FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
or
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from to
Commission file number 0-9137
U.S. GOLD CORPORATION
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0796160
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Madison, Suite 700
Denver, Colorado 80206
(Address of principal executive offices)
(303) 322-8002
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the 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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Class Outstanding as of August 10, 1996
Common Stock, $0.10 par value 13,806,505
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET
ASSETS June 30, 1996
Current assets:
Cash and cash equivalents $ 11,189
Accounts receivable 162,714
Interest receivable 70,063
Note receivable, current portion 758,156
Federal tax refund 95,182
Other current assets 13,114
Total current assets 1,110,418
Investment in Tonkin Springs Project Joint Venture 2,262,578
Note receivable, non-current portion 1,001,920
Investment in Gold Capital Common Stock 517,500
Investment in Gold Capital Preferred Stock 3,000,000
Deferred tax assets, net 223,662
Other assets, net of depreciation 62,408
$8,178,486
LIABILITIES, DEFERRED CREDITS AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 21,816
Reserve for reclamation 640,000
Deferred gain on sale of Tonkin Springs interest 2,838,751
Shareholders' equity:
Common stock, $.10 par value, 15,000,000 shares
authorized; 13,806,505 shares issued and
outstanding 1,380,651
Additional paid-in capital 31,982,099
Accumulated deficit (28,684,831)
Total Shareholders' equity 4,677,919
$8,178,486
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended June 30, 1996 and 1995 (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
Installment gain on sale
of Tonkin Springs
interest $ 73,546 $523,891 $115,768 $523,891
Interest income 34,392 56,908 73,731 123,087
Dividend income 0 67,500 0 135,000
Other income 1,215 18 1,215 9,036
Total 109,153 648,317 190,714 791,014
Other costs and expenses:
General and administrative 167,520 258,803 495,220 401,516
Interest 53 21,102 120 34,289
Depreciation and
amortization 2,924 1,138 5,588 2,646
Total expense 170,497 281,043 500,928 438,451
Income (loss) before
income taxes (61,344) 367,274 (310,214) 352,563
Provision for income taxes 0 0 0 0
Net income (loss) $(61,344) $367,274 $(310,214) $352,563
Per share data:
Net income (loss) $(0.00) $0.03 $(0.02) $0.02
Weighted average shares
and share equivalents
outstanding 13,806,505 14,514,943 13,806,505 14,427,810
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1996 and 1995 (Unaudited)
June 30, June 30,
1996 1995
Cash flows from operating activities:
Cash paid to suppliers and employees $(603,550) $(275,456)
Cash used in operating activities (603,550) (275,456)
Cash flows from investing activities:
Cash received from sale of Tonkin
Springs interest 191,844 998,880
Cash received for accrued interest
on note 195,572 234,158
Capital expenditures (8,218) 0
Sale of assets 1,215 9,000
Cash provided by investing activities 380,413 1,242,038
Cash flows from financing activities:
Payment on income tax obligation 0 (534,152)
Cash provided by (used in) financing
activities 0 (534,152)
Increase (decrease) in cash and
equivalents (223,137) 432,430
Cash and equivalents, beginning 234,326 18,257
Cash and equivalents, ending $11,189 $450,687
Reconciliation of net income (loss) to
cash used in operating activities:
Net income (loss) $(310,214) $352,563
Items not requiring (providing) cash:
Interest income (70,063) (117,245)
Dividend income 0 (135,000)
Interest expense 0 8,967
Depreciation, depletion and amortization 5,588 2,646
Investment gain on sale of Tonkin Springs
interest (115,768) (523,891)
(Increase) decrease in current assets
related to operations 159,313 38,228
Increase (decrease) in current
liabilities related to operations (24,385) (444,428)
Decrease (increase) in other assets,
long term (248,021) 1,093,616
Cash used in operating activities $603,550 $275,456
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Summary of Significant Accounting Policies
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, as well as the accounts
of Tonkin Springs Venture Limited Partnership ("TSVLP").
Significant intercompany accounts and transactions have been
eliminated.
