FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MAY 31, 2000
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number 0-12132
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SILVERADO GOLD MINES LTD.
(Exact name of registrant as specified in its charter)
British Columbia, Canada 98 -0045034
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) I.D. No.)
Suite 505, 1111 West Georgia Street (604) 689-1535
Vancouver, British Columbia, Canada V6E 4M3 (Registrant's
(Address of Principal Executive Offices) telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 13(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for a 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 stock, as of the latest practicable date.
Class Outstanding at July 11, 2000
(Common stock (npv)) 24,802,391
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SILVERADO GOLD MINES LTD.
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED)
<S> <C> <C> <C>
As at
May 31, November
2000 30, 1999
Assets
Current Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,695 $ -
Gold inventory . . . . . . . . . . . . . . . . . . . . . . 10,567 10,567
Accounts receivable. . . . . . . . . . . . . . . . . . . . 17,039 79,935
------- -------
33,301 90,502
Mineral Properties and Development, net. . . . . . . . . . . 1,224,200 1,224,200
Buildings, Plant and Equipment . . . . . . . . . . . . . . . 2,982,608 2,982,608
Less accumulated depreciation. . . . . . . . . . . . . . . (1,714,511) (1,538,322)
---------- -----------
1,268,097 1,444,286
$ 2,525,598 $ 2,758,988
Liabilities and Shareholders' Equity
Current Liabilities
Bank indebtedness. . . . . . . . . . . . . . . . . . . . . $ - $ 2,385
Accounts payable and accrued liabilities (note 5). . . . . 1,061,888 1,162,023
Loans payable. . . . . . . . . . . . . . . . . . . . . . . 49,130 49,130
Mineral claims payable . . . . . . . . . . . . . . . . . . 282,875 286,500
Convertible debenture, current portion . . . . . . . . . . 2,000,000 2,000,000
--------- ----------
3,393,893 3,500,038
Long Term Liabilities
Convertible debenture (Note 5) . . . . . . . . . . . . . . 75,000 75,000
Shareholders' Equity
Share capital
Authorized: 100,000,000 common shares
Issued and outstanding:. May 31, 2000 - 24,489,891 shares 45,064,365 44,454,365
November 30, 1999 - 15,873,224 shares
Shares to be Issued. . . . . . . . . . . . . . . . . . . 42,277 28,188
Deficit (46,049,937) (45,298,603)
------------ ------------
(943,295) (816,050)
------------ ------------
$ 2,525,598 $ 2,758,988
------------------------------
See accompanying notes to consolidated financial statements
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SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND ACCUMULATED DEFICIT
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED)
Six Months Ended
May 31, May 31,
2000 1999
<S> <C> <C>
Revenue from gold sales. . . . . . . . . . . . . . . . . . . $ - $ 15,859
Less mining and processing costs . . . . . . . . . . . . . - 14,601
----------------- -------------
Loss from Operations . . . . . . . . . . . . . . . . . . . . - 1,258
Mineral properties and development expenditures. . . . . . . - 246,316
Administrative expenses. . . . . . . . . . . . . . . . . . . 667,584 304,338
Interest Expense . . . . . . . . . . . . . . . . . . . . . . 83,750 80,000
Loss for the period. . . . . . . . . . . . . . . . . . . . . (751,334) (629,396)
Accumulated deficit at beginning of the period . . . . . . . (45,298,603) (43,849,212)
------------------ ------------
Accumulated deficit at end of the period . . . . . . . . . . $ (46,049,937) $(44,478,608)
----------------- -------------
Loss per share . . . . . . . . . . . . . . . . . . . . . . . $ (0.033) $ (0.048)
----------------- -------------
See accompanying notes to consolidated financial statements
Three Months Ended
May 31, May 31,
2000 1999
Revenue from gold sales. . . . . . . . . . . . . . . . . . . $ - $ -
Less mining and processing costs . . . . . . . . . . . . . - -
----------------- -------------
Loss from Operations . . . . . . . . . . . . . . . . . . . . - -
- -
Mineral properties and development expenditures. . . . . . . - 71,305
Administrative expenses. . . . . . . . . . . . . . . . . . . 359,044 110,212
Interest Expense . . . . . . . . . . . . . . . . . . . . . . 43,750 40,000
Loss for the period. . . . . . . . . . . . . . . . . . . . . (402,794) (221,517)
