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 March 31, 1997
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 incorporation (I.R.S. Employer
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 May 9, 1997
Common Stock, $0.10 par value 13,853,894
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET
(unaudited)
ASSETS March 31, 1997
Current assets:
Cash and cash equivalents $ 59,083
Interest receivable 28,065
Note receivable, current portion 550,000
Federal tax refund 153,000
Other current assets 47,954
Total current assets 838,102
Investment in Tonkin Springs
Project Joint Venture 2,262,578
Note receivable, non-current portion 789,645
Investment in Gold Capital Common Stock 3,779,529
Deferred tax assets, net 86,520
Other assets, net of depreciation 87,708
$ 7,844,082
LIABILITIES, DEFERRED CREDITS AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 110,161
Reserve for reclamation 640,000
750,161
Deferred gain on sale of Tonkin
Springs interest 1,789,100
Shareholders' equity:
Common stock, $.10 par value, 15,000,000
shares authorized; 13,853,894 shares
issued and outstanding 1,385,424
Additional paid-in capital 31,976,965
Accumulated deficit (28,057,568)
5,304,821
$ 7,844,082
The accompanying notes are an integral part of these
consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
March 31, 1997 March 31, 1996
Installment gain on sale of
Tonkin Springs interest $0 $42,222
Interest income 28,171 39,339
28,171 81,561
Costs and expenses:
General and administrative 197,107 327,700
Interest 1,486 67
Depreciation and amortization 2,954 2,664
Total expense 201,547 330,431
Loss before taxes (173,376) (248,870)
Provision for taxes 0 0
Net loss $(173,376) $(248,870)
Per share data:
Net loss $(0.01) $(0.02)
Weighted average shares and
share equivalents outstanding 13,854,006 13,806,505
The accompanying notes are an integral part of
these consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1997 and 1996
(Unaudited)
March 31, 1997 March 31, 1996
Cash flows from operating activities:
Interest received $151 $1,432
Cash paid to suppliers and employees (237,528) (386,788)
Cash used in operating activities (237,376) (385,356)
Cash flows from investing activities:
Cash received from note payments 161,431 76,844
Cash received for accrued interest
on note 129,569 195,572
Capital expenditures 0 (7,684)
Cash provided by investing activities 291,000 264,732
Increase (decrease) in cash
and equivalents 53,624 (120,624)
Cash and equivalents, beginning 5,459 234,326
Cash and equivalents, ending $59,083 $113,702
Reconciliation of net loss to cash
used in operating activities:
Net loss (173,376) $(248,870)
Items not requiring (providing) cash:
Interest income (28,065) (36,118)
Depreciation, depletion and
amortization 2,954 2,664
(Increase) decrease in current
assets related to operations (48,271) (14,224)
Increase (decrease) in current
liabilities related to operations (16,952) (35,615)
Decrease (increase) in other assets,
long term 26,334 (53,193)
Cash used in operating activities $(237,376) $(385,356)
The accompanying notes are an integral part of
these 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 March 31, 1997 and the results of
operations and cash flows for the three month periods ended March 31, 1997
and 1996, 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 Companys consolidated financial statements in conformity
with generally accepted accounting principles requires the Companys 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 month periods ended March 31, 1997 and
1996 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 and Exchange
Commission for the year ended December 31, 1996.
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 delivery of a mortgage note in the amount of $3.8 million (the
Promissory Note); 300,000 shares of unregistered Gold Capitals 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. Effective December 31, 1996, the Company converted its Gold
Capital Preferred Stock for 1,750,000 shares of Gold Capital common stock.
Through March 31, 1997 TSVLP has received $2,460,355 in principal payments on
the Promissory Note with a balance of $1,339,645 remaining due at March 31,
1997. The Promissory Note, as amended June 21 1995, is collateralized by Gold
Capitals 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 1996 in the amount of $129,569
was received in full in January, 1997. 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:
1997 $400,000
1998 600,000
1999 339,645
$1,339,645
Effective March 13, 1997, Gold Capital and Globex Mining Enterprises, Inc.