The balance sheet of the Company as of June 30, 1996 and the
results of operations for the three and six month periods ended
June 30, 1996 and 1995, and cash flows for the six month periods
ended June 30, 1996 and 1995, have not been examined by independent
certified public accountants. However, in the opinion of
management, the accompanying unaudited consolidated financial
statements contain all necessary adjustments in order to make the
financial statements not misleading.
The preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting
principles requires the Company's management to make estimates and
assumptions that affect the amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates. The results of operations for the three and
six month periods ended June 30, 1996 and 1995 are not necessarily
indicative of the results to be expected for the full years. These
financial statements should be read in conjunction with the
Company's annual report on Form 10-KSB filed with the Securities &
Exchange Commission for the year ended December 31, 1995.
2. Sale of 60% Interest in Tonkin Springs Project
On December 31, 1993 (the "Closing"), TSVLP, a partnership owned
by subsidiaries of U.S. Gold Corporation (the "Company"), sold a 60
percent undivided interest in the Tonkin Springs Properties
and Obligations (the "Properties") to Gold Capital Corporation
("Gold Capital"). TSVLP retained a 40 percent undivided interest
in the Properties. Immediately after the conveyance to Gold
Capital, TSVLP and Gold Capital each made their respective interest
in the Properties subject to a mining joint venture, the Tonkin
Springs Project Joint Venture ("Project Joint Venture"), to operate
and manage the Properties. Ownership in the Project Joint Venture
is: TSVLP- 40 percent, Gold Capital- 60 percent. Gold Capital is
manager of the Properties under the Project Joint Venture.
Gold Capital purchased its 60 percent undivided interest in the
Properties from TSVLP for a purchase price and other consideration
of approximately $7,830,000 representing the estimated fair market
value of the assets. The purchase price included $200,000 in cash
at Closing, delivery of a mortgage note in the amount of $3.8
million (the "Promissory Note"); 300,000 shares of unregistered
Gold Capital's Series A Preferred Stock ("Gold Capital Preferred
Stock") having an assigned value of $3 million, and the assumption
of 60 percent of a reclamation obligation recorded at $960,000.
Through June 30, 1996, TSVLP has received $2,039,924 in principal
payments on the Promissory Note with a balance of $1,760,076
remaining due at June 30, 1996. The Promissory Note, as amended
June 21, 1995, is collateralized by Gold Capital's 60% interest in
the Properties and the Project Joint Venture and accrues interest
at a fixed rate of 7.5% on the unpaid principal balance. Interest
on the Promissory Note for fiscal year 1995 in the amount of
$195,572 was received in full in March, 1996. A portion of the
April, 1996 and all of the May, June, July and August, 1996 monthly
note payments from Gold Capital are currently past due.
Remaining principal balance of the Promissory Note is due in
monthly installments of $50,000 until Gold Capital has raised an
aggregate of $4,000,000 in new financing, or until paid in full,
increasing to $75,000 per month until the note is paid in full
subsequent to Gold Capital raising $4,000,000 in new financing.
The future annual minimum principal payments (at the $50,000 per
month level) are as follows:
1996 $458,156
1997 600,000
1998 600,000
1999 101,920
Total $1,760,076
Effective June 22, 1995, the TSVLP entered into the Commitment
and Agreement to Convert, under which TSVLP agreed to convert its
300,000 shares of Gold Capital Preferred Stock into 1,500,000
shares of Gold Capital common stock at some time after November 30,
1995. Under this arrangement, the mandatory 9% annualized stock
dividend requirement under the Preferred Stock terminated November
30, 1995.
Also effective June 22, 1995, the Company entered into the
Shareholders' Agreement under which:
Royalstar Resources Ltd. ("Royalstar"), as majority owner of
Gold Capital, agreed for a period of five years to support the
nomination and election of certain individuals to Gold
Capital's board of directors, including a member recommended
by TSVLP.
TSVLP granted a proxy to Mr. John Young, the President and
Chief Executive Officer of Royalstar, which continues until
June, 2000 and provides that Mr. Young can vote all common
shares of Gold Capital standing in the name of TSVLP or the
Company in all matters submitted to shareholders of Gold
Capital. This proxy terminates as to any shares sold or
transferred to third parties and in addition, terminates if
Mr. Young is no longer president of Royalstar or Gold Capital.
