UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Quarterly Report under Section 13 or 15(d)of the Securities
Exchange Act of 1934 For Quarterly period ended March 31, 1997
Transaction report under section 13 or 15(d) of the exchange act
For the transition period from to
Commission file number 0-1519
LEADVILLE CORPORATION
(Exact Name or Registrant as Specified in its Charter)
COLORADO 84-0388216
(State of Incorporation) (I.R.S. Employer Identification No.)
2851 S. PARKER ROAD, SUITE 610, AURORA, COLORADO 80014
(Address of Principal Executive Office) (Zip Code)
(303) 671-9792
(Issuer's telephone number)
N/A
(Former name, address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
9,839,954
State the number of Shares of the issuer's classes
of common equity, as of the latest practicable date:
Transitional Small Business Disclosure Format (Check one):
Yes No X
LEADVILLE CORPORATION
INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
PART I - FINANCIAL INFORMATION Page
FINANCIAL STATEMENTS
Balance sheets 3 - 4
Statements of operations 5
Statements of stockholders' equity 6
Statements of cash flows 7
Notes to financial statements 8 - 12
PLAN OF OPERATION 13 - 14
PART II - OTHER INFORMATION
Legal proceedings 15 - 16
Exhibits and reports on Form 8-K 17
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PART I
ITEM 1. FINANCIAL STATEMENTS
LEADVILLE CORPORATION
Balance Sheets
March 31, 1997
(Unaudited)
March 31, December 31,
1997 1996
ASSETS
CURRENT ASSETS
Cash $ 22,879 $ 146,340
Prepaid expenses and other 5,310 7,834
Total current assets 28,189 154,174
PROPERTY AND EQUIPMENT, at cost
(Notes 2 and 3)
Mining properties, including assets
acquired under capital leases 7,356,979 7,356,979
Buildings and equipment:
Mine, including assets acquired
under capital leases 1,219,564 1,219,564
Mill 829,032 829,032
Other 108,143 108,143
Land 22,429 22,429
9,536,147 9,536,147
Less accumulated depreciation and
depletion including amortization
applicable to assets acquired under
capital leases (2,819,788) (2,802,796)
6,716,359 6,733,351
OTHER ASSETS:
Investments - certificates of
deposit 133,000 133,000
Inventories 351,964 363,289
484,964 496,289
$ 7,229,512 $ 7,383,814
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March 31, December 31,
1997 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Related parties: (Note 4)
Convertible debentures (Note 3)$ 440,000 $ 440,000
Notes payable, stockholders (Note 3) 348,000 368,500
Accrued interest payable 3,263,732 3,160,482
Due to officers and directors 7,102 10,276
Notes payable-other 55,000 55,000
Accounts payable 67,633 106,017
Accrued expenses 45,168 89,179
Capital lease obligations (Note 3) 809,594 796,040
Total current liabilities 5,036,229 5,024,994
SETTLEMENT OF LITIGATION (Note 3) 80,000 80,000
LONG-TERM DEBT:
Related parties - -
Other - -
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDERS' EQUITY
Capital stock, par value $1 per share;
authorized 15,000,000 shares; issued and
outstanding March 31, 1997 and
December 31, 1996, 9,839,954 and
9,810,992 shares 9,839,954 9,810,992
Additional paid-in capital 8,450,682 8,450,682
18,290,636 18,261,674
Accumulated deficit (16,177,353) (15,982,854)
Total stockholders' equity 2,113,283 2,278,820
$ 7,229,512 $ 7,383,814
See Notes to Financial Statements.
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LEADVILLE CORPORATION
STATEMENTS OF OPERATIONS
Three Months ended March 31, 1997 and 1996
(Unaudited)
Three Months
ended March 31,
1997 1996
Operating revenue $ - $ -
Operating costs and expenses:
General and administrative 67,114 61,161
Depreciation 16,992 16,242
Total operating expenses 84,106 77,403
Operating loss (84,106) (77,403)
Financial income and expense:
Debt settlements (7,470) -
Interest income 1,756 1,370
Interest expense (104,679) (106,678)
Total financial income
(expense) (110,393) (105,308)
Net loss $ (194,499) $ (182,711)
Net loss per capital
share $ (.02) $ (.02)
Weighted average number of
capital shares outstanding
(total shares) 9,824,325 8,953,571
See Notes to Financial Statements.
