<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number 1-316
INDEPENDENCE LEAD MINES COMPANY
(Exact name of registrant as specified on its charter)
ARIZONA 82-0131980
State of other I.R.S. Employer
jurisdiction of Identification Number
Incorporation or organization
P.O. Box 717
Wallace, Idaho 83873
Registrant's telephone number (208)753-2525
Securities registered pursuant to Section 12 (b) of the
Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON
WHICH REGISTERED
Common non-assessable
Stock, par value $1.00
Per share None
- --------------------- ------------------
Securities registered pursuant to Section 12 (b) of the
Act:
NONE
(Title of Class)
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 December 31, 1997, the aggregate market value of
the voting stock held by non-affiliates of the
registrant was $6,336,040.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of December 31, 1997, there were 4,324,306 shares
outstanding of the registrant's $1.00 par value common
stock.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference in
the indicated parts of this Form 10-K:
None
<PAGE>
TABLE OF CONTENTS
PART I
Page
Item 1. Business 4
Item 2. Properties 7
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of
Security Holders 7-8
PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters 9
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 8. Financial Statements and Supplementary Data 11
Item 9. Disagreements on Accounting and
Financial Disclosure 11
Index to Financial Statements 12
PART III
Item 10. Directors and Executive Officers of
the Registrant 19
Item 11. Executive Compensation 19
Item 12. Security Ownership of Certain Beneficial
Owners and Management 20
Item 13. Certain Relationships and
Related Transaction 21
PART IV
Item 14. Exhibits, Financial Statement Schedules
And Reports on Form 8-K 21
Signature Page 22
Exhibit Index 23-24
Schedule of Property, Plant and Equipment 25
<PAGE>
PART I
------
ITEM 1. BUSINESS.
Independence Lead Mines Company (the Company) is a
corporation organized under the laws of the State of Arizona
on September 16, 1929. The Company is the owner of fifteen
patented and fourteen unpatented mining claims. This claim
group (the property) is situated Northwest of Hecla Mining
Company's Luck Friday Mine in the Coeur d' Alene Mining
District, Shoshone County Idaho. Adjacent is the community
of Mullan and U.S. Interstate Highway 90.
Pursuant to the terms of an agreement dated February 8,
1968, among Hecla Mining Company (Hecla), Day Mines, Inc.
(Day), Abot Mining Company (Abot) and the Company (the
Unitization Agreement), the Eastern portion of the Company's
Property (approximately five-eighths of the total area of the
Property) was unitized with certain adjoining and near-by
properties owned by the Day and Abot into a unitized area,
consisting of 55 claims, known as the DIA Area. Under the
terms of the Unitization Agreement, ores and minerals in
place are owned by the parties thereto in the following
percentages:
Day (now Hecla by merger) 47.70%
Independence 46.30%
Abot 6.00%
By a second agreement also dated February 8, 1968, (the
Lease Agreement), Hecla leased the DIA Area for a period of
fifty (50) years, subject to a 30-year extension, for the
purpose of conducting mineral exploration and development of
the DIA Area and mining such commercial ore as may be
discovered in the DIA Area by Hecla. Since inception of the
Lease Agreement, Hecla has performed exploration and
development work on what is called the Gold Hunter Project at
a cost of more than $29,000,000 at year end December 31,
1997. To date exploration has revealed a resource of 2.5
million tons. Ore production for December 1997 was 6,936
tons and averaged 17.1 ounces silver, 9.2% lead and 1.2% zinc
per ton. Hecla projects mining 193,000 tons of ore from this
deposit in 1998.
The Lease Agreement provides that all costs and expenses
incurred in the exploration, development and operation of the
DIA Area are to be paid by Hecla subject to the right of
Hecla to be reimbursed for such costs and expenses, together with
All advance royalties paid, out of any future net profits
realized from the operation of the DIA Area. After recovery of
Hecla's costs and expenses and amounts paid as advance
royalties, and the establishment of a three month working
capital reserve, net profit royalties are to be paid to the
Company and the other property owners as follows:
Day (now Hecla by Merger) 19.08%
Independence 18.52%
Abot 2.40%
Hecla, as the lessee, will retain the remaining sixty
percent (60%) of any net profits realized. Under the terms
of the Unitization Agreement, one-half of the first net
profit royalties received by the Company are to be paid over
to Day (now Hecla) until Day recovers the sum of $450,000.
