SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Amendment Number 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 SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-10104
LA TEKO RESOURCES LTD.
(Exact name of Registrant as specified in its charter)
British Columbia, Canada 87-0483319
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 East 2100 South, #204
Salt Lake City, Utah 84115
(Address of principal executive offices) (Zip Code)
(801) 466-1402
(Registrant's telephone number, including area code)
N/A
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
-----
As of August 9, 1996, the registrant had 23,416,258 shares of its common stock
issued and outstanding.
LA TEKO RESOURCES LTD.
Part I - Financial Information
ITEM 1. FINANCIAL STATEMENTS
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's annual report on Form 10-
K for the year ended December 31, 1995. The accompanying financial statements
have not been examined by independent accountants in accordance with generally
accepted auditing standards, but in the opinion of management such financial
statements include all adjustments (consisting only of normal recurring
adjustments) necessary to summarize fairly the Company's financial position and
results of operations.
LA TEKO RESOURCES LTD.
Condensed Consolidated Balance Sheets
ASSETS
June 30, December 31,
<TABLE> 1996 1995
(Unaudited) (Audited)
<S> <C> <C>
Current Assets
Cash and short-term deposits $ 2,142,038 $ 2,972,278
Receivables 53,084 124,876
Inventories 6,295 6,295
Pre-paid expenses 89,889 176,541
----------- -----------
Total current assets 2,291,306 3,279,990
Mineral properties and deferred
costs 10,292,061 10,155,234
Plant and equipment 209,503 204,589
Investments 231,069 231,069
----------- -----------
$13,023,939 $13,870,882
=========== ===========
LIABILITIES
Current Liabilities
Accounts payable and accrued
expenses $ 118,999 $ 240,441
Current portion of long-term debt 868,000 712,296
----------- -----------
Total current liabilities 986,999 952,737
Long-term debt 15,000 360,289
----------- -----------
Total liabilities 1,001,999 1,313,026
----------- -----------
SHAREHOLDERS' EQUITY
Common capital stock, no par
value; authorized 100,000,000
shares; issued and outstanding:
23,416,258 and 23,318,478 18,029,617 17,807,169
Accumulated deficit (6,007,677) (5,249,313)
----------- -----------
12,021,940 12,557,856
----------- -----------
$13,023,939 $13,870,882
=========== ===========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these consolidated financial statements.
LA TEKO RESOURCES LTD.
Condensed Consolidated Statements of Operations
(Unaudited)
For the Three-Month Periods
Ended June 30,
<TABLE> 1996 1995
<S> <C> <C>
Sales of gold and silver $ - $ -
----------- -----------
Expenses
Operating and mine maintenance
costs 75,132 47,207
New prospect evaluation 6,855 -
General and administrative
expenses 344,839 177,279
Depreciation 15,460 11,106
Royalty and lease expenses 37,500 71,726
----------- -----------
479,786 307,318
----------- -----------
Income (loss) from operations ( 479,786) ( 307,318)
Other Income (Expense)
Gain from disposition of mineral
property - 404,953
Gain on sale of equipment 3,532 -
Interest income/expense (net) 21,446 ( 27,616)
----------- -----------
Net income (loss) before income
taxes ( 454,808) ( 70,019)
Income taxes - -
Net income (loss) $( 454,808) $ 70,019
----------- -----------
Income (loss) per share $( .019) $( .003)
=========== ===========
Weighted average shares
outstanding 23,372,240 23,179,082
=========== ===========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these consolidated financial statements.
LA TEKO RESOURCES LTD.
