SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the Fiscal Year Ended December 31, 1999
Commission File No. 1-3871
CALIFORNIA-ENGELS MINING COMPANY
Incorporated in the State of California
IRS Employer I.D. No. 94-0357560
117 Crescent Street
P. O. Box 778
Greenville, California 95947-0778
Telephone Number (530) 284-6191
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT
Title of Each Class - Capital Stock, par value, $0.25 per share.
Number of Shares outstanding: 760,954.34
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, and
(2) has been subject to such filing requirements for the past 90
days. Yes: X No:
As of March 6, 2000, 760,954.34 capital shares were outstanding,
and the aggregate market value of the common shares of California-
Engels Mining Company held by nonaffiliates was approximately
$134,209.
Documents Incorporated by Reference: NONE
Filing Contains 31 Pages
<PAGE>
PART 1
ITEM 1. BUSINESS
Registrant was incorporated under the laws of the State of
California on July 12, 1922, under the name of California Copper
Corporation, as a holding company for the shares of its operating
company Engels Copper Mining Company which was incorporated under
the laws of the State of California on June 19, 1901. Engels
Copper Mining Company was merged into California Copper Corporation
on March 3, 1936, and the name of the merged company was changed to
California-Engels Mining Company. Exploration and development
commenced at the Engels Mine, Lights Creek Mining District, Plumas
County, California, upon organization of Engels Copper Mining
Company; but it was not until 1914 that milling facilities were
available and actual production of copper started. From 1914 until
operations were suspended due to the low price of copper in July,
1930, approximately 4,700,000 tons of ore were mined from the
Engels and Superior mines and milled producing 160,170,000 pounds
of copper and substantial values in gold and silver. Out of
profits of this operation, the Registrant retired a bond issue of
$500,000 and paid out more than $1,285,000 in dividends. During
the 1930's the mining and milling plant, Engelmine townsite and the
Indian Valley Railroad subsidiary were dismantled and sold.
Registrant's mining properties were continuously leased from
September, 1947, to March, 1951; from March, 1951, to December,
1959; from November, 1960, to October, 1979; from August, 1980, to
August, 1990; and from November, 1990, to April 1993. The lessee
from 1964 to 1993 was Placer Dome U.S. Inc., the U.S. Subsidiary of
Placer Dome Inc., Vancouver, B.C., Canada. The Mining Lease With
Option to Purchase, between the Registrant (Lessor) and Placer Dome
U.S. Inc. (Lessee) was terminated by Placer Dome U.S. Inc.
effective April 20, 1993. Registrant has received a substantial
amount of technical data on its mining properties and maintains a
library on the Plumas Copper Belt. Thousands of feet of drill core
from the Superior Mine, Sulphide Ridge and the Engels Mine are
stored at Crescent Mills, California. Registrant's mineral
deposits and prospects are not deemed economically attractive under
current conditions for the mining industry in California and the
United States, nor are they likely to be so in the foreseeable
future.
The Non-Industrial Timber Management Plan on Registrant's mining
properties was approved by the California Department of Forestry
and became effective July 2, 1999. The permitting process for this
project began in August, 1994 with the start of the archaeological
survey and the February, 1995 agreement with Shasta Land
Management Consultants to prepare the Plan. The Plan estimates
that the four parcels comprising the Lights Creek Unit contain
4,532,000 board feet with an annual growth rate of 67,000 board
feet. The three Ward Creek parcels are estimated to contain
983,000 board feet with an annual growth rate of 9,420 board feet.
<PAGE>
The Non-Industrial Timber Management Plan is an assessment of
the timber inventory, conditions and potential of the entire
property broken down into units with similar growing conditions
within each unit. Its intent is to demonstrate a long-term
commitment to appropriately manage the resource. It functions as
a coordinated collection of individual Timber Harvest Plans and its
advantage is that, once approved, the paperwork necessary to
initiate individual timber harvests is minimal. Under the Plan the
Registrant is restricted in management options to those
silvicultural systems that produce uneven-aged stands of timber.
Uneven-aged management means the management of a specific forest
with the goal of establishing a well-stocked stand of various age
classes of trees scattered over the forest. It will permit the
periodic harvest of all size classes as individual or small groups
to realize yield. Over the long term, forest growth and yield will
be balanced. The Registrant will also have the advantage of
being able to time harvests for favorable market conditions. It
will take a number of years to fully implement the Plan.
After the effective date of the Non-Industrial Timber Management
Plan the Registrant began the process of preparing and permitting
a helicopter timber harvest on its Green Ledge and Austrian
Syndicate parcels on Ward Creek pursuant to the Plan. This project
harvested 377,520 board feet of green timber and was completed on
October 28, 1999.
