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 March 31, 1997
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.)
500 Fifth Avenue, Suite 1021, New York, NY 10110-1099
(Address of Principal Executive Offices)
212-354-4044
(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 March 31, 1997
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
March 31, 1997
December 31, 1996
(Unaudited)
Current Assets:
Cash and cash equivalents $ 35,911
$ 52,250
U.S. treasury bills (at cost which
approximates market value)
394,864 621,214
Accounts receivable 6,006
2,991
Other current assets 39,800
39,800
Total Current Assets 476,581
716,255
Investments in Affiliates:
Tintic Utah Metals LLC 3,975,873
3,975,873
Other Entities 79,961
79,961
Advances 25,150
25,150
Total Investments 4,080,984
4,080,984
Property, Plant and Equipment:
Mining claims and properties
2,421,839 2,421,839
Machinery and equipment
61,758
59,758
Accumulated depletion and
depreciation (845,501)
( 841,051)
Net Property, Plant and Equipment
1,638,096 1,640,546
Other Assets 28,583
8,473
$ 6,224,244
$6,446,258
=========
========
See Notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, 1997
December 31,1996
(Unaudited)
Current Liabilities:
Accounts payable and accrued liabilities $
20,292 $ 39,263
Minority Interest 42,029
42,029
Shareholders' Equity:
Preferred stock, authorized, 1,500,000
shares of $.50 par value; issued and outstanding
5,200 shares. 2,600
2,600
Common stock, authorized 20,000,000
shares of $.50 par value; issued and outstanding
5,988,109 shares. 2,994,055
2,994,055
Additional paid-in capital
11,566,944 11,566,944
Deferred compensation (39,839)
(46,089)
Notes receivable from shareholders (87,500)
(87,500)
Accumulated deficit
(8,274,337) (8,065,044)
Total shareholders' equity 6,161,923
6,364,966
$ 6,224,244 $ 6,446,258
========
=========
See Notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months
Ended
March 31, 1997 March 31, 1996
Revenue:
Interest $ 7,198 $
38,298
Other income 9,320
2,541 Total revenue 16,518
40,839
Expenses:
Mining properties and
Exploration Costs
108,124 324,514
General & Administrative 108,365
159,893
Taxes other than income taxes 9,322
16,521
Total expense
225,811 500,928
Net Loss $(209,293)
$( 460,089)
=========
========
Net loss per common share $(.03)
$(.08)
========== =========
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.
Outstanding March 31, 1997: 5,200 shares preferred,
5,988,109 common; total 5,993,309 shares; outstanding March
31, 1996 5,200 shares preferred, 5,988,109 shares common;
total 5,993,309.
See Notes to Condensed Consolidated Financial Statements.
CHIEF CONSOLIDATED MINING COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the
three months ended
March 31, 1997
March 31, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ ( 209,293)
$(460,089)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation
4,450 5,819
Amortization of deferred compensation
6,250 7,292
Change in Assets and Liabilities:
Increase in accounts receivable
(3,015) (4,256)
Increase in other current assets
- - (1,572)
Increase in other assets
(20,110) (12,478)
Decrease in accounts payable
and accrued liabilities
( 18,971) (62,836)
Net cash used in operating activities
( 240,689) (528,120)
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in U.S. treasury bills, net
226,350 901,874
Mining property development costs
and acquisitions of machinery and equipment
(2,000) ( 541,661)
Increase in investments and advances to affiliates
- - (550)
Net cash provided by investing activities
224,350 359,663
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of common stock
- - 525,000
Net cash provided by financing activities
- - 525,000
Net increase (decrease) in cash and cash equivalents (
16,339) 356,543
Cash and cash equivalents at beginning of period
52,250 96,833
Cash and cash equivalents at end of period $
35,911 $
453,376
========
========
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 there to 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, 1996.
Acquisition of South Standard Mining Company
Registrant's 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
accompanying financial statements reflect the combined
financial position and results of operations for both
entities for all periods presented.