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LEADVILLE CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
Three Months ended March 31, 1997
(Unaudited)
March 31, 1997 December 31, 1996
Shares Amount Shares Amount
Capital Stock 9,839,954 $ 9,839,954 9,810,992 $ 9,810,992
Additional
Paid-In Capital 8,450,682 8,450,682
Accumulated deficit,
December 31, 1996 (15,982,854) (15,982,854)
2,307,782 $ 2,278,820
Net Loss,
March 31, 1997 (194,499)
$ 2,113,283
See Notes to Financial Statements.
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LEADVILLE CORPORATION
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1997 and 1996
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (194,499) $ (182,711)
Adjustments to reconcile net loss
to net cash provided by (used) in
operating activities:
Depreciation 16,992 16,242
Change in assets and liabilities:
(Increase) decrease in:
Prepaid expenses 2,524 2,525
Inventories 11,325 11,325
Increase (decrease) in:
Accounts payable (38,384) 4,289
Accrued expenses (44,011) 11,178
Officer payables (3,174) 15,416
Accrued interest 112,212 87,864
Capital lease obligations 13,554 13,554
Net cash provided by (used
in) operating activities (123,461) (20,318)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowing,
related parties - 20,000
Net cash provided by financing
activities - 20,000
Increase (decrease) in cash and
cash equivalents (123,461) (318)
Cash and cash equivalents:
Beginning 146,340 2,780
Ending $ 22,879 $ 2,462
SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Capital stock issued for
forgiveness of notes payable
and interest $ 28,962 $ -
See Notes to Financial Statements.
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LEADVILLE CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
Nature of Business and Significant Accounting Policies:
Nature of Business - Leadville Corporation (the Company) is
engaged in the development and mining of hard rock
mineral properties in Lake and Park Counties, Colorado.
Inventories - Inventories are stated at the lower of cost
(average method) or market value. Inventories consist of
operating and maintenance supplies. In 1995, the Company began
amortizing the carrying value of inventory to recognize a
declining useful life and obsolescence.
Property and Equipment - Mining properties consist primarily
of patented and unpatented mining claims. Mining properties
include the cost of acquisition and accumulated exploration
and development expenditures incurred in the pre-production
stage.
In the event such mining properties are developed into producing
properties, depletion of these related costs will be computed on
the unit-of-production method, based on estimated tons of
recoverable ore reserves. If the properties are determined to
be incapable of producing commercial quantities of ore, the costs
will be charged to operations in the period in which the
determination is made.
The Company provides for depreciation of buildings and equipment
on the straight-line method, to apportion costs over the
estimated useful lives of the assets which range principally from
five to twenty years. During 1995, the Company began to
recognize depreciation on fixed assets which are not in service
in order to recognize the declining useful life of such assets.
Income Taxes - The Company accounts for income taxes under the
liability method, whereby deferred tax assets and liabilities
are recorded for the expected future tax consequences of events
that have been included in the financial statements or tax
returns. Under this method, deferred tax assets and liabilities
are determined based on the difference between the financial
statements and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the
differences are expected to reverse.
Net Income (Loss) Per Capital Share - The net income (loss) per
capital share is based on the weighted average number
of shares outstanding during the period. Convertible debt has
not been included in the computation of fully diluted
earnings per share because its effect would be anti-dilutive.
Capitalization of Interest - The Company capitalizes interest
expense as part of the historical cost of acquiring certain
assets which require an extended period of time to prepare them
for their intended use . Subsequent to 1988, interest
has been expensed due to the suspension of development activities
on the Company's properties.
