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, 2000
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
2201 Kipling Street, Suite 100
Lakewood, Colorado 80215-1545
(Address of principal executive offices)
(303) 238-1438
(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 1, 2000
Common Stock, $0.10 par value 13,974,040
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2000 and 1999
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
Project payments $135,000 $135,000 $270,000 $370,000
Interest income 19 25 39 51
Gain (loss) on sale of assets - 486 - (6,606)
Total revenues 135,019 135,511 270,039 363,445
Other costs and expenses:
General and administrative 158,844 151,302 319,675 355,437
Consulting fees, related Parties - - - 10,000
Interest 971 1,881 1,984 3,679
Depreciation 3,841 4,211 7,709 8,448
Total expense 163,656 157,394 329,368 377,564
Loss before income taxes (28,637) (21,883) (59,329) (14,119)
Provision for income taxes - - - -
Net (loss) $(28,637) $(21,883) $(59,329) $(14,119)
Basic and diluted per share data:
Basic $(0.00) $(0.00) $(0.00) $(0.00)
Diluted $(0.00) $(0.00) $(0.00) $(0.00)
Weighted average shares
outstanding 13,974,040 13,927,469 13,966,416 13,927,469
U.S. GOLD CORPORATION
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Six Months Ended June 30, 2000 and 1999
(Unaudited)
June 30, 2000 June 30, 1999
Net loss $(59,329) $(14,119)
Comprehensive item-
unrealized gain (loss) on
securities available for sale - 26,690
Comprehensive income (loss) $(59,329) $12,571
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
CONSOLIDATED BALANCE SHEET
June 30, 2000
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $41,431
Project payments receivable 495,000
Total current assets 536,431
Project payments receivable 270,000
Investment in Tonkin Springs LLC 2,262,578
Other assets 55,296
TOTAL ASSETS $3,124,305
LIABILITIES, DEFERRED CREDIT & SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $4,559
Installment purchase contracts 11,235
Related party payables 216,613
232,407
Installment purchase contracts, long-term 27,216
Deferred credit, project payments 810,000
Reserve for reclamation 640,000
Total liabilities and deferred credit 1,709,623
Shareholders' equity:
Common stock, $.10 par value, 18,000,000
shares authorized; 13,974,040 shares
issued and outstanding 1,397,404
Additional paid-in capital 31,972,245
Accumulated deficit (31,954,967)
Total shareholders' equity 1,414,682
TOTAL LIABILITIES, DEFERRED CREDIT
& SHAREHOLDERS' EQUITY $3,124,305
The accompanying notes are an integral part of these consolidated financial
statements.
U.S. GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2000 and 1999
(Unaudited)
June 30, 2000 June 30, 1999
Cash flows from operating activities:
Interest received $39 $51
Project Payments 270,000 370,000
Cash paid to suppliers and employees (271,853) (387,298)
Cash provided by (used in) operating activities (1,814) (17,247)
Cash flows from investing activities:
Sale of marketable securities and assets - 21,720
Capital expenditures - (1,193)
Cash provided by (used in) investing activities - 20,527
Cash flows from financing activities:
Payments on installment purchase contracts (5,235) (4,403)
Cash used in financing activities (5,235) (4,403)
Decrease in cash and cash equivalents (7,049) (1,123)
Cash and cash equivalents, beginning of period 48,480 1,954
Cash and cash equivalents, end of period $41,431 $831
Reconciliation of net loss to cash used in
operating activities:
Net loss $(59,329) $(14,119)
Items not requiring (providing) cash:
Loss on sale of assets - 7,778
Depreciation 7,709 8,448
Increase (decrease) in current liabilities
related to operations 32,365 (11,390)
Decrease (increase) in other assets, long term 17,441 (7,964)
Cash provided used in operating activities $(1,814) $(17,247)
See accompanying notes to consolidated financial statements.
U.S. GOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation: The interim financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's Form 10-KSB as of December 31,
1999. Results of operations for the interim period are not indicative of annual
results.