(Globex), a Canadian corporation with shares traded on the Toronto and Montreal
stock exchanges (symbol: GMX) entered into an Agreement and Plan of Merger (the
Gold Capital Merger). Subject to the completion of the Gold Capital Merger,
the Company has conditionally agreed to amend the Project Joint Venture
Agreement. Under the terms of the proposed amendment, Gold Capital would
immediately pay off the balance of the Promissory Note to TSVLP, finance
capital requirements of the Company after Commencement of Commercial Production,
and pay TSVLP $60,000 per month as minimum distributions of cash flow during a
24 month period commencing 12 months after the effective date of the amendment.
The amendment would give Gold Capital the right to borrow up to 100% of TSVLPs
cash flow from the Project to support Gold Capitals debt service for third party
project financing with any net borrowings from TSVLPs cash flow due and payable
upon payoff of any third party project financing, increase the amount of
Reimbursable Costs from $6 million to $8.05 million and further provide for
limited increases to the amount of Reimbursable Costs for additional
exploration costs in excess of $750,000 but not more than $1,500,000 prior to
Commencement of Commercial Production, and provide expanded definitions of
Commencement of Commercial Production.
On January 16, 1997, Gold Capital and Globex entered into a loan agreement (the
Globex Loan.) Globex agreed, as long as it is progressing satisfactory towards
the potential merger of Globex and Gold Capital, or until August 30, 1997, to
make advances under the Globex Loan to Gold Capital to be used, among other
things, to reasonably maintain, preserve and protect the Tonkin Springs
property, and service the Promissory Note to TSVLP at the rate of $50,000 per
month commencing February 1, 1997. The Company agreed to share its security
interest in the assets of Gold Capital as provided under the Promissory Note,
pari passu, with Globex as provided in an Intercreditor Agreement, and in
addition, the Company and Globex entered into the Stock Purchase Option
Agreement, Agreement Not To Sell Shares, And Agreement To Vote Shares For Merger
with Globex, each dated January 16, 1997.
As provided in the Intercreditor Agreement, the Company agreed to share, pari
passu with Globex, the security interest held by the Company under the
Security Agreement dated December 31, 1993, by and between the Company, TSVLP
and Gold Capital. The Company agreed not to give Gold Capital notice of payment
default under the Promissory Note so long as the $50,000 per month payments are
made. If a foreclosure action is jointly undertaken, Company and Globex agree to
jointly bid not less than the lesser of the fair market value of the collateral
or the combined balance then owing under the applicable loan agreements. Upon
any foreclosure action which results in the Company and Globex acquiring the
collateral from Gold Capital, the Company has the right, for 90 days thereafter,
to pay to Globex the amount owed to Globex by Gold Capital, and thus to acquire
all the rights to the collateral from Globex.
Under the Stock Purchase Option Agreement, Agreement Not To Sell Shares, And
Agreement To Vote Shares For Merger, the Company agreed to support the proposed
merger of Gold Capital and Globex, to vote its shares owned by the Company in
Gold Capital in favor of the proposed merger, and agreed, subject to the
completion of that merger, to exchange its 2,287,547 shares of Gold Capital for
632,094 free trading shares of Globex, being the same exchange ratio for Gold
Capital shares under the Merger Agreement between Gold Capital and Globex.
The various agreements between the Company, Gold Capital and Globex generally
terminate August 30, 1997, unless extended thereafter by the parties, but may be
terminated earlier, under certain conditions. If the merger of Gold Capital and
Globex is completed, there will be a change of control within Gold Capital and
new management for the manager of the Tonkin Springs Project Joint Venture.
This new management will be responsible for establishing the plan and schedule
for commencement of production, if any, at the Properties.
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 March 31, 1997, Gold Capital has reported that it has incurred
approximately $4,069,000 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. The balance of the deferred gain is associated with the shares of
Gold Capital common stock received effective December 31, 1996 by the Company
through the conversion of its Gold Capital Preferred Stock. If the Gold Capital
Merger is completed, and subject to the then market price of the Globex shares
to be received by the Company in the merger, it is anticipated that the
remaining deferred gain could be realized.
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 condensed
balance sheet and statement of operations for TSVLP as of and for the three
months ended March 31, 1997.
