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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: December 31, 1999
Commission File: 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
(Address of Principal Executive Officers) (Zip Code)
(509) 535-6092
Telephone Number of Registrant
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of Exchange
on which Registered
$0.05 par Value Common None
Non-Assessable Stock
Securities registered under Section 12(b) of the Exchange 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, 1999 was $583,671. This figure is based on
estimated bid price of $.04.
Issued and outstanding common capital stock as of March 18, 2000.
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]
<PAGE>
PART 1
ITEM 1. DESCRIPTION OF BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS.
The Company was originally incorporated under the laws of the Sate 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.
<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 1999.
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 1999 and 1998 were
as follows:
<TABLE>
BID PRICES
----------
HIGH LOW
--------- ---------
<S> <C> <C>
1999:
First Quarter $ 0.04 $ 0.04
Second Quarter $ 0.04 $ 0.04
Third Quarter $ 0.04 $ 0.04
Fourth Quarter $ 0.10 $ 0.06
1998:
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>
(b) APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS:
Title of Class No. of Record Holders
- ------------------------------ ------------------------------
Common Stock, $0.05 Par Value
Non-Assessable 2,241 as of December 31, 1999
(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.
<PAGE>
ITEM 6: SELECTED FINANCIAL DATA
The following is a summary of selected financial data which indicates trends in
Registrant's financial condition and results of operations.
<TABLE>
Year Ended December 31,
-----------------------------------------------------------
Selected Balance Sheet Data 1999 1998 1997 1996 1995
- --------------------------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Current Assets $ 546,492 $ 530,307 $ 659,329 $ 523,893 $ 733,797
Property and Equipment 238,296 255,211 260,018 266,775 261,482
Non-Current Investments 170 170 170 170 170
---------- ---------- ----------- ---------- ----------
Total Assets 784,958 785,688 919,517 1,090,838 995,449
Current Liabilities 27,500 41,250 22,500 42,500 42,500
---------- ---------- ----------- ---------- ----------
Stockholders' Equity 757,458 744,438 897,017 1,048,338 952,949
---------- ---------- ----------- ---------- ----------
Selected Operational Data
- ---------------------------
Royalty Revenue - - 62,500 100,000 75,000
---------- ---------- ----------- ---------- ----------
Other Revenue and Gains
(Losses) 126,817 16,860 24,589 51,845 19,375
Net Income (Loss) 37,050 (125,684) 17,250 83,029 26,367
---------- ---------- ----------- ---------- ----------
Net Income (Loss)
per share $ NIL $ (0.01) $ NIL $ 0.01 $ 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 1999 to keep
its unpatented claims valid will be performed by the Company. Directors and
management fees are $25,000 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.
Results of Operations: The Company had no production from operations for
1999. 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 1999 the gross revenues were $-0-.
<PAGE>
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
CONTENTS
Page
----
Report of Independent Accountants' 1
Balance Sheet at December 31, 1999 and 1998 2-3
Statement of Operations for the Years Ended
December 31, 1999, 1998, and 1997 4
Statement of Cash Flows for the Years Ended
December 31, 1999, 1998, and 1997 5-6
Statement of Changes in Stockholders' Equity for the
Years Ended December 31, 1999, 1998, and 1997 7
Notes to Financial Statements 8-14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS'
----------------------------------
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, 1999 and 1998, and the related Statements of Operations, Cash
Flows and Changes in Stockholders' Equity for each of the three years ended
December 31, 1999, 1998, and 1997. 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, 1999 and 1998, and the results of its operations, cash flows and
changes in stockholders' equity for each of the three years ended December 31,
1999, 1998, and 1997, in conformity with generally accepted accounting
principles.
ROBERT MOE & ASSOCIATES, P.S.