Consolidated Statement of Changes in Shareholders' Equity
For the Years Ended 1994, 1995 and the
Six-Month Period Ended June 30, 1996
(Expressed in U.S. Dollars)
Common Stock Accumulated
Shares Amount Deficit Total
<TABLE>
<S> <C> <C> <C> <C>
Balance December 31, 1993 34,933,849 $20,566,202 $(3,514,645) $17,051,557
---------- ----------- ----------- -----------
1994
Common stock issued for:
Private placement
stock sales 450,000 738,000 - 738,000
Public offering
stock sales 379,480 952,500 - 952,500
Exercise of options 75,000 42,164 - 41,164
Exercise of warrants 444,480 841,600 - 841,600
Exercise of warrants
issued for services 5,000 12,500 - 12,500
Less public offering and
private placement costs - ( 143,987) - ( 143,987)
Compensatory stock options - 43,500 - 43,500
Net income (loss) - - (1,369,811) (1,369,811)
---------- ----------- ----------- -----------
1,353,960 2,486,277 (1,369,811) 1,116,466
---------- ----------- ----------- -----------
Balance,December 31,1994 36,287,809 23,052,479 (4,884,456) 18,168,023
---------- ----------- ----------- -----------
1995
Common stock issued for:
Public offering sales/$2.51 70,520 177,005 - 177,005
Exercise of $2.51
warrants 371,120 814,061 - 814,061
Short-swing profits - 2,100 - 2,100
Less public offering and
private placement costs - ( 45,360) - ( 45,360)
Compensatory stock options - 64,190 - 64,190
Net income (loss) - - ( 364,857) ( 364,857)
---------- ----------- ----------- -----------
441,640 1,011,996 ( 364,857) 647,139
---------- ----------- ----------- -----------
Balance, December 31, 1995 36,729,449 24,064,475 (5,249,313) 18,815,162
---------- ----------- ----------- -----------
1996
Common stock issued for:
Exercise of warrants 97,780 156,448 - 156,448
Compensatory stock options - 66,000 - 66,000
Net income (loss) for the
six-month period ended
June 30, 1996 - - ( 758,364) ( 758,364)
---------- ----------- ----------- -----------
97,780 222,448 ( 758,364) 535,916)
---------- ----------- ----------- -----------
36,827,229 24,286,923 (6,007,677) 18,279,246
---------- ----------- ----------- -----------
Less cost of treasury
shares (13,410,971) (6,257,306) - (6,257,306)
Balance, June 30, 1996 23,416,258 $18,029,617 $(6,007,677) $12,021,940
========== =========== =========== ===========
</TABLE>
The accompanying Notes to Consolidated Financial Statements are an integral part
of these financial statements.
LA TEKO RESOURCES LTD.
Condensed Consolidated Statements of Operations
(Unaudited)
For the Six-Month Periods
Ended June 30,
1996 1995
Sales of gold and silver $ - $ -
----------- -----------
Expenses
Operating and mine maintenance
costs 105,333 59,278
New prospect evaluation 39,333 -
General and administrative
expenses 526,755 301,309
Depreciation 26,797 23,051
Royalty and lease expenses 75,000 143,451
----------- -----------
773,218 527,089
----------- -----------
Income (loss) from operations ( 773,218) ( 527,089)
Other Income (Expense)
Gain from disposition of mineral
property - 404,953
Interest income/expense (net) 7,447 ( 57,864)
Gain (loss) on sale of equipment 7,407 ( 8,112)
Other expense - ( 1,872)
----------- -----------
Net income (loss) before income
taxes ( 758,364) ( 189,984)
----------- -----------
Income taxes - -
----------- -----------
Net gain/(loss) $( 758,364) $( 189,984)
=========== ===========
Gain/(loss) per share $( .032) $( .008)
=========== ===========
Weighted average shares
outstanding 23,350,331 23,059,149
=========== ===========
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these consolidated financial statements.