In addition, TSVLP and the Company gave to Royalstar a first
right of refusal as relates to sales by TSVLP or the Company
of shares of Gold Capital common stock to third parties.
As noted above, the Gold Capital Preferred Stock, as amended June
22, 1995, required Gold Capital to pay a mandatory annual 9%
dividend through November 30, 1995 (based on the $10 per share
stated value, or $3 million aggregate valuation). The 1994
dividend ($270,000) was satisfied with the issuance of 127,702
shares of common shares of Gold Capital and the 1995 dividend
($247,500 through November 30, 1995) was satisfied by the issuance
of 147,816 shares issued to the Company in February, 1996.
Gold Capital is required to fund 100% of the holding, development
and administrative costs relating to the Properties until
commencement of commercial production. Gold Capital shall be
reimbursed for expenditures, up to $6 million ("Reimbursable
Costs"), from a preferential portion of cash flows from the
operations of the Properties, if any. Expenditures in excess of $6
million will be considered contributions to the Project Joint
Venture by Gold Capital. Through June 30, 1996, Gold Capital has
reported that it has incurred approximately $2,983,000 in net
Reimbursable Costs.
The Company is recognizing the gain from the sale of the 60%
interest in the Tonkin Springs Properties to Gold Capital using the
installment method of accounting. For the six month period ended
June 30, 1996, 2.4% ($115,768) of the gain was recognized, while in
the comparable period of 1995, 11% ($523,891) of the gain was
recognized.
3. Tonkin Springs Venture Limited Partnership
The Company holds its interest in the Project Joint Venture
through TSVLP, a partnership which is owned by subsidiaries of the
Company, Tonkin Springs Gold Mining Company ("TSGMC") (99.5%
general partner) and U.S. Environmental Corporation (0.5% limited
partner).
The following is the unaudited statement of operations and
condensed balance sheet for TSVLP as of and for the six months
ended June 30, 1996.
Six Months Ended
STATEMENT OF OPERATIONS June 30, 1996
Revenues:
Installment gain on sale of
Tonkin Springs interest $71,754
Interest income 73,690
Other income 1,165
Total revenues 146,609
Costs and expenses:
General, administrative and other 111,446
Net income $35,163
BALANCE SHEET June 30, 1996
Assets:
Current assets
Cash $1,752
Interest receivable 70,063
Accounts receivable 20,000
Note receivable, current portion 758,156
Total current assets 849,971
Investment in Project Joint Venture 3,283,875
Note receivable, non-current portion 1,001,920
Investment in Gold Capital Common Stock 517,500
Investment in Gold Capital Preferred Stock 3,000,000
Intercompany account 607,573
Other assets 2,302
Total Assets $9,263,141
Liabilities and Partners' Interest:
Current liabilities $601
Reserve for reclamation 640,000
Deferred gain on sale of Tonkin
Springs interest 1,759,489
Subtotal 2,400,090
Partners' interest
Subsidiaries of U.S. Gold-
Initial interest 3,309,902
Allocation of withdrawn interests 3,515,384
Accumulated earnings 37,765
Partners' Interest 6,863,051
Total Liabilities and Partners' Interest $9,263,141
Note A. The partnership agreement has been amended to, among
other things, eliminate the requirement that the general partner
fund TSVLP activities through contributions. The amended agreement
provides at the option of the general partner, the ability to make
secured loans to TSVLP to fund activities.
Note B. TSVLP and Gold Capital are jointly responsible for
reclamation of disturbance of the Properties, proportionate to
their respective interest in the Project Joint Venture. The
current estimate of reclamation cost, on a 100% basis, totals
approximately $1.47 million of which the Company reflects $640,000
on its balance sheet related to its 40% share. Actual reclamation,
generally, will be commenced upon the completion of operations at
the Properties. Bonding of reclamation under various Nevada and
Federal Bureau of Land Management agencies, currently set at $1.3
million, is the responsibility of Gold Capital under the terms of
the Project Joint Venture.
