UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______________________ to_________________
Commission File Number 0-9370
____________________
USMX, INC.
(Exact name of registrant as specified in its charter)
____________________
Delaware 84-1076625
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
141 Union Boulevard, Suite 100
Lakewood, Colorado 80228
(Address of principal executive offices) (Zip Code)
(303) 985-4665
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report)
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 (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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class of Common Outstanding at
Stock May 12, 1995
---------------- ---------------
$.001 par value 14,747,019
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
USMX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Amounts in Thousands)
<CAPTION>
March 31, December 31,
1995 1994
--------------------- ---------------
<S> <C> <C>
ASSETS
Cash and equivalents $ 10,365 $ 12,014
Deferred mining and processing costs 2,414 2,344
Federal income taxes receivable 459 274
Other current assets 237 291
--------------------- ---------------
Total current assets 13,475 14,923
--------------------- ---------------
Property, plant & equipment 11,915 11,210
Accumulated depreciation, depletion and amortization (3,431) (3,418)
--------------------- ---------------
Net property, plant and equipment 8,484 7,792
Other assets 1,617 1,475
--------------------- ---------------
Total assets $ 23,576 $ 24,190
===================== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 161 $ 197
Accrued salaries 53 32
Accrued reclamation 441 493
Other accrued liabilities 73 96
--------------------- ---------------
Total current liabilities 728 818
Estimated reclamation liability 361 361
Stockholders' equity
Common stock 15 15
Additional paid-in capital 15,792 15,844
Retained earnings 6,680 7,152
--------------------- ---------------
Total liabilities and stockholders' equity $ 23,576 $ 24,190
===================== ===============
<FN>
The accompanying notes are part of the condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
USMX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in Thousands, Except Per Share Amounts)
<CAPTION>
Three Months Ended
March 31,
---------------------------------------------
1995 1994
------------------- ------------------
<S> <C> <C>
Sales $ 386 $ 1,872
Cost applicable to sales 453 1,749
------------------- ------------------
Gross profit (67) 123
General and administrative expenses 560 509
Prospecting costs 246 166
Mineral property abandonments 28 -
------------------- ------------------
Loss from operations (901) (552)
Royalty income 180 180
Other income, net 187 103
------------------- ------------------
Loss before income tax provision (534) (269)
Income tax provision (61) 10
------------------- ------------------
Net loss $ (473) $ (279)
------------------- ------------------
Loss per common share $ (0 03) $ (0 02)
=================== ==================
Weighted average common and common equivalent
shares outstanding 14,820 14,857
=================== ==================
<FN>
The accompanying notes are part of the condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
USMX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in Thousands)
<CAPTION>
Three Months Ended
March 31,
-------------------------------------------
1995 1994
----------------- -------------------
<S> <C> <C>
Net cash used in operations $ (856) $ (588)
----------------- -------------------
Net cash provided by (used in) investing activities:
Capital additions and property acquisitions (724) (870)
Proceeds from sale of property plant and equipment (17) -
Other - (37)
----------------- -------------------
(741) (907)
----------------- -------------------
Net cash provided by (used in) financing activities:
Repurchase of common stock (52) (3,200)
Proceeds from issuance of common stock - 24
----------------- -------------------
(52) (3,176)
----------------- -------------------
Increase (decrease) in cash and equivalents (1,649) (4,671)
Cash and cash equivalents at beginning of year 12,014 15,720
----------------- -------------------
Cash and cash equivalents at end of period $ 10,365 $ 11,049
================= ===================
Three Months Ended
Supplemental Disclosures of Cash Flow Information March 31,
-------------------------------------------
1995 1994
----------------- -------------------
Cash paid during the period for:
Interest $ - $ -
Income taxes $ 123 $ -
<FN>
The accompanying notes are part of the condensed consolidated financial statements.
</TABLE>
<PAGE>
USMX, INC. AND SUBSIDIARIES
- ---------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------
Note 1 - General
The accompanying interim condensed consolidated financial
statements have been prepared in accordance with the instructions
for Form 10-Q. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary
for a fair statement of the results for the interim periods
presented have been included. Operating results for the three month
period ended March 31, 1995 are not necessarily indicative of the
results which may be expected for the year ending December 31, 1995.
These interim condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Form 10-K for the year ended
December 31, 1994. Certain 1994 amounts in the accompanying
financial statements have been reclassified to conform to
classifications used in 1995.
