SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended July 31, 1996 Commission File No. 0-13078
Nevada 13-31805030
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
LEADVILLE MINING AND MILLING CORP.
(Exact name of Registrant as specified in its charter)
76 Beaver Street, New York New York 10005
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 344-5158
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934,
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No_____
Indicate by check mark if disclosure of delinquent filers pursuant to Regulation
S-B is not contained herein, and will not be contained to registrant's
knowledge, in definitive proxy or information statements incorporate by
reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB.[X]
The aggregate market value of the voting Common stock held by non-affiliates (1)
of the registrant based on the average on November 12, 1996 of the bid (.125)
and asked ($.14) prices of the Company's Common Stock, as of July 31, 1996, was
approximately $13,804,817, based upon the average of the bid and asked prices
($.1325) multiplied by the 104,187,298 shares of Registrant's Common Stock held
by non-affiliates as of July 31, 1996.
The number of shares outstanding of each of the Registrant's classes of
Common Stock, as of July 31, 1996 is 124,012,674 shares all of one class of
$.0001 par value Common Stock.
(1) "Affiliates" solely for purposes of this item refers to those persons who,
during the 3 months preceding the filing of this Form 10-KSB were officers,
directors and/or beneficial owners of 5% or more of the Company's outstanding
stock.
DOCUMENTS INCORPORATED BY REFERENCE
See Item 13.
<PAGE>
LEADVILLE MINING AND MILLING CORP.
Form 10-KSB
Fiscal Year Ended July 31, 1996
PART I Table of Contents Page
Glossary (ii)
Item 1. Business 1
Item 2. Properties 2
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of 9
Security Holders
Part II
Item 5. Market for Company's Common 9
Equity and Related Stockholder Matters
Item 6. Management's Discussion and Analysis of 10
Financial Condition and Results of Operations
Item 7. Financial Statements 14
Item 8. Changes in and Disagreement with Accountants 14
on Accounting and Financial Disclosure
Part III
Item 9. Directors, Executive Officers, Promoters 15
and Control Persons; Compliance with
Section 16(a) of the Exchange Act.
Item 10. Executive Compensation 16
Item 11. Security Ownership of Certain Beneficial 18
Owners and Management
Item 12. Certain Relationships and Related 19
Transactions
Item 13. Exhibits and Reports on Form 8-K 19
Signatures 21
Supplemental Information 22
Financial Statements F-1
(i)
<PAGE>
GLOSSARY OF TECHNICAL TERMS
Backfilling:
Putting waste rock in an open stope.
Ball Mill:
Instrument which reduces rock to powder form.
Blanket Ore:
Ore which usually lies horizontal in the form of a sedimentary bed.
Brecchia Pipe:
A funnel of broken rock descending into the earth (along a fault line)
through which mineralizing solutions may rise. Contact Metamorphic Type of
Deposit : Where minerals result from ion exchange or replacement between an
intrusive igneous rock and a host rock.
CuSO4:
Copper Sulfate.
Feeder Veins:
Small veins.
Floatation Plant:
Mechanical system which separates valuable minerals from rock powder using
chemical solutions.
Gravity Plant:
Mechanical system which separates valuable minerals from rock powder using
the force of gravity for separation.
Hydrometallurgical Plant :
A smelter which reduces sulfide faults converging from different
directions.
Leadville Dolomite
Name of a specific limestone bed in Leadville, Colorado.
Leadville Silver Gold Process :
Generally similar to the Sherrit Gordon process whereby chemicals are used
to produce oxides and sulfates of zinc.
Lode Claim:
Claim on which mineral is found underground; i.e., vein.
Magnetic Anomaly:
A variation in the earth's magnetic field.
Magnetite Skarn:
The mineral magnetite (iron Oxide) in combination with quartz emplaced in
limestone. Major Intrusive Center: An area where large funnels exist and
through which large amounts of mineralizing fluids rose. Massive
Polymetallic Ores: Large dense mass of sulfide minerals containing several
metals.
MNSO4:
Manganese Sulfate.
(ii)
<PAGE>
Mineral Deposit or Mineralized Material:
A mineralized underground body which has been intersected by sufficient
closely spaced drill holes and or underground sampling to support
sufficient tonnage and average grade of metal(s) to warrant further
exploration-development work. This deposit does not qualify as a
commercially minable ore body (Reserves), as prescribed under Commission
standards, until a final and comprehensive economic, technical and legal
feasibility study based upon the test results is concluded.
Open Stope:
A mined area which remains as an open space.
OPT:
Ounces per ton.
Patented Claim:
Privately owned mineral land.
PbSO4:
Lead Sulfate.
Place Claim:
Claim on which minerals are found in sand and gravel - on surface.
Positive Ore:
Ore which is proven (same as proven).
Probable Ore:
Inferred ore. Ore which is believed to exist, but not fully proven.
Proven Ore:
Minerals which are determined to be recoverable.
Replacement Ore Body:
Mineral ore, irregular in form, which is emplaced in limestone.
Rhyolite Agglomerate:
An igneous rock (rhyolite) which has been fractured (crushed) and
recemented.
Sherrit Gordon Process:
Hydrometallurgical method of processing (smelting) zinc concentrates into
oxides and sulfates.
Shockwork Breccia:
Earth's crust broken by two or more sets of parallel faults converging from
different directions.
Silica Stope:
Name of a mine location in the Hopemore mine.
Square Setting:
A system of timbering a tunnel or opening underground to prevent cave- in.
Stockwork:
Ore, when not in strata or in veins but in large masses, so as to be worked
in chambers or in large blocks.
Unpatented Claim:
Mineral land owned by the government and rented for an annual fee.
ZNSO4:
Zinc Sulfate.
(iii)
<PAGE>
PART I
Item 1. Business
Leadville Mining and Milling Corp. (the "Company") was incorporated in the
state of Nevada in February 1982. The Company owns rights to property located in
the California Mining District, Lake County, Colorado and plans to engage in the
business of mining and milling gold and other minerals from its properties. At
present, there is no assurance that a commercially viable ore body exists in any
of the Company's properties until further systematic underground sampling or
core drilling is done, and a final feasibility study based upon the results is
concluded. The future of the Company is dependent upon the Company's properties
producing gold, silver, lead and zinc in sufficient quantities so that the
Company will be a commercially viable entity. A description of the mining claims
owned by the Company is contained in "Item 2. Properties."
During the past year, the Company's activities continued to be directed
towards rebuilding the second exit, the Hunter shaft. Work was also carried out
on the headframe and the hoisting facility. Due to the Company's financial
condition, limited work was performed during the year (approximately $174,722).
At this time, assuming that the Company is able to obtain adequate funding
(see "Part II, Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations- Liquidity and Capital Resources"),
management believes that the Company's Hopemore-Comstock, Hunter and Penn Groups
may be explored with positive results. If ore is discovered in sufficient
quantity it could be processed at the Company's custom mill which is prepared to
process ores at a rate of 180 tons per day; expandable to 300 tons per day as
required; or at the ASARCO Black Cloud Mill by Agreement. Management has signed
an agreement whereby milling may be performed by ASARCO Incorporated ("ASARCO")
at ASARCO's Black Cloud Unit. All activity at the mine or mill would be
performed by persons employed by the Company. (see "Part II, Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources").
In the event that sufficient ore is discovered and processed, concentrates
of metallic minerals containing gold (AU), silver (AG), Lead (PB), zinc (ZN) and
copper (CU) would be processed (smeltered) at ASARCO's smelter in East Helena,
Montana or, other possible smelters in the United States or Canada.
The Mine Safety Health Administration requires that all underground mines
have at least two shafts which communicate with mine operating areas. With
sufficient funding, the Company expects to complete its mandated second exit,
the Hunter shaft, in April 1996. Thereupon the Company hopes to explore
potential mineral horizons on two levels; including possible gold- bearing
replacement minerals in the "B-Zone" and other minerals associated with the #4
vein and the Silica stopes. At a later date, efforts will be made to explore for
minerals on the Weston fault, followed by an eventual tunnel drive to the New
President shaft (Penn Group Area).
In the event that ore is discovered in sufficient quantity, it is estimated
that the cost to establish a viable mining and milling operation capable of up
to 300 tons per day on a continuous and long term basis, will require
approximately $2,000,000 in capital. These funds would be applied towards the
completion of the Hunter Shaft, exploration for minerals in the B-zone and other
locations, exploration of the Weston fault area, the Penn group area and other
potential target locations, and their possible development, if economic, in
addition to mining and milling of the discovered ores if these are discovered
and extraction is determined to be economically feasible. There can be no
assurance that sufficient ore will be discovered, that extraction will be
economically feasible or that funding can be obtained (see "Part II, Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operations).
<PAGE>
Competition
While there is intense competition in the acquisition of viable mining
properties, the Company already has the properties that it intends to explore
and is not currently involved in further property acquisition. The Company
believes that there is no material competition in the sale of mineral
concentrates because the prices for mineral concentrates are based upon
standards established by the commodities exchange (London Metals Exchange
market).
Employees
As of July 31, 1996, the Company has 10 full time employees, consisting of
two executive officers, six mine laborers and two administrative personnel.
Item 2. Properties
The Company owns the following mining claims, all of which are located in
California Mining District, Lake County, Colorado.
