SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to
Commission File Number: 0-13078
LEADVILLE MINING AND MILLING CORP.
(Exact name of registrant as specified in its charter)
NEVADA #13-3180530
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
76 BEAVER STREET, NEW YORK, NEW YORK 10005
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code (212) 344-2785
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 ___
Indicate the number of shares outstanding of each the issuer's classes of common
equity as of the latest practicable date.
Class Outstanding at April 30, 1999
----- -----------------------------
Common Stock, par value 19,774,040 Shares
$.001 per share
Transitional Small Business Format (check one); Yes___ No _X_
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying financial statements are unaudited for the interim
periods, but include all adjustments (consisting only of normal recurring
accruals) which management considers necessary for the fair presentation of
results for the three and nine months ended April 30, 1999.
Moreover, these financial statements do not purport to contain complete
disclosure in conformity with generally accepted accounting principles and
should be read in conjunction with the Company's audited financial statements
at, and for the fiscal year ended July 31, 1998.
The results reflected for the three and nine months ended April 30, 1999
are not necessarily indicative of the results for the entire fiscal year.
2
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
APRIL 30, 1999
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 232,234
Loan Receivable 10,619
Other Current Assets 537
-----------
Total Current Assets 243,390
-----------
Property and Equipment (Net of
Accumulated Depreciation of $354,147) 1,351,504
-----------
Other Assets:
Mining Reclamation Bonds 11,000
Security Deposit 3,667
-----------
Total Other Assets 14,667
-----------
Total Assets $ 1,609,561
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Expenses and Taxes $ 32,487
-----------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, Par Value $.001 Per Share;
Authorized 150,000,000 shares; Issued and
Outstanding 19,774,040 Shares 19,774
Capital Paid In Excess of Par Value 9,193,062
Deficit Accumulated in the Development Stage (7,635,762)
-----------
Total Stockholders' Equity 1,577,074
-----------
Total Liabilities and Stockholders' Equity $ 1,609,561
===========
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For The Period
Three Months Ended Nine Months Ended September 17,1982
April 30, April 30, (Inception)
------------------------------- ------------------------------- To
1999 1998 1999 1998 April 30, 1999
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Revenues:
Interest Income $ -- $ 187 $ 686 $ 630 $ 709,797
Miscellaneous -- -- 300 -- 25,506
------------ ------------ ------------ ------------ ------------
Total Revenues -- 187 986 630 735,303
------------ ------------ ------------ ------------ ------------
Costs and Expenses:
Mine Expenses 286,873 109,225 324,662 339,777 2,464,011
Selling, General and
Administrative Expenses 611,550 95,046 992,186 288,771 5,414,663
Depreciation 1,331 1,420 3,993 3,904 354,147
Loss on Write-Off of
Investment -- -- -- -- 10,000
Loss on Joint Venture -- -- -- -- 101,700
------------ ------------ ------------ ------------ ------------
Total Costs and
Expenses 899,754 205,691 1,320,841 632,452 8,344,521
------------ ------------ ------------ ------------ ------------
Loss before Provision
For Income Taxes (899,754) (205,504) (1,319,855) (631,822) (7,609,218)
Provision For Income
Taxes 170 172 510 1,204 26,544
------------ ------------ ------------ ------------ ------------
Net Loss $ (899,924) $ (205,676) $ (1,320,365) $ (633,026) $ (7,635,762)
============ ============ ============ ============ ============
Net Loss Per Share $ (.05) $ (0.01) $ (.07) $ (0.04)
============ ============ ============ ============
Average Common Shares Outstanding 19,443,654 15,908,794 18,355,198 15,326,085
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For The Period
Nine Months Ended September 17, 1982
April 30, (Inception)
----------------------------- To
1999 1998 April 30, 1999
----------- ----------- --------------
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Loss $(1,320,365) $ (633,026) $(7,635,762)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities:
Depreciation 3,993 3,904 354,147
Loss on Write-Off of Investment -- -- 10,000
Loss From Joint Venture -- -- 101,700
Value of Common Stock Issued For Services 100,217 39,596 1,687,287
Compensation Portion of Options Exercised 642,024 33,475 903,524
Changes in Operating Assets and Liabilities:
Decrease in Prepaid Expenses -- -- --
(Increase) Decrease in Other Current Assets (353) 627 (537)
(Increase) in Security Deposit -- -- (3,667)
Increase (Decrease) in Accrued Expenses
and Taxes (28,109) 19,211 32,487
----------- ----------- -----------
Net Cash Used By Operating Activities (602,593) (536,213) (4,550,821)
----------- ----------- -----------
Cash Flow From Investing Activities:
Purchase of Property and Equipment -- -- (1,705,650)