Registrant made application to the California Tree Farm Committee
of the American Tree Farm System for approval of its Engelmine
Forest timber lands on Lights Creek as a tree farm. Its Engelmine
Forest was accepted as California Tree Farm No. 2611 on June 17,
1999.
Registrant is preparing a Timber Harvest Plan on the 73 acre
Henry Parcel purchased on August 31, 1999. The property is
contiguous to its Lights Creek parcels and contains over 220,000
board feet of green timber and an area suitable for the development
of residential sites.
Registrant is subject to a State of California General
Industrial Activities Storm Water Permit. During the year,
pursuant to the Registrant's Storm Water Pollution Prevention Plan,
catch and evaporation basins and storm records were maintained.
ITEM 2. PROPERTIES
(a) Registrant is the fee owner of 36 patented lode mining
claims totaling 736 acres, plus 274.49 acres of other patented
lands at Engelmine, Lights Creek Mining District, Plumas County,
California. During the year Registrant purchased 7700 and 7701
Diamond Mountain Road contiguous to its other Lights Creek parcels
for $175,000. Escrow closed August 31, 1999. None of the claims
or patented lands are subject to any encumberance.
<PAGE>
(b) Registrant is the fee owner of 11 patented lode mining
claims totaling 204.75 acres and 184.20 acres of deeded mineral
rights in the Genesee Mining District, Plumas County, California.
None of the patented claims and mineral rights are subject to any
encumbrance.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. MARKET FOR THE REGISTRANT'S CAPITAL STOCK AND RELATED
SHAREHOLDER MATTERS
(a) Principal Markets.
Registrant's shares of Capital Stock are listed on the OTC
Bulletin Board and quoted in the "pink sheets" which are published
daily by the National Quotation Bureau, LLC.
The following table shows the high and low bid prices of
Registrant's Capital Shares in the Over-the-Counter Market for the
past two years:
[CAPTION]
High Bid Low Bid
[S] [C] [C]
1999 Market Price $.71875 $ .125
1998 Market Price $.6875 $ .375
[/TABLE]
(b) Approximate number of holders of capital stock.
The approximate number of holders of record of Registrant's
Capital Stock as of March 6, 2000, is 921.
(c) The Registrant has never paid a dividend on its Capital
Stock because it has had an accumulated deficit since the merger in
1936. The Board of Directors of the Registrant is endeavoring to
earn income from the sale of timber so funds are available for
the maintenance of its properties and the implementation of its
Non-Industrial Timber Management Plan. It is not the intention of
the Registrant to pay dividends in the foreseeable future.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
Year Ended December 31
<CAPTION>
Selected Financial Data 1999 1998 1997 1996 1995
- ----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating Revenues 257,502 43,314 39,212 14,463 25,202
Net Income (Loss) 28,936 22,228 (5,101) 7,538 (2,719)
Income (loss) from
continuing operations
per capital share .038 .029 (.007) .001 (.004)
Total Assets 562,585 350,531 347,884 347,033 355,732
Working Capital 16,807 10,128 24,896 33,394 22,830
Shareholder's Equity 377,914 347,259 344,684 346,983 355,682
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(a) Financial condition, changes in financial condition and
results of operations.
During the 30 years its mining properties were leased, the Board
of Directors of the Registrant endeavored to increase working
capital, total assets and shareholder's equity in the event that
its lessee, Placer Dome, U.S. Inc., terminated its Mining Lease
With Option to Purchase agreement and return the mining properties
to the Registrant. This event occurred effective April 20, 1993.
Thus funds were available to begin preparation of the Non-Industrial Timber
Management Plan. Changes in working capital,
total assets and shareholder's equity for the past five years are
summarized as follows:
<TABLE>
<CAPTION>
Changes 1998 1998 1997 1996 1995
- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Working
Capital ($) 16,807 10,128 24,896 33,394 22,830
Total Assets 562,585 350,531 347,884 347,033 355,732
Shareholders Equity 377,914 347,259 344,684 346,983 355,682
</TABLE>
The objective of the Board of Directors of the Registrant is to
earn income from the sale of timber so funds are available for the
maintenance of its properties and the implementation of its Non-Industrial
Timber Management Plan.
<PAGE>
(b) Results of operations.
Registrant's principal sources of income are from the sale of
timber, interest, capital gains, dividends and sale of sand and
rock. There is no assurance that any of the sources of income will
continue at current rates into the future. The termination of the
Mining Lease with Option to Purchase agreement substantially
increased Registrant's property maintenance expenses.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements relying on Rule 3-11 of Regulation S-X
which allows the filing of unaudited statements of inactive
registrants are listed in the index to financial statements and
schedules, and are included under PART IV, Item 14, of this report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There were no disagreements on accounting and financial
disclosure matters required to be disclosed in this item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
(a) Identification of Directors.
