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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2000
Commission file number 0-4846-3
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CONSIL CORP.
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(Exact name of registrant as specified in its charter)
Idaho 82-0288840
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6500 Mineral Drive
Coeur d'Alene, Idaho 83815-8788
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(Address of principal executive offices) (Zip Code)
208-769-4100
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(Registrant's telephone number, including area code)
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 at least the past 90 days. Yes XX . No .
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding July 31, 2000
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Common stock, no par value 9,449,707 shares
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ConSil Corp.
Form 10-Q
For the Quarter Ended June 30, 2000
Index *
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Page
Part I. - Financial Information
Item l - Consolidated Balance Sheets - June 30,
2000 and December 31, 1999 3
- Consolidated Statements of Operations -
Three Months and Six Months Ended
June 30, 2000 and 1999 4
- Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2000 and 1999 5
- Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. - Other Information
Item 1 - Legal Proceedings 11
Item 6 - Exhibits and Reports on Form 8-K 11
* Items omitted are not applicable.
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Part I - Financial Information
ConSil Corp.
Consolidated Balance Sheets (Unaudited)
(U.S. Dollars)
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June 30, December 31,
2000 1999
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Assets
Current assets:
Cash and cash equivalents $ 17,618 $ 11,209
Other receivables 128 148
Prepaid expenses - - 300
Income tax refund receivable - - 8,000
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Total current assets 17,746 19,657
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Total assets $ 17,746 $ 19,657
========= =========
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses $ - - $ 3,175
Accounts payable - Hecla Mining Company 248,517 248,650
Accrued interest payable - Hecla Mining Company 251,522 214,209
Note payable - Hecla Mining Company 725,000 711,000
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Total current liabilities 1,225,039 1,177,034
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Stockholders' deficit:
Preferred stock; $0.25 par value; authorized
10,000,000 shares; issued and outstanding, none - - - -
Common stock; no par value; authorized
100,000,000 shares; issued 9,455,689 shares 2,111,675 2,111,675
Accumulated deficit (3,315,507) (3,265,591)
Less: Common stock reacquired at cost;
5,982 shares (3,461) (3,461)
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Total stockholders' deficit (1,207,293) (1,157,377)
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Total liabilities and stockholders' deficit $ 17,746 $ 19,657
========= =========
The accompanying notes are an integral part
of the consolidated financial statements.
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<TABLE>
Part I - Financial Information (Continued)
ConSil Corp.
Consolidated Statements of Operations (Unaudited)
(U.S. Dollars)
<CAPTION>
Three Months Ended Six Months Ended
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```````` June 30, June 30, June 30, June 30,
2000 1999 2000 1999
------------ ----------- ---------- ---------
<S> <C> <C> <C> <C>
Revenue:
Interest $ - - $ - - $ - - $ 30
------------ ---------- --------- -------
- - - - - - 30
------------ ---------- --------- -------
Expenses:
General and administrative 6,455 9,474 12,772 16,851
Interest expense on note
payable to Hecla Mining Co. 19,426 16,625 37,313 32,992
Foreign exchange (gain) loss (463) 294 (169) 1,090
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25,418 26,393 49,916 50,933
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Loss before income taxes (25,418) (26,393) (49,916) (50,903)
Income tax provision - - - - - - - -
--------- --------- -------- --------
Net loss $ (25,418) $ (26,393) $(49,916) $(50,903)
========= ========= ======== ========
Basic and diluted loss per
common share $ nil $ nil $ (0.01) $ (0.01)
========= ========= ======== ========
Cash dividends per share $ - - $ - - $ - - $ - -
========= ========= ======== ========
Weighted average number of
common shares outstanding 9,449,707 9,449,707 9,449,707 9,449,707
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
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Part I - Financial Information (Continued)
ConSil Corp.