Investment in Joint Venture -- -- (101,700)
Investment in Privately Held Company -- -- (10,000)
----------- ----------- -----------
Net Cash Used By Investing Activities -- -- (1,817,350)
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
For The Period
Nine Months Ended September 17, 1982
April 30, (Inception)
----------------------------- To
1999 1998 April 30, 1999
----------- ----------- --------------
<S> <C> <C> <C>
Cash Flow From Investing Activities:
(Increase) Decrease in Loans Receivable $ (2,129) $ 3,186 $ (10,619)
Proceeds of Loans Payable - Officers -- -- 18,673
Repayment of Loans Payable - Officers -- -- (18,673)
Proceeds From Sale of Common Stock 825,382 522,302 7,036,037
Commissions on Sale of Common Stock -- -- (5,250)
Expenses of Initial Public Offering -- -- (408,763)
Combined Purchase of Certificate of Deposit-Restricted -- -- (5,000)
Combined Purchase of Mining Reclamation Bond -- -- (6,000)
----------- ----------- -----------
Net Cash Provided By Financing Activities 823,253 525,488 6,600,405
----------- ----------- -----------
Increase (Decrease) In Cash and Cash Equivalents 220,660 (10,725) 232,234
Cash and Cash Equivalents - Beginning 11,574 27,510 --
----------- ----------- -----------
Cash and Cash Equivalents - Ending $ 232,234 $ 16,785 $ 232,234
=========== =========== ===========
Supplemental Cash Flow Information:
Cash Paid For Interest $ -- $ -- --
=========== =========== ===========
Cash Paid For Income Taxes $ 510 $ 1,204 $ 25,993
=========== =========== ===========
Non-Cash Financing Activities:
Issuances of Common Stock as Commissions
on Sales of Common Stock $ 94,159 $ 101,860 $ 320,580
=========== =========== ===========
Issuances of Common Stock as
Payment For Expenses $ 13,684 $ 39,596 $ 114,312
=========== =========== ===========
Issuance of Common Stock For
Acquisition of Property and Equipment $ -- $ -- $ 4,500
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
(Unaudited)
NOTE 1 - Basis of Presentation
In the opinion of the Company, the accompanying unaudited financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows for the periods presented.
The results for interim periods are not necessarily indicative of the
results to be obtained for a full fiscal year.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Cautionary Statement on Forward-Looking Statements
Except for the historical information contained herein, certain of the matters
discussed in this quarterly report are "forward-looking statements," as defined
in Section 21E of the Securities Exchange Act of 1934, which involve certain
risks and uncertainties, which could cause actual results to differ materially
from those discussed herein including, but not limited to, risks relating to
changing economic conditions, changes in the prices of minerals and the results
of testing and actual mining.
The Company cautions readers that any such forward-looking statements are based
on management's current expectations and beliefs but are not guarantees of
future performance. Actual results could differ materially from those expressed
or implied in the forward-looking statements.
Results of Operations
3 months ended 4/30/99 compared to 3 months ended 4/30/98
Once again the Company generated no revenues from operations because the Company
has not commenced significant mining activities prior to April 30, 1999.
Mine expenses increased by $177,648 (approximately 162.6%) from $109,225 during
the three months ended April 30, 1998 to $286,873 during the three months ended
April 30, 1999 Management believes that this increase in mine expenses was due
primarily to an increase in labor costs, equipment, and supplies.
Selling, general and administrative expenses increased by $516,504
(approximately 543.4%) from $95,046 during the three months ended April 30, 1998
to $611,550 during the three months ended April 30, 1999. This increase in
selling, general and administrative expenses was due primarily to stock issued
for services.
As a result of the significant increases in mine expense and in selling, general
and administration expenses, the net loss increased by $694,248 from $205,676
during the three months ended April 30, 1998 to $899,924 during the three months
ended April 30, 1999.
On March 4, 1999 we commenced limited development production at our Hopemore
gold mining site located near Leadville, Colorado. Mine development has
proceeded steadily with stope preparation (two) reaching an advanced stage at
the Hopemore B-Zone location. The mill has operated simultaneously with the mine
operation, processing stope development ore, as it becomes available.
8
<PAGE>
Gold-bearing ore recovered from stope development has generally assayed in the
multi-ounce range (one to six ounces). High-grade gold ore is associated with
pod like structures situated in the lower, carbonaceous member of the Chaffee
formation and possibly also in the overlaying Parting quartzite and Dyer
dolomite. Long-hole drilling has tentatively identified five such high-grade
gold structures along the B-Zone trend. The quantity of reserves is unknown.
