That part of a mineral deposit which could be economically and
legally extracted or produced at the time of the reserve determination.
Reserves are subcategorized as either proven (measured) reserves, for which
(a) quantity is computed from dimensions revealed in outcrops, trenches,
workings, or drill holes, and grade and/or quality are computed from the
results of detailed sampling, and (b) the sites for inspection, sampling, and
measurement are spaced so closely and geologic character is so well defined
that size, shape, depth, and mineral content are well-established; or
probable(indicated) reserves, for which quantity and grade and/or quality are
computed from information similar to that used for proven (measured) reserves,
yet the sites for inspection, sampling and measurement are farther apart.
Tetrahedrite- Sulfosalt mineral containing copper, antimony and silver.
Vein- A zone or body of mineralized rock lying within boundaries separating it
from neighboring wallrock. A mineralized zone having a more or less regular
development in length, width and depth to give it a tabular form and commonly
inclined at a considerable angle to the horizontal.
Wallrock- Barren rock surrounding a vein.
<PAGE>
PART I
ITEM 1.
DESCRIPTION OF THE BUSINESS
BUSINESS DEVELOPMENT
Form and Year of Organization
New Jersey Mining Company (the company) is a corporation organized under the
laws of the State of Idaho on July 18, 1996. The Company was dormant until
December 31,1996, when all of the assets and liabilities of the New Jersey
Joint Venture ( a partnership) were transferred to the Company in exchange for
10,000,000 shares of common stock. The New Jersey Joint Venture, a
partnership, was formed in 1994 to develop the New Jersey mine. The
partnership consisted of Mine Systems Design, Inc. [75%], Plainview Mining
Company [13%], Silver Trend Mining Company [10%], Mark C. Brackebusch [1%],
and Mascot Silver-Lead Mines, Inc. [1%]. The New Jersey Joint Venture brought
the New Jersey mine into production by building a 100 ton per day concentrator
with a gravity circuit for gold recovery.
Any Bankruptcy, Receivership or Similar Proceedings
There have been no bankruptcy, receivership or similar proceedings.
Any Material Classification, Merger, Consolidation, or Purchase or Sale of a
Significant Amount of Assets Not in the Ordinary Course of Business.
On March 12, 1998 New Jersey Mining Co. and Plainview Mining Co. consummated a
merger with New Jersey Mining Co. being the surviving corporation. A majority
of Plainview shareholders (59%) approved the merger at a Special Meeting of
Shareholders held on January 27, 1998. The merger involved Plainview
delivering all of its assets to New Jersey in exchange for stock with 2 shares
of New Jersey Mining Co. common stock being exchanged for each share of
Plainview Mining Co. common stock. The Articles of Merger were filed with the
Idaho Secretary of State on March 27,1998. The Articles of Merger are
incorporated as an Exhibit by reference.
BUSINESS OF THE COMPANY
General Description of the Business
The company is involved in exploring for and developing gold, silver and base
metal ore resources in the Coeur d'Alene Mining District of northern Idaho.
The Company has a portfolio of three mineral properties in the Coeur d'Alene
Mining District: the New Jersey mine, the CAMP project and the Wisconsin-Teddy
project.The New Jersey mine is the Company's development stage property while
the other two properties are exploration stage properties. The New Jersey mine
is located 3 miles east of Kellogg,Idaho. The Company's New Jersey mine
property has an area of approximately 370 acres and includes a group of mineral
leases. A mineral lease from Gold Run Gulch Mining Company includes 5 patented
claims containing 62 acres, seven unpatented claims surrounding the patented
claims, and mineral rights to fee land containing 108 acres. The known orebody
is located on the patented claims. Another mineral lease from William Zanetti
in the New Jersey mill area contains about 60 acres. Both mineral leases carry
a 5% Net Smelter royalty.
Effect of Existing or Probable Governmental Regulations on the Business
<PAGE>
All operating plans have been made in consideration of existing governmental
regulations. Regulations that would most affect operations are related to
water quality. Plans of operation will be required before exploration or
mining activities can be conducted on Federal land that is administered by the
Bureau of Land Management. The Bunker Hill Superfund site is located about 1
mile west of the New Jersey mine. It is possible that Superfund status could be
applied to the area around the New Jersey mine because of historic mining
activities. There is no known evidence that previous operations at the New
Jersey mine prior to 1910 caused any ground water or stream pollution or
discharged any tailings into the South Fork of the Coeur d'Alene River;
howevever such evidence could be discovered. Historic mine tailings from
upstream mining operations located near the New Jersey mill may have to be
covered or removed if Superfund status is applied. The Bureau of Land
Management is currently revising its regulations relative to exploration and
mining operations, but the planned changes are not thought to have major
effects on planned operations at the New Jersey mine.
Costs and Effects of Compliance with Environmental Laws (Federal, State and
Local)
No major Federal permits [except EPA storm water permit which is a blanket
state-wide permit] are required for the New Jersey mine because most operations
are on private land and there are no process discharges to streams. Any
exploration program conducted by the Company on unpatented mining claims,
usually administered by the U.S. Bureau of Land Management (BLM), requires a
Plan of Operation permit. For example, the Company recently received permission
to drill an exploration hole on its unpatented Wisconsin claims after submitting
a Plan of Operation to the BLM. Approval of the Plan of Operation took about 2
weeks. The Plan of Operation includes the details of the drill site reclamation,
the location of the hole and other details.
The Company is also subject to the rules of the U.S. Department of Labor, Mine
Safety and Health Administration (MSHA) for the New Jersey mine operations.
When the mine is operating, MSHA performs a series of inspections to verify
compliance with mine safety laws. The Company files reports with MSHA on a
quarterly basis.
With respect to the New Jersey mine, two important State of Idaho permits are
necessary to perform the mining and milling operation, both of which are in
hand. The first is an Idaho Cyanidation Permit and the second is a reclamation
plan for surface mining operations. An Idaho cyanidation permit was applied
for, and the permit was granted October 10, 1995 [No. CN-000027] The Idaho
Cyanidation Permit was obtained through a 1 year permitting effort, which is
quite speedy compared to several other cases. The operation of the cyanidation
mill did not prove to be controversial locally, probably due to the long mining
history in the established Coeur d'Alene Mining District. The deposition of
tailings using paste technology is a unique part of the permit. Tailings will
be dewatered to a paste consistency using a high density thickener. Cyanide
will be destroyed in the paste using bleach, and the tailings will be deposited
on a sloped stack. Fred W. Brackebusch has received a U.S. patent (5,636,942)
on this new tailings technology. Reclamation of the tailings stack will be done
concurrently with mining. The Cyanidation permit requires quarterly surface and
groundwater monitoring prior to startup of the CIL plant and monthly sampling
once operations commence. The current water monitoring program costs the company
about $2,000 on an annual basis. The estimated annual cost for sampling after
CIL operations begin is $25,000.
