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, 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 April 30, 2000
Common Stock, par value 22,630,580 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 we consider necessary for the fair presentation of results for
the three and nine months ended April 30, 2000.
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 our audited financial statements at, and for
the fiscal year ended July 31, 1999.
The results reflected for the three and nine months ended April 30, 2000
are not necessarily indicative of the results for the entire fiscal year.
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
APRIL 30, 1999
(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 77,424
Loan Receivable 9,850
Other Current Assets 3,270
------------
Total Current Assets 90,544
------------
Property and Equipment (Net of
Accumulated Depreciation of $359,468) 1,346,183
------------
Other Assets:
Mining Reclamation Bonds 35,550
Security Deposit 3,667
------------
Total Other Assets 39,217
------------
Total Assets $ 1,475,944
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Expenses and Taxes $ 55,825
Note Payable - Current Portion 4,408
------------
Total Current Liabilities 60,233
Long-Term - Net of Current Portion 6,810
------------
Total Liabilities 67,043
Commitments and Contingencies
Stockholders' Equity:
Common Stock, Par Value $.001 Per Share;
Authorized 150,000,000 shares; Issued and
Outstanding 22,630,580 Shares 22,631
Capital Paid In Excess of Par Value 10,881,741
Deficit Accumulated in the Development Stage (9,495,471)
------------
Total Stockholders' Equity 1,408,901
------------
Total Liabilities and Stockholders' Equity $ 1,475,944
============
The accompanying notes are an integral part of the financial statements.
<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 Nine Months Ended To
April 30, April 30, April 30, 2000
------------------------------ ------------------------------ ---------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Interest Income $ 415 $ -- $ 881 $ 686 $ 710,911
Miscellaneous -- -- 400 300 26,206
------------ ------------ ------------ ------------ ------------
Total Revenues 415 -- 1,281 986 737,117
------------ ------------ ------------ ------------ ------------
Costs and Expenses:
Mine Expenses 185,869 286,673 556,728 324,662 3,182,807
Selling, General and
Administrative Expenses 309,631 611,550 655,378 992,186 6,551,089
Depreciation 1,331 1,331 3,992 3,993 359,468
Loss on Write-Off of
Investment -- -- -- -- 10,000
Loss on Joint Venture -- -- -- -- 101,700
------------ ------------ ------------ ------------ ------------
Total Costs and
Expenses 496,831 899,554 1,216,098 1,320,841 10,205,064
------------ ------------ ------------ ------------ ------------
Loss Before Provision
For Income Taxes (496,416) (899,554) (1,214,817) (1,319,855) (9,467,947)
Provision For Income
Taxes 470 170 810 510 27,524
------------ ------------ ------------ ------------ ------------
Net Loss $ (496,886) $ (899,724) $ (1,215,627) $ (1,320,365) $ (9,495,471)
============ ============ ============ ============ ============
Net Loss Per Share $ (0.02) $ (0.05) $ (.06) $ (0.07)
============ ============ ============ ============
Average Common Shares Outstanding 22,389,935 19,443,654 21,266,961 18,355,198
============ ============ ============ ============
</TABLE>
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
Nine Months Ended September 17, 1982
April 30, (Inception)
-------------------------------- To
2000 1999 April 30, 2000
----------- ----------- --------------
<S> <C> <C> <C>
Cash Flow From Operating Activities:
Net Loss $(1,215,627) $(1,320,365) $(9,495,471)
Adjustments to Reconcile Net Loss to
Net Cash Used By Operating Activities:
Depreciation 3,992 3,993 359,468
Loss on Write-Off of Investment -- -- 10,000
Loss From Joint Venture -- -- 101,700
Value of Common Stock Issued For Services 77,502 100,217 1,941,401
Compensation Portion of Options Exercised 329,422 642,024 1,437,346
Changes in Operating Assets and Liabilities:
Decrease in Prepaid Expenses -- -- --
(Increase) Decrease in Other Current Assets (805) (353) (3,270)
(Increase) in Security Deposit -- -- (3,667)
Increase (Decrease) in Accrued Expenses
and Taxes 2,439 (28,109) 55,825
----------- ----------- -----------
Net Cash Used By Operating Activities (803,077) (602,593) (5,596,668)
----------- ----------- -----------
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.