Our mill has operated with a few minor breakdowns and adjustments. The ore being
processed consists of a high-grade gold ore (stope-development ore) and, from
time to time, a mixture of low-grade rock materials and high-grade ore. The mill
is producing a gravity gold concentrate, and a concentrate of mixed sulfides of
silver, lead, and zinc, copper and gold. The direct cost per ounce of gold
produced is estimated at $107 (fully loaded $147). The mill at present is
treating a quantity of ore consistent with the mine development phase; i.e.,
only ore made available from stope preparation. With initial stope construction
expected to reach completion in the coming weeks, the mills production rate is
expected to increase accordingly.
We have, at present, approximately 126,200 tons of mineralized material
containing varied amounts of gold, silver, lead, zinc and copper. The possible
mineral potential of all the Company's properties, as indicated by Scott
Hazlett, Consulting Geologist, ranges up to 5,000,000 tons. To date, we have
completed only limited exploration of the Hopemore 6 and 7 levels (by crosscut,
raise, drift, and drill). Hopemore entered into limited development production
on March 4, 1999 on level 7 and has continued to mill small quantities of gold
ore. As the mining program becomes firmly established, the mined tonnage is
expected to rise accordingly. To operate the mine and mill for a 3-month period
at a rate of 50 to 75 tons per day the estimated direct cost is $220,500 to
$468,000. Cash flow is anticipated (but cannot be assured) during the 4th
quarter of fiscal 1999. The products from the operation will yield a concentrate
of gold, silver, and lead (to be refined) and a concentrate of magnetite and
pyrite.
With regards to all estimates of mineral tonnage, additional geologic work is
needed before a conclusion can be made that it is commercial materiel or, that
ore exists.
Liquidity and Capital Resources
As of April 30, 1999, the Company had working capital of $210,903 defined as
current assets less current liabilities which represents a net increase in
working capital of $46,948 from January 31, 1999. Although the Company commenced
limited development production at the Hopemore on March 4, 1999 and has milled
small quantities of gold ore, the Company has yet to sell any ore and, as was
explained in the Company's 10KSB, the Company is in a precarious financial
condition. No assurance whatsoever can be given that the Company will be able to
continue as a going concern or that any of its plans with respect to its gold
mining properties will, to a material degree, come to fruition. Absent
commencement of sustained sales of ore, the Company, in order to continue its
mine program, must obtain substantial financing. While management is seeking
such financing through joint venture partners, private placement of its shares
and other arrangements arrangements, there is no assurance that management will
succeed therein. It should by emphasized the Company's financial condition has
remained critical since the date of the last 10-KSB and that in order to
survive, the Company most likely will need an infusion of capital within the
near future.
9
<PAGE>
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. In 1997, 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. To the Company's knowledge, the
EPA has initiated no further comments or questions.
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 tailing 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.
Year 2000 Computer Issue
At the present, and for the foreseeable future, management does not believe that
computers will play a material role in the company's operations. At present, the
Company only uses computers for simple tasks such as word processing.
Accordingly, management does not believe that the potential year 2000 computer
problem will materially affect the Company's current or planned operations. The
Company recently commenced mining and milling operations which requires it to
interact with outside entities such as suppliers, smelters, refiners, and
government agencies. The Company is unable to predict whether the potential year
2000 computer problem will adversely affect these entities. It is conceivable,
that if one or more of these entities is adversely affected by the potential
year 2000 computer problem, the Company's operations might be adversely affected
also.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
During the quarter ended April 30, 1999, the Company issued the
following shares of its common stock pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.
In February 1999, the Company sold an aggregate of 157,521 shares to
five individuals for an aggregate of $132,000. In March 1999, the
Company sold an aggregate of 61,714 shares to three individuals for an
aggregate of $62,300. In April 1999, the Company sold an aggregate of
90,000 shares to four individuals for an aggregate of $74,000 and
issued 646,434 shares to three individuals for commissions, expenses
and services for an aggregate value of $677,240.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
None.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
LEADVILLE MINING & MILLING CORP.
Registrant
By: /s/ Gifford A. Dieterle
---------------------------
Gifford A. Dieterle
Treasurer/Secretary
Dated: June 4, 1999
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> FEB-02-1999
<PERIOD-END> APR-30-1999
<CASH> 232,234
<SECURITIES> 0
<RECEIVABLES> 10,619
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 243,390
<PP&E> 1,705,651
<DEPRECIATION> 354,147
<TOTAL-ASSETS> 1,609,561
<CURRENT-LIABILITIES> 32,487
<BONDS> 0
0
0
<COMMON> 19,774
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,771
<SALES> 0
<TOTAL-REVENUES> 986
<CGS> 0
<TOTAL-COSTS> 324,662
<OTHER-EXPENSES> 996,179
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,319,855)
<INCOME-TAX> 510
<INCOME-CONTINUING> (1,320,365)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,320,365)
<EPS-BASIC> (0.07)
<EPS-DILUTED> 0.0
</TABLE>
