AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED COMMISSION
FILE
March 31, 1997 Number:
0-12570
AMERICAN EAGLE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3494141
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Six Mile Canyon Road, Virginia City, Nevada 89502
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(Address of principal executive office) (Zip code)
Registrant's telephone number including area code: (702) 246-0761
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period than 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 stock as of the latest practicable date:
5,400,000 shares of common stock outstanding at March 31, 1997
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AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
AMERICAN EAGLE RESOURCES INC.
FORM 10-Q
INDEX
Page Number
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Part I - Financial Information
- ----------------------------------
Item 1. Financial Statements:
Consolidated Balance Sheets as at March 31, 1997
(unaudited) and June 30, 1996 3
Consolidated Statements of Operations for
the three months ended March 31, 1997,
1996, and 1995 (unaudited) 4
Consolidated Statements of Cash Flows for the
three months ended March 31, 1997, 1996,
and 1995 (unaudited) 5
Notes to Consolidated Financial Statements
(unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Part II - Other Information
- -------------------------------
Item 6. Exhibits and Reports of Form 8-K
11
Signatures 12
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<TABLE>
<CAPTION>
AMERICAN EAGLE RESOURCES, INC.
CONSOLIDATED BALANCE SHEET
March 31, 1997 June 30, 1996
---------------- ----------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash $ 39,524 $ 48,545
Accounts Receivable 9,340 56,846
Prepaid Expenses 10,970 14,978
---------------- ----------------
Total Current Assets $ 59,834 $ 120,369
Property and Equipment - Net - -
Other Assets
Marketable Securities at cost 1,058,125 1,058,125
Restricted Cash 366,232 366,232 Due from Related Party 55,121 55,121
------ ------
Total Other Assets $ 1,479,478 $ 1,479,478
---------------- ----------------
Total Assets $ 1,539,312 $ 1,599,847
Liabilities and Shareholders' Equity (Deficiency)
Current Liabilities
Accounts Payable $ 20,165 $ 21,845
Accrued and Other Liabilities 3,018 9,316
---------------- ----------------
Total Current Liabilities $ 23,183 $ 31,161
Long Term Liabilities
Reclamation 440,365 $ 113,601
Due to Related Parties 2,618,087 2,521,426
---------------- ----------------
Total Long Term Liabilities $ 3,058,452 $ 2,635,027
Shareholders' Equity (Deficiency)
- -------------------------------------------------
Common Shares, par value $0.01 per share
30,000,000 shares authorized
5,400,000 shares issued and outstanding 54,000 54,000
Additional Paid-in Capital 15,088,360 15,088,360
Deficit (16,684,683) (16,208,701)
---------------- ----------------
Total Shareholders' Equity
(Deficiency) (1,542,323) ( 1,066,341)
---------------- ----------------
Total Liabilities & Shareholders'
Equity $1,539,312 $ 1,599,847
<FN>
(see accompanying notes to the consolidated financial statements)
</TABLE>
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<TABLE>
<CAPTION>
AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
AMERICAN EAGLE RESOURCES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Nine months ended March 31
1997 1996 1995
--------------------------- ------------------------- ----------
<S> <C> <C> <C>
Revenue
- ---------------------------
Mineral Sales and Royalties 28,252 659,517 557,126
Interest Income and Other 29,227 32,152 6,035
--------------------------- ------------------------- ----------
157,479 691,669 563,161
Expenses
Mine Operating Costs 151,753 524,348 606,402
Mineral Exploration -
Reclamation 421,303
Depreciation and Depletion 202,592 144,604
General and Administration 60,405 32,901 106,259
--------------------------- ------------------------- ----------
633,461 759,841 857,265
Net Loss for the Period (475,982) 68,172 294,104
--------------------------- -------------------------
Net Loss per share (0.09) (0.01) (0.05)
Weighted average shares
Outstanding 5,400,000 5,400,000 5,400,000
</TABLE>
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<TABLE>
<CAPTION>
AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
AMERICAN EAGLE RESOURCES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine months ended March 31
1997 1996 1995
------------------------ --------------------------- ---------
<S> <C> <C> <C>
Net Profit (Loss) (475,982) (68,172) (294,104)
Adjustments to reconcile net loss
to net cash provided by (used in)
Operating Activities
Depreciation and Depletion 202,592 144,604
Reclamation expense 326,764 18,558 18,504
(Increase) decrease in accounts receivable 47,506 10,779 (295,585)
(Increase) decrease in prepaid expenses 4,008 11,907) 4,791
(Increase) in due to related party 96,661 164,594 538,631
(Increase) decrease in other assets 15,148
Increase (decrease) in accounts payable (1,680) (36,056) (68,081)
Increase (decrease) in accrued and
other liabilities (6,298) (11,047) 1,885
------------------------ ---------------------------
Total adjustments 466,961 337,513 359,897
------------------------ ---------------------------
Net Cash used in Operations ( 9,021) 269,341 65,793
Purchase of Equipment (103,926) (30,268)
Financing Activities (55,521)
------------------------
Increase (Decrease) in Cash (9,021) 165,415 (19,996)
Cash - Beginning of Period 48,545 48,000 20,888
------------------------ --------------------------- ---------
Cash - End of Period 39,524 213,415 892
</TABLE>
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AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
AMERICAN EAGLE RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business- All mining, exploration, development and production of
- --------------------
precious metals has ceased. The only remaining activity in it's 40% interest
- ---
of the Golden Eagle Mine Joint Venture ( formerly the Flowery Mine) is
reclamation work.
Basis of Presentation - The financial statements include the accounts of
- -----------------------
American Eagle Resources, Inc. (the "Company") and a proportionate share of
- -----
the accounts of the Golden Eagle Mine Joint Venture in which the Company has
- --
an interest. All material inter-company balances and transactions have been
eliminated.
Restricted Cash - Restricted cash consists of certificates of deposit held as
- ----------------
collateral for the performance of the Companies reclamation activities.
The Company ceased mining operations during fiscal 1996 and leaching stopped
in the second quarter of fiscal 1997; only reclamation work is being carried
out. Management does not intend to further explore, expand or develop the
properties owned and leased by the Golden Eagle Mine Joint Venture.
Accordingly, an impairment allowance of $442,181 was established as of June
30, 1996 which fully reserved the remaining net book value of property and
equipment.
Revenue Recognition - Any revenue is recognized when gold shipments are made
- --------------------
Net Loss Per share - The computation of net loss per share is based on the
- ---------------------
Company's reported net loss and the weighted average number of shares of
- ---
common stock outstanding.
- ---
Reclamation - Estimated reclamation costs are accrued over the estimated life
- -----------
of the mine on a unit-of-production basis. Total anticipated reclamation
costs are estimated to be $524,312, of which $83,947. has been expended
through March 31, 1997, reducing the accrual to $440,365.
Impairment of Long-Lived Assets - Statement of Financial Accounting Standards
- --------------------------------
("SFAS") No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF, was issued by the Financial Accounting
Standards Board ("FASB") in March 1995, and established accounting for the
impairment of long-lived assets, certain identifiable intangibles, and
goodwill related to those assets to be held and used for long-lived assets and
certain identifiable intangibles to be disposed of. The Company adopted the
provisions of SFAS No. 121 during the year ended June 30, 1996. The Company
reviews the carrying values of its long-lived and identifiable intangible
assets for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of assets may not be recoverable.
Reclassifications - Certain amounts have been reclassified to conform with the
- -----------------
current year's presentation.
2. PROPERTY AND EQUIPMENT
Property and Equipment has been fully reserved (see note 1).
<PAGE>
3. INVESTMENT IN MIRAMAR MINING CORPORATION
The Company's Investment in Miramar Mining Corporation ("Miramar")
represents and approximate 2% interest in that Company. Miramar is a mining
Company listed on the NASDAQ Stock Exchange and is a related party. At March
31, 1997 and 1996, this investment was recorded at cost, which was less than
market value. Due to the related party nature of the investment, the
investment is not recorded above original cost basis.
4. INCOME TAXES
No provision for income taxes has been recorded in the financial
statements due to the net losses of the Company. At June 30, 1996, the
Company had net operating loss ("NOL") carryforwards of $15,207,207, which
expire up to the year ending June 30, 2011. The Company has not recognized a
deferred tax asset relating to these carryforwards.
