SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended DECEMBER 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-12761
BRUSH CREEK MINING AND DEVELOPMENT CO., INC.
(Exact name of Small Business Issuer as specified in its charter)
NEVADA 88-0180496
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
970 EAST MAIN STREET, SUITE 200
GRASS VALLEY, CALIFORNIA 95945
(Address of Principal Executive Offices)
(530) 477-5961
(Issuer's Telephone Number, Including Area Code)
Check whether the Issuer (1) filed all reports required to be filed 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
State the number of shares outstanding of each of the Issuers' classes of
common equity as of the latest practicable date:
Common, $.0001 par value per share: 47,476,722
outstanding as of February 13, 1998
Transitional Small Business Disclosure Format: Yes X No
<PAGE>
PART I - FINANCIAL INFORMATION
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARIES
Index to Financial Information
Period Ended December 31, 1997
ITEM PAGE HEREIN
ITEM 1 - Financial Statements:
Condensed Consolidated Balance Sheets
as of December 31, 1997 (unaudited) and June 30, 1997. 3
Condensed Consolidated Statements of Operations (unaudited)
for the three months ended December 31, 1997 and 1996. 4
Condensed Consolidated Statements of Operations (unaudited)
for the six months ended December 31, 1997 and 1996 and for the
period July 1, 1989 (date of resumption of development stage
enterprise activities) through December 31, 1997. 5
Condensed Consolidated Statements of Cash Flows (unaudited)
for the six months ended December 31, 1997 and 1996 and for
the period July 1, 1989 (date of resumption of development
stage enterprise activities) through December 31, 1997. 6
Notes to Condensed Consolidated Financial Statements (unaudited). 7
ITEM 2 - Management's Discussion and Analysis or Plan
of Operation. 9
<PAGE>
BRUSH CREEK MINING AND DEVELOPMENT CO., INC.
AND SUBSIDIARIES
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 1997 June 30, 1997
(Unaudited) (Audited)
ASSETS
Current assets:
Cash $ 160,643 $ 111,059
Inventory 31,670 2,750
Total current assets 192,313 113,809
Office furniture and
equipment, net 48,057 45,547
Mineral properties and
mining equipment, net 10,091,969 10,190,581
Deposits 272,095 272,095
Total assets $10,604,434 $10,622,023
LIABILITIES AND SHAREHOLDER'S
EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 1,782,235 $ 1,771,014
Current portion of
long term debt 698,000 672,000
Other 3,700 3,700
Total current liabilities 2,483,935 2,446,714
Long-term debt, net or
current portion - 362,000
Total liabilities 2,483,935 2,808,714
Shareholders' Equity:
Common Stock, $.0001
par value; authorized
100,000,000 shares;
issued and outstanding
47,304,904 and
31,370,482 shares
as of December 31, 1997
and June 30, 1997,
respectively 49,877,325 47,092,740
Capital Contributions 450,000 -
Accumulated deficit (11,260,214) (11,260,214)
Accumulated deficit
during the
development stage (30,946,612) (28,019,208)
Total shareholders'
equity 8,120,499 7,813,318
Total liabilities and
shareholder's equity $10,604,434 $10,622,032
See notes to Condensed Consolidated Financial Statements.
<PAGE>
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months
Ended December
1997 1996
Revenues:
Sale of Joint Venture $ - $ -
Other Income - -
Interest income 3,168 5,527
Total revenues 3,168 5,527
Expenses:
General and administrative expenses 704,389 243,292
General mining and exploration 627,282 493,170
Loss on lease abandonments - -
Depreciation and amortization 65,875 93,969
Loss (Gain) on sale of mining equip. - -
Interest expense 847 29,512
Litigation settlement 573,959 -
Total expenses 1,972,352 859,943
Loss before extraordinary item (1,969,184) (854,416)
Extraordinary item - net loss from
debt extinguishment - -
Net loss $(1,969,184) $(854,416)
Loss per common share before
extraordinary item $(.07) $(0.05)
Net loss per common share $(.07) $(0.05)
Weighted average common shares
outstanding 29,669,830 18,248,180
See notes to Condensed Consolidated Financial Statements.