<TABLE>
<CAPTION>
Patented Claims
Type Percent Of
Name Claim No. Acreage Of Claim Ownership
<S> <C> <C> <C> <C>
Belle Placer 02778 120.860 Placer 62.5
Pueblo (et al [6]) 12718 36.534 Lode 75.0
Chicago 01295 10.020 Lode 50.0
New York 01294 10.140 Lode 50.0
Mikado 08015 9.250 Lode 100.0
Little Bertha 00504 8.380 Lode 3/8
Free America #2 01177 4.210 Lode 3/4
Emma 00756 8.270 Lode 3/8
Colman 09747 1.446 Lode 44/50
Little Galesburg 01176 6.000 Lode 1/8
Highland Chief 00429 2.097 Lode 100.0
Robert Burns 00538 9.859 Lode 100.0
Highland Mary 00539 6.600 Lode 100.0
President 08942 6.900 Lode 1/16
J.G. Fraction 13251 1.727 Lode 31/96
Ballard 00589 3.190 Lode 23/144
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Unpatented Claims
Book/ Type Percent Of
Name Page No. Acreage Of Claim Ownership
<S> <C> <C> <C> <C>
Columbine 437/180 7.310 Lode 100.0
Judy 437/181 17.990 Lode 100.0
New Comstock #1 433/191 20.661 Lode 100.0
New Comstock #2 433/191 20.661 Lode 100.0
</TABLE>
The Company additionally owns 20.73 acres located in the same area namely
the California Mining District, Lake County, Colorado on which its mill site for
processing of ore is located.
The Company owns the foregoing claims as indicated. The Company has not
formed any partnership regarding these claims, nor are there any association
whereby profits or expenses are to be shared. The claims are located
approximately 2.5 miles northeast of the town of Leadville, Colorado by County
Road. The principal acreage forms a contiguous group and is located on a
prominent topographic feature known as Breece Hill. See below.
The mill is new, 180 ton per day flotation gravity plant. The Company has
purchased an additional ball mill of 120 tons per day capacity which is at the
mill site and ready to be installed. The plant would have total capacity of 300
tons per day when the second mill has been put into place.
The plant is situated on a 20.73 acre mill site and has an approved
tailings disposal location. The plant has been pilot tested and is ready for
production. All necessary permits to operate have been granted.
Construction of the mill began in 1987 and was completed in August of 1989.
It was the Company's intent to do fee-milling for other companies while the
federally-mandated construction of the mine second exit was in progress.
However, the recession in the mining industry, which the Company could not
predict, and the resulting lower metal prices essentially eliminated the
possibility of custom milling. The mill is on a stand-by basis and has been
since its completion. The Company has discussed custom milling with many
potential shippers of ore, but transportation costs from any mines not in the
Leadville District have proved to be prohibitive. The Company anticipates that
this mill will be used to process oxide minerals and ASARCO will process sulfide
minerals (see "Part II, Item 6. Management's Discussion and Analysis of
Financial Condition and Results of Operations-Liquidity and Capital Resources").
-3-
<PAGE>
History Hopemore Mine
The Leadville mining district is located 100 miles west of Denver, Colorado
in the heart of the Rocky Mountains. The weather is harsh with long winters and
short summers.
The Company's properties are within the high gold zone of the Leadville
district which was dominated by the Ibex Mines on Breece Hill. The high gold
zone has produced approximately 3 million ounces of gold. The average grade of
ore from the Hopemore area is not known. On adjacent properties a weighted
average of siliceous precious metal ore shipments from the Garbutt Lode and
South Ibex Stockwork between 1913 and 1922 is 0.850 OPT Au, and 4.97 OPT Ag from
63,796 tons.
Historically, the Company's properties were worked as two separate mining
areas, the Hopemore shaft in the Ibex area and the Penn Group area further west;
and the ores were not concentrated by milling but were shipped directly to the
Arkansas Valley Smelter in Leadville.
Work by the Company started in 1984 with acquisition of the Comstock
Hopemore Group of claims. Retimbering of the entire Hopemore shaft followed
along with establishment of the new seventh level, partial rehabilitation of the
other levels, several raises, the fifth level connection with the Hunter shaft,
construction of a mill and the present retimbering of the Hunter escape shaft.
The Hopemore shaft was worked as part of the Ibex mines until approximately
1902. The Hopemore shaft was sunk in 1907 to reach the seventh level of the Ibex
No. 4 mine. Large replacement ore bodies in the Leadville dolomite (Blue
limestone) lie on the hanging wall side (southwest) of the Ibex No. 4 vein. The
ore is associated with a large magnetite skarn replacement body in the Leadville
dolomite. The Leadville dolomite on the footwall (east) side of the Ibex No. 4
vein was mined via the Hunter Shaft.
Ground conditions in the district generally do not allow open stopes,
therefore, square setting and backfilling with waste of low grade ore was
commonly practiced. When the large ore bodies of the Hopemore were mined zinc
sulfide ore was of no value. High zinc ore was penalized at the local lead
smelter, and it is believed that much of the backfill may be high grade (+12%)
zinc mineralization.
Mineralized Material
Tons Au in OPT Ag in OPT %PB %ZN %Cu
121,200 0.178 8.63 3.98 12.2 0.35
[Donald Wilson, August 14, 1989, Report on Properties of Leadville Mining &
Milling Corp. Donald Wilson, February, 1994, Ore Reserves on Properties of
Leadville Mining & Milling Corp. Mr. Wilson is the President of the Company.]
-4-
<PAGE>
GEOLOGY
Exploration Targets
Hopemore Mine Exploration Target
The Hopemore area has been mined from the Ibex No. 7 level. The lower host
rocks of the Manitou and Peerless formation are thought to remain unexplored.
The mineralized zones are commonly controlled by steep sulfide veins. Four veins
have been identified which could feed replacement mineral bodies in these
underlying formations. The potential mineral bodies are massive sulfide and
could contain between 25,000 to 80,000 tons each of mineralized material. [Scott
Hazlitt Geological Report, Leadville Mining & Milling Properties, January 1993,
Page 7].
The Company's holdings in the Hopemore area are in a location which should
have good ground preparation for vein deposits. Vein mineralization is not
limited to specific host rocks and may form minable bodies of mineralization.
The veins in the gold belt of the Leadville district are generally low in base
metals and higher in quartz and precious metals. [Scott Hazlitt Geological
Report, Leadville Mining & Milling Properties, January 1993, Page 7]. The
expected tonnage from veins would be 5,000 to 25,000 tons of mineralized
material. [Emmons, et. al., 1927.Fig.98,99]
Penn Group Explorations Targets
The targets in the Penn Group area, west of the Hopemore, are gold rich
magnetite skarns, massive sulfide replacement deposits below or west or the
magnetite and vein deposits. The near surface gold rich magnetite skarn could be
over one million tons of mineralized material. [Scott Hazlitt Geological Report,
Leadville Mining & Milling Properties, January 1993. Emmons, et.al. (P104,
1927)] The deeper massive sulfide target could be in the range of one to +four
million tons of mineralized material. Vein type deposits, high in precious
metals are also a possibility under the magnetite deposits. The expected tonnage
from veins would be 5,000 to 25,000+ tons of mineralized material. [Thompson's
Magnetic Anomaly Map (1990), Johansing, Plate 1, Magnetic Anamoly, Emmons,
et.al. (P104, 1927)]
The Penn Group including the area to the southwest, has not been thoroughly
prospected. The Magnetic anomaly map (1990) of the Breece Hill area shows a
large zone with an anomalously high magnetic signature which management believes
to be a large body of magnetite skarn. Although the magnetite skarn is a contact
metamorphic type of deposit it is usually found near sulfide mineralization.
In the adjacent mine, massive sulfide replacement bodies are often found
next to bodies of rhyolite agglomerate, which is also known locally as
Fragmental Porphyry. The Fragmental Porphyry is thought to form breccia pipes
which were formed during the late stages of mineralization and were reamed out
centrally to form mineralizing conduits. In numerous cases, magnetite is found
peripheral to the massive sulfide deposits. Pyrite veins in the magnetite often
carry high gold contents. Within the Leadville Mining District northeast
trending veins are generally the best feeders for the massive sulfide blanket
deposits. The White Prince Vein which is mapped north of the Penn Group property
is northeast trending and on Johnasing's maps is correlated with the Pilot
Fault.
-5-
<PAGE>
The target zone would be either between the magnetite skarn and the breccia
pipe or under the magnetite skarn. Magnetite skarn cappings to massive sulfide
bodies are common in the general vicinity of the Comstock shaft.
Penn Group Mines
The Penn Group lies northwest of the Hopemore and contains magnetite skarn
and underlying sulfide minerals hosted by the Leadville dolomite. Magnetite ore
was mined from shallow open cuts and was shipped as smelter flux. The ores
produced from underground workings contained a high gold and silver content. The
underground workings went to depths of 450 to 600 feet and focused on "Feeder"
veins and blanket ore in the lower Leadville formation.
Mineralization was mined along and to the east of the White Prince fault.
The area west of the White Prince fault is down thrown and was prospected but
not to sufficient depths to locate the favorable carbonate section.
