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 January 31, 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 (I.R.S. 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) 344-5158
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 January 31, 1999
Common Stock, par value 18,818,371 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 six months ended January 31, 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 six months ended January 31, 1999
are not necessarily indicative of the results for the entire fiscal year.
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<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
JANUARY 31, 1999
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 186,786
Loan Receivable 14,499
Other Current Assets 632
-----------
Total Current Assets 201,917
-----------
Property and Equipment (Net of
Accumulated Depreciation of $352,816) 1,352,835
-----------
Other Assets:
Mining Reclamation Bonds 11,000
Security Deposit 3,667
-----------
Total Other Assets 14,667
-----------
Total Assets $ 1,569,419
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Expenses and Taxes $ 37,962
-----------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, Par Value $.001 Per Share;
Authorized 150,000,000 shares; Issued and
Outstanding 18,818,371 Shares 18,818
Capital Paid In Excess of Par Value 8,248,477
Deficit Accumulated in the Development Stage (6,735,838)
-----------
Total Stockholders' Equity 1,531,457
-----------
Total Liabilities and Stockholders' Equity $ 1,569,419
===========
The accompanying notes are an integral part of the financial statements.
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<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For The Period
September 17, 1982
(Inception)
Three Months Ended Six Months Ended To
January 31, January 31, January 31, 1999
---------------------- --------------------- ----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues:
Interest Income $ 533 $ 226 $ 731 $ 442 $ 709,842
Miscellaneous -- -- 300 -- 25,506
------------ ------------ ------------ ------------ ------------
Total Revenues 533 226 1,031 442 735,348
------------ ------------ ------------ ------------ ------------
Costs and Expenses:
Mine Expenses 101,024 115,017 193,511 230,721 2,332,860
Selling, General and
Administrative Expenses 145,763 116,511 224,959 193,555 4,647,436
Depreciation 1,331 1,242 2,662 2,484 352,816
Loss on Write-Off of
Investment -- -- -- -- 10,000
Loss on Joint Venture -- -- -- -- 101,700
------------ ------------ ------------ ------------ ------------
Total Costs and
Expenses 248,118 232,770 421,132 426,760 7,444,812
------------ ------------ ------------ ------------ ------------
Loss Before Provision
For Income Taxes (247,585) (232,544) (420,101) (426,318) (6,709,464)
Provision For Income
Taxes 170 344 340 1,032 26,374
------------ ------------ ------------ ------------ ------------
Net Loss $ (247,755) $ (232,888) $ (420,441) $ (427,350) $ (6,735,838)
============ ============ ============ ============ ============
Net Loss Per Share $ (.01) $ (0.02) $ (.02) $ (0.03)
============ ============ ============ ============
Average Common Shares Outstanding 18,254,739 15,392,596 18,090,732 15,034,730
============ ============ ============ ============
</TABLE>
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The accompanying notes are an integral part of the financial statements.
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For The Period
September 17, 1982
(Inception)
Six Months Ended To
January 31, January 31, 1999
------------------------ ----------------
1999 1998
---- ----
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Loss $(420,441) $(427,350) $(6,735,838)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities:
Depreciation 2,662 2,484 352,816
Loss on Write-Off of Investment -- -- 10,000
Loss From Joint Venture -- -- 101,700
Value of Common Stock Issued For Services 12,500 14,596 1,599,570
Compensation Portion of Options Exercised 52,500 33,475 314,000
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Other Current Assets (448) 776 (632)
(Increase) in Security Deposit -- -- (3,667)
Increase (Decrease) in Accrued Expenses and
Taxes (22,634) 7,835 37,962
--------- --------- -----------
Net Cash Used By Operating Activities (375,861) (368,184) (4,324,089)
--------- --------- -----------
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
September 17, 1982
(Inception)
Six Months Ended To
January 31, January 31, 1999
------------------------ ----------------
1999 1998
---- ----
<S> <C> <C> <C>
Cash Flow From Investing Activities:
(Increase) Decrease in Loans Receivable $ (6,009) $ 3,252 $ (14,499)
Increase in Loans Payable - Officers -- -- 18,673
Repayment of Loans Payable - Officers -- -- (18,673)
Proceeds From Sale of Common Stock 557,082 385,775 6,767,737
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 551,073 389,027 6,328,225
--------- --------- -----------
Increase (Decrease) In Cash and Cash Equivalents 175,212 20,843 186,786
Cash and Cash Equivalents - Beginning 11,574 27,510 --
--------- --------- -----------
Cash and Cash Equivalents - Ending $ 186,786 $ 48,353 $ 186,786
========= ========= ===========
Supplemental Cash Flow Information:
Cash Paid For Interest $ -- $ -- --
========= ========= ===========
Cash Paid For Income Taxes $ 340 $ 344 $ 25,823
========= ========= ===========
Non-Cash Financing Activities:
Issuances of Common Stock as Commissions
on Sales of Common Stock $ 14,000 $ 101,860 $ 240,421
========= ========= ===========
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
JANUARY 31, 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.
