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 FEBRUARY 29, 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 I.D. No)
of incorporation or organization)
Suite 505, 1111 West Georgia Street
Vancouver, British Columbia, Canada V6E 4M3 (604) 689-1535
- -------------------------------------------- -------------------------------
(Address of Principal Executive Offices) (Registrant's 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 April 10, 2000
- ---------------------------------- ------------------------------
(Common stock (npv)) 25,089,891
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SILVERADO GOLD MINES LTD.
CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) AS AT
FEBRUARY 29, NOVEMBER 30,
2000 1999
------------------- -------------------
<S> <C> <C>
Assets
Current Assets
Gold inventory. . . . . . . . . . . . . . . . . . . . . . . $ 10,567 $ 10,567
Accounts receivable . . . . . . . . . . . . . . . . . . . . 86,741 79,935
97,308 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 . . . . . . . . . . . . . . . (1,627,976) (1,538,322)
------------------- -------------------
1,354,632 1,444,286
$ 2,676,140 $ 2,758,988
------------------- -------------------
Liabilities and Shareholders' Equity
Current Liabilities
Bank indebtedness . . . . . . . . . . . . . . . . . . . . . $ 47,235 $ 2,385
Accounts payable and accrued liabilities (note 5) . . . . . 1,338,720 1,162,023
Loans payable . . . . . . . . . . . . . . . . . . . . . . . 49,130 49,130
Mineral claims payable. . . . . . . . . . . . . . . . . . . 286,500 286,500
Convertible debenture, current portion. . . . . . . . . . . 2,000,000 2,000,000
------------------- -------------------
3,721,585 3,500,038
Long Term Liabilities
Convertible debenture (Note 6). . . . . . . . . . . . . . . 75,000 75,000
Shareholders' Equity
Share capital
Authorized: 100,000,000 common shares
Issued and outstanding:
February 29, 2000 - 15,873,224 shares . . . . . . . . . . 44,454,365 44,454,365
November 30, 1999 - 15,873,224 shares
Shares to be issued . . . . . . . . . . . . . . . . . . . . 72,333 28,188
Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . (45,647,143) (45,298,603)
(1,120,445) (816,050)
------------------- -------------------
$ 2,676,140 $ 2,758,988
------------------- -------------------
See accompanying notes to consolidated financial statements.
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SILVERADO GOLD MINES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED)
THREE MONTHS ENDED
FEBRUARY 29, FEBRUARY 28,
2000 1999
-------------------------- --------------------
<S> <C> <C>
CASH PROVIDED BY (USED FOR):
Operations:
Loss for the period . . . . . . . . . . . . . . . . . . . . . . . $ (348,540) $ (407,879)
Items not involving cash:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . 89,654 75,694
Amortization of deferred financing fees . . . . . . . . . . . . - 9,300
Changes in non-cash operating working capital:
Increase in accounts receivable . . . . . . . . . . . . . . . . (6,806) (4,083)
Decrease in gold inventory. . . . . . . . . . . . . . . . . . . - 14,601
Decrease (increase) in prepaid expenses paid to related parties - 94,360
Increase in accounts payable and accrued liabilities. . . . . . 176,697 1,027
-------------------------- --------------------
(88,995) (216,980)
Financing:
Bank indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 47,235 -
Shares issued for cash. . . . . . . . . . . . . . . . . . . . . . - 129,600
Share subscriptions received. . . . . . . . . . . . . . . . . . . 44,145 -
Increase in loans payable . . . . . . . . . . . . . . . . . . . . - 88,795
-------------------------- --------------------
91,380 218,395
Investments:
Proceeds from sale of equipment . . . . . . . . . . . . . . . . . - 6,846
-------------------------- --------------------
- 6,846
Increase (decrease) in cash . . . . . . . . . . . . . . . . . . . . 2,385 8,261
Cash (bank indebtedness) at beginning of the period . . . . . . . . (2,385) (4,396)
-------------------------- --------------------
Cash at end of the period . . . . . . . . . . . . . . . . . . . . . - $ 3,865
-------------------------- --------------------
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) THREE MONTHS ENDED
FEBRUARY 29, FEBRUARY 28,
2000 1999
---------------------- ---------------------
<S> <C> <C>
Revenue from gold sales. . . . . . . . . . . . . . . . . . . $ - $ 15,859
Less mining and processing costs . . . . . . . . . . . . . - 14,600
---------------------- ---------------------
Loss from Operations . . . . . . . . . . . . . . . . . . . . - 1,259