Geology and Potential Reserves
The ore deposits in the Leadville district include precious and base metal
massive sulfide veins and carbonate hosted deposits, gold bearing magnetite
skarns, and gold rich veins. The major ore bodies are hosted in Paleozoic aged,
shelf carbonate rocks with a total thickness of 600 feet.
These sedimentary rocks have been intruded by a series of sills and dikes
and faulted, resulting in complex geology. The Company's properties are located
on Breece Hill which is a major intrusive center and contain both gold, silver
and base metal minerals.
Mineralized Material
Tons Au in OPT Ag in OPT %PB %ZN %Cu
121,200 0.178 8.63 3.98 12.2 0.35
80,000 tons of this total is based upon representations by Hopemore Mining Co.
at cessation of mining activities in 1913. Another 30,000 tons is represented by
the 640 "Zinc Stope" which is accessed by the 740 service raise and is above the
Hopemore sixth level (old Ibex 7th Level). Other quantities of unknown size are
assigned to seven other areas for which dimensions are unknown.
The B-Zone Mineral structure which is of unknown size and situated in the
Manitou limestone assayed .78 ounces of gold and 17.00 ounces of silver per ton
across a width of several feet. The total width of this bed is 15 to 20 feet
(not all sampled). [Donald L. Wilson, Report on the Properties of Leadville
Mining & Milling Corp. August 14, 1989 P. 25. Scott Hazlitt, Evaluation of the
Properties of Leadville Mining & Milling. Mr. Wilson is the President of the
Company.]
-6-
<PAGE>
<TABLE>
Location Of Mineralized Material
Tons Area Au Ag Pb Zn Cu
- ---- ---- ---- ---- ---- ---- ---
#4 Vein 7 Level
<C> <C> <C> <C> <C> <C> <C>
300 N 1/2 Block 428 0.14 8.4 2.65 4.40 0.55
300 S 1/2 Block 428 0.40 16.0
600 S 1/2 Block 441 0.11 9.2 1.95 7.90 1.30
#4 Vein 6 Level
100 N 1/2 Block 428 0.78 45.90 2.40 4.10 0.70
400 N 1/2 Block 428 0.16 13.20 2.10 4.70 0.35
#4 Vein (North Split)
600 N 1/2 Block 428 0.15 15.10 2.35 3.30 0.40
200 N 1/2 Block 428 0.36 23.70 2.10 4.10 0.46
7 Level "B" Zone
16,675 Replacement
Minerals 0.463 14.60 2.55 4.90 0.30
600 Block 429 "B" Vein 0.85 36.40 1.85 1.50 0.85
(2' Mining Width)
6 640 Stope Area
17,325 Blocks 440, 441 0.092 5.80 3.95 16.20 0.40
7 Level
3,200 Block 475 0.11 9.70 4.25 16.00 0.35
6 Level
500 Block 475 0.26 4.30 2.50 6.00 0.30
#4 Vein 5 Level
300 S 1/2 Block 430 and
N 1/2 Block 441 0.07 9.10 1.55 2.90 6.30
- ------------------------------------------------------------------------------
0.264 10.57 3.21 10.43 0.43
0.139 7.63 4.38 13.10 0.31
121,200 Total 0.178 8.63 3.98 12.20 0.35
</TABLE>
[Donald L. Wilson, Report on the Properties of Leadville Mining & Milling Corp.
August 14, 1989. Mr. Wilson is the President of the Company.]
-7-
<PAGE>
Weston Fault Massive Sulfide Exploration Targets
The Weston fault forms the western boundary of the down-dropped block which
contains the deposits or the Black Cloud mine south and east of the Company's
properties. The Hopemore- Hunter workings are separated from the Penn Group by
Weston fault which has had a complex history of movement. Early compressional
tectonics are believed to have resulted in minor over thrusting and drag
folding, possibly similar to that along the Tucson Main Fault on Iron Hill.
Later normal faulting resulted in a near vertical structure with the east side
down faulted. These two episodes of movement are believed to have produced two
strands of the Western Fault. The ground between the two strands of the fault
should have undergone good ground preparation and may contain the favorable
carbonate section for massive sulfide blanket mineralization. [Scott Hazlitt
Geological Report, Leadville Mining & Milling Properties, January 1993, Page 8].
Weston Fault Stockwork Breccia Exploration Targets
Along the southern strike of the Weston fault zone, intersecting faults
have hosted stockwork breccia zones which contain precious metals and are low in
sulfides. The Antioch mine produced a silicious gold ore contained in a broken
and brecciated porphyry body between two fault strands. Another similar
stockwork breccia zone is known as the South Ibex stockwork or Capital stope
which contained approximately 250,000 tons of ore. There are two strands of the
Weston fault on the Company's property. The strike length controlled is from
1,400-1,600 feet. [Scott Hazlitt Geological Report, Leadville Mining & Milling
Properties, January 1993, Page 9]
Management believes that stockwork mineralization along the intersection of
the Ibex No. 4 vein and the Weston fault is a good target [Thompson's Magnetic
Anomaly Map (1990), Johansing, Page 9]. The stockwork mineralization could be
hosted by porphyries and could range in size from 50,000 to 500,000+ tons of
mineralized material. [Scott Hazlitt, Evaluation of the Properties of Leadville
Mining & Milling Corp., January 1993. Chapman and Stevens, 1929, Colorado
Mineral Survey; Leadville District and Adjoining Territory.] Several veins may
intersect the Weston fault and more than one stockwork body on each strand of
the fault is a possibility [Scott Hazlitt Geological Report, Leadville Mining &
Milling Properties, January 1993, Page 9].
-8-
<PAGE>
Planned Exploration
An exploration program, is now being considered which would consist of
drilling from both underground and surface locations. Some of the targets and
their locations are listed and described below:
A) The Hopemore-Hunter mine area exploration for massive sulfide replacement
deposits and vein deposits in near previously mined areas or in the
underlying carbonate hosts.
B) Stockwork breccia deposits near vein intersections with the Weston Fault.
C) Massive sulfide replacement targets along the footwall or eastern side of
the Weston Fault.
D) Replacement targets along the hanging wall, or western side of the Weston
Fault.
E) The Penn Group area magnetite-gold and massive sulfide replacement and vein
targets.
F) The magnetic anomaly which extends to the west and southwest of the Penn
Group-new magnetite-gold and massive sulfide mineralization. The area
between the breccia pipe (rhyolite agglomerate) and the west side of the
magnetic anomaly- massive sulfide mineralization.
[Scott Hazlitt Geological Report, Leadville Mining & Milling Properties, January
1993, Pages 9- 10; Thompson's Magnetic Anomaly Map (1990), Johansing, Pages
5-12].
Item 3. Legal Proceedings
There is no litigation pending against the Company.
Item 4. Submission of Matters to a Vote of Securityholders
The Company held an annual meeting on January 7, 1996 and elected Donald
Wilson, Gifford Dieterle, Robert Roningen, Jack Everett and Horst Scherp as
Directors.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
(a) Marketing Information -- The principal U.S. market in which the
Company's common shares (all of which are of one class, $.0001 par value Common
Stock) are traded or will trade is in the over-the-counter market (Bulletin
Board Symbol: "LDMM"). The Company's stock is not traded or quoted on any
Automated Quotation System.
The following table sets forth the range of high and low bid quotes of the
Company's Common Stock per quarter since the beginning of fiscal 1995 as
reported by the National Quotation Bureau (which reflect inter-dealer prices
without retail mark-up, mark-down or commission and may not necessary represent
actual transactions).
-9-
<PAGE>
MARKET PRICE OF COMMON STOCK
Date
Quarter Ending High and Low Bid
July 31, 1996 .15 .10
April 30, 1996 .19 .11
January 31, 1996 .20 .075
October 31, 1995 .11 .08
July 31, 1995 .145 .01
April 30, 1995 .1425 .06
January 31, 1995 .15 .06
October 31, 1994 .15 .06
(b) Holders -- The approximate number of recordholders of the Company's
Common Stock, as of July 31, 1996 amounts to 1,528 inclusive of those brokerage
firms and/or clearing houses holding the Company's common shares for their
clientele (with each such brokerage house and/or clearing house being considered
as one holder). The aggregate number of shares of Common Stock outstanding is
124,012,674 as of July 31, 1996.
(c) Dividends -- The Company has not paid or declared any dividends upon
its Common Stock since its inception and, by reason of its present financial
status and its contemplated financial requirements, does not contemplate or
anticipate paying any dividends upon its Common Stock in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Fiscal 1996 Compared to Fiscal 1995
Results of Operations
During the fiscal year ended July 31, 1996, the Company continued activity
at its gold/silver/base metal mining project in Colorado. The effort was mainly
concentrated on rehabilitating the second exit, Hunter shaft and installing a
new hoist. At the present time, the Company has not received revenue from its
operations although it has expended considerable sums for the development of its
proposed mining and milling operation. (See "Liquidity and Capital Resources").
To date, the remaining unfinished task prior to commencing any other
activity is the completion of the mandated second exit, Hunter shaft. It is
estimated that the second exit will be completed, and the mining project will
become operational, in November, 1996.
