SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1996 Commission File No. 001-10156
ORIGINAL SIXTEEN TO ONE MINE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0735390
(State or other jurisdiction of (I.R.S. Employer
incorporated or organization) Identification No.)
Post Office Box 1621, Alleghany, CA 95910
(Address of principal executive offices)
(916)287-3223
(Registrant's telephone number)
(including area code)
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 past 12 month (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirement for the past 90 days.
Yes X No
As of March 31, 1996, 3,509,060 shares of Common Stock, par
$.10 per share, were issued and outstanding.
<PAGE>
PART I: FINANCIAL INFORMATION
Original Sixteen to One Mine, Inc.
Statement of Cash Flows
Three Months Ended Three Months Ended
March 31, 1996 March 31, 1995
Cash Flows From Operating Activities:
Cash Received $ 667,741 $ 71,714
Cash Received From
Other Sources 6,921 29,743
Cash Paid to Suppliers
& Employees (453,550) (157,448)
Interest Received 112 4,573
Interest Paid (7,187) 0
Taxes Paid In Cash (84,000) (28,200)
--------------- -------------------
Cash Provided
By Operations 130,037 (79,618)
Cash Flows From Investing Activities:
Payments Made on Brown
Bear Property 0 (50,000)
Bond Deposit (5,000) 0
Proceeds From Borrowing 0 121,000
Purchase Of Equipment (108,389) (8,015)
Payments Made For
Development (86,533) (82,805)
Cash Used In ---------------- ----------------
Investing Activities (199,922) (19,820)
Cash Flows From Financing Activities:
Payments Made On
Notes Payable (850) 0
Repurchase and Retirement
of Common Stock (15,742) (38,111)
Cash Used in
Financing Activities (16,592) (38,111)
Net Increase
(Decrease) in Cash (86,477) (137,549)
Cash, Beginning 180,618 146,713
----------------- ------------------
Cash, Ending $ 94,141 $ 9,164
================= ==================
Reconciliation of Net Income to Cash Provided by Operating Activities:
Net Income (Loss) 52,243 (338,992)
Changes in Operating Assets
& Liabilities:
Decrease in Accounts Receivable 2,144 (798)
(Increase) Decrease in
Inventory 38,818 149,560
Decrease in
Other Current Assets (5,911) 584
Increase in
Accounts Payable 80,485 89,212
Increase (Decrease) in
Accrued Expenses 16,043 20,431
Decrease in
Income Tax Payable (84,000) (28,200)
Increase in
Deferred Income taxes 1,000 0
Depreciation 27,777 27,147
Amortization 1,438 1,438
--------------- ---------------
Cash Provided By Operations $ 130,037 $ (79,618)
<PAGE>
PART I: FINANCIAL INFORMATION
Original Sixteen to One Mine, Inc.
[CAPTION]
Statement of Income and Retained Earnings
<TABLE>
Three Months Ended March 31,
1996 1995
<S> <C> <C>
Revenue $ 665,597 $ 72,511
Expenses:
Administration 8,221 0
Directors' Fees 4,796 0
Salaries, Officers 53,476 36,977
Wages & Related 266,214 182,043
Contract Labor 24,062 17,212
Insurance 17,922 14,309
Professional Fees 38,680 25,779
Supplies 88,262 52,604
Taxes 11,115 13,218
Utilities 31,367 26,579
Drayage 14,822 8,140
Office 11,557 2,624
Shareholders' Expense 405 0
Advertising & Marketing 11,197 9,300
Depreciation &
Amortization 29,215 28,585
----------- ------------
Total Expenses 611,311 417,370
Profit(Loss)
from Operations 54,286 (344,859)
Other Income & (Expense):
Other Income 7,034 29,743
Other Expenses 8,077 (23,876)
Total Other
Income (Expense) (1,043) 5,867
Income (Loss) Before Taxes 53,243 (338,992)
Provision for Income Tax (1,000) 0
Net Income (Loss) 52,243 (338,992)
Retained Earnings
(December 31, 1995) 1,366,131
Retained Earnings
(March 31, 1996 $ 1,418,374
Income (Loss) Per Share 0.01 (0.10)
</TABLE>
<PAGE>
PART I: FINANCIAL INFORMATION
Original Sixteen to One Mine, Inc.