Use of Estimates - The preparation of the Company's consolidated
financial statements in conformity with generally
accepted accounting principles requires the Company's management
to make estimates and assumptions that affect the
amounts reported in these financial statements and accompanying
notes. The Company makes significant assumptions concerning
the realizability of its investment in property and equipment,
and the ultimate liabilities associated with asserted claims .
Management believes that the interim financial statements include
all adjustments necessary in order to make the financial
statements not misleading.
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Continuing operations:
The accompanying financial statements have been prepared on a
going concern basis which contemplates the realization
of assets and liquidation of liabilities in the ordinary course
of business. At March 31, 1997, the Company has a
significant investment in non-producing mining properties,
recovery of which is dependent upon the production of ore
reserves in commercial quantities or sale of these properties at
an amount equal to or in excess of cost. In addition, the
Company has suffered recurring losses from operations and at
March 31, 1997 has a working capital deficiency of
approximately $5,000,000 which includes approximately $4,050,000
due to related parties. The Company also has significant
inventories which the Company intends to utilize in the start up
and operation of its mining properties. As the ultimate
realization of the mining properties and related inventories
depends on circumstances which cannot currently be evaluated, it
is not possible to determine whether any loss will ultimately be
realized from their disposition. All real properties are
collateral for convertible debentures. The Company has no
property or liability insurance coverage at March 31, 1997 or as
of the date of this report. The litigation concerning the
environmental matters and certain mining equipment (Note 3) has
made it difficult for the Company to obtain working capital
through additional equity or debt financing. The Company has
reached agreement with the EPA to reduce the $3,000,000
environmental liability to $500,000 and to waive past due amounts
due under the consent decree. The Company is continuing its
efforts to further improve terms of the consent decree and to
ultimately have its properties severed from Superfund Site
designation. Negotiations are continuing and no payments have
been made to the United States pending results of ongoing
discussions.
The Company believes a substantial portion of the convertible
debentures, notes payable, accrued interest and certain
other obligations may at some future time be converted into
capital shares. Management is continuing to investigate
alternatives to raise additional working capital which will be
required to meet current and future obligations and is
vigorously attempting to settle outstanding litigation matters
without additional material impact to the Company's
financial position.
If the Company cannot successfully restructure its debt,
satisfactorily resolve its current litigation and obtain working
capital, secure an agreement with EPA to modify terms of the
consent decree and ultimately achieve profitable operations,
there is substantial doubt about the ability of the Company to
continue as a going concern. The financial statements do not
include any adjustments which might result from the outcome of
these uncertainties.
2. Mining Properties:
At March 31, 1997, the Company owns two mining properties, the
Sherman Hilltop Consolidation and the Diamond-Resurrection
Consolidation.
Activity at the Diamond-Resurrection property, primarily a gold
property, has been suspended since 1989, due to insufficient
cash resources to finance further exploration and development
work.
Since May of 1987 and continuing into 1997, Leadville's
activities at the Sherman Mine, primarily a silver property,
have been limited to care, maintenance and permit related work,
due to continuing low silver prices. During 1985, the
Sherman Mine was placed in temporary cessation due to suspension
of mining activities. During 1995, the temporary cessation
period expired and Leadville will be required to conduct a
program of study, exploration and sampling to maintain existing
regulatory permits. In the event the required work is not
performed, the Company may be required to reclaim the Sherman
Mine site. The Company maintains a reclamation bond, in the
amount of $128,000, which relates to the Sherman and Stringtown
Mill sites. Although the Sherman Mine is not included as part of
the California Gulch Superfund Site, the Environmental Protection
Agency is considering use of rock materials located on the
property for use on Superfund designated properties. Pending
final decision by EPA on use of Sherman Mine materials, Leadville
has taken no action at the Sherman Mine.
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3. Notes Payable and Convertible Debentures:
The notes payable are summarized as follows:
March 31, December 31,
1997 1996
Notes payable, at 10%, to
stockholders and/or officers/
directors, due dates range to
December 1997
$ 348,000 $ 368,000
Notes payable-other, at 10% due
dates ranging to
December 1997.
$ 55,000 $ 55,000
The above notes payable are convertible to the Company's capital
stock at the option of note holders at conversion prices
of $.80 to $1.00 per share during the term of the notes.