<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 2000 April 30, 2000
----------- ----------- --------------
<S> <C> <C> <C>
Cash Flow From Financing Activities:
Increase in Loans Receivable $ (660) $ (2,129) $ (9,850)
Increase of Loans Payable - Officers -- -- 18,673
Repayment of Loans Payable - Officers -- -- (18,673)
Increase in Notes Payable 11,218 -- 11,218
Proceeds From Sale of Common Stock 787,600 825,382 7,939,637
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 (24,550) -- (30,550)
----------- ----------- -----------
Net Cash Provided By Financing Activities 773,608 823,253 7,491,442
----------- ----------- -----------
Increase (Decrease) In Cash and Cash Equivalents (29,469) 220,660 77,424
Cash and Cash Equivalents - Beginning 106,893 11,574 --
----------- ----------- -----------
Cash and Cash Equivalents - Ending $ 77,424 $ 232,234 $ 77,424
=========== =========== ===========
Supplemental Cash Flow Information:
Cash Paid For Interest $ -- $ -- $ --
=========== =========== ===========
Cash Paid For Income Taxes $ 810 $ 510 $ 26,973
=========== =========== ===========
Non-Cash Financing Activities:
Issuances of Common Stock as Commissions
on Sales of Common Stock $ 19,120 $ 94,159 $ 339,700
=========== =========== ===========
Issuances of Common Stock as
Payment For Expenses $ 77,502 $ 13,684 $ 191,814
=========== =========== ===========
Issuance of Common Stock For
Acquisition of Property and Equipment $ -- $ -- $ 4,500
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
LEADVILLE MINING AND MILLING CORP.
(A DEVELOPMENT STAGE ENTERPRISE
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 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.
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.
We caution readers that any such forward-looking statements are based on our
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 April 30, 2000 Compared to Three Months Ended April 30, 1999
Results of Operations
During the third fiscal quarter ended April 30, 2000, we continued the
core-drilling program at the Hopemore mine in search of economic bodies of gold.
We drilled from the 5th level station directed towards ore targets that we
believed to be of superior quality. We completed and assayed samples from a
total of nine core holes. Assaying was performed by Cone Geochemical Inc.,
Lakewood, Colorado, an independent assayer.
<PAGE>
We encountered significant gold indications in the following core holes HM 5-3,
237'-247', .197 oz. gold, 6.77 oz. silver, HM 5-8, 225'-231'-.331 oz. gold, .92
oz. silver, 250'-253'-.144 oz. gold, .29 oz. silver; HM 5-9, 252'-256', .103 oz.
gold, 2.41 oz silver, 250'-254'-.20 oz gold, .11 oz. silver, 464'-484, 5-.187 oz
gold, 1.73 oz. silver; SL-RB, widths - 5', .204 oz. gold, 4.16 oz. silver, 5'
.366 oz. gold, 1.66 oz silver, 10'-1.30 oz. gold, 8 oz. silver, 15'-. 118 oz.
gold, 1.98 oz. silver. We are continuing core drilling on the 5th level but will
soon be directed from a station on the 7th level. The above grades of precious
metals and the locations in the core hole give indications of possible ore and
where to look for it. We also are conducting long hole drilling at various
locations on the 7th level. We plan to conduct instep drilling and tunneling to
explore gold rich intersections discovered by core hole drilling to determine
grade and tonnage. The .7L428S drift (tunnel) continues in the direction of the
Silica stope. Accordingly, we believe that this location is a prime environment
for large-scale gold mineralization. Gold in the Leadville district is
historically often associated with strong silica (quartz) mineralization.
We utilize computer modeling, using Maptek's Vulcan software, to compile all
available property data and drilling results.
At present, we have approximately 126,200 tons of mineralized material
containing varied amounts of gold, silver, lead, zinc and copper. The possible
mineral potential of all of our properties, as indicated by Scott Hazlitt, in
1993. Although Mr. Hazlitt is now employed by us, he was an independent
consulting geologist at the time of his report, ranges up to 5,000,000 tons. To
date, we have 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.
We generated no revenues from operations during the three months ended April 30,
2000 and 1999. There were de minimis non-operating revenues during the three
months ended April 30, 2000 of $415.
