SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended: January 31, 1997
Commission File No. 0-9496
----------------
GOLD STANDARD, INC.
-------------------
(Exact name of registrant as specified in its charter)
Utah 87-0302579
------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 712 Kearns Building, Salt Lake City, Utah 84101
- - ------------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 328-4452
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None NASDAQ and Pacific Stock Exchange
------ ---------------------------------
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
----------------------------------------
(Title of class)
Indicate by check mark whether 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 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 the close of the period covered by this report there were
outstanding 18,697,500 shares of Registrant's common stock, $.001 par
value per share.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
---------------------
GOLD STANDARD, INC.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR INCLUSION IN QUARTERLY REPORT
ON FORM 10-Q
January 31, 1997
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GOLD STANDARD, INC.
CONSOLIDATED BALANCE SHEETS
January 31, 1997 and October 31, 1996
January 31, 1997 October 31, 1996
---------------- ----------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,678,057 $ 6,078,321
Accrued interest 19,464 7,123
Prepaid expenses 11,070 6,579
--------------- ---------------
TOTAL CURRENT ASSETS 5,708,591 6,092,023
PROPERTY AND EQUIPMENT
Equipment and leasehold
improvements 176,240 197,568
--------------- ---------------
176,240 197,568
OTHER ASSETS
Securities available for sale 197,611 244,034
Deferred offering costs 84,579 77,954
Deposits 740 690
---------------- ---------------
282,930 322,678
---------------- ---------------
$ 6,167,761 $ 6,612,269
=============== ===============
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LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable - trade $68,313 $87,344
Accrued liabilities 678 1,103
Income tax payable 300 300
-------------- --------------
TOTAL CURRENT LIABILITIES 69,291 88,747
LONG-TERM LIABILITIES
Deferred liabilities 61,000 61,000
-------------- --------------
TOTAL LIABILITIES 130,291 149,747
MINORITY INTEREST 48,185 101,902
STOCKHOLDERS' EQUITY
Common stock 18,698 18,698
Additional paid-in capital 13,515,927 13,515,927
Unrealized holding loss on
securities availabl (20,888) (20,888)
Accumulated deficit (7,524,452) (7,153,117)
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 5,989,285 6,360,620
-------------- --------------
$ 6,167,761 $ 6,612,269
============== ==============
See accompanying notes to consolidated financial statements
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GOLD STANDARD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three month periods ended January 31, 1997 and 1996
Three months ended
------------------
January 31,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
INCOME FROM OPERATIONS
Royalty income $0 $246,355
EXPENSES
Depreciation 12,264 7,389
Leasehold exploration
and carrying costs 339,829 82,027
General and administrative:
Legal 4,001 11,356
Other 88,249 107,489
----------- ----------
NET INCOME/(LOSS) FROM OPERATIONS (444,343) 38,094
OTHER INCOME (EXPENSES)
Interest income 64,211 25,988
Loss from investments (44,920) 0
----------- ----------
(425,052) 64,082
NET LOSS - MINORITY INTEREST 53,717 0
----------- ----------
NET INCOME/(LOSS) ($371,335) $64,082
=========== ==========
Net income/(loss) per common share ($0.02) $0.00
=========== ==========
See accompanying notes to consolidated financial statements.
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GOLD STANDARD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three month periods ended January 31, 1997 and 1996
Three months ended
January 31,
------------------------
1997 1996
--------- ---------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ($371,335) $64,082
Add (deduct) adjustments
to cash basis:
Depreciation 12,264 7,389
Disposal of equipment 11,361 0
Net loss - minority interest (53,717) 0
Increase (decrease) in:
Accounts payable (19,031) 25,545
Accrued liabilities (425) 307
Decrease (increase) in:
Accrued interest (12,341) (41,248)
Prepaid expenses (4,491) 1,540
Securities available for sale 46,423
Deposits (50) 0
Deferred costs (6,625) (2,340)
---------- ----------
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES (397,967) 55,275
CASH FLOWS FROM INVESTMENT ACTIVITIES:
Equipment purchased (2,297) (518)
---------- ----------
NET CASH USED IN INVESTMENT ACTIVITIES (2,297) (518)
NET INCREASE (DECREASE) IN CASH (400,264) 54,757
CASH BALANCE AT BEGINNING OF PERIOD 6,078,321 2,465,980
---------- ----------
CASH BALANCE AT END OF PERIOD $5,678,057 $2,520,737
========== ==========
See accompanying notes to consolidated financial statements.