The convertible debentures are summarized as follows:
March 31, December 31,
1997 1996
10% convertible debentures,
interest and principal due December 1997,
convertible to the Company's Capital
Stock at the option of the debenture
holders at a conversion price of $1
per share, collateralized by mining
properties.
$ 440,000 $ 440,000
Of the $440,000, $340,000 is due to stockholders. During 1996
and early 1997, the Company secured extended due
dates for the debentures to December 1997.
3. Commitments and Contingencies:
Lease Commitment Litigation - In December 1988, the Company sold
and leased back certain equipment from an
unrelated entity. Proceeds of $415,000 were recorded as a
capital lease obligation. In addition, the Company leases
several other pieces of mining equipment which are classified as
capital leases. The Company was delinquent on certain
of its lease obligation payments, and the lessor has asserted
that the Company was in default. In January 1991, the
lessor won a summary judgment in the amount of approximately
$642,000, which represents all unpaid past and future
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capital lease obligations (including interest). During 1994,
in an appeal, the judgment amount of $642,000 was upheld,
and additional attorneys fees and interest of approximately
$46,000 were awarded the lessor. During the first three
months of 1997, the Company accrued an additional $13,554 of
interest expense on this obligation. During 1992, the
lessor also won a summary judgment for possession of leased
equipment with a net book value of $525,000 and for
interest and penalty charges on the unpaid summary judgments.
The lessor has also asserted that it has a lien on all
the real property of the Company and that this lien should be
foreclosed. Leadville contests lessor's foreclosure
assertions. The lessor has repossessed approximately $402,000
of the leased equipment. Approximately $123,000 of
equipment the lessor has not repossessed remains recorded as an
asset of the Company.
Environmental Litigation - The Company has been named as one of
several defendants in certain legal actions involving
environmental matters. The plaintiffs in these actions, the
State of Colorado and the Federal Government, have alleged
that the defendants are liable under the Comprehensive
Environmental Response, Compensation and Liability Act of
1980 (CERCLA) in connection with mining and property ownership
positions in the California Gulch Superfund Site
near Leadville, Colorado.
The Company has answered the complaints and has vigorously
defended the consolidated action. Further, the Company
and litigation counsel believe they have substantial and
meritorious defenses to the claims being made. However, in an
effort to expedite a conclusion and to minimize legal costs, the
Company agreed to a settlement of the cases.
During August 1993, a consent decree was entered by the Federal
District Court in Colorado whereby the United States
agreed to settle the Company's alleged liability, with the
exception of natural resources damages, if any, in consideration
for $3,000,000. Under the original terms of the consent decree,
a total of $250,000 was to be paid by the Company over
15 years, with a contingent liability of $2,750,000 to be paid
based on profitable operations or sale of properties.
Minimum cash payments are to be $10,000 for years 1-5, $15,000
for years 6-10, and $25,000 for years 11-15.
During October 1995, the Company reached agreement, in
principle, with the United States to reduce the consent decree
obligation amount of $3,000,000 to $500,000, with minimum annual
cash payments to begin in April 1996. In effect,
the contingent liability of $2,750,000 was reduced to $250,000.
In consideration, the Company agreed to provide to the
United States certain dirt and rock material for use by the
Environmental Protection agency (EPA) in remedial action
work at the Superfund site. During late 1995, the EPA began to
use the dirt material. The Company's management is continuing
efforts to further improve terms of the Consent Decree and to
ultimately have its properties severed from Superfund Site
designation. The Company has accrued a $110,000 environmental
settlement liability, which was the present value of the $250,000
future minimum payments.
Contract Mining Litigation - During March 1990, a subcontractor
of the Company filed an action in Lake County District Court for
non-payment of approximately $35,000 for mining services, plus
associated costs. Leadville has filed a counter-claim against
the plaintiff for approximately $185,000 relating to the same
contract. No action has occurred in the case since 1993 and the
Court ordered a status report on the issues by August 1996.
Since August of 1996, no further action has occurred in this
case.
Certificates of Deposit - The Company is required by the Mined
Lands Reclamation Board to maintain certificates of
deposit for future reclamation costs. No future reclamation
costs have been accrued as of March 31, 1997.
- 11 -
4. Related Party Transactions:
Certain officers, directors and stockholders have provided
significant loans and advanced expenses to the Company in
recent years. The aggregate indebtedness, including accrued
interest and other payables, amounted to approximately
$4,050,000 at March 31, 1997. Substantially all of that
indebtedness is convertible in the Company's Capital Stock at
a price of $1.00 per share.
The Company leases office space on a month-to-month basis from an
officer for $125 per month. This officer is a
principal partner in an accounting firm which performs
bookkeeping, accounting and other administrative services for
the Company. As of March 31, 1997, the Company owed the firm
approximately $7,100 for accrued fees and expenses.
5. Income Taxes:
At December 31, 1996, the Company has available tax net operating
loss carryforwards of approximately $7,700,000,
which can be utilized to offset future taxable income.
Utilization of these loss carryforwards may be limited due to
changes in ownership of the Company, and expire from 1997 through
2011.
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ITEM 2. PLAN OF OPERATION
The following discussion should be read in conjunction with the
Company's consolidated financial statements and related
notes included elsewhere herein. The Company's results may be
affected by various trends and factors which are
beyond the Company's control. These include factors discussed
elsewhere herein.
With the exception of historical information, the matters
discussed below under the headings "Plan of Operations" may
include forward-looking statements that involve risks and
uncertainties. The Company cautions the reader that a
number of important factors discussed herein, and in other
reports filed with the Securities and Exchange Commission,
could affect the Company's actual results and cause actual
results to differ materially from those discussed in forward-
looking statements.
The Company earned no operating revenues during 1995 and 1996 and
incurred net losses in those years of $617,069
and $633,057 respectively. Management does not anticipate that
any operating revenues will be generated during the
year 1997. The Company's most viable prospect for generating
income from operations is by achieving production at
the Diamond-Resurrection property. The property should be
primarily a gold producer. In order to achieve production
from the Diamond property, the Company must secure significant
financing for further mine development and to reestablish
milling capabilities.
Leadville is severely undercapitalized. As of March 31, 1997,
the Company has a working capital deficit of $5,008,000
and minimal operating cash. With the exception of the $500,000
in proceeds received in 1996 from issuance of stock,
substantially all of Leadville's cash needs have been met loans
from the Company's President and by proceeds from short term
notes. Management is hopeful that cash needs for 1997 will be
met from existing cash resources and short-term borrowings until
significant financing can be secured.
In 1996 and in the first quarter of 1997, the Company used cash
to meet general, administrative and property obligations. In
addition, certain long standing past due obligations were
settled on terms favorable to Leadville. No capital
expenditures were made during the first quarter of 1997.
The Company's certificates of deposit, in the amount of $133,000,
are held as mining reclamation bonds and classified as long term
assets.
In order for Leadville to continue as a going concern and attempt
to operate its mining properties, a significant amount
of capital from sources outside the Company willl be required.
Management is seeking to resume discussions with several mining
companies that previously expressed interest in the Diamond and
Sherman Mine properties. It is management's assessment that
financing will be difficult to obtain until the California Gulch
Superfund site cleanup issues are more clearly defined. The EPA
Court action involving the Leadville Mining District, for all
practical purposes, eliminated Leadville's ability to obtain
significant outside financing over the past several years.
Management cannot predict if or when the litigation will be
resolved to a point where outside parties will show a serious
interest and ability to provide financing to Leadville.
During 1997, management will continue its efforts to obtain
financing for the Company's properties through joint-
venture, cash investment or a secondary offering of Leadville's
stock. No assurance can be given that Leadville will be
successful in securing financing. In order to improve the
financing prospects for Leadville, managment is continuing
its efforts to lessen the financial and operating burdens of the
consent decree with the United States and negotiations
with the EPA are continuing.
The Company continues to incur significant interest charges
associated with the outstanding notes and debentures
payable. Management believes that a substantial amount of the
note, debenture and associated accrued interest obligations
will ultimately be converted to Capital Stock by the holders.
The holders of these instruments have the right to convert
principal and accrued interest to Capital Stock at prices of $.80
to $1.00 per share. Substantially all holders of the notes and
debentures payable are stockholders of the Company.
-13-
Leadville intends to use the proceeds from significant financing
to settle existing obligations and to finance an exploration
and development program on the Diamond properties. The
objective of the exploration program is to identify reserves
in addition to the 700,000 tons already identified at the
Diamond-Resurrection. In anticipation of settling the
environmental litigation, Leadville completed three studies of
the Diamond property during 1992, 1993 and early 1997.
The studies included verification of known mineralization,
evaluation of mine development, and surface geo-physics
intended to indicate potential exploration targets. Conclusions
of these studies are encouraging and provide additional
evidence that the Diamond-Resurrection property may hold
significant deposits of gold, silver and base metals.
Full production at the Diamond Mine will require a significant
capital expenditure to acquire surface plant and underground
equipment. Realizing operating revenues from the Diamond Mine
production will require that the Company re-establish milling
capabilities at the Stringtown Mill site, construct a new milling
facility or make other milling arrangements. No significant
capital expenditures are anticipated to be made until such time
as the Company secures significant financing or participation on
the Diamond properties. Management does not anticipate that
there will be an significant change in the number of Company
employees, until such time as significant financing can be
obtained. The Company's Board of Directors is in the process of
expanding its number of members beyond three. In addition,
the Board is seeking new members for senior management positions.
In recent months, management has been involved in discussion with
several mining companies who have expressed preliminary interest
in the Diamond-Resurrection and Sherman-Hilltop properties. To
date, no agreements have been reached. It is management's
assessment that financing will be difficult to obtain until the
California Gulch Superfund site cleanup issues are more clearly
defined. Leadville will continue to press EPA to lift the
Superfund designation from its properties and to lessen the
burdens on mining operations in the Leadville, Colorado area.
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PART II
Item 1. LEGAL PROCEEDINGS
UNITED STATES (ENVIRONMENTAL PROTECTION AGENCY)
In 1983, Leadville was named as one of several defendants in an
action (United States of America vs. Apache Energy
and Mineral Company, et al) brought by the United States in
Federal District Court in Colorado under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA") in connection with the approximately 11.5 square mile
California Gulch Superfund site in Lake County, Colorado. In
1986, Leadville was also named as a third party defendant in a
suit (State of Colorado vs. Asarco, Inc., et al) involving the
same site. The cases were subsequently consolidated.
From 1983 through 1988, Leadville negotiated with the United
States to have its involvement in the consolidated case
dismissed or settled on a de minimis basis. That effort was
ultimately unsuccessful. During the years 1989 and
continuing into 1993, Leadville attempted to negotiate a
settlement of its alleged liability to the United States.
Management believed that financing might be obtained by
Leadville if the claims asserted by the United States were
settled and the financial exposure limited.
During August, 1993, a consent decree was entered by the
Federal District Court in Colorado whereby the United States
agreed to settle Leadville's alleged liability, with the
exception of natural resources damages, if any, in consideration
for $3,000,000. Under the original terms of the consent decree,
a total of $250,000 was to be paid by Leadville over 15
years, with a contingent liability of $2,750,000 to be paid based
on profitable operations or sale of properties. Minimum
cash payments are to be $10,000 for years 1-5, $15,000 for years
6-10 and $25,000 for years 11-15.
During October 1995, Leadville reached agreement, in
principle, with the United States to reduce the consent decree
obligation amount of $3,000,000 to $500,000, with minimum
annual cash payments to begin in April 1996. In effect,
the contingent liability of $2,750,000 was reduced to $250,000.
In consideration, Leadville agreed to provide to the
United States certain dirt and rock material for use by the
Environmental Protection Agency (EPA) in remedial action
work at the Superfund site. During late 1995, the EPA began to
use the dirt material. Leadville management is
continuing efforts to improve terms of the consent decree and
ultimately, to sever the Company's properties from
Superfund Site designation. Leadville has made no payments to
the United States, pending resolution of current
negotiations with the EPA.
MINING EQUIPMENT, INC.
During December 1988, Leadville raised financing for operations
through the sale and lease back of certain mining and
milling equipment. In late 1989, due to Leadville's inability
to raise financing, scheduled payments under the agreement
could not be made and the lessor of the equipment sued in the
District Court of Lake County, Colorado to obtain
financial relief and possession of the equipment. (Mining
Equipment, Inc. vs. Leadville Corporation).
In October 1994, Leadville and Mining Equipment, Inc. reached
an agreement to settle the case for $678,000. The plaintiff
has obtained possession of substantially all mining and milling
equipment subject to the lease agreements, with the exception
of the Diamond Mine hoist and certain other equipment. The
plaintiff's right to possession of the hoist is subordinate to
Leadville's debenture holders' first mortgage position.
Plaintiff intends to obtain possession of the
other equipment in 1997.
As of March 31, 1997, Leadville is obligated to Mining Equipment,
Inc. in the amount of $809,594 including accrued
interest. The plaintiff asserts that it has the right to
foreclose on Leadville's properties to satisfy the obligation.
Leadville contests such assertions and, to date, the plaintiff
has not initiated any foreclosure action.
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COWIN & COMPANY, INC.
In 1990, Cowin & Company, Inc. Mining Engineers and Contractors
filed suit against Leadville in Lake County, Colorado District
Court asserting that Leadville was obligated to Cowin & Company,
Inc. for approximately $45,000 for contract mining fees. Cowin &
Company, Inc. is requesting damages, equipment possession and
general relief relating to a contract mining agreement entered
into March 3, 1987.
Leadville counter-claimed for damages resulting from improper
construction of the Diamond Mine shaft and damages
resulting from Cowin & Company activities at the site. Since no
action had been taken in the case since October 1993,
the Court ordered a Status Report be filed on the matter by
August 30, 1996. The status report was filed with the
Court, however, no action has occurred since then.
- 16 -
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed herewith or incorporated by reference to
previous filings with the Securities and Exchange
Commission.
Exhibit
Number Description
(2) Plan of Acquisition, reorganization, arrangement,
liquidation or succession
(3) Articles of Incorporation and By-laws
(4) Instruments defining the rights of security
holders, including indentures
(9) Voting Trust Agreement
(10) Material Contracts
(11) Statement Regarding Computation of Earning Per
Share is not required since the information is
ascertainable from Leadville's financial
statements filed herewith.
(13) Annual Report to security holders, Form 10-Q or
quarterly report to security holders
(16) Letter re: change in accounting principles
(19) Documents not previously filed
(21) Subsidiaries of the Registrant
(22) Published report regarding matters submitted to
vote of security holders
(23) Consents of experts and counsel
(24) Power of Attorney
(27) Financial Data Schedule
(28) Information from reports furnished to state
insurance authorities
(29) Additional Exhibits
___________________
(3) The Articles of Incorporation of Leadville were filed with
its Form 10-K on May 6, 1965; the By-laws of Leadville
were filed with its Report on Form 10-K for the year ended
December 31, 1980.
(4) Filed with Form 10-K for year ended December 31, 1987.
(28) Consent Decree, State of Colorado vs. Asarco, Inc., et al,
Defendants and Third Party Plaintiffs vs. Leadville
Corporation, et al, Third Party Defendants: United States
of America vs. Apache Energy and Minerals Company, et al.
(b) Reports on Form 8-K filed during the Registrant's first
quarter of 1997. NONE
- 17 -
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant
has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
LEADVILLE CORPORATION
(Registrant)
DANIEL F. NIBLER
Daniel F. Nibler, Vice President,
Secretary-Treasurer, (Principal
Financial and Accounting Officer)
Dated: MAY 15, 1997
- 18 -<PAGE>
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