UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1999
--------------------------------------------
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transaction period from to
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Commission File number 0-26709
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THE ZEBALLOS MINING COMPANY
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(Exact name of Company as specified in charter)
Nevada 98-0201259
- -------------------------------------------- --------------------------
State or other jurisdiction of incorporation (I.R.S. Employee I.D. No.)
or organization
Unit 34 - 3387 King George Highway
Surrey, British Columbia, Canada V4P 1B7
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 1-604-538-4898
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Securities registered pursuant to section 12 (b) of the Act:
Title of each share Name of each exchange on which registered
None None
- ------------------- -----------------------------------------
Securities registered pursuant to Section 12 (g) of the Act:
None
- ----------------
(Title of Class)
Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act during the past 12 months (or for a shorter
period that the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $ -0-
---------------
State the aggregate market value of the voting stock held by nonaffiliates of
the Company. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specific date within the past 60 days.
<PAGE>
As at December 31, 1999, the aggregate market value of the voting stock held by
nonaffiliates is undeterminable and is considered to be 0.
(THE COMPANY INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE LAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE COMPANYS)
As of December 31, 1999, the Company has 11,075,400 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the part
of this Form 10-KSB (eg., Part I, Part II, etc.) into which the documents is
incorporated:
(1) Any annual report to security holders;
(2) Any proxy or other information statement;
(3) Any prospectus filed pursuant to Rule 424 (b) or (c) under the
Securities act of 1933.
NONE
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PART 1
Page
----
<S> <C> <C>
ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2. DESCRIPTION OF PROPERTY 4
ITEM 3. LEGAL PROCEEDINGS 6
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS 6
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 7
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 7
ITEM 7. FINANCIAL STATEMENTS 8
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE 8
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS, COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT 8
ITEM 10. EXECUTIVE COMPENSATION 11
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT 12
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 13
PART IV
ITEM 13. EXHIBITS 14
</TABLE>
3
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PART 1
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ITEM 1. DESCRIPTION OF BUSINESS
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HISTORY AND ORGANIZATION
The Company was incorporated in the State of Nevada on March 4, 1999.
The Company has no subsidiaries and no affiliated companies. The executive
offices of the Company are located at Suite 34 - 3387 King George Highway,
Surrey, British Columbia, Canada, V4P 1B7.
The Company is engaged in the exploration of mineral properties. The
Company is referred to as being in the "development" stage by its auditors. This
term is generally used in Financial Accounting Standards to describe a company
seeking to develop its ideas and products. The Company is not in the development
stage with regards to any mineral claim. No ore body has been discovered and no
substantial exploration has been done on its mineral claim. The Company is
purely an exploration company. There is no assurance that any ore body will ever
be found nor that the Company will have sufficient funds to undertake the
exploration work required to identify an ore body.
The Company's shares have been given a quotation on the system of the
National Association of Securities Dealers, Inc. ("NASD") known as the OTC
Bulletin Board. The Company has not entered a bid or ask price as at the signing
of the Form 10K-SB
The Company has no revenue to date from the exploration of its mineral
property, and its ability to effect its plans for the future will depend on the
availability of financing. Such financing will be required to develop the
Company's mineral property to a stage where a decision can be made by management
as to whether an ore body exists and can be successfully brought into
production. The Company anticipates obtaining such funds from its directors and
officers, financial institutions or by way of the sale of its capital stock in
the future, but there can be no assurance that the Company will be successful in
obtaining additional capital for exploration activities from the sale of its
capital stock or in otherwise raising substantial capital.
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ITEM 2. DESCRIPTION OF PROPERTIES
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EXPLORATION AND DEVELOPMENT OF THE ZEB AU MINERAL PROPERTY
The Company retained Calvin Church, P. Geo. of Vancouver, British
Columbia, to summarize the geology and mineral potential on its mineral claim
near Zeballos, British Columbia. His report was dated April 30, 1999. The
mineral claim was staked February 28, 1999 by Edward Skoda on behalf of the
Company and named "Zeb Au".