Mine expenses decreased by $100,804 (approximately 35.2%) from $286,673 during
the three months ended April 30, 1999 to $185,869 during the three months ended
April 30, 2000. The decrease in mine expenses resulted primarily from the shut
down of the milling operations in January 2000. We stopped milling operation due
to the difficulty in processing high pyrite ore and to permit us to concentrate
on exploration.
Selling, general and administrative expenses decreased by $301,919 approximately
(49.4%) from $611,550 during the three months ended April 30, 1999 to $309,631
during the three months ended April 30, 2000. The decrease in selling, general
and administrative expenses resulted primarily from
o a reduction of activities to permit us to primarily focus on drilling;
o a decrease in the cost of capital funding and in non-operating
expenses at the Hopemore mine; and
o a change of direction under new operating management headed by Scott
Hazlitt at the mine site.
As a result, our net loss for the three months ended April 30, 2000 was
$496,886, which was $402,838 less (approximately 44.8%) than our loss of
$899,724 for the three months ended April 30, 1999.
<PAGE>
Liquidity and Capital Resources
As of April 30, 2000, we had working capital of $30,311 compared to working
capital of $65,162 as of July 31, 1999 and working capital of $210,903 as of
April 30, 1999. These decreases in working capital primarily were due to a
decrease in capital funding. As we explained in our annual report on form 10-KSB
for the fiscal year ended July 31, 1999, we are in a precarious financial
condition. We cannot assure whatsoever that we will be able to continue as a
going concern or that any of our plans with respect to our gold mining
properties will, to a material degree, come to fruition. Absent commencement of
sustained sales of ore, in order to continue our mine program, we must obtain
substantial financing. While we are seeking such financing through joint venture
partners, private placement of our shares and other arrangements, we cannot
assure that we will succeed. We must emphasize that our financial condition has
remained critical since the date of our last annual report on form 10-KSB and
that in order to survive, we most likely will need an infusion of capital within
the near future.
<PAGE>
Environmental Issues
We do not expect that environmental issues will have an adverse material effect
on our liquidity or earnings. Before any mining development or mining
exploration or construction of milling facilities could begin, we were required
to meet all environmental requirements and to satisfy the regulatory agencies in
Colorado that our proposed procedures fell within the boundaries of sound
environmental practice. We are bonded to insure procedures and reclamation of
any areas disturbed by our activities in 1997, the Mined Land Reclamation Board
reviewed our permit and bond and determined that an increase in the bond was
necessary. At that time, we placed an additional $6,000 in escrow against any
future indemnity. The State of Colorado determined that our existing bond was
too low. Accordingly, in March 2000, we increased the bond by $24,550.
Part of the Leadville Mining District was declared a Superfund site. Several
mining companies and one individual were declared defendants in a possible
lawsuit. We were not named a defendant or Possible Responsible Party. We did
respond in full detail to a lengthy questionnaire prepared by the Environmental
Protection Agency ("EPA") regarding our proposed procedures and past activities
in November 1990. To our knowledge, the EPA has initiated no further comments or
questions.
We do include in all our 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 us beyond those already
addressed above. No assurance can be given that environmental regulations will
not be changed in a manner that would adversely affect our planned operations.
<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, 2000, we issued the following shares of
our common stock pursuant to the exemption from registration provided by
Section 4(2) of the Securities Act of 1933: In February 2000, we sold an
aggregate of 193,806 shares to five individuals for an aggregate of
$84,900.In March 2000, we sold an aggregate of 219,644 shares to seven
individuals for an aggregate of $85,000. In April 2000, we sold an
aggregate of 77,000 shares to three individuals for an aggregate of $18,000
and issued 30,000 shares to two individuals for expenses and services for
an aggregate value of $10,500.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
We held our annual shareholders' meeting on April 5, 2000. At that meeting:
o Gifford A. Dieterle resigned as secretary; Robert Roningen was elected
as secretary and Jeffrey Pritchard was elected Vice President;
o the following persons were elected to the Board of Directors: Gifford
A. Dieterle, Jack V. Everett, Jeffrey Pritchard and Robert Roningen;
and
o Wolinetz, Gottlieb & Lafazan, P.C. was ratified as the auditor to
audit our financial statements for the fiscal year ending July 31,
2001.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
<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 CORPORATION
Registrant
By: /s/ Gifford A. Dieterle
-----------------------
Gifford A Dieterle
President/Treasurer
Date: June 13, 2000