-10-
<PAGE>
Completion of the Hunter shaft will be followed by the exploration for
commercial minerals and, if determined economically feasible, their development,
if discovered on the Hopemore 7th level. A cross-cut to be driven from the 8th
level will explore the minerals associated with the "B-Zone" structure. The
Weston fault potential will be explored for possible large scale mineralization
in the White limestone with a tunnel driven 121 feet long, followed by core
drilling. These exploration and development projects will require approximately
13 months (after funding) and cost approximately $300,000.
The Company has approximately 121,000 tons of mineralized material
containing specified amounts of gold, silver, lead, zinc and copper. Possible
drill target potential as indicated by Scott Hazlett, Consulting Geologist,
ranges up to 5,000,000 tons of mineralized material. The Company to date, has
completed partial exploration of the Hopemore 7th level by cross-cut, raise,
drift, and core drill. Stopes, ore chutes, ore passes and various other loading
facilities are completed and operational. Assuming adequate funding, the Company
is prepared to enter into an exploration program subsequent to completing the
Hunter shaft (three months to complete) and will, if sufficient mineralized
material is discovered and extraction is determined to be economically feasible,
develop and mine the property.
If sufficient ore is discovered, the Company would commence mining and
milling at a rate of up to 180 tons per day and gradually increase the tonnage
as conditions would allow. It is understood that in order to realize a mill
capacity of 300 tons per day the Company would need to explore and develop a two
year supply of proven ore (225,000 tons) and a two year supply of probable ore
(225,000 tons). In order to execute the entire project, if conditions warranted,
a capital investment of approximately $2,000,000 would be required.
With regard to all estimates of mineral tonnage, further geologic work is
required before the Company can conclude that commercially viable ore deposits
exist.
The Company generated no revenues from operations during the fiscal years
ended July 31, 1996 and 1995. There was de minimis income during these periods
of $960 and $435, respectively. Costs and expenses more than doubled from fiscal
1995 to fiscal 1996. Mine expenses increased by $62,838 (40%) from 1995
($174,722) to 1996 ($237,560). Selling, General and Administrative expenses
increased by $471,655 (298%) from 1995 ($238,052) to 1996 ($709,707) primarily
due to increased purchases of mine supplies and equipment. As a result, the
Company's net loss for 1996 was $956,043, which was $529,240 (124%) more than
its 1995 loss of $426,803.
Liquidity and Capital Resources
As of July 31, 1996
As of July 31, 1996, the Company's current liabilities exceed its current
assets by a ratio of approximately 1.8 to 1 and the Company had a working
capital deficiency of $36,507. Therefore, the Company can only continue as a
going concern in the event that it obtains additional capital. As noted above,
management anticipates that it will need at least $2,000,000 to become fully
operational and begin generating revenues from operations. To obtain such
funding, management intends to raise additional capital through the sale of its
securities, debt financing and/or by entering into one or more joint ventures
and/or working arrangements.
-11-
<PAGE>
Specific plans to obtain financing for a full scale mining and milling
operation will most likely include a combination of one or more of the
following:
1. Private placements of the Company's securities to institutions;
private individuals; mining companies; and/or investment groups.
During fiscal 1996, the Company raised approximately $515,000 through
the sale of common stock. These investments have enabled the
continuation of work in the Hunter shaft. The Company wishes to
complete it's Hunter shaft, second exit, prior to seeking major
capital for operational purposes.
2. A working arrangement with a mining company pursuant to which the
Company would mine and the other company would mill, smelt and market
the products. Under these conditions, the Company's cost would be
concentrated on the mining effort only. The Company has finalized such
an agreement with ASARCO pursuant to which the Company will mine and
sell the mined material to ASARCO and ASARCO will process the
minerals. The ASARCO agreement runs for an initial two-year term and,
thereafter, is cancelable by either party on 60 day's written notice.
Notwithstanding the foregoing, the Agreement would not extend beyond
June 30, 2000. Pursuant to the Agreement, the Company is to deliver
metallic minerals to ASARCO's mill site six miles southeast of
Leadville, Colorado. The price for the material would be based upon
the London Metals Exchange market price, less certain deductions for
treatment and impurities.
3. Joint Venture with other mining companies on a division of profits
basis, whereby the Company would initiate a mining venture with
another mining company, the latter providing the capital to initiate
mining and milling and, thereafter, dividing the net profit (if any)
on an agreed amount basis. There are no firm joint venture prospects
at this time.
4. A public underwriting. The Company may pursue a public underwriting of
it's securities. The Company has not sought out the interest of an
underwriter nor can the Company assure that it would be able to obtain
an underwriter or complete a public offering.
Assuming that the Company is able to obtain funds from one or more of the
above sources, planned activities over the next year, in order of priority, are
as follows:
Estimated Time Required
to Complete
(or Operating Time -
Production),
Activity Estimated Cost Assuming Funding
(a)Complete the mandated
Hunter Shaft, 2nd exist. $120,000 Three-five months
(b)Develop B-zone mineral structure
in preparation for mining. $36,000-55,000 Three-five months
(c)Drive tunnel to Weston fault
mineral structure - develop. $24,000-30,000 Three-four months
(d)Drive to IBEX mineral structures
and develop. $22,000-34,000 Five-seven months
(e)Sell mined products
to the ASARCO mill. $1,744,000-2,000,000 Six months
-12-
<PAGE>
Aside from the above planned activities, the Company's basic administrative
capital needs (e.g. rent, salaries, utilities, etc.) are approximately $12,400
per month. Management has been funding these basic requirements and hopes to
continue to fund these requirements through the private sale of its Common
Stock. During the year ended July 31, 1996, the Company obtained approximately
$515,000 from the private sale of Common Stock.
There is no assurance whatsoever that any of the Company's proposed plans
to raise capital and otherwise fund operations will prove successful. The
Company's inability to obtain sufficient funding will delay the Company's
planned operations or, possibly, force the Company to go out of business.
Environmental Issues
Management does not expect that environmental issues will have an adverse
material effect on the Company's liquidity or earnings. Before any mining
development or mining exploration or construction of milling facilities could
begin, it was necessary to meet all environmental requirements and to satisfy
the regulatory agencies in Colorado that the Company's proposed procedures fell
within the boundaries of sound environmental practice. The Company is bonded to
insure procedures and reclamation of any areas disturbed by the Company's
activities. Recently, the Mined Land Reclamation Board reviewed the Company's
permit and bond and determined that an increase in the bond was necessary. At
that time, the Company placed an additional $6,000 in escrow against any future
indemnity.
Part of the Leadville Mining District was declared a Superfund site.
Several mining companies and one individual were declared defendants in a
possible lawsuit. The Company was not named a defendant or Possible Responsible
Party. The Company did respond in full detail to a lengthy questionnaire
prepared by the Environmental Protection Agency ("EPA") regarding the Company's
proposed procedures and past activities in November 1990. No further comments or
questions have been initiated by the EPA.
The Company does include in all its internal revenue and cost projections a
certain amount for environmental and reclamation costs on an ongoing basis. This
amount is determined at a fixed amount of $1.50 per ton of material to be milled
on a continual, ongoing basis to provide for further tailings disposal sites and
to reclaim the tailings disposal sites in use. At this time, there does not
appear to be any environmental costs to be incurred by the Company beyond those
already addressed above. No assurance can be given that environmental
regulations will not be changed in a manner that would adversely affect the
Company's planned operations.
-13-
<PAGE>
Item 7. Financial Statements.
The following financial statements have been prepared in accordance with
the requirements of Item 310(a) of Regulation S-B.
LEADVILLE MINING AND MILLING CORP.
FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
YEAR ENDED JULY 31, 1996
INDEX
Page Number
INDEPENDENT AUDITORS' REPORT F-1
FINANCIAL STATEMENTS:
Balance Sheet
July 31, 1996 F-2
Statement of Operations
For each of the two years
ended July 31, 1996 and
for the period from
September 17, 1982 (inception)
to July 31, 1996 F-3
Statement of Changes in Stockholders'
Equity from September 17, 1982
(inception) to July 31, 1996 F-4
Statement of Cash Flows
For each of the two years
ended July 31, 1996 and
for the period from
September 17, 1982
(inception) to July 31, 1996 F-9
Notes to Financial Statements F-11
All other schedules not submitted are omitted, because the information is
included elsewhere in the financial statements or the notes thereto, or the
conditions requiring the filing of these schedules are not applicable.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures.
There have been no changes in or disagreements with accountants with
respect to accounting and/or financial disclosure.
-14-
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
INDEX TO FINANCIAL STATEMENTS
FILED WITH THE ANNUAL REPORT OF THE
COMPANY ON FORM 10-KSB
FOR THE YEAR ENDED JULY 31, 1996
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
BALANCE SHEET AS OF JULY 31, 1996, LEADVILLE MINING AND MILLING CORP.
STATEMENT OF OPERATIONS FOR THE YEARS ENDED JULY 31, 1996 AND JULY 31, 1995, AND
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996, LEADVILLE MINING
AND MILLING CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE PERIOD SEPTEMBER 17, 1982
(INCEPTION) TO JULY 31, 1996, LEADVILLE MINING AND MILLING CORP.
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED JULY 31, 1996 AND JULY 31, 1995, AND
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996, LEADVILLE MINING
AND MILLING CORP.
