<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2000
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: 000-27667
METALLINE MINING COMPANY
(Exact name of registrant as specified in its charter)
Nevada 91-1766677
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
1330 E. Margaret Ave.
Coeur d'Alene, ID 83815
(Address of principal executive offices)
Registrant's telephone number,
including area code: (208) 665-2002
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock The OTC-Bulletin Board
Title of each class Name of each exchange on which
registered.
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 as the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
<PAGE>
METALLINE MINING COMPANY ANNUAL REPORT
ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED JANUARY 31, 2000
TABLE OF CONTENTS Page
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements 1
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operation 1
PART II - OTHER INFORMATION
Item 1: Legal Proceedings 4
Item 2: Changes in Securities 4
Item 3: Defaults upon Senior Securities 4
Item 4: Submission of Matters to a Vote of Security Holders 4
Item 5: Other Information 5
Item 6: Exhibits and Reports on Form 8-K 5
Index to Financials 6
Signatures F/S - 12
[The balance of this page has been intentionally left blank.]
(i)
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements of the Company for the period covered
by this report are included elsewhere in this report, beginning at page F/S-1.
The unaudited condensed financial statements have been prepared by the
Company in accordance with generally accepted accounting principles for the
interim financial information with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the
Company's management, all adjustments (consisting of only normal accruals)
considered necessary for a fair presentation have been included. Operating
results for the three-month period ended January 31, 2000 are not
necessarily indicative of the results that may be expected for the full
year ending October 31, 2000.
For further information refer to the financial statements and footnotes
thereto in the Company's Annual Report on Form 10-K for the year ended
October 31, 1999 incorporated by reference herein.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS FOR THE PERIOD ENDED JANUARY 31, 2000.
Three months ended January 31, 2000 compared to the three months ended
January 31, 1999:
During the three months ended January 31, 2000, the Company generated no
revenue other than interest income of $1,633. General and administrative
expenses decreased to $205,200 for the three-month period ended January 31,
2000 as compared to $237,400 for the three-month period ended January 31,
1999. The decrease is principally attributed to reduced expenses charged to
it's Mexican properties. For the three months ended January 31, 2000, the
Company experienced a loss of $209,139, or $0.03 per share, compared to a
loss of $243,703, or $0.04 per share, during the comparable period in the
previous year.
LIQUIDITY AND CAPITAL RESOURCES.
Metalline Mining Company (the "Company") is a development stage
enterprise formed under the laws of the State of Nevada, on August 20,
1993, to engage in the business of mining. The Company has no operating
history and is subject to all the risks inherent in a new business
enterprise. The likelihood of success of the Company must be considered in
light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with a new business, and the
competitive and regulatory environment in which the Company will operate.
From inception until May 1996, the Company was essentially dormant having
as its only asset unpatented mining claims located in the State of Montana
("Kadex Property"). Since May 1996, the focus of the Company has been the
Sierra Mojada Project in Mexico.
The Company has insufficient funds to carry on operations during the next
twelve months. In order to maintain operations, the Company will have to
raise additional capital through loans or through the sale
Page 1
of securities. If the Company is unable to raise additional capital, it may
have to cease operations. The Company's plan of operation, subject to
maintaining sufficient funds, calls for continued geologic mapping of the
surface and underground workings, sampling, and drilling to explore for
additional mineralization and to develop an ore reserve and compilation of
the data into a computer data base for reserve calculation.
Currently the Company is spending approximately $20,000 per month in
general overhead. Over the next six months the Company has budgeted
$100,000 for Sierra Mojada programs, $40,000 for property payments and
$220,000 for working capital and costs of future financing.
Due to the Company's lack of revenues, the Company's independent
certified public accountants included a paragraph in the Company's 1999
financial statements relative to a going concern uncertainty. The Company
has financed its obligations during the 1998-99 fiscal year by its sale of
1,068,800 shares at prices ranging between $0.90 and $1.75 per share.
During the current period, the Company realized $849,750 from the sale of
1,000,000 shares.