BALANCE SHEET March 31, 1997
Assets:
Current assets
Cash $50,071
Interest receivable 28,065
Note receivable, current portion 550,000
628,136
Investment in Project Joint Venture 3,283,875
Note receivable, non-current portion 789,645
Investment in Gold Capital Common Stock 3,537,500
Intercompany account 890,917
Other assets 2,096
Total Assets $9,132,169
Reserve, Deferred Gain and Partners Interest:
Reserve for reclamation $640,000
Deferred gain on sale of Tonkin
Springs interest 1,108,901
1,748,901
Partners interest
Subsidiaries of U.S. Gold-
Initial interest 3,309,902
Allocation of withdrawn interests 3,515,384
Accumulated earnings 557,982
Partners Interest 7,383,268
Total Reserve, Deferred Gain and
Partners' Interest $9,132,169
STATEMENT OF OPERATIONS Three Months Ended
March 31, 1997
Revenues:
Interest income $28,065
Costs and expenses:
General, administrative and other 88,571
Net loss $ 60,506
Note A. 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
three months ended March 31, 1997. All costs and expenditures associated
with the Properties have been funded by Gold Capital.
STATEMENT OF OPERATIONS Three Months Ended
March 31, 1997
Revenues $0
Property maintenance costs 107,251
Interest expense 4,859
Net loss $(112,110)
BALANCE SHEET March 31, 1997
Assets:
Current assets $1,990
Property, plant, equipment &
development costs 12,792,001
Prepaid royalties 694,604
Other assets 8,457
Total assets $13,497,052
Liabilities, Reserves and Project
Joint Venturers Interest:
Current liabilities $474,177
Intercompany account, Gold Capital 4,069,390
Reserve for reclamation 1,469,900
6,013,467
Venturers Interest
Gold Capital interest 5,048,407
TSVLP interest 2,435,178
Total venturers interest 7,438,585
Total liabilities, reserves and
venturers' interest $13,497,052
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.
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 Corporation (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 Capitals 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. Effective December 31, 1996,
the Company converted the Gold Capital Preferred Stock into 1,750,000 shares of
Gold Capital common stock.
Through March 31, 1997, the Company has received $2,460,355 in principal
payments on the Promissory Note with $1,339,645 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. If the
merger of Gold Capital and Globex is completed, and in conjunction with
certain amendments to the Joint Venture agreement, Gold Capital is required
to pay off the Promissory Note. The Promissory Note as amended, is
collateralized by Gold Capitals 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 1996 in the amount of
$129,569 and was received in full during January, 1997.
The aggregate carrying value of the total 2,287,547 common shares of Gold
Capital owned by the Company is $3,779,529 ($1.65/share) and the market
price of such shares as of May 8, 1997 was bid $0.69 and ask $0.88. At
March 31, 1997, there remains $1,789,100 in deferred gain associated with the
sale of interest in Tonkin Springs to Gold Capital which is anticipated to be
realized in the future as provided under installment sale accounting.
Excluding the deferred gain balance which is included in the aggregate
carrying value of the Gold Capital common shares, the average carrying value
is reduced to $0.87 per share. Pursuant to the Registration Rights Agreement
dated March 27, 1995, Gold Capital has agreed to use its best efforts to
register all common stock of the Company and 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 March 31, 1997, Gold Capital has reported
that it has incurred approximately $4,069,000 in 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. Subject to the completion of the Gold Capital Merger, the
Company has conditionally agreed to amend the Project Joint Venture
Agreement. Under the terms of the proposed amendment, Gold Capital would
immediately pay off the balance of the Promissory Note to TSVLP, finance
capital requirements of the Company after Commencement of Commercial Production,
and pay TSVLP $60,000 per month as minimum distributions of cash flow during
a 24 month period commencing 12 months after the effective date of the
amendment. The amendment would give Gold Capital the right to borrow up to 100%
of TSVLPs cash flow from the Project to support Gold Capitals debt service for
third party project financing with any net borrowings from TSVLPs cash flow due
and payable upon payoff of any third party project financing, increase the
amount of Reimbursable Costs from $6 million to $8.05 million and further
provide for limited increases to the amount of Reimbursable Costs for additional
exploration costs in excess of $750,000 but not more than $1,500,000 prior to
Commencement of Commercial Production, and provide expanded definitions of
Commencement of Commercial Production.
In April, 1996, Gold Capital obtained an audit of the project feasibility study
from an outside engineering firm, which study confirms the economic viability
and recommends development of the project to produce gold from a milling and
heap leach operation at Tonkin Springs. Subject to certain conditions and
assumptions set forth therein, the feasibility study concludes that gold can be
successfully mined over the estimated five year initial phase of the Project.