NOTES TO FINANCIAL STATEMENTS
Other schedules not submitted are omitted, because the information is included
elsewhere in the financial statements or the notes thereto, or the conditions
requiring the filing of these schedules are not applicable.
As to certain matters, the financial statements herein differ in presentation
from, and include data which are not contained in, the Company's published
financial statements to stockholders. Such presentation and additional data are
submitted solely for the purpose of complying with the applicable accounting
requirements of Form 10-KSB and Regulation S-X.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors & Shareholders of
Leadville Mining and Milling Corp.
We have audited the accompanying balance sheet of Leadville Mining and Milling
Corp. (A Development Stage Enterprise) as of July 31, 1996, and the related
statements of operations, changes in stockholders' equity and cash flows for
each of the two years in the period ended July 31, 1996 and for the period
September 17, 1982 (Inception) to July 31, 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 Leadville Mining and Milling
Corp. (A Development Stage Enterprise) as of July 31, 1996 and the results of
its operations and its cash flows for each of the two years in the period ended
July 31, 1996 and for the period September 17, 1982 (Inception) to July 31, 1996
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred recurring losses through July 31,
1996 and has a working capital deficiency of $36,507 at July 31, 1996 that
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 10. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
WOLINETZ, GOTTLIEB & LAFAZAN, P.C.
Rockville Centre, New York
October 8, 1996
F-1
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
JULY 31, 1996
ASSETS
<S> <C>
Current Assets:
Cash ........................................................... $ 34,857
Loans Receivable ............................................... 7,908
Other Current Assets ........................................... 207
-----------
Total Current Assets ........................................ 42,972
-----------
Property and Equipment (Net of
Accumulated Depreciation of $338,482) .......................... 1,356,472
-----------
Other Assets:
Mining Reclamation Bonds ....................................... 11,000
Security Deposit ............................................... 3,667
Deferred Expense ............................................... 51,408
-----------
Total Other Assets ............................................ 66,075
-----------
Total Assets ..................................................... $ 1,465,519
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Expenses and Taxes ..................................... $ 69,806
Loans Payable - Officers ....................................... 9,673
-----------
Total Current Liabilities ................................... 79,479
-----------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, Par Value $.0001 Per Share;
Authorized 150,000,000 shares; Issued and
Outstanding 126,077,150 Shares ............................... 12,608
Capital Paid In Excess of Par Value ............................ 6,076,152
Deficit Accumulated in the Development Stage ................... (4,702,720)
-----------
Total Stockholders' Equity .................................. 1,386,040
-----------
Total Liabilities and Stockholders' Equity ....................... $ 1,465,519
===========
</TABLE>
The accompany notes are an integral part of the financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
For The Period
For The Year Ended September 17,1982
July 31, (Inception)
----------------------- To
1996 1995 July 31, 1996
---- ---- -----------------
<S> <C> <C> <C>
Revenues:
Interest Income ............... $ 960 $ 435 $ 707,394
Miscellaneous ................. -- -- 23,483
------------- ------------- -------------
Total Revenues .............. 960 435 730,877
------------- ------------- -------------
Costs and Expenses:
Mine Expenses ................. 237,560 174,722 1,405,572
Selling, General and
Administrative Expenses ..... 709,707 238,052 3,553,865
Depreciation .................. 8,344 13,810 338,482
Loss on Write-Off of
Investment .................. -- -- 10,000
Loss on Joint Venture ......... -- -- 101,700
------------- ------------- -------------
Total Costs and
Expenses ................... 955,611 426,584 5,409,619
------------- ------------- -------------
Loss Before Provision
For Income Taxes .............. (954,651) (426,149) (4,678,742)
Provision For Income
Taxes ......................... 1,392 654 23,978
------------- ------------- -------------
Net Loss ........................ $ (956,043) $ (426,803) $ (4,702,720)
============= ============= =============
Net Loss Per Share .............. $ (.01) $ (.00)
============= =============
Average Common Shares Outstanding 118,581,724 102,166,434
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996
Deficit
Accumulated
Capital Paid In The
Common Stock In Excess of Development
Shares Amount Par Value Stage Total
------ ------ --------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance
September 17, 1982
(Inception) ...................... -0- $ -0- $ -0- $ -0- $ -0-
Initial Cash
Officers - At $.0001 Per Share ... 15,750,000 1,575 -- -- 1,575
Other Investors -
At $.0001 Per Share ............ 10,450,000 1,045 -- -- 1,045
Initial - Mining Claims ............ --
Officer - At $.0002 Per Share .... 8,750,000 875 759 -- 1,634
Common Stock Issued For:
Cash At $.05 Per Share ........... 3,000,000 300 149,700 -- 150,000
Net Loss ........................... -- -- -- (8,486) (8,486)
---------- ---------- ---------- ---------- ----------
Balance - July 31, 1983 ............ 37,950,000 3,795 150,459 (8,486) 145,768
Common Stock Issued For:
Cash Pursuant to Initial Offering
At $.15 Per Share, Net of
Offering Costs of $408,763 ....... 17,547,411 1,755 2,221,594 -- 2,223,349
Net Income ......................... -- -- -- 48,890 48,890
---------- ---------- ---------- ---------- ----------
Balance - July 31, 1984 ............ 55,497,411 5,550 2,372,053 40,404 2,418,007
Net Income ......................... -- -- -- 18,486 18,486
---------- ---------- ---------- ---------- ----------
Balance - July 31, 1985 ............ 55,497,411 5,550 2,372,053 58,890 2,436,493
Common Stock Issued For:
Mineral Lease At $.10 Per Share .. 1,000 -- 100 -- 100
Net Income ......................... -- -- -- 4,597 4,597
---------- ---------- ---------- ---------- ----------
Balance - July 31, 1986 ............ 55,498,411 5,550 2,372,153 63,487 2,441,190
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - (Continued)
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996
Deficit
Accumulated
Capital Paid In The
Common Stock In Excess of Development
Shares Amount Par Value Stage Total
------ ------ --------- ----- -----
<S> <C> <C> <C> <C> <C>
Net Loss ............... -- $ -- $ -- $ (187,773) $ (187,773)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1987 55,498,411 5,550 2,372,153 (124,286) 2,253,417
Common Stock Issued For:
Services Rendered At
$.10 Per Share ..... 920,000 92 91,908 -- 92,000
Net Loss ............... -- -- -- (328,842) (328,842)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1988 56,418,411 5,642 2,464,061 (453,128) 2,016,575
Net Loss ............... -- -- -- (379,852) (379,852)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1989 56,418,411 5,642 2,464,061 (832,980) 1,636,723
Common Stock Issued For:
Cash:
At $.07 Per Share .. 2,690,601 269 194,219 -- 194,488
At $.05 Per Share .. 3,870,326 387 199,443 -- 199,830
Services:
At $.05 Per Share .. 682,826 68 34,073 -- 34,141
Commissions:
At $.07 Per Share .. 150,000 15 (15) -- --
Commissions Paid ....... -- -- (2,100) -- (2,100)
Net Loss ............... -- -- -- (529,676) (529,676)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1990 63,812,164 6,381 2,889,681 (1,362,656) 1,533,406
Common Stock Issued For:
Cash At $.06 Per Share 3,183,998 319 180,954 -- 181,273
Net Loss ............... -- -- -- (356,874) (356,874)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1991 66,996,162 6,700 3,070,635 (1,719,530) 1,357,805
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - (Continued)
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996
Deficit
Accumulated
Capital Paid In The
Common Stock In Excess of Development
Shares Amount Par Value Stage Total
------ ------ --------- ----- -----
<S> <C> <C> <C> <C> <C>
Common Stock Issued For:
Cash:
At $.03 Per Share .. 1,149,167 $ 115 $ 34,303 $ -- $ 34,418
At $.05 Per Share .. 20,000 2 998 -- 1,000
At $.06 Per Share .. 228,666 23 13,698 -- 13,721
At $.07 Per Share .. 100,000 10 6,990 -- 7,000
At $.08 Per Share .. 62,500 6 4,994 -- 5,000
At $.09 Per Share .. 54,444 5 4,895 -- 4,900
Services:
At $.032 Per Share . 393,597 39 12,561 -- 12,600
At $.05 Per Share .. 923,529 93 46,084 -- 46,177
Exercise of Options:
At $.05 Per Share By
Related Party .... 1,000,000 100 49,900 -- 50,000
Net Loss ............... -- -- -- (307,477) (307,477)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1992 70,928,065 7,093 3,245,058 (2,027,007) 1,225,144
Common Stock Issued For:
Cash:
At $.03 Per Share .. 1,760,575 $ 176 $ 51,503 $ -- $ 51,679
At $.05 Per Share .. 1,400,000 140 69,964 -- 70,104
At $.06 Per Share .. 100,000 10 5,990 -- 6,000
At $.07 Per Share .. 170,000 17 11,983 -- 12,000
At $.10 Per Share .. 500,000 50 49,950 -- 50,000
Services:
At $.05 Per Share .. 4,955,556 496 272,504 -- 273,000
Commissions:
At $.05 Per Share .. 202,200 20 (20) -- --
Commissions Paid ....... -- -- (1,500) -- (1,500)