Basis of Consolidation: The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries, as well as the
accounts of the wholly-owned Tonkin Springs Venture Limited Partnership
("TSVLP"). Significant intercompany accounts and transactions have been
eliminated.
Per share amounts: Statement of Financial Accounting Standards No. 128
provides for the calculation of "Basic" and "Diluted" earnings per share. Basic
earnings per share includes no dilution and is computed by dividing income
available to common shareholders by the weighted-average number of shares
outstanding during the period (13,974,040 and 13,966,416, respectively for
the three and six month periods ended June 30, 2000 and 13,927,469 for the
corresponding periods of 1999). Diluted earnings per share reflect the
potential dilution of securities that could share in the earnings of the
Company, similar to fully diluted earnings per share. As of June 30, 2000 and
1999 options are not considered in the computation of diluted earnings per
share as their inclusion would be antidilutive.
Recent Pronouncements: The FASB recently issued Interpretation No. 44,
"Accounting for Certain Transactions involving Stock Compensation." This
interpretation effects applications under APB Opinion No. 25. This
interpretation is effective for interim statements beginning after July 1, 2000
and requires variable option plan accounting for plans where certain option
agreements were terminated and new option agreements were entered into
by a company. Under variable option plan accounting, outstanding options
to acquire shares must be marked-to-market with the cumulative net
adjustment included in the statement of operations and with the net
cumulative adjustment balance reflected in paid in capital within shareholders'
equity. This accounting is required until the options in question are either
exercised, terminated or expire. The Company intends to adopt this
interpretation effective with interim statements as of September 30, 2000.
However, if this interpretation had been applied as of June 30, 2000, the
Company would have at that date recognized additional compensation
expense of approximately $147,000 with the resultant net loss for the six
months then ended increased to $(206,329) or $(.01) per share.
The FASB also recently issued Statement No. 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of Effective Date of FASB
Statement No. 133." The Statement defers for one year the effective date of
FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities." The rule now will apply to all fiscal quarters of all fiscal years
beginning after June 15, 2000. In June 1998, the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in years beginning after June 15, 1999. The
Statement permits early adoption as of the beginning of any fiscal quarter
after its issuance. The Statement will require the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. The Company has determined that implementation
of SFAS No. 133 will have no effect on the earnings and financial position of
the Company.
Adjustments: 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.
2. Tonkin Springs Project
From December 31, 1993 until February 26, 1999, TSVLP, a partnership
owned by subsidiaries of the Company, held a 40 percent undivided interest
in the Tonkin Springs Properties (the "Properties") subject to a mining joint
venture, the Tonkin Springs Project Joint Venture as amended (the "1993
Agreement"), with Gold Capital Corporation ("Gold Capital") being the holder
of 60 percent undivided interest and project manager. Effective February 26,
1999 (the "Effective Date") TSVLP and Gold Capital terminated the 1993
Agreement and each retained their respective 40 percent and 60 percent
undivided interests in the Properties. Gold Capital then immediately sold its
60 percent undivided interest in the Properties to Tonkin Springs Holdings
Inc., a Colorado corporation ("TSHI") which is owned by subsidiaries of
Sudbury Contact Mines Limited, an Ontario, Canada corporation
("Sudbury")(SUD:TSE), which is itself a subsidiary of Agnico-Eagle Mines
Limited, an Ontario, Canada corporation ("Agnico-Eagle") (AME:NYSE). TSHI
then immediately contributed its 60 percent undivided interest in the
Properties into a new limited liability company, Tonkin Springs LLC ("TSLLC")
in exchange for 60 percent of the equity membership interest of TSLLC, and
TSVLP contributed its 40 percent undivided interest in the Properties into
TSLLC in exchange for 40 percent of the equity membership interest of
TSLLC. The deemed amount of the Initial Contribution of TSVLP to TSLLC
is $2 million and for TSHI the Initial Contribution to TSLLC is $3 million. The
objective of TSLLC is the exploration, evaluation and, if justified, the
development and mining of mineralization in the Properties.