Note 2 - Deferred mining and processing costs
Deferred mining and processing costs in the accompanying
consolidated balance sheets represent mining, crushing, pad loading
and processing costs associated with ounces in various stages of
production as follows:
<TABLE>
<CAPTION>
Ounces of Gold at
------------------------------------
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Gold bullion and dore 2,200 1,200
Gold in process 7,100 9,100
------------ ------------
Total estimated ounces in process 9,300 10,300
============ ============
</TABLE>
Note 3 - Income Taxes
The income tax provisions were computed using the expected
annual effective income tax rate. The effective income tax rate
varies from the statutory rate primarily due to differences in tax
and book treatment of statutory depletion on mining properties.
Note 4 - Commitments and Contingencies
Reclamation Surety
- ------------------
Pursuant to the mining reclamation and bonding regulations of
the State of Utah, Department of Natural Resources and the Bureau of
Land Management, the Company has provided reclamation surety for the
Goldstrike Mine in the amount of $2,251,000. The required surety is
in the form of a certificate of deposit in the amount of $1,000,000
and a letter of credit in the amount of $1,251,000. The certificate
of deposit is reflected in Other assets in the accompanying
condensed consolidated statements of financial position.
<PAGE>
USMX, INC AND SUBSIDIARIES
- --------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------
Hedging
- -------
As part of its gold hedging program, the Company has entered
into agreements with several major financial institutions to deliver
gold. Realization under these agreements is dependent upon the
ability of the counterparties to perform in accordance with the
terms of the agreements. As of March 31, 1995, the Company had
entered into forward sales contracts for 1,000 ounces of gold for
delivery on April 13, 1995 at an average selling price of $390 per
ounce. Delivery under these spot deferred contracts can be deferred
at the Company's option from twelve months to thirty months
depending on the individual contract. The aggregate unrealized
excess of the spot gold price of $392 per ounce as of March 31,
1995, over the net market value of the Company's forward sales
contracts, amounted to approximately $2,000.
Further, the Company had written short-term call options
expiring April, 1995, which, if exercised, would become spot
deferred contracts with delivery deferred as previously described.
At March 31, 1995, the Company had sold 1,000 ounces of gold call
option contracts at a strike price of $415 per ounce expiring April
26, 1995.
All gold sales have been made to one unaffiliated customer.
The Company does not believe the loss of this customer would affect
its business.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Financial Condition
- -------------------
Liquidity
- ---------
The Company remains in strong financial condition with working
capital at March 31, 1995 of $12,747,000. Cash and cash equivalents
decreased during the first three months of 1995 by $1,649,000
primarily as a result of cash invested in property, plant and
equipment (principally exploration of undeveloped mineral
properties) of $741,000 and net cash used in operating activities of
$856,000. Net cash used in operations during the first three months
of 1995 is the result of reduced gold sales during the period. The
Company sold 1,000 ounces of gold for $386,000 during the first
quarter of 1995. At March 31, 1995 the Company had on hand 2,200
ounces of gold bullion and dore valued at approximately $860,000.
Based on the current status of the Company's properties
and development plans, management believes that cash and cash
equivalents on hand, refined gold available for sale, anticipated
cash flow from operations and the unused portion of its bank line of
credit should be adequate to fund internally exploration, development
and currently scheduled capital requirements for the next 12 months.
The Company is engaged in feasibility studies with respect to three
mining properties. Each of these properties would require a
significant amount of capital to develop. In addition, the Company
engages in on-going active evaluations of various opportunities in
the mining business which may require significant amounts of
capital. Accordingly, it may be necessary for the Company to use
its existing internal resources, as well as external sources of
capital.
Capital Investment
- ------------------
During the first three months of 1995 the Company invested
$351,000 in exploration activities primarily on its Mexico
properties. In addition the Company invested approximately $395,000
to further develop the Illinois Creek, Alaska property, the Cala
Abajo, Puerto Rico property and the Thunder Mountain, Idaho
property.
Over the next 12 months, the Company plans to invest
approximately $4.0 million in exploration and development
activities, including approximately $1,000,000 in Mexico, $2,000,000
at Illinois Creek, Alaska, $500,000 at Thunder Mountain, Idaho and
$300,000 at Cala Abajo, Puerto Rico.
Results of Operations
- ---------------------
The Company sustained a net loss for the first quarter of 1995
of $473,000, compared with a net loss of $279,000 for the same
period of 1994.