Condensed Balance Sheet
ASSETS
March 31, 1996 December 31, 1995
Current Assets:
Cash & Cash Equivalents $ 94,141 $ 180,618
Accounts Receivable 11,226 13,370
Inventory 2,189,374 2,228,192
Other Current Assets 15,463 9,552
----------- -----------
Total Current Assets 2,310,204 2,431,732
Mining Property:
Real Estate & Property Rights
(at March 1, 1913,
cost plus subsequent
additions, net of
depletion of $524,145) 105,517 105,517
Mineral Property 415,263 415,263
Development 800,570 714,037
---------- ----------
Total Mining Property 1,321,350 1,234,817
Fixed Assets:
Building & Mill 144,462 143,250
Vehicles 166,998 118,011
Equipment 751,893 693,703
---------- ---------
1,063,353 954,964
Accumulated Depreciation (596,466) (568,689)
---------- ---------
Net Fixed Assets 466,887 386,275
---------- ----------
Other Assets (Net of Amortization) 37,806 34,244
---------- ----------
Total Assets $ 4,136,247 $ 4,087,068
========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY
March 31, 1996 December 31, 1995
Current Liabilities:
Accounts Payable $ 136,523 $ 56,038
Income Taxes Payable 0 84,000
Deferred Income Taxes 633,000 632,000
Accrued Expenses 16,043 0
Line of Credit 260,921 260,921
Current Maturities of long-term Debt 3,619 3,531
---------- ----------
Total Current Liabilities 1,050,106 1,036,490
---------- ----------
long-term Liabilities:
Note Payable - GMAC 18,504 19,354
Less Current Maturities (3,619) (3,531)
----------- ----------
Total long-term Liabilities 14,885 15,823
Stockholders' Equity:
Capital Stock, par value $.10 - 10,000,000 shares
authorized; 3,509,062 and 3,513,062 shares
issued & outstanding as of March 31, 1996
and December 31, 1995,
respectively 350,906 351,306
Paid-In-Capital 1,353,976 1,369,318
Notes Receivable-Employees (52,000) (52,000)
Retained Earnings 1,379,748 1,366,131
---------- ----------
Total Stockholders' Equity 3,032,630 3,034,755
---------- ----------
Total Liabilities and
Stockholders Equity $ 4,097,621 $ 4,087,068
========== ==========
See Accompanying Notes
<PAGE>
PART I - FINANCIAL INFORMATION
Notes to Financial Statements
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Original Sixteen to One Mine, Inc. was incorporated October 9, 1911 as a
California corporation. It owns and operates mining claims in both Sierra and
Trinity Counties located in Northern California.
Revenue
Revenue consists of gold and silver mined during the reporting period, either
sold during the period or held in inventory. It is recorded at the spot price
per ounce on the statement date. Revenue does not include unprocessed
high-grade ore mined during the reporting period. Gold and silver held in
inventory is recorded at the spot price per ounce on the balance sheet date.
Inventory
Inventory consists of gold bullion, dore, specimens and jewelry. Inventory is
recorded at the spot price per ounce on the balance sheet date.
Fixed Assets
Fixed assets are stated at historical cost. Depreciation is being calculated
using straight-line and accelerated methods over the following estimated useful
lives:
Vehicles 3 to 5 years
Equipment 5 to 7 years
Buildings 18 to 31.5 years
Depletion Policy
The Company has established a depletion policy for its mineral and mining
properties. Because of the geological formation in the Alleghany Mining
District, estimates of ore reserves cannot be calculated; therefore a cost per
unit depletion factor cannot be determined. Management has determined that a
straight-line method of depletion over a 25 year period would most accurately
match the estimated production of the mining properties (See Note 2). If
estimates of ore reserves become available, the units of production method of
depletion will be used.
Development
In February 1994, the Company began development of the 2483 winze into
unexplored ground. Costs associated with the development have been
capitalized.
Income Taxes
Differences exist between the amount of income or loss reported for financial
statements and income tax reporting purposes. These differences are
attributable to the use of the cash basis reporting of more revenues and
accelerated depreciation and depletion methods for income tax purposes. No
provision for income taxes has been made in the current year because of the
uncertainty of revenues for the remainder of the year.