The claim covers 18 metric units (25.3 square miles) located within the
Zeballos mining camp near the town of Zeballos on the West Coast of Vancouver
Island. Auriferous quartz veins in the Zeballos mining camp produced over
287,811 ounces of gold and 124,700 ounces of silver from ore averaging 0.44
ounces per ton during the period 1934 to 1948 (B.C. Department of Mines).
4
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The present report summarizes geology and mineralization in the
Zeballos mining camp and potential for discoveries on the Zeb Au claim. Church's
report is summarized below. All of the material presented in his report is from
a literature search of British Columbia Department of Mines annual reports and
papers, Geological Survey of Canada Open File maps, memoirs and papers, and
Assessment Report filings with the B.C. Department of Mines. Calvin Church did
not visited the property which was covered in snow at the time of his
preparation of his report.
LOCATION, ACCESS AND TOPOGRAPHY
The property is situated just north of the town of Zeballos, which is
located on the West Coast of Vancouver Island about 300 kilometers (186 miles)
northwest of Victoria. The geographic center of the Zeb Au property is located
at 126(degrees)48'35" West Longitude and 50(degrees)03'35" North Latitude on
N.T.S. mapsheet 92 L/2. This location may also be described as being in U.T.M.
zone 09 with coordinates Northing 5547300N and Easting 656900E. The claim's
legal corner post is beside the main road about 2.8 kilometers (1.7 miles) up
the Zeballos River from its junction with the Nomash River.
Access is by an all weather road which follows the Zeballos River and
connects Zeballos to the Island highway at Mukwilla Lake. The road comes within
less than one kilometre from the south and east boundaries of the claim from
where steep footpaths follow creeks to higher ground in the northwest area of
the claim.
The terrain is mountainous and rugged. Elevations range from 20 meters
(75 feet) in the Zeballos River valley to above 1,030 meters (Mt. Lukwa 3,749
feet) at some of the local peaks within the mining camp. Many of the creeks flow
down waterfalls in narrow canyons and there are many unscalable bluffs which
make foot traverses difficult. The area is considered coastal rainforest and
total annual precipitation is high, rarely less than 500 centimeters (200
inches). Forests of yellow cedar and hemlock populate the mountaintops and
Douglas fir and red cedar grow well in the river valleys, however, much of the
main drainages were logged in the 1940's.
CLAIM STATUS
The claim is owned outright by the Company. Mineral tenure is secure
for one year from the date of staking as described below.
Claim Name Tenure No. Units Expiry Date
-----------------------------------------------------------------------
Zeb Au 367965 18 February 28, 2000
The Company undertook an exploration program in October 1999 in which a
geochemical grid was set out on the mineral claim for future soil sampling. This
work was recorded as assessment work with the Ministry of Mines for British
Columbia and has maintained the claim in good standing until February 28, 2001.
MINERALIZATION AND ALTERATION
Mineral deposits of the area include gold-bearing quartz veins and high
temperature replacement (skarn) or contact metamorphic deposits in limestone or
calcareous sedimentary rocks. Deposits of the latter type are confined to areas
where Quatsino limestone and sedimentary parts of the Karmutsen and Bonanza
group rocks have been invaded by Coast intrusions. The replacements typically
contain chiefly magnetite with lesser amounts of pyrrhotite (F.L., Ridge,
Churchill) or they contain mainly chalcopyrite and only minor magnetite and
pyrrhotite (Maquinna and Central Zeballos) and sometimes appreciable gold
(Beano). In the
5
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Ford skarn deposit a 21 metre thick tabular body of magnetite follows a
limestone-tuff contact and has been traced along 400 metres of strike.
Auriferous gold-bearing veins of the Zeballos camp are
characteristically narrow, with widths less than one foot (30 cm), but commonly
contain gold in excess of one ounce to the ton (35 g/tonne). Some of the veins
occur in sheeted zones up to 4 feet (1.2 m) wide that may pinch and swell along
strike forming lenticular quartz-sulphide zones (Goldfield Vein). The veins
follow fairly continuous fault fissures and are often banded by an alternation
of quartz and sulphides where the abundance of sulphide varies from 10 to 50
percent and averages about 25 percent. Sulphides, in order of abundance are
pyrite, sphalerite, arsenopyrite, chalcopyrite, galena, pyrrhotite, and rarely
marcasite.