<PAGE>
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Period from
Six Months July 1, 1989
Ended December 31 through
December 31,
1997 1996 1997
Revenues:
Sale of joint venture - - $ 4,232,000
Other income - - 156,444
Interest income $ 5,766 $ 15,531 190,377
Total revenues 5,766 15,531 4,579,818
Expenses:
General and administrative
expenses 1,079,553 507,099 15,811,776
General mining and exploration 1,147,060 1,388,778 12,201,313
Loss on lease abandonments - - 392,317
Depreciation and amortization 131,750 192,621 1,565,652
Loss (Gain) on sale of mining
equipment - 46,853 171,174
Interest expense 847 58,763 493,141
Litigation settlements 573,959 - 4,137,032
Total expenses 2,933,169 2,194,114 34,772,405
Loss before extraordinary item (2,927,403) (2,178,583) (30,192,587)
Extraordinary item - net loss
from debt extinguishment - - 144,462
Net loss $(2,927,403) $(2,178,583) $(30,048,125)
Loss per common share before
extraordinary item $(.099) $(0.13)
Net loss per common share $(.099) $(0.13)
Weighted average common shares
outstanding 29,669,830 17,202,142
See notes to Condensed Consolidated Financial Statements.
<PAGE>
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Period from July 1,
Ended December 31 1989 through
1997 1996 December 31, 1997
Cash flows from operating
activities:
Net income (loss) $(2,927,403) $2,178,583 $(30,946,611)
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
Gain on debt restructuring - - (144,462)
Depreciation and amortization 131,750 192,621 1,565,652
Loss on lease abandonments - - 444,359
Loss on litigation settlement 573,959 - 4,680,991
Loss (Gain) on sale of mining
equipment - 46,853 49,164
Other - - 43,576
Shareholder payment of
services - - 105,055
Stock and debt for services 423,573 - 1,126,641
Change in inventory (28,920) 21,439 (29,330)
Change in note receivable - - 47,462
Change in prepaid expenses - 6,173 501,736
Change in deposits and other
current assets - 15,712 (115,961)
Change in deposits - - (29,065)
Change in accounts payable
and accrued liabilities 62,274 15,948 4,385,745
Total adjustment 1,162,636 298,746 12,631,563
Net cash provided by (used in)
operating activities (1,764,767) (1,879,837) (18,315,048)
Cash flows from investing
activities:
Acquisition of mineral
properties, equipment,
and deferred developments (17,149) (26,242) (5,091,578)
Acquisition of office equipment (18,500) (5,058) (278,601)
Proceeds from sale of equipment - - 384,356
Proceeds from acquisition of
Trans-Russian - - 20,060
Net cash used in investing
activities (35,649) (31,300) (4,965,763)
Cash flows from financing
activities:
Advances from (to) affiliates 450,000 - 2,459,127
Payments made to affiliates - - (343,798)
Proceeds from issuance of
common stock 1,736,000 716,251 22,002,513
Proceeds from warrant extensions - - 207,750
Proceeds from issuance of
notes payable - - 870,043
Payments on long-term debt (336,000) (63,010) (1,758,029)
Proceeds from convertible
debenture - - 300,000
Payments on convertible
debenture - - (300,000)
Net cash provided by
financing activities 1,850,000 653,241 23,437,606
Net increase (decrease)
in cash 49,584 (1,257,896) 156,795
Cash at beginning of period 111,059 1,275,413 3,848
Cash at end of period $160,643 $17,517 $160,643
Cash paid during the period
for interest (net of amounts
capitalized) $847 $ $338,449
See notes to Condensed Consolidated Financial Statements.
<PAGE>
BRUSH CREEK MINING AND DEVELOPMENT CO., INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Condensed Consolidated Balance Sheet as of December 31, 1997, the
Condensed Consolidated Statements of Operations for the three months
ended December 31, 1997 and 1996, the Condensed Consolidated Statements
of Operations and Cash Flows for the six months ended December 31, 1997
and 1996 and for the period July 1, 1989 (date of resumption of
development stage enterprise activities) through December 31, 1997, have
been prepared by the Brush Creek Mining & Development Co., Inc. (the
Company) without audit. In the opinion of management, all adjustments
necessary to present fairly the financial position, results of operations
and cash flows at December 31, 1997 and for all periods presented have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated statements be read in conjunction with the
financial statements and notes thereto included in the Company's June 30,
1997 Form 10-KSB. The result of operations for the period ended December
31, 1997 is not necessarily indicative of the operating results for the
full year.
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries, B. Creek Acquisition Corp. and Alpha
Hardware.
NOTE 2 - OPERATIONS AND BASIS OF PRESENTATION
The Company was incorporated in 1982 and operated as a mining and mineral
development company until April 17, 1989, at which time its mining
operations, all of which had been conducted through the Brush Creek Joint
Venture (BCJV) (40% owned) were terminated. Shortly thereafter, the
Company became actively engaged in acquiring additional mineral
properties, raising capital, and preparing properties for resumed
production. The Company did not have any significant operations or
activities from April 17, 1989 through June 30, 1989 and suspended all
mining operations and reduced its activities to a care and maintenance
level. Accordingly, the Company is deemed to have reentered the
development stage effective July 1, 1989.
In February 1992, the Company began limited production at the Ruby Mine
under a permit that limited mill capacity to 225 tons per day. Production
was terminated due to adverse weather conditions in December 1992. The
company resumed limited production at the Ruby Mine in July 1993 and
gradually increased production until October 1996 when production was
suspended. In early 1997, the Company received interim approval from the
United States Forest Service to transport thirty tons of ore per day from
the lower Brush Creek Mine to the Ruby mill site. The Company has not
commenced economic production and is therefore still considered to be in
the development stage.
The Company's consolidated financial statements have been presented on
the basis that it is a going concern, which contemplates the realization
of the mineral properties and other assets and the satisfaction of
liabilities in the normal course of business. The Company has incurred
losses of $42,206,826 from inception to December 31, 1997 and had a
working capital deficit of $2,291,622 at December 31, 1997. These factors
raise doubt about the Company's ability to continue as a going concern.
There is no assurance that the Company will be successful in establishing
probable or proven ore reserves, or determining if the mineral properties
can be mined economically. These consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
Management of the Company periodically reviews the recoverability of the
capitalized mineral properties and mining equipment. Management takes
into consideration various information including, but not limited to,
historical production records from previous mine operations, results of
exploration activities conducted to date, estimated future metal prices,
and reports and opinions of internal and external geologists, mine
engineers and consultants. Accordingly, in management's opinion, based on
such information, the capitalized costs in mineral properties and mining
equipment do not exceed their estimated net realizable value.
NOTE 3 - STOCKHOLDERS' EQUITY
In October 1997, the Company sold 4,050,000 shares of its common stock
pursuant to a private placement at a price of $0.10 per share. The shares
were sold pursuant to Regulation D and Section 4(2). The Company received
a net amount of $405,000 from the sale.
In November, 1997 the Company issued 50,421 shares of its Common Stock
for certain consulting services. The shares were registered with the
Securities and Exchange Commission on Form S-8. The shares are valued at
$1.172, the average of the bid and asked price for the Company's Common
Stock on November 4, 1997.
Also in November, 1997, the Company sold 280,000 shares of its Common
Stock pursuant to a private placement at a price of $.50 per share. The
shares were sold pursuant to Regulation D and Section 4(2). The Company
received a net amount of $140,000 from the sale.
Also in November, 1997, the Company issued and caused to be released
150,000 shares of its Common Stock which had been in escrow in connection
with an investment transaction pursuant to Regulation S which occured in
September, 1996. The shares are valued at $.9375, the average of the bid
and asked price for the Company's Common Stock on November 28, 1997.
In December, 1997, the Company sold 440,000 shares of its Common Stock
pursuant to a private placement at a price of $.50 per share. The shares
were sold pursuant to Regulation D and Section 4(2). The Company received
a net amount of $220,000 for the sale.
Also in December, 1997, the Company issued 156,667 shares of its Common
Stock to pay for certain finders fees. The shares were issued pursuant to
Section 4 (2). The shares are valued at $.859375 the average of the bid
and asked price for the Company's Common Stock on December 2, 1997.
Also in December, 1997, the Company issued 115,000 shares of its common
stock to pay for certain finders fees. The shares were issued pursuant to
Section 4 (2). The shares are valued at $1.15625, the average of the bid
and asked price for the Company's Common Stock on December 12, 1997.
Also in December, 1997, the company issued 433,334 shares of its Common
Stock as part of a settlement with the Royal Bank plaintiffs. The shares
are valued at $1.00 the average of the bid and asked price for the
Company's Common Stock on December 31, 1997.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Introduction
The following discussion should be read in conjunction with the Financial
Information and Notes thereto included in this report and is qualified in
its entirety by the foregoing.
This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs and assumptions
made by the Company's management as well as information currently
available to the management. When used in this document, the words
"anticipate", "believe", "estimate", and "expect" and similar
expressions, are intended to identify forward-looking statements. Such
statements reflect the current views of the Company with respect to
future events and are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Company has no obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect anticipated or unanticipated events
or circumstances occurring after the date of such statements.
Liquidity and Capital Resources
At December 31, 1997, the Company had a working capital deficit of
$2,291,622 which represents a decrease in working capital deficit of
$176,699 as compared to a working capital deficit of $2,468,321 at
September 30, 1997. The increase in working capital was primarily due to
an increase in available cash from the Operating Agreement entered into
with Sterling (discussed below).
The mining industry is capital intensive. During the fiscal year ended
June 30, 1997, the Company raised $2.1 million from the sale of shares of
Common Stock. During the first six months of fiscal 1998, the Company
obtained additional equity financings. At December 31, 1997, the Company
had a working capital deficit of $2,291,622 and had no material revenues
from mining operations.
On November 20, 1997, the Company entered into an Operating Agreement, as
amended (the "November 1997 Agreement"), with Sterling Mining L.L.C.
("Sterling") pursuant to which Sterling has agreed to participate with the
Company (Sterling and the Company being referred to herein as the
"Participants") in the exploration, evaluation and development of mineral
resources within the Company's gold mining properties (the "Operations").
In connection therewith, Sterling as its initial contribution (the "Initial
Contribution") has agreed to fund the Operations by contributing $9,000,000
payable as follows: (i) $500,000 upon execution of the November 1997 Agreement;
(ii) $700,000 on or before January 5, 1998; (iii) $1,200,000 on or before
June 30, 1998; (iv) $1,200,000 on or before January 5, 1999; (v) $1,800,000
on or before June 30, 1999; (vi) $1,800,000 on or before January 5, 2000;
and (vii) $1,800,000 on or before June 30, 2000.
In February, 1998, Sterling gave notice to the Company advising the
Company that Sterling desired to exercise its option to acquire an
additional interest (the "Additional Interest") by increasing the Initial
Contribution to $15,000,000. Sterling shall pay the Company the following
amounts in accordance with the following schedule:
1. The sum of $300,000 on or before March 1, 1998.
2. The sum of $300,000 on or before April 1, 1998.
3. The sum of $600,000 on or before October 1, 1998.
4. The sum of $600,000 on or before April 1, 1999.
5. The sum of $600,000 on or before October 1, 1999.
6. The sum of $900,000 on or before April 1, 2000.
7. The sum of $900,000 on or before October 1, 2000.
8. The sum of $900,000 on or before April 1, 2001.
9. The sum of $900,000 on or before October 1, 2001.
With regard to the interests of the Participants, after Sterling's
Contribution, the Company shall have a participating interest
of 51% and Sterling shall have a participating interest of 49%.
The Agreement also provides for the establishment of a Management
Committee in order to determine overall policies, objectives, procedures,
methods and actions, which Committee will initially consist of one member
appointed by the Company (James S. Chapin, Chief Executive Officer of the
Company), one member appointed by Sterling (Robert Danial, a principal of
Sterling) and one member appointed jointly by the Participants (Kenneth
Friedman, a director of the Company).
In conjunction with the November 1997 Agreement, the Company has granted
a stock option to Sterling pursuant to a Stock Option Agreement dated
November 20, 1997 (the "Option Agreement") to acquire 6,000,000 shares of
the Company's Common Stock (the "Initial Option"), and in the event
Sterling exercises its option to acquire the Additional Interest
described above, Sterling shall have the option to purchase an additional
6,000,000 shares of the Company's Common Stock (the "Additional Option").
The purchase price of the shares covered by the Initial Option shall be
$.25 per share without commission for the first 3,000,000 shares and $.35
per share for the second 3,000,000 shares. The purchase price for the
Additional Option shall be $.25 per share without commission for the
first 3,000,000 shares and $.35 per share for the second 3,000,000
shares.
The Initial Options exercisable at $.25 per share shall become
exercisable on the day on which Sterling has contributed $3,600,000 of
the Initial Contribution and expire if the first installment of the
Initial Option is not exercised by July 30, 2000. The $.35 Initial
Options shall become exercisable on each of the last three installments
of the Initial Contribution. The Additional Options shall become
exercisable in two installments as follows: (1) the $.25 additional
option shall consist of the purchase of shares in an amount not
exceeding 3,000,000 shares of Brush Creek Common Stock covered by
the additional option and shall become exercisable after the payment
of the $600,000 amount which becomes due on April 1, 1999, and (2) the
$.35 additional option shall consist of five installments of the purchase
of shares of Brush Creek Common Stock covered by the additional option
and each sub-installment of 600,000 shares each shall become
exercisable on the date on which optionee contributes each of the final
five additional contributions starting with the October 1, 1999
installment. The Option Agreement further provides that the Company
shall in good faith attempt to register the options and the underlying
shares in advance of the date on which the options provided for thereunder
are exercisable under said Option Agreement.
Sterling and James S. Chapin, the Company's Chief Executive Officer, have
also executed a Voting Agreement dated as of November 19, 1997 pursuant
to which Sterling has agreed to vote all shares of Common Stock now or
any time hereafter held by it with respect to electing directors of the
Board of the Company in favor of the directors selected by Mr. Chapin.
The Voting Agreement has a term of five years provided however that the
Voting Agreement shall be renewed automatically for succeeding terms of
two years unless at least sixty days before the expiration of any such
term any party gives written notice to the other of its intention not to
renew the Voting Agreement.
The Company estimates its mining development and operating costs to be
approximately $4 million for the fiscal year ending June 30, 1998. The
majority of the funds will be used for operations in the lower Brush
Creek mine and Ruby mill.
Results of Operations
The Company had total revenues of $5,766 (from interest only) during the
six months ended December 31, 1997 compared to total revenues of $15,531
(from interest only) during the six months ended December 31, 1996. The
Company had no revenues from operations during such periods. The Company
had a ($2,927,403) net loss for the six months ended December 31, 1997
compared to a net loss of ($2,178,583) for the comparable fiscal 1996
period. This change in net loss is primarily due to an increase in
general mining and exploration costs, general and administrative
expenses, and litigation settlements. General and administrative expenses
increased $572,454 from the same period in the prior fiscal year
primarily due to an increase in administrative payroll and professional
fees. In addition, the Company paid $573,959 in the form of Common Stock
for litigation settlements.
The price of gold has a material effect on the Company's financial
operations. Following deregulation, the market price for gold has been
volatile. Since the end of 1987 the price of gold has declined from a
high of approximately $500 per ounce to approximately $289.20 per ounce
at December 31, 1997. Instability in the price of gold may affect the
profitability of the Company's operations if and when the Company
realizes economic production.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to the Company's Form 10-KSB for fiscal year ended June
30, 1997 and the financial statements included therein and in particular
to Part I, Item 3 and Note 13 to the consolidated financial statements,
the full contents of which are incorporated by reference herein in
accordance with Rule 12b-23 of the General Rules and Regulations under
the Securities Exchange Act of 1934. There has been no material changes
in legal proceedings during the quarter ended December 31, 1997.
Item 2. Changes in Securities.
During the quarter ended December 31, 1997, the Company sold the
following equity securities that were not registered under the Securities
Act of 1933: 4,050,000 restricted shares of Common Stock at $0.10 per share
wherein the Company received net proceeds of $405,000 in October 1997;
280,000 restricted shares of Common Stock at $0.50 per share wherein the
Company received net proceeds of $140,000 in November 1997; 440,000
restricted shares of Common Stock at $0.50 per share wherein the Company
received net proceeds of $220,000 in December 1997. All shares were sold
under Regulation D and Section 4(2). Investors who acquired such shares
were required to be accredited investors.
In addition, during the quarter ended December 31, 1997, the Company
issued 271,667 restricted shares to pay for certain finders fees and issued
433,334 shares as part of a settlement with the Royal Bank Plaintiffs. The
shares were issued pursuant to Section 4(2).
The Company has agreed to register all of the foregoing shares pursuant to
a Registration Statement.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security-Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
There are no exhibits applicable to this Form 10-QSB.
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the fiscal quarter
ended December 31, 1997.
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.
BRUSH CREEK MINING AND
DEVELOPMENT CO., INC.
(Registrant)
Dated: February 18, 1998 By: /s/James S. Chapin
James S. Chapin,
Chief Executive Officer
Dated: February 18, 1998 By: /s/ James S. Chapin
James S. Chapin,
Principal Financial
Officer and Principal
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM BRUSH CREEK MINING AND DEVELOPMENT CO., INC.'S QUARTERLY
REPORT FOR THE QUARTER ENDED DECEMBER 31, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 160,643
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 31,670
<CURRENT-ASSETS> 192,313
<PP&E> 10,140,026
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,604,434
<CURRENT-LIABILITIES> 2,483,935
<BONDS> 0
<COMMON> 49,877,325
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,604,434
<SALES> 0
<TOTAL-REVENUES> 3,168
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,972,352
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,969,184)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,969,184)
<DISCONTINUED> (0)
<EXTRAORDINARY> (0)
<CHANGES> (0)
<NET-INCOME> (1,969,184)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