<CAPTION>
Directors Name Positions Year First Principal
and Age and Offices Elected Occupation
- ------------- ----------- ---------- ---------
<S> <C> <C> <C>
Norman A. Lamb President 1978 Mining
(63) & Director Executive
Greenville, CA
Thomas J. Reardon Vice President 1975 Retired
(78) & Director
Daly City, CA
James E. Brousseau Secretary-Treasurer 1987 Mining
(68) & Director Executive
Vallejo, CA
Richard C. Poulton Director 1993 Consultant
(56)
San Mateo, CA
</TABLE>
There are no arrangements or understandings between any of the
foregoing persons and any other person or persons pursuant to which
any of the foregoing persons were named as directors.
<page)
<TABLE>
(b) Identification of Executive Officers.
<CAPTION>
Name of Officer Age Office Held
- --------------- ---- -----------
<S> <C> <C>
Norman A. Lamb 63 President
James E. Brousseau 68 Secretary-Treasurer
</TABLE>
There are no arrangements or understandings between any of the
foregoing persons and any other person or persons pursuant to which
any of the foregoing persons were named as executive officers.
(c) Identification of certain significant employees.
None
(d) No family relationships exist between any of the above
named directors and executive officers of the Registrant.
(e) Business experience.
(1) Norman A. Lamb is a Mining Executive and an officer and
director of several public mineral companies. He serves the
Registrant as President, was Secretary-Treasurer until November 16,
1987, and has been a Director since 1978.
(2) Thomas J. Reardon is retired and formerly was a
Department Manager for Foremost Dairies. He serves the Registrant
as Vice-president and has been a Director since 1975.
(3) James E. Brousseau is a Mining Executive and an officer
and director of several public mineral companies. He was elected
Secretary-Treasurer and a Director on November 16, 1987.
(4) Richard C. Poulton is a Consultant. He was elected
a Director of the Registrant on March 27, 1993.
(5) Leola M. Schwarz passed away on October 28, 1993, at the
age of 95. She had served as a Director since 1976, was the mother
of Thomas J. Reardon, an officer and director of the Registrant,
and the widow of Paul W. Schwarz, an officer and director of the
Registrant from 1954 to 1978.
(f) Involvement in certain legal proceedings.
There have been no events under any bankruptcy act, no criminal
proceedings and no judgments or injunctions material to the
evaluation of the ability and integrity of any director or
executive officer during the past five years.
<PAGE>
(g) Compliance with Section 16(a) of the Exchange Act
Registrant is not aware of any person who at any time during the
year 1999 was a director, officer or beneficial owner of more than
10 percent of Registrant's capital stock who failed to file on a
timely basis reports required by Section 16(a) during 1999 or prior
years.
ITEM 11. Executive Compensation
<TABLE>
(a) Cash Compensation.
<CAPTION>
Name of individual or Capacity Cash Compensation
number in group
- --------------------- --------- -------------------
<S> <C> <C>
Norman A. Lamb President $0.00
Officers and Directors
as a group - Four persons
including those named above. $2,000.00
</TABLE>
(b) Compensation pursuant to plans.
During the fiscal year, Norman A. Lamb was reimbursed for out-
of-pocket expenses.
(c) Other compensation.
None
(d) Compensation of directors.
During the fiscal year, directors received a fee of $500 each
for their services as directors.
(e) Termination of employment and change of control
arrangement.
None
<PAGE>
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management
(a) Security ownership of certain beneficial owners.
<TABLE>
The following table shows, as of March 6, 2000, the number of
shares of Capital Stock held by every person owning of record or
known by the Registrant as owning beneficially more than five
percent of the outstanding stock:
<CAPTION>
Security Ownership of Certain Beneficial Owners
Title of Class Name and Address Amount and Nature Percent
of Owner of Ownership of Class
- -------------- --------------- ----------------- -------
<S> <C> <C> <C>
Capital Stock James E. Brousseau 179,147 shares 23.5%
Par Value 270 Peppercorn Ct. owned of record and
$0.25/share Vallejo, CA beneficially*
94591
Norman A. Lamb 271,192 shares 35.6%
P.O. Box 778 owned of record and
Greenville, CA beneficially **
95947
Poulton Trust 50,253 shares 6.6%
551 West 30th Ave owned of record
San Mateo, CA
94403
Thomas J. Reardon 81,620 shares 10.7%
162 E Market St owned of record
Daly City, CA and beneficially***
94403
</TABLE>
* Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington Corporation, of which Mr. Brousseau is Secretary-Treasurer, a
Director and substantial shareholder. Includes 85,000
shares owned by Flowery Gold Mines Company of Nevada, a Nevada
corporation of which Mr. Brousseau is Secretary-Treasurer, a
Director and major shareholder.