The relationship of the parties to the Agreement may, under
certain circumstances, be converted to a joint venture at the
option of the property owners, where after the property
owners would become participating, non-operating working
interest owners who would share profits and expenses in
connection with the DIA Area in the same ratio as exists
pursuant to lease arrangement with Hecla described above.
Until Hecla commences to pay net profit royalties and
during such period as the Lease Agreement is in effect, Hecla
is obligated to pay an advance royalty to the Company of $750
per month subject to increase to $1,500 if production for the
DIA Area exceeds 2,000 tons per month.
The western portion of the Company's property is not
under the DIA Area agreement. West Independence, as it is
called, consists of 10 patented mining claims of which 4
claims are partly included in the DIA Area agreement.
Patented acres owned are listed below.
West Independence Acres 81.362
East Independence Acres 91.808
--------
Total Acres 173.170
On November 10, 1997 present management was informed by
Hecla that Hecla had given notice of termination of the West
Independence Agreements in 1993. The former management had
been notified of this by Hecla's certified letter dated
December 21, 1993. Former Management did not disclose the
termination of the West Independence agreements in the 1993
10-K. Erroneous statements as to the status of the West
Independence continued in the 10-K's for 1994,1995, and 1996.
Two letters from Hecla dated November 12, 1993 and December
21, 1993 regarding the West Independence Agreements are
missing from the corporate records received from previous
management. The minute book is silent on this subject.
Within the boundaries of the property covered by the
West Independence agreement were three unpatented claims
owned by the Company, named Goethals, Panama Number 2 and
Silver Mountain. After the termination of the West
Independence Agreements, the former management failed to make
the necessary filings and to pay the necessary fees. Those
three mining claims lapsed and were lost to Independence Lead
Mines Company.
These three unpatented claims were re-staked and filed
in the name of Hunter Mining Company by Don Springer, a
former geological consultant of Independence Lead mines
Company, on May 7, 1996. The Idaho Secretary of State's
annual report form for 1997 lists the following persons as
officers and directors of Hunter Mining Company.
Harry F. Magnuson, President
R.M. MacPhee, Secretary/Treasure
Tom Magnuson, Director
H. James Magnuson, Director
H. James Magnuson is a former Director of Independence.
R.M. MacPhee is a former director and was a long time
Secretary/Treasurer of Independence.
Pursuant to the terms of the February 8, 1968,
agreements, Hecla will be obligated to pay a royalty of 18.52
percent of defined net profits after Hecla has recouped its
costs to explore and develop this property from the new
discovery to Independence Lead Mines Company.
The Company has no patents, licenses, franchises or
concessions which are considered by the Company to be of
importance. The business is not of a seasonal nature. Since
the potential products are traded in the open market, the
Company has no control over the competitive conditions in the
industry. There is no backlog of orders.
There are numerous Federal and State laws and regulation
related to environmental protection which have direct
application to mining and milling activities. The more
significant of these laws deal with mined land reclamation
and waste water discharge from mines and milling operations.
The Company does not believe that these laws and regulations
as presently enacted will have a direct material adverse
effect on its operations.
The current officers and directors of the Company serve
without compensation and are not considered by the Company to
be employees.
ITEM 2. PROPERTIES
By an agreement dated February 8, 1968 among the Company
and the owners of other adjacent or neighboring mining
properties, the Company and the owners of the other
properties entered into certain agreements, the general
effect of which was to establish certain vertical boundaries
between their respective properties and to waive certain
existing or potential claims to extralateral rights to veins
or ores found outside of the vertical boundaries of their
respective properties. The Property of the Company is
subject to this agreement.
Pursuant to existing law, the Company is required to
perform the equivalent of $100 of work each year on each of
its 14 unpatented claims or to pay $100.00 per claim as a
rental fee in order to maintain possessory title to such
properties. These requirements are performed by Hecla Mining
Company under the terms of the February 8, 1968 agreements
described in Item 1 of this report.
Further information regarding the Properties of the
Company is set forth in this report under Item 1. Business
and is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
H.F. Magnuson & Company, the accounting firm, which,
prior to May 22, 1997 provided accounting, bookkeeping,
geological and other professional services to Independence
Lead Mines Company. H.F. Magnuson Company has filed suit in
Shoshone County, Idaho in case #CV98-34222 to enforce two
promissory notes. One note in the amount of $47,800.00
executed by former directors, R.M. MacPhee and Dale B.