The producing mines in the camp were located at the northwest end or
nose of the quartz diorite intrusive body and related to structural deformation
and mineralization there. It has been found that veins, or parts of veins, that
follow the direction of tension in any fracture pattern are the most favourable
for the localization of ore. A study of fracture patterns in the Zeballos camp
by J. S. Stevenson in 1950 determined that veins that strike close to north 62
degrees east and dip vertically were formed by tension and thus most likely to
contain higher grade oreshoots. This discovery has been proven by practical
experience where several high grade veins (Privateeer No.3, Goldfield Vein) and
gash veins in the Zeballos camp are orientated in this direction.
On the Zeb Au claim there are more than three sheared-vein showings of
limited extent containing minor amounts of gold and base metals. The shears
zones are generally less than one metre wide, strike 035 to 090 degrees, and dip
steeply north or south. The quartz veins within the shears are usually 5 to 30
centimetres wide and mineralized with pyrite-arsenopyrite and lesser amounts of
pyrrhotite, chalcopyrite, sphalerite and galena. Near the headwaters of Fault
Creek, in the northwest corner of the claim, several small lens shaped
replacement bodies of magnetite are exposed along the contact of intruding
diorite and Quatsino limestones. These showings are the southern extension of
the Churchill showings which follow the northwest trending strike of the
contact. Outcrop areas of magnetite are characterized by large areas of
limonitic material alternating with coal-black patches of magnetite.
The Goldspring Vein is exposed in the creek bed of Fault Creek and on
the south bank of the creek between two adits. The vein follow a rusty shear
zone up to 30 centimetres wide with an orientation of 355 degrees dipping 55 to
70 degrees east and is mineralized with abundant pyrite and patches of
chalcopyrite. At the lower portal a sample taken across the 20 centimetre width
of vein assayed 0.40 oz/ton gold and 0.1 oz/ton silver.
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ITEM 3. LEGAL PROCEEDINGS
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There are no legal proceedings to which the Company is a party or to which its
property is subject, nor to the best of management's knowledge are any material
legal proceedings contemplated.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
================================================================================
No matters were submitted to a vote of shareholders of the Company during the
period year ended December 31, 1999.
6
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PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
================================================================================
During the past year there has been no established trading market for the
Company's common stock. Since its inception, the Company has not paid any
dividends on its common stock, and the Company does not anticipate that it will
pay dividends in the foreseeable future. As at December 31, 1999 the Company had
39 shareholders; two of these shareholders are officers and directors of the
Company.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
================================================================================
OVERVIEW
The Company was incorporated on March 4, 1999 under the laws of the State of
Nevada. The Company's articles of incorporation currently provide that the
Company is authorized to issue 200,000,000 shares of common stock, par value
$0.001 per share. As at December 31, 1999 there were 11,075,400 shares
outstanding. The Company is engaged in the exploration stage. There is no
assurance that reserves exist in its mineral claim until further exploration
work has been done and economic evaluation based on such work concludes economic
feasibility.
Liquidity and Capital Resources
- -------------------------------
As at December 31, 1999, the Company had $685 of assets, and $8,250 of
liabilities, including cash or cash equivalents amounting to $685. The
liabilities of $8,250 consist of amounts accrued for audit and accounting of
$2,250 and amounts due to a director of $6,000.
The Company has no contractual obligations for either lease premises, employment
agreements or work commitments on the Zeb Au claim and has made no commitments
to acquire any asset of any nature.
Results of Operations
- ---------------------
The Company has had no revenue to date from its mineral properties and none can
be expected for several years.
7
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ITEM 7. FINANCIAL STATEMENTS
================================================================================
The financial statements of the Company are included following the signature
page to this Form 10-KSB.
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ITEM 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
================================================================================
From inception to date, the Company's principal accountant is Andersen Andersen
& Strong, L.C. of Salt Lake City, Utah. The firm's report for the period from
inception to December 31, 1999 did not contain any adverse opinion or
disclaimer, nor were there any disagreements between management and the
Company's accountants.