<PAGE>
Fluctuations in the Company's results of operations arise
primarily from four factors: (1) changes in the volume of gold sold
and the selling price of gold, (2) changes in the cost of gold sold,
(3) the cost of mineral properties abandoned during any given period
and (4) asset dispositions.
Change in the Volume of Gold Sold and Selling Price of Gold
- -----------------------------------------------------------
The following table analyzes the variance in gold sales revenue
for the quarter ended March 31, 1995 and 1994:
<TABLE>
<CAPTION>
---------------------------------------------------------------------
Revenue Variance Analysis
Quarter Ended March 31, 1995 1994
---------------------------------------------------------------------
<S> <C> <C>
Ounces of gold sold 1,000 5,000
Average price realized per ounce $386 $374
Variances
Lower volume ($1,498,000) ($649,000)
Higher prices 12,000 205,000
---------------------------------------------------------------------
Decrease in gold sales revenue over the
comparable period of the preceding year ($1,486,000) ($444,000)
---------------------------------------------------------------------
</TABLE>
The 1995 increase in the average price realized per ounce is
attributable to the general increase in the price of gold over the
last year. The decrease in ounces sold is the result of reduced
production from the Company's Goldstrike Mine and management's
decision not to sell all available gold production. At March 31,
1995 the Company had on hand 2,200 ounces of gold bullion and dore
valued at approximately $860,000.
Change in Cost Applicable to Sales
- ----------------------------------
Cost applicable to sales was $453,000 or approximately
$453 per ounce, net of silver credits, for the first quarter of
1995, compared to $1,749,000 or $349 per ounce for the same period
of 1994. The fluctuation in the cost of gold sold is a result of
the change from period to period in the mix of production from the
Company's mines and the change in production throughout the life of
each mine as illustrated in the following table.
<PAGE>
<TABLE>
<CAPTION>
Quarter Ended March 31, 1995 1994
- -------------------------------------------------------------- ------------------------------
Goldstrike Mine
------------------------------
<S> <C> <C>
Ounces of gold produced 2,168 8,171
Ounces of gold sold 1,000 5,000
Per ounce statistics:
Cash production costs incurred $ 186 $ 297
Depreciation, depletion, amortization and reclamation
accruals 1 49
- ------------------------------------------------------------------------------------------------
Production cost per ounce produced $ 187 $ 346
================================================================================================
Gold sales revenue $ 386 $ 374
- ------------------------------------------------------------------------------------------------
Production cost per ounce sold 405 566
Change in inventories (78) (261)
Mining Taxes 3 5
Production royalties 124 39
- ------------------------------------------------------------------------------------------------
Costs applicable to sales 453 349
- ------------------------------------------------------------------------------------------------
Gross profit $ (68) $ 25
================================================================================================
</TABLE>
Mineral Property Abandonments
- -----------------------------
Property abandonments, charged to operations, amounted to
$28,000 for the first three months of 1995. No property
abandonments were charged to operations for the same period of 1994.
Asset Dispositions
- ------------------
During the first three months of 1995, a $3,000 gain was
recorded as the result of asset disposals. For the same period of
1994, no gains or losses were recorded.
Other Factors
- -------------
As the result of high precipitation during the first three
months of 1995, gold production was adversely affected at the
Company's Goldstrike Mine. Management expects the lost production
to be recovered during the remaining life of the mine.
<PAGE>
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
March 31, 1995.
<PAGE>
SIGNATURES
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.
USMX, INC.
(Registrant)
Date: May 15, 1995 By: /s/ Donald E. Nilson
------------ -----------------------------------------
Donald E. Nilson, Vice President - Finance,
Secretary, Chief Financial Officer
Date: May 15, 1995 By: /s/ Daniel J. Stewart
------------ ------------------------------------------
Daniel J. Stewart, Controller, (Principal
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 10,365
<SECURITIES> 0
<RECEIVABLES> 459
<ALLOWANCES> 0
<INVENTORY> 2,414
<CURRENT-ASSETS> 13,475
<PP&E> 11,915
<DEPRECIATION> 3,431
<TOTAL-ASSETS> 23,576
<CURRENT-LIABILITIES> 728
<BONDS> 0
<COMMON> 15
0
0
<OTHER-SE> 22,472
<TOTAL-LIABILITY-AND-EQUITY> 23,576
<SALES> 386
<TOTAL-REVENUES> 753
<CGS> 327
<TOTAL-COSTS> 453
<OTHER-EXPENSES> 834
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (534)
<INCOME-TAX> (61)
<INCOME-CONTINUING> (473)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (473)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> 0
</TABLE>