At various times, the Project has engaged the consulting firm Ore Reserves
Engineering (ORE) to provide estimates of the open pit minable reserves from the
Project. The open-pit reserve estimate done by ORE and completed in October,
1996, is summarized in the table below:
Tons Grade Ounces
above above Contained Strip
Deposit Cutoff Cutoff Cutoff Gold Ratio
(opt Au) (1,000) (opt Au) (1,000) (W:O)
TSP-1
Milling 0.055 1,470 0.099 146 3.4
Bioheap 0.025 1,159 0.040 46 2.0
2,629 192
Rooster
Oxide Heap 0.015 3,692 0.037 136 1.3
Bioheap 0.027 1,805 0.051 92 1.3
5,497 228
O-15
Milling 0.055 969 0.107 103 11
Bioheap 0.025 601 0.040 24 3
1,570 127
TSP-6
Milling 0.055 90 0.117 11 2.4
Bioheap 0.025 86 0.039 3 2.4
176 14
TSP-8
Milling 0.055 48 0.081 4 8.2
Bioheap 0.025 61 0.041 2 8.2
109 6
F-Grid
Milling 0.055 247 0.094 23 7.0
Bioheap 0.025 407 0.037 15 7.0
654 38
Total 10,635 0.057 605 3.1
Liquidity and Capital Resources
During the remainder of 1997, TSVLP anticipates receipt of a minimum of
$550,000 in principal payments from Gold Capital plus accrued interest
under the Promissory Note which is due December 31, 1997. If the Gold
Capital Merger is completed, the remaining balance of the Promissory Note
is required to be paid off. These payments are the only source of working
capital anticipated during 1997. Therefore, the sufficiency of the
Company's working capital is dependent upon Gold Capitals continuing
performance under the terms of various agreements. Management plans to
monitor Gold Capitals 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 Capitals 60% interest in the Properties and Project Joint
Venture.
For the three months ended March 31, 1997, net cash used in operations
decreased from $385,356 in the 1996 period to $237,376 during 1997, reflecting
the decrease in cash paid to suppliers and employees. Cash flow from
investing activities increased to $291,000 for 1997 from $264,732 in 1996,
primarily reflecting increased payments received on the note from Gold Capital
offset, in part, by lower amounts of accrued interest received on the note.
Results of Operations - 1997 Compared to 1996
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. As of December 31, 1996, the remaining deferred gain
represented by the balance due under the Promissory Note was recognized. At
March 31, 1997, $1,789,100 of the gain, related to the shares of Gold Capital
common stock received in conversion of the Gold Capital Preferred Stock,
remains deferred and is anticipated to be recognized as income in the future
as provided under installment sale accounting. If the Gold Capital Merger is
completed, and subject to the then market price of the Globex shares to be
received in the merger by the Company, it is anticipated that the remaining
deferred gain could be realized. For the three month period ended March 31,
1996, $42,222 of the gain was recognized reflecting principal payment received
on the Promissory Note. During the 1997 period, $28,171 in interest income,
primarily related to the Promissory Note, was recorded, compared to interest
income of $39,330 during the 1996 period reflecting the larger average balance
outstanding under the Promissory Note.
General and Administrative expenses decreased approximately $130,593 in the
1997 period compared to 1996, primarily reflecting lower compensation paid
to employees.
PART II
1. No report required.
2. No report required.
3. No report required.
4. No report required.
5. No report required.
6.a No report required.
6.b No report required.
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: May 10, 1997
By /s/ William W. Reid
William W. Reid, President and Chairman of the Board
Dated: May 10, 1997
By /s/ William F. Pass
William F. Pass, Vice President and Chief
Financial Officer
U.S. GOLD CORPORATION
Exhibit 11 to Form 10-Q
For the Three Month Period Ended March 31, 1997 and 1996
Computation of Weighted Average Shares Outstanding Used in Earnings
Per Share Calculations:
1997 1996
(1) (1)
Total shares issued,
beginning of period 13,854,119 13,806,505
Weighted average of treasury
shares acquired and retired (113) 0
Weighted shares outstanding 13,854,006 13,806,505
Weighted average of common
stock equivalents:
Unexercised stock options 0 0
Less: Buy back of common
shares under treasury stock
method using average price. 0 0
13,854,006 13,806,505
(1) Common stock equivalents not considered in either period since
their effect would be antidilutive.
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THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRATED FROM THE 3/31/97 FORM 10-QSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
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