4. Condensed Financial Information of Tonkin Springs Project
Joint Venture
As noted in Footnote 2 above, effective December 31, 1993, TSVLP
sold a 60 percent undivided interest in the Properties to Gold
Capital and the parties each made their respective interest in the
Properties subject to the Project Joint Venture. Gold Capital is
manager of the Properties under the Project Joint Venture. The
following is the unaudited condensed statement of operations and
balance sheet of the Project Joint Venture as of and for the six
months ended June 30, 1996. All costs and expenditures associated
with the Properties have been funded by Gold Capital.
Six Months Ended
STATEMENT OF OPERATIONS June 30, 1996
Property maintenance costs $397,721
Net loss $397,721
BALANCE SHEET June 30, 1996
Assets:
Current assets, cash $2,405
Property, plant, equipment &
development costs 12,304,747
Prepaid royalties 527,823
Deposits and other assets 9,675
Total assets $12,844,650
Liabilities, Reserves and Project Joint Venturers' Interest:
Current liabilities $354,490
Intercompany account-Gold Capital 2,983,081
Reserve for reclamation 1,469,900
Subtotal 4,807,471
Venturers' Interest-
Gold Capital's interest 5,602,001
TSVLP's interest 2,435,178
Total venturers' interest 8,037,179
Total liabilities, reserves and
venturers' interest $12,844,650
5. Loan Settlement Agreement
On February 21, 1992, in a Loan Settlement Agreement with its
senior secured lender, The French American Banking Corporation
("FABC"), the Company discharged its debt to FABC. As part of the
consideration to FABC under the Loan Settlement Agreement, the
Company entered into an agreement between TSGMC and FABC entitled
"Agreement To Pay Distributions." Under the terms of this
agreement, TSGMC is required to pay to FABC (i) the first $30,000
of distributions, as defined in such agreement, received from
TSVLP, plus (ii) an amount equal to 50% of such retained
distributions after TSGMC has first received and retained $500,000
of such retained distributions. This obligation to FABC shall
terminate after FABC has been paid a total of $2,030,000
thereunder.
6. Short-term Borrowing
Effective August 23, 1993, the Company entered into an unsecured
loan agreement with Placer Dome U.S. Inc. ("PDUS") under which PDUS
loaned $300,000 to U.S. Gold. On July 14, 1995, the Company repaid
this loan along with accrued interest of $30,016. PDUS is
beneficial owner of approximately 7% of the outstanding shares of
common stock of U.S. Gold.
PART II
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Changes in Financial Condition
On December 31, 1993 (the "Closing"), TSVLP, a partnership owned
by subsidiaries of U.S. Gold Corporation (the "Company"), sold a 60
percent undivided interest in the Tonkin Springs Properties and
Obligations (the "Properties") to Gold Capital. TSVLP retained a
40 percent undivided interest in the Properties. Immediately
thereafter, TSVLP and Gold Capital each made their respective
interest in the Properties subject to the Tonkin Springs Project
Joint Venture ("Project Joint Venture") to operate and manage the
Properties. Ownership in the Project Joint Venture is: TSVLP- 40
percent, Gold Capital- 60 percent. Gold Capital is manager of the
Properties under the Project Joint Venture.
Gold Capital purchased its 60 percent undivided interest in the
Properties from TSVLP for a purchase price and other consideration
of approximately $7,830,000 representing the estimated fair market
value of the assets purchased. The purchase price included
$200,000 in cash at Closing; delivery of a mortgage note in the
amount of $3.8 million (the "Promissory Note"); 300,000 shares of
unregistered Gold Capital's Series A Preferred Stock ("Gold Capital
Preferred Stock") having an assigned value of $3 million, and the
assumption of 60 percent of a reclamation obligation recorded at
$960,000.
Through June 30, 1996, the Company has received $2,039,924 in
principal payments on the Promissory Note with $1,760,076 remaining
due. The Promissory Note as amended, requires monthly payments by
Gold Capital of $50,000 until Gold Capital has raised an aggregate
of $4,000,000 in new financing, or until paid in full, and $75,000
per month until the note is paid in full subsequent to Gold Capital
raising an aggregate of $4,000,000 in new financing. The
Promissory Note as amended, is collateralized by Gold Capital's 60%
interest in the Properties and the Project Joint Venture and
accrues interest at a fixed rate of 7.5% on the unpaid principal
balance. Interest on the Promissory Note for 1995 in the amount of
$195,572 and was received in full during March, 1996.