The surface mining reclamation plan was approved by the Idaho State Department
of Lands in 1993.The plan calls for grading of steep fill slopes and planting
of vegetation on the area disturbed by the open pit mine. A bond of $1,750 is
held in a joint account to ensure that reclamation is completed.
<PAGE>
The Company complies with local building codes and ordinances as required by
law.
Number of Total Employees and Number of Full Time Employees
The Company's total number of employees is three including the President Fred
Brackebusch, the Vice President Grant Brackebusch and the Secretary Tina
Brackebusch. There are no full-time employees at this time.
REPORTS TO SECURITY HOLDERS
The Company is not required to deliver an annual report to shareholders,
however, it has delivered an annual report to shareholders in each of the past
two years. The annual report delivered to shareholders in 1998 did contain
audited financial statements while the recent 1999 annual report letter did
not contain audited financial statements. It is expected in the future that
the Company may deliver annual reports with audited financial statements. The
Company may also rely on the Internet in the future to deliver annual reports to
shareholders.
The Company filed a Form 10-SB with the Securities and Exchange Commission on
January 11, 2000. The filing became effective on January 27, 2000.
The public may read a copy of any materials the Company files with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site (http://www.sec.gov)that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC.
<PAGE>
ITEM 2.
DESCRIPTION OF PROPERTIES
NEW JERSEY MINE
Location
The New Jersey mine is located in the Gold Run Gulch area, comprising about 15
square miles in the Coeur d'Alene Mining District just east of Kellogg, Idaho.
The mine is adjacent to Interstate 90 and is easily accessed by local roads
through the entire year. The area is underlain by argillites and quartzites of
the Prichard formation [member of Belt Supergroup], which commonly hosts gold
mineralization. The controlled property, known as the New Jersey mine, has an
area of approximately 370 acres and includes a group of mineral leases and
property held by the Company.
Mineral Leases
A mineral lease from Gold Run Gulch Mining Company includes 5 patented claims
containing 62 acres, seven unpatented claims surrounding the patented claims,
and mineral rights to fee land containing 108 acres. The known orebody is
located on the patented claims. Another mineral lease from William Zanetti in
the New Jersey mill area contains about 60 acres. Alliance Title and Escrow
Corporation of Wallace, Idaho has issued a Commitment for Title Insurance for
the fee simple property leased from Gold Run Gulch Mining Company and William
Zanetti. The unpatented claims leased from Gold Run Gulch Mining Company are on
federal land administered by the U.S. Bureau of Land Management. The leases
provide for the Company's exploration, development and mining of minerals on
patented and unpatented claims through October 2008 and thereafter as long as
mining operations are deemed continuous. The lessors may terminate the leases
upon the Company's failure to perform under the terms of the leases. The leases
provide for royalties of 5% of net sales of ores or concentrates less
transportation also know as a Net Smelter Return. Additional royalties of 1%
to 5% are due if the gold price exceeds $ 559 per ounce as of December 31,1999.
This additional royalty gold price is indexed to the Consumer Price Index with
1987 as the base year. Also, annual advance royalties totaling $2900 per year
are required under the leases. The advance royalties are accumulated and will
be credited against the royalty obligations. Both the Zanetti and Gold
Run Gulch lease agreements are incorporated as exhibits by reference to the
Company's Form 10-SB filing.
History
There are at least 14 gold prospects in or near the New Jersey mine area. Most
of the prospecting activity was completed before the turn of the century, and
almost no work has been done for at least 50 years. Just after the turn of the
century, at the New Jersey mine, more than 2,500 feet of development workings
including drifts, crosscuts, shafts, and raises, were driven by the New Jersey
Mining and Milling Company to develop the Coleman vein and the northwest branch
of the Coleman vein. A 10 stamp gravity mill was built and operated for a
short period. The amount of money spent from 1899 to 1910 appears to have been
$500,000 to $1,000,000 in 1996 dollars. The operation was discontinued because
of the difficulty in recovering fine gold without cyanidation technology,
because of the lower price of gold relative to mining costs, and because of
inadequate drilling and mining technology. For example, the Coleman vein, a
hard quartz vein, was so difficult to drill using hand steel that drifts along
the vein were not driven to any great lengths. A considerable portion of the
gold is in free grains, so there is a strong nugget effect.
<PAGE>
Hershey [1916], a well known Coeur d'Alene district geologist, noted the nugget
effect and lack of drifting on the vein: "The average gold-content is known to
be very low, though it is said that one small shoot carried $55 gold per ton
(2.66 ounces per ton @ $20.67 per ounce which was the gold price at that
time)..The great variation in the assays indicates a pockety distribution.
This suggests that if this fine large vein were developed for 2000 ft. instead
of merely 200 ft., a commercial ore-shoot might be found."
Present Condition and Work Completed on the Property
Presently, operations at the New Jersey mine are suspended due to the low price
of gold. Operations were suspended in mid 1997. During the period from 1994
through the suspension of operations in 1997 many projects were completed on
the property. Several of the historic underground workings, namely the 2400
level adit and the Keyhole tunnel, were opened up. This permitted personnel
to sample, map and evaluate the Coleman vein and associated gold bearing
structures.
A 100 ton per day gravity mill has been built and commissioned. A crushing
plant was built and commissioned in 1996. An open pit mining program on the
Coleman vein was initiated in 1995. A series of haulage roads were also
upgraded in order to provide access from the open pit operation to the gold
plant (mill). Approximately 5,000 tons of ore were processed at the mill during
1995 through 1996. A gravity concentrate was produced and sold to ASARCO in
East Helena, Montana. Gold recovery from the ore using gravity methods of
concentration was relatively low (approx. 60%) so the decision was made to
upgrade the mill to a CIL (Carbon-In-Leach) process. Testwork using the CIL
process on New Jersey ores determined gold recovery rates up to 95% were
achievable. As previously stated the Company has received a Cyanide Permit from
the State of Idaho (Permit No. CN-000027). In late 1996, the Company began
construction the permitted CIL mill upgrade with work mainly consisting of the
concrete foundation work for the new process facilities. Other work included
carpentry and metal working tasks. This work was suspended in the spring of
1997 after completion of all the required concrete work due to an inability of
the company to raise sufficient funds. Since 1997 only regular maintenance and
upkeep (including environmental monitoring) and some geological work have been
performed at the project site. In the summer of 1999, management of the Company
began a modest construction project which culminated in the partial completion
of one 32 foot by 48 foot pole type building.