Under the Members' Agreement and the Operating Agreement of the TSLLC,
TSHI is required to fund all costs related to the Properties, including all
holding, administrative, operational and exploration costs, until TSHI has first
expended $4 million on Exploration (exploration related costs only) of the
Properties (the "Cut-Off Date"). All expenditures funded by TSHI prior to the
Cut-Off Date, including Exploration, holding, administrative or other
operational costs of the Properties, shall be added to TSHI's Recoupable
Amount which has as its opening balance the sum of $5,625,000, which was
intended to represent approximately one-half of the recoupment account
balance of Gold Capital under the 1993 Agreement as of the Effective Date.
TSHI has reported that through June 30, 2000 the balance of Exploration
expenditures on the Properties is approximately $931,500 and that the
balance of the Recoupable Amount as of that date is approximately
$8,076,187. If TSHI should withdraw from the TSLLC prior to Cut-Off, TSHI
shall have no further right, title or interest in the Properties of TSLLC and
its ownership interest shall be deemed transferred to TSVLP. In addition, TSHI
shall remain obligated to TSVLP: (i) to fund the remaining balance of the
adopted Program and Budget in effect upon termination, (ii) to complete its
Minimum Work Commitment for Exploration of the Properties in the amount
of $2 million, or pay to TSVLP the deficiency, (iii) to pay any unpaid Monthly
Minimum Payments to TSVLP (as described further below) that are due and
payable, and (iv) to fund and satisfy all unfunded liabilities to third parties
arising out of operations conducted subsequent to the Effective Date but prior
to the date of TSHI's withdrawal or deemed withdrawal. TSVLP and TSHI
(the "Members") have designated Tonkin Springs Management Co., a Colorado
corporation ("TSMC", and an affiliate of TSHI) as the initial Manager of the
Properties with overall management responsibilities for operations.
At the Effective Date, TSHI paid to TSVLP $190,000, and commencing March
1, 1999 TSHI began making additional payments to TSVLP in the amount of
$45,000 per month through December 1, 2001 (collectively "Minimum
Payments to TSVLP"). One half of Minimum Payments to TSVLP are added
to TSHI's Recoupable Amount as discussed further below (and included in the
June 30, 2000 balance as reported above). As of June 30, 2000, there
remains recorded a $765,000 receivable due from the TSLLC reflecting
remaining Minimum Payments to TSVLP, of which $495,000 is classified as
a current asset, offset by a $810,000 deferred credit, with the effect that
the entire receivable is offset by a deferred credit.
The Operating Agreement of the TSLLC defines Commencement of
Commercial Production ("CCP"). After CCP 60 percent of positive cash flow
from the operations of the Properties ("Cash Flow"), if any, shall be
distributed to TSHI until TSHI has recovered its Recoupment Amount, and the
remaining 40 percent of Cash Flow shall be distributed to the Members based
upon their respective ownership interest on a calendar quarter basis. After
TSHI has recovered the Recoupment Amount, 100 percent of Cash Flow shall be
distributed to the Members in proportion to the Member's ownership interest.
Therefore, initially during the period in which TSHI is thus receiving
preferential payments, TSVLP shall receive 16 percent of Cash Flow, if any,
from operations. Cash Flow otherwise due TSVLP shall first be applied to
reduce any Elected Loans outstanding from TSHI, as discussed further below.
On the last day in the calendar month in which CCP is achieved, TSHI shall
pay TSVLP an additional amount to be calculated by multiplying $15,000
times the number of months from the Effective Date through the month in
which CCP is achieved (the "Lump-Sum Payment").