TSVLP entered into the Commitment and Agreement to Convert with
Gold Capital dated June 22, 1995, whereby it agreed to convert its
300,000 shares of Gold Capital Preferred Stock at some time in the
future into 1,500,000 shares of Gold Capital common stock. The
Preferred Stock accrued mandatory 9% dividend (based on the $10 per
share stated value which totals $3 million aggregate valuation)
through November 30, 1995. The 1994 dividend in the amount of
$270,000 was satisfied with the issuance of 127,702 shares of Gold
Capital common stock, and the 1995 dividend (through November 30,
1995) in the amount of $247,500 was satisfied by the issuance of
147,816 shares of common stock of Gold Capital received by TSVLP in
February, 1996. The aggregate carrying value of the 275,518 shares
of Gold Capital common shares received as dividends is $517,500
($1.88/share), and the market price of such shares as of August 13,
1996 was bid $1.00 and ask $1.38. Pursuant to the Registration
Rights Agreement dated March 27, 1995, Gold Capital has agreed to
use its best efforts to register all common stock received by
TSVLP.
Gold Capital is required to fund 100% of the holding, development
and administrative costs relating to the Properties until
commencement of commercial production. Through June 30, 1996, Gold
Capital has reported that it has incurred approximately $2,983,000
in net costs for the Project Joint Venture. Gold Capital shall be
reimbursed for expenditures, up to $6 million ("Reimbursable
Costs"), from a preferential portion of cash flows from the
operations of the Properties, if any. Expenditures in excess of $6
million will be considered contributions to the Project Joint
Venture by Gold Capital.
During 1996, Gold Capital retained Behre Dolbear & Company, Inc.,
international consultants to the mining industry, to perform a
technical audit of the feasibility study for the Tonkin Springs
Project incorporating the initial 5 year plan of operations. The
feasibility study incorporated estimates, projections and
assumptions related to various items including ore grade, gold
recovery rates and operating and capital costs. Actual results
could differ from those estimates. The audit was completed in
April, 1996, and the Conclusion/Recommendation section of the
Executive Summary of the report indicated that the project, "on a
100 percent basis and pre-tax, has strong economics and a quick
payback of capital". Behre Dolbear projected average cash
operating costs for the initial 5 years of operations at $243.43
per ounce of gold and concluded that the project economics and
technical factors indicate the project should proceed to commercial
production.
The feasibility study included an updated estimate of gold ore
reserves as summarized below by operating processes:
Strip Contained
Ore Tons Grade Ratio Ounces
(000's) (OPT)
Sulfide Milling 2,568 0.102 260,900
Sulfide Heap Leaching 3,575 0.045 160,700
Oxide Heap Leaching 3,690 0.036 132,100
Total 9,833 0.056 2.84 553,700
The Company anticipates that Gold Capital will put the Tonkin
Springs Project into production upon Gold Capital obtaining the
necessary funding and issuance of final operating permits.
Liquidity and Capital Resources
During the remainder of 1996, TSVLP anticipates receipt of a
minimum of $458,156 in principal payments from Gold Capital plus
accrued interest due December 31, 1996 under the Promissory Note.
These payments are the only source of working capital anticipated
during 1996. Therefore, the sufficiency of the Company's working
capital is dependent upon Gold Capital's continuing performance
under the terms of various agreements. Management plans to monitor
Gold Capital's performance under the various terms of the
agreements and, if required, to exercise its rights as provided in
a security agreement dated December 31, 1993, under which the
Company holds a security interest in Gold Capital's 60% interest in
the Properties and Project Joint Venture.
For the six months ended June 30, 1996, net cash used in operations
increased from $275,456 in the 1995 period to $603,550 during the
1996 period, reflecting the increase in cash paid to suppliers and
employees, and payments during 1995 on a Federal tax obligation.
Cash flow from investing activities decreased to $380,413 for the
1996 period from $1,242,038 in 1995, primarily reflecting receipt
of higher payments in the 1995 period under the Promissory Note
from Gold Capital.