The Company is engaged in the business of mining. The Company currently
owns one mining property located in Mexico known as the Sierra Mojada
Property. The Company conducts its operations in Mexico through its wholly
owned subsidiary corporation, Minera Metalin S.A. de C.V. ("Minera
Metalin").
The Sierra Mojada Property is comprised of eight concessions totaling
7,060 hectares (17,446 acres). The concessions were acquired by purchase
agreements from the titled owners. The Company controls 100% of the
concessions. The Company is current on its annual payments.
The Sierra Mojada Mining District is located in the west central part of
the state of Coahuila, Mexico, near the Coahuila-Chihuahua state border
some 200 kilometers south of the Big Bend of the Rio Grande River. The
principal mining area extends for some 5 kilometers in an east-west
direction along the base of the precipitous, 1,000 meter high, Sierra
Mojada Range.
Vehicle access from Torreon is by 200 kilometers on paved road to the
Penoles chemical plant at Laguna del Rey and then another 50 kilometers of
gravel road to Sierra Mojada. There is a well maintained, 1200 meter,
gravel airstrip. The District has high voltage electric power and is
served by a rail line, which was constructed from Escalon to the district
in 1891 and later connected to Monclova.
The initial discovery of silver ore in the Sierra Mojada Property was
made in 1879. Over the next 12 years numerous small mines developed along
an oxidized silver lead ore body known as the "lead manto" (a bed, layer or
strata). The lead manto was mined continuously for 3 kilometers and
discontinuously for another 2 kilometers. Ore was selectively mined and
hauled by wagon to Escalon on the railroad main line from El Paso to Mexico
City; from there it went to smelters in Mexico and the United States.
In September of 1891 the Mexican Northern Railroad completed its spur
line from Escalon to the district. Rail access stimulated development and
the period from 1891 to the late 1920's was the peak of productivity of the
district. The main lead manto was nearly mined out by 1905, the same year
that the discovery of the first silver-copper ore body was made.
Additional discoveries of silver, silver-copper, and silver-copper-zinc-
lead ores provided production through the 1930's. Between 1922 and 1931
additional lead manto silver-lead ore was discovered and mined to the
southwest for some 1,400 meters under the Sierra Mojada range, this manto
was eventually mined for more than 2 kilometers.
Page 2
By the mid 1920's many of the mines were under control of Penoles
Corporation ("Penoles") and ASARCO Incorporated ("ASARCO"). ASARCO ceased
mining in the district in the late 1930's. Both companies still owned
properties during the 1940's and Penoles mined until the late 1950's when
the Mineros Nortenos Cooperative acquired the Penoles properties. The
Mineros Nortenos Cooperative ("Mineros Nortenos") has operated the San
Salvador, Encantada and Fronteriza mines since 1957 and direct shipped high-
grade oxide zinc and lead-silver ore to smelters in Mexico.
The lead manto produced 3 to 3.5 million tonnes prior to 1905 with
another 1.5 million tonnes of similar ore coming from other ore bodies to
the west and to the southwest.
Mineros Nortenos has mined about 600,000 tonnes of predominantly oxide
zinc ore with grades of 20 to 50% zinc. Some of this ore was oxide silver-
lead and silver, copper, zinc and lead sulfide at grades of 1 to 4 kilogram
silver per tonne, 1 to 5% copper, 10 to 30% zinc and 30 to 70% lead.
Production records from 1978 to 1981 for the San Salvador mine average
33.5% zinc.
The Sierra Mojada Property has produced in excess of 10 million tonnes of
high-grade ore that graded in excess of 30% lead, 20% zinc, 1% copper and 1
kg (31 ounces) silver per tonne that was shipped directly to the smelter.
The district has never had a mill to concentrate ore. All of the mining
was done selectively for ore of sufficient grade to direct ship; mill grade
ore was left unmined. More than 50 kilometers of underground workings are
spread through the 5 kilometer by 2 kilometer area from which more than 45
mines have produced ore. The deepest workings have ore grade
mineralization and provide some of the best targets for reserve
development. In spite of the amount of historic work, when a map of all of
the historic workings is viewed there is much more unexplored area in the 5
by 2 kilometer area than has been explored and the vertical extent greater
than 100 meters is totally unexplored.