Net Income or Loss Per Share
Net income or loss per share has been computed using the common shares
outstanding at end of reporting period. The Company's stock equivalents have
been excluded from the calculation of shares outstanding.
NOTE 2: MINING PROPERTY
The original mining property is carried on the books at its March 1, 1913 value
of $379,000 as determined for depletion purposes in connection with Federal
income taxes. This value together with the cost of mining properties acquired
in 1920 and 1924 for the aggregated sum of $145,145 has been fully amortized
through depletion charges. During 1994, the Company purchased mining
properties at a cost of $300,000, and capitalized $86,633 in legal costs.
These legal costs were incurred in defense of certain mining claims which is
currently under appeal.
NOTE 3: INCOME TAXES
For Federal income tax purposes, the Company has operating loss carryforwards
which may provide future tax benefits, expiring as follows:
Year of expiration
2006 $345,753
2007 $48,562
-----------
$394,315
For California state income taxes, the Company has no operating loss
carryforwards.
NOTE 4: NOTES PAYABLE
At March 31, 1996, the Company has a $18,504 secured 9.95% note payable in
connection with the acquisition of a Chevrolet Astro Van. The note is
payable in 60 monthly installments of $442.
At March 31, 1996, the Company has revolving lines of credit. The credit lines
expire June 30, 1996. The borrowing under these lines of credit at
March 31, 1996, are $67,847 and $193,074.
Comparison Of Three Months
The company's mining activities for the first three months ended March 31, 1996
produced $665,597 compared to $72,511 in the first quarter of 1995. Gold
production at the Sixteen to One Mine has always been unpredictable when
compared on a quarter to quarter basis, either by years of by successive
quarters. During the first quarter of 1996 a high-grade concentration of gold
was mined which accounts for the nine-fold increase in revenue.
Wages and related expense, supplies, and other expenses increased for 1996, when
compared with the first quarter of 1995. This is due to an overall increase in
the number of employees and the scope of mining and company related activities.
Balance sheet financial data remained stable when first quarter 1996 is compared
to December 31, 1995.
RESULTS OF OPERATIONS:
The primary mining focus in developing the 2483 winze and the access levels from
the winze. The 2600 feet level extends 60 feet to the north and 290 feet to the
south. Gold has been encountered along the strike of the vein on the 2600 foot
level. A ventilation and access raise was excavated between the 2600 foot level
and the 2400 foot level. Gold was located during the work and the area will be
developed during the second quarter. Miners continue the small block mining
objectives as well as metal detection activities and maintenance.
LIQUIDITIY AND CAPITAL RESOURCES AS OF MARCH 31, 1996:
Gold production and accumulated inventory were the sources of cash during the
quarter, In order to finance the Company, inventory will be sold, in the event
that gold production ceases and inventory is consumed, other financing
alternatives will be implemented to maintain the current level of activity.
The company throughout its 85 year history has never experienced steady or
regular gold production when measured on a monthly, quarterly, semi-annual,
and annual basis. This situation is due to the high-grade nature of the gold
deposit in Alleghany, California. The situation is further stressed because of
the wide choices in areas to develop the mine for future production and the
many choices to conduct small block mining for gold.
Considerations for determining mining priorities include: potential ounces
of each target, set up costs, on-going costs, time, impact on the mine's
infrastructure (hoisting capacity, haulage, water) and the likelihood of little
or no gold production.
The company has adequate gold in inventory to sustain its normal mining
operations during 1996. Gold held in the bank equals $2,189,374.
<PAGE>
SIGNATURES
Pursuantj 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.
Original Sixteen to One Mine, Incorporated
(Registrant)
Date: May 13, 1996
Michael M. Miller, President
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 94,141
<SECURITIES> 0
<RECEIVABLES> 11,226
<ALLOWANCES> 0
<INVENTORY> 2,189,374
<CURRENT-ASSETS> 2,310,204
<PP&E> 1,321,350
<DEPRECIATION> 29,215
<TOTAL-ASSETS> 4,136,247
<CURRENT-LIABILITIES> 1,050,106
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,097,621
<SALES> 665,597
<TOTAL-REVENUES> 665,597
<CGS> 611,311
<TOTAL-COSTS> 611,311
<OTHER-EXPENSES> 8,077
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53,243
<INCOME-TAX> 1,000
<INCOME-CONTINUING> 52,243
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52,243
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