March 13, 2000
Spokane, Washington
Accountants' page 1
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Balance Sheet
December 31, 1999 and 1998
<TABLE>
ASSETS
1999 1998
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 36,240 $ 77,729
Prepaid Expenses 94 852
Investments 510,158 451,726
------------ ------------
Total Current Assets 546,492 530,307
------------ ------------
INVESTMENTS - Non-Current 170 170
------------ ------------
PROPERTY AND EQUIPMENT:
Mining Equipment 5,477 5,477
Office Equipment 7,141 6,547
Automotive 21,893 47,436
Mining Claims 461,934 461,934
------------ ------------
Total Property and Equipment 496,445 521,394
Less: Accumulated Depreciation and Depletion 258,149 266,183
------------ ------------
Net Property and Equipment 238,296 255,211
------------ ------------
TOTAL ASSETS $ 784,958 $ 785,688
============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Accountants' page 2
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Balance Sheet
December 31, 1999 and 1998
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
1999 1998
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Accrued Directors and Management Fees $ 27,500 $ 41,250
------------ ------------
Total Current Liabilities 27,500 41,250
------------ ------------
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 149,608 173,638
Retained Earnings/(Deficit) (108,564) (145,614)
------------ ------------
Total Stockholders' Equity 757,458 744,438
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 784,958 $ 785,688
============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Accountants' page 3
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement of Operations
For the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
1999 1998 1997
------------ ------------ ------------
<C> <S> <S> <S>
INCOME:
Royalties $ - $ - $ 62,500
------------ ------------ ------------
EXPENSES:
Exploration and Development 24,781 77,362 -
Depreciation and Depletion 4,145 4,807 6,757
Directors' Fees and
Professional Services 25,000 40,000 40,000
Legal and Accounting 12,340 8,543 5,375
Management and Administrative 23,501 11,832 17,707
------------ ------------ ------------
Total Expenses 89,767 142,544 69,839
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS (89,767) (142,544) (7,339)
------------ ------------ ------------
OTHER INCOME:
Interest and Dividend Income 7,654 12,558 24,589
Gain on Sale of Asset 119,163 4,302 -
------------ ------------ ------------
126,817 16,860 24,589
------------ ------------ ------------
INCOME (LOSS) BEFORE FEDERAL
INCOME TAXES 37,050 (125,684) 17,250
PROVISION FOR INCOME TAXES:
Tax At Statutory Rates - - -
Tax Benefit - - -
------------ ------------ ------------
NET INCOME (LOSS) 37,050 (125,684) 17,250
OTHER COMPREHENSIVE INCOME
Net of Income Tax:
Unrealized Holding Gain (loss) (24,030) (26,894) (168,521)
------------ ------------ ------------
COMPREHENSIVE INCOME (LOSS) $ 13,020 $ (152,578) $ (151,271)
============ ============ ============
EARNINGS (LOSS) PER SHARE:
Basic $ NIL $ (0.01) $ NIL
============ ============ ============
Diluted $ NIL $ (0.01) $ NIL
============ ============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Accountants' page 4
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement of Cash Flows
For the Years Ended December 31, 1999, 1998, and 1997
<TABLE>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES:
Net Income (Loss) $ 37,050 $ (125,684) $ 17,250
Non-Cash Expenses, Revenues,
Losses And Gains Included
in Income:
Depreciation and
Amortization 4,145 4,807 6,757
Gain on sale of asset (119,163) (4,302) -
Net (Increase) Decrease In
Receivables and Payables (2,992) 19,678 (20,585)
------------ ------------ ------------
Net Cash Flows Provided (Used)
By Operating Activities (80,960) (105,501) 3,422
------------ ------------ ------------
CASH FLOWS PROVIDED (USED) BY
INVESTING ACTIVITIES:
Purchase Of Investments (204,885) (14,817) (7,087)
Purchase Of Property and Equipment (594) - -
Proceeds from Disposition
of Investments7 244,950 60,970 -
------------ ------------ ------------
Net Cash Flows Provided (Used)
By Investing Activities 39,471 46,153 (7,087)
------------ ------------ ------------
CASH FLOWS (USED) BY FINANCING
ACTIVITIES
Reacquisition of stock
- - (50)
------------ ------------ ------------
Net cash flows (used) by
Financing Activities - - (50)
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH (41,489) (59,348) (3,715)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 77,729 137,077 140,792
------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 36,240 $ 77,729 $ 137,077
============ ============ ============
</TABLE>
The Accompanying Notes Are An Integral Part Of These Financial Statements