The sediments are predominantly carbonate with some sandstone and shale
and the attitudes are near horizontal. The mines are dry and the rocks are
competent, there is very little unstable ground and the ore thickness is
amenable to high volume mechanized mining methods. Sierra Mojada has ideal
mining conditions and grades for low cost production.
Based upon the foregoing, the Company is of the opinion that the
magnitude of the Sierra Mojada mineral system and its exploration potential
is capable of providing new reserves for many more years of mining.
Because, however, the reserves are located below the surface of the earth,
there is no assurance as to the quantity or quality of the undeveloped
reserves. No commercially mineable ore body has been delineated on the
properties, nor have any reserves been identified.
There is potential for long-term reserve expansion within the known
extent of the mineral systems. There is potential to discover ore deposits
in unexplored portions of the land position and at depth in unexplored
stratigraphy. There is however, no assurance that the Company will have the
monetary resources to continue to explore for, develop, or retrieve any of
the minerals located in the Sierra Mojada Property.
Minera Metalin has signed a Joint Venture Letter Agreement with Minera
North S. de R.L. de C.V. a wholly owned subsidiary of North Limited of
Melbourne Australia, a major international mining company. The letter
agreement is to be followed with a formal Joint Venture Agreement. The
agreement allows North to acquire a 60% participating interest in Sierra
Mojada by exploring and completing a feasibility study (which shall be of a
standard acceptable to international banks as enabling them to lend funds
to the project) over a "Earn In Period" of not more than 5 years. If a
decision is made to proceed
Page 3
with the development of any mine, North shall arrange financing for the
development on behalf of both parties.
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-Lived Assets." This
standard became effective for years beginning after December 15, 1995. In
complying with this standard, the Company has reviewed its long-lived
assets quarterly to determine if any events or changes in circumstances
have transpired which indicate that the carrying value of its assets may
not be recoverable. The Company determines impairment by comparing the
undiscounted future cash flows estimated to be generated by its assets to
their respective carrying amounts. The Company does not believe any
adjustments are needed to the carrying value of its assets October 31, 1999
and 1998.
In October 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Stock-Based Compensation" (FAS 123). This
statement encourages, but does not require, companies to recognize
compensation expense for grants of stock, stock options, and other equity
instruments to employees based on fair value.
Transactions in equity instruments with non-employees for goods or
services must be accounted for on the fair value method. The Company has
adopted the fair value accounting prescribed by FAS 123.
CASH FLOWS FOR THE THREE MONTHS ENDED JANUARY 31, 2000 WERE AS FOLLOWS:
During the three-month period ended January 31, 2000, the Company's cash
position increased $530,815, to $771,228. During the three-month period,
the Company used $213,815 in operating activities, which were in excess of
the reported $209,139 net loss due to changes in operating assets and
liabilities. Investing activities used $67,869 for mining property
acquisitions, and financing activities realized $849,750 from the sale of
1,000,000 common shares, less deposits of $37,500 received in the prior
period.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None.
ITEM 2. CHANGES IN SECURITIES.
Neither the constituent instruments defining the rights of the
registrant's securities holders nor the rights evidenced by the
registrant's outstanding common stock have been modified, limited, or
qualified. The Company sold 950,000 shares of its common stock for $0.855
per share in November 1999, and 50,000 shares of its common stock for $0.75
per share in December 1999.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The registrant has no outstanding senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Page 4
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS. The following exhibit is filed as part of this report:
Exhibit 27.0 Financial Data Schedule.
REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the
registrant during the period covered by this report.
[The balance of this page has been intentionally left blank.]
Page 5
METALLINE MINING COMPANY
INDEX TO FINANCIAL STATEMENTS
PAGE
Financial Statements:
Balance Sheets as of October 31, 1999
and October 31, 1998 F/S-1
Statements of Loss for the Years Ended
October 31, 1999, 1998, 1997, and for
the period from inception (November 8, 1993)
to October 31, 1999 F/S-2
Statements of Changes in Stockholder's Equity
for the period from inception (November 8, 1993)
to October 31, 1999 F/S-3
Statements of Cash Flow for the Years Ended
October 31, 1999, 1998, 1997, and for the
period from inception (November 8, 1993) to
October 31, 1999 F/S-9
Notes to Financial Statements F/S-10
Signatures F/S-12
[The balance of this page has been intentionally left blank.]