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
Once again the Company generated no revenues from operations because the Company
has yet to commence mining activities. Mine expenses decreased by $13,993
(approximately 12.2%) from $115,017 during the three months ended January 31,
1998 to $101,024 during the three months ended January 31, 1999. Management
believes that this decrease in mine expenses was due primarily to the lower cost
of work in progress. Selling, general and administrative expenses increased by
$29,252 (approximately 25.1%) from $116,511 during the three months ended
January 31, 1998 to $145,763 during the three months ended January 31, 1999.
Management believes that this increase was due primarily to the increased cost
of raising capital.
As a result of the increased selling, general and administrative expenses, the
net loss increased by $14,867 (approximately 6.4%) from $232,888 during the
three months ended January 31, 1998 to $247,755 during the three months ended
January 31, 1999.
-7-
<PAGE>
During the quarter ended January 31, 1999, the Company completed the vertical
raise to connect the 5th and 7th levels and, the connecting passageway between
the top of the raise and the 5th level tunnel. All other minor safety
requirements, preparatory to mining were also completed; fire retardant painting
of Hunter shaft timbers, toeholds and steps, landings in Hunter raise, gates on
shaft.
The Company has, 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. The Company to date
has completed only limited exploration of the Hopemore 7 and 6 level (by
crosscut, raise, drift, and drill). Stopes, chutes, ore passes and handling
facilities are now operational. The Company entered into limited mining on March
4, 1999 on levels 6 and 7 at a rate of 25-30 tons per day. As the mining program
becomes more firmly established, the mined tonnage is expected to rise. Milling
is expected to commence before the end of March. To operate the mine and mill on
a four-month basis would cost an estimated $350,000. Cash flow is anticipated
(but cannot be assured) during the fifth month after commencement of mining and
milling. We anticipate that products from the operation will yield gold (dore'
bars), silver, lead concentrate, copper concentrate.
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 January 31, 1999, the Company had working capital of $163,955 (defined as
current assets less current liabilities) which represents a net increase in
working capital of $204,303 from the working capital deficit of $40,348 at July
31, 1998. This increase in working capital is a result of funds received from
the private sale of securities. As was explained in the Company's 1998 10-KSB,
the Company is in a precarious financial condition and there is no assurance
whatsoever 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 come to
fruition. The Company, in order to continue its mine program must obtain
additional financing. While management is seeing such financing through private
placement of its shares, there is no assurance that management will succeed
therein. It should be emphasized that the Company's financial condition has
remained critical since the date of the last 10-QSB and that in order to
survive, the Company will need an infusion of capital within the near future.
The Company plans to raise capital through private placement of its shares.
Management is aware of potential investors who may purchase such shares. There
is however no assurance that any shares will be sold.
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.
-8-
<PAGE>
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. If
and when the Company commences mining and milling operations, it will 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
During the quarter ended January 31, 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 November 1998, the Company
sold an aggregate of 291,716 shares to twelve individuals for an aggregate of
$86,660. In December 1998, the Company sold an aggregate of 232,026 shares to
nine individuals for an aggregate of $74,500. In January 1999, the Company sold
an aggregate of 268,833 shares to eleven individuals for an aggregate of
$121,437 and issued 350,000 shares to one individual for exercise of stock
option for an aggregate value of $87,500.
-9-
<PAGE>
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
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
Date: March 17, 1999
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 186,786
<SECURITIES> 0
<RECEIVABLES> 14,499
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 201,917
<PP&E> 1,705,651
<DEPRECIATION> 352,816
<TOTAL-ASSETS> 1,569,419
<CURRENT-LIABILITIES> 37,962
<BONDS> 0
0
0
<COMMON> 18,818
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,569,419
<SALES> 0
<TOTAL-REVENUES> 1,031
<CGS> 0
<TOTAL-COSTS> 193,511
<OTHER-EXPENSES> 227,621
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (420,101)
<INCOME-TAX> 340
<INCOME-CONTINUING> (420,441)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (420,441)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> 0
</TABLE>