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's accounting policies reflect industry practices and
conform to generally accepted accounting principles. The following
policies are considered to be significant:
Financial Statements
--------------------
The financial information provided in the Consolidated Balance Sheet
for the year ended October 31, 1996, has been taken from the audited
financial statements at that date. In the opinion of management, all
adjustments necessary to present fairly the financial position, results
of operations and cash flow at January 31, 1997, have been made. All
such adjustments were of a normal, recurring nature.
Principles of Consolidation
---------------------------
The accompanying consolidated financial statements at January 31, 1997
include the accounts of Gold Standard, Inc., its wholly owned
subsidiaries, Gold Standard South and Gold Standard Minas, and a 64.4%
owned subsidiary, Big Pony Gold. As used herein, references to Gold
Standard, Inc., the Registrant, or the Company refers to Gold Standard,
Inc. and its consolidated subsidiaries. All significant intercompany
transactions are eliminated. Information for 1996 includes the
accounts of a wholly owned subsidiary, Kellwood Enterprises, Ltd. This
company was dissolved during the current period and all assets disposed
of.
Gold Standard South, a Utah corporation, was organized for the express
purpose of carrying on a property acquisition and gold exploration
program in the country of Uruguay. Big Pony Gold holds certain mineral
exploration concessions in Uruguay and is conducting exploration work
on those properties. Gold Standard Minas was organized for the purpose
of carrying on a gold exploration program in the country of Brazil.
Investment in Mining Properties
-------------------------------
Prospecting and exploration costs incurred in the search for new mining
properties are charged to expense as incurred. Direct costs associated
with the development of identified reserves are capitalized until the
related geological areas
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
are either put into production, sold or abandoned. As of January 31,
1997 there were no geological areas under production.
Earnings (Loss) Per Share
-------------------------
Earnings (loss) per share of common stock is computed on the
weighted-average number of shares outstanding during the period.
Cash Equivalents
----------------
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments and investments readily convertible into
cash, or purchased with a maturity of three months or less, to be cash
equivalents.
Securities Available for Sale and Options
-----------------------------------------
Instruments used in trading activities include both securities and
options and are stated at market value. Quoted market prices are
generally used as a basis to determine the market value. If quoted
market prices are not available market values are based on dealer
quotes. Realized and unrealized losses are recognized in the financial
statements.
Foreign Currency Translation
----------------------------
Substantially all assets and liabilities of the Company's international
operations are translated at year-end exchange rates and the resulting
adjustments are accumulated in stockholders' equity. Income and
expenses are translated at exchange rates prevailing during the period.
Foreign currency transaction gains and losses are included in net
income, except for those relating to intercompany transactions of a
long-term investment nature, which are accumulated in stockholders'
equity.
NOTE 2 - SECURITIES AVAILABLE FOR SALE
In February 1996 the Company entered into a non-monetary transaction
exchanging rights to diamond potential properties located in Brazil for
100,000 shares of American Mineral Fields stock (AMZ) which was trading
at $4.00 per share. This
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 2 - SECURITIES AVAILABLE FOR SALE (Continued)
transaction resulted in a net gain to the Company of $300,000 ($400,000
less $100,000 paid to three geologists as bonuses on the transaction).
During the period February 1,1996 to January 31, 1997, the Company
realized gains on the sale of this stock in the amount of $107,436. At
January 31, 1997, the remaining 49,000 shares with a book value of
$4.00 per share were valued at $2.74 per share.