Page 6
METALLINE MINING COMPANY
(An Exploration Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 771,228 $ 240,662
Accounts receivable - -
Prepaid expenses 5,533 3,127
Employee advances 5,208 5,208
---------- ---------
Total Current Assets 781,969 248,997
PROPERTY AND EQUIPMENT
Office equipment 132,166 132,166
Less: Accumulated depreciation (67,901) (62,328)
---------- ---------
Total Property and Equipment 64,265 69,838
---------- ---------
MINERAL PROPERTIES 1,171,540 1,103,671
---------- ---------
TOTAL ASSETS $ 2,017,774 $ 1,422,506
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - $ 3,739
Deposits payable - 37,500
Accrued liabilities 8,924 13,027
--------- ---------
Total Current Liabilities 8,924 54,266
--------- ---------
COMMITMENTS AND CONTINGENCIES - -
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value;
50,000,000 shares
authorized, 8,215,095 shares
issued and outstanding, at
January 31, 2000; 7,215,095
shares issued and outstanding
at October 31, 1999. 82,152 72,152
Additional paid-in capital 4,817,100 3,977,350
Stock options and warrants 288,000 288,000
Deficit accumulated during
development stage (3,178,402) (2,969,262)
---------- ---------
Total Stockholders' Equity 2,008,850 1,368,240
---------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,017,774 $1,422,506
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S-1
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Inception
(Nov. 8, 1993) 3 Months 3 Months
to Ended Ended
Jan. 31, 2000) Jan.31, 2000 Jan.31, 1999
------------- ------------ -------------
<S> <C> <C> <C>
REVENUES
Interest Income $ 4,847 $ 1,633 $ -
------- ------- ----------
GENERAL AND
ADMINISTRATIVE EXPENSES
Salaries 485,778 54,000 54,000
Administration 108,600 19,582 12,666
Professional services 1,028,140 27,911 22,782
Property expenses 1,114,918 91,304 127,814
Depreciation 68,318 5,573 6,297
Marketing and research 91,895 12,402 20,140
Financing Costs 276,000 - -
--------- -------- ----------
Total Expenses 3,173,649 210,772 243,699
OTHER EXPENSES
Interest 9,599 - 4
--------- -------- ----------
NET LOSS $(3,178,401) $(209,139) $(243,703)
=========== ========== ============
BASIC AND DILUTED
LOSS PER
COMMON SHARE $ (0.03) $ (0.04)
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING 7,715,095 6,095,739
- ---------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S-2
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Accumulated
Common Stock Stock Stock Deficit
----------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance in August
1993 (prior to in-
ception) common stock
without value 960,800 $ 9,608 $(9,608) $ - $ - $ - $ -
Reverse stock split
of 5:1, reducing
common stock to
192,160 shares (768,640) (7,686) 7,686 - - - -
Net loss for the
year ending
October 31,1994 - - - - - (8,831) (8,831)
------- ------- ------- ------- ------- ------- -------
Balances at
October 31,1994 192,160 1,922 (1,922) - - (8,831) (8,831)
Stock split 3:1,
increasing common
stock to 576,480
shares 384,320 3,843 (3,843) - - - -
Net loss for the
year ending October
31,1995 - - - - - (7,861) (7,761)
------- ------- ------- ------- ------- ------- -------
Balance at
October 31,1995 576,480 $ 5,765 $(5,765) $ - $ - $(16,592) $(16,592)
------- ------- ------- ------- ------- ------- -------
- -------------------------------------
Table continued on next page.