LA TEKO RESOURCES LTD.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Six-Month Periods
<TABLE> Ended June 30,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities
Net gain/(loss) $( 758,364) $( 189,984)
Charges (credits) to operations
not affecting cash:
Gain on disposition of property - ( 404,953)
(Gain)/loss on sale of equipment ( 7,407) 8,112
Adjust gold and silver inventory
to fair market value - 1,872
Depreciation 26,797 23,051
Compensatory expense - stock
options granted 66,000 -
----------- -----------
( 672,974) ( 561,902)
----------- -----------
Net changes
(Increase)/decrease in gold
inventory - 5,109
(Increase)/decrease in accounts
receivable and pre-paid
expenses 158,444 ( 10,927)
Increase/(decrease) in current
portion of long-term debt 155,704 -
(Decrease)/increase in accounts
payable and accrued expenses ( 121,441) ( 105,174)
----------- -----------
192,707 ( 110,992)
----------- -----------
Net cash used in operating
activities ( 480,267) ( 672,894)
----------- -----------
Cash Flows From Investing Activities
Investment in mineral properties ( 15,000) ( 250,000)
Exploration costs capitalized ( 121,828) ( 175,676)
Proceeds from sale of equipment 9,800 2,500
Purchase of plant and equipment ( 34,104) ( 1,685)
Cash proceeds from disposition of
property - 2,500,000
----------- -----------
Net cash provided (used) by
investing activities ( 161,132) 2,075,139
----------- -----------
Cash Flows From Financing Activities
Short-term loans - 200,000
Reduction of long-term debt ( 345,289) ( 201,283)
Cash proceeds from stock issuance 156,448 769,666
Public offering costs - ( 19,627)
Short-swing profits - 2,100
----------- -----------
Net cash provided by financing
activities ( 188,841) 750,856
----------- -----------
Net increase (decrease) in cash
and cash equivalents ( 830,240) 2,153,101
Cash and cash equivalents,
beginning of period 2,972,278 275,364
----------- -----------
Cash and cash equivalents,
end of period $ 2,142,038 $ 2,428,465
=========== ===========
Supplemental Disclosures of Cash
Flow Information
Cash paid during the period for
interest $ 58,565 $ 69,623
Cash paid during the period for
income taxes $ 300 $ -
Supplementary Schedule of Non-cash
Investing and Financing Activities
Depreciation capitalized into
deferred costs $ - $ 3,767
Depreciation costs in accounts
receivable $ - $ 2,723
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these consolidated financial statements.
LA TEKO RESOURCES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Share Capital
Authorized - 100,000,000 shares having no par value
Issued - 23,416,258
During the second quarter of 1996, 51,550 shares were issued upon
exercise of employee and director stock options.
Options, Warrants and Convertible Securities
Options Outstanding
Total Exercisable
June 30, June 30, Grant Expiration
1996 1996 Date Date Price
DIRECTORS
200,000 200,000 11/16/95 11/16/2000-03 $ 1.60
100,000 100,000 11/24/95 11/24/2000-03 $ 1.60
100,000 100,000 03/07/96 03/07/2001 $ 2.50
200,000 50,000 06/18/96 06/18/2001-04 $ 2.53
PREVIOUS DIRECTORS
100,000 100,000 08/17/94 08/17/1999 $ 1.60
100,000 100,000 11/16/95 11/16/2000 $ 1.60
25,000 25,000 11/16/95 06/05/1997 $ 1.60
25,000 25,000 11/16/95 06/05/1997 $ 1.60
OTHERS
100,000 100,000 04/01/93 04/01/1998 $ 2.13
170,000 170,000 08/17/94 08/17/1999 $ 1.60
105,000 105,000 11/16/95 11/16/2000 $ 1.60
During 1996, directors purchased 25,000 shares and employees purchased
72,780 shares pursuant to options exercised. Options to purchase 20,155 shares
expired as a result of employee termination.
Effective June 5, 1996, each of the five directors became eligible to
purchase 25,000 shares each as part of the 100,000-share option granted each
director exercisable over a four-year period. Director options to acquire
150,000 shares expired as the service of two directors was terminated on June 5,
1996.
Exercise of all options outstanding is contingent upon the optionees
continued employment and/or association with the Company.