NOTE 3 - EXCHANGE TRADED OPTIONS
The Company has invested in options to purchase gold. The options
expire in May 1998. Through January 31, 1997 the Company has recorded
a cumulative realized loss related to these instruments of $291,300.
NOTE 4 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements are stated at cost. Maintenance,
repairs, and renewals which neither materially add to the value of the
property nor appreciably prolong its life are charged to expense as
incurred. Gains or losses on dispositions of property and equipment
are included in earnings. Depreciation and amortization of property
and equipment is provided on the straight-line method using the
estimated lives shown below:
Years
-------
Furniture and equipment 5-7
Transportation equipment 5
Leasehold improvements lease term
Amortization of leasehold improvements is calculated using the
straight-line method over the term of the lease agreement.
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 5 - MINING PROPERTIES
The Company holds directly or through its subsidiary companies, mineral
and exploration rights to property located in the Dugway region of
western Utah, Southern Uruguay, and Brazil. All exploration costs
associated with these properties have been charged to operations as
incurred, consistent with the Company's accounting policies (see Note
1). The Company's leasehold exploration and carrying expenses for the
three month period ended January 31, 1997 are summarized as follows:
Uruguay $138,964
Brazil 183,020
United States 6,483
--------
Total $328,467
========
NOTE 6 - DEFERRED LIABILITY
The Company received a payment of $61,000 in 1990 from Compania Minera
San Jose, S.A., a joint venture participant in Uruguay (see Note 9).
The payment is to be used to fund potential future reclamation costs on
the San Juan Hills joint venture in Uruguay. Upon completion of the
reclamation efforts, any unused portion of the deposit will be refunded
to the payor.
NOTE 7 - CAPITAL STOCK
In February 1996, outstanding stock warrants that were issued in March
1992, were exercised for the purchase of 250,000 shares of common stock
in the Company. The exercise price of these warrants was $.75 per
share. The Company realized $187,500 from the transaction.
In May and June 1996, Sun Valley Gold Company purchased 3,000,000
shares of the Company's common stock for $1.00 per share. As part of
the transaction, Sun Valley Gold also received warrants for the
purchase of 3,000,000 additional shares of the Company's common stock.
The exercise price of
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 7 - CAPITAL STOCK (Continued)
these warrants is $1.50 per share and the warrants expire in May 1999.
The Company realized $3,000,000 from this transaction.
In May 1996, FCMI purchased 600,000 shares of the Company's common
stock for $1.00 per share. The Company realized $600,000 from this
transaction.
In June 1996 the Company extended the expiration dates of warrants for
the purchase of 500,000 shares of common stock from June 1996 to June
1999. The Company also extended the expiration date of warrants for
the purchase of an additional 100,000 shares of common stock from
October 1996 to October 1999. Warrants for the purchase of 200,000
shares of common stock expired in June 1996 and were not extended.
The Company's stock purchase warrants outstanding as of January 31,
1997, are summarized as follows:
Shares
Issue Expiration Exercise Subject to
Date Date Price Warrant
----- ---------- -------- ----------
06/87 06/30/99 $1.25 500,000
10/87 10/01/99 1.25 100,000
07/88 07/18/99 2.25 750,000
03/92 03/31/03 .75 750,000
05/93 01/18/01 1.25 50,000
01/96 01/19/98 1.00 100,000
05/96 04/30/02 1.50 100,000
05/96 05/31/99 1.50 3,000,000
05/96 05/10/99 1.50 600,000
06/96 06/30/99 1.25 50,000
---------
Total outstanding warrants 6,000,000
=========
If all outstanding stock purchase warrants were exercised, the total
proceeds would be $8,775,000.
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 7 - CAPITAL STOCK (Continued)
In March 1996, Big Pony Gold, the Company's 64.4% owned subsidiary
issued 100,000 shares of its unregistered and restricted common stock
to two individuals in consideration of consulting services rendered.