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S-3
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
<TABLE>
<CAPTION>
Accumulated
Common Stock Stock Stock Deficit
---------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance brought
Forward 576,480 $ 5,765 $(5,765) $ - $ - $(16,592) $(16,592)
Issuance in November
1995 of shares for
cash at $0.01
per share 45,000 450 - - - - -
Issuance in November
1995 of shares for
cash at $1.00 per
share 15,859 159 15,700 - - - 15,859
Issuance in June
1996 of shares for
cash at $0.10 per
share 1,305,000 13,050 117,450 - - - 130,500
Issuance in June
1996 of shares at
$0.01 per share in
exchange for assignment
of mineral property
rights valued
at $9,000 900,000 9,000 - - - - 9,000
Issuance in October
1996 of shares for CAD
computer equipment at
$0.10 per share 150,000 1,500 13,500 - - - 15,000
Issuance in October
1996 of shares for
services at $0.10
per share 140,000 1,400 12,600 - - - 14,000
Net loss for the
year ending
October 31,1996 - - - - - (40,670) (40,670)
------- ------- ------- ------- ------- ------- -------
Balances at
October 31,1996 3,132,339 $31,324 $153,485 $ - $ - $(57,262) $127,547
------- ------- ------- ------- ------- ------- -------
- --------------------------------------
Table continued on next page.
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S-4
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
<TABLE>
<CAPTION>
Accumulated
Common Stock Stock Stock Deficit
--------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance brought
Forward 3,132,339 $31,324 $153,485 $ - $ - $(57,262) $127,547
Issuance in February
1997 of shares for
services at $0.30 and
$0.35 per share 133,800 1,338 44,245 - - - -
Issuance in March and
April of shares for
cash at $0.35
per share 250,000 2,500 85,000 - - - 87,500
Issuance in May and
June 1997 of shares
for cash at $0.35
per share 181,600 1,816 61,744 - - - 63,560
Issuance in May and
June 1997 of shares
for services at $0.35
per share 62,500 625 21,250 - - - 21,875
Issuance in August 1997
of shares for payment
of loan at $0.315
per share 100,200 1,002 30,528 - - - 31,530
Issuance in August 1997
of shares for cash at
$0.90 per share 420,000 4,200 373,800 - - - 378,000
Issuance in August 1997
of shares for services
at $1.00 per share 95,000 950 94,050 - - - 95,000
Issuance in October 1997
of shares for cash at
$1.00 per share 75,000 750 74,250 - - - 75,000
Issuance of option (for
300,000 shares at $2.25
per share) for cash - - 3,000 - - - 3,000
Net loss for year ending
October 31, 1997 - - - - - (582,919) (582,919)
------- ------- ------- ------- ------- ------- -------
Balances at October
31, 1997 4,450,439 $44,505 $941,352 $ - $ - $(640,181) $345,676
------------------ ------- ------- ------- ------- ------- ------- -------
Table continued on next page.
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S-5
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
<TABLE>
<CAPTION>
Accumulated
Common Stock Stock Stock Deficit
---------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance brought
Forward 4,450,439 $44,505 $941,352 $ - $ - $(640,181) $345,676
Issuance in November
and December 1997 of
shares for cash at
$1.00/share 403,500 $4,035 $399,465 - - - 403,500
Issuance of options
(for 1,200,000 shares
at $0.90 per share)
for cash - - 120,000 - - - 120,000
Issuance of options
for financing fees - - - - 60,000 - 60,000
Issuance of warrants
for consulting fees - - - - 117,000 - 117,000
Issuance in November and
December 1997 of shares
for services at $0.35
and $1.00 per share 41,800 418 21,882 - - - 22,300
Issuance in February
1998 of shares for
mine data base at
$1.625 per share 200,000 2,000 323,000 - - - 325,000
Issuance in February
and March 1998 of
shares for cash at
$1.00 and $0.87
per share 345,000 3,450 338,495 - - - 341,945
Issuance in June and
July 1998 of shares
for cash at $1.00
per share 95,000 950 94,050 - - - 95,000
Issuance in September
and October 1998 of
shares for cash and
receivables at $1.00
per share 555,000 5,550 519,450 (300,000) - - 225,000
Net loss for year ending
October 31,1998 - - - - - (906,036) (906,036)
------- ------- ------- ------- ------- ------- -------
Balance at
October 31,1998 6,090,739 $60,908 $2,757,694 $(300,000) $177,000$(1,546,217) $1,149,385
- ----------------- ------- ------- ------- ------- ------- ------- -------
Table continued on next page.