PART 111
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ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16 (a) OF THE
EXCHANGE ACT
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The following table sets forth as of December 31, 1999, the name, age, and
position of each executive officers and directors and the term of office of each
director of the Company.
Term as
Director
Name Age Position Held Since
---- --- ------------- -----
E. Del Thachuk 63 President and Director 1999
Stacey Bligh 26 Secretary Treasurer 1999
James Bruce 71 Director 1999
Each director of the Company serves for a term of one year and until his
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the Company's shareholders. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until his successor is elected at the annual general meeting of the board of
directors and is qualified.
Set forth below is certain biographical information regarding each of the
Company's executive officers and directors.
8
<PAGE>
DEL THACHUK has been the President and a director of the Company since its
inception. Mr. Thachuk graduated from Victoria Composite High School in
Edmonton, Alberta before spending nine months articling as a chartered
accountant student. Subsequently Mr. Thachuk worked for two years for the City
of Edmonton as a surveyor before entering professional football for four years.
He was a player for London Lords in London, Ontario and was subsequently was
hired by the Edmonton Eskimos. From 1962 to 1969, Mr. Thachuk was owner and
president of Civic Tire & Battery Ltd. located in Olds, Alberta. His company
owned three tire shops and was in partnership with an additional two. Subsequent
to the sale of his company he became a contractor for a short period of time
during which time he built and sold five houses and thirty pre-fab homes. In
1971, Mr. Thachuk commenced mining a placer gold property he owned in Atlin,
British Columbia. During the fifteen years he mined his placer property he
extracted in excess of 30,000 ounces of gold. With the sale of the placer
property, Mr. Thachuk, over the next five years, entered into various mining
ventures in Nevada, Washington State and British Columbia. During this same
period of time, Mr. Thachuk was president of Red Fox Minerals Ltd., a company
listed on the Vancouver Stock Exchange. In 1991, he became part owner and
general manager for Koben Sand & Gravel which employed 36 employees and in its
third year of operations had in excess of CDN $6,000,000 in sales. In 1994, Mr.
Thachuk became a consultant for various companies until 1997 when he
incorporated and became president of Mine A Max Corporation, a company called
for trading on the OTC Bulletin Board in the United States.
STACEY BLIGH has been the Secretary Treasurer of the Company since its
inception. She graduated from Edward Milne Secondary School in 1990 with the
Dogwood Diploma after having achieved the Honor Roll Status for four consecutive
years before obtaining a position with Westport Design Centre where her
responsibilities were preparing bid sheets for large development projects, job
costing and co-ordinating activities with various departments. In 1992 she
attended the University of Victoria for two years where she majored in Biology.
Subsequent to leaving University Ms. Bligh became an assistant appraiser for
D.R. Coell & Associates in Victoria, British Columbia where her duties comprised
proof reading all residential property appraisals and ensuring that legal
matters were attended to. In 1995 she moved to Whistler, British Columbia and
worked for Re/Max, completing all closing documentation for real estate
projects. Subsequently she was employed by Whistler Resort Association where she
was responsible for food and beverage accounting and supervising all staff at
functions involving cash sales. Presently Ms. Bligh is employed by her personal
wholly-owned company undertaking administrative work for various other
companies.
JAMES BRUCE has been a Director of the Company since its inception. Mr. Bruce
received a degree from the University of British Columbia in Agriculture in
1950. After graduation he became Vice President of Sales and General Manager for
Imperial School Furniture where he worked for 14 years before becoming Vice
President of Sales for Co-ordinated Business Interiors. Subsequent to his
departure from Co-ordinated Business Interiors he became a registered broker for
Hemsworth Turton where his responsibilities were to promote equity funding for
public and private companies. In 1969 he became President of White Water
International and Inter-American Nickel Corp. which was in the process of
developing a water purification system. In 1972, he accepted the position of
Senior Account Manager for Finning Tractor (Caterpillar Distributor) where he
was employed until 1981. Since that time, Mr. Bruce has been President and Chief
Executive Officer for Environmental Systems Inc. (formerly New Generation Power
Corp.), a public company currently trading on the Alberta Exchange.