Accountants' page 5
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement of Cash Flows (Continued)
For the Years Ended December 31, 1999 , 1998, and 1997
<TABLE>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURE
OF CASH FLOWS INFORMATION
Cash paid during the year
for interest $ - $ - $ -
============ ============ ============
Cash paid during the year
for taxes $ - $ - $ -
============ ============ ============
SUPPLEMENTAL SCHEDULE OF
NONCASH INVESTING ACTIVITIES
Exchange of automobile for accrued
directors fee payable $ 10,000 $ - $ -
============ ============ ============
Marketable security written off as
worthless $ 7,296 $ - $ -
============ ============ ============
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
Accountants' page 6
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Statement Of Changes In Stockholders' Equity
For the Years Ended December 31, 1999, 1998, and 1997
*begin 9pt type*
</TABLE>
<TABLE>
Unrealized
Common Stock Additional Gain on Retained
--------------------- Paid-In Marketable Treasury Earnings/
Shares Amount Capital Securities Stock (Deficit) Total
---------- --------- ---------- ------------- ---------- ---------- -----------
<C> <S> <S> <S> <S> <S> <S> <S>
Balances at
Dec. 31, 1996 9,727,852 $ 486,392 $ 254,222 $ 369,054 $ (24,150) $ (37,180) $1,048,338
---------- --------- ---------- ------------- ---------- ---------- -----------
Reacquisition
of stock - - - - (50) - 1,048,288
Unrealized gain
in marketable
securities - - - (168,521) - - (168,521)
Net income
- 1997 - - - 17,250 17,250
---------- --------- ---------- ------------- ---------- ---------- -----------
Comprehensive
(Loss) - - - - - - (151,271)
---------- --------- ---------- ------------- ---------- ---------- -----------
Balances at
Dec. 31, 1997 9,727,852 486,392 254,222 200,533 (24,200) (19,930) 897,017
---------- --------- ---------- ------------- ---------- ---------- -----------
Unrealized loss
in Marketable
securities - - - (26,895) - - (26,895)
Net Loss - 1998 - - - - - (125,684) (125,684)
---------- --------- ---------- ------------- ---------- ---------- -----------
Comprehensive
(Loss) - - - - - - (152,579)
---------- --------- ---------- ------------- ---------- ---------- -----------
Balances at
Dec. 31, 1998 9,727,852 486,392 254,222 173,638 (24,200) (145,614) 744,438
---------- --------- ---------- ------------- ---------- ---------- -----------
Unrealized loss
in Marketable
securities - - - (24,030) - - (24,030)
Net Income-1999 - - - - - 37,050 37,050
---------- --------- ---------- ------------- ---------- ---------- -----------
Comprehensive
Income - - - - - - 13,020
---------- --------- ---------- ------------- ---------- ---------- -----------
Balances at
Dec. 31, 1999 9,727,852 $ 486,392 $ 254,222 $ 149,608 $ (24,200) $(108,564) $ 757,458
========== ========= ========== ============= ========== ========== ===========
</TABLE>
*end 9pt type*
The Accompanying Notes Are An Integral Part Of These Financial Statements
Accountants' page 7
<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 Company 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 $359,639 at December 31, 1999. A valuation allowance in the amount of
$150,518 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, the Company adopted Statement of Financial Accounting Standards
(FAS) 130, "Reporting Comprehensive Income," issued by the Financial Accounting
Standards Board (FASB). The Company 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.
Accountants' page 8
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 1999, 9,727,852 in 1998, and 9,727,852 in 1997. No adjustment
to reported net income is required when computing diluted earnings per share.
NOTE 2 - INVESTMENTS
Investments consist of the following:
<TABLE>
Carrying Market
Value Cost Value
------------ ----------- ------------
<S> <C> <C> <C>
December 31, 1999:
Current Investments $ 510,158 $ 359,639 $ 510,158
Other Investments 170 1,080 170
------------ ----------- ------------
Total $ 510,328 $ 360,719 $ 510,328
============ =========== ============
December 31, 1998:
Current Investments $ 451,726 $ 277,178 $ 451,726
Other Investments 170 1,080 170
------------ ----------- ------------
Total $ 451,896 $ 278,258 $ 451,896
============ =========== ============
December 31, 1997:
Current Investments $ 520,382 $ 318,939 $ 520,382
Other Investments 0 1,080 170
------------ ----------- ------------
Total $ 520,552 $ 320,019 $ 520,552
============ =========== ============
</TABLE>
At December 31, 1999, 1998, and 1997 the current investment portfolios
included gross unrealized gains of $150,518, $174,548, and $201,443,
respectively. The non current included gross unrealized losses of $910, $910 and
$910, respectively.