** Includes 89,295 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington Corporation, of which Mr. Lamb is President, a
Director and major shareholder. Includes 85,000 shares owned
by Flowery Gold Mines Company of Nevada, a Nevada corporation of
which Mr. Lamb is President, a Director and major shareholder.
<PAGE>
*** Includes 74,508 shares owned by Thomas J. Reardon, Edward P.
Reardon, Michael T. Reardon and Frank J. Reardon, as joint tenants
with right of survivorship.
(b) Security ownership of management.
The following table shows as of March 6, 2000 all shares of
Capital Stock beneficially owned by all directors and all directors
and officers of Registrant as a group:
<TABLE>
<CAPTION>
Capital Stock Beneficially Owned
<S> <C> <C> <C>
Title
of Class Name of Beneficial Amount and Nature of Percent
Owner Beneficial Ownership of Class
- -------------- ------------------ -------------------- --------
Capital Stock James E. Brousseau 179,147 shares owned 23.5%
Par Value of record and
$0.25 per share beneficially*
Norman A. Lamb 271,192 shares owned 35.6%
of record and
beneficially**
Richard C. Poulton 50,253 shares owned 6.6%
beneficially***
Thomas J. Reardon 81,620 shares owned 10.7%
of record and
beneficially****
All directors and 403,065 shares 53%
officers as a group
(four persons)
</TABLE>
* Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation, and wholly owned subsidiary of Jenex Gold Corporation,
a Washington corporation, of which Mr. Brousseau is Secretary-Treasurer, a
Director and substantial shareholder. Includes 85,000
shares owned by The Flowery Gold Mines Company of Nevada, a Nevada
corporation, of which Mr. Brousseau is Secretary-Treasurer, a
Director and major shareholder. Mr. Brousseau may be deemed to
have shared voting and investment power with respect to such
shares.
** Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation, and wholly owned subsidiary of Jenex Gold Corporation,
a Washington corporation, of which Mr. Lamb is President, a
Director and major shareholder. Includes 85,000 shares owned by
The Flowery Gold Mines Company of Nevada, a Nevada corporation, of
<PAGE>
which Mr. Lamb is President, a Director and major shareholder. Mr.
Lamb may be deemed to have shared voting and investment power with
respect to such shares.
*** Includes 50,253 shares owned by the Poulton Trust, of which
Mr. Poulton is co-trustee. Mr. Poulton may be deemed to have
shared voting and investment power with respect to such shares.
**** Includes 74,508 shares owned by Thomas J. Reardon, Edward P.
Reardon, Michael T. Reardon and Frank J. Reardon, as joint tenants
with right of survivorship. Mr. Thomas J. Reardon may be deemed to
have shared voting and investment power with respect to such
shares.
(c) Changes in control.
Mr. Lamb may be deemed the "parent" or a "control person" of
Registrant, as those terms are defined under the Securities
Exchange Act of 1934, as amended. There are no arrangements known
to Registrant the operation of which may at a subsequent date
result in a change of control of Registrant.
ITEM 13. Certain Relationships and Related Transactions
None
PART IV
ITEM 14. Exhibits, Financial Statements, Schedules and Reports on
Form 8-K
(a) Financial Statements: Page
Balance Sheets as of December 31, 1999 F 2-3
and December 31, 1998.
Statements of Operations for the Years Ended
December 31, 1999, December 31, 1998, and
December 31, 1997. F 4
Statements of Accumulated Deficit and
Accumulated Other Comprehensive Income (Loss)
for the Years Ended December 31, 1999,
December 31, 1998, and December 31, 1997. F 5
Statements of Cash Flows for the years ended
December 31, 1999, December 31, 1998, and
December 31, 1997. F 6-7
(b) Notes to Financial Statements F 8-17
(c) Exhibits
EX-27 Financial Data Schedule.
(d) No reports on Form 8-K were filed during the last
quarter of 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of section 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.