Warrants Outstanding
None
Convertible Securities
The Company has $883,000 debentures payable which are convertible into
shares of stock as follows:
Shares
Conversion Reserved For
Amount Maturity Date Prices Conversion
$ 500,500 Jul-Dec 1996 $ 3.13 159,904
75,000 Jan-Aug 1997 $ 3.13 23,962
40,000 Jan-Aug 1997 $ 3.75 10,667
252,500 May-Jun 1997 $ 2.81 89,858
15,000 Sep-Oct 1997 $ 3.13 4,792
---------- -------
$ 883,000 289,183
========== =======
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The financial statements of the Company include the consolidated operations of
its wholly-owned subsidiaries La Teko Resources, Inc., a Nevada corporation and
Ryan Lode Mines, Inc., an Alaska corporation.
All dollar amounts included herein respecting Management's Discussion and
Analysis are in U.S. dollars except where noted otherwise as Canadian dollars
(CAN).
During April 1996, the Company consummated a five-year agreement with the
University of Alaska to explore its Twin Buttes property. The property is
located 28 miles northeast of Fairbanks, Alaska, adjacent to La Teko's 16,131-
acre Juniper property. The Twin Buttes property contains 12,640 acres and is
situated on the northeast-trending Chatanika Terraine and aeromagnetic anomaly.
A geochemical sampling program will be undertaken during the 1996 exploration
season to assess the near future expression of mineralization. This program
will be complemented by more sophisticated exploration methods in 1997 and 1998.
In the event La Teko's exploration of the Twin Buttes is successful, it has the
opportunity to acquire an exclusive development and mining lease on or before
the expiration of five years.
The combined Twin Buttes and Juniper properties, totalling 28,771 acres
(approximately 45 square miles), represent one of the largest blocks of
exploration property on the Chatanika Trend.
CAPITALIZED COSTS
Costs of acquisition and deferred exploration expenditures associated with the
Company's mineral properties are summarized as follows:
Capitalized Capitalized
Balance Additions Additions Balance
December 31, (Deletions) (Deletions) June 30,
1995 1st Q 1996 2nd Q 1996 1996
<TABLE>
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
RYAN LODE $ 4,839,376 $ - $ - $ 4,839,376
Acquisition cost
Deferred exploration
and development
expenses 4,882,993 26,687 17,911 4,927.591
----------- -------- -------- ----------
Total Ryan Lode 9,722,369 26,687 17,911 9,766,967
----------- -------- -------- ----------
MARGARITA
Acquisition cost 350,100 - - 350,100
Deferred exploration
and development
expenses 4,554 65,354 1,220 71,128
----------- -------- -------- ----------
Total Margarita 354,654 65,354 1,220 421,228
----------- -------- -------- ----------
JUNIPER
Deferred exploration
and development
expenses 78,211 2,729 3,368 84,308
----------- -------- -------- ----------
Total Juniper 78,211 2,729 3,368 84,308
----------- -------- -------- ----------
TWIN BUTTES
Deferred exploration
and development
expenses - - 3,451 3,451
----------- -------- -------- ----------
Total Twin Buttes - - 3,451 3,451
----------- -------- -------- ----------
DISCOVERY
Acquisition cost - - 15,000 15,000
Deferred exploration
and development
expenses - - 1,107 1,107
----------- -------- -------- ----------
Total Discovery - - 16,107 16,107
----------- -------- -------- ----------
Total mineral properties
and deferred costs $10,155,234 $ 94,770 $ 42,057 $10,292,061
=========== ========= ========== ===========
</TABLE>
RESULTS OF OPERATIONS
As a result of not having been in production since 1989, the Company will
continue to sustain its financial expenditures through utilization of existing
cash resources, anticipated additional cash that may be received from Newmont,
sale of common stock and/or proceeds from corporate borrowings at such time as
debt financing may be needed and available. It is anticipated that the Company
will receive $2.5 million from Newmont on or before December 31, 1996 if Newmont
opts to continue with its acquisition of 65% of the True North Joint Venture
property.