After the Cut-Off Date, TSHI is required to exercise reasonable efforts to
attempt to obtain third party project financing for any development of the
Properties requiring funding of more than $20 million. After the Cut-Off
Date, TSVLP is required to fund its 40 percent share of all costs of the
Properties or be subject to dilution under a formula. Either party may elect
to contribute a lesser amount or none towards its share of an adopted
program and budget. However, as long as TSHI owns at least 50 percent
interest in TSLLC, TSHI is obligated to loan TSVLP its share of funding of an
adopted program and budget after the Cut-Off Date under one-year term loans
(the "Elected Loan") with an interest rate of LIBOR plus 2 percent. If,
however, TSVLP does not repay an Elected Loan when due, TSHI shall have
no further obligation to make additional Elected Loans to TSVLP and the
amounts of defaulted Elected Loans and accrued interest thereon shall be
incorporated into the computation of dilution of TSVLP's working interest
under a formula. If the ownership interest of any Member falls to 10
percent or less as a result of the dilution formula, then such Member shall be
deemed to have withdrawn from the TSLLC and to have automatically
relinquished and transferred its interest to the other Member and upon such
relinquishment the withdrawing Member shall be granted an overriding 2
percent net smelter royalty (the "NSR") on products subsequently extracted,
removed and sold from the Properties.
The Company has guaranteed TSVLP's obligations under the TSLLC and
TSVLP has given a security interest (consisting of its ownership interest
arising under the TSLLC) in favor of TSHI to secure its performance under the
TSLLC. Sudbury has guaranteed certain obligations of TSHI. The Company
recognized neither a gain nor a loss on the termination of the 1993
Agreement or with the contribution of its 40 percent undivided interest in the
Properties to the TSLLC.
3. Condensed Financial Information of Tonkin Springs LLC
As noted in Footnote 2 above, effective February 26, 1999, the Company's
interest in the Tonkin Springs Properties were contributed into the Tonkin
Springs LLC with TSMC as manager. The following is the condensed
unaudited balance sheet of Tonkin Springs LLC as of June 30, 2000, and a
condensed statement of operations for the six months then ended. All costs
associated with the Properties have been funded by TSHI.
STATEMENT OF OPERATIONS Six Months Ended
June 30, 2000
Interest income $30,063
Exploration expense 298,500
Property holding costs, net 414,802
Depreciation 23,173
736,475
Net loss $(706,412)
BALANCE SHEET June 30, 2000
Assets:
Cash $65,339
Prepaid claim fees 57,804
123,143
Property, plant, equipment, net 5,069,520
Restricted time deposit for reclamation bond 1,347,224
Total assets $6,539,887
Liabilities, Reserves and Members' Equity:
Current liabilities $35,360
Reserve for reclamation 1,469,000
1,504,360
Members' Equity-
TSHI 3,035,527
TSVLP 2,000,000
Total members' equity 5,035,527
Total liabilities, reserves and members' equity $6,539,887
Note A. TSVLP and TSHI are jointly responsible for reclamation of
disturbances of the Properties. The current estimate of reclamation costs, on
a 100 percent basis, totals approximately $1.47 million of which TSVLP and
the Company reflects $640,000 on its balance sheet related to its 40 percent
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, tentatively set at $1.3
million, is the responsibility of TSHI under the terms of the Tonkin Springs
LLC prior to Cut-Off. Tonkin Springs LLC has a cash bond posted in the initial
amount of $1.3 million with the required governmental agencies secured by
a restricted cash time deposit for a total balance of reclamation deposits of
$1,347,224.
4. Loan Settlement Agreement with FABC
On February 21, 1992, the Company, among other related things, entered into
a Loan Settlement Agreement with its senior secured lender, The French
American Banking Corporation ("FABC"). The Company discharged its debt
to FABC and terminated all prior security interests related thereto. As part of
the consideration to FABC under the Loan Settlement Agreement, the
Company entered into an agreement between Tonkin Springs Gold Mining
Company, a wholly-owned subsidiary of the Company ("TSGMC") and FABC
entitled "Agreement To Pay Distributions," which requires TSGMC to pay a
limited portion of certain distributions from TSVLP through TSGMC to FABC.
The Company has complete control of such distributions, if any, from TSVLP
to TSGMC. Under the terms of the Agreement To Pay Distributions, TSGMC
is required to pay to FABC (i) the first $30,000 in cash or value of asset
distributions, as defined in such agreement, received from TSVLP, plus (ii) an
amount equal to 50% of such retained distributions in cash or value of asset
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 or upon disposition by TSGMC of
its interest in TSVLP.
