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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: Commission File
December 31, 1998 #001-08429
THUNDER MOUNTAIN GOLD, INC.
(Exact name of Registrant as specified in its charter)
State of Idaho 91-1031075
(State or other jurisdiction of (IRS Identification No.)
incorporation or organization)
3605 E. 16th Avenue 99223
Spokane, Washington (Zip Code)
(Address of Principal Executive Officers)
Telephone Number of Registrant (509) 535-6092
Securities registered pursuant to Section 12(b) of the Act:
Name of Exchange
Title of each Class on which Registered
$0.05 Par Value Common None
Non-Assessable Stock
Securities registered pursuant to Section 12(g) of the Act: NONE
Check whether the issuer (1) filed all reports required by Section 13 or 15(d)
of the Exchange Act during the past 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[ ]
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulations S-B is met contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of the Form
10-KSB or any amendment to this Form 10-KSB. [ ] Not Applicable [X]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of December 31, 1998 was $389,114. This figure is based on
estimated bid price of $.04.
Issued and outstanding common capital stock as of March 23, 1999.
9,727,852 shares of common $0.05 par value stock non -assessable.
No documents are Incorporated by reference.
Transitional small business disclosure format: Yes [ ] No [X]
Total Number of Pages: 28
********************************************************************************
<PAGE>
PART 1
ITEM 1. Description of Business
(a) General development of Business.
The Company was originally incorporated under the laws of the State of
Idaho on November 9, 1935 under the name of Montgomery Mines, Inc. In August
1985, the Company's shareholders approved an increase in the authorized
common stock, $.05 par value, from 7,500,000 shares to 12,000,000 shares.
Quotations of the bid and ask prices for the stock are published by the Spokane
Quotations Service of Spokane, Washington.
USMX, Inc. of Lakewood, Colorado signed a Letter of Intent to do exploratory
work and possibly acquire and interest in the Dewey-Sunnyside and Thunder
Mountain Gold properties in Valley County, Idaho during 1994. They have sent
their intent to mine the U.S. Forest Service, so they will build a mine if all
necessary permits can be secured. These companies control approximately 10,000
acres in the Thunder Mountain mining district in central Idaho, consisting of
both patented and unpatented mining claims.
June 2, 1997 - Dakota Mining Corporation of Denver, CO. completed its merger
with USMX, Inc of Lakewood, CO with shareholders voting in favor by both
companies.
Precious Minerals Properties
1. Thunder Mountain Claims:
The Registrant now holds 510 unpatented Iode mining claims and fractional
claims in the Thunder Mountain District of Valley County, Idaho. Thirteen of
the patented Iode claims are owned by the Registrant and are under lease, and
of the 510 unpatented Iode mining claims, 446 are owned by the Registrant and
64 are held under leases. The mineralization of the main interest on them is
gold and silver.
2. Dewey Mining Co. properties:
The properties of the Dewey Mining Company approximate 1,500 acres in the area
and are known to contain gold mineralization There are 9 patented and 108
unpatented mining claims.
3. Dry Creek and Mineral Hill Groups:
In addition the Company holds 130 unpatented mining claims in Eureka County,
Nevada. These claims are known as the Dry Creek and Mineral Hill claims.
There is no known commercial mineralization on these claims.
(b) Financial Information About Industry Segments.
The Registrant has no other industry segments.
(c) Narrative Description of Business.
Refer to ITEM:1 Description of Business (supra) Subparagraph (i) through
(xii) are not applicable to the Registrant
(d) Financial Information About Foreign and Domestic Operations and Export
Sales.
This paragraph is not applicable to the Registrant.
Document page: 2
<PAGE>
ITEM 2: Properties
For continuity and clarity, this information was included in the information
set in Item 1.
ITEM 3: Legal Proceedings.
The Registrant has no legal actions pending against it and it is not a party
to any suits in any court of law, nor are the directors aware of any claims
which could give rise to or investigations pending by the Securities and
Exchange Commission or any other governmental agency.
The Registrant is involved in no civil rights negotiations or proceedings.
ITEM 4: Submission of Matters to Vote on Security Holders.
No matters were submitted to vote of the Registrant's security holders during
1998.
PART 11
ITEM 5: Market for Registrant's Common Equity and Related Stockholder Matters.
(a) Market Information.
The common stock of the Registrant is traded over-the-counter in Spokane,
Washington and its bid and asked prices are quoted on a daily basis by the
Spokane Quotation Service, Spokane, Washington.
The bid prices for the Registrant's stock for the years 1997 and 1998 were as
follows:
<TABLE>
1998 BID PRICES
HIGH LOW
<S> <C> <C>
First Quarter $0.04 $0.03
Second Quarter $0.04 $0.03
Third Quarter $0.04 $0.03
Fourth Quarter $0.04 $0.04
</TABLE>
<TABLE>
1997 BID PRICES
HIGH LOW
<S> <C> <C>
First Quarter $0.06 $0.05
Second Quarter $0.05 $0.04
Third Quarter $0.04 $0.03
Fourth Quarter $0.05 $0.03
</TABLE>
(b) Approximate Number of Equity Security Holders:
Title of Class No. of Record Holders
------------------------------- ---------------------------------
$0.05 Par Value 2,241 as of December 31, 1998
Common Stock Non -Assessable
Document page: 3
<PAGE>
(c) Dividend History and Restrictions
The Registrant has not paid any dividends, and does not plan to do so in the
foreseeable future as it plans to use its capital to finance the search for
additional mineral properties of potential commercial value.