9
<PAGE>
To the knowledge of management, during the past five years, no present or former
director, executive officer or person nominated to become a director or an
executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by the court for the business or property of such person, or
any partnership in which he was a general partner at or within two
years before the time of such filings;
(2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting,
the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, associated person of
any of the foregoing, or as an investment advisor,
underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment
company, or engaging in or continuing any conduct or practice
in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activities in connection with the purchase or
sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal
commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the
right of such person to engage in any activity described above under
this Item, or to be associated with persons engaged in any such
activities;
(5) was found by a court of competent jurisdiction in a civil action or by
the Securities and Exchange Commission to have violated any federal or
state securities law, and the judgment in such civil action or finding
by the Securities and Exchange Commission has not been subsequently
reversed, suspended, or vacated.
(6) was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by
the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
10
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COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT
The Company knows of no director, officer, beneficial owner of more than ten
percent of any class of equity securities of the Company registered pursuant to
Section 12 ("Reporting Person") that failed to file any reports required to be
furnished pursuant to Section 16(a). Other than those disclosed below, the
Company knows of no Reporting Person that failed to file the required reports
during the most recent fiscal year.
The following table sets forth as at December 31, 1999, the name and position of
each Reporting Person that failed to file on a timely basis any reports required
pursuant to Section 16 (a) during the most recent fiscal year.
Name Position Report to be Filed
- ---- -------- ------------------
E. Del Thachuk President and Director Form 3
Stacey Bligh Secretary Treasurer Form 3
James Bruce Director Form 3
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ITEM 10. EXECUTIVE COMPENSATION
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CASH COMPENSATION
There was no cash compensation paid to any director or executive officer of the
Company during the fiscal year ended December 31, 1999.
BONUSES AND DEFERRED COMPENSATION
None
COMPENSATION PURSUANT TO PLANS
None
PENSION TABLE
None
OTHER COMPENSATION
None
COMPENSATION OF DIRECTORS
None
11
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TERMINATION OF EMPLOYMENT
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash
Consideration set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of such
person's employment with the Company or its subsidiaries, or any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
================================================================================
The following table sets forth as at December 31, 1999, the name and address and
the number of shares of the Company's common stock, with a par value of $0.001
per share, held of record or beneficially by each person who held of record, or
was known by the Company to own beneficially, more than 5% of the issued and
outstanding shares of the Company's common stock, and the name and shareholdings
of each director and of all officers and directors as a group.
<TABLE>
<CAPTION>
Name and Address Amount
of Beneficial Nature of of Beneficial Percent
Owner Ownership(1) Ownership of Class
----- ------------ --------- --------
<S> <C> <C> <C>
E. DEL THACHUK Direct 2,525,000 22.80%
34-3387 King George Highway
Surrey, B.C.
Canada, V7S 2X7
JAMES BRUCE Direct 2,525,000 22.80%
114-2274 Folkestone Way
West Vancouver, B.C.
Canada, V5A 2W1
STACEY BLIGH Nil Nil 0.00%
2406-1050 Burrard Street
Vancouver, B.C.
Canada, V6Z 2S3
All Officers and Directors Direct 5,050,000 45.60%
as a Group (3 persons)
</TABLE>
(1) All shares owned directly are owned beneficially and of record, and
such shareholder has sole voting, investment and dispositive power,
unless otherwise noted.
12
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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TRANSACTIONS WITH MANAGEMENT AND OTHERS
Except as indicated below, there were no material transactions, or series of
similar transactions, since inception of the Company and during its current
fiscal period, or any currently proposed transactions, or series of similar
transactions, to which the Company was or is to be a party, in which the amount
involved exceeds $60,000, and in which any director or executive officer, or any
security holder who is known by the Company to own of record or beneficially
more than 5% of any class of the Company's common stock, or any member of the
immediate family of any of the foregoing persons, has an interest.