5. Related Party Transactions
Effective November 15, 1997 through February, 1999, the Company and
Moyes & Newby & Co, ("Moyes Newby") entered into a month-to-month
arrangement whereby Moyes Newby provided the Company general corporate
and financial advisory services for a retainer of $5,000/month for a total paid
or accrued for 1999 of $10,000. Douglas J. Newby, a director of the
Company, is managing partner of Moyes Newby.
Commencing July 1, 1998, the three executive officers of the Company
voluntarily deferred a portion of their individual salaries in order to conserve
working capital of the Company. As of June 30, 2000, the total amount of
such voluntary deferral was $201,613. In addition, certain of the director
fees accrued for 1999 and the first six months of 2000 in the amount of
$15,000 remain unpaid as of June 30, 2000. All of these amounts are
reflected as liabilities of the Company as of June 30, 2000.
Effective July 1, 2000, the Company and Gold Resource Corporation ("GRC"),
a private Colorado corporation, entered into a management contract whereby
the Company will provide general management of GRC business activities in
exchange for common shares of GRC. The business objective of GRC is to
acquire and develop mining properties in Mexico. GRC will be responsible for
all funding needed and anticipates raising funds through the sale of GRC stock
and debt financing. Under the management contract, the Company will
receive approximately 166,667 shares of GRC per quarter over the 18 month
duration of the contract for an aggregate 1,000,000 shares of GRC common
stock with stated value under the agreement of $.50/share. In addition, the
Company received 280,000 shares in GRC with the execution of the
management contract as consideration for past efforts directed at evaluating
opportunities in Mexico. The management contract may be terminated by
either party for cause with 30 days prior written notice. The Company
anticipates that performance under the contract will involve no more than
approximatley 50 percent of the available time of its staff. The aggregate
shares of GRC to be received by the Company under this contract, 1,280,000,
initially represents approximately 39 percent of the current capitalization of
GRC but that percentage is anticipated to be temporary in nature since it is
anticipated that GRC will issue additional shares for funding or for the
acquisition of property interests. In addition, the shares of GRC currently
have no readily determinable fair value since the shares are not publicly
traded. Therefore, the Company anticipates accounting for its investment in
GRC under the cost method of accounting. William W. Reid, president, chief
executive officer and chairman of the Board of Directors of the Company and
David C. Reid, vice president and director of the Company are currently the
controlling shareholders of GRC. Through this arrangement the Company has
the opportunity to participate in potential opportunities in Mexico with no
additional expenditures, other than those related to the current level of
corporate overhead expenditures.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Changes in Financial Condition
The principal property of U.S. Gold Corporation (the "Company") is it's 40
percent interest in Tonkin Springs (the "Properties"). The Company holds it's
interest in the Properties through Tonkin Springs Venture Limited Partnership
("TSVLP"), a partnership owned by subsidiaries of the Company.
Until February 26, 1999, the Properties were subject to the Tonkin Springs
Project Joint Venture as amended (the "1993 Agreement") with Gold Capital
Corporation ("Gold Capital") owner of 60 percent, project manager and
responsible for all funding. Effective February 26, 1999 (the "Effective Date")
TSVLP and Gold Capital terminated the 1993 Agreement and each retained
their respective 40% and 60% undivided interests in the Properties.
Gold Capital then immediately sold it's 60% undivided interest in the
Properties to Tonkin Springs Holdings Inc., a Colorado corporation ("TSHI")
which is owned by subsidiaries of Sudbury Contact Mines Limited, an Ontario,
Canada corporation ("Sudbury")(SUD:TSE), which is itself a subsidiary of
Agnico-Eagle Mines Limited, an Ontario, Canada corporation ("Agnico-Eagle")
(NYSE:AME).