CALIFORNIA-ENGELS MINING COMPANY
Registrant
By Norman A. Lamb
Norman A. Lamb, President and
Chief Executive Officer
Date: March 31, 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 Norman A. Lamb
Norman A. Lamb
President and Director
March 31, 2000
By Thomas J. Reardon
Thomas J. Reardon
Vice-President and Director
March 31, 2000
By James E. Brousseau
James E. Brousseau
Secretary-Treasurer
Chief Financial and Accounting
Officer, March 31, 2000
By Richard C. Poulton
Richard C. Poulton
Director, March 31, 2000
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
(A California Corporation)
FINANCIAL STATEMENTS
December 31, 1999
page F-1
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(Unaudited)
<TABLE>
ASSETS
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 71,295 $ 10,128
Current portion of deeds of
trust $ 5,317 $ 9,944
Deferred tax assets $ - $ 305
Deposits $ - $ 563
Total Current Assets $ 76,612 $ 20,940
PROPERTY AND EQUIPMENT
Furniture and equipment $ 37,511 $ 33,775
Land $ 291,522 $ 116,696
Less: Accumulated depletion $ (24,210) $ (18,700)
$ 304,823 $ 131,771
Timber Management Development $ 164,078 $ 109,636
Less: Accumulated depreciation $ (18,097) $ (2,896)
$ 145,981 $ 106,740
Total Property and Equipment $ 450,804 $ 238,511
OTHER ASSETS
Investments available-for-sale
at estimated fair value $ 1,549 $ 19,974
Investments held-to-maturity $ 2,790 $ 3,572
Deeds of trust $ 30,830 $ 67,534
Total Other Assets $ 35,169 $ 91,080
Total Assets $ 562,585 $ 350,531
</TABLE>
The accompanying notes are an integral part of these financial
statements.
page F-2
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(Unaudited)
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
1999 1998
--------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
LIABILITIES
Income taxes payable $ 4,697 $ 3 272
Deferred tax liabilities $ 50 $ -
Accrued expenses $ 48 614 $ -
Notes payable, current portion $ 6,444 $ -
Total Current Liabilities $ 59,805 $ 3,272
Notes payable, net of current
portion $ 124,866 $ -
Total Liabilities $ 184,671 $ 3,272
STOCKHOLDERS' EQUITY
Common stock, par value $.25:
California-Engels Mining Company,
4,000,000 shares authorized
760,954.3 shares issued and
outstanding in 1999 and
761,135.6 shares issued and
outstanding in 1998 $ 190,241 $ 190,284
Accumulated other comprehensive
income (loss) $ 288 $ (1,721)
Reduction surplus $2,800,917 $2,801,164
Accumulated deficit (2,613,532) (2,642,468)
Total Stockholders' Equity $ 377,914 $ 347,259
Total Liabilities and
Stockholders' Equity $ 562,585 $ 350,531
</TABLE>
The accompanying notes are an integral part of these financial
statements.
page F-3
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
REVENUE
Timber and rock revenue $ 248,928 $ 33,258 $ 28,683
Dividend income 1,580 2,155 3,675
Interest income 6,994 7,901 6,854
Total revenue 257,502 43,314 39,212
OPERATING AND GENERAL EXPENSES
Depreciation 5,510 1,775 2,950
Director fees 2,000 - -
Insurance 1,900 1,900 2,352
Miscellaneous 748 1,006 272
Office and storage rents 3,510 3,510 3,510
Office expense 1,815 1,887 2,036
Professional fees 2,026 1,793 1,531
Reclamation plan expense - - 4,231
Repairs and maintenance 4,787 4,800 4,935
Superior quarry expense - - 3,510
Taxes and licenses 5,894 3,793 2,759
Travel and per diem 999 537 439
Vehicle expense 973 1,186 2,086
Total operating and
general expenses $ 30,162 $ 22,187 $ 30,611
Net income (loss) from
operations $227,340 $ 21,127 $ 8,601
OTHER INCOME/(EXPENSES)
Depletion (15,202) (1,293) (1,604)
Gain (loss) on sale
of securities - 20,733 (543)
Gain on sale of land $ - $ 1,000 $ -
Interest $ (5,687) $ - $ -
Timber management expense (168,818) (15,358) (10,755)
Total other income (expense)(189,707) $ 5,082 $ (12,902)
Income (Loss) Before Taxes $ 37,633 $ 26,209 $ (4,301)
Provision for income taxes $ (8,697) $ (3,981) $ (800)
Net Income (Loss) $ 28,936 $ 22,228 $ (5,101)
Earnings (Loss) Per Share $ 0.038 $ 0.029 $ 0.007
</TABLE>
The accompanying notes are an integral part of these financial
statements.
page F-4
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF ACCUMULATED DEFICIT AND ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
ACCUMULATED DEFICIT,
Beginning of year $(2,642,468) $(2,664,696) $(2,659,595)
Net Income (Loss) $ 28,936 $ 22,228 $ (5,101)
ACCUMULATED DEFICIT,
End of year $(2,613,532) $(2,642,468) $(2,664,696)
ACCUMULATED OTHER COMPREHENSIVE INCOME,
Beginning of year $ 1,721 $ 17,856 $ 12,762
Other Comprehensive Income
(Loss) $ 2,009 $ (19,577) $ 5,094
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
End of year $ 288 $ (1,721) $ 17,856
</TABLE>
The accompanying notes are an integral part of these financial
statements.