Exploration and development expenditures . . . . . . . . . . - 175,011
Administrative expenditures. . . . . . . . . . . . . . . . . 348,540 234,127
---------------------- ---------------------
Loss for the period. . . . . . . . . . . . . . . . . . . . . (348,540) (407,879)
Accumulated deficit at beginning of the period . . . . . . . (45,298,603) (43,161,796)
---------------------- ---------------------
Accumulated deficit at end of the period . . . . . . . . . . $ (45,647,143) $ (43,569,675)
---------------------- ---------------------
Loss per share . . . . . . . . . . . . . . . . . . . . . . . (0.02) (0.04)
---------------------- ---------------------
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
YEARS ENDED NOVEMBER 30, 1999, 1998, AND 1997
UNAMORTIZED ADVANCES TO RELATED
STOCK PARTIES SECURED BY
NUMBER OF SHARE COMPENSATION COMMON SHARES
SHARES CAPITAL EXPENSE IN THE COMPANY
<S> <C> <C> <C> <C>
------------ ----------- ---------- ----------------
Balance at November 30, 1996 . . . . . . . . . . . . . . . . . . 56,406,493 $38,651,294 $ - $ -
------------ ----------- ---------- ----------------
Year ended November 30, 1997
Shares issued:
Share split. . . . . . . . . . . . . . . . . . . . . . . . . 4,934,725 -
On exercise of contract employee share options . . . . . . . 3,390,000 487,500
On exercise of warrants. . . . . . . . . . . . . . . . . . . 600,000 102,000
Private placements for cash. . . . . . . . . . . . . . . . . 14,181,000 2,863,229
Private placement for consulting services: . . . . . . . . . 500,000
For cash . . . . . . . . . . . . . . . . . . . . . . 500
For consulting services. . . . . . . . . . . . . . . 169,500
Fair value of share options granted to contract employees. . . 771,389
Fair value of share options granted to consultants . . . . . . 39,008
Stock compensation cost. . . . . . . . . . . . . . . . . . . . (151,612)
Advances to related parties. . . . . . . . . . . . . . . . . . (480,236)
------------ ----------- ---------- ----------------
23,605,725 4,433,126 (151,612) (480,236)
------------ ----------- ---------- ----------------
Balance as at November 30, 1997. . . . . . . . . . . . . . . . . 80,012,218 43,084,420 (151,612) (480,236)
------------ ----------- ---------- ----------------
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. . . . 225,448
Uncollected balance recorded as a receivable allowance . . . . 254,788
------------ ----------- ---------- ----------------
(69,014,328) 990,500 151,612 480,236
------------ ----------- ---------- ----------------
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 $ - $ -
------------ ----------- ========== ================
Balance as at Feb 29, 2000
Shares issued:
On exercise of warrants for cash
- $ -
------------ -----------
Balance as at Feb 29, 2000 . . . . . . . . . . . . . . . . . . . 15,873,224 $44,454,365
------------ -----------
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) FEBRUARY 29, 2000
1. BASIS OF PRESENTATION
The consolidated financial statements as at February 29, 2000 and for the three
month period ended February 29, 2000 and February 28, 1999 included herein is
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
three month period ended February 29, 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 February 29, 2000 and February 28, 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 February 29,
2000, in the amount of $286,500 (Nov. 30/99 $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.
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Accounts payable and accrued liabilities are delineated in the following
table:
NOVEMBER 30,
FEBRUARY 29, 2000 1999
---------------------------- ----------------
<S> <C> <C>
Accounts payable $ 792,303 $ 659,356
Accrued interest 350,417 306,667
Accrued reclamation
expenses 196,000 196,000
---------- ----------
$1,338,720 $1,162,023
========== ==========
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SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) FEBRUARY 29, 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 $320,000 to December 31,
1999. Total interest payable at February 29, 2000, amounting to $ 346,666 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
U.S.$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. Total interest payable
at February 29, 2000 amounts to $3,750.
7. SHARE CAPITAL
(A) DIRECTOR AND EMPLOYEE OPTIONS. The Company has 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.
(B) WARRANTS. The Company has 3,366,667 warrants outstanding to purchase
common shares at prices in the range of $0.04 TO $2.20.