Consolidated Statements of Cash Flows (Unaudited)
(U.S. Dollars)
Six Months Ended
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June 30, June 30,
2000 1999
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Operating activities:
Net loss $ (49,916) $ (50,903)
Change in:
Accounts and other receivables 8,320 30
Accounts payable and accrued
liabilities (3,308) 1,115
Accrued interest payable on note
to Hecla Mining Company 37,313 32,992
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Net cash used by operating activities (7,591) (16,766)
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Financing activities:
Borrowing on Hecla note payable 14,000 11,000
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Net cash provided by financing
activities 14,000 11,000
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Net increase (decrease) in cash
and cash equivalents 6,409 (5,766)
Cash and cash equivalents at
beginning of period 11,209 11,236
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Cash and cash equivalents at
end of period $ 17,618 $ 5,470
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The accompanying notes are an integral part of
the consolidated financial statements.
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Part I - Financial Information (Continued)
ConSil Corp.
Notes to Consolidated Financial Statements
Note 1. The notes to the consolidated financial statements as of December
31, 1999, as set forth in ConSil Corp.'s (ConSil) 1999 Annual Report
on Form 10-K, substantially apply to these interim consolidated
financial statements and are not repeated here. All amounts are in
U.S. dollars unless otherwise indicated.
Note 2. The financial information given in the accompanying unaudited
interim financial statements reflects all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim periods reported. All such adjustments are of
a normal recurring nature. All financial statements presented herein
are unaudited. However, the balance sheet as of December 31, 1999, was
derived from the audited consolidated balance sheet described in Note
1 above.
Note 3. At June 30, 2000, ConSil had 9,449,707 common shares outstanding
of which Hecla Mining Company (Hecla), the majority stockholder of
ConSil, owned 7,418,300 shares or 78.503% of the outstanding shares.
The financial statements have been prepared on a going concern
basis which assumes realization of assets and liquidation of
liabilities in the normal course of business. At June 30, 2000,
ConSil had negative working capital of $1,207,293 and a stockholders'
deficit of $1,207,293. Included in current liabilities are the
$725,000 note payable and the related accrued interest due to Hecla
which are due upon demand by authorized representatives of Hecla, but
in no event later than March 31, 2001. Also included in current
liabilities are accounts payable to Hecla of $248,517. If other
sources of funds are unavailable, Hecla has committed to fund the
reasonable minimum financial requirements of ConSil through March 31,
2001.
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Part I - Financial Information (Continued)
ConSil Corp.
Note 4. On June 28, 1996, ConSil and Hecla entered into a loan agreement
whereby Hecla agreed to make available to ConSil a loan not to exceed
$500,000, due in its entirety on or before December 31, 1996. This
loan agreement was subsequently amended on seven separate occasions,
increasing the amount available to borrow to $725,000 and extending
the repayment date until March 31, 2001. At June 30, 2000, there was
$725,000 outstanding under the loan agreement with Hecla, having an
interest rate of 11% and accrued interest due to Hecla totaling
$251,522.
Note 5. ConSil prepares its consolidated financial statements in
accordance with generally accepted accounting principles (GAAP) as
practiced in the United States. ConSil also has regulatory reporting
requirements in Canada. There are no differences between U.S. GAAP
and Canadian GAAP with respect to stockholders' deficit or net loss at
June 30, 2000 or 1999 and the six months then ended.
Item 2. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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Introduction
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Except for the historical information contained herein, the
matters discussed that are forward-looking statements involve risks
and uncertainties, including the timely development of future
projects, the impact of metals prices, changing market conditions and
regulatory environment, and other risks detailed from time to time in
ConSil's Form 10-K and Form 10-Qs filed with the United States
Securities and Exchange Commission. Actual results may differ
materially from those projected or implied. Forward-looking
statements included herein represent ConSil's judgment as of the date
of this filing. ConSil disclaims, however, any intent or obligation
to update these forward-looking statements.
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Part I - Financial Information (Continued)
ConSil Corp.
Following the sale of ConSil's Silver Summit mine in 1995, ConSil was
actively involved in exploration and acquisition activities, primarily in
Mexico. ConSil was unsuccessful in its exploration and acquisition
activities, and since the fourth quarter of 1997, ConSil has been inactive.