page F-5
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ -----
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C> <C>
Net Income (loss) $ 28,936 $ 22,228 $ (5,101)
Adjustments to reconcile net income (loss)
to net cash provided (used) by
operating activities:
Depreciation and depletion 20,712 3,068 4,554
Amortization of GNMA discount (423) (564) (596)
(Gain) loss on
sale of securities and land - (20,733) 543
(Gain) on sale of land - (1,000) -
(Increase) decrease in:
Prepaid expenses - - 300
Deposits 563 (563) -
Increase (decrease) in:
Taxes payable 1,425 3,272 -
Accrued expenses 48,614 (50) -
Net cash provided (used)
by operating activities $ 99,827 $ 5,685 $ (300)
<CAPTION>
CASH FLOWS FROM INVESTING ACTIVITIES
<S> <C> <C> <C>
Payments received on
notes receivable 41,331 (25,508) 6,139
Purchases of securities
and investments (36) (20 845) (77)
Proceeds from sale
of securities 20,824 47,094 12,503
Proceeds from sale of land - 34,000 -
Return of principal GNMA 1,205 1,391 1,170
Capital expenditures (233,004) (56,483) (27,893)
Net cash used by
investing activities (169,680) (20,351) (8,158)
</TABLE>
The accompanying notes are an integral part of these financial
statements.
page F-6
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury shares (290) (75) (40)
Notes payable 148,000 39,600 6,550
Payments on notes payable (16,690) (39,600) (6,550)
Net cash provided (used) by
financing activities 131,020 (75) (40)
Net increase (decrease) in
cash and cash equivalents $ 61,167 $(14,768) $ (8,498)
<CAPTION>
CASH AND CASH EQUIVALENTS,
<S> <C> <C> <C>
Beginning of Year $ 10,128 $ 24,896 $ 33,394
<CAPTION>
CASH AND CASH EQUIVALENTS,
<S> <C> <C> <C>
End of Year $ 71,295 $ 10,128 $ 24,896
<CAPTION>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<S> <C> <C> <C>
Cash paid during the year:
For income taxes $ 2,650 $ 800 $ 800
<CAPTION>
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING ACTIVITIES
<S> <C> <C> <C>
Change in unrealized
gain (loss) on
investment securities $ 2,363 $ (2,299) $ 5,449
</TABLE>
The accompanying notes are an integral part of these financial
statements.
page F-7
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of California-
Engels Mining Company (the Company) is presented to assist in
understanding the Company's financial statements. The financial
statements and notes are representations of the Company's
management who is responsible for their integrity and objectivity.
These accounting policies conform to Generally Accepted Accounting
Principles and have been consistently applied in the preparation of
the financial statements.
Nature of Activity
The Company's principal line of business is development of
mineral and timber properties. The principal revenue sources
currently consist of timber and rock sales and investment income.
The Company's properties are located in the western United States.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from
these estimates.
Basis of Accounting
The Company's books are maintained on the accrual method of
accounting.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments with a purchased
maturity of three months of less to be cash equivalents.
Concentration of Credit Risk
The Company places its temporary cash investments with financial
institutions and limits the amount of credit exposure to any one
financial institution.
page F-8
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Mineral and Timber Lands
Mineral and timber lands and depreciable property are stated at
book value less accumulated depletion and depreciation.
Depreciation is calculated using the declining balance method over
five to seven year lives. Timber depletion is calculated based on
units of production.
Comprehensive Income
Pursuant to Financial Accounting Standards Board ("FASB")
Statement No. 130, Reporting Comprehensive Income, the Company
reports any material components of comprehensive income in its
financial statements.
Reclassification
Certain amounts in the prior year financial statements have been
reclassified to conform to the current years financial statement
presentation. Such reclassification had no effect on net equity or
net income.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at December
31:
1999 1998
Furniture and equipment $ 37,511 $ 33,775
Land 291,522 116,696
Less: Accumulated depreciation (24,210) (18,700)
304,823 131,771
Timber management development 164,078 109,636
Less: Accumulated depletion (18,097) (2,896)
145,981 106,740
Total Property and Equipment $ 450,804 $ 238,511
NOTE 3 - MINING CLAIMS AND FEE LAND OWNED
At December 31, 1999, the Company was the owner of 36 patented
lode mining claims totaling 736 acres comprising the Engels and
Superior Mines and 234.49 acres of patented land at Engelmine,
Lights Creek Mining District, Plumas County, California. In
addition the Company owned 40 acres of patented land at 6000
page F-9
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Diamond Mountain Road within two miles of the above property.
During the year the Company purchased 7700 and 7701 Diamond Road
for $175,000. Escrow closed August 31, 1999.
At December 31, 1999, the Company was the owner of 11 patented
lode mining claims totaling 204.74 acres and 184.20 acres of deeded
mineral rights on Ward Creek in the Genesee Mining District, Plumas
County, California.