On February 8, the Company entered into an agreement with a warrant holder to
amend the number of warrants available for exercise. The warrant holder
exercised on March 8, 2000 the 2,000,000 share purchase warrant exercisable AT
$0.04 PER common share for gross proceeds of $80,000.
On March 14, 2000, the Company issued 1,400,000 units at $0.05 per unit by way
of a private placement for gross proceeds of $70,000. Each unit consists of one
common share and one share purchase warrant. Each share purchase warrant
entitles the holder to acquire an additional common share at an exercise price
of $0.10 for a two-year period.
On March 15, 2000, the company issued 866,667 common shares on exercise of share
purchase warrants. Proceeds were received prior to February 29, 2000.
(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.
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10. SUBSEQUENT EVENTS
On February 8, the Company entered into an agreement with a warrant holder
to amend the number of warrants available for exercise. The warrant holder
exercised on March 8, 2000 the 2,000,000 share purchase warrant exercisable at
$0.0.04 per common share for gross proceeds of $80,000.
SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) FEBRUARY 29, 2000
On March 8, 2000, the Company issued 1,750,000 units at $0.04 per unit by
way of a private placement for gross proceeds of $70,000. Each unit consists of
one common share and one share purchase warrant. Each share purchase warrant
entitles the holder to acquire an additional common share at an exercise price
of $0.08 for a two-year period.
On March 14, 2000, the Company issued 1,400,000 units at $0.05 per unit by
way of a private placement for gross proceeds of $70,000. Each unit consists of
one common share and one share purchase warrant. Each share purchase warrant
entitles the holder to acquire an additional common share at an exercise price
of $0.10 for a two-year period.
On March 16, 2000, the Company entered into an agreement with a warrant holder
to amend the number of warrants available for exercise. The warrant holder
exercised 500,000 of the share purchase warrant, exercisable at $0.22 per common
share for gross proceeds of $110,000.
On March 21, 2000, the Company granted 350,000 options to acquire common
shares with an exercise price of $0.35 per share exercisable until December 1,
2004, in accordance with the terms and conditions of its December 12, 1994,
Stock Option Plan.
On March 22, 2000, the Company issued 1,000,000 shares at $0.10 per share
by way of a private placement for gross proceeds of $100,000.
On March 28, 2000, the Company issued 700,000 units at $0.20 per unit by
way of a private placement for gross proceeds of $140,000. Each unit consists
of one common share and one share purchase warrant. Each share purchase warrant
entitles the holder to acquire an additional common share at an exercise price
of $0.40 for a two-year period.
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.
THREE MONTHS 2000 V. 1999
- -----------------------------
The Company continued its work on a new fuel process as well as engineering and
planning for summer gold production and development at its Nolan gold mine.
$44,145 in cash was received for share subscriptions. Expenditures during the
three months ended February 29, 2000 were $348,540 slightly down from $409,138
in the comparable period.
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SILVERADO GOLD MINES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (UNAUDITED) FEBRUARY 29, 2000
LIQUIDITY AND CAPITAL RESOURCES AT FEBRUARY 29, 2000
- -----------------------------------------------------------
During the first three months of 2000 the Company received cash of $44,145
from share subscriptions. The Company has a working capital deficiency of
$3,624,277 at February 29, 2000 compared to $3,409,536 at November 30, 1999.
RESULTS OF OPERATIONS
- -----------------------
(A) At the 100% owned Nolan property in arctic Alaska, the Company has
completed its development plans for the deep Nolan channel. Also plans are
complete for the open-cut mining and gold extraction to take place this summer
and fall from a rich tract of gold bearing ground called Workman's Bench. Work
in this area last fall disclosed gold bearing gravel over an extensive area.
(B) OTHER PROPERTIES
The Company continued to maintain its other properties in good standing, pending
further exploration and development, subject to the availability of financing.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4
- -------
None.
ITEM 5 OTHER INFORMATION.
- ------- -------------------
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
- ------- --------------------------------------
Exhibits
(27) Financial Data Schedule
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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 86741
<ALLOWANCES> 0
<INVENTORY> 10567
<CURRENT-ASSETS> 97308
<PP&E> 2982608
<DEPRECIATION> (1627976)
<TOTAL-ASSETS> 1354632
<CURRENT-LIABILITIES> 3721585
<BONDS> 0
0
0
<COMMON> 44454365
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2676140
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 348540
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (348540)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (348540)
<EPS-BASIC> (.02)
<EPS-DILUTED> 0
</TABLE>