Results of Operations - 1996 Compared to 1995
Six Month Periods Ended June 30, 1996 and 1995:
The Company is recognizing the gain from the sale of the 60%
interest in the Tonkin Springs Properties to Gold Capital using the
installment method of accounting as the purchase price
consideration from Gold Capital becomes reasonably assured. For
the six month period ended June 30, 1996, 2.4% ($115,768) of the
gain was recognized reflecting principal payment received on the
Promissory Note while in 1995 period, 11% ($523,891) of the gain
was recognized. At June 30, 1996, $2,838,751 of the gain remains
deferred and is anticipated to be recognized as income in the
future as provided under installment sale accounting. During the
1996 period, $71,853 in interest income related to the Promissory
Note was recorded, compared to interest income of $123,087 during
the 1995 period as well as dividend income of $67,500 related to
the Gold Capital Preferred Stock. Dividends on the preferred stock
ceased to accrue effective November 30, 1995.
General and Administrative expenses increased approximately
$93,704 in the 1996 period compared to 1995, reflecting higher
office rental costs as well as salaries and bonuses paid to
employees. Interest expense during the 1995 period was $34,289,
and related primarily to the Federal tax liability, and interest on
the unsecured note in favor of PDUS paid in full in July, 1995.
Three Month Periods Ended June 30, 1996 and 1995
For the three months ended June 30, 1996, the net loss totaled
$61,344 compared to a net income of $367,274 for the comparable
period of 1995, reflecting primarily greater installment gain
income related to the sale of the Tonkin Springs interest during
the 1995 period as well as dividend income on the Gold Capital
Preferred Stock (which dividends ceased to accrue effective
November 30, 1995), offset, in part, by reduced general and
administrative expenses during the 1996 period.
Other
Certain statements in this report which relate to the Company's
plans, objectives or future performance may be deemed to be
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are
based on current expectations of management. Actual strategies and
results may differ materially from those currently expected because
of various risks and uncertainties. This report should be read in
conjunction with the Company's annual report on Form 10-KSB filed
with the Securities & Exchange Commission for the year ended
December 31, 1995.
PART II
1. No report required.
2. No report required.
3. No report required.
4. No report required.
5. No report required.
6.a Exhibit 11 - Statement of Computation of Weighted
Average Shares Outstanding.
6.b Reports on Form 8-K. None
SIGNATURES
In accordance with the requirements of the Securities and
Exchange Act of 1934, the registrant has caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
U.S. GOLD CORPORATION
Dated: August 13, 1996 By /s/ William W. Reid
William W. Reid, President and Chairman
of the Board
Dated: August 13, 1996 By /s/ William F. Pass
William F. Pass, Vice President and
Chief Financial Officer
EXHIBIT 11
GOLD CAPITAL CORPORATION
EXHIBIT TO FORM 10-QSB
Computation of Weighted Average Shares Outstanding
Used in Earnings Per Share Calculations
for the three and six month periods ended June 30, 1996 and 1995
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
Shares issued at
beginning of period 5,042,514 2,228,931 5,042,514 2,026,098
Weighted average shares-
Issued in exchange
for legal work 0 0 0 13,923
Issued for cash 0 567,184 0 408,006
Total weighted average
shares outstanding 5,042,514 2,796,115 5,042,514 2,448,027
Fully diluted computation not made as effect would be antidilutive
in all periods.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS INFORMATION EXTRACTED FROM THE FORM
10-QSB FOR THE PERIOD ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FORM 10-KSB.
</LEGEND>
<CIK> 0000314203
<NAME> U. S. GOLD CORPORATION
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 11,189
<SECURITIES> 0
<RECEIVABLES> 232,777
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,110,418
<PP&E> 161,387
<DEPRECIATION> (105,906)
<TOTAL-ASSETS> 8,178,486
<CURRENT-LIABILITIES> 21,816
<BONDS> 0
0
0
<COMMON> 1,380,651
<OTHER-SE> 3,297,268
<TOTAL-LIABILITY-AND-EQUITY> 8,178,486
<SALES> 0
<TOTAL-REVENUES> 190,714
<CGS> 0
<TOTAL-COSTS> 495,220
<OTHER-EXPENSES> 5,588
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120
<INCOME-PRETAX> (310,214)
<INCOME-TAX> 0
<INCOME-CONTINUING> (310,214)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (310,214)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
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