Net Loss ............... -- -- -- (626,958) (626,958)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1993 80,016,396 8,002 3,705,432 (2,653,965) 1,059,469
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - (Continued)
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996
Deficit
Accumulated
Capital Paid In The
Common Stock In Excess of Development
Shares Amount Par Value Stage Total
------ ------ --------- ----- -----
<S> <C> <C> <C> <C> <C>
Common Stock Issued For:
Cash:
At $.03 Per Share ............. 1,493,300 $ 150 $ 43,489 $ -- $ 43,639
At $.05 Per Share ............. 3,772,053 377 189,894 -- 190,271
Services:
At $.03 Per Share ............. 5,000,000 500 149,500 -- 150,000
At $.05 Per Share ............. 1,300,000 130 71,287 -- 71,417
At $.05 Per Share
By Related Party ............ 1,560,000 156 77,844 -- 78,000
At $.07 Per Share ............. 47,429 4 3,316 -- 3,320
Exercise of Options For Services:
At $.05 Per Share ............. 350,000 35 17,465 -- 17,500
At $.05 Per Share
By Related Party ............. 1,500,000 150 74,850 -- 75,000
Net Loss .......................... -- -- -- (665,909) (665,909)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1994 ........... 95,039,178 9,504 4,333,077 (3,319,874) 1,022,707
Common Stock Issued For:
Cash:
At $.03 Per Share ............. 1,500,000 $ 150 $ 49,856 $ -- $ 50,006
At $.04 Per Share ............. 2,882,000 288 115,215 -- 115,503
At $.05 Per Share ............. 2,696,112 270 132,831 -- 133,101
At $.06 Per Share ............. 1,208,337 121 72,379 -- 72,500
At $.07 Per Share ............. 230,000 23 16,077 -- 16,100
Services:
At $.04 Per Share ............. 1,450,000 145 60,755 -- 60,900
At $.05 Per Share ............. 750,000 75 34,925 -- 35,000
Exercise of Options For:
Cash:
At $.05 Per Share
By Related Party .............. 3,500,000 350 174,650 -- 175,000
Services:
At $.05 Per Share ............... 350,000 35 17,465 -- 17,500
Commissions Paid .................. -- -- (1,650) -- (1,650)
Net Loss .......................... -- -- -- (426,803) (426,803)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1995 ........... 109,605,627 $ 10,961 $ 5,005,580 $(3,746,677) $ 1,269,864
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - (Continued)
FOR THE PERIOD SEPTEMBER 17, 1982 (INCEPTION) TO JULY 31, 1996
Deficit
Accumulated
Capital Paid In The
Common Stock In Excess of Development
Shares Amount Par Value Stage Total
------ ------ --------- ----- -----
<S> <C> <C> <C> <C> <C>
Common Stock Issued For:
Cash:
At $.04 Per Share ...... 759,715 $ 76 $ 30,274 $ -- $ 30,350
At $.05 Per Share ...... 5,504,235 550 270,074 -- 270,624
At $.06 Per Share ...... 1,467,731 147 87,853 88,000
At $.07 Per Share ...... 557,216 56 38,949 39,005
At $.08 Per Share ...... 1,101,000 110 87,890 88,000
Services:
At $.04 Per Share ...... 1,041,501 104 38,296 -- 38,400
At $.05 Per Share ...... 420,100 42 20,963 -- 21,005
At $.06 Per Share ...... 46,006 5 2,755 2,760
At $.07 Per Share ...... 1,543,928 155 107,920 108,075
Commissions:
At $.035 Per Share .... 234,286 23 (23)
At $.05 Per Share ..... 505,450 50 (50)
At $.06 Per Share ..... 19,998 2 (2)
At $.07 Per Share ..... 120,357 12 (12)
Exercise of Options:
Cash:
At $.035 Per Share
By Related Party ... 195,714 20 6,830 6,850
Services:
At $.035 Per Share
By Related Party .. 2,004,286 200 69,950 -- 70,150
At $.05 Per Share .... 950,000 95 47,405 -- 47,500
Compensation Portion of
Options Exercised .. -- -- 261,500 -- 261,500
Net Loss ................... -- -- -- (956,043) (956,043)
----------- ----------- ----------- ----------- -----------
Balance - July 31, 1996 .... 126,077,150 $ 12,608 $ 6,076,152 $(4,702,720) $ 1,386,040
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For The Period
September 17, 1982
For The Year Ended (Inception)
July 31, To
1996 1995 July 31, 1996
---- ---- ------------------
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Loss ......................................... $ (956,043) $ (426,803) $(4,702,720)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities:
Depreciation ................................. 8,344 13,810 338,482
Loss on Write-Off of Investment .............. -- -- 10,000
Loss From Joint Venture ...................... -- -- 101,700
Value of Common Stock Issued For Services .... 287,890 113,400 1,254,445
Compensation Portion of Options Exercised .... 261,500 -- 261,500
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Prepaid Expenses .... 164 (51,572) (51,408)
(Increase) Decrease in Other Current Assets (207) 50 (207)
Increase in Security Deposit ............... -- (3,667) (3,667)
Increase (Decrease) in Accrued Expenses
and Taxes ............................... (79,352) (184,091) 69,806
----------- ----------- -----------
Net Cash Used By Operating Activities .............. (477,704) (538,873) (2,722,069)
----------- ----------- -----------
Cash Flow From Investing Activities:
Purchase of Property and Equipment ............... (15,636) -- (1,694,953)
Investment in Joint Venture ...................... -- -- (101,700)
Investment in Privately Held Company ............. -- -- (10,000)
----------- ----------- -----------
Net Cash Used By Investing Activities .............. (15,636) 0 (1,806,653)
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-9
<PAGE>
<TABLE>
<CAPTION>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Continued)
For The Period
September 17, 1982
For The Year Ended (Inception)
July 31, To
1996 1995 July 31, 1996
---- ---- -------------
<S> <C> <C> <C>
Cash Flow From Financing Activities:
(Increase) Decrease in Loans Receivable ....... $ 1,101 $ (1,626) $ (7,908)
Decrease in Loans Payable ..................... -- (4,050) --
Increase in Loans Payable - Officers .......... -- -- 18,673
Repayment of Loans Payable - Officers ......... (7,000) (2,000) (9,000)
Proceeds From Sale of Common Stock ............ 522,828 562,210 4,986,827
Commissions on Sale of Common Stock ........... -- (1,650) (5,250)
Expenses of Initial Public Offering ........... -- -- (408,763)
Purchase of Certificate of Deposit - Restricted -- (5,000)
Purchase of Mining Reclamation Bond ........... -- (6,000) (6,000)
----------- ----------- -----------
Net Cash Provided By Financing Activities ....... 516,929 546,884 4,563,579
----------- ----------- -----------
Increase In Cash and Cash Equivalents ........... 23,589 8,011 34,857
Cash and Cash Equivalents - Beginning ........... 11,268 3,257 --
----------- ----------- -----------
Cash and Cash Equivalents - Ending .............. $ 34,857 $ 11,268 $ 34,857
=========== =========== ===========
Supplemental Cash Flow Information:
Cash Paid For Interest ........................ $ -- $ -- --
=========== =========== ===========
Cash Paid For Income Taxes .................... $ 1.392 $ 806 $ 23,427
=========== =========== ===========
Non-Cash Financing Activities:
Issuances of Common Stock as Commissions
on Sales of Common Stock .................... $ 43,125 $ -- $ 69,785
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 1 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company has incurred
recurring losses through July 31, 1996 aggregating $4,702,720, and has a working
capital deficiency at July 31, 1996 of 36,507 that raises substantial doubt
about its ability to continue as a going concern. As indicated in Note 10, the
Company is in the process of raising additional capital and financing.
Continuation of the Company is dependent on (1) consummation of the contemplated
financings, (2) achieving sufficiently profitable operations and (3)
subsequently maintaining adequate financing arrangements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Property and Equipment
Property and equipment is reported at cost. It is the Company's policy to
capitalize costs incurred to improve and develop the mining and milling
property. General and administrative expenses are expensed as incurred.
Depletion of mine and mill improvements is computed at cost using the units
of production method. The Company has made no provision for depletion as the
mine and mill is not in the production stage. Provision is made for the
depreciation of office furniture and fixtures, machinery and equipment, and
building. Depreciation is computed using both straight-line and accelerate
methods over the estimated useful lives of the related assets.
F-11
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 1 - Summary of Significant Accounting Policies (Continued) Income Taxes
The Company accounts for income taxes under the asset and liability method.
The objective of the asset and liability method is to establish deferred tax
assets and liabilities for the temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities at
enacted tax rates expected to be in effect when such amounts are realized or
settled.
NOTE 2 - Mining Reclamation Bonds
This represents certificates of deposit that have been deposited as
security for a Mining Reclamation Bond.
NOTE 3 - Loans Receivable
Included in loans receivable are unsecured short-term revolving loans of
$7,908 paid by the Company to Franklin Consolidated Mining Co., Inc., a publicly
traded corporation. These are non-interest bearing and due on demand.
F-12
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 4 - Property and Equipment
Property and equipment consists of the following:
Land $ 24,364
Building 22,655
Machinery and Equipment 346,980
Mining Claims and
Leasehold Improvements 107,339
Mill and Mining Improvements 1,192,658
Office Furniture, Fixtures
and Equipment 958
------------
1,694,954
Less: Accumulated Depreciation 338,482
------------
$ 1,356,472
============
NOTE 5 - Accrued Expenses and Taxes
Included in accrued expenses and taxes are amounts aggregating $38,659 owed
to certain officers and stockholders of the Company for unpaid salaries.