Operating and mine maintenance expenses increased approximately $46,000,
principally as a result of labor surcharges and employee benefits associated
with employee stock options exercised during 1996. Also, salaries and wages
classified as general project overhead expense not otherwise capitalized with
individual project exploration and development costs contribute to this
increase.
Commencing in 1996, the Company initiated an accelerated effort to procure new
mining projects for potential future development. It incurred $39,333
respecting evaluation of properties considered for subsequent acquisition. No
comparable expense was incurred in 1995. In addition to the costs associated
with new project evaluation, in the Second Quarter of 1996 the Company expended
$19,558 for capitalized acquisition and development costs associated with its
newly-acquired Twin Buttes and Discovery properties as discussed herein under
the CAPITALIZED COSTS caption of this MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. An additional $22,499 was
expended in the Second Quarter of 1996 for development of the Company's Ryan
Lode, Margarita and Juniper properties. These amounts combined with the $94,770
capitalized during the First Quarter of 1996 aggregate $136,827 for the first
six months of 1996.
General and administrative expenses for the six-month periods ended June 30,
1996 and 1995 are presented as follows:
June 30,
1996 1995
---- ----
Director fees $ 34,289 $ 5,250
Rent 15,378 15,416
Salaries and employee benefits 199,078 128,625
Contract services 90,016 1,225
Accounting 15,687 12,788
Shareholder expense 31,918 22,258
Transfer agent fees 1,773 3,998
Travel 27,375 19,908
Office and general 14,805 14,253
Telephone and utilities 10,079 10,026
Equipment rental 1,368 1,745
Insurance 5,482 11,465
Legal 53,676 38,049
Regulatory fees 4,410 5,901
Other 21,421 10,402
----------- -----------
$ 526,755 $ 301,309
=========== ===========
Details with respect to significant changes are as follows:
. Director fees reflect an increase of approximately $29,000. The principal
item of change is $22,000 compensatory stock option expense relative to stock
options granted to two new directors at the 1996 annual meeting of
shareholders. See Note 1 of Notes to Condensed Consolidated Financial
Statements attached hereto. Additional director meetings, by telephone and
in person, account for the additional increase.
. Salaries, payroll taxes and employee benefits increased approximately
$70,000, principally as a result of compensatory stock options granted the
corporate president and two directors and related labor surcharges and
liability insurance associated with the 1996 options granted and options
exercised in 1996 wherein current-period payroll tax expense only is
recognized.
. Contract services for the first six months of 1996 include $60,000
professional fees and related expenses respecting management and strategic
business planning and $25,000 associated with analysis, interpretation and
evaluation of the Company's mineral properties to assist management and the
corporate board of directors in formulating a business plan for future
development of the Company's mineral properties. $5,000 was paid to the
Company's past president as part of a consulting arrangement to facilitate a
transition in personnel as a result of the recent change in corporate
presidency and directorship of the Company.
. Shareholder expense has increased as a result of broader shareholder base of
the corporate stock and added expenses associated with preparation and
distribution of annual reports, proxy information, additional postage,
consulting services, etc., associated with the Company's annual general
meeting.
. Travel expenses increased approximately $7,500 as a result of directors'
travel associated with an additional directors' meeting and other required
travel by directors in the business administration of the Company.
. Legal fees increased approximately $15,600, partially as a result of a
continuing requirement to supplement a Form S-2 filing with the United States
Securities & Exchange Commission, which Form S-2 was associated with a May
1994 stock offering. The Form S-2 is currently being converted to a Form S-3
filing such that the requirements for continuing supplements will be
eliminated. Other increased legal fees continue as a result of the
consulting requirements associated with regulatory filings, property
acquisitions, technical aspects of the corporation's annual general meetings
and general business matters.
TRUE NORTH JOINT VENTURE AND OTHER ACTIVITIES
Newmont Exploration Limited commissioned its summer exploration effort at True
North in June; the effort will continue, at Newmont's expense, through
approximately October. Newmont advised on May 6, 1996 that it had completed a
late winter 39-hole 11,320-foot core drilling program to explore areas that were
not otherwise available for drilling during the summer. It has also announced
that its summer exploration activity would be comprised of approximately 10,000
feet of core, 30,000-feet of reverse-circulation drilling and a 5,000-sample
geochemical program. Exploration drilling between the Hindenburg and Shepard
ore zones has verified that these two zones are continuous.
The following map shows the relationship of the Hindenburg and Shepard ore zones
and the extent of Newmont's drilling connecting the two. La Teko's 1993/1994
drilling program comprised of 235 reverse-circulation and 8 core holes, which
were drilled within the Hindenburg and Shepard resource zones, shown as the
shaded areas. Holes within the shaded area, not shown individually on this map,
defined 445,800 ounces of proven/probable mineable gold, metallurgical recovery
estimated at 80-90%. Two new mineralized areas, the Zepplin and the East
Zones, are also depicted on the map.
[This page contains a map or the True North project, showing certain 1995 and
1996 drill hole locations, the location and area of the Shepard and Hindenburg
resources, the Central Zone connecting the Hindenburg and Shepard resources,
and five additional non-contiguous target areas, including one identified as
the Zeppelin Zone and one identified as the East Zone. The map legend
identifies the five target areas and the symbols used within the map to
designate completed core holes, 1996; completed core twins, 1996; and 1995
drill holes.]
Newmont's second quarter 1996 core drilling at the True North was comprised of
6,601 feet of core in 25 holes, including 18 holes in the Central and East
Zones. The remaining seven holes were core/reverse-circulation and core/core
twins to test short-range variability and compare drilling methods and assays at
the Hindenburg and Shepard. Most of the 6,601 second quarter footage was
included in the 11,320 feet completed May 6, 1996 previously mentioned. A
track-mounted reverse-circulation drill is currently being used to test trench
and soil geochemical exploration targets and to complete step-outs beyond known
mineralization.
The most important result of the 1996 winter drilling was the discovery of a
shallow, partially oxidized, low-angled shear hosted zone of gold mineralization
in the Central Zone. This shallow mineralization, if successfully delineated
with infill drilling, will significantly increase the mineable reserve.
The 5,000-sample soil program under way will cover all previously unsampled
areas of the True North property. By June 30, 1996, four drills had collected
samples of the weathered bedrock interface from 881 sites 100 feet apart on
lines spaced 400 feet apart. Infill sampling will reduce the line spacing to
200 feet where needed. Sampling to date has disclosed a large gold anomaly in
the vicinity of the Soo vein system on the south edge of the property with
values to 9,890 ppb. A grab sample from an old prospect pit in the anomalous
area returned a value of 2.5 oz Au per ton. Results are pending on the majority
of the samples collected.
Reclamation and engineering studies are in progress on the Ryan Lode project.
The effort includes heap contouring, fertilization using lime treated municipal
sewage sludge, and seeding. The property is being studied to determine the
underground mining possibilities. Mine Development Associates has been
commissioned to ascertain the continuity of high-grade zones in the property
that could be mined by underground methods.
The Company will proceed with the evaluation of new prospects for possible
future development. Geochemical soil sampling, rock sampling and geologic
mapping are being employed to evaluate the Juniper, Twin Buttes, Discovery Gulch
and Lucky Gulch prospects.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had $2,142,038 cash and short-term deposits.
Pursuant to the Newmont joint venture agreement, the Company could receive an
additional $2.5 million on or before December 31, 1996. Cash currently on hand
and to be received will be utilized by the Company to sustain its ongoing
financial requirements.
Working capital of the Company has been as follows:
June 30, December 31,
1996 1995 1995
<TABLE> ----------- ----------- -----------
<S> <C> <C> <C>
Current assets $ 2,291,306 $ 2,657,212 $ 3,279,990
Current liabilities 986,999 40,132 952,737
----------- ----------- -----------
Working capital $ 1,304,307 $ 2,617,080 $ 2,327,253
=========== =========== ===========
</TABLE>
Since June 30, 1996, the Company has expended $269,844 for the acquisition of
750,000 shares of International Freegold Mineral Development, Inc. pursuant to
the exercise of warrants associated with a 1994 unit purchase agreement with
Freegold. The Company now owns 1.5 million shares of Freegold stock. The
current market price of Freegold stock is approximately $.65 (US). Freegold is
aggressively exploring its Golden Summit property adjacent to the True North
Newmont/La Teko joint venture project.
Also, since June 30, 1996, La Teko paid Newmont $29,436 for its 35% interest in
additional mineral property acquired by Newmont adjacent to the True North site.
The Company anticipates the following additional expenditures for the remainder
of 1996:
Property Acquisition - exploration
in new project evaluation $ 295,000
Project overhead 100,000
Corporate overhead 183,000
Debenture interest 38,500
Ryan Lode royalty 150,000
Retirement of debentures 500,500
----------
$1,267,000
==========
As discusssed in Note 1 of NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS,
the Company has outstanding options to directors and employees for the future
acquisition of 1,225,000 shares, 1,075,000 of which may be exercised
immediately. During 1996, nine employees and a director exercised options to
acquire 97,780 shares for $156,448. It is not known whether optionees will
exercise stock options during the remainder of 1996.
COMMITMENTS AND CONTINGENCIES
Operations are subject to certain lease and royalty obligations previously
described in notes to the Company's consolidated financial statements at
December 31, 1995.
The Company carries insurance against property damage including insurance on its
machinery and equipment and motor vehicles and also comprehensive general
liability and liability policies applicable to motor vehicles. The Company has
elected not to insure against business interruption.
Effective March 1, 1992, the Company initiated a health and medical insurance
program available to all employees who have been employed by the Company for
over 30 days. The Company pays 70% of the monthly premium with the employees
responsible for the balance. The Company is evaluating other health and medical
insurance programs in anticipation of making a change in current coverage. The
basic aspects of the current coverage will be continued.
The Company has no need at present to insure for environmental pollution and has
elected not to insure for mine cave-in's, mine flooding, earthquake and other
possible natural hazards consistent with industry practice. La Teko may in the
future be exposed to contingencies relating to the foregoing or liabilities that
may arise under governmental regulations relating to the environment. The
Company is not aware of any existing material contingencies respecting
compliance of its previous activities with environmental requirements.
The Company has taken extra precautions to minimize the possibility of chemical
spills, especially in its drilling and former heap-leaching operations and
utilizes a special patented process in the neutralization of cyanide and other
chemical solutions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Report on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LA TEKO RESOURCES LTD.
Dated: August 8, 1996 By /s/Robert W. Gentry, President
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF JUNE 30, 1996, AND STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,142,038
<SECURITIES> 231,069
<RECEIVABLES> 53,084
<ALLOWANCES> 0
<INVENTORY> 6,295
<CURRENT-ASSETS> 2,291,306
<PP&E> 209,503
<DEPRECIATION> 675,170
<TOTAL-ASSETS> 13,023,939
<CURRENT-LIABILITIES> 986,999
<BONDS> 15,000
<COMMON> 18,029,617
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,023,939
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 773,218
<OTHER-EXPENSES> (7,407)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (7,447)
<INCOME-PRETAX> (758,364)
<INCOME-TAX> 0
<INCOME-CONTINUING> (758,364)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (758,364)
<EPS-PRIMARY> (.32)
<EPS-DILUTED> (.32)
</TABLE>