Lavigne, in favor of H.F. Magnuson & Company was executed on
September 10, 1996 and states interest at nine percent (9%)
per annum. The other note is in the principal amount of
$38,300 and was executed by former directors R.M. MacPhee
and Dale B. Lavigne in favor of H.F. Magnuson & Company on
May 13, 1997 and states interest at the rate of nine percent
(9%) per annum. H.F. Magnuson & Company also seeks an award
of its attorney fees and costs in that action. Independence
Lead Mines Company, Inc. has denied any liability of
Independence Lead Mines Company under those notes.
Independence Lead Mines Company has also filed a counterclaim
against H.F. Magnuson & Company. Management believes that
the promissory notes will be invalidated by the court and
believes that Independence Lead Mines Company will prevail on
its counterclaims.
H.F. Magnuson & Company and former directors, R.M.
MacPhee, Dale B. Lavigne and Wray Featherstone have filed
suit in Shoshone County, Idaho case #CV98-34225 against
Independence Lead Mines Company, Bernard Lannen, Gordon
Berkhaug, Forrest Godde, and Robert Bunde to validate 60,000
shares of Independence stock issued to them prior to May 22,
1997 for alleged past advances of expenses, services and as
directors fees. The Plaintiffs also seek monetary damages
from the Defendants in excess of $10,000 plus attorney fees
and costs for the actions for the Defendants. Independence
Lead Mines Company, Bernard Lannen, Gordon Berkhaug, Forrest
Godde, and Robert Bunde have denied the validity of those
60,000 shares and have denied any liability for monetary
damages. Independence Lead Mines company and the other named
Defendants have made counterclaims against the Plaintiffs.
Management believes the 60,000 shares of stock claimed by the
plaintiffs will be invalidated by the court, the Plaintiffs
will recover nothing from any of the Defendants and the
Plaintiffs, including Independence Lead Mines Company, will
prevail on their counterclaim. See note 5 to the financial
statements.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
On September 26, 1997 a meeting of the security holders of
the Company was held to consider and vote on the following
proposals. All proposals were recommended by current
management and all were approved by the Company's security
holders.
1) Election of directors
2) Amendment of the Articles of Incorporation of the Company
to increase
Authorized capitalization from 4,000,000
shares of common stock to 5,000,000 shares.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
(a) The market price ranges of the Company's common stock
during each quarter of the years 1997 and 1996, respectively,
were as follows:
<TABLE>
<CAPTION>
1997 1996
HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
1st Quarter 2.10 1.28 .85 .60
2nd Quarter 2.15 1.65 1.30 .84
3rd Quarter 2.00 1.50 1.40 1.00
4th Quarter 2.05 1.65 1.42 1.05
</TABLE>
(b) APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS.
TITLE OF CLASS (1) NUMBER OF RECORD HOLDERS
DECEMBER 31, 1997
Common non-assessable Approximately 2,400 (1)
Capital stock, par value
$1.00 per share
(1) Included in the number of shareholders of record are
shares held in nominee or street name.
(c) No dividends were paid by the Registrant in 1997 or
1996, and the Company has no plans to pay a dividend in the
foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Selected Income Statement Data:
YEAR ENDED DECEMBER 31,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Revenues 0 0 0 0 0
Net Income (Loss) (34,788) (51,353) (22,868) (20,521) (23,958)
Net Income (Loss)
Per Share 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Selected Balance Sheets Data:
YEAR ENDED DECEMBER 31,
1997 1996 1995 1994 1993
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Current Assets 8,883 396 158 0 1,638
Current Liabilities 105,185 79,160 88,319 74,293 64,410
Working Capital (96,302) (78,764) (88,161) (74,293) (62,772)
Total Assets 3,244,105 3,235,618 3,235,380 3,234,507 3,236,860
Deferred Income 283,250 266,000 253,250 244,250 235,250
Long-Term Debt 0 0 0 0 0
Stockholders Equity 2,855,670 2,890,458 2,893,811 2,916,679 2,937,200
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULT OF OPERATIONS.
LIQUIDITY. The liquidity of the Company decreased over
the past year, due to an increase in general and
administrative costs. It is anticipated that working
capital will be provided in the future by advanced
royalties and proceeds from the sale of company stock.