INDEBTEDNESS OF MANAGEMENT
There were no material transactions, or series of similar transactions, since
the beginning of the Company's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which the Company was or is
to be a part, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than 5% of the common shares of
the Company's capital stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS
The Company does not have promoters and has no transactions with any promoters.
13
<PAGE>
PART IV
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ITEM 13. EXHIBITS AND REPORTS
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(a) (1) FINANCIAL STATEMENTS.
The following financial statements are included in this report:
<TABLE>
<CAPTION>
Title of Document Page
- ----------------- ----
<S> <C>
Report of Andersen, Andersen & Strong, Certified Public Accountants 15
Balance Sheet as at December 31, 1999 16
Statement of Operations for the period from March 4, 1999 (Date of
Inception) to December 31, 1999 17
Statement in Changes in Stockholders' Equity for the period from March 4, 1999
(Date of Inception) to December 31, 1999 18
Statement of Cash Flows for the period from March 4, 1999 (Date of
Inception) to December 31, 1999 19
Notes to the Financial Statements 20
</TABLE>
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules are included as part of this report:
None.
(a) (3) EXHIBITS
The following exhibits are included as part of this report by reference:
None.
14
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SIGNATURES
================================================================================
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
Company and in its capacities and on the date indicated:
THE ZEBALLOS MINING COMPANY
Date: February 15, 2000 By:
--------------------------------------
E. Del Thachuk, President and Director
Date: February 15, 2000 By:
--------------------------------------
Stacey Bligh, Secretary Treasurer
15
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<TABLE>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite 220
Certified Public Accountants and Business Consultants Salt Lake City, Utah, 84106
Member SEC Practice Section of the AICPA Telephone 801-486-0096
Fax 801-486-0098
</TABLE>
Board of Directors
The Zeballos Mining Company
Vancouver B. C. Canada
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of The Zeballos Mining Company
(exploration stage company) at December 31, 1999, and the statement of
operations, stockholders' equity, and cash flows for the period from March 4,
1999 (date of inception) to December 31, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
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 balance sheet presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Zeballos Mining Company at
December 31, 1999, and the results of operations, and cash flows for the period
from March 4, 1999 (date of inception) to December 31, 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is in the development
stage and will need additional working capital for its planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 5. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Salt Lake City, Utah /s/ "Andersen Andersen & Strong"
February 10, 2000 -----------------------------------
Andersen Andersen & Strong L.L.C.
16
<PAGE>
THE ZEBALLOS MINING COMPANY
(EXPLORATION STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
================================================================================
ASSETS
CURRENT ASSETS
Cash $ 685
---------
Total Current Assets $ 685
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - related party $ 6,000
Accounts payable 2,250
---------
Total Current Assets 8,250
---------
STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001 par
Value, 11,075,400 shares issued and outstanding 11,075
Capital in excess of par value 11,515
Deficit accumulated during the development stage (30,155)
--------
Total Stockholders' Equity (7,565)
---------
685
=========
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
THE ZEBALLOS MINING COMPANY
(EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MARCH 4, 1999
(DATE OF INCEPTION) TO DECEMBER 31, 1999
================================================================================
REVENUES $ -
EXPENSES 30,155
----------
NET LOSS $ 30,155)
==========
NET LOSS PER COMMON SHARE
Basic $ (0.003)
==========
AVERAGE OUTSTANDING SHARES
Basic 10,669,000
==========
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
THE ZEBALLOS MINING COMPANY
(EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 4, 1999 (DATE OF INCEPTION)
TO DECEMBER 31, 1999
================================================================================
<TABLE>
<CAPTION>
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
------ ------ --------- -------
<S> <C> <C> <C> <C>
BALANCE MARCH 4, 1999 (date of inception) - - - -
Issuance of common shares for cash at
$0.001 - March 14, 1999 5,050,000 5,050 - -
Issuance of common shares for cash at
$0.001 - March 16, 1999 6,000,000 6,000 - -
Issuance of common shares for cash at
$0.10 - March 27, 1999 25,400 25 2,515 -
Capital contributions - expenses 9,000
Net operating loss for the year ended
December 31, 1999 - - - (30,155)
---------- ---------- ---------- ------------
BALANCE, DECEMBER 31, 1999 11,075,400 $ 11,075 $ 11,515 $ (30,155)
========== ========== ========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
THE ZEBALLOS MINING COMPANY
(EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 4, 1999
(DATE OF INCEPTION) TO DECEMBER 31, 1999
================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(30,155)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Change in accounts payable 8,250
Capital contribution - expense 9,000
-----
Net Cash Used in Operations (12,905)
--------
CASH FLOWS FROM INVESTING ACTIVITIES -
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 13,590
------
Net Increase in Cash 685
Cash at Beginning of Period -
------
CASH AT END OF PERIOD $ 685
=======
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Capital contributions - expenses $ 9,000
=======
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
THE ZEBALLOS MINING COMPANY
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on March 4,
1999 with authorized common stock of 200,000,000 shares at $0.001 par value.