NOTE 4 - VALUATION OF MINERAL LANDS - DEFERRED INCOME TAXES
The Mineral lands carried on the books at a value of $10,000
less depletion have a historical cost basis from June 19, 1901 of
$1,000,000. Beginning in 1913, different valuations were placed on
these lands by the Commissioner of Internal Revenue. Under
instructions of the Commissioner, the values of the land were
written up on the books to a high of $4,500,000 on February 23,
1928.
In 1934, because of depressed conditions, the mineral lands were
written down to $10,000 without any tax benefit. In the event of
a sale of these lands the recognized gain for tax purposes will be
substantially reduced or eliminated. Consequently a deferred tax
asset of approximately $340,000 has been offset by a
corresponding valuation allowance of approximately $340,000 due to
the unlikelihood of the sale of the property in the near future.
Current generally accepted accounting principles dictate
carrying properties such as these lands at historical cost or the
lower of cost or market value. It is estimated that the current
market value of the properties meets or exceeds the $1,000,000
historical cost basis; however, due to the length of time the
Company has reported the land values at the written down value of
$10,000, a change to the cost method has not been deemed
appropriate for reporting purposes.
page F-10
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 5 - DEEDS OF TRUST
<TABLE>
Trust deed notes receivable at December 31, 1999 and 1998
consist of the following:
<CAPTION>
1999 1998
--------------------------------- ------
Due within Due after Total Total
---------- ---------- -------- -------
<S> <C> <C> <C> <C>
Douglas R.
Friedrich
9% Note secured by
Plumas County,
California
real property $ 3,290 $ 28,305 $ 31,595 $ 34,602
Less unamortized
discount (676) (1,491) (2,167) (2,855)
--------- --------- --------- ---------
Total $ 2,614 $ 26,814 $ 29,428 $ 31,747
Robert F. Carmody
10% Note secured by
Plumas County,
California
real property - - - $ 4,731
John and Tina Tucker
9% Note secured by
Plumas County,
California
real property $ 2,703 $ 4,016 $ 6,719 $ 9,201
Monte C. Wolford
8% Note secured by
Plumas County,
California
real property - - - $ 31,799
-------- -------- -------- --------
Total $ 5,317 $ 30,830 $ 36,147 $ 77,478
</TABLE>
page F-11
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 6 - INVESTMENT SECURITIES
At December 31, 1999 and 1998, the investment securities
portfolio is comprised of items classified as available-for-sale
and held-to-maturity. In accordance with the provisions of SFAS
No. 115, the available-for-sale securities are reported as an asset
at their fair market value with the unrealized gain or loss
excluded from earnings and reported as a separate component of
comprehensive income and the held-to-maturity securities are
stated at amortized cost, adjusted for amortization of premiums and
accretion of discounts to maturity. realized gains and losses are
determined using specific identification of securities sold.
The following reflect the estimated fair values of investment
securities and amortized cost held at December 31, 1999, 1998, and
1997. Fair values are based on management's estimate
[CAPTION]
1999
----
[S] [C] [C] [C] [C]
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gain Loss Value
------ ---------- ---------- --------
Equity Securities
available-for-sale $ 1,212 $ 337 $ - $ 1,549
Mortgage-backed securities
held to maturity $ 3,508 $ - $ - $ 2,790
-------- -------- --------- --------
Totals $ 4,720 $ 337 $ - $ 4,339
page F-12
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
[CAPTION]
1998
----
[S] [C] [C] [C]
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gain Loss Value
------ ---------- ---------- --------
Equity Securities
available-for-sale $ 22,000 $ 48 $(2,074) $ 19,974
Mortgage-backed securities
held to maturity $ 3,572 $ - $ - $ 3,572
-------- --------- -------- --------
Totals $ 25,572 $ 48 $(2,074) $ 23,546
[/TABLE]
[CAPTION]
1997
----
[S] [C] [C] [C]
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gain Loss Value
------ ---------- ---------- --------
Equity Securities
available-for-sale $ 27,516 $ 21,006 $ - $ 48,522
Mortgage-backed securities
held to maturity $ 4,401 $ - $ - $ 4,401
-------- --------- -------- --------
Totals $ 31,917 $ 21,006 $ - $ 52,923
[/TABLE]
Sales of equity securities resulted in a gain of $20,733 in
1999, a loss of $543 in 1998 and a gain of $19,160 in 1997.
page F-13
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 7 - CAPITAL STOCK
The Company acquired and subsequently retired 181.26 shares of
common stock for $290 in 1999 and 100 shares for $75 in 1998.
