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, 2000
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) 344-2785
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 of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding at January 31, 2000
Common Stock, par value 21,835,130 Shares
$.001 per share
Transitional Small Business Format (check one); Yes __ No _X_
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
JANUARY 31, 2000
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 219,466
Loan Receivable 18,840
Other Current Assets 3,047
------------
Total Current Assets 241,353
------------
Property and Equipment (Net of
Accumulated Depreciation of $358,137) 1,347,514
------------
Other Assets:
Mining Reclamation Bonds 11,000
Security Deposit 3,667
------------
Total Other Assets 14,667
------------
Total Assets $ 1,603,534
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Expenses and Taxes $ 84,792
Note Payable - Current Portion 4,408
------------
Total Current Liabilities 89,200
------------
Long Term Liabilities:
Note Payable - Net of Current Portion 8,448
------------
Total Liabilities 97,648
------------
Commitments and Contingencies
Stockholders' Equity:
Common Stock, Par Value $.001 Per Share;
Authorized 150,000,000 shares; Issued and
Outstanding 21,835,130 Shares 21,835
Capital Paid In Excess of Par Value 10,482,636
Deficit Accumulated in the Development Stage (8,998,585)
------------
Total Stockholders' Equity 1,505,886
------------
Total Liabilities and Stockholders' Equity $ 1,603,534
============
The accompanying notes are an integral part of the financial statements.
2
<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, 2000
----------------------------- ---------------------------- -----------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Interest Income $ 222 $ 533 $ 466 $ 731 $ 710,496
Miscellaneous -- -- 400 300 26,206
------------ ------------ ------------ ------------ ------------
Total Revenues 222 533 866 1,031 736,702
------------ ------------ ------------ ------------ ------------
Costs and Expenses:
Mine Expenses 210,649 101,024 371,311 193,511 2,997,390
Selling, General and Administrative
Expenses 270,092 145,763 345,295 224,959 6,241,006
Depreciation 1,332 1,331 2,661 2,662 358,137
Loss on Write-Off of Investment -- -- -- -- 10,000
Loss on Joint Venture -- -- -- -- 101,700
------------ ------------ ------------ ------------ ------------
Total Costs and Expenses 482,073 248,118 719,267 421,132 9,708,233
------------ ------------ ------------ ------------ ------------
Loss Before Provision For Income Taxes (481,851) (247,585) (718,401) (420,101) (8,971,531)
Provision For Income Taxes 170 174 340 340 27,054
------------ ------------ ------------ ------------ ------------
Net Loss $ (482,021) $ (247,755) $ (718,741) $ (420,441) $ (8,998,585)
============ ============ ============ ============ ============
Net Loss Per Share $ (.02) $ (0.01) $ (.04) $ (0.02)
============ ============ ============ ============
Average Common Shares Outstanding 21,016,958 18,254,739 20,705,474 18,090,732
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For The Period
September 17, 1982
Six Months Ended (Inception)
January 31, To
----------------------------- January 31, 2000
2000 1999 ----------------
----------- ----------
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Loss $ (718,741) $(420,441) $(8,998,585)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities:
Depreciation 2,661 2,662 358,137
Loss on Write-Off of Investment -- -- 10,000
Loss From Joint Venture -- -- 101,700
Value of Common Stock Issued For Services 50,002 12,500 1,913,901
Compensation Portion of Options Exercised 152,422 52,500 1,260,346
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Other Current Assets (582) (448) (3,047)
Increase in Security Deposit -- -- (3,667)
Increase (Decrease) in Accrued Expenses and
Taxes (31,406) (22,634) 84,792
---------- ---------- ----------
Net Cash Used By Operating Activities (482,832) (375,861) (5,276,423)
---------- ---------- ----------
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.
4
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
For The Period
September 17, 1982
Six Months Ended (Inception)
January 31, To
------------------------------- January 31, 2000
2000 1999 ----------------
----------- ------------
<S> <C> <C> <C>
Cash Flow From Investing Activities:
Increase in Loans Receivable $ (9,650) $ (6,009) $ (18,840)
Increase in Loans Payable - Officers -- -- 18,673
Repayment of Loans Payable - Officers -- -- (18,673)
Increase in Note Payable 12,856 -- 12,856
Increase in Loan Payable -- -- --
Proceeds From Sale of Common Stock 592,199 557,082 7,744,236
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 595,405 551,073 7,313,239
----------- ----------- -----------
Increase (Decrease) In Cash and Cash Equivalents 112,573 175,212 219,466
Cash and Cash Equivalents - Beginning 106,893 11,574 --
----------- ----------- -----------
Cash and Cash Equivalents - Ending $ 219,466 $ 186,786 $ 219,466
=========== =========== ===========
Supplemental Cash Flow Information:
Cash Paid For Interest $ -- $ -- $ --
=========== =========== ===========
Cash Paid For Income Taxes $ 340 $ 340 $ 26,503
=========== =========== ===========
Non-Cash Financing Activities:
Issuances of Common Stock as Commissions
on Sales of Common Stock $ -- $ 14,000 $ 320,580
=========== =========== ===========
Issuance of Common Stock as Payment for Expenses $ 50,002 $ -- $ 164,314
=========== =========== ===========
Issuance of Common Stock as Payment for Property
and Equipment $ -- $ -- $ 4,500
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(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.