CAPITAL RESOURCES. The Property of the Company is
leased to Hecla Mining Company. Capital improvements
are to paid for by Hecla pursuant to the terms of the
leases. The Company has no long-term debt.
RESULTS OF OPERATIONS. The Company is in the
exploratory and development stage and has no operations.
The general and administrative costs increased
substantially in 1996 but are expected to stabilize at
1997 levels in the foreseeable future.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's financial statements appear following Item
9. See index to Financial Statements at Page 12 of this
report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
Not applicable.
<PAGE> PAGE
FINANCIAL STATEMENTS:
Balance Sheet, December 31, 1997 and 1996 13
Statement of Operations and Deficit Accumulated
During The Exploratory Stage for the Years Ended
December 31, 1997, 1996 and 1995 14
Statement of Cash flows, for the years ended
December 31, 1997, 1996 and 1995 15
Notes to Financial Statements, December 31, 1997
And 1996 16 - 18
The Company's financial statements are unaudited in
reliance upon
Section 210.3-11 of Regulations S-X adopted by the
Securities and
Exchange Commission.
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEET UNAUDITED
December 31, 1997 and 1996
----------------------
A S S E T S
1997 1996
------ ------
<S> <C> <C>
Current Assets
Cash 8,883 396
------ ------
Total Current Assets 8,883 396
------ ------
Property and Equipment, at cost
Equipment 118
Less accumulated depreciation --------- ---------
Mining Property 3,047,302 3,047,302
--------- ---------
3,047,302 3,047,302
Other Assets
Unrecovered exploration costs 187,920 187,920
--------- ---------
Liabilities and Stockholders' Equity
Current Liabilities 1997 1996
----- -----
Accounts Payable 3,905 13,024
Advance payable (Note 6) 86,100 59,600
Interest payable 5,180 6,536
Loans from Shareholders 10,000 0
--------- ---------
Total current liabilities 105,185 79,160
--------- ---------
Deferred Income 283,250 266,000
--------- ---------
Stockholders' Equity
Common stock, $1.00 par value;
Authorized 5,000,000 shares;
Issued Outstanding 4,324,306
and 3,990,047 Shares (Note 5) 4,324,306 3,990,047
Additional Paid-In Capital (137,630) 196,621
(deficit) ---------- ---------
4,186,668 4,186,668
Less deficit accumulated
During the exploratory stage (1,330,998) (1,296,210)
---------- ---------
2,855,670 2,890,458
---------- ---------
3,244,105 3,235,618
========== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING THE
EXPLORATORY STAGE - UNAUDITED
For the years ended December 31, 1997, 1996, 1995
-----------------------------------------------
Revenue 1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Expenses
Management and directors fees 24,000
Licenses and fees 290 560 550
Office expense 2,939 3,131 2,683
Office Services 4,900 8,445 8,355
Geological 2,050 7,169 5,662
Interest 7,004 6,535 5,618
Legal 9,671 1,513
Accounting 877
Shareholder & Public Relations 7,057
--------- --------- ---------
34,788 51,353 22,868
--------- --------- ---------
Net Loss 34,788 51,353 22,868
Deficit, accumulated during the
Exploratory stage, beginning
Of year 1,296,210 1,244,857 1,221,989
--------- --------- ---------
Deficit, accumulated during the
Exploratory stage, end of year 1,330,998 1,296,210 1,244,857
========= ========= =========
Loss per share .0087 .0061 .0058
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash Flows From
Operating Activities
Net Loss (34,788) (22,868) (20,521)
Adjustment to reconcile net
Loss to net cash provided by
Operating activities
1. Increase (decrease) in cash
Due to changes in assets
And liabilities
Receivable
Accounts payable (9,119) 2,124
Deferred income 17,250 12,750 9,000
Interest payable (1,335) 917 941
------- ------- -------
Net cash used by
Operating activities (28,013) (35,562) (12,927)
------- -------- --------
Cash Flows From Financing Activities
Issuance of capital stock -0- 24,000
Net borrowing on short-term
Advances 36,500 11,800 13,800
------- -------- --------
36,500 35,800 13,800
------- -------- --------
Net increase (decrease) in cash 8,487 238 873
Cash, beginning of year 396 158 (715)
------- -------- --------
Cash, end of year 8,883 396 158
======= ======== ========
Disclosure of Accounting Policy
For the years ended December 31, 1997, 1996 and 1995,
the Company had no cash equivalents.