Mr. Roger A. Kauffman resigned as President and Director of ConSil on
July 10, 2000 as a result of leaving his position with Hecla Mining
Company, ConSil's majority stockholder. Mr. Michael B. White has been
appointed by ConSil's Board of Directors to serve as the current President
and as Director. Mr. White also serves as Hecla's Vice President - General
Counsel.
Results of Operations
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First Six Months of 2000 Compared to First Six Months of 1999
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ConSil reported a net loss of $49,916, or $0.01 per share, for the
first six months of 2000 compared to a net loss of $50,903, or $0.01 per
share in the same period in 1999. The decrease in the net loss was due
primarily to a decrease in general and administrative expense of $4,079,
partially offset by a $4,321 increase in interest expense on the note
payable to Hecla (see Note 4 of Notes to Consolidated Financial
Statements).
Three Months Ended June 30, 2000 Compared to Three Months Ended
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June 30, 1999
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ConSil reported a net loss of $25,418, or nil per share in the second
quarter of 2000, compared to a net loss of $26,393, or nil per share in the
second quarter of 1999. The decrease in the net loss was due primarily to
a decrease in general and administrative costs of $3,019, partially offset
by a $2,801 increase in interest expense.
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Part I - Financial Information (Continued)
ConSil Corp.
Financial Condition and Liquidity
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At June 30, 2000, assets totaled $17,746 and stockholders' deficit
totaled $1,207,293. Cash and cash equivalents increased by $6,409 to
$17,618 at June 30, 2000 from $11,209 at December 31, 1999. The primary
source of cash was from borrowings of $14,000 against the note payable to
Hecla. This source of cash was partly offset by general and administrative
expenditures.
Working capital decreased $49,916 during the first six months of 2000,
from a negative $1,157,377 at December 31, 1999 to a negative $1,207,293 at
June 30, 2000. The decrease in working capital is primarily the result of
funding operating losses consisting principally of interest and general and
administrative costs.
ConSil's planned 2000 expenditures include the necessary expenditures
to maintain the current inactive status of ConSil. ConSil intends to
finance planned expenditures partially through existing cash and cash
equivalents. Any further exploration projects, potential acquisitions or
even limited operations are subject to ConSil being able to raise funds
from external sources.
The financial statements have been prepared on a going concern basis
which assumes realization of assets and liquidation of liabilities in the
normal course of business. At June 30, 2000, ConSil had negative working
capital of $1,207,293 and a stockholders' deficit of $1,207,293. Included
in current liabilities are the $725,000 note payable and the related
accrued interest due to Hecla which are due upon demand by authorized
representatives of Hecla, but in no event later than March 31, 2001. Also
included in current liabilities are accounts payable to Hecla of $248,517.
If other sources of funds are unavailable, Hecla has committed to fund the
reasonable minimum financial requirements of ConSil through March 31, 2001.
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Quantitative and Qualitative Disclosures About Market Risk
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At June 30, 2000, ConSil's note payable to Hecla (refer to Note 4 of
Notes to Consolidated Financial Statements) was subject to changes in
market interest rates. However, due to the short-term nature of the debt,
ConSil's management does not believe it is at material risk with respect to
changes in market interest rates.
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Part II - Other Information
ConSil Corp.
Item 1. Legal Proceedings
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There are no pending legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
None.
Items 2, 3, 4 and 5 of Part II are omitted from this report
as inapplicable.
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Signatures
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Pursuant to the requirements 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.
CONSIL CORP.
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(Registrant)
Date: August 14, 2000 By: /s/ Michael B. White
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Michael B. White
President and Director
Date: August 14, 2000 By: /s/ David F. Wolfe
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David F. Wolfe
Treasurer (principal accounting
and financial officer)
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ConSil Corp.
Form 10Q - Period Ending June 30, 2000
Exhibit List
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Exhibit No. Description
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27 Financial Data Schedule