The Company's proposed program of exploration and development for the New
Jersey mine is listed below:
1. Diamond Drilling - The Company would drill approximately 10,000 feet of
diamond drill holes. A portion of this drilling, about 5,000 feet, would be
done to increase the amount and certainty of gold resources on the Coleman
vein. Some of this drill footage would also be more exploratory in nature and
would test geochemical anomalies and other vein prospects. This program would
cost about $250,000.
2. Mill Upgrade - The upgrade of the current gravity mill to a CIL process
would be completed. This is also expected to cost $250,000.
Both of the above programs are dependent on the Company's ability to raise
money through a private placement and will not be completed until such a
placement takes place.
Geology and Reserve/Resource
The description of the geology of the New Jersey mine and the calculation of
mineral resources have been completed by the Company and not an independent
third party. The description of the geology of the area can be verified from
third party published reports by the U.S. Geological Survey and unpublished
reports by Oscar Hershey, former Coeur d'Alene District geologist. The Company
is solely responsible for the resource calculations.
<PAGE>
Geology
The Prichard formation, which is 25,000 feet in thickness, underlies the New
Jersey mine area which is adjacent to and north of the major Osburn fault. The
Osburn fault is in the center of a Proterozoic rifting basin. The Prichard
formation is divided into nine rock units of alternating argillites and
quartzites, and the units exposed in the New Jersey mine area appear to belong
to the lower members. A broad domal structure with a series of
tighter folds near the Osburn fault typifies the structure of the area. South
of the Osburn fault, the Wallace formation is exposed on the north flank of the
Big Creek anticline.
Gold mineralization is associated with sulfide-bearing quartz veins which cut
the bedding in Prichard argillite and quartzite. Associated sulfides are
pyrite, arsenopyrite, chalcopyrite, low-silver tetrahedrite, galena, and
sphalerite. Most commonly in the Coleman vein of the New Jersey mine visible
gold is associated with the tetrahedrite. Gold prospects are concentrated in
the New Jersey mine area possibly because of the presence of lower Prichard
stratigraphic members, an anticlinal structure, and/or the existence of a gold
source. Gold is associated with arsenic, copper, and antimony. Igneous dikes
are relatively rare. Some wallrock alteration has been observed. The
Coleman vein shows a characteristic brecciation The strike length of the veins
on the property based on exposures in drifts, outcrops and float is about 1,500
feet.
Reserves
The only reserves at the New Jersey mine as of this date are those contained
within the open pit on the Coleman vein. Open pit reserves are from the
planned pit which extends from the south portal north to the terminus of the
Coleman Vein. The vertical extent of the pit is from the surface outcrop down
to the Keyhole Tunnel level. Grade estimation for the blocks in the pit
reserve is based upon calculated head grades from 5,000 tons of gravity-mill
production. Other sources include channel samples from the outcrop and
also from the Keyhole Tunnel
Open Pit Reserve (Proven and Probable)
============================================================================
Ore Blocks Tons Grade Ounces
(Au ounces/ton) (Au)
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Coleman (17+00-21+00) 62,300 0.133 8,306
Coleman Split (21+0-23+00) 23,500 0.103 2,420
North Vein (21+00) 3,300 0.250 825
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Total 89,100 0.130 11,551
============================================================================
The open pit reserve tonnages are diluted. That is, the expected dilution from
open pit mining is accounted for in the grade and tonnage of the reserve
blocks. The ounces stated in the above table are contained ounces. According
to metallurgical testwork, approximately 95% of the gold contained in the open
pit reserve will be recovered at the mill using the CIL process.
<PAGE>
CAMP PROJECT
Location
The CAMP project is an exploration project located south of and adjacent to the
City of Osburn, Idaho. The CAMP is accessed by the Mineral Point mine road
otherwise known as the McFarren Gulch road. The CAMP is located in the
approximate center of the silver belt of the Coeur d'Alene Mining District.
The CAMP project covers approximately 380 acres. The Company controls 17.75% of
the land in the CAMP. Merger Mines and Coeur d'Alene Mines Corp.
(CDE:NYSE)control the remainder. Coeur d'Alene Mines Corp. is the operator of
the property. This property was acquired by the Company in its January 1998
merger with Plainview Mining Co. The CAMP area extends from the surface to 900
feet below sea level. Sunshine Mining Company owns the mineral property
beneath the CAMP property.
Mineral Lease
As part of a July 26, 1978 lease agreement with Coeur d'Alene Mines Corp.
(Coeur), New Jersey Mining Co. will receive a 7.1% Net Profits Interest
(NPI),if the property is put into production. However, according to the
agreement Coeur can retain 93.925% of the net profits until Coeur is reimbursed
in total for its advance payments and expenditures. The term of the lease is
61 years. The Agreement also calls for Coeur to spend $50,000 annually on
exploration. However, a December 18, 1992 Amendment to the Agreement allowed
Coeur to fulfill the exploration work requirement until 2006 by applying past
work in the amount of $1,436,243 towards the exploration work requirement.
History
Originally the CAMP project was leased to ASARCO during the period from 1969
through 1972. ASARCO developed an exploration drift on the 1400 level of the
Coeur d'Alene mine (aka Mineral Point mine), before terminating the drift 1000
feet short of its planned termination. The drift extended 1,000 feet into the
CAMP project area before terminating. A series of diamond drill holes were
planned along the 1400 level drift, but ASARCO terminated the lease agreement
before any drilling could take place.
In 1978, Coeur d'Alene Mines Corp. signed a new lease agreement with Merger
Mines and Plainview Mining Co. Coeur began an exploration program soon
thereafter consisting of geochemical soil sampling, trenching, an exploration
tunnel and diamond drilling (surface & underground). The exploration program
continued through 1982. Coeur spent a total of $1,436,243 on the project. The
property has not received any more exploration activity since 1982.