NOTE 8 - NOTICE OF DEFAULT
On December 2, 1999, Cal-Sierra Title Company, as Trustee
under a Deed of Trust, filed a Notice of Default and Election to
Sell Under Deed of Trust to secure obligations in favor of the
Company as Beneficiary on real property in Plumas County,
California sold to Robert F. Carmody on May 16, 1990. The Deed of
Trust was brought current and a Notice of Rescission was filed on
April 13, 1999. On May 27, 1999, Cal-Sierra Title Company, as
Trustee under the above Deed of Trust, filed Notice of Default and
Election to Sell Under Deed of Trust to secure obligations in favor
of the Company as Beneficiary on the above real property. On
October 6, 1999 the Deed of Trust was paid in full and a
Reconveyance was issued to the Trustor.
NOTE 9 - CONTINGENT LIABILITIES
The Company is not a defendant in any legal proceeding nor is
there any litigation in progress, pending or threatened against the
Company.
page F-14
<PAGE>
NOTE 10 - COMPREHENSIVE INCOME
As reported earlier in the Summary of Significant Accounting
Policies, there is a new accounting standard that required
additional reporting. This statement requires an entity to display
an amount representing total comprehensive income for the period
and in accumulation for all periods presented. This statement also
requires the entity to classify items of other comprehensive income
by their nature in the financial statements. The following is the
statements of comprehensive income as of December 31,:
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Net Income (Loss) $ 29,147 $ 22,228 $ (5,101)
Other Comprehensive Income, (Loss)
net of tax:
Unrealized gains on securities:
Unrealized holding gains arising
during period $ 2,009 $ (1,954) $ 4,632
Less: reclassification
adjustment for (gains)
losses included in net income $ - $ (17,623) $ 462
Total Other Comprehensive
Income $ 2,009 $ (19,577) $ 5,094
Comprehensive Income $ 31,156 $ 2,651 $ (7)
</TABLE>
page F-15
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
The following shows the tax effect of each component of
comprehensive income as of December 31,:
[CAPTION]
Calculation of Holding Gains (Losses)
1999 1998 1997
[S] [C] [C] [C]
Holding gains (losses)
recognized in other comprehensive
income $ 2,363 $ (2,299) $ 5,449
Tax (expense) benefit (345) 345 (817)
Total gain (loss), net of tax $ 2,009 (1,954) 4,632
[CAPTION]
Reclassification Adjustments
[/TABLE]
Net income:
(Gain) loss on sale of
securities $ - $ (20,733) $ 543
Income tax (expense) benefit - 3,110 (81)
Net gain (loss) realized in
net income $ - (17,623) 462
[/TABLE]
Accumulated other comprehensive income is comprised of only
unrealized gains (losses) on investment securities.
NOTE 11 - LONG-TERM DEBT
1999 1998
Due within Due after
one year one year Total Total
Note payable to Jenex Gold
Corporation in monthly
installments of $1,000
including interest at 9%
per annum $ 4,360 $ 82,493 $ 86,853 $ -
page F-16
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Note payable to Volcanic
Gold, Inc. in monthly
installments of $500
including interest at
9% per annum 2,083 42,373 44,456 -
$ 6,443 $ 124,866 $ 131,309 $ -
The following table represents future principle payments for the
years ended December 31:
2000 $6,444
2001 7,048
2002 7,709
2003 8,432
2004 9,223
Thereafter 92,453
$ 131,309
NOTE 12 - INCOME TAXES
<TABLE>
<CAPTION> 1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Federal Income Tax - Current $5,106 $1,959 $ -
State Income Tax - Current 3,591 $2,022 800
Total provision $8,697 $3,981 $ 800
</TABLE>
The Company's deferred tax assets and liabilities were
represented by unrealized gains or losses on investment securities
resulting in deferred tax assets of $50 for 1999 and deferred tax
liabilities of $305 for 1998.
page F-17
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
[DESCRIPTION] Exhibit 27 Financial Data Schedule for 1999.
This form contains summary financial information
extracted from Form 10K for California-Engels
Mining Company for the year ended 12/31/98 and is
qualified in its entirety by reference to such
financial statements.
[TEXT]
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<S> <C>
<CASH> 71,295
<SECURITIES> 4,339
<RECEIVABLES> 36,147
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 76,612
<PP&E> 493,111
<DEPRECIATION> 24,210
<depletion> 18,097
<TOTAL-ASSETS> 562,585
<CURRENT-LIABILITIES> 4,697
<BONDS> 0
0
0
<COMMON> 190,241
<OTHER-SE> 187,673
<TOTAL-LIABILITY-AND-EQUITY> 562,585
<SALES> 248,928
<TOTAL-REVENUES> 257,502
<CGS> 0
<TOTAL-COSTS> 214,182
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 37,633
<INCOME-TAX> 8,697
<INCOME-CONTINUING> 28,936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,936
<EPS-BASIC> 0.029
<EPS-DILUTED> 0.029
</TABLE>