TSVLP and TSHI (the "Members") then immediately contributed their
respective undivided interests in the Properties into a new limited liability
company, Tonkin Springs LLC ("TSLLC") in exchange for 40% and 60%,
respectively, of the equity membership interest of TSLLC. TSHI is manager
of TSLLC.
Liquidity and Capital Resources
At the Effective Date, TSHI paid to TSVLP $190,000, and commencing March
1, 1999 TSHI began making additional payments to TSVLP in the amount of
$45,000 per month through December 1, 2001 (collectively "Minimum
Payments to TSVLP"). During the six months ended June 30, 2000 and 1999,
the Company received $225,000 and $370,000, respectively, in Minimum
Payments to TSVLP which are reflected in revenue including for the 2000
period the January 2000 payment of $45,000 which was received in
December, 1999. One half of Minimum Payments to TSVLP will be added to
TSHI's Recoupable Amount as discussed further below. As of June 30, 2000,
there remains recorded a $765,000 receivable due from the TSLLC reflecting
remaining Minimum Payments to TSVLP of which $495,000 is classified as a
current asset offset by a $810,000 deferred credit, with the effect that the
entire receivable is offset by a deferred credit.
During the six months ended June 30, 1999, the Company sold 200,000
shares of Globex for aggregate $20,970 recognizing a gain on the sale of
$1,172.
The Operating Agreement of the TSLLC defines Commencement of
Commercial Production ("CCP"). On the last day in the calendar month in
which CCP is achieved, TSHI shall pay TSVLP an additional amount to be
calculated by multiplying $15,000 times the number of months from the
Effective Date through the month in which CCP is achieved (the "Lump-Sum
Payment").
As of June 30, 2000, the Company had working capital of $304,024 made up
of current assets of $536,431 and current liabilities of $232,407. During the
next twelve months the Company anticipates receipt of $495,000 in Minimum
Payments to TSVLP from the TSLLC. The Company may also issue equity in
public or private transactions to raise additional working capital. These items
are the primary source of working capital presently anticipated during 2000.
Net cash provided by (used in) operations decreased to $(1,814) for the six
months ended June 30, 2000 from $(17,247) for the corresponding period of
1999, primarily reflecting $370,000 in Minimum Payments to TSVLP during
the 1999 period compared to $270,000 received during the 2000 period, as
well as lower cash paid to suppliers and employees. Cash flow from investing
activities for the 1999 period was $20,527 in 1999 compared to none during
the 2000 period reflecting the sale of marketable securities in the 1999 period.
Cash flows from financing activities decreased from $(5,235) for the 2000
period to ($4,403) for the corresponding period of 1999 reflecting payments
on installment purchase contracts.
Results of Operations - 2000 Compared to 1999
For the six month period ended June 30, 2000, the Company recorded a net
loss of $59,329 ($0.00 per share) compared to a net loss of $14,119 in the
corresponding period of 1999. During the 2000 period, $270,000 in Minimum
Payments to TSVLP were recognized compared to $370,000 in the
corresponding period of 1999. General and Administrative expenses
decreased approximately $35,762 in the 2000 period compared to 1999,
primarily reflecting lower legal, financial consulting and office rental costs.
For the three month period ended June 30, 2000, the Company recorded a
net loss of $28,637 compared to a net loss of $21,883 in the corresponding
period of 1999. During both the 2000 and 1999 periods, $135,000 in
Minimum Payments to TSVLP were recognized. General and Administrative
expenses increased approximately $7,542 in the 2000 period compared to
1999, primarily reflecting travel expenses related to evaluation of mining
opportunities in Mexico.
PART II
1. No report required.
2. No report required.
3. No report required.
4. No report required.
5. No report required.
* 6.a Management Agreement dated effective July 1, 2000 between U.S. Gold
Corporation and Gold Resource Corporation.
6.b No report required.
* Filed herewith.
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
U.S. GOLD CORPORATION
Dated: August 1, 2000 By /s/ William W. Reid
William W. Reid, President and Chairman
of the Board
Dated: August 1, 2000 By /s/ William F. Pass
William F. Pass, Vice President and Chief
Financial Officer