Geology
The CAMP area lies astride the Silver Belt of the Coeur d'Alene Mining District
east of the Sunshine mine and west of the Coeur and Galena mines. The north
limb of the Big Creek anticline trends through the CAMP area. Most of the
silver orebodies in adjacent properties are located in the north limb of the
Big Creek anticline. Prospective fault structures that trend through the CAMP
property include the Polaris fault, Silver Summit vein-fault, Chester fault,
and other structures. Favorable rock types are located in the footwall of the
Polaris fault including the St. Regis and Revett formation.
<PAGE>
WISCONSIN-TEDDY PROJECT
Summary
This project lies north of the New Jersey mine and is accessed by a local
frontage road. The Company's claims cover 83 acres. The claims are unpatented
and are on federal land administered by the U.S. Bureau of Land Management. The
project is a base metal exploration project in the Prichard formation. Several
tunnels with an aggregate length of 2,000 feet were driven on the property
prior to 1930. This development was related to two veins systems - a copper-
gold vein and a zinc-lead-silver vein. Preliminary field investigations have
delineated a large structure about 30 meters in width which contains anomalous
copper, lead and silver mineralization. One shallow exploration hole (500 feet)
is planned for an initial investigation of this structure. This property may
contain a vent or fracture system related to Sullivan-type mineralization. NJMC
plans to rehabilitate the underground workings in order to undertake a sampling
program which may indicate future drilling targets.
ITEM 3.
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The Company's stock trades on the NASD's OTCBB under the symbol "NJMC". The
Company began trading on the OTCBB on January 28, 1998 following its merger
with Plainview Mining Company, Inc.
The following table sets forth, for the respective periods indicated, the
prices for the Company's Common Stock in the over-the-counter market according
to the NASD's OTC Bulletin Board. The bid prices represent inter-dealer
quotations, without adjustments for retail markups, markdowns or commissions
and may not necessarily represent actual transactions. All prices in the
following table have been rounded to the nearest whole cent.
Quarterly High/Low Bids
============================================================================
High Bid Low Bid
- ----------------------------------------------------------------------------
Fiscal Year Ending December 31, 1998
First Quarter $ 0.56 $ 0.25
Second Quarter $ 0.25 $ 0.13
Third Quarter $ 0.22 $ 0.09
Fourth Quarter $ 0.25 $ 0.09
- ----------------------------------------------------------------------------
Fiscal Year Ending December 31, 1999
First Quarter $ 0.19 $ 0.09
Second Quarter $ 0.19 $ 0.06
Third Quarter $ 0.16 $ 0.06
Fourth Quarter $ 0.16 $ 0.06
============================================================================
Shareholders
As of December 31, 1999 there were approximately 231 shareholders of record of
the Company's Common Stock. As of December 31, 1999 the Company had issued
and outstanding 11,510,190 shares of Common Stock.
Dividend Policy
The Company has not declared or paid cash dividends or made distributions in
the past and the Company does not anticipate that it will pay cash dividends or
make distributions in the foreseeable future. The Company currently intends to
retain and reinvest future earnings, if any, to finance its operations.
Transfer Agent
The transfer agent for the Company's Common Stock is Idaho Stock Transfer
Company, P.O. Box 2196, Coeur d'Alene, Idaho 83816-2196.
ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's cash requirements materially decreased in 1999 from 1998, for
which the primary reason was the leasing of the mill and mine facilities to the
largest shareholder. Operating and administrative expenses decreased from
$31,466 in 1998 to $274 in 1999. Royalty from the lease exceeded holding costs
so the net income from operations in 1999 was $23,762 as compared to net income
(loss) of ($30,705) in 1998. In addition, the leasee paid for many costs in
1999 which the Company had been responsible for in 1998. The lease is
continuing into 2000; therefore financial results in 2000 should be comparable
to 1999.
In 1999 the book value of common stock in Consil Corporation was written down
by $47,500 causing a loss for 1999 of $23,738. At year end 1999, Consil had no
business plans for increasing shareholder value. The Company's assets remained
the same from 1998 to 1999 except for the write-down of the Consil common
stock. Total liabilities decreased from $42,911 in 1998 to $19,346 at the end
of 1999.
Should gold and silver prices rise from the current low levels, the Company may
be able to resume financing activities. The Company would be able to end the
lease arrangement with the current leasee and resume construction of the mineral
processing plant, exploration, and mining activities.
ITEM 7.
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
[Nathan Wendt, C.P.A. LETTERHEAD]
Board of Directors
New Jersey Mining Company
PO Box 1019
Kellogg, Idaho 83837
Directors:
We have audited the accompanying balance sheet of New Jersey Mining Company (a
development stage company)as of December 31, 1999 and the related statements of
operations, stockholders' equity and cash flows for the year then ended. These
financial statements are the responsibility of New Jersey Mining Company. Our
responsibility is to express an opinion on financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the 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 financial statements referred to above present fairly, in
all material aspects, the financial position of New Jersey Mining Company at
December 31, 1999, and the results of its operation and its cash flow for the
year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 7 to the
financial statements, the Company has generated a loss to date and is in the
development stage. These conditions raise substancial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Nathan Wendt
- ----------------
Certified Public Accountant
Kellogg, Idaho
March 8, 2000
<PAGE>
<TABLE>
NEW JERSEY MINING COMPANY
(A Development Stage Company)
BALANCE SHEET
ASSETS
Dec. 31 Dec. 31 Dec. 31
1999 1998 1997
-------- --------- --------
<S> <C> <C> <C>
Current Assets
Cash $ 282 $ 85 $ 179
Property & Equipment
Building $ 33,894 $ 33,894 $ 3,894
Equipment $246,536 $246,536 $210,975