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S-6
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
<TABLE>
<CAPTION>
Accumulated
Common Stock Stock Stock Deficit
------------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------- ------- ---------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance brought
Forward 6,090,739 $60,908 $2,757,694 $(300,000) $177,000 $(1,546,217) $1149385
Stock subscription
received - - - 300,000 - - 300,000
Expiration of stock
options - - 60,000 - (60,000) - -
Issuance of stock
options for
financing fees - - - - 216,000 - 216,000
Exercise of stock
warrants at
$0.90 per share 250,000 2,500 267,500 - (45,000) - 225,000
Issuance in November
1998 and March-August,
1999 shares for cash
at $1.00 per share 776,000 7,760 768,240 - - - 776,000
Issuance in August
1999 of shares for
drilling fees at
$0.90 per share 55,556 556 49,444 - - - 50,000
Issuance in August
1999 shares for cash
at $1.75 per share 42,800 428 74,472 - - - 74,900
Net loss for year
ending October 31,
1999 - - - - - (1,423,045) (1423045)
------- ------- ------- ------- ------- ------- -------
Balance at
October 31,1999 7,215,095 $72,152 $3,977,350 $ - $288,000 $(2,969,262) $1,368,240
------- ------- ------- ------- ------- ------- -------
Table continued on next page.
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S - 7
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
<TABLE>
<CAPTION>
Accumulated
Common Stock Stock Stock Deficit
---------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance brought
forward 7,215,095 $72,152 $3,977,350 $ - $288,000 $(2,969,262) $1,368,240
Issuance in November
1999 shares for cash
at $0.855 per share 950,000 9,500 802,750 - - - 812,250
Issuance in December
1999 shares for cash
at $0.75 per share 50,000 500 37,000 - - - 37,500
Net loss for the 3
months ending
January 31,2000 - - - - - (209,139) (209,139)
------ ------ ------- ------ ------- --------- ---------
8,215,095 $82,152 $4,817,100 $ - $288,000 $(3,178,401) $2,008,851
------ ------ -------- ----- ------- --------- --------
- -------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F/S - 8
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From Inception
(Nov. 8, 1993 3 Months 3 Months
to Ended Ended
Jan. 31, 2000 Jan. 31, 2000 Jan. 31, 1999
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from
operating activities:
Net loss $(3,178,401) $(209,139) $(243,703)
Adjustments to reconcile
net loss to cash used by
operating activities:
Depreciation 68,318 5,573 6,297
Stock given in exchange
for services 248,758 - -
Stock options given
for operating expenses 393,000 - -
Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable 2,849 - -
(Increase) decrease in
prepaid expenses 18,079 (2,406) 1,606
(Increase) decrease in
employee advances (31,668) - -
Increase (decrease) in
accounts payable - 3,738 (32,910)
Increase (decrease) in
accrued liabilities 8,925 (4,104) 1,110
------ ------ -----
Net cash used by
operating activities (2,470,140) (213,815) (267,600)
----------- --------- ---------
Cash flows from investing
activities:
Equipment purchases (117,165) - -
Mining property
acquisitions (823,543) (67,869) -
--------- -------- -------
Net cash used by investing
activities (940,708) (67,869) -
--------- -------- ---------
Cash flows from financing
activities:
Stock given in exchange
for loan 31,530 - -
Proceeds from sales of
common stock 3,991,964 849,750 310,000
Proceeds from sales of
options 123,000 - -
Deposits for sale of stock 50,000 (37,500) -
Payments on subscriptions
receivable - - -
Re-payments on
shareholders' loans (14,418) - -
-------- ------- -------
Net cash provided by
financing activities: 4,182,076 812,250 310,000
--------- ------- -------
Net increase (decrease)
in cash and cash
equivalents 771,228 530,566 42,400
Cash beginning of period 0 240,662 313,322
------- ------- -------
Cash at end of period $771,228 $771,228 $355,722
======== ======== ========
Supplemental cash flow
disclosures:
Interest paid $9,599 $ - $ 4
Income taxes paid - - -
Non-cash financing
activities:
Common stock issued
for services 248,758 - -
Common stock issued
for mineral properties 348,000 - -
Common stock issued
for equipment 15,000 - -
Common stock issued
for payment of debt 80,000 - -
Common stock issued
for subscription receivable 300,000 - -
Common stock options
issued for services 117,000 - -
Common stock options issued
for financing fees 276,000 - -
The accompanying notes are an integral part of these financial statements.