Accumulated deficit at beginning of the period . . . . . . . (45,647,143) (44,257,091)
----------------- -------------
Accumulated deficit at end of the period . . . . . . . . . . $ (46,049,937) $(44,478,608)
---------------- -------------
Loss per share . . . . . . . . . . . . . . . . . . . . . . . $ (0.017) $ (0.017)
----------------- -------------
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SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED)
Six Months Ended
May 31, May 31,
2000 1999
<S> <C> <C>
CASH PROVIDED BY (USED FOR):
Operations:
Loss for the period. . . . . . . . . . . . . . . . . . . . . . . . $ (751,334) (629,396)
Items not involving cash:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 176,189 153,029
Amortization of deferred financing fees. . . . . . . . . . . . . - 18,600
Changes in non-cash operating working capital: . . . . . . . . . . . - -
Decrease in accounts receivable. . . . . . . . . . . . . . . . . . 62,896 2,070
Decrease in gold inventory . . . . . . . . . . . . . . . . . . . . - 14,601
(Decrease) in mineral claims payable . . . . . . . . . . . . . . . (3,625) (3,500)
Increase in loans payable. . . . . . . . . . . . . . . . . . . . . - -
Increase (decrease) in accounts payable and accrued liabilities. . (100,135) 37,437
-------- ---------
(616,009) (407,159)
Financing:
Bank indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . (2,385) (4,396)
Shares issued for cash . . . . . . . . . . . . . . . . . . . . . . 610,000 273,035
Share subscriptions received . . . . . . . . . . . . . . . . . . . 14,089 135,000
-------- ---------
621,704 408,035
Investments:
Proceeds from sale of equipment. . . . . . . . . . . . . . . . . . - 5,347
-------- ---------
- 5,347
Increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . 5,695 6,223
Cash at beginning of period. . . . . . . . . . . . . . . . . . . . . - -
-------- ----------
Cash at end of the period. . . . . . . . . . . . . . . . . . . . . . $ 5,695 $ 1,827
Supplemental cash flow information
Interest paid. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,750 $ -
-------- ----------
Issue of shares for purchase of mineral property, a non cash
investing activity not reflected in the Statements of Cashflows. $ - $ -
See accompanying notes to consolidated financial statements
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SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHARE CAPITAL
EXPRESSED IN U.S. DOLLARS
Six Months Ended May 31, 2000, and years ended November 30, 1999 & 1998
Unamortized
Stock
Number of Share Compensation
shares Capital Expense
<S> <C> <C> <C>
Balance as at November 30, 1997 . . . . . . . . . . . . . . . . . . . . 80,012,218 $ 43,084,420 $ (151,612)
Year ended November 30, 1998
Share consolidation . . . . . . . . . . . . . . . . . . . . . . . . . (72,010,996)
Shares issued:
On exercise of warrants for cash. . . . . . . . . . . . . . . . . . 255,000 216,200
Private placements for cash . . . . . . . . . . . . . . . . . . . . 2,446,668 372,600
Private placement for consulting services:. . . . . . . . . . . . . 125,000 112,500
Fair value of shares issued for mineral property. . . . . . . . . . 170,000 289,200
Amortization of stock compensation. . . . . . . . . . . . . . . . . . 151,612
Cash received on sale of common shares by related party
Uncollected balance recorded as a receivable allowance ------------- ------------- -----------
(69,014,328) 990,500 $ 151,162
Balance as at November 30, 1998 . . . . . . . . . . . . . . . . . . . . 10,997,890 44,074,920 -
Year ended November 30, 1999
Shares issued:
On exercise of warrants for cash. . . . . . . . . . . . . . . . . . 4,008,667 250,050
Private placements for cash . . . . . . . . . . . . . . . . . . . . 866,667 129,395
------------ --------- ----------
4,875,334 379,445 -
Balance as at November 30, 1999 . . . . . . . . . . . . . . . . . . . . 15,873,224 44,454,365 -
Shares issued:
On Exercise of warrants for cash. . . . . . . . . . . . . . . . . . 3,366,667 190,000
On exercise of employee share options . . . . . . . . . . . . . . . 400,000 40,000
Private placements for cash . . . . . . . . . . . . . . . . . . . . 4,850,000 380,000
-------------
Balance as at May 31,2000 . . . . . . . . . . . . . . . . . . . . . . . 8,616,667
------------- ----------- -----------
