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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 SEPTEMBER 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 .
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding September 30, 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 September 30, 2000
Index *
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Page
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Part I. - Financial Information
Item l - Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999 3
- Consolidated Statements of Operations -
Three Months and Nine Months Ended
September 30, 2000 and 1999 4
- Consolidated Statements of Cash Flows -
Nine Months Ended September 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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[CAPTION]
<TABLE>
September 30, December 31,
2000 1999
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Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,810 $ 11,209
Other receivables 41 148
Prepaid expenses - - 300
Income tax refund receivable - - 8,000
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Total current assets 4,851 19,657
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Total assets $ 4,851 $ 19,657
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Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses $ - - $ 3,175
Accounts payable - Hecla Mining Company - - 248,650
Accrued interest payable - Hecla Mining Company 262,623 214,209
Note payable - Hecla Mining Company 725,000 711,000
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Total current liabilities 987,623 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 2,360,572 2,111,675
Accumulated deficit (3,339,883) (3,265,591)
Less: Common stock reacquired at cost;
2000 & 1999 - 5,982 shares (3,461) (3,461)
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Total stockholders' deficit (982,772) (1,157,377)
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Total liabilities and stockholders' deficit $ 4,851 $ 19,657
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</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 Operations (Unaudited)
(U.S. Dollars)
[CAPTION]
<TABLE>
Three Months Ended Nine Months Ended
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September 30, September 30, September 30, September 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenue:
Interest $ - - $ 1,006 $ - - $ 1,036
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- - 1,006 - - 1,036
Expenses:
General and administrative 3,866 1,123 16,638 17,974
Interest expense on note payable
to Hecla Mining Company 20,101 17,103 57,414 50,095
Foreign exchange loss (gain) 409 (9) 240 1,081
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24,376 18,217 74,292 69,150
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Loss before income taxes (24,376) (17,211) (74,292) (68,114)
Income tax provision - - - - - - - -
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Net loss $ (24,376) $ (17,211) $ (74,292) $ (68,114)
============ =========== =========== ============
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)
[CAPTION]
<TABLE>
Nine Months Ended
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September 30, September 30,
2000 1999
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<S> <C> <C>
Operating activities:
Net loss $ (74,292) $ (68,114)
Change in:
Accounts and other receivables 407 97
Income tax refund receivable 8,000 8,000
Accounts payable (2,928) 1,115
Accrued interest payable on note
to Hecla Mining Company 48,414 50,095
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Net cash used by operating activities (20,399) (8,807)
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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 (6,399) 2,193
Cash and cash equivalents at
beginning of period 11,209 11,236
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Cash and cash equivalents at
end of period $ 4,810 $ 13,429
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</TABLE>
Noncash financing activity: See Note 3.
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 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 September 30, 2000, ConSil had 9,449,707 common shares
outstanding of which Hecla Mining Company, the majority stockholder
of ConSil, owned 7,418,300 shares or 78.503% of the outstanding
shares.
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 September 30, 2000, there was $725,000 outstanding under the
loan agreement with Hecla, having an interest of 11% and accrued
interest due to Hecla totaling $262,623.
During the third quarter of 2000, Hecla forgave $248,650 of
ConSil and Minera ConSil's accounts payable to Hecla Mining Company
and Minera Hecla, S.A. de C.V. ConSil recorded the forgiveness of
the accounts payable as an equity contribution.
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Part I - Financial Information (Continued)
ConSil Corp.
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 September 30,
2000, ConSil had negative working capital of $982,772 and a
stockholders' deficit of $982,772. 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. If other sources
of funds are unavailable, Hecla has committed to fund the reasonable
minimum financial requirements of ConSil through March 31, 2001.
Note 4. ConSil prepares its consolidated financial statements in
accordance with generally accepted accounting principles (GAAP) 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
September 30, 2000 or 1999 and the three and nine 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 and Secretary.
Mr. John P. Stilwell resigned from the Board of Directors of
ConSil on September 8, 2000 as a result of leaving his position
with Hecla Mining Company. Mr. Lewis E. Walde has been appointed
to ConSil's Board of Directors. Mr. Walde also serves as Hecla's
Controller.
Results of Operations
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First Nine Months of 2000 Compared to First Nine Months of 1999
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ConSil reported a net loss of $74,292, or $0.01 per share, for the
first nine months of 2000 compared to a net loss of $68,114, or $0.01 per
share in the same period in 1999. The increase in the net loss was due
primarily to an increase in interest expense of $7,319 on the note payable
to Hecla (see Note 3 of Notes to Consolidated Financial Statements) and a
decrease in interest income of $1,036. Partially offsetting the
unfavorable items was a decrease in general and administrative expense of
$1,336 and a decrease in foreign exchange loss of $841.
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Part I - Financial Information (Continued)
ConSil Corp.
Three Months Ended September 30, 2000 Compared to Three Months
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Ended September 30, 1999
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ConSil reported a net loss of $24,376, or nil per share in the third
quarter of 2000, compared to a net loss of $17,211, or nil per share in
the third quarter of 1999. The increase in the net loss was due primarily
to an increase in interest expense of $2,998 on the note payable to Hecla
(see Note 3 of Notes to Consolidated Financial Statements), an increase
in general and administrative expense of $2,743, and an increase in
foreign exchange loss of $418.
Financial Condition and Liquidity
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At September 30, 2000, assets totaled $4,851 and stockholders'
deficit totaled $982,772. Cash and cash equivalents decreased by
$6,399 to $4,810 at September 30, 2000 from $11,209 at December 31, 1999.
The primary uses of cash were for payment of general and administrative
costs, and an interest payment of $9,000 on the note payable to Hecla
(see Note 3 of Notes to Consolidated Financial Statements). The primary
source of cash was from borrowings of $14,000 against the note payable
to Hecla.
Working capital increased $174,605 during the first nine months of
2000, from a negative $1,157,377 at December 31, 1999 to a negative
$982,772 at September 30, 2000. The increase in working capital is
primarily the result of Hecla's forgiveness of ConSil's accounts payable
to Hecla and Minera Hecla, S.A. de C.V. of $248,650, partly offset by
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. If additional funds are required, Hecla has agreed to fund
the reasonable minimum financial requirements of ConSil through March 31,
2001. On December 31, 1999, ConSil and Hecla entered into a seventh
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Part I - Financial Information (Continued)
ConSil Corp.
amendment to the loan agreement (see Note 3 of Notes to Consolidated
Financial Statements) which extended the due date to March 31, 2001.
As of September 30, 2000, $725,000 was payable to Hecla,
excluding accrued interest of $262,623, under the loan agreement. 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 September 30, 2000, ConSil had negative
working capital of $982,772 and a stockholders' deficit of $982,772.
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. If other sources of funds are unavailable, Hecla has committed to
fund the reasonable minimum financial requirements of ConSil through March
31, 2001.
Quantitative and Qualitative Disclosures About Market Risk
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At September 30, 2000, ConSil's note payable to Hecla (refer to Note 3
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: November 13, 2000 By:
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Michael B. White
President and Director
Date: November 13, 2000 By:
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David F. Wolfe
Treasurer (principal accounting
and financial officer)
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ConSil Corp.
Form 10Q - Period Ending September 30, 2000
Exhibit List
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Exhibit No. Description
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27 Financial Data Schedule
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