Other Assets
Deferred Development
Costs $ 80,881 $ 80,881 $ 80,881
Investment in Plainview
Mining Company, Inc. $148,000
Investment in Consil
Corporation $ 38,000 $ 85,500
Mining Reclamation Bond $ 1,722 $ 1,722 $ 1,722
Goodwill $ 30,950 $ 30,950
Total Assets $432,265 $479,568 $475,651
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS EQUITY
<S> <C> <C> <C>
Current Liabilities
Accounts Payable &
accrued expenses $ 0 $ 7,979 $ 15,160
Current Maturities of
Capital Lease Obligations $ 10,860 $ 11,500 $ 10,000
Total Current Liabilities $ 10,860 $ 19,479 $ 25,160
Capital Lease Obligations
(less current maturities) $ 8,486 $ 23,432 $ 28,582
Total Liabilities $ 19,346 $ 42,911 $ 53,742
Stockholders Equity
Preferred Stock
No shares issued
Common Stock
No Par Value, 20,000,000 shares authorized
<PAGE>
1999 Dec. 31,1999 $647,836
13,457,334 Issued
1998
13,378,634 Issued $647,836
Treasury Stock $(136,300) $(136,300)
(1,947,744 shares)
1997
11,730,564 Issued $466,083
Retained Earnings $(23,738)
Deficit Accumulated in
the Development Stage $(74,879) $(74,879) $(44,174)
Total Stockholders Equity $412,919 $436,657 $421,909
Total Liabilities and
Stockholders Equity $432,265 $479,568 $475,651
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Dec. 31 Dec. 31 Dec. 31
1999 1998 1997
-------- ------- --------
<S> <C> <C> <C>
Revenues $ 24,036 $ 761 $ -0-
Operating and Administrative Expenses $ (274) $(31,466)
Net Income or (Loss and Deficit
Accumulated in the Development Stage) $ 23,762 $(30,705) $(44,174)
Loss on Devaluation of Investments $(47,500)
Net Loss $(23,738)
Basic Earnings (Loss) Per Share $ (0.002) $(0.003) $(0.004)
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock Treasury Accumulated
Stock Deficit
Shares Amount Total
------- -------- -------- ---------- ------
<S> <C> <C> <C> <C>
Balance at
Incorporation
July 18, 1996 -0- $-0- $-0- $ -0-
Issuance of
common shares
for New Jersey
Joint Venture
Interests
Dec. 31, 1996 10,000,000 $207,968 $-0- $207,968
Issuance of
common shares
for cash 1997 228,816 $110,115 $-0- $110,115
Issuance of
common shares
for services
1997 14,000 $-0- $-0- $-0-
Exchange of
common shares
for 743,874
shares of
Plainview
December 1997 1,487,564 $148,000 $-0- $148,000
Net Loss year
ended December
31, 1997 $(44,174) $(44,174)
Balance December
31, 1997 11,730,748 $466,083 $(44,174) $421,909
Retirement of
Common Shares
owned by
Plainview Mining
Company, Inc.
and held as
investment at
December 31,
1998 (1,947,144) $(136,300) $(136,300)
Issuance of
common shares
for cash 1998 117,218 $ 29,753 $ 29,753
Issuance of
common shares
for services
1998 18,000 $ -0-
<PAGE>
Exchange of
Common Stock for
756,126 shares of
Plainview Mining
Company,Inc.
December 1998 1,512,252 $152,000 $152,000
Net Loss year
ended December
31, 1998 $(30,705) $(30,705)
Balances
December
31, 1998 11,430,890 $647,836 $(136,300) $(74,879) $436,657
Issuance of
common shares
for services
1999 79,300 $ -0-
Net Loss year
ended December
31, 1999 $(23,738) $(23,738)
Balances
December
31, 1999 11,510,190 $647,836 $(136,300) $(98,617) $412,919
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CASH FLOWS
Dec. 31 Dec. 31 Dec. 31
1999 1998 1997
-------- ------- --------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH
Cash Flows From Operating Activities
Net Income (Loss) $ 23,762 $(30,705) $(44,174)
Decrease in accounts payable
and accrued expenses $( 7,979) $ (2,303) $ 12,191
Net cash used in operating
activities $ 15,783 $(33,008) $(31,983)
Cash Flows From Investing Activities
Additions to property and
equipment $ -0- $ (5,561) $(50,327)
Additions to deferred
development costs $ -0- $ -0- $(19,297)
Proceeds from sale of
equipment $ -0- $ 1,079
Proceeds from sale of
investments $ -0- $ 4,500
Net cash used in investing
activities $ -0- $ 18 $(69,624)
Cash Flows From Financing Activities
Proceeds from sale of common
stock $ -0- $ 29,753 $110,115
Principal payments on capital
lease obligations $(15,586) $(10,291) $ (4,894)
Repayment of note payable to
bank $(20,000)
Proceeds from purchase of
Plainview Mining Company $ 13,434
Net cash provided by
financing activities $(15,586) $ 32,896 $ 85,221
Net Increase (Decrease)in Cash $ 197 $ (94) $(16,386)
Cash, Beginning of Year $ 85 $ 179 $ 16,565
Cash, End of Year $ 282 $ 85 $ 179
Supplemental Schedule of Noncash
Investing and Financing
Activities
<PAGE>
Capital Lease Obligation
for equipment acquired $ 0 $ 6,641 $ 18,275
Acquisition of Plainview
Mining Company, Inc. in
Exchange for Common Stock $ 0 $152,000 $148,000
Devaluation of Investment
in Consil Corporation $(47,500)
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1999
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
New Jersey Mining Company (the Company) was incorporated as an Idaho
corporation on July 18, 1996. The Company was dormant until December 31, 1996
when all of the assets and liabilities of New Jersey Joint Venture (a
partnership) were transferred to the Company in exchange for 10,000,000 shares
of common stock. Such assets and liabilities, transferred at historical cost,
consisted of:
Assets acquired:
Cash $ 16,565
Property & Equipment $176,267
Other Assets $ 63,306
---------
$256,138
Liabilities assumed:
Accounts payable $ 2,969
Note payable to bank $ 20,000
Capitalized lease obligation $ 25,201
---------
$ 48,170
Net assets acquired December 31, 1997 $207,968
The Company owns and leases various patented and unpatented mining claims in
the Coeur d'Alene Mining District near Kellogg, Idaho. The Company is
considered to be a development stage company, as only nominal operations have
occurred to date. Planned principal operations include commercial open pit
mining and milling of ore to produce and sell gold concentrate.
Summary of Significant Accounting Policies:
a. Property and equipment - Property and equipment are stated at cost. No
Depreciation has been recorded through December 31, 1999, as substantially all
assets are under construction or have not yet been placed into service.
Depreciation will be provided when the assets are placed into service, using
straight-line and accelerated methods over the estimated useful lives of the
assets.
b. Deferred development costs - Certain costs of developing the Company's
mining claims and related property have been capitalized. Such costs,
consisting principally of clearing, drilling, blasting, and similar
activities,less nominal sales of concentrate, will be amortized to expense
based on production. If production does not commence, the costs will be
charged to expense.