Supplementary Disclosure of Cash Flow Information
Interest paid 8,324 5,618 4,678
======= ======== ========
Taxes paid 10 10 10
======= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMNTS
December 31, 1997 and 1996
-------------------------
Note 1 Company business, The Company was incorporated under
the laws of the State of Arizona on September 16, 1929.
The Company is presently in the exploratory stage.
Note 2 The significant accounting principles and practices of
the Company are as follows:
a. The financial statements are prepared on the accrual basis of
accounting.
b. In accordance with Statement No. 7 of the Financial Accounting
Standards Boards, the Company charges current costs related to
exploration and development to operations.
c. The Company depreciated its equipment on the straight-line
method over their estimated useful life of 7 years.
d. Earning per share have been computed using the weighted average
of shares outstanding during the period.
Note 3 Company property The Company has 15 patented and 14
unpatented claims situated Hunter Mining District,
Shoshone County, Idaho. On February 8, 1968, the Company
entered into an agreement with Day Mines, Inc., Abot
Mining Company and Hecla Mining Company. Certain
properties of the four companies were combined for
purposes of exploration and development. These
properties were referred to as the DIA Area. DIA Area
consists of 9 patented and 14 unpatented claims of
Independence Lead Mines Company. Hecla Mining Company is
the exploring and developing company. The DIA agreement
allows Hecla Mining Company to recover all of its
exploration and development cost, advance royalties paid,
and to build a three months' reserve for working capital
prior to splitting profits. Independence is to receive
18.52% of the profits, and under the terms of the DIA
agreement the Company receives an advance of $1.500 each
month 2,000 tons of ore is mined.
Note 4 In addition to cash costs in the amount of $23,302, the amount
Reflected in the balance sheet as the cost of mining claims
reflects the par value assigned to 3,024,000 shares of
stock issued for $3,034,000. The underlying cost basis
of the mining claims is unknown and unobtainable. Since
it was an accepted accounting practice at the time of the
transaction, all subsequent financial statements have
used the par value of the shares issued as the cost basis
of the mining claims. The Company has considered
revaluation of the mining properties, but feels that to
revalue them at an amount that has no basis would be
misleading. The Company feels that the claims are of
value, as Hecla Mining Company has continued with its
lease since 1968.
Note 5 As reported in previous forms 10-K by management, the
stock ledger and shareholders list in the past indicated
more shares issued and outstanding than the shares
authorized and reported on the financial statements. In
spite of the apparent over-issuance of stock, on
September 10, 1996 the previous board of directors
authorized the issuance of 30,000 shares to H.F. Magnuson
& Co. and 30,000 shares to themselves as compensation for
services. Immediately prior to the issuance of the
60,000 shares, the shares issued and outstanding
according to the shareholder list exceeded authorized
capitalization by 255,806 shares. Shares outstanding,
according to the shareholders list, were understated in
the company's then current form 10-K by 325,759 shares.
Current management has not found what it considers to be
adequate substantiation that the Company was not over-
capitalized when the 60,000 shares were issued. Because
of this, the recipients of the shares have been requested
to return the shares to the company. This request has
been refused by all recipients.
Note 6 As shown in the financial statements, the Company
incurred net losses of $34,788, $51,353, and $22,868
during the years ending December 31, 1997, 1996, and
1995, respectively, and on these dates, the Company's
current liabilities exceeding current assets by $96,302,
$78,764, and $88,161. These factors indicate doubt as to
the ability of the Company to continue business on a
going concern basis. Current liabilities at December 31,
1997 include advances payable to H.F. Magnuson & Co. of
$86,100 plus accrued interest of $5,180. These
liabilities are being disputed by the Company and
subsequent to December 31, 1997 have become involved in
litigation. The Company has taken the position that the
advances and accrued interest are not valid claims
against the Company. The financial statements do not
include any adjustments relating to the recoverability of
recorded asset amounts or the amounts and classification
of liabilities that might be necessary should the company
be unable to continue in existence.
Note 7 Statements of income, cash flows, and shareholders'
equity since the inception of the Company, September 16,
1929, through December 31, 1997 have not been
presented. Generally accepted Accounting principles
require that such statements be presented when financial
statements purport to present financial position and
results of operations for a development stage company.