The NOL carryforwards generated through the date of the Company's
reorganization in 1990 are subject to an annual limitation of $272,858. The
NOL carryforwards generated subsequent to such reorganization are allowed
without limitation. Therefore, total NOL carryforwards actually available to
offset future taxable income will be limited to approximately $6,500,000
before fully expiring during the year ending June 30, 2011. Subsequent
ownership changes could further reduce available NOL carryforwards. The
annual limitation, and therefore the NOL carryforwards available, are
increased by any recognized built-in gains during a taxable year as provide by
Internal Revenue Code Section 382.
The Company has adopted Financial Accounting Standards Board Statement
No. 109, Accounting for Income Taxes (FAS109). The Company had no recorded
deferred taxes before or after implementation of FAS 109 and, accordingly,
there was no cumulative or current period effect from the adoption of FAS 109.
Deferred income taxes reflect the impact of temporary differences between
the amount of assets and liabilities recognized for financial reporting
purposed and such amount recognized for tax purposes and the impact of net
operating loss carryforwards. The components of the Company's deferred tax
assets as of June 30, 1996 were as follows:
Benefit from net operating loss carryovers $ 5,170,450
Benefit from investment tax credit carryovers $ 129,120
Other $ 164,777
-----------
Total 5,464,347
Valuation Allowance (5,464,347)
-----------
Net $ -
5. RELATED PARTY TRANSACTIONS
In September 1989, the Company entered into a joint venture agreement
with Miramar Gold Corporation ("Miramar Gold"), a Nevada corporation for the
operation of mining properties and equipment (the Golden Eagle Mine Joint
Venture). Miramar Gold is a wholly owned subsidiary of Miramar (see Note 3),
which has a 16% interest in the Company. Mr. W.H. Berukoff is President and a
member of the Board of Directors of the Company. He is also President and a
member of the Board of Directors of Miramar Gold and Miramar. Under the terms
of the agreement, the Company received 20% of the revenues and paid 40% of the
expenses from mining operations until Miramar had received the sum of
$1,000,000. Beginning in September, 1994, the Company received 40% of the
revenues and paid 40% of the expenses.
At March 31, 1997, the Company had a payable to Miramar Gold of
$2,618,087 for costs paid by Miramar Gold on behalf of the Company. The
Company classifies this payable as non-current as Miramar Gold has represented
it will not demand payment in fiscal 1997.
At March 31, 1997, the Company has a receivable of $53,261 from a Company
controlled by the President of the Company as well as a receivable of $1,860
from other companies that are controlled by the President of the Company.
The Company classifies this amount as non-current as significant repayments
are not expected within a year.
<PAGE>
AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------------------------------------------------------------------------------
RESULTS OF OPERATIONS
- -----------------------
Results of Operations
- -----------------------
The profitability of the Company's operations in any one accounting period is
directly related to, among other things: 1) the average realized price of gold
and silver; 2) the average ore grade; 3)the rate of production of ore.
Effectively all operations have ceased as at the end of the second quarter,
and only reclamation work is being carried out.
During the first six months, net production was 606 ounces of gold and 10,119
ounces of silver of which the Company's share is 242 ounces of gold and 4,048
ounces of silver.
Liquidity and Capital Resources
- ----------------------------------
Mar 31 June 30, Increase
1997 1996 (Decrease)
Current Assets $59,834 $120,369 $(60,535)
Current Liabilities 23,183 31,161 (7,978)
Working Capital $ 36,651 $ 89,208 $(52,557)
Working capital decreased due to cessation of all activities, other than
reclamation.
Leaching ceased by the end of the second quarter, and only reclamation work
remains.
The Company is in the process of evaluating various future business
directions.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
A) NONE
B) NONE
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AMERICAN EAGLE RESOURCES, INC.
10-Q FOR QUARTER ENDED 03-31-97
Commission File No. 0-12570
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 the
undersigned thereunto duly authorized.
AMERICAN EAGLE RESOURCES, INC.
Date: By: Margaret E. Stewart
Authorized Representative
Date: By: James McKay
Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-30-1997
<CASH> 39,524
<SECURITIES> 1,058,25
<RECEIVABLES> 64,461
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 59,834
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,479,478
<CURRENT-LIABILITIES> 23,183
<BONDS> 0
0
0
<COMMON> 54,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,539,312
<SALES> 128,252
<TOTAL-REVENUES> 157,479
<CGS> 0
<TOTAL-COSTS> 633,461
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (475,982)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (475,982)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