In May 1996, Sun Valley Gold Company purchased 500,000 shares of Big
Pony Gold's common stock for $1.00 per share. As part of the
transaction, Sun Valley Gold also received warrants for the purchase of
500,000 additional shares of Big Pony Gold's common stock. The
exercise price of these warrants is $1.25 per share and the warrants
expire in May 1999. Big Pony Gold realized $500,000 from this
transaction. These are the only outstanding warrants for the purchase
of Big Pony Gold common stock and if they were all exercised proceeds
would be $625,000.
NOTE 8 - RELATED PARTY TRANSACTIONS
The Company has funded the majority of the operations of its
subsidiaries Big Pony Gold, Gold Standard South, and Gold Standard
Minas with unsecured non-interest bearing long term cash advances. As
of January 31, 1997 the Company had receivables from these companies of
$326,990, $512,580, and $809,310 respectively. All intercompany
transactions have been eliminated in consolidation.
To guarantee the future reclamation commitments in Uruguay of the
Company's subsidiary, Big Pony Gold, Inc., the Company has obtained a
standby letter of credit in the amount of $1,000,000 and extended the
benefits of the letter of credit to their subsidiary.
On March 14, 1996 the Company acquired 750,000 shares of the common
stock of its subsidiary Big Pony Gold, Inc. in exchange for
cancellation of $10,000 in debt owed by the subsidiary to the Company
and transfer by the Company of all its interest in certain mineral
rights and assets pursuant to the cancellation of the Campo Del Oro
venture (Note 9).
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 9 - OPERATING AND JOINT VENTURE AGREEMENTS
The Company was party to three operating or joint venture agreements.
While the terms of the agreements differ, they all generally address
funding of exploration activities and subsequent mine development and
production activities, should exploration results warrant development.
The agreements are summarized as follows:
a. In September 1988, the Company entered into a joint venture
agreement for the exploration of certain properties in
southern Uruguay with Compania Minera San Jose S.A. (CMSJ), a
wholly owned subsidiary of Bond International Gold. During
1992 CMSJ was acquired by California-based American
Resources, Inc. (ARI) who has continued to drill and explore
the property under the terms of the agreement. ARI
previously acquired a 60% interest in the project by funding
the project's exploration activities, while the Company
retained a 40% participating interest. In an agreement dated
February 22, 1995, the Company's 40% participating interest
was replaced with a 20% royalty interest in a parcel of this
property known as the San Carlos Mine. In June 1995 gold
production commenced at this mine. In accordance with the
terms of the joint venture agreement, the Company's royalties
revenues totaled $339,726 for the twelve months ended October
31, 1996.
b. In June 1992, the Company entered into a joint venture
agreement with Santa Fe Pacific Mining, Inc. The objective
of the agreement was to facilitate exploration and potential
future development of all the Company's mineral holdings in
southern Uruguay, except for those properties covered by a
joint venture agreement with Compania Minera San Jose S.A.
which is discussed in the preceding paragraph. Under terms
of this agreement, Santa Fe could earn up to a 60% interest
in producible discoveries on the subject properties by
funding 100% of the exploration expenses up to either a
specified minimum investment or until a decision to develop a
discovery was reached. Thereafter, the Company was to
participate by funding its proportionate share of future
development costs or have its 40% participating interest
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 9 - OPERATING AND JOINT VENTURE AGREEMENTS (Continued)
eroded. In February 1996, the agreement was terminated with
all assets and properties being relinquished by Santa Fe
Pacific Mining, Inc. to the Company and its subsidiary Big
Pony Gold, Inc.
c. In November 1994, Big Pony Gold, Inc., the Company's
subsidiary, entered into a joint venture agreement with Ashton
Mining of Australia and Santa Fe Pacific Gold. The objective
of the agreement was to facilitate the exploration for
diamonds and encompassed the entire country of Uruguay. Under
terms of this agreement Big Pony Gold's share of costs and
proceeds was 16% for diamonds and 24% for gold. These terms
did not apply to any properties covered by the preceding two
joint venture agreements. In February 1996, the agreement was
terminated.
NOTE 10 - INCOME TAX
The amounts and expiration dates of net operating loss carryforwards
and investment tax credits at January 31, 1997 are detailed in the
following summary:
Federal State
Net Operating Net Operating Invest.