Other investments consist of small stock holdings in several local mining
companies.
Accountants' page 9
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
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.
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 Company 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 Company. The transaction was between Phillips
and Coeur d'Alene Mines Company, 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.
Accountants' page 10
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 3 - MINING CLAIMS AND OPERATING AGREEMENT (CONTINUED)
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.
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 Company 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.
Accountants' page 11
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 4 - MINING PROPERTY LEASES (CONTINUED)
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.
NOTE 5 - INCOME TAXES
The components of the income tax (provision) benefit are as follows:
<TABLE>
1999 1998 1997
------------ ----------- ------------
<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>
Accountants' page 12
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 5 - INCOME TAXES (CONTINUED)
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>
1999 1998 1997
------------ ----------- ------------
<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, 1999, the Company has $257,232 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.
NOTE 6 - MARKETABLE SECURITIES
The Company 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.
Accountants' page 13
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
Spokane, Washington
Notes To Financial Statements
NOTE 6 - MARKETABLE SECURITIES (CONTINUED)
The following information is as of December 31, 1999, 1998, and 1997:
<TABLE>
1999 1998 1997
------------ ----------- ------------
<S> <C> <C> <C>
Aggregate fair value of
marketable securities $ 510,158 $ 451,726 $ 520,382
Gross unrealized holding gains (184,798) (214,270) (269,033)
Gross unrealized holding losses 34,279 39,722 67,590
------------ ----------- ------------
Amortized cost basis $ 359,639 $ 277,178 $ 318,939
============ =========== ============
</TABLE>
Changes in current marketable securities for the twelve months ended
December 31, 1999, 1998, and 1997 are as follows:
<TABLE>
1999 1998 1997
------------ ----------- ------------
<S> <C> <C> <C>
Cost, as of January 1, $ 277,178 $ 318,939 $ 311,852
Purchase of shares 70,680 - -
Sales of shares - (56,578) -
Dividends and capital
gains reinvested 11,781 14,817 7,087
Unrealized gain,
as of December 31, 150,519 174,548 201,443
------------ ----------- ------------
Fair market value,
as of December 31 $ 510,158 $ 451,726 $ 520,382
============ =========== ============
</TABLE>
Accountants' page 14
<PAGE>
INDEPENDENT ACCOUNTANTS' 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,
1999, 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, 1999 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 13, 2000
Accountants' page 15
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
SCHEDULE 1 - MARKETABLE SECURITIES - OTHER INVESTMENTS
For the Years Ended December 31, 1999 and 1998
<TABLE>
December 31, 1999
_____________________________________________________
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 2,736 $ 46,773 $ 61,669 $ 61,669
Barrick Gold Corporation
Common Shares 4,000 21,776 70,748 70,748
ML Global Growth
Common Shares 2,453 40,000 42,142 42,142
Munder Future Tech.
Common Shares 3,361 40,006 46,885 46,885
Freeport McMoRan Cop & Gld A
Common Shares 8,204 42,734 152,282 152,282
Mass Investors
Common Shares 2,267 43,236 43,594 43,594
Aim Value Fund
Common Shares 890 40,005 42,008 42,008
Pioneer Growth Shares
Common Shares 2,041 40,005 39,411 39,411
Midas Gold
Common Shares 8,396 45,104 11,419 11,419
------------ ------------ ------------ ------------
34,348 $ 359,639 $ 510,158 $ 510,158
============ ============ ============ ============
Non - Current:
Other stock ownership
in inactive companies
Common Shares 164,500 $ 1,080 $ 170 $ 170
------------ ------------ ------------ ------------
Totals 164,500 $ 1,080 $ 170 $ 170
============ ============ ============ ============
</TABLE>
Accountants' page 16
<PAGE>
THUNDER MOUNTAIN GOLD, INC.
SCHEDULE 1 - MARKETABLE SECURITIES - OTHER INVESTMENTS
For the Years Ended December 31, 1999 and 1998
<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>
Accountants' page 16
<PAGE>
ITEM 8: DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
During the year ended December 31, 1999 there were no disagreements between
the Company and its independent certified public accountants concerning
accounting and financial disclosure.
PART II
ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors:
Ellis J. Collord, Age 53 - President and Director - Mr. Collord has been an
officer and Director of the Registrant since 1978.
Robin S. McRae, Age 59 - Secretary/Treasurer and Director - Dr. McRae has been
an officer and Director of the Registrant since 1978.
Pete Parsley, Age 38 - Director and Thunder Mountain Project Manager. Mr.
Parsley has been a director since 1999.
Ronald Yanke, Age 62, - Director
(b) IDENTIFICATION OF EXECUTIVE OFFICERS
This information is contained in paragraph (a) above.
(c) FAMILY RELATIONSHIPS
James E. Collord died in September 1999 at the age of 88 after serving as
President and Director of the Registrant since 1978. E. James Collord, son of
James E. Collord, was elected by the Board of Directors to serve as the
President and General manager of the Registrant late in 1999. Dr. Robin S.
McRae is the cousin of E. James Collord, the President of the Registrant.
(d) BUSINESS EXPERIENCE
E. James Collord has a Masters of Science degree in exploration geology from the
Mackay School of Mines, University of Nevada. He has been a mining professional
since 1973, employed as a mill construction superintendent, exploration
geologist, mine construction and reclamation manager, and in environmental and
lands management. He is currently active employed as Environmental and Land
Superintendent at a large gold mine 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, and 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.
Ron Yanke is a successful Boise-based businessman, including owner of the
57-year old Yanke Machine Shop. He also is an owner of Yanke Energy
(cogeneration plants), has timber interests and is part owner of the Dewey
Mining Company.
<PAGE>
(e) DIRECTORSHIPS
None 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 10: EXECUTIVE COMPENSATION
(a) CASH COMPENSATION
None of the executive officers or Directors received $50,000 or more during
1999.
All officers and Directors, of which there were five* at various times
during 1999, received the sum of $40,000 distributed as follows:
James E. Collord Former President/Director $20,000*
E. James Collord President/Director $10,000
Robin S. McRae Secretary/Treasury $10,000
Ron Yanke Director No compensation
Pete Parsley Director/Project Manager No compensation
* Note: Compensation received by James E. Collord prior to his death in
September 1999.
(b) BONUSES AND DEFERRED COMPENSATION:
Standard arrangements (in 2000):
E. James Collord $10,000
Robin S. McRae $10,000
Ron Yanke None
Pete Parsley $ 5,000
(c) OTHER COMPENSATION
There are no remuneration payments to any officer or Director other than
those set forth in (a) above.
<PAGE>
(d) COMPENSATION OF DIRECTORS
Other arrangements: There are no arrangements for remuneration for services
as a Director in addition to the standard arrangements.
(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 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following are known to the Registrant to be the beneficial owners of
more than five percent (5%) of the Registrant's voting securities:
Common Stock Ronald C. Yankee 1,883,525 shares 19.36%
P.O. Box 5405, record and beneficially
Boise, ID 83715
(b) THE SECURITY HOLDINGS OF MANAGEMENT ARE AS FOLLOWS
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 and beneficially
Total of all Officers and Directors: 61,205 share of 6.29%
record and beneficially
ITEM 12: 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 11.
(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.
(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
<PAGE>
PART IV
ITEM 13: 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 1999
SIGNATURES
Pursuant to the requirements of Section 143 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
the undersigned, thereunto duly authorized.
THUNDER MOUNTAIN GOLD, INC.
(Registrant)
By: /s/ E. James Collord Date: 3/28/2000
----------------------------------- -----------------------
E. James 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/ Robin S. McRae Date: 3/28/2000
----------------------------------- -----------------------
Robin S. McRae
Secretary/Treasurer and
Director and Chief Financial
Accounting Officer
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------
Board of Directors
Thunder Mountain Gold, Inc.
Spokane, Washington
We here by 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, P.S.
Spokane, Washington
March 12, 1999
<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, 1999, and
the Statement of Operation for the year ended December 31, 1999, and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 36,240
<SECURITIES> 510,158
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 546,492
<PP&E> 496,445
<DEPRECIATION> 226,183
<TOTAL-ASSETS> 784,958
<CURRENT-LIABILITIES> 27,500
<BONDS> 0
0
0
<COMMON> 486,392
<OTHER-SE> 271,066
<TOTAL-LIABILITY-AND-EQUITY> 784,958
<SALES> 0
<TOTAL-REVENUES> 126,817
<CGS> 0
<TOTAL-COSTS> 89,767
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 37,050
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,050
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