<PAGE>
c. Impairment - Impairment is recognized when it is probable that a loss will
be incurred in the realization of a recorded asset. Management has determined
that no impairment of assets has occurred at December 31, 1999, as adequate ore
reserves are available for production and sale to recover all capitalized
costs.
d. Income taxes - Federal and state income taxes are provided for the tax
effects of transactions reported in the financial statements and consist of
taxes currently due and deferred tax assets and liabilities based on the
differences between their tax bases for financial and tax purposes. Such
differences relate principally to deferred development costs. In addition, a
deferred tax asset is recognized for tax-basis operating losses being carried
forward. A valuation allowance for deferred tax assets is also recognized when
appropriate.
e. Loss per share - Basic loss per share has been calculated on the basis of
the weighted average number of shares outstanding during the year.
f. Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets, liabilities, revenue
and expenses, and the disclosure of contingent assets and liabilities.
Significant estimates used in preparing these financial statements include
those relating to the evaluation of asset impairment. Actual results could
differ from these estimates.
NOTE 2 - LEASES OF MINING CLAIMS
The Company has been assigned mining leases with Gold Run Gulch Mining Company
and William Zanetti. The leases provide for the Company's exploration,
development, and mining of minerals on patented and unpatented claims through
October 2008 and thereafter as long as mining operations are deemed
continuous. The leases provide for production royalties of 5% of net sales of
ores ore concentrates. Additional production royalties of 1% to 5% are due if
the price of gold exceeds $559 per troy ounce. Also, advance royalties totaling
$2,900 are required under the lease. The advance royalties, charged to expense
as incurred, are accumulated and will be credited against the production
royalty obligations. The lessors may terminate the leases upon the Company's
failure to perform under the term of the leases. The Company may also
terminate the leases at any time. Mine Systems Design, Inc., the majority
shareholder of New Jersey Mining Company - 66.6%, has agreed to fulfill all
mineral lease requirements necessary for mineral lease permits.
NOTE 3 - PLAINVIEW MERGER
In October 1997, the Company made an exchange offer for the outstanding common
shares of Plainview Mining Company, Inc.(Plainview). The offer allowed
Plainview's stockholders to exchange their shares on the basis of one share of
Plainview stock for two shares of the Company's stock. Plainview was also a
minority shareholder of the Company as a result of its participation as partner
in New Jersey Joint Venture (see Note 1).
At December 31, 1998, a total of 1,500,000 (100%) shares of Plainview had been
exchanged for 3,000,000 shares of the Company. The Company is accounting for
the business combination of Plainview on the purchase method. The estimated
fair value of the Company's shares issued in the exchange ($0.10 per share) was
used to reflect the purchase price of the investment.
<PAGE>
The acquisition of 1,947,144 shares of the Company's Common Stock owned by
Plainview was accounted for in 1998 as a purchase of treasuruy stock, based on
the fair value of the shares issued, $0.07, or $136,000.
At March 12, 1998, Plainview's summarized (unaudited) balance sheet consisted
of the following at fair values:
Assets:
Cash $ 12,750
Property & mining claims $ 30,000
Investment, at cost:
Consil Corporaton $ 90,000
New Jersey Mining Company $136,300
(1,947,144 common shares)
Goodwill $ 30,950
--------
Total Assets $300,000
Stockholders' equity $300,000
NOTE 4 - INVESTMENTS
The Company owns 190,000 shares of Consil Corporation. These shares were
received from the merger with Plainview (see Note 3). At the date of the
merger these shares were valued at $0.45 per share or $85,500. During all of
1999, the price of these shares was below $0.15 per share. Due to Consil
Corporation's future plans, the value is not expected to rise above $0.20 per
share. We have, therefore, written the value of these shares off to reflect a
proper value of $38,000.
NOTE 5 - CAPITAL LEASE OBLIGATIONS
The Company leases certain equipment under capital lease obligations. The
capitalized cost of such equipment at December 31, 1999 totalled $54,273.
Amortization of the cost has not begun (see note 1). In January 1999, the
Company entered into a royalty agreement with Mine Systems Design, Inc. (MSD).
The agreement states that MSD will pay all of the accounts payable, expenses,
and yearly lease obligations in exchange for unlimited use of the Company's
equipment. During 1999, the total royalties received were $22,836. Following
are the future minimum lease payments and net capital lease obligations at
December 31, 1999:
Years Ending December 31 Amount
------------------------ -------
2000 $12,587
2001 $ 6,073
2002 $ 3,278
-------
Total minimum payments required $21,938
Less Interest $ 2,592
-------
Net capital lease obligations $19,346
Less current maturities $10,860
-------
Noncurrent capital lease obligations $ 8,486
NOTE 6 - INCOME TAXES
At December 31, 1999, the Company had deferred tax assets of $20,000, which
were fully reserved by valuation allowances. For the year ended December 31,
1999, the Company has recognized the net tax benefit for its operating loss in
the statement of operations, as valuation allowances offset such benefit.
The Company has a tax-basis operating loss carry-forward of approximately
$98,617 that is available to offset future taxable income through 2014.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared on the basis that the
Company will continue as a going concern, although the Company is in the
development stage. As shown in the accompanying statement of operations, the
Company incurred a net loss of $23,738 in 1999. The ability of the Company to
recover its capitalized costs of assets and continue as a going concern is
dependent upon the Company's evolution to the operating stage, the success of
future operations, and obtaining additional capital and financing. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors and Executive Officers
============================================================================
Name & Address Age Position Date First Term
Elected Expires
- ----------------------------------------------------------------------------
Fred W. Brackebusch 55 President 7/18/96
P.O. Box 1019 Director
Kellogg, Idaho 83837 Treasurer
- ----------------------------------------------------------------------------
Grant A. Brackebusch 30 Vice President 7/18/96
P.O. Box 131 Director
Silverton, ID 83867
- ----------------------------------------------------------------------------
Charles F. Asher 75 Director 1/1/97
P.O. Box 4157
South Padre Island
TX 78597
- ----------------------------------------------------------------------------
Tina C. Brackebusch 30 Secretary 1/1/97
P.O. Box 131
Silverton, ID 83867
- ----------------------------------------------------------------------------
Ronald Eggart 78 Director 1/1/97
HC-01 Box 187
Kellogg, ID 83837
- ----------------------------------------------------------------------------
Kurt J. Hoffman 33 Director 9/29/97
401 S. Dollar St.
Coeur d'Alene, ID 83814
============================================================================
Directors are elected by shareholders at each annual shareholders meeting to
hold office until the next annual meeting of shareholders or until their
respective successors are elected and qualified.