ITEM 6: Selected Financial Data
Following is a summary of selected financial data which indicates trends in
Registrants financial condition and operations.
Selected Balance Sheet Data
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996 1995 1994
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Current Assets $ 530,307 $ 659,329 $ 523,893 $ 733,797 $580,135
Property and Equipment 255,211 260,018 266,775 261,482 246,976
Non-Current Investments 170 170 170 170 170
Total Assets 785,688 919,517 1,090,838 995,449 827,281
Current Liabilities 41,250 22,500 42,500 42,500 42,500
Stockholders' Equity 744,438 897,017 1,048,338 952,949 784,781
Selected Operational Data
Royalty Revenue - 62,500 100,000 75,000 25,000
Other Revenue and Gains
(Losses) 16,860 24,589 51,845 19,375 17,867
Net Income (Loss) (125,684) 17,250 83,029 26,367 (27,471)
Net Income (Loss) per share $ (0.01) $ NIL $ 0.01 $ NIL $ NIL
========== ========== =========== ========== ==========
</TABLE>
No dividends have been paid by the Company.
ITEM 7: Management's Discussion and Analysis of Financial Condition and Results
of Operation.
(a) Full fiscal year.
Liquidity: The Company has a positive cash position and has invested
funds in a cash management mutual fund. The Company's cash and liquid assets
are considered adequate to meet its current and foreseeable obligations.
Expenses for the ensuing year will be incurred for continued search and
Exploration for additional properties, and for management fees and
administrative costs. The Company's required assessment work for 1998 to keep
its unpatented claims valid will be performed by the Company. Directors and
management fees are $40,000 annually. Please refer to the financial statements
for additional costs and expenditures and other financial information.
Capital Resources: The Company presently does not intend to make any capital
expenditures from its funds. The Company also does not presently have any plans
to raise capital through debt or equity financing.
Document page: 4
<PAGE>
Results of Operations: The Company had no production from operations for
1998. Although additional production units are likely, it is impossible to
predict with any certainty when and where the next production unit will be
developed. For that reason, it is impossible to predict the future production
units.
For 1998 the gross revenues were $-0- compared to $100,000 for 1996 and
$75,000 for 1995.
ITEM 8: Financial Statements and Supplemental Data
CONTENTS
Page
Independent Auditor's Report 1
Balance Sheet at December 31, 1998 and 1997 2-3
Statement of Operations for the Years Ended
December 31, 1998, 1997, and 1996 4
Statement of Cash Flows for the Years Ended
December 31, 1998, 1997, and 1996 5-6
Statement of Changes in Stockholders' Equity for the
Years Ended December 31, 1998, 1997, and 1996 7
Notes to Financial Statements 8-13
Document page: 5
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Thunder Mountain Gold, Inc.
Spokane, Washington
We have audited the accompanying Balance Sheets of Thunder Mountain Gold, Inc.
as of December 31, 1998 and 1997, and the related Statements of Operations, Cash
Flows and Changes in Stockholders' Equity for the years ended December 31, 1998,
1997, and 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Thunder Mountain Gold, Inc. as
of December 31, 1998 and 1997, and the results of its operations, cash flows and
changes in stockholders' equity for each of the three years ended December 31,
1998, 1997, and 1996, in conformity with generally accepted accounting
principles.
ROBERT MOE & ASSOCIATES, P.S.
March 12, 1999
Spokane, Washington
1
Document page: 6
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Balance Sheet
As of December 31, 1998 and 1997
<TABLE>
1998 1997
____________ ____________
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $ 77,729 $ 137,077
Prepaid Expenses 852 1,870
Investments 451,726 520,382
____________ ____________
Total Current Assets 530,307 659,329
____________ ____________
INVESTMENTS - Non-Current 170 170
____________ ____________
PROPERTY AND EQUIPMENT:
Mining Equipment 5,477 5,477
Office Equipment 6,547 6,547
Automotive 47,436 47,436
Mining Claims 461,934 461,934
____________ ____________
Total Property and Equipment 521,394 521,394
____________ ____________
Less: Accumulated Depreciation
and Depletion 266,183 261,376
____________ ____________
Net Property and Equipment 255,211 260,018
____________ ____________
TOTAL ASSETS $ 785,688 $ 919,517
============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
2
Document page: 7
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Balance Sheet
As of December 31, 1998 and 1997
(Continued)
<TABLE>
1998 1997
____________ ____________
<C> <S> <S>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued Directors and Management Fees $ 41,250 $ 22,500
____________ ____________
Total Current Liabilities 41,250 22,500
____________ ____________
STOCKHOLDERS' EQUITY:
Common Stock, $0.05 Par Value;
12,000,000 Shares Authorized;
9,727,852 and 9,727,852
Shares Issued Respectively 486,392 486,392
Additional Paid-in Capital 254,222 254,222
Less: 11,700 Shares of Treasury
Stock, At Cost (24,200) (24,200)
Accumulated other comprehensive
Income 173,639 200,533
Retained Earnings/(Deficit) (145,615) (19,930)
____________ ____________
Total Stockholders' Equity 744,438 897,017
____________ ____________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 785,688 $ 919,517
============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
3
Document page: 8
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement Of Operations For The Years
Ended December 31, 1998, 1997, and 1996
<TABLE>
1998 1997 1996
_____________ ____________ ____________
<S> <C> <C> <C>
INCOME:
Royalties $ - $ 62,500 $ 100,000