Tintic Utah Metals LLC Joint Venture
On July 17, 1996, the Company entered into a joint venture
agreement with Akiko Gold Resources, Ltd. And Korea Zinc.
Co., Ltd. and formed Tintic Utah Metals LLC("Tintic"). In
connection with this transaction, the Company deeded
approximately 9,000 acres of its mining claims, properties,
vehicles and machinery with historical net book values on
that date of approximately $3,975,000 to Tintic. The deed
with respect to this property is being held in escrow until
each of the two other members of the joint venture
contribute their $3 million required by the joint venture
operating agreement to become separately vested. The
historical cost bases of the properties contributed have
been classified in the accompanying March 31, 1997 balance
sheet as investment in affiliates: Tintic Utah Metals LLC.
No gain recognition or step-up in basis resulted from this
transaction. The investment in Tintic is being accounted
for under the equity method of accounting as the Company
owns 50% of Tintic.
Plutus Mine Development and Exploration
In December 1995, Registrant began rehabilitating the
Chief number 2 shaft and certain drifts which had been
previously been used to mine the Plutus ore vein in
registrant's Plutus Mine. In 1996, the Company began a test
drilling program to determine the direction, extent and
mineralization of the Plutus ore vein. In connection with
these efforts, the Company has capitalized $381,355 of costs
related to the infrastructure of the Chief number 2 shaft
and related buildings and equipment as of March 31,1997.
All drilling and related costs, have been expensed as
exploration costs.
Recent Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board
released Statement of Financial Accounting Standards No. 128
"Earnings Per Share" (SFAS 128). This statements specifies
the computation, presentation, and disclosure requirements
for earnings per share. (EPS) for financial statements
issued for all periods ending after December 15, 1997. SFAS
128 simplifies the standards for computing EPS previously
found in APB Opinion No. 15 and replaces the presentation of
Primary EPS and Fully Diluted EPS. When the Company incurs
a loss, common stock equivalents are not included in the
calculation of the weighted average number of shares
outstanding as they would be anti-dilutive. Accordingly,
the adoption of SFAS 128 is not expected to have a
significant impact on the Company's calculation of its net
loss per common share.
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, 1997 on Form
10-KSB for the fiscal year ended December 31, 1996.
It is anticipated that Registrant's initial drilling and
work sampling program on its Main Tintic District
properties, including the Plutus Mine, will be completed by
May 31, 1997. In order to fund a full exploration and
development program which will focus on possible extensions
of four previously mined orebodies, registrant will consider
various sources for obtaining financing to fund its
operations, through the private placement of its shares or
otherwise, or, in the alternative, registrant will seek a
joint venture partner.
RESULTS OF OPERATION:
Registrant has no revenues from mining operations during the
year 1996 or during the first three months of 1997.
Registrant had income from sales of surface real estate of
$7,070
during the first three month of 1997. No surface real
estate was sold during the first three months of 1996.
Registrant's loss from operations for the three months ended
March 31, 1997 as compared to registrant's loss from
operations for the three months ended March 31, 1996
decreased in the amount of $250,796. The decrease in loss
resulted primarily from the transfer of the financial
responsibility for rehabilitation and exploration activities
on its East Tintic operational area properties in Utah to
Tintic Utah Metals LLC in which registrant has a 50% joint
venture interest.
With the anticipated completion of its first phase Main
Tintic District exploration program during the second
quarter of 1997, registrant expects that there will be a
significant reduction in its operating expenses. Absent
income from sales of surface real estate or other sources,
registrant expects to continue funding its operating
overhead for the balance of 1997, and beyond, utilizing its
cash and U.S. Treasury Bills on hand and, if required,
through the private placement of its shares.
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)
May 13, 1997 /s/LEONARD WEITZ
(Signature and Title)
Leonard Weitz
Chairman of the Board of Directors, and
Principal Executive Officer
May 13, 1997 /s/EDWARD R. SCHWARTZ
(Signature and Title)
Edward R. Schwartz
Director, Treasurer,
Principal Financial Officer and
Principal Accounting Officer