</TABLE>
F/S-9
METALLINE MINING COMPANY
An Exploration Stage Company
Notes to the Financial Statements
January 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Metalline Mining Company ("the Company") was incorporated in the state of
Nevada on November 8, 1993 as the Cadgie Company for the purpose of acquiring
and developing mineral properties. The Cadgie Company was a spin-off from its
predecessor Precious Metal Mines, Inc. The Articles of Incorporation of Cadgie
Company were executed on August 20, 1993. On June 28, 1996, at a special
directors meeting, the Company's name was changed to Metalline Mining Company.
The Company's efforts have been concentrated in expenditures related to
exploration properties, principally in the Sierra Mojada Project, located in
Coahuila, Mexico. The Company has not determined whether the exploration
properties contain ore reserves that are economically recoverable. The
ultimate realization of the Company's investment in exploration properties is
dependent upon the success of future property sales, the existence of
economically recoverable reserves, the ability of the Company to obtain
financing or make other arrangements for development, and upon future
profitable production. The ultimate realization of the Company's investment in
exploration properties cannot be determined at this time, and accordingly, no
provision for any asset impairment that may result, in the event the Company is
not successful in developing or selling these properties, has been made in the
accompanying financial statements.
The Company is actively seeking additional capital and management believes its
properties can ultimately be sold or developed to enable the Company to
continue its operations. However, there are inherent uncertainties in mining
operations and management cannot provide assurances that it will be successful
in this endeavor. Furthermore, the Company is in the development stage, as it
has not realized any revenues from its planned operations.
The costs of acquiring, exploring and developing mineral properties are
capitalized by project area. Costs to maintain the mineral rights and leases
are expensed as incurred. When a property reaches the production stage, the
related capitalized costs will be amortized, using the units of production
method on the basis of periodic estimates of ore reserves. Mineral properties
are periodically assessed for impairment of value and any losses are charged to
operations at the time of impairment.
NOTE 2 - MINERAL PROPERTIES
SIERRA MOJADA MINING CONCESSION
In June of 1996, USMX (now named Dakota) and the Company entered into a joint
venture agreement, whereby the Company could acquire a 65% interest in a mining
concession named the Sierra Mojada Project, located in Coahuila, Mexico. Under
the terms of the agreement, the Company was to contribute two million dollars
($2,000,000) in work commitments over the following seven years.
After the execution of the USMX agreement, Dakota's interest (35%) in the joint
venture was sold to an entity, which subsequently defaulted on its joint
venture obligations. This action in 1998 triggered the elimination of the
joint venture and resulted in the Company assuming 100% control of the Sierra
Mojada concession without the need to spend $2,000,000 to vest its interest.
SIERRA MOJADA EXPLORATION CONCESSIONS
In the twelve-month period of August 23, 1996 to September 2, 1997, the Company
executed five separate agreements for the acquisition of exploration
concessions in the same mining region as the Sierra Mojada Project in Mexico.
Each agreement enables the Company to explore the underlying property by paying
stipulated annual payments, which shall be applied in full toward the
contracted purchase price of the related concession.
F/S-10
METALLINE MINING COMPANY
An Exploration Stage Company
Notes to the Financial Statements
January 31, 2000
NOTE 2 - MINERAL PROPERTIES (Continued)
Under the terms of the agreements, the Company is obligated to pay the
following amounts over the following two years:
Year 1 3,355,384
Year 2 103,076
On October 7, 1999 the Company announced the acceptance of a joint venture with
North Limited. The agreement gives North Limited the right to earn into 60% of
the Sierra Mojada by providing all funds necessary to complete a feasibility
study that is acceptable to international banking institutions for lending
development capital. North Limited is a large Australian mining company based
in Melbourne, Australia and was known as North Broken Hill Peko before a name
change in 1994. North Limited is dedicated to natural resource development that
produces iron, uranium, base and precious metals, and forestry products.
NOTE 3 - COMMON STOCK
The Company (Cadgie Co.) was formed in August of 1993 and incorporated in
November 1993 by Mr. Carman Ridland of Las Vegas, Nevada as a spin-off from its
predecessor firm Precious Metal Mines, Inc.
The Company issued 960,800 of its $0.01 par value shares to Precious Metal
Mines, Inc. for 16 unpatented mining claims located near Philipsburg, Montana
comprising the Kadex property group.
Precious Metal Mines, Inc. distributed the 960,800 shares of Cadgie Company to
its shareholders. One share of Cadgie Co. was exchanged for each share of
Precious Metal Mines, Inc. held by holders of record as of August 31, 1993.
On August 31, 1994, the directors of Cadgie Co. declared a 1:5 reverse stock
split of the outstanding Cadgie Co. shares, thus reducing the number of
outstanding shares from 960,800 to 192,160 shares.
On August 4, 1995 the directors of Cadgie Co. declared a 3:1 forward stock
split of the outstanding Cadgie Co. shares, thus increasing the number of
outstanding shares from 192,160 to 576,480.
In January 1996, Mr. Carmen Ridland, in a private sale, sold a controlling
interest in the corporation to Mr. Howard Crosby. On January 12, 1996, Mr.
Ridland transferred control of Cadgie Co. to Mr. Crosby and Mr. Robert
Jorgensen.
In June 1996, the Company completed a private placement of common stock
resulting in net proceeds of $25,000. The Company also issued 900,000 shares
to Messrs. Ryan, Bingham, and Gorski, who had formed a partnership to advance
development of the mining concession located in Coahuila, Mexico. The
partnership had an informal joint venture agreement with USMX, Inc. covering
the mining concessions. By acquiring the partnership interest, the Company was
able to negotiate and sign a formal joint venture agreement with USMX in July
1996. (See Note 2)
In August 1996, the Company changed its name to Metalline Mining Company.
F/S - 11
METALLINE MINING COMPANY
An Exploration Stage Company
Notes to the Financial Statements
January 31, 2000
SIGNATURES
In accordance with Section 12, 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
METALLINE MINING COMPANY
BY: /s/ Merlin Bingham
Merlin Bingham,
its President
Date: March 15, 2000
By: /s/ Wayne L. Schoonmaker
Wayne Schoonmaker, its
Principal Accounting Officer
Date: March 15, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
By: /s/ Merlin Bingham By: /s/ Jim Czirr
Merlin Bingham Jim Czirr
Director Director
Date: March 15, 2000 Date: March 15, 2000
By: /s/ Daniel Garski By: /s/ Wayne L. Schoonmaker
Daniel Gorski Wayne Schoonmaker
Vice President/Director Secretary/Treasurer, Director
Date: March 15, 2000 Date: March 15, 2000
By: /s/ Mario Ayub Touche
Mario Ayub Touche
Director
Date: March 15, 2000
F/S - 12
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001031093
<NAME> METALLINE MINING COMPANY
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 777,228
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 781,969
<PP&E> 1,235,805<F1>
<DEPRECIATION> 67,901
<TOTAL-ASSETS> 2,017,774
<CURRENT-LIABILITIES> 8,924
<BONDS> 0
0
0
<COMMON> 82,152
<OTHER-SE> 1,926,698<F2>
<TOTAL-LIABILITY-AND-EQUITY> 2,017,774
<SALES> 0
<TOTAL-REVENUES> 1,633<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 210,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (209,139)
<INCOME-TAX> 0
<INCOME-CONTINUING> (209,139)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (209,139)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
<FN>
<F1>Consists of $1,171,540 in resource properties and claims, and $132,166 of
equipment at cost.
<F2>Consists of $4,817,100 in additional paid-in capital and $288,000 of stock
options and warrants, less a deficit of $3,178,402 accumulated during
development stage.
<F3>Consists of $1,633 in interest income.
</FN>
</TABLE>
