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 October 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 & MILLING CORPORATION
(Exact name of small business issuer as specified in its charter)
NEVADA 13-3180530
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
76 Beaver Street, New York, NY 10005
(Address of principal executive offices)
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 of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding at October 31, 1999
----- -------------------------------
Common Stock, par value 20,485,463 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 months ended October 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, 1999.
The results reflected for the three months ended October 31, 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
OCTOBER 31, 1999
(Unaudited)
ASSETS
Current Assets:
Cash $ 44,381
Loans Receivable 10,190
Other Current Assets 2,896
-----------
Total Current Assets 57,467
-----------
Property and Equipment (Net of
Accumulated Depreciation of $356,805) 1,348,846
-----------
Other Assets:
Mining Reclamation Bonds 11,000
Security Deposit 3,667
-----------
Total Other Assets 14,667
-----------
Total Assets $ 1,420,980
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Expenses and Taxes $ 65,474
Note Payable - Current Portion 4,408
Loan Payable 12,500
-----------
Total Current Liabilities 82,382
Long Term Liabilities
Note Payable - Net of Current Portion 8,815
-----------
Total Liabilities 91,197
-----------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, Par Value $.001 Per Share;
Authorized 150,000,000 shares; Issued and
Outstanding 20,485,463, Shares 20,485
Capital Paid In Excess of Par Value 9,825,862
Deficit Accumulated in the Development Stage (8,516,564)
-----------
Total Stockholders' Equity 1,329,783
-----------
Total Liabilities and Stockholders' Equity $ 1,420,980
===========
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
September 17,1982
(Inception)
Three Months Ended To
October 31, October 31, 1999
---------------------------- ----------------
1999 1998
------------ ------------
<S> <C> <C> <C>
Revenues:
Interest Income $244 $198 $710,274
Miscellaneous 400 300 26,206
------------ ------------ ------------
Total Revenues 644 498 736,480
------------ ------------ ------------
Costs and Expenses:
Mine Expenses 159,306 92,487 2,785,385
Selling, General and Administrative Expenses 76,559 79,196 5,972,270
Depreciation 1,329 1,331 356,805
Loss on Write-Off of Investment -- -- 10,000
Loss on Joint Venture -- -- 101,700
------------ ------------ ------------
Total Costs and Expenses 237,194 173,014 9,226,160
------------ ------------ ------------
Loss Before Provision For Income Taxes (236,550) (172,516) (8,489,680)
Provision For Income Taxes 170 170 26,884
------------ ------------ ------------
Net Loss $(236,720) $(172,686) $(8,516,564)
============ ============ ============
Net Loss Per Share $(.01) $(.01)
============ ============
Average Common Shares Outstanding 20,393,990 17,367,201
============ ============
</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
Three Months Ended September 17, 1982
October 31, (Inception)
------------------------ To
1999 1998 October 31, 1999
---------- ---------- ---------------
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Loss $(236,720) $(172,686) $(8,516,564)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities:
Depreciation 1,329 1,331 356,805
Loss on Write-Off of Investment -- -- 10,000
Loss From Joint Venture -- -- 101,700
Value of Common Stock Issued For Services -- 12,500 1,863,899
Compensation Portion of Options Exercised -- -- 1,107,924
Changes in Operating Assets and Liabilities:
Increase in Other Current Assets (431) (149) (2,896)
Increase in Security Deposit -- -- (3,667)
Increase (Decrease) in Accrued Expenses
and Taxes 12,088 (21,908) 65,474
----------- ----------- -----------
Net Cash Used By Operating Activities (223,734) (180,912) (5,017,325)
----------- ----------- -----------
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
Three Months Ended September 17, 1982
October 31, (Inception)
-------------------------- To
1999 1998 October 31, 1999
----------- ----------- ----------------
<S> <C> <C> <C>
Cash Flow From Investing Activities:
(Increase) Decrease in Loans Receivable $(1,000) $(6,540) $(10,190)
Increase in Loans Payable - Officers -- -- 18,673
Repayment of Loans Payable - Officers -- -- (18,673)
Increase in Note Payable 13,223 -- 13,223
Increase in Loan Payable 12,500 -- 12,500
Proceeds From Sale of Common Stock 136,499 239,486 7,288,536
Commissions on Sale of Common Stock -- -- (5,250)
Expenses of Initial Public Offering -- -- (408,763)
Purchase of Certificate of Deposit - Restricted -- -- (5,000)
Purchase of Mining Reclamation Bond -- -- (6,000)
----------- ----------- -----------
Net Cash Provided By Financing Activities 161,222 232,946 6,879,056
----------- ----------- -----------
Increase (Decrease) In Cash and Cash Equivalents (62,512) 52,034 44,381
Cash and Cash Equivalents - Beginning 106,893 11,574 --
----------- ----------- -----------
Cash and Cash Equivalents - Ending $44,381 $63,608 $44,381
=========== =========== ===========
Supplemental Cash Flow Information:
Cash Paid For Interest $ -- $ -- $ --
=========== =========== ===========
Cash Paid For Income Taxes $170 $170 $26,333
=========== =========== ===========
Non-Cash Financing Activities:
Issuance of Common Stock as Commissions
on Sales of Common Stock $ -- $14,000 $320,580
=========== =========== ===========
Issuance of Common Stock as Payment for Expenses $ -- $ -- $114,312
=========== =========== ===========
Issuance of Common Stock For
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
OCTOBER 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.
Results of operations for interim periods are not necessarily indicative of
the results of operations for a full year due.
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.
Three Months Ended October 31, 1999 Compared to Three Months Ended
October 31, 1998
Results of Operations
During the first fiscal quarter, the Company continued to develop and mine ore
at the B-Zone location. Milling was also continued but subject to metallurgical
testing and equipment repair and replacement. The mill is producing a high
pyrite concentrate with gold and, the Company's consulting metallurgist, Mr.
Thomas Quigley, is working to reduce the pyrite content and increase recovery of
fine gold. The Company has had difficulty in producing a satisfactory gold
concentrate and had its original small lot shipments returned from Spaks,
Nevada. It will be sold elsewhere, slightly modified.
Mining in the B-Zone is occurring in the 7-15 stope, raise #1 and raise #3. The
ore continues to be highly pyritic. Gold is concentrated in small veins,
veinlets and vein intersections in high grades distributed in a pyrite manto
which itself contains low grades of gold. The exploration and development of the
B-zone has been directed in a southeasterly direction with encouraging results.
Face samples have assayed 0.50 ounces of gold per ton. Gold containing pyrite
has been accumulated and is being dried in preparation for sale. We are thinking
of a sale for the users of autoclaves and will make a decision soon. In the
autoclave, the pyrite becomes fuel in the oxidation process and the gold and
silver is recovered.
Management of the operation is now under the control of Mr. Scott Hazlitt. Mr.
Hazlitt was Chief Geological Mine Operations for the Getchell Corporation,
Turquoise Ridge Mine, Nevada. We are most excited about his involvement with the
Company as a management consultant. Mr. Hazlitt is in full control of all
activities at the mine and mill. Mr. Hazlitt wrote the original geological
report on the Company's property. Under Mr. Hazlitt's guidance, the Company
plans to drill a significant portion of the Company's property in order to
locate large silicic gold ore bodies associated with the Weston fault. Initial
drillings call for approximately 10,000 feet. The length of holes may be up to
600 to 700 feet. To continue operating the Hopemore project for the next three
months is estimated to cost approximately $250,000.
8
<PAGE>
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 7th level (by crosscut,
raise, drift, and drill). Stopes, chutes, ore passes and handling facilities are
in operational condition.
The Company generated no revenues from operations during the three months ended
October 31, 1999 and 1998. There were de minimis non-operating revenues during
these periods of $644 and $498, respectively. Costs and expenses increased by
$64,180 (approximately 37.1%) from $173,014 during the three months ended
October 31, 1998 to $237,194 during the three months ended October 31, 1999
primarily due to a significant increase in mine expenses. Mine expenses
increased by $66,819 (approximately 72.3%) from $92,487 during the three months
ended October 31, 1998 to $159,306 during the three months ended October 31,
1999. The increase in mine expenses resulted primarily from construction of mine
stopes, mine development, milling and metallurgy. Selling, general and
administrative expenses and depreciation did not change materially between the
three months ended October 31, 1998 and the three months ended October 31, 1999.
As a result, the Company's net loss for the three months ended October 31, 1999
was $236,720, which was $64,034 more (approximately 37.1%) than its loss of
$172,686 for the three months ended October 31, 1998.
Liquidity and Capital Resources
As of October 31, 1999, the Company had a working capital deficit of ($24,915)
compared to working capital of $65,162 as of July 31, 1999. This $90,077
decrease in working capital primarily was due to increased cost and a decrease
in funding. 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, there is no assurance that
management will succeed therein. It should by emphasized that 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.
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.
9
<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.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
During the quarter ended October 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 August 1999, the
Company sold an aggregate of 102,546 shares to five individuals for an
aggregate of $53,999; in September 1999, the Company sold an aggregate of
$87,573 shares to four individuals for an aggregate of $47,000; and in
October 1999, the Company sold an aggregate of $72,729 shares to five
individuals for an aggregate of $35,500.
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.
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
President/Treasurer/Secretary
Date: December 14, 1999