Early records of income and expense for the Company are
incomplete.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name of Executive
Officers and Directors Brief profile of
And Position Held Age Officers and Directors
- ------------------------ ----- --------------------------
Bernard C. Lannen 61 President Vulcan Silver
President and Director Mining Company, Director
Of Lucky Friday Ext.
Mining Company.
Wayne L. Schoonmaker 61 Certified Public Accountant
Secretary/Treasurer Secretary/Treasurer Hanover Gold
Company Inc.
Forrest G. Godde 81 President of Corporate Ranches in
Director California & Nevada, Director of
Mineral Mountain Mining.
Robert Bunde 59 Semi retired farmer with
Director investments in the mining field.
Gordon Berkhaug 63 Management of real estate
Director investments, with experience in
the mining field.
Dale B. Lavigne 67 President of Osburn Drug Company
Director Director of numerous mining
company's. Mr. Lavigne resigned on
April 13, 1998.
The by-laws of the Company provide that the Directors serve until
the next annual meeting of shareholders or until their respective
successors have been duly elected and qualified. Officers serve at
the discretion of the Board of Directors.
Item 11. Executive Compensation
(a) The following table sets forth all remuneration paid by the
company during the fiscal year ended December 31, 1997, for
services in all capacities to all directors and executive officers
of the Company.
<PAGE>
Name of Individual Capacities in
Or Number in Group Which served
Compensation
- ------------------ ------------- ------------
Six persons in the group All executive officers -0-
Directors as a group
No retirement benefit, bonus or other remuneration plans are
in effect with respect to the Company's officers and
directors.
The Company has no standard or other arrangements for
compensating directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
To the knowledge of the Company, no person beneficially owned
more than five percent (5%) of any class of the Registrant's
voting securities as of January 31, 1998.
The following tabulation shows the beneficial ownership's of
the Company's officers and directors in the securities of the
Company as of January 31, 1998:
<TABLE>
<CAPTION>
Share of Approximate
Common Stock Percentage of
Name Beneficially Owned Class
----- ------------------ --------------
<S> <C> <C>
Bernard C. Lannen 171,082 3.91
Wayne L. Schoonmaker 4,000 .09
Forrest G. Godde 90,000<F1> 2.06
Robert Bunde 132,500 3.03
Gordon Berkhaug 68,275 1.56
Dale B. Lavigne 18,425 .42
<FN>
<F1> Includes 45, 000 shares which represent Mr. Godde's 50%
interest in the Godde 1980 Trust.
</FN>
</TABLE>
All directors and executive officers of the Company as a group
(six persons in a group) own 484,282 shares or approximately
11.07 percent of the Company's outstanding voting securities.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
Not applicable
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. Financial Statements See index to Financial Statements
at page 12 of this report
2. Financial Statement Schedules
V Statement of Property, Plant and Equipment, Page 25
Other financial statement schedules are omitted because of
conditions under which they are required, or because the
required information given in the financial statements or
notes thereto.
(b) The company filed its report on Form 8-K during the last
quarter of 1992.
(c) Exhibits No additional exhibits are filed as a part of this
report. The Exhibit Index appears at Page 23 of this report.
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be sign on its behalf by the undersigned, there
unto duly authorized.
INDEPENDENCE LEAD MINES COMPANY
/s/ Wayne L. Schoonmaker /s/ Bernard C.Lannen
- -------------------------- ----------------------
Wayne L. Schoonmaker Bernard C. Lannen
Secretary/Treasurer President, Chief Administrative
Officer, and Director
Dated April 29, 1998 Dated April 29, 1998
- ----------------------- ----------------------
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and as
of the date indicated.
<PAGE>
EXHIBIT INDEX
Exhibits
3.1 Articles of Incorporation of Independence Lead Mines, Inc.,
as amended, previously filed as Exhibit 3.1 to Form 10-K for 1983
and incorporated by reference herein.
3.2 Bylaws of Independence Lead Mines Company, as amended,
previously filed as Exhibit 3.2 to Form 10-K for 1983 and
incorporated by reference herein.
10.1 Unitization Agreement dated February 8, 1968 among Day
Mines, Inc., Independence Lead Mines company and Abot Mining
Company, previously filed as Exhibit 10.1 to Form 10-K for 1983
and incorporated by reference herein.
10.2 Agreement dated February 8, 1968 among Hecla Mining
Company, Day Mines, Inc., Independence Lead Mines Company and
Abot Mining Company, previously filed Exhibit 10.2 to Form 10-K
for 1983 and incorporated by reference herein.
