<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1995
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 0-10100
GOLD COMPANY OF AMERICA
(The Prudential-Bache/Barrick Gold Acquisition Partnership,
a California Limited Partnership)
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(Exact name of Registrant as specified in its charter)
California 22-2553065
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
199 Water Street, 16th Floor, New York, N.Y. 10292-0116
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(Address of principal executive offices) (Zip Code)
(212) 214-1016
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Registrant's telephone number, including area code
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Former name, former address and former fiscal year, if changed since last report
Indicate by check CK 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 that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _CK_ No __
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PART I--FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
GOLD COMPANY OF AMERICA
(The Prudential-Bache/Barrick Gold Acquisition Partnership,
a California Limited Partnership)
STATEMENTS OF NET ASSETS
(in process of liquidation)
(Unaudited)
<TABLE>
<CAPTION>
March 31, September 30,
1995 1994
<S> <C> <C>
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ASSETS
Cash and cash equivalents $ 386,375 $ 459,980
Gold on hand 1,129,144 1,134,902
Due from general partners at liquidation 408,600 408,600
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Total assets 1,924,119 2,003,482
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LIABILITIES
Accrued operating and liquidation costs 176,502 151,360
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Total liabilities 176,502 151,360
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Net assets $1,747,617 $ 1,852,122
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Limited partnership units issued and outstanding 2,391,099 2,391,099
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</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in process of liquidation)
(Unaudited)
<TABLE>
<S> <C>
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Net assets in liquidation at September 30, 1994 $1,852,122
Changes in estimated liquidation values of assets and liabilities (104,505)
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Net assets in liquidation at March 31, 1995 $1,747,617
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See notes to financial statements
</TABLE>
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GOLD COMPANY OF AMERICA
(The Prudential-Bache/Barrick Gold Acquisition Partnership,
a California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(in process of liquidation)
March 31, 1995
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of management, the financial statements for the period ended March 31, 1995
contain all adjustments necessary to fairly present such information subject to
the effects of any further liquidation accounting adjustments that might have
been required had the current realizable values of assets and the amounts of
liabilities been known when the Partnership first changed to the liquidation
basis of accounting.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report filed with the Securities and Exchange
Commission on Form 10-K for the year ended September 30, 1994.
B. Realization of Assets and Plans for Liquidation
The Camflo Gold Purchase Agreement for 69,287 ounces of gold was fulfilled in
October 1992, and the proved and probable reserves of the Camflo Mine were
exhausted in December 1992. During the term of the Partnership, Barrick Minerals
(Canada) Inc. (``Barrick Minerals'') (the mine operator) spent significant
amounts on exploration to expand reserves at the Camflo Mine. These exploration
efforts, individually and as a group, failed to disclose reserves with the
ability to extend the life of the mine. In addition, in August 1992 Barrick
Minerals retained Micon International (``Micon'') to estimate the remaining
reserves at the Camflo Mine and to review the historic exploration for the
Camflo Mine. A copy of the report prepared by Micon (the ``Micon Report'') was
delivered to the General Partners in October 1992. The Micon Report stated that
(i) the economically mineable reserves at the Camflo Mine would be exhausted in
calendar 1992 and (ii) Barrick Minerals has made all reasonable attempts of
exploration at the Camflo Mine and the potential for finding a deposit of
sufficient size and grade to support a mine under a reasonably predictable gold
price was negligible. Consequently, Barrick Minerals closed the mine. The
Partnership will not receive any gold under the Camflo Gold Acquisition
Agreement beyond the approximately 2,260 ounces (approximately $752,000 upon
receipt) received through March 1993.
In connection with the closure of the Camflo Mine, Barrick Minerals advised
the Partnership that it had evaluated various options to maximize the remaining
value of the assets at the Camflo Mine to the Partnership. In particular,
Barrick Minerals informed the Partnership in October 1992 that it contacted
likely candidates who might have been interested in purchasing the Camflo Mine
facilities for use in continuing operations and initially concluded that the
facilities were not saleable on such a basis. However, in 1993, the shares of
Barrick Minerals were sold (subject to assumption of all environmental
liabilities. See below.) Consequently, Barrick Minerals advised the Partnership
in October 1992 that the best alternative with respect to the Camflo Mine
facilities was to disassemble such facilities and realize any value from the
residual gold which might be found in the mill and related facilities and obtain
the salvage value of any usable equipment. The Micon Report concluded that upon
closure of the Camflo Mine the usable equipment would have a gross estimated
salvage value of Cdn. $450,000 (approximately U.S. $354,000 at September 30,
1992).