_____________ ____________ ____________
EXPENSES:
Exploration and Development 77,362 - 1,139
Depreciation and Depletion 4,807 6,757 4,470
Directors' Fees and
Professional Services 40,000 40,000 40,000
Legal and Accounting 8,543 5,375 5,475
Management and
Administrative 11,832 17,707 17,732
_____________ ____________ ____________
Total Expenses 142,544 69,839 68,816
_____________ ____________ ____________
INCOME/(LOSS) FROM OPERATIONS (142,544) (7,339) 31,184
_____________ ____________ ____________
OTHER INCOME:
Interest and Dividend
Income 12,558 24,589 25,126
Gain on sale of asset 4,302 - 26,719
_____________ ____________ ____________
16,860 24,589 51,845
_____________ ____________ ____________
INCOME/(LOSS) BEFORE FEDERAL
INCOME TAXES (125,684) 17,250 83,029
PROVISION FOR INCOME TAXES:
Tax At Statutory Rates - - -
Tax Benefit - - -
_____________ ____________ ____________
NET INCOME (LOSS) (125,684) 17,250 83,029
OTHER COMPREHENSIVE INCOME
Net of income tax:
Unrealized holding gain (loss) (26,894) (168,521) 12,360
_____________ ____________ ____________
$ (152,578) $ (151,271) $ 95,389
COMPREHENSIVE INCOME (LOSS) ============= ============ ============
EARNINGS (LOSS) PER SHARE:
Basic $ (0.01) $ NIL $ (0.01)
============= ============ ============
Diluted $ (0.01) $ NIL $ (0.01)
============= ============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statement
4
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement of Cash Flow For The Years
Ended December 31, 1998, 1997, and 1996
<TABLE>
1998 1997 1996
____________ ____________ ____________
<S> <C> <C> <C>
CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES:
Net Income/(Loss) $ (125,684) $ 17,250 $ 83,029
Non-Cash Expenses, Revenues,
Losses And Gains Included
in Income:
Depreciation and
Amortization 4,807 6,757 4,470
Gain on sale of asset (4,302) - (26,719)
Net (Increase)/Decrease In
Receivables and Payables 19,678 (20,585) 215
____________ ____________ ____________
Net Cash Flows Provided (Used)
By Operating Activities (105,501) 3,422 60,995
____________ ____________ ____________
CASH FLOWS PROVIDED (USED) BY
INVESTING ACTIVITIES:
Purchase Of Investments (14,817) (7,087) (51,806)
Purchase Of Property and
Equipment - - (25,543)
Proceeds from Disposition
Of Investments 60,970 - -
Disposition of Equipment - - 42,500
____________ ____________ ____________
Net Cash Flows Provided (Used)
By Investing Activities 46,153 (7,087) (34,849)
____________ ____________ ____________
CASH FLOWS (USED) BY FINANCING
ACTIVITIES
Reacquisition of stock - (50) -
____________ ____________ ____________
Net cash flows (used) by
Financing Activities - (50) -
____________ ____________ ____________
NET INCREASE/(DECREASE) IN CASH (59,348) (3,715) 26,146
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 137,077 140,792 114,646
____________ ____________ ____________
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 77,729 $ 137,077 $ 140,792
============ ============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
5
Document page: 10
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement of Cash Flow For The Years
Ended December 31, 1998, 1997, and 1996
(Continued)
<TABLE>
Supplemental Disclosure of Cash Flow Information:
1998 1997 1996
____________ ____________ ____________
<C> <S> <S> <S>
Cash Paid For:
Income Taxes $ - $ - $ -
Interest - - -
</TABLE>
Disclosure Of Accounting Policy:
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid debt instruments purchased with an initial maturity of
three (3) months or less to be cash equivalents.
The Accompanying Notes Are An Integral Part Of These Financial Statements
6
Document page: 11
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement Of Changes In Stockholders' Equity For The
Years Ended December 31, 1997, 1996, and 1995
<TABLE>
*begin 9pt type*
Unrealized
Additional Gain on Retained
Common Stock Paid-In Marketable Treasury Earnings/
Shares Amount Capital Securities Stock (Deficit) Total
__________ _________ __________ _____________ __________ __________ _________
<S> <C> <C> <C> <C> <C> <C> <C>
Balances,
December 31,
1995 9,727,852 486,392 254,222 356,694 (24,150) (120,209) 952,949
Unrealized gain
in marketable
securities - - - 12,360 - - 12,360
Net income - 1996 - - - - - 83,029 83,029
__________ _________ __________ _____________ __________ __________ _________
Balances,
December 31,
1996 9,727,852 486,392 254,222 369,054 (24,150) (37,180) 1,048,338
Reacquisition
of stock - - - - (50) - (50)
Unrealized loss
in Marketable
securities - - - (168,521) - - (168,521)
Net income - 1997 - - - - - 17,250 17,250
__________ _________ __________ _____________ __________ __________ _________
Balances,
December 31,
1997 9,727,852 486,392 254,222 200,533 (24,200) (19,930) 897,017
Unrealized loss
In marketable
Securities - - - (26,894) - - (26,894)
Net loss - 1998 - - - - - (125,684) (125,684)
----------
Comprehensive
Loss - - - - - - (152,578)
__________ _________ __________ _____________ __________ __________ _________
Balances,
December 31,
1998 9,727,852 $ 486,392 $ 254,222 $ 173,639 $ (24,200) $(145,614) $ 744,439
========== ========= ========== ============= ========== ========== ==========
*end 9pt type*
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
7
Document page: 12
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Business Operations
Thunder Mountain Gold, Inc. ("Thunder Mountain Gold" and the "Company") takes
its name from the Thunder Mountain Mining District in Valley County, Idaho,
where its principal lode mining claims are located. Since 1978, the efforts of
the Company have been to develop its property into a producing gold mine. Coeur
d'Alene Mines Corporation started initial production of gold on the Thunder
Mountain Gold property in July, 1986.
Accounting Policies
Marketable securities are stated at their fair market value. The market value
is based on quoted market prices or other fair value estimates provided by third
party portfolio managers. Current marketable securities had an aggregate cost
of $277,177 at December 31, 1998. A valuation allowance in the amount of
$174,549 has been recorded to adjust the carrying amount of the portfolio to
market value.
Exploration Costs
Exploration costs are charged to operations when incurred.
Property and Equipment
Property and equipment are carried at cost. Depreciation is computed using
accelerated depreciation methods with useful lives of three to seven years.
Major additions and betterment's are capitalized. Costs of maintenance and
repairs which do not improve or extend the life of the associated assets are
expensed currently. When there is a disposition of property and equipment, the
cost and related accumulated depreciation are removed from the accounts and any
gain or loss is reflected in net income. Depletion is computed using the unit
of production method.
Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Comprehensive Income
In 1998, we adopted Statement of Financial Accounting Standards (FAS) 130,
"Reporting Comprehensive Income," issued by the Financial Accounting Standards
Board (FASB). We report accumulated other comprehensive income as a separate
component of shareowners' equity. There were no adjustments required for the
deferred tax effects of the unrealized gain or loss on available - for - sale
securities.
Earnings Per Share
We compute basic earnings per common share by dividing the net income by the
weighted average number of common share outstanding during the period.
Diluted earnings per share are calculated by including all dilutive potential
common shares such as stock options. Dilutive potential common shares were
9,727,852 in 1998, 9,777,852 in 1997, and 9,727,852 in 1996. No adjustment to
reported net income is required when computing diluted earnings per share.
8
Document page: 13
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 2 - INVESTMENTS
Investments consist of the following:
<TABLE>
Carrying Market
Value Cost Value
___________ ___________ ___________
<S> <C> <C> <C>
December 31, 1998:
Current Investments $ 451,726 $ 227,178 $ 451,726
Other Investments 170 1,080 170
___________ ___________ ___________
Total $ 451,896 $ 228,258 $ 451,896
=========== =========== ===========
December 31, 1997:
Current Investments $ 520,382 $ 318,939 $ 520,382
Other Investments 170 1,080 170
___________ ___________ ___________
Total $ 520,552 $ 320,019 $ 520,552
=========== =========== ===========
December 31, 1998:
Current Investments $ 681,816 $ 311,852 $ 681,816
Other Investments 170 1,080 170
___________ ___________ ___________
Total $ 681,986 $ 312,932 $ 681,986
=========== =========== ===========
</TABLE>
At December 31, 1998, 1997, and 1996 the current investment portfolios
included gross unrealized gains of $224,548, 201,443, and $369,964
respectively, and gross unrealized losses of $910, $910 and $910, respectively.
Other investments consist of small stock holdings in several local mining
companies.
NOTE 3 - MINING CLAIMS AND OPERATING AGREEMENT
Substantially all of the Company's patented and unpatented claims in the
Thunder Mountain Mining district were obtained from major stockholders for cash
or newly issued stock.
On April 15, 1982, the Company entered into a mining lease with Phillips
Petroleum Company ("Phillips"). The lease permitted Phillips to explore,
develop, and mine the Thunder Mountain claims, in exchange for which the Company
was to receive, as a royalty, a percentage of the defined net production
proceeds. Until the beginning of production, Thunder Mountain Gold received
advance minimum royalties of $125,000 per year, increased by the percentage of
increase in the average price of gold over $400 per ounce during the preceding
year.
9
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 3 - MINING CLAIMS AND OPERATING AGREEMENT (continued)
After the beginning of production, which commenced in July, 1986, the Company
was to receive annually the greater of 10% of the defined net proceeds from
production or the minimum royalty as defined above. When Phillips has recovered
all of its pre-production costs as defined in the contract, including the
advance and minimum royalties, out of defined net production proceeds, the
Company was to receive annually the greater of 30% of the defined net production
proceeds or the minimum royalty.
The term of the lease was initially for ten years and thereafter for as long
as continuous mining or development is conducted. The lessee however, could
cancel the lease at any time subject to 30 days notice.
On April 8, 1983, the Coeur d'Alene Mines Corporation acquired a 60% interest
in the Phillips mining lease with Thunder Mountain Gold. Phillips retained a
10% interest and a two year option to repurchase its interest up to an equal
share with Coeur d'Alene Mines Corporation. The transaction was between
Phillips and Coeur d'Alene Mines Corporation, and did not change the Company's
30% interest in defined profits nor any other terms of the lease between
Phillips and the Company.
In March, 1986, Coeur d'Alene Mines increased its ownership in Thunder
Mountain by paying Phillips Petroleum $1 million for Philip's ten (10) percent
interest.
On September 1, 1987, the Company issued 10,000 shares of its restricted
common stock for purchase of the "Althouse Placer" mining claims which cover an
area of approximately 380 acres in Valley County, Idaho. The transaction was
valued at the market price of the stock on the date of issuance.
During 1988, the Company acquired an area of approximately 7,300 acres in
Elko, Eureka and Lander Counties, Nevada, pursuant to an agreement entered into
with the Company's consulting geologist, a stockholder of the Company. Under
this agreement, the Company has issued 100,000 shares of its restricted common
stock for legal title to approximately 400 mining claims.
In April, 1990, the Company entered into a mining lease agreement with the
Vancouver, BC, Canada, based Equinox Resources, Ltd. Equinox, in turn, assigned
the lease to Amax Gold Exploration, Inc. of Reno, Nevada. Amax performed
exploration work in excess of $100,000 that consisted primarily of drilling of
approximately 4,000 feet of holes.
On the basis of negative drilling results, Amax has elected to terminate its
interest in the Agreement with Equinox. In turn, Equinox decided to also
terminate its lease with the Company, effective February 21, 1991.
10
Document page: 15
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 3 - MINING CLAIMS AND OPERATING AGREEMENT (continued)
In February, 1989, the Company entered into a mineral lease agreement with
Freeport-McMoRan Gold Company, pertaining to the Blue Bluff property in Valley
County, Idaho. The principal target of exploration is gold and silver. The
agreement calls for production royalties and advance annual royalty payments.
Freeport (now Independence Mining Co.) sold its interest to NERCO Exploration
Co. of Vancouver, Washington.
On December 2, 1990, Coeur d'Alene Mines Corporation notified the Company of
its intention to terminate its lease effective December 31, 1990.
NOTE 4 - MINING PROPERTY LEASES
In August, 1981, the Company entered into a two year option with two groups of
its major stockholders regarding various patented and unpatented claims known as
the "Bull" and "L" groups of claims. Under the option, the Company had the
right, for a two year period, to enter into a lease with those individuals to do
exploration and development work on the properties. The options were exercised,
and two identical leases were executed on February 2, 1982. The lease terms
provide that the Company will do all assessment work, pay all taxes, and pay to
the lessors, 3% of defined net smelter returns with a minimum annual advance
royalty of $15,000 on each lease. During 1987, the existing leases were
modified to reduce the minimum annual advance royalties to $7,500 on each lease,
beginning in 1988. During 1990, the existing leases were further modified to
reduce the minimum annual advance royalties to $1.00 per contract beginning with
1990.
On August 28, 1992 one million shares of Thunder Mountain Gold, Inc.
restricted stock was issued to Dewey Mining Co. and Sunnyside Consolidated
Mining Co., as tenants in common, in exchange for a mining contract on the DEWEY
& THUNDER MOUNTAIN GOLD properties, situated in Valley County, Idaho. The
shares were issued at par value of $.05 per share.
An option to purchase one million shares of restricted treasury stock was
issued to Dewey Mining Company (a.k.a. Jim Nelson and Ron Yanke) August 3, 1992.
The price per share payable to Thunder Mountain Gold shall be six cents per
share. The term of this option will be for a period of two years from the date
of agreement with a third party company to explore and develop Thunder Mountain
and Dewey's joint property holdings in the Thunder Mountain District located in
Valley County Idaho. It is understood that the issuance of this option is
contingent upon the receipt of a purchase option to Thunder Mountain issued by
Dewey Mining for the acquisition of Dewey Mining's real and mineral properties
located in the district. The option was exercised and the company received
$60,000 for the sale of 1,000,000 shares at six cents per share on November 24,
1993.
11
Document page: 16
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 5 - INCOME TAXES
The components of the income tax (provision) benefit are as follows:
<TABLE>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Currently Payable:
State $ -0- $ -0- $ -0-
Federal -0- -0- -0-
---------- ---------- ----------
Total Current $ -0- $ -0- $ -0-
========== ========== ==========
Deferred Benefit:
State -0- -0- -0-
Federal -0- -0- -0-
---------- ---------- ----------
Tax Effect Of Net
Operating Loss Carry-
forward -0- -0- -0-
---------- ---------- ----------
Net Income Taxes $ -0- $ -0- $ -0-
========== ========== ==========
</TABLE>
The causes of the difference between the provision (benefit) for income taxes
at the federal statutory rate and that shown in the statements of operations are
summarized as follows:
<TABLE>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Tax at statutory rate $ -0- $ -0- $ -0-
Surtax exemption -0- -0- -0-
Dividends received exclusion -0- -0- -0-
Long-term capital loss -0- -0- -0-
State tax benefit -0- -0- -0-
Benefit of net operating loss
carryback to prior years at
other than the statutory rate -0- -0- -0-
Other -0- -0- -0-
---------- ---------- ----------
Total $ -0- $ -0- $ -0-
========== ========== ==========
</TABLE>
At December 31, 1998, the Company has $290,601 in net operating loss carry
forward which may be used to offset taxable income generated by operations which
will begin expiring in 2004. The Company also has a general business tax credit
carryover in the amount of $1,283 which may be used to offset future federal
income tax liabilities. This credit will expire in 2004.
12
Document page: 17
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 6 - MARKETABLE SECURITIES
The Corporation has adopted Statement of Financial Accounting Standards (SFAS)
No. 115, Accounting for Certain Investments in Debt and Equity Securities. SFAS
No. 115 establishes generally accepted accounting principles for the financial
accounting and measurement and disclosure principles for (1) investments in
equity securities that have readily determinable fair market value and (2) all
investments in debt securities. The change had no effect on prior years'
results. All of the marketable securities held by THUNDER MOUNTAIN GOLD, INC.
consist of securities "available-for-sale", as defined by SFAS No. 115. The
method used in computing realized gains and losses is the specific
identification method.
The following information is as of December 31, 1998, 1997, and 1996:
<TABLE>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Aggregate fair value of marketable securities $ 451,726 $520,382 $ 681,816
Gross unrealized holding gains (214,270) (269,033) (408,168)
Gross unrealized holding losses 39,722 67,590 38,204
Amortized cost basis 277,178 318,939 311,852
</TABLE>
Changes in current marketable securities for the twelve months ended December
31, 1998, 1997, and 1996 are as follows:
<TABLE>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Cost, as of January 1, $318,939 $ 311,852 $ 260,046
Purchase of shares (56,578) - 45,104
Dividends and capital gains reinvested 14,817 7,087 6,702
Unrealized gain, as of December 31, 174,548 201,443 369,964
---------- ---------- ----------
Fair market value, as of December 31, $451,726 $ 520,382 $ 681,816
========== ========== ==========
NOTE 7 - LETTER OF INTENT SIGNED FOR EXPLORATION
USMX, Inc. of Lakewood, Colorado signed a Letter of Intent to do exploratory
work and possibly acquire an interest in the Dewey-Sunnyside and Thunder
Mountain Gold properties in Valley County, Idaho.
Effective June 18, 1997 the Companies, USMX and Dakota agreed to an extension
of the exploration agreement to April 30, 1998 (USMX became a wholly - owned
subsidiary of Dakota on May 29, 1997).
13
Document page: 18
<PAGE>
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
The Board of Directors
Thunder Mountain Gold, Inc.
Spokane, Washington
Our report on the financial statements of Thunder Mountain Gold, Inc. is
included in the Form 10-KSB and covers the financial statements for December 31,
1998, listed under Item 14(a)(1) of this Form 10-KSB. In connection with our
audit of such financial statements, we have also audited the related financial
statement schedules for December 31, 1998 listed under Item 14(a)(2) of this
Form 10-KSB.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly the information required to be included therein.
Spokane, Washington
March 12, 1999
14
Document page: 19
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
For The Years Ended December 31, 1998 and 1997
</TABLE>
<TABLE>
December 31, 1998
_____________________________________________________
COLUMN A Column B Column C Column D Column E
___________ ___________ ___________ ___________
Amount at
Which
Issue is
Market on Carried
Number of Cost of Value on Balance
ISSURER Shares Shares Shares Sheet
_____________________ ___________ ___________ ___________ ___________
<C> <S> <S> <S> <S>
CURRENT:
Colonial Utilities Fund
Class A, Common shares 12,904 $ 160,267 $ 281,576 $ 281,576
Barrick Gold Corporation
Common shares 4,000 21,776 78,000 78,000
Freeport McMoRan Cop &
Gld A, Common shares 8,204 42,734 79,472 79,472
Dakota Mining
Common shares 1,819 7,296 - -
Midas Gold
Common shares 8,396 45,104 12,678 12,678
___________ ___________ ___________ ___________
35,323 $ 277,177 $ 451,726 $ 451,726
=========== =========== =========== ===========
Non-Current:
Other stock ownership
in inactive companies
Common shares 164,500 1,080 170 170
___________ ___________ ___________ ___________
Totals 164500 $ 1,080 $ 170 $ 170
=========== =========== =========== ===========
</TABLE>
15
Document page: 20
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
SCHEDULE I - MARKETABLE SECURITIES - OTHER INVESTMENTS
For The Years Ended December 31, 1998 and 1997
<TABLE>
December 31, 1997
_____________________________________________________
COLUMN A Column B Column C Column D Column E
___________ ___________ ___________ ___________
Amount at
Which
Issue is
Market on Carried
Number of Cost of Value on Balance
ISSURER Shares Shares Shares Sheet
_____________________ ___________ ___________ ___________ ___________
<C> <S> <S> <S> <S>
CURRENT:
Colonial Utilities Fund
Class A, Common shares 11,718 $ 145,450 $ 230,393 $ 230,393
American Barrick
Common shares 4,000 21,776 74,500 74,500
Freeport McMoRan,
Julphur
Common shares 143 - 1,680 1,680
IMC Global inc.
Del Pv $1
Common shares 612 55,941 20,043 20,043
WTIZ 00IMC
Global INCVSP
Common shares 226 - 875 875
Freeport McMoRan Cop
& Gld A, Common shares 8,204 42,734 125,619 125,619
Freeport McMoRan Cop
& Gld B,Common shares 2,864 - 45,108 45,108
Freeport M Res Dep
Ut Lp, Common shares 64 64 584 584
F M Properties, Inc.
Common shares 408 561 2,116 2,116
McMoran Oil & Gas
Common shares 408 - 1,312 1,312
USMX, Inc.
Common shares 1,819 7,296 437 437
Midas Gold
Common shares 8,396 45,104 17,715 17,715
___________ ___________ ___________ ___________
38,862 $ 318,926 $ 520,382 $ 520,382
=========== =========== =========== ===========
Non-Current:
Other stock ownership
in inactive companies
Common shares 164,500 1,080 170 170
___________ ___________ ___________ ___________
Totals 164,500 $ 1,080 $ 170 $ 170
=========== =========== =========== ===========
16
Document page: 21
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
SCHEDULE V1 -PROPERTY, PLANT AND EQUIPMENT
For the Years Ended December 31, 1998, 1997, and 1996
</TABLE>
<TABLE>
Column A Column B Column C Column D Column E Column F
___________ ___________ ___________ ___________ ___________
Other
Balance at Changes Balance at
Beginning Additions Add End of
of Period at Cost Retirements (Deduct) Period
DESCRIPTION ___________ ___________ ___________ ___________ ___________
<C> <S> <S> <S> <S> <S>
Year ended
December 31, 1998:
Mining equipment $ 5,477 $ - - - $ 5,477
Office equipment 6,577 - - - 6,577
Automotive 47,436 - - - 47,436
Mining claims 461,934 - - - 461,934
___________ ___________ ___________ ___________ ___________
Totals $ 521,424 $ - $ - $ - $521,424
=========== =========== =========== =========== ===========
Year ended
December 31, 1997:
Mining equipment $ 5,477 - - - $ 5,477
Office equipment 6,547 - - - 6,547
Automotive 47,436 - - - 47,436
Mining claims 461,934 - - - 461,934
___________ ___________ ___________ ___________ ___________
Totals $ 521,394 $ - $ - $ - $ 521,394
=========== =========== =========== =========== ===========
Year ended
December 31, 1996:
Mining equipment $ 23,010 - $ (17,533)(1) - $5,477
Office equipment 6,547 - - - 6,547
Automotive 21,893 $ 25,543(2) - - 47,436
Mining claims 461,934 - - - 461,934
___________ ___________ ___________ ___________ ___________
Totals $ 513,384 $ 25,543 $ (17,533) $ - $ 521,394
=========== =========== =========== =========== ===========
</TABLE>
(1) Sale of D-7G Caterpiller
(2) Purchase of 1996 Subaru
17
Document page: 22
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY AND EQUIPMENT
For the Years Ended December 31, 1997, 1996, and 1995
<TABLE>
Column A Column B Column C Column D Column E Column F
___________ ___________ ___________ ___________ ___________
Other
Balance at Changes Balance at
Beginning Additions Add End of
of Period at Cost Retirements (Deduct) Period
DESCRIPTION ___________ ___________ ___________ ___________ ___________
<S> <C> <C> <C> <C> <C>
Year ended
December 31, 1998:
Mining equipment $ 5,477 $ - - - $ 5,477
Office equipment 5,5249 282 - - 5,806
Automotive 22,146 4,525 - - 26,671
Mining claims 228,229 - - - 228,229
___________ ___________ ___________ ___________ ___________
Totals $ 261,376 $ 4,807 $ - $ - $ 266,183
=========== =========== =========== =========== ===========
Year ended
December 31, 1997:
Mining equipment $ 5,477 - - - $ 5,477
Office equipment 5,242 $ 282 - - 5,524
Automotive 15,671 6,475 - - 22,146
Mining claims 228,229 - - - 228,229
___________ ___________ ___________ ___________ ___________
Totals $ 254,619 $ 6,757 $ - $ - $ 261,376
=========== =========== =========== =========== ===========
Year ended
December 31, 1996:
Mining equipment $ 7,230 - $ (1,753) - $ 5,477
Office equipment 4,901 $ 341 - - 5,242
Automotive 11,542 4,129 - - 15,671
Mining claims 228,229 - - - 228,229
___________ ___________ ___________ ___________ ___________
Totals $ 251,902 $ 4,470 $ (1,753) $ - $ 254,619
=========== =========== =========== =========== ===========
(1) Depreciation is calculated using the accelerated deprediation
methods with useful lives of three to seven years.
(2) Depletion is computed using the units of production method.
</TABLE>
18
Document page: 23
<PAGE>
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Thunder Mountain Gold, Inc.
Spokane, Washington
We hereby consent to the use of our opinion, dated March 12, 1999 on the
financial statements of THUNDER MOUNTAIN GOLD, INC. for the year ended
December 31, 1998 in the Form 10-KSB included herein.
/s/ Robert Moe & Associates
Spokane, Washington
March 12, 1999
Document page: 24
<PAGE>
ITEM 9: Disagreements on Accounting and Financial Disclosure
During the year ended December 31, 1998 there were no disagreements between
the Company and its independent certified public accountants concerning
accounting and financial disclosure.
PART II
ITEM 10: Directors and Executive Officers of the Registrant
(a) Identification of Directors:
James E. Collord, Age 87 - President and Director - Mr. Collord has been a
Director and President of the Registrant since 1978. He is Chief Executive
Officer of the Registrant.
Ellis J. Collord, Age 52 - Vice President and Director - Mr. Collord has been an
officer and Director of the Registrant since 1978.
Robin S. McRae, Age 58 - Secretary/Treasurer and Director - Dr. McRae has been
an officer and Director of the Registrant since 1978.
Each director serves for a period of one year or until his successor is elected
and qualified.
None of the above has any arrangement or understanding with any other person
pursuant to which he was or is to be selected as a director or nominee.
(b) Identification of Executive Officers
This information is contained in paragraph (a) above.
(c) Family Relationships
James E. Collord, the President and Director of the Registrant, is the Father
of Ellis J. Collord who is the Vice President and a Director of the
Registrant. Dr. Robin S. McRae is the nephew of Marjorie Collord, the wife of
James E. Collord, the President of the Registrant.
(d) Business Experience
James E. Collord has over fifty-years of experience in the mining industry.
He has worked as a miner and a mine superintendent but mainly has been
employed in mineral exploration assignments. At the present time, Mr. Collord
is semi-retired.
Ellis J. Collord has a Masters of Science degree in geology from the Mackay
School of Mines, from the University of Nevada. He has been active in the
mining industry for over 19 years and is an exploration geologist and mining
superintendent actively employed in mining supervision near Elko, Nevada.
Robin S. McRae is a graduate of the Pacific College of Optometry and is a
practicing optometrist. He is the grandson of Daniel C. McRae, the
original locator of many of the gold prospects in the Thunder Mountain Gold
Mining District, and is the son of Robert J. McRae, author of numerous
geological reports concerning the Thunder Mountain Mining District. His
knowledge of mining and related exploratory activities is derived from three
generations of ownership of the Sunnyside Group of Claims which the
Registrant now owns.
Document page: 25
<PAGE>
(e) Directorships
Non of the directors of the Registrant is a director of any other corporation
subject to the requirements of Section 12 or Section 15(d) of the Exchange Act
of 1934.
(f) Involvement in Certain Legal Proceedings
None of the Officers and Directors of the Registrant has been involved in any
bankruptcy, insolvency, or receivership proceedings as an individual or member
of any partnership or corporation; none has ever been convicted in a criminal
proceeding or is the subject of a criminal proceeding presently pending. None
has been involved in proceedings concerning his ability to act as an
investment advisor, underwriter, broker, or dealer in securities, or to act in a
responsible capacity for investment company, bank savings and loan
association, or insurance company or limiting his activity in connection with
the purchase and sale of any security or engaging in any type business
practice. None has been enjoined from engaging in any activity in connection
with any violation of federal or state securities laws nor been involved in a
civil action regarding the violation of such laws.
(g) Promoters and Control Persons
Not applicable
ITEM 11: Executive Compensation
(a) Cash compensation
Officers and Directors: None of the executive officers or directors of the
Registrant received
$50,000 or more a year.
All officers and Directors: All officers and directors, of which there are
three, together received the sum of $40,000 per year.
James E. Collord President/Director $20,000.00
Ellis J. Collord Vice President $10,000.00
Robin S. McRae Secretary / Treasurer $10,000.00
(b) Bonuses and Deferred Compensation:
None of the executive officers or Directors of the Registrant receives
any bonuses or deferred compensation, and none is planned.
A previous stock option plan was voluntarily canceled by the recipients.
(c) Other compensation
There are no remuneration payments to any officer or Director other than those
set forth in (a) above.
(d) Compensation of Directors
Standard arrangements: James E. Collord - $20,000.00 annually
Ellis J. Collord - $10,000.00 annually
Dr. Robin S. McRae - $10,000.00 annually
Other arrangements: There are no arrangements for remuneration for services as
a Director in addition to the standard arrangements.
Document page: 26
<PAGE>
(e) Termination of Employment and Change of Control Arrangement
There are no compensatory plans or arrangements for compensation of any
Director in the event of his termination of employment and resignation,
retirement, etc.
ITEM 12: Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
The following are know to the Registrant to be the beneficial owners of more
that five percent (5%) of the Registrant's voting securities:
Common Stock Ronald C. Yankee and 1,883,525 shares of 19.36%
Donald J. Nelson record and
P.O. Box 5405, Boise, ID 83715 beneficially
(b) The Security Holdings of Management are as follows
Common Stock James E. Collord 280,000 share of 2.88%
record and
beneficially
Common Stock Ellis J. Collord 239,250 shares of 2.46%
record and
beneficially
Common Stock Dr. Robin S. McRae 91,955 shares of .95%
record
beneficially
Total of all Officers and Directors: 61,205 share of 6.29%
record and
beneficially
ITEM 13: Certain Relationships and related Transactions
(a) Transactions with management and Others
Other than payments of compensation to the Directors of the company, there have
been no other transactions with:
Any Director or executive officer
Any Nominee for election as a director
Any immediate family member of any of the forgoing, or
Any security holder known to the issuer to own
beneficially or of record more than
5% of the Registrant's voting securities
other than transactions disclosed in ITEM 12.
(b) Certain Business Relationships
There have been no unusual business relationships during the last fiscal year
of the Registrant
between the Registrant or affiliates as described in Item 404 (b) (1-6) of the
Regulation S-K.
Document page: 27
<PAGE>
(c) Indebtedness of Management
No Director or executive officer or nominee for Director, nor any member of the
immediate family of such has been indebted to the Company during the past year.
(d) Transactions with Promoters
Not Applicable
PART IV
ITEM 14: Exhibit, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements
Included in Part II of this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last calendar year 1998.
********************************************************************************
SIGNATURES
********************************************************************************
Pursuant to the requirements of Section 13 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.
THUNDER MOUNTAIN GOLD, INC.
By: /s/ James E. Collord Date: 03-29-1999
_________________________ ________________
JAMES E. COLLORD
President and Director
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934 this report signed
below by the following person on behalf of the Registrant and in the capacities
on the date indicated.
By: /s/ James E. Collord Date: 03-29-1999
________________________ _________________
ROBIN S. McRAE
Vice President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet for Thunder Mountain Gold, Inc. at December 31, 1998, and
the Statement of Operation for the year ended December 31, 1998, and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 77,729
<SECURITIES> 451,726
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 530,307
<PP&E> 521,394
<DEPRECIATION> 266,183
<TOTAL-ASSETS> 785,688
<CURRENT-LIABILITIES> 41,250
<BONDS> 0
0
0
<COMMON> 486,392
<OTHER-SE> 258,046
<TOTAL-LIABILITY-AND-EQUITY> 785,688
<SALES> 0
<TOTAL-REVENUES> 16,860
<CGS> 0
<TOTAL-COSTS> 142,544
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (125,684)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (125,684)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
