9
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
OMB Approval
OMB Number:xxxx-xxxx
Expires: Approval Pending
Estimated Average Burden Hours Per Response: 1.0
(Mark One)
x Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
Transition report under Section 13 or 15(d) of the
Exchange Act
For the transition period from to
Commission File Number 1-1761
CHIEF CONSOLIDATED MINING COMPANY
(Exact name of Small Business Issuer as Specified in Its
Charter)
Arizona 87-0122295
(State if other jurisdiction of incorporation or
organization)(I.R.S. Employer ID. No.)
866 Second Avenue, New York, New York 10017
(Address of Principal Executive Offices)
212-688-8130
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15 (d) of the Securities and
Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
5,988,109
Number of shares of Common Stock, par value $.50,
outstanding June 30, 1996
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
June 30, 1996
December 31, 1995
(Unaudited)
Current Assets:
Cash and Cash Equivalents $ 52,280
$ 160,045
U.S. Treasury Bills (at cost which
approximates market value)
1,284,790 2,616,559
Accounts Receivable 57,397
32,228
Other Current Assets 2,600
2,228
Total Current Assets 1,397,067
2,811,060
Investments in Affiliates:
Common Stock 78,101
78,101
Advances 21,700
21,150
Total Investments 99,801
99,251
Property, Plant & Equipment:
Mining claims & properties 7,855,198
6,755,838
Machinery & equipment 170,798
158,298
Accumulated depletions &
depreciation (2,374,443)
(2,363,280)
Net property, plant & equipment 5,651,553
4,550,856
Other Assets: 55,878
51,675
$ 7,204,299 $
7,512,842
======= ========
See Notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, 1996
December 31,1995
(Unaudited)
Current Liabilities:
Accounts Payable and Accrued Liabilities $
171,425 $ 230,767
Minority Interest 42,201
42,201
Shareholder's Equity:
Preferred stock-nonassessable (authorized,1,500,000
shares of $0.50 par value each; issued and outstanding:
1996-5,200 shares, 1995-5,200 shares.)
2,600 2,600
Common stock-nonassessable (authorized 20,000,000
shares of $.50 par value each; issued 1996-6,004,550
shares, 1995-5,829,551 shares; held in treasury-16,441
shares; outstanding: 1996-5,988,109 shares;
1995-5,813,110 shares) 2,994,055
2,906,555
Additional Paid-in Capital
11,483,444 11,036,444
Deferred Compensation
(58,774) (71,274)
Notes Receivable from shareholders
(87,500) (87,500)
Accumulated Deficit
(7,343,152) (6,546,951)
Total shareholder's equity
6,990,673 7,239,874
$ 7,204,299
$ 7,512,842
========
=========
See Notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
For the Six Months Ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
Revenue:
Sale of Flux Materials $ - $
59,417 $ - $ 197,964
Interest 18,229 11,595
53,461 28,735
Other Income 3,525 8,272
5,408 12,447
Total 21,754 79,284
58,869 239,146
Expenses:
Cost of Sale of Flux Materials -
58,433 - 168,653
Mining properties Costs 170,066
147,030 494,580 306,931
General & Administrative 250,422 121,721
336,242 225,966
Taxes other than income taxes 7,727 8,332
24,248 17,258
Total 428,215 335,516
855,070 718,808
Net Loss $(406,461) $(256,232)
$(796,201) $(479,662)
======= ========
======== ========
Net loss per share $ ( .07) $ (
.05) $ ( .13) $ ( .10)
======== ======== ========
========
Computation of net loss per share:
The loss per share is based on the weighted average number
of shares of preferred stock (equal to common in right to
receive dividends) and common stock outstanding for the six
and three month periods: For the six month periods:
outstanding June 30, 1996: 5,200 shares preferred 5,911,186
shares common; total 5,916,386 shares; outstanding June 30,
1995: 5,653 shares preferred, 4,912,960 shares common; total
4,918,613 shares. For the second quarter periods:
Outstanding June 30, 1996: 5,200 shares preferred,
5,988,109 shares common: total 5,993,309 shares; outstanding
June 30, 1995: 5,653 shares preferred, 4,948,505 shares
common : total 4,954,158 shares.
See Notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the
six months ended
June 30, 1996
June 30, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(796,201)
$(479,662)
Adjustments to reconcile net loss to
net cash used in operating activities:
Issuance of common stock for
services rendered -
31,488
Depreciation
11,163 5,464
Amortization of deferred compensation
12,500 -
Change in Assets and Liabilities:
Decrease (increase) in accounts receivable
(25,169) 57,037
Increase in other current assets ( 372)
(22,002)
Increase in other assets
(7,203) -
Decrease in accounts payable
& accrued liabilities
(59,342) (45,280)
Net cash used in operating activities
(864,624) ( 452,955)
CASH FLOW FROM INVESTING ACTIVITIES:
Decrease in U.S. treasury bills, net
$1,331,769 -
Mining property development costs
and acquisitions to machinery & equipment
(1,099,360) (822,330)
Increase in investment & advances to affiliates
(550) (400)
Net cash provided by (used in) investing activities
231,859 (822,730)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of common stock 525,000
1,000,000
Net cash provided by financing activities
525,000 1,000,000
Net decrease in cash and cash equivalents
(107,765) (275,685)
Cash and cash equivalents at beginning of period
160,045 1,756,329
Cash and cash equivalents at end of period $
52,280 $1,480,644
========
=========
See notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements
included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes the
following disclosures are adequate to make the information
presented not misleading. In the opinion of management, all
adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been
included. Results of operations for interim periods are not
necessarily indicative of results for a full year. These
condensed financial statements and notes thereto should be
read in conjunction with the Company's financial statements
and notes thereto, included in the Company's Form 10-KSB for
the year ended December 31, 1995.
Registrants condensed consolidated financial statements
reflect the acquisition of South Standard Mining Company
effective June 28, 1996 which was accounted for under the
pooling of interests method of accounting. Accordingly the
financial statements for both entities have been presented
consolidated for all periods presented to reflect the
acquisition
Item 2. Management's Discussion And Analysis Or Plan Of
Operation.
(a) PLAN OF OPERATION.
Registrant hereby incorporates by reference "Item 6.
Management's Discussion and Analysis or Plan of Operation -
(a) Plan of Operation." and "Item 1.-Description of
Business." contained in registrant's Annual Report dated
March 28, 1996 on Form 10-KSB for the fiscal year ended
December 31, 1995 ("1995 Form 10-KSB").
The operating Agreement, as described in registrant's
1995 Form 10-KSB at Items "1" and "6", between registrant
and subsidiary companies of Korea Zinc, Ltd. and Akiko Gold
Resources Ltd. was signed and became effective as of July
17, 1996.
Pursuant to the Operating Agreement, Tintic Utah Metals
LLC ("LLC") was formed on July 29, 1996 as the operating
company of the joint venture. Registrant anticipates that
by August 31, 1996, $2 million will be contributed to LLC by
the subsidiary of Korea Zinc, Ltd. on account of that joint
venture member's capital contribution to the LLC. Those
funds will be used to reimburse registrant for registrant's
advances to the joint venture and for development and
drilling costs under budgets approved by the management
committee of the LLC. After the aforesaid $2 million
contribution to the LLC has been paid, there will remain
another $4 million of contributions to be paid into the LLC
in installments by the other two members of the LLC pursuant
to approved budgets, but no later than August 31, 1998.
Subject to the conditions contained in the Operating
Agreement, registrant has deeded in the name of the LLC
approximately 9,000 acres of its East Tintic properties,
including the Burgin Mine, to the LLC. The deed will be
held in escrow until the two other members of the LLC
contribute to the LLC the full $6 million as required in the
Operating Agreement.
Registrant hereby incorporates by reference "Item 5.
Other Events. ", contained in registrant's Current Report
Form 8-K dated July 12, 1996 reporting the consummation on
June 29, 1996 of the merger of South Standard Mining Company
("South Standard") with and into registrant's subsidiary,
Chief Gold Mines, Inc. Under the terms of the Operating
Agreement as signed, the LLC holds an option to require
registrant to cause the property so acquired by registrant's
subsidiary as a result of the merger to be contributed to
the LLC. The option is exercisable beginning eighteen
months after the Operating Agreement was signed, and if the
option is exercised, the LLC will reimburse registrant for
all net costs incurred by registrant in the merger and in
maintaining and developing the property after the merger.
RESULTS OF OPERATIONS:
Registrant had no revenues from mining operations during the
year 1995 or during the first six months of 1996.
Registrant had income from sales of surface real estate of $
600 during the first six months of 1996 and $2,000 during
the first six months of 1995.
Registrant's loss from operations for the six months ended
June 30, 1996, as compared to Registrant's loss from
operations for the six months ended June 30, 1995 increased
in the amount of $ 316,539. Registrant's loss from
operations for the three months ended June 30, 1996, as
compared to registrants loss from operations for the three
months ended June 30, 1995 increased in the amount of $
150,229. These increases in losses both resulted from the
acceleration of registrant's rehabilitation and development
activities on its Utah East Tintic and Main Tintic
operational area properties, including underground drilling
programs during the first half of 1996 and costs and
additional operating loss incurred in connection with the
consolidation of financial statements to reflect the
acquisition of South Standard Mining Company by a wholly
owned subsidiary of registrant in a merger effective June
28, 1996.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant had duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
CHIEF CONSOLIDATED MINING COMPANY
(Registrant)
Date: August 14, 1996 /s/LEONARD WEITZ
(Signature and Title)
Leonard Weitz
President and
Principal Executive Officer
Date: August 14, 1996 /s/EDWARD R. SCHWARTZ
(Signature and Title)
Edward R. Schwartz
Director, Treasurer,
Principal Financial Officer and
Principal Accounting Officer