NOTE 6 - Loans Payable - Officers
These loans represent advances to the Company by certain officers of the
Company. The loans have no specific repayment terms and are non-interest
bearing.
NOTE 7 - Stockholders' Equity
At various stages in the Company's development, shares of stock have been
issued in exchange for the fair market value, as determined by the Board of
Directors, of services received with a corresponding charge to operations,
property and equipment or capital paid in excess of par value depending on the
nature of the services provided.
F-13
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 7 - Stockholders' Equity (Continued)
Common Stock Reserved For Issuance
The following is a table with respect to common stock reserved for options
as of July 31, 1996:
Options Outstanding
Number of Price Range
Shares Per Share
------ ---------
Balance - July 1, 1991 .............. -0- $ -
Options Granted:
Services ........................ 4,000,000 .01 - .05
Services - Related Parties ...... 2,250,000 .05
Options Exercised - Related Parties (1,000,000) .05
---------- ---------
Outstanding - July 31, 1992 ......... 5,250,000 .01 - .05
Options Granted:
Services ........................ 2,000,000 .05
---------- ---------
Outstanding - July 31, 1993 ......... 7,250,000 .01 - .05
Options Granted:
Services ........................ 3,100,000 .05
Services - Related Parties ...... 3,500,000 .05
Exercised:
Services ........................ (350,000) .05
Services - Related Parties ...... (1,500,000) .05
Expired: .......................... (5,250,000) .01 - .05
---------- ---------
Outstanding - July 31, 1994 ......... 6,750,000 .05
Exercised:
Services ........................ (350,000) .05
Services - Related Parties ...... (3,500,000) .05
---------- ---------
Outstanding - July 31, 1995 ......... 2,900,000 .05
F-14
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 7 - Stockholders' Equity (Continued)
Common Stock Reserved For Issuance
The following is a table with respect to common stock reserved for options
as of July 31, 1996:
Options Outstanding
Number of` Price Range
of Shares Per Share
Options Granted:
Services - Related Parties 6,000,000 .035
Exercised:
Cash - Related Parties ... (175,000) .04
Services ................. (950,000) .05
Services -Related Parties (2,025,000) .035
Expired: ....................... (1,650,000) .05
----------- -----------
Outstanding - July 31, 1996 .... $ 4,100,000 $.035 - .05
=========== ===========
Authorized Common Stock
In September 1993 the Company's shareholders approved an increase in the
unauthorized common stock from 100,000,000 shares to 150,000,000 shares.
F-15
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 8 - Income Taxes
For income tax purposes, the Company has a net operating loss carryforward
at July 31, 1996 of approximately $4,700,000 beginning to expire at July 31,
2001 if not offset against future federal taxable income.
Pursuant to FASB 109, the Company has elected to take a 100% reserve on the
deferred tax asset arising from the net operating loss $1,598,000 and
accordingly there is no cumulative effect adjustment or current year tax benefit
recorded.
NOTE 9 - Commitments and Contingencies
Litigation
In June 1996, the Company commenced an action against Franklin Consolidated
Mining Company, Inc. ("Franklin") in District Court, Clear Creek County Colorado
with respect to certain monies advanced by the Company to Franklin in connection
with expenses attributable to common office space. On July 10, 1996, the Company
entered into a Settlement Agreement with Franklin Consolidated Mining
Corporation pursuant to which it was agreed that the Company would settle all
claims involved for $18,000 and the Company will as soon as possible, (I)
discontinue the action against Franklin as well as withdraw any motions filed
with respect thereto, (ii) remove any liens or other encumbrances which may have
been filed against the assets of Franklin and (iii) execute releases with
respect to such claims. As of July 31, 1996 Franklin has paid the Company $9,000
of the $18,000 owed under the Settlement Agreement.
F-16
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 10 - Liquidity and Going Concern Uncertainty
The company has incurred recurring losses amounting to $4,702,720 and has a
working capital deficiency of $36,507 at July 31, 1996. These events raise
substantial doubt about the Company's ability to continue as a going concern.
Specific plans to obtain financing for a full scale mining and mill
operation may include a combination of one or more of the following:
a. Private placements of the Company's securities to institutions, private
individuals, mining companies, and/or investment groups. During the fiscal year
ended July 31, 1996 the Company raised approximately $515,000 through the sales
of common stock to investors, which enabled continuation of work in the Hunter
Shaft. The Company wishes to complete its Hunter Shaft, second exit, prior to
seeking major capital for operational purposes.
B. A working arrangement with a mining company pursuant to which the
Company would mine and the other company would mill, smelt and market the
products. Under these conditions, the Company's cost would be concentrated on
the mining effort only. The Company has been negotiating such an agreement
pursuant to which the Company will mine ore and sell the ore to a mining company
and that mining company will process sulfite minerals. Such an agreement can
have an initial two year term subject to five one year extensions.
Notwithstanding the foregoing, the agreement would be terminable by either party
on thirty days' notice. The Company would deliver ore to the mining company's
millsite six miles southeast of Leadville, Colorado. The price for the ore would
be based upon the London Metals Exchange market price on the date of delivery.
There is no assurance that such an agreement will be finalized.
F-17
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 10 - Liquidity and Going Concern Uncertainty (Continued)
c. Joint Venture with other mining companies on a division of profits
basis, whereby the company would initiate a mining venture with another mining
company, the latter providing the capital to initiate mining and milling and,
thereafter, dividing the net profits (if any) on an agreed amount basis. There
are no joint venture prospects at this time.
d. The Company may pursue a public underwriting of its securities. The
Company has not sought out the interest of an underwriter nor can the Company
assure that it would be able to obtain an underwriter or complete a public
offering.
Assuming that the Company is able to obtain funds from one or more of the
above sources, planned activities over the next twelve months should include
completion of the Hunter Shaft, 2nd exit, development of B-Zone mineral
structure in preparation of mining, drive tunnel to Weston fault mineral
structure and develop, drive to IBEX mineral structures and develop (if working
arrangement with another mining company is approved), develop mine and mill.
There is no assurance whatsoever that any of the Company's proposed plans
to raise capital and otherwise fund operations will prove successful. The
Company's ability to continue as a going concern is dependent upon its ability
to obtain sufficient funding as discussed above and its inability to do so will
delay or cease the Company's planned operations as discussed above.
F-18
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
NOTE 11 - Subsequent Events
Refining Contract
The Company has entered into an agreement with ASARCO Incorporated for the
sale and refining of lead concentrates produced from the Company's mine in
Colorado. The Agreement provides that the Company may ship metallic materials in
lots of 200 - 300 tons to ASARCO's smelter in East Helena, Montana. ASARCO will
take delivery of the material, perform the smelting operations and pay for the
metals at 60% - 75% of the metallic prices as published in London or New York,
depending on the metal, less certain deductions for expenses of smelting and
adjustment for excess impurities, including water. The period of the agreement
shall commence with lead concentrates delivered on or after September 1, 1995
through and including August 31, 1997 and shall continue thereafter on a sixty
(60) day written notice of cancellation by either party, provided, however, the
agreement shall not extend beyond June 30, 2000.
F-19
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
The following table sets forth certain information concerning the directors
and executive officers of the Company:
First
Became
Name Age Director Position
Donald W. Wilson 67 9/22/82 President & Director
Gifford A. Dieterle 64 9/22/82 Executive Vice President,
Secretary, Treasurer &
Chairman of the Board
Robert Roningen 63 9/14/93 Vice President -
Operations & Director
Horst Scherp 67 1/25/95 Director
Jack V. Everett 74 1/25/95 Director
Directors are elected at the meeting of shareholders called for that
purpose and hold office until the next shareholders meeting called for that
purpose or until their resignation or death. Directors can also be elected by
the Board of Directors and hold service until their resignation or death.
Officers of the corporation are elected by the directors at meetings called by
the directors for its purpose. Robert L. Elder and Richard Asbury resigned as
officers and/or directors in December 1994.
DONALD W. WILSON, President and Director. His highest educational degree is
a High School diploma obtained from Leadville High School in Leadville, Colorado
in 1949. He additionally attended the Colorado School of Mines in 1969 on a
non-matriculating basis, where he took courses in geology, surveying, mapping
and mathematics. He did not graduate and therefore did not obtain a degree. His
employment history since 1977 consists of the following: From May 1983 until the
present, he has been President of the Company. From January 1981 to May 1983, he
was mine and mill manager of the Franklin Mine, a gold mine in Colorado which is
owned by Franklin Consolidated Mining Company. From 1979 to 1980, he was
employed by M.S.T. Company - Rio Blanco Oil Shale Corporation as a project
engineer. From 1977 to 1979, he was employed by United Nuclear-Homestake
Partnership, Inc., Grants, New Mexico as a superintendent of shaft sinking
operation.