Fred W. Brackebusch, P.E. is the President and a Director of the Company. He
has a B.S. and an M.S. in Geological Engineering both from the University of
Idaho. He is a consulting engineer with extensive experience in mine
development, mine backfill, mine management, permitting, process control and
mine feasibility studies. He has over 25 years of experience in the Coeur
d'Alene Mining District principally with Hecla Mining Co. He has been the
principal owner of Mine Systems Design, Inc., a mining consulting business,
since 1987. Mr. Brackebusch is also on the Board of Directors of Trend Mining
Company and Mascot Silver-Lead Mines, Inc.
Grant A. Brackebusch, P.E. is the Vice President and a Director of the Company.
He holds a B.S. in Mining Engineering from the University of Idaho. He worked
or Newmont Gold Co. in open pit mine planning and pit supervision for 3 years.
since that time he as worked with Mine Systems Design performing various
engineering and geotechnical tasks. He also supervised New Jersey Mining Co.'s
mining and milling operations prior to the suspension of operations. He is
also a Director of Trend Mining Co.
Charles Asher is a Director of the Company. He is also a Director with the
following companies: ConSil Corporation, Merger Mines Corporation, and Mascot
Silver-Lead Mines Inc. He was formerly President of Plainview Mining Co. and
Silver Trend Mining Co. Mr. Asher has extensive experience as an underground
mine operator in the Coeur d'Alene Mining District.
Tina C. Brackebusch is Secretary of the Company. She has served as Office
Manager for the Company. She holds a B.S. in Secondary Education from the
University of Idaho.
Ronald Eggart is a Director of the Company. He is a retired CPA with a long
record of experience with Coeur d'Alene Mining District mining ventures. He is
also a Director and Secretary for Mascot Silver-Lead Mines Inc.
Kurt J. Hoffman is a Director of the Company. He is President and a Director
of Trend Mining Co. and is also a director of Atlas Mining Co.
Family Relationships
Fred W. Brackebusch is the father of Grant A. Brackebusch. Tina C. Brackebusch
is the wife of Grant A. Brackebusch.
ITEM 10.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
============================================================================
Name & Year Salary Bonus Other Restrct. Options LTIP
Pricipal ($) ($) Annual Stock SARs Payout
Position Comp.($) Awards($) ($)
- ----------------------------------------------------------------------------
F. 1997 -0- -0- -0- -0- -0- -0-
Brackebusch 1998 -0- -0- -0- -0- -0- -0-
President 1999 -0- -0- -0- -0- -0- -0-
- ----------------------------------------------------------------------------
G. 1997 13,760 -0- -0- -0- -0- -0-
Brackebusch 1998 -0- -0- -0- -0- -0- -0-
Vice Pres. 1999 -0- -0- -0- -0- -0- -0-
- ----------------------------------------------------------------------------
C. Asher 1997 -0- -0- -0- -0- -0- -0-
Director 1998 -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0-
- ----------------------------------------------------------------------------
T. 1997 -0- -0- -0- -0- -0- -0-
Brackebusch 1998 -0- -0- -0- -0- -0- -0-
Secretary 1999 -0- -0- -0- -0- -0- -0-
- ----------------------------------------------------------------------------
R. Eggart 1997 -0- -0- -0- -0- -0- -0-
Director 1998 -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0-
- ----------------------------------------------------------------------------
K. Hoffman 1997 -0- -0- -0- -0- -0- -0-
Director 1998 -0- -0- -0- -0- -0- -0-
1999 -0- -0- -0- -0- -0- -0-
============================================================================
Mr. Grant Brackebusch was paid a salary in early 1997 for his supervisory role
at the New Jersey mine. However, this salary was terminated once operations
were suspended in April of 1997. Since its formation in June 1996 and to this
date, the Company has not paid to, except for the above mentioned event, nor
has there been accrued for, any Officer or Director of the Company any cash
remuneration for services which are related to the duties of those Officers or
Directors. There are no immediate plans to pay any cash remuneration to any
Officers or Directors related to their respective duties until the Company is
able to afford payment.
The Board of Directors agreed to pay Officers and Directors for their services
3,000 shares of restricted (Rule 144) common stock per year for 1998 and 1999.
There are no plans at this time to change the number of shares awarded to
Directors and Officers of the Company. No value was ascribed to the stock. The
Company does not have a standard arrangement pursuant to which Directors or
Officers are compensated for their services.
ITEM 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as those who
own beneficially more than five percent of the Company's common stock through
the most current date - December 31, 1999.
Security Ownership of Certain Beneficial Owners and Management
============================================================================
Title Of Name and Address of Amount & Nature of Percent of
Class Beneficial Owner Beneficial Owner Class
- ----------------------------------------------------------------------------
Common Trend Mining Co. 1,000,000 (a) 8.70%
410 Sherman Ave., Suite 209
Coeur d'Alene, ID 83814
- ----------------------------------------------------------------------------
Common Plainview Shareholders Trust 849,034 (b) 7.38%
Tina C. Brackebusch, Trustee
P.O. Box 1019
Kellogg, ID 83837
- ----------------------------------------------------------------------------
Common Fred W. Brackebusch 7,267,215 indirect(c) 63.34%
President & Director 16,000 direct
P.O. Box 1019
Kellogg, Idaho 83837
- ----------------------------------------------------------------------------
Common Grant A. Brackebusch 382,485 indirect(d) 3.38%
Vice Pres. & Director 6,000 direct
P.O. Box 131
Silverton, ID 83837
- ----------------------------------------------------------------------------
Common Charles F. Asher, Director 52,000 0.45%
P.O. Box 4157
South Padre Island, TX 78597
- ----------------------------------------------------------------------------
Common Tina C. Brackebusch, Secretary 6,000 0.05%
P.O. Box 131
Silverton, ID 83867
- ----------------------------------------------------------------------------
Common Ronald Eggart, Director 45,332 0.39%
HC-01 Box 187
Kellogg, ID 83837
- ----------------------------------------------------------------------------
Common Kurt Hoffman, Director 8,000 0.07%
401 S. Dollar Street
Coeur d'Alene, ID 83814
============================================================================
(a) Trend Mining Co. does not have the right to acquire any securities pursuant
to options, warrants, conversion privileges or other rights.