Expiration Date Loss Loss Tax Credit
----------------- ------------- ------------- ----------
December 31, 1996 $ -- $ 216,911 $ 270
October 31, 1997 -- 569,296 --
October 31, 1998 -- 15,927 --
October 31, 1999 -- 674,075 --
October 31, 2001 -- 184,956 --
October 31, 2003 1,477,109 467,153 --
December 31, 2003 1,391 -- --
October 31, 2004 675,277 -- --
December 31, 2004 332,153 -- --
October 31, 2005 1,106,261 -- --
December 31, 2005 408,740 -- --
October 31, 2006 762,506 -- --
October 31, 2007 568,726 -- --
October 31, 2008 16,027 -- --
October 31, 2009 673,421 -- --
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 10 - INCOME TAX (Continued)
Federal State
Net Operating Net Operating Invest.
Expiration Date Loss Loss Tax Credit
----------------- ------------- ------------- ----------
October 31, 2010 185,357 --
October 31, 2011 467,553 -- --
$6,674,521 $ 2,128,318 $ 296
NOTE 11 - COMMITMENTS
To guarantee future reclamation commitments in Uruguay, the Company has
obtained a standby letter of credit in the amount of $1,000,000. The
benefits of this letter of credit have been extended to the subsidiary,
Big Pony Gold, Inc., and its subsidiary, Tormin S.A.
NOTE 12 - LITIGATION
In 1986, the Company filed a lawsuit against American Barrick Resources
Corporation, Getty Oil Company, and Texaco, relative to party's interest
on the Mercur gold mine located in Tooele County, Utah. The lawsuit
alleges breach of contract, breach of fiduciary duty and several other
causes of action related to the operating agreement between the Company
and the defendants or their successors in interest to the Mercur gold
mine. Under the action the Company sought the return of the Mercur
property, monetary damages and other appropriate relief.
In April 1993, the Company accepted an out-of-court cash settlement with
American Barrick Resources Corporation, one of the defendants in the
action, for a total of $5,225,000.
The lawsuit against the other defendants went to trial in July 1993.
Following a seven week trial the jury returned a verdict in favor of the
Company on September 3, 1993, and awarded the Company $404,164,000 in
damages. Subsequently, the judge set aside the jury verdict, thereby
denying the Company the jury's award. The Company appealed the judge's
decision to the Supreme Court of the
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GOLD STANDARD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
January 31, 1997 and October 31, 1996
(Unaudited)
NOTE 12 - LITIGATION (Continued)
State of Utah. On January 11, 1996, the Supreme Court announced its
decision to uphold the trial judge's directed verdict for the defendants
in the case. As a result of the unsuccessful appeal, the Company must
pay approximately $48,000 in court costs. These costs have been accrued
in the January 31, 1997 financial statements.
In May 1996 the Company was notified that a Writ of Reconsideration filed
with the Utah Supreme Court was denied. The Company has decided to no
longer continue its efforts in the lawsuit.
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
----------------------
INTRODUCTION
Gold Standard, Inc. and its subsidiaries (the Registrant) are principally
engaged in the acquisition, exploration, and if warranted, development of
producing or potentially productive gold properties. Its activities are
concentrated, for the most part, in southern Uruguay, Brazil and west central
Utah.
A significant factor effecting the Registrant's operations for years was
its lawsuit against the operators and former operators of the Mercur Gold Mine
in Tooele County, Utah. A January, 1996 ruling against the Registrant, and a
subsequent denial for reconsideration has ended the Registrant's efforts in
the case.
RESULTS OF OPERATIONS
The Registrant holds a 40% royalty interest in a joint venture property
in Southern Uruguay known as the San Juan Hills property. Its joint venture
partner, American Resources, Inc., funded exploration on this property.
Mining from one deposit, the San Carlos Mine, resulted in royalty revenue of
$339,726 for the Registrant during the twelve month period ended October 31,
1996. In March 1996 the deposit was fully depleted and surface mining was
completed.
The Registrant had no operating revenue during the three month period
ended January 31, 1997 and had no properties under production. The
Registrant does not expect to generate operating revenue from any of its
properties during 1997. The Registrant's operating activities have been
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solely exploration related and have been concentrated on their Uruguay,
Brazil, and western Utah properties. Exploration related expenses for the
three month period ended January 31, 1997 were $328,467 ($82,027 for the three
month period ended January 31, 1996). Exploration costs incurred during the
three month period ended January 31, 1997 are summarized as follows:
Uruguay $138,963
Brazil 183,020
Utah 6,483
-------
$328,467
=======
Exploration expenses have been significantly higher in 1997 than in 1996
because of the Registrant's increased activity in its properties in Brazil and
Uruguay. The Registrant is currently working on funding for the Uruguay
properties through it's subsidiary, Big Pony Gold.
The Registrant's general and administrative expenses, excluding legal
expenses totaled $88,249 for the three month period ended January 31, 1997
($107,489 for the three month period ended January 31, 1996). The two most
significant general and administrative expense categories during the three
month period ended January 31, 1997 were (a) professional and consulting fees
($18,810) and (b) wages and salaries ($38,000). The balance of general and
administrative expenses includes office supplies and expenses, office rent,
travel, etc.
LIQUIDITY AND CAPITAL RESOURCES
In the absence of income from operations the Registrant will continue to
rely on funds received in prior years for its operations. These funds include
royalty revenues, lawsuit settlements, equity funding, and proceeds from sales
of securities.
The Registrant has no material capital commitments or agreements which
would require significant outlays of capital during the remaining nine months
of the year.
Expenses in 1997 should remain close to the 1996 level. In the short
term, the Registrant has sufficient cash reserves to fund operations. In the
long-term it will look to the issuance of additional equity capital and
increased production from its properties.
INFLATION
The impact of inflation on the Registrant's operations will vary. The
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future price of gold and the level of future interest rates could directly
effect the Registrant's future operating revenue.
Serious increases in inflation could increase general and administrative
expenses for the Registrant and make it difficult to remain within budget.
However, management does not expect any material increases in the inflation
rate during the near future.
ENVIRONMENTAL RULES AND REGULATIONS
The Registrant is not aware of any noncompliance with environmental rules
and regulations, nor has the Registrant been cited by any local, state or
national agency either in the United States or South America for noncompliance
with environmental rules and regulations.
The Registrant has obtained a standby letter of credit in the amount of
$1,000,000 which is pledged as security against future potential reclamation
costs of mineral properties under exploration in Uruguay. Furthermore, the
Registrant is not aware of any potential reclamation costs. Except for the
above, the Registrant has no actual or potential involvement in environmental
remediation activities.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. Not Applicable
ITEM 2. CHANGES IN SECURITIES. Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No items were presented for a vote of security holders
during the period ended January 31, 1997.
ITEM 5. OTHER INFORMATION. Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Exhibits
27.0 Financial Data Schedule
(b) Reports on Form 8-K
Not applicable
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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.
Gold Standard, Inc.
Date 21 March 1997 By:/s/ Scott L. Smith
Exhibit Index
-------------
Exhibit No. Description
- - ----------- -----------
27 Financial Data Schedule.
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-31-1997
<CASH> $5,678,057
<SECURITIES> $197,611
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> $5,708,591
<PP&E> $176,240
<DEPRECIATION> 0
<TOTAL-ASSETS> $6,167,761
<CURRENT-LIABILITIES> $69,291
<BONDS> 0
0
0
<COMMON> $18,698
<OTHER-SE> $5,970,587
<TOTAL-LIABILITY-AND-EQUITY> $6,167,761
<SALES> 0
<TOTAL-REVENUES> $64,211
<CGS> 0
<TOTAL-COSTS> $444,343
<OTHER-EXPENSES> $44,920
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> ($425,052)
<INCOME-TAX> 0
<INCOME-CONTINUING> ($425,052)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> ($371,335)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