-15-
<PAGE>
GIFFORD A. DIETERLE, Executive Vice-President, Treasurer and Chairman of
the Board of Directors of the Company. His highest educational degree is a M.S.
in Geology obtained from New York University. From 1977 until July 1993, he was
Chairman, Treasurer and Executive Vice-President of Franklin Consolidated Mining
Company. From 1965 to 1987, he was lecturer in geology at the City University of
N.Y. (Hunter Division). Since 1962, he has been a consulting geologist engaged
in the geological evaluation of oil and mineral properties. From 1978 until the
present, he has been a registered representative with Datek Securities.
ROBERT RONINGEN, Vice President-Operations and a director, has, for more
than the past five years, been engaged in the practice of law as a sole
practitioner and is a self-employed consultant geophysicist in Duluth,
Minnesota. From 1988 to August 1993, he was an officer and director of Franklin
Consolidated Mining Company, Inc. He graduated from the University of Minnesota
in 1957 with a B.A. in geology and in 1962 with a degree in Law.
HORST SCHERP, a director, has been an Associate Professor of Geology at
Hunter College of the City of New York since 1963. From 1980 to 1987, he was a
Director and geologist for Jeger Oil Corp. Mr. Scherp received a Ph.D in geology
from the University of Gottingen, Germany, in 1959.
JACK V. EVERETT, a director, has been a consulting mining geologist for 25
years, with expertise in all phases of exploration for base and precious metals.
Following his 1947 graduation from Michigan State University, he was District
Geologist for Pickands Mather & Company on the Cuyuna Iron Range, Minnesota.
From 1951 to 1970, he was Chief Geologist and Exploration Manager for W.S. Moore
Company, Duluth, Minnesota, an iron mining company with gold and base metal
sulfide holdings in the U.S. and Canada.
Compliance With Section 16(a) of The Securities Exchange Act of 1934
To the Company's knowledge, based solely on a review of such materials as
are required by the Securities and Exchange Commission, no officer, director or
beneficial holder of more than ten percent of the Company's issued and
outstanding shares of Common Stock failed to timely file with the Securities and
Exchange Commission any form or report required to be so filed pursuant to
Section 16(a) of the Securities Exchange Act of 1934 during the fiscal year
ended July 31, 1996.
Item 10. Executive Compensation
The following table shows all the cash compensation paid or to be paid by
the Company or any of its subsidiaries, as well as certain other compensation
paid or accrued, during the fiscal years indicated, to the Chief Executive
Officer for such period in all capacities in which he served. No other Executive
Officer received total annual salary and bonus in excess of $100,000.
-16-
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- -------------------- ------- ------- ------- -------- --------- -------- --------- ------
Other Restrict- All Other
Annual ed Stock LTIP Compensa
Name and Principal Compen- Award Options Payouts -tion
Position Year Salary ($) sation($) ($) SARs ($) (i)
- -------------------- ------- ------- ------- --------- --------- -------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald W. Wilson 1996 54,029 -0- -0- -0- 2,000,000 -0- -0-
Chief Executive 1995 53,472 -0- -0- -0- -0- -0- -0-
Officer 1994 38,371 -0- -0- -0- 2,000,000 -0- -0-
1993 25,000 -0- -0- -0- -0- -0- -0-
</TABLE>
The following table sets forth information with respect to the
Company's Executive Officers concerning the grants of options and Stock
Appreciation Rights ("SAR") during the past fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
(a) (b) (c) (d) (e)
Percent of Total
Options/SARs
Options/ Granted to
SARs Employed in Exercise or Base Expiration
Name Granted Fiscal Year Price ($/SH) Date
Donald W. Wilson 2,000,000 33.3% $ .03 Jan 5, 1998
Gifford Dieterle 2,200,000 36.7% $ .03 Jan 5, 1998
Robert Roningen 1,500,000 25.0% $ .03 Jan 5, 1998
Jack Everett ... 250,000 4.2% $ .03 Jan 5, 1998
Horst Schaap ... 50,000 .8% $ .03 Jan 5, 1998
The following table sets forth information with respect to the Company's
Executive Officers concerning exercise of options during the last fiscal year
and unexercised options and SARs held as of the end of the fiscal year:
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Option/SARs
Shares at FY-End(#) at FY-End(#)
Acquired on Value
Exercisable/ Exercisable/
Name Exercise (#) Realized Unexercisable Unexercisable
Donald W. Wilson -0- -0- 2,000,000 --
Gifford Dieterle 700,000 $ 49,000 1,500,000 --
Robert Roningen 1,500,000 $105,000 -0- --
Jack Everett ... -0- -0- 250,000 --
Horst Schaap ... -0- -0- 50,000 --
-17-
<PAGE>
The following table sets forth information with respect to the Executive
Officers concerning awards under long term incentive plans during the last
fiscal year:
Estimated Future Payouts
under Non-Stock
Price Based Plans
(a) (b) (c) (d) (e) (f)
Performance
Number of or Other
Shares,Units Period Until
or Other Maturation or Threshold Target Maximum
Name Rights(#) Payout ($ or #) ($ or #) ($ or #)
- ---- ------------ ------------- --------- -------- --------
Donald W. Wilson 2,000,000
Gifford Dieterle 2,200,000
Robert Roningen 1,500,000
Jack .Everett 250,000
Horst Schaap 50,000
Directors are not compensated for acting in their capacity as Directors.
Directors are reimbursed for their accountable expenses incurred in attending
meetings and conducting their duties.
Item 11. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners -- The persons set
forth on the charts below are known to the Company to be the beneficial owners
of more than 5% of the Company's outstanding voting Common Stock as of July 31,
1996.
(b) Security Ownership of Management -- Information concerning the number
and percentage of shares of voting Common Stock of the Company owned of record
and beneficially by management as of July 31, 1996, is set forth on the charts
below.
Name of Amount & Nature
Beneficial of Beneficial Approximate
Title of Class Owner Ownership 7/31/96(1) Percentage
Common Stock Donald W. Wilson 7,851,000 6.3%
Common Stock Gifford A. Dieterle 8,641,042 7.0%
Common Stock Jack Everett 250,000 .20%
Common Stock Robert Roningen 3,083,334 2.5%
Common Stock Horst Scherp -0- 0.0%
All Officers and
Directors as a
Group (5) 19,825,376 16.00%
-18-
<PAGE>
* Less than one percent.
(1) Supplied by the persons set forth above.
Item 12. Certain Relationships and Related Transactions.
Between September 1, 1991 and July 31, 1995, the Company and Franklin
Consolidated Mining & Milling Company lent to one another on short term basis,
small amounts of money for current operations. The Company currently is a
creditor of Franklin Consolidated Mining Company in the amount of $9,000.00.
On January 5, 1996 the Company issued the following options to certain
officers and directors. Donald Wilson - option to purchase 2,000,000 shares;
Gifford Dieterle - option to purchase 2,200,000 shares; Robert Roningen option
to purchase 1,500,000 shares; Jack Everett option to purchase 250,000 shares;
Horst Schaap - option to purchase 50,000 shares. All options granted on that
date expire on January 5, 1998 and are exercisable at $.035 oer share.
During fiscal 1993 and 1994, Gifford A. Dieterle an officer and director of
the Company, loaned the Company $18,873, which funds were used for operating
expenses. There are no specific repayment terms and the loans are interest free.
As of July 31, 1996, $9,673 remained outstanding.
Item 13. Exhibits and Reports on Form 8-K.
Exhibits
3.a Certificate of Incorporation of Company*
3.b Amendments to Certificate of Incorporation of Company*
3.c By-Laws of Company*
10.a Mining Claims*
10.b ASARCO Agreement
* Previously filed as an exhibit to the Company's Registration Statement on
Form S-18 (SEC File No. 2-86160-NY) filed on or about November 10, 1983,
and incorporated herein by this reference.
Reports of Form 8-K
The Company has filed the following Reports of Form 8-K during the year
ended July 31, 1996 with the principal office of the Securities and Exchange
Commission in Washington, D.C.:
None.
Statements contained in this Form 10-KSB as to the contents of any
agreement or other document referred to are not complete, and where such
agreement or other document is an exhibit to this Report or is included in any
forms indicated above, each such statement is deemed to be qualified and
amplified in all respects by such provisions.
-19-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
LEADVILLE MINING AND MILLING CORP.
Dated: November , 1996 By: /s/ Donald W. Wilson
------------------------
Donald W. Wilson, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
President, Principal November __, 1996
Donald W. Wilson Executive Officer and
a Director
Treasurer and November __, 1996
Gifford A. Dieterle Principal Financial
and Accounting
Officer and Chairman
of the Board of Directors
Director November __, 1996
Jack Everett
Director November __, 1996
Robert Roningen
Director November __, 1996
Horst Scherp
-20-
<PAGE>
SUPPLEMENTAL INFORMATION
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
NOT APPLICABLE
-21-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-1-1995
<PERIOD-END> JUL-31-1996
<CASH> 34,857
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42,972
<PP&E> 1,694,954
<DEPRECIATION> 338,484
<TOTAL-ASSETS> 1,465,514
<CURRENT-LIABILITIES> 79,479
<BONDS> 0
0
0
<COMMON> 12,608
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 960
<CGS> 0
<TOTAL-COSTS> 237,560
<OTHER-EXPENSES> 718,051
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (954,651)
<INCOME-TAX> 1,392
<INCOME-CONTINUING> (956,043)
<DISCONTINUED> 0
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</TABLE>