(b) The Plainview Shareholders Trust was created in order to hold shares for
those shareholders of Plainview Mining Company who have not participated
in the merger with the Company as of this date. As Plainview shareholders
exchange their shares for New Jersey shares, the number of shares in the
Trust declines. Tina C. Brackebusch is the Trustee and retains the right to
vote those shares. The Plainview Shareholders Trust does not have the right to
acquire any securities pursuant to options, warrants, conversion privileges or
other rights.
(c) Fred Brackebusch owns 95% of Mine Systems Design, Inc.(MSD) which is a
Schedule S corporation that owns 7,649,700 common shares of New Jersey
Mining Co. Mine Systems Design, Inc. Neither MSD nor Fred Brackebusch have the
right to acquire any securities pursuant to options, warrants, conversion
privileges or other rights.
(d) Grant Brackebusch owns 5% of Mine Systems Design, Inc.(MSD) which is a
Schedule S corporation that owns 7,649,700 common shares of New Jersey
Mining Co. Mine Systems Design, Inc. Neither MSD nor Grant Brackebusch have the
right to acquire any securities pursuant to options, warrants,
conversion privileges or other rights.
None of the directors or officers have the right to acquire any securities
pursuant to options, warrants, conversion privileges or other rights.
ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The principal office, telephone, copier and other office equipment are provided
by Mine Systems Design Inc. which is the majority shareholder of the Company.
In exchange for the use of these facilities and services, Mine Systems Design,
Inc. was issued 49,200 shares of restricted Common Stock in early 1999.
Because New Jersey Mining Company has no significant revenue source from
operations and has been unable to raise funds from investors due to the low
gold price, Mine Systems Design, Inc. has agreed, as of January 1, 1999, to
fulfill the requirements of mineral leases, pay maintenance costs including
property taxes, and to conduct environmental sampling required by permits.
The Company made an exchange offer to Plainview Mining Company, Inc.
shareholders in 1997 which led to the merging of Plainview into New Jersey
Mining Co. At the time of the offer, Mr. Fred Brackebusch, Mr. Charles Asher
and Mr. Ron Eggart were on the Board of Directors for both Plainview and New
Jersey. According to an evaluation by an independent expert, 2 shares of New
Jersey common stock should be exchanged for each share of Plainview. The Board
of Directors of New Jersey Mining Company approved an exchange offer on
September 29, 1997 whereby shareholders of Plainview Mining Company, Inc. would
be offered 2 shares of the common stock of New Jersey Mining Company for each
share of common stock of Plainview Mining Company, Inc. The Board of Directors
of Plainview Mining Company, with the exception of Mr. Fred Brackebusch who
abstained, approved the exchange offer and recommended that their shareholders
accept the exchange offer.
On December 30, 1997, New Jersey Mining Company and Plainview Mining Company,
Inc. approved a merger agreement that involved Plainview Mining Company, Inc.
delivering all of its assets to New Jersey Mining Company in exchange for stock
with 2 shares of New Jersey Mining Company common stock exchanged for share of
common stock of Plainview Mining Company, Inc. New Jersey Mining Company was
to be the surviving corporation according to the agreement. The merger
agreement was contingent upon the approval of the shareholders of Plainview
Mining Company, Inc. Previously, a majority of New Jersey Mining Co.
shareholders approved the merger.
On January 27, 1998 a Special Meeting of Plainview Mining Company Inc.
shareholders was held to vote on the merger. Plainview Mining Company Inc.
had 1,500,000 shares of common stock issued and authorized as of the Special
Meeting date. No other classes of Plainview Mining Company Inc. stock were
authorized. The number of votes cast by the shareholders of Plainview Mining
Company Inc. for the merger plan was 886,841 with no dissenting or disputed
votes. Therefore, the merger was approved by a majority of the shareholders of
Plainview Mining Company Inc. The effective date of the merger of New Jersey
Mining Company and Plainview Mining Company Inc. was March 12, 1998. A copy
of the merger agreement is included as an Exhibit herewith.
ITEM 13.
EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 3.1 Articles of Incorporation - Filed as an exhibit to the
registrant's registration statement on Form 10-SB (Commission File No. 000-
28837) and incorporated by reference herein.
Exhibit 3.2 Bylaws - Filed as an exhibit to the registrant's registration
statement on Form 10-SB (Commission File No. 000-28837) and incorporated by
reference herein.
Exhibit 10.1 Lease Agreement with Gold Run Gulch Mining Company - Filed as an
exhibit to the registrant's registration statement on Form 10-SB (Commission
File No. 000-28837) and incorporated by reference herein.
Exhibit 10.2 Lease Agreement with William Zanetti - Filed as an exhibit to t
he registrant's registration statement on Form 10-SB (Commission File No. 000-
28837) and incorporated by reference herein.
Exhibit 10.3 Articles of Merger For Plainview Mining Company Inc. and New
Jersey Mining Co. - Filed as an exhibit to the registrant's registration
statement on Form 10-SB (Commission File No. 000-28837) and incorporated by
reference herein.
Exhibit 27.1 Financial Data Schedule
No reports on Form 8-K have been filed by the Company.
SIGNATURES
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
New Jersey Mining Company
Date: March 21, 2000 By /s/ FRED W. BRACKEBUSCH
----------------- ---------------------------------
Fred W. Brackebusch, President,
Treasurer & Director
Date: March 21, 2000 By /s/ GRANT A. BRACKEBUSCH
------------------ ---------------------------------
Grant A. Brackebusch, Vice President
& Director
<PAGE>
This schedule contains summary financial information extracted from the
Financial Statements of New Jersey Mining Company for the year ending December
31, 1999 and is qualified in its entirety by reference to such financial
statements.
<PERIOD TYPE> YEAR
<TABLE>
<S> <C>
[FISCAL-YEAR-END] DEC-31-1999
<PERIOD END> DEC-31-1999
[CASH] 282
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 282
[PP&E] 280,430
[DEPRECIATION] 0
[TOTAL-ASSETS] 432,265
[CURRENT-LIABILITIES] 10,860
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 647,836
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 432,265
[SALES] 0
[TOTAL-REVENUES] 24,036
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 274
[LOSS-PROVISION] 47,500
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (23,738)
[INCOME-TAX] 0
[INCOME-CONTINUING] (23,738)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (23,738)
[EPS-BASIC] (0.002)
[EPS-DILUTED] (0.002)
</TABLE>