24,489,891 $ 45,064,365 $ -
See accompanying notes to the consolidated financial statements
SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHARE CAPITAL
EXPRESSED IN U.S. DOLLARS
Six Months Ended May 31, 2000, and years ended November 30, 1999 & 1998
Advances to Related
Parties secured by
Common Shares in
the Company
<S> <C>
Balance as at November 30, 1997 . . . . . . . . . . . . . . . . . . . . $ (480,236)
Year ended November 30, 1998
Share consolidation
Shares issued:
On exercise of warrants for cash
Private placements for cash
Private placement for consulting services:
Fair value of shares issued for mineral property
Amortization of stock compensation
Cash received on sale of common shares by related party 225,448
Uncollected balance recorded as a receivable allowance 254,788
-----------------
$ 480,236
Balance as at November 30, 1998 . . . . . . . . . . . . . . . . . . . . -
Year ended November 30, 1999
Shares issued:
On exercise of warrants for cash
Private placements for cash
-
Balance as at November 30, 1999 . . . . . . . . . . . . . . . . . . . . -
Shares issued:
On Exercise of warrants for cash
On exercise of employee share options
Private placements for cash
Balance as at May 31,2000
$ -
See accompanying notes to the consolidated financial statements
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SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 2000
1. BASIS OF PRESENTATION
The consolidated financial statements as at May 31, 2000 and 1999 and for the
six month periods ended May 31, 2000 and 1999 included herein are unaudited;
however, such information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair statement of results for the interim period. These consolidated financial
statements are presented in accordance with United States generally accepted
accounting principles. The results of operations for the six month period ended
May 31, 2000 are not necessarily indicative of the results to be expected for
the full year.
2. GOLD INVENTORY
Gold inventory is valued at the lower of weighted average cost and estimated net
realizable value. At May 31, 2000 and November 30, 1999, gold is valued at net
realizable value.
3. MINERAL PROPERTIES AND DEVELOPMENT
The Company confines its exploration activities to areas from which gold has
previously been produced or to properties which are contiguous to such areas and
have demonstrated mineralization. Accordingly, the Company capitalizes the
costs of acquiring mineral claims until such time as the properties are placed
into production or abandoned. At that time, costs are amortized on a units of
production basis or written off. The Company is in arrears of required mineral
claims and option payments for certain of its mineral properties at May 31,
2000, in the amount of $282,875 (November 30, 1999 - $286,500).
4. BUILDINGS PLANT AND EQUIPMENT
Buildings, plant and equipment are stated at cost. Depreciation is provided on
buildings, plant and equipment using the straight-line method based on estimated
lives of 3 to 20 years.
5. ACCOUNTS PAYABLE
Accounts payable and accrued liabilities are detailed in the following table:
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<CAPTION>
<S> <C> <C>
MAY 31, NOVEMBER
2000 30, 1999
ACCOUNTS PAYABLE 479,221 659,356
ACCRUED INTEREST . . . . . . 386,667 306,667
ACCRUED RECLAMATION EXPENSES 196,000 196,000
$ 1,061,888 $1,162,023
============= ==========
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SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 2000
6. CONVERTIBLE DEBENTURE
In July, 1994, the Company issued a convertible callable debenture for
$2,000,000 with interest payable at the rate of 8.0% per annum on December 31,
and June 30, each year. The debenture is unsecured and was due on July 2, 1999.
The Company has not made required interest payments of $386,667 to May 31, 2000
which has been recorded as a current liability. The Company was granted a
deferral of these payments based on monthly progress updates until financing is
in place. The Company is currently in negotiations to restructure its
obligation.
On February 15, 1999, the Company issued a convertible debenture for
$75,000 with interest payable at the rate of 5% per annum on March 1 of each
year. The debenture is due on February 28, 2002. The required interest payment
of $3,750 was made on April 14, 2000.
7. SHARE CAPITAL
(a) DIRECTOR AND EMPLOYEE OPTIONS. The Company has 3,100,000 (November 30,
1999 - 3,500,000) outstanding options to acquire common shares with an exercise
price of $0.10 per share until December 1, 2004, in accordance with the terms
and conditions of its December 12, 1994, Stock Option Plan; and 350,000
outstanding options to acquire common shares with an exercise price of $0.35 per
share until December 1, 2004, in accordance with the terms and conditions of its
December 12, 1994 Stock Option Plan.
(b) WARRANTS. The Company has 4,537,500 warrants outstanding to purchase
common shares at prices in the range of $0.08 - $0.40.
(c) OTHER SHARE TRANSACTIONS. The Company has reserved 295,192 common shares
for issuance upon the potential conversion of the convertible debentures.
8. COMMITMENTS
The Company has a lease agreement for office premises for a term of 10
years commencing April 1, 1994, with an approximate annual rate of $122,000
(Cdn.) including operating costs.
9. LITIGATION
A former employee of the Tri-Con Group has initiated a claim against that
company for wrongful dismissal / breach of contract in the amount of $150,000.
The Company has been named as a co-defendant in the suit. No provision for this
litigation has been made in these financial statements and the amount of the
loss, if any, for this lawsuit, would be accounted for prospectively.
10. SUBSEQUENT EVENTS
On June 16, 2000 312,500 share purchase warrants were exercised at a price
of $0.08 per share
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and the Company issued 312,500 shares from the treasury for proceeds of $25,000.
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) MAY 31, 2000
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain factors which
have significantly affected the Company's financial position and operating
results during the period included in the accompanying condensed consolidated
financial statements.
SIX MONTHS 2000 v. 1999
---------------------------
For the six month period ended May 31, 2000 there was a loss per share of
$0.033. This was down from $0.048 for the six month period ended May 31, 1999
as a result of increased share issuances. Loss per share of 0.017 for the
second quarter ended May 31, 2000 was unchanged from $0.017 from the comparable
period. Loss for the six month period ended May 31, 2000 was $751,334 up from
$629,396 for the six month period ended May 31, 1999. Loss for the quarter was
$402,794 up from $221,517 for the quarter ended May 31, 1999. Expenditures
during the six months ended May 31, 2000 were $751,334 up from $629,396 in the
comparable period due to an increase in advertising and promotion expenditures.
$610,000 in cash was received for share issuances during the fist six months of
2000.
The Company continued its work on the new fuel process low-rank coal-water fuel
as well as engineering and planning for summer gold production and development
at its Nolan gold mine.
Plans are complete for the open-cut mining and gold extraction to take place
this summer and fall from a tract of gold bearing ground called Workman's Bench.
Work in this area last fall disclosed gold bearing gravel.
The Company has plans to retrofit the Grant Mill as part of a program to create
the world's first commercial low-rank coal-water fuel facility.
The Company continued to maintain its other properties in good standing, pending
further exploration and development, subject to the availability of financing.
LIQUIDITY AND CAPITAL RESOURCES AT MAY 31, 2000
------------------------------------------------------
During the first six months of 2000 the Company received cash of $610,000 from
share subscriptions. The Company plans to raise capital through gold sales from
its 100% owned Nolan Gold Mine as well as through private placements and warrant
issues. The Company has a working capital deficiency of $3,360,592 at May 31,
2000 slightly down from $3,409,536 at November 30, 1999 as a result of a
decrease in accounts payable.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
A former employee of the Tri-Con Group has initiated a claim against that
company for wrongful dismissal / breach of contract in the amount of $150,000.
The Company has been named as a co-defendant in the suit.
<PAGE>
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS.
During the second quarter of 2000 the company received proceeds from the issue
of 1,700,000 unregistered shares.
ITEM 3
None.
ITEM 4
None.
ITEM 5 OTHER INFORMATION.
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
None.
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 thereunto duly authorized.
SILVERADO GOLD MINES LTD.
/s/ G.L. ANSELMO
G.L. Anselmo
President/CEO/CFO