The Company was organized for the purpose of acquiring and exploring mineral
properties. At the report date mineral claims, with unknown reserves, had been
acquired. The Company has not established the existence of a commercially
minable ore deposit and therefore has not reached the development stage and is
considered to be in the exploration stage. (see note 3).
Since its inception the Company has completed Regulation D offerings of
11,025,400 shares of its capital stock for cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICILES
Accounting, Methods
- -------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ---------------
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
- ------------
On December 31, 1999, the Company had a net operating loss carry forward of
$30,155. The tax benefit from the loss carry forward has been fully offset by
valuation reserve because the use of the future tax benefit is undeterminable
since the Company has no operations. The net operating loss will expire in 2020.
Earning (Loss) Per Share
- ------------------------
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding in accordance with FASB statement No. 128.
Amortization of Capitalized Mineral Claims Costs
- ------------------------------------------------
Cost of acquisition, exploration, carrying, and retaining unproven properties
are expensed as incurred. Cost incurred in proving and developing a commercial
minable ore reserve ready for production are capitalized and amortized over the
life of the mineral deposit or over a shorter period if the property is shown to
have an impairment in value. Expenditures for mine equipment will be capitalized
and depreciated over their useful lives.
21
<PAGE>
THE ZEBALLOS MINING COMPANY
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICILES - CONTINUED
Environmental Requirements
- --------------------------
At the report date environmental requirements related to the mineral claims
acquired (note 3) are unknown and therefore an estimate of any future cost
cannot be made.
Financial Instruments
- ---------------------
The carrying amounts of financial instruments, including cash, mineral claims,
and accounts payable, are considered by management to be their estimated fair
values.
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses.
3. MINERAL CLAIMS
The Company has acquired one 18 unit metric mineral claim known as the Zeb Au
Claim located in the Zeballos mining camp near the town of Zeballos about 300
kilometres northwest of Victoria, British Columbia.
The claims have not been proven to have a commercially minable ore reserve and
therefore all costs for exploration and retaining the properties have been
expensed.
The claims may be retained by the Company by completion of year assessment work
of $1,800Cn or by a payment of $1,800Cn. The next assessment work is due on
March 2001.
4. RELATED PARTY TRANSACTIONS
Related parties have acquired 45% of the common stock issued.
5. GOING CONCERN
The Company will need additional working capital to be successful in its planned
activity and continuation of the Company as a going concern is dependent upon
obtaining additional working capital and the management of the Company had
developed a strategy, which it believes will accomplish this objective through
additional equity funding, and long term financing, which will enable the
Company to operate for the coming year. There can be no assurance that the
management will be successful in its efforts.
22
<TABLE>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite 220
Certified Public Accountants and Business Consultants Salt Lake City, Utah, 84106
Member SEC Practice Section of the AICPA Telephone 801-486-0096
Fax 801-486-0098
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
THE ZEBALLOS MINING COMPANY
We hereby consent to the use of our report dated February 10, 2000, for the
period ended December 31, 1999 to be included in the form 10-K in accordance
with Section 12 of the Securities Exchange Act of 1934.
/s/ "Andersen Andersen & Strong"
-----------------------------------
Andersen Andersen & Strong L.L.C.
February 10, 2000
Salt Lake City, Utah