10.3 Agreement and Mining Lease dated February 7, 1968 among
Independence Lead Mines Company, Hecla Mining Company and the
Bunker Hill Company, previously filed as Exhibit 10.3 to Form 10-
K for 1983 and incorporated by reference herein.
(Notice of agreement termination given to previous
management December 21, 1993 and erroneously reported
in 10K for year 1993, 1994, 1995 and 1996.)
10.4 First Amendment to West Independence Agreement and Mining
Lease among Independence Lead Mines Company, Hecla Mining Company
and the Bunker Hill Company dated April 19, 1973, previously
filed as Exhibit 10.4 to Form 10-K for 1983 and incorporated by
reference herein.
(Notice of agreement termination given to previous
management December 21, 1993 and erroneously reported
in 10K for year 1993, 1994, 1995 and 1996.)
10.5 Second Amendment to West Independence Agreement and
Mining Lease among Independence Lead Mines Company,
Hecla Mining Company and The Bunker Hill Company dated
April 1981, previously filed as Exhibit 10.5 to Form 10-
K for 1983 incorporated by reference herein.
(Notice of agreement termination given to previous
management December 21, 1993 and erroneously reported
in 10K for year 1993, 1994, 1995 and 1996.)
10.6 Assignment dated February 7, 1968 from Independence
Lead Mines Company to Day Mines, Inc. assigning 5%
royalties from the West Independence Area, previously
filed as Exhibit 10.6 to Form 10-K for 1983 and
incorporated by reference herein.
(Notice of agreement termination given to previous
management December 21, 1993 and erroneously reported
in 10K for year 1993, 1994, 1995 and 1996.)
10.7 Agreement dated February 8, 1968 among Independence
Lead Mines Company, Day Mines, Inc., Abot Mining
Company, Wall Street Mining Company, Hunter Creek
Mining Company, Lucky Friday Extension Mining Company,
Hecla Mining Company and the Bunker Hill Mining Company
relating to extralateral and intralimital rights to
mining claims, previously filed as Exhibit 10.7 to Form
10-K for 1983 and incorporated by reference herein.
<PAGE>
<TABLE>
<CAPTION>
Property, Plant and Equipment
For the years ended December 31, 1997, 1996 and 1995
---------------------------------------------------
Balance, Balance
Beginning Other End of
Of year Addition Retirements Changes Year
-------- --------- ----------- ------- -------
<S> <C> <C> <C> <C> <C>
December 31, 1997
Equipment 118 (118) 0
Mining Property 3,047,302 3,047,302
Less deferred credits 266,00 17,250 283,250
--------- -------- -------- ------- ---------
Net 2,781,302 (17,250) (118) 2,764,052
--------- -------- -------- ------- ---------
Total 2,781,402 (17,250) (118) NONE
2,764,052
========= ======== ======== ======= =========
December 31, 1996
Equipment 118 118
--------- ---------
Mining Property 3,047,302 3,047,302
Less deferred credits 253,250 12,750 266,000
--------- -------- ---------
Net 3,794,052 (12,750) 2,781,302
--------- -------- ---------
Total 3,794,170 (12,750) None None 2,781,402
========= ======== ===== ===== =========
December 31, 1995
Equipment 118 118
--------- ---------
Mining Property 3,047,302 3,047,302
Less deferred credits 244,250 9,000 253,250
--------- ------- ---------
Net 2,803,052 (9,000) 2,794,052
--------- ------- ---------
Total 2,803,170 (9,000) None None 2,794,170
========= ======= ====== ===== =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 8,883
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,883
<PP&E> 3,235,222<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,244,105
<CURRENT-LIABILITIES> 105,185
<BONDS> 0
0
0
<COMMON> 4,324,306
<OTHER-SE> (1,468,628)<F2>
<TOTAL-LIABILITY-AND-EQUITY> 3,244,105
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 34,788
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,004
<INCOME-PRETAX> (34,788)
<INCOME-TAX> 0
<INCOME-CONTINUING> (34,788)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,788)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
<FN>
<F1>Consists of $3,235,222 in resource properties and claims.
<F2>Consists of $137,630 deficit in additional paid-in capital plus a deficit of
$1,330,998 accumulated during the development stage.
</FN>
</TABLE>