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<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 January 31, 2000 Compared to Three Months Ended January 31,
1999
Results of Operations
During the second fiscal quarter, the Company continued, under the management of
Scott Hazlett to explore and mine ore at the B-Zone location. Milling also
continued on a limited basis subject to metallurgical testing, until mid January
2000 when, milling was temporarily suspended. The mill continued to produce a
high pyrite concentrate containing gold and silver. The Company's metallurgist,
Mr. Thomas Quigley worked to reduce the pyrite content of the concentrate and
did fire assays on ore samples. The mill processed ore from the 7-15 drift,
B-zone. It also re-processed pyrite concentrates in order to elevate the gold
content. As a result, approximately 35 tons of pyrite concentrate was reduced to
approximately 7 tons. Its shipment to the ASARCO smelter is under consideration.
Serious exploration began underground in mid January 2000 with long hole
drilling and drifting at the 7-15 location. Core drilling commenced on the 5th
level towards the Weston fault on February 15, 2000, subsequent to site
preparation, electrical cables in place and reassembly of the drilling rig.
The purpose of drilling is to identify and outline ore for mining. The initial
ore target is at the intersection of the Ibex #4 vein and the Weston Fault. Both
of these structures have hosted ore elsewhere in the district. The first and
second holes have encounted hydrothermal breccias containing some sulfide ore
fragments possibly dislodged from a blind ore manto or vein. These holes have
also tagged the margin of the Breece Hill intrusive stock. Further drilling will
probe for replacement ore adjacent to these breccias, and also on the Ibex #4
vein. The drilling program is planned to consist of 16 holes totaling 8,000 feet
of core.
Longhole drilling from 7th level is testing for extensions of the Ibex #4 vein
between 6th and 7th levels in the southeast area of the mine. Development of the
715 drift has encountered mineralization, and additional longhole drilling is
planned in this area.
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<PAGE>
Computer modeling, using Maptek's Vulcan software, is used to compile all
available property data and drilling results.
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
Hazlitt, 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
January 31, 2000 and 1999. There were de minimis non-operating revenues during
these periods of $222 and $533, respectively. Mine expenses increased by
$109,625 (approximately 109%) from $101,024 during the three months ended
January 31, 1999 to $210,649 during the three months ended January 31, 2000. The
increase in mine expenses resulted primarily from mine development, longhole
drilling, assaying and metallurgy. Selling, general and administrative expenses
and depreciation increased by $124,330 approximately (85%) from $147,094 during
the three months ended January 31, 1999 to $271,424 during the three months
ended. The increase in selling, general and administrative expenses and
depreciation resulted primarily from an accelerated pace of operating and change
of direction under new mine management. As a result, the Company's net loss for
the three months ended January 31, 2000 was $482,021, which was $234,266 more
(approximately 95%) than its loss of $247,755 for the three months ended January
31, 1999.
Liquidity and Capital Resources
As of January 31, 2000, the Company had a working capital of $152,153 compared
to working capital of $65,162 as of July 31, 1999. This $86,991 increase in
working capitals primarily was due to an increase in capital 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
8
<PAGE>
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. To
date, the Company has not experienced any material problems resulting from year
200 computer issues.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
During the quarter ended January 31, 2000, 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 1999,
the Company sold an aggregate of 179,888 shares to ten individuals for an
aggregate of $79,200. In December 1999, the Company sold an aggregate of
309,571 shares to nine individuals for an aggregate of $128,000 and issued
25,958 shares to one individual for services for an aggregate value of
$16,354. In January 2000, the Company sold an aggregate of 656,250 shares
to fourteen individuals for an aggregate of $248,500 and issued 178,000
shares to four individuals for services for an aggregate value of $186,070.
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.
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<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
/s/ Gifford a. Dieterle
By: ------------------------------
Gifford A Dieterle
President/Treasurer/Secretary
Date: March 21, 2000
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