In addition to the Camflo Mine facilities, Barrick Minerals held certain
mining rights in respect of its operations of the Camflo Mine which extended to
the Partnership under the gold purchase agreements. Given the prospects for the
Camflo Mine, as confirmed in the Micon Report referred to above, Barrick
Minerals advised the Partnership in October 1992 that it had determined that
such mining rights had no value and, accordingly, Barrick Minerals commenced
operations to perform reclamation of the Camflo Mine and to ultimately abandon
such mining rights. Given the above, the prospects of the Partnership realizing
any value under the Camflo Security Agreements were negligible. In fact,
exercising the security interest
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might have resulted in the Partnership becoming responsible for the reclamation
costs of the Camflo Mine, which were estimated by Micon in their report to be
approximately Cdn. $2,250,000 (approximately U.S. $1,770,000 at September 30,
1992).
After considering the foregoing, in January 1993 the General Partners
determined that it would be in the best interests of all the partners to
terminate the Camflo Gold Acquisition Agreement (including the Camflo Security
Agreements and all other security agreements entered into in connection
therewith), dissolve the Partnership and distribute the Partnership's remaining
assets to the limited partners. As a result of this decision, the financial
statements as of September 30, 1992 were adjusted to reflect the Partnership's
liquidation basis. The Managing General Partner, on behalf of the Partnership,
and Barrick Minerals reached an agreement (the ``Camflo Termination Agreement'')
whereby the Partnership released Barrick Minerals from its obligations under the
Camflo Gold Acquisition Agreement, the Camflo Security Agreements and all other
security agreements entered into in connection therewith in exchange for Barrick
Minerals paying to the Partnership $425,000, representing an estimate of the
gross salvage value of the remaining assets of the Camflo Mine upon its closure
and the residual gold estimated to be recoverable from the mill, net of
extraction costs, when dismantled.
Barrick Minerals informed the Partnership that, subsequent to the date of the
determinations stated above, Barrick Minerals was approached by Richmont Mines
Inc. (``Richmont''), an unaffiliated third party, regarding the possibility of
Richmont acquiring the Camflo Mine's mill facilities, and that after a series of
negotiations which began in June 1993, agreement was reached with Richmont on
August 4, 1993 providing for the sale to it of all of the shares of Barrick
Minerals upon the finalization of the Camflo Termination Agreement. The
Partnership was informed by Barrick Minerals that Richmont plans to use the
Camflo's mill facilities to process an existing ore body owned by Richmont
located within a transportable distance. The Partnership was also informed that
Richmont paid a nominal amount for all of the shares of Barrick Minerals and
assumed any and all reclamation liabilities relating to the mill facilities. PB
Minerals and Barrick Minerals signed the Camflo Termination Agreement as of
August 3, 1993. The termination of the relevant agreements became effective on
August 12, 1993 upon acknowledgment of receipt by the Partnership of the
$425,000 payment by Barrick Minerals.
In connection with the termination of the Partnership, in February 1993 the
Managing General Partner made certain amendments to the Partnership Agreement
effective October 1, 1992 so that the allocations made in connection with the
Partnership's liquidation would be respected by the Internal Revenue Service,
pursuant to regulations adopted by it after the organization of the Partnership.
These amendments have the effect of causing any losses incurred in connection
with the operations of the Partnership after September 30, 1992, as well as all
losses resulting from the termination of the agreements with Barrick Minerals,
the dissolution of the Partnership and the distribution of its assets, to be
allocated solely to the limited partners. In addition, the amendments cause all
distributions after September 30, 1992 to be made exclusively to the limited
partners. The amendments result in the allocation of losses to limited partners
which may be utilized to offset certain taxable income. Investors should consult
their personal tax advisors.
C. Profit and Loss Allocations and Distributions
Historically, for financial and tax reporting purposes net profits or losses
as well as distributions of gold were allocated 92% to the limited partners and
8% to the General Partners. Effective October 1, 1992, the allocation and
distribution provisions of the Partnership Agreement were amended in certain
respects as described in Note B.
The capital accounts of the partners reflect their respective capital
contributions as adjusted to reflect each partner's share of net income, net
loss and distributions computed in accordance with the Partnership Agreement.
The Partnership Agreement contains an apparent inconsistency in the
provisions regarding the General Partners' obligation to restore the deficits in
their capital accounts. Under the provision determined by the General Partners
to best reflect the business intent of the Partnership Agreement, the General
Partners are required to and will pay $408,600 upon the liquidation of the
Partnership. Under another provision, the restoration obligation would be
significantly greater.
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D. Related Parties
PB Minerals and its affiliates perform services for the Partnership which
include but are not limited to: accounting and financial management, asset
management, investor communications, printing services and other administration.
Costs of approximately $43,000 for the three months ended March 31, 1995 were
included in the accruals for winding down and liquidating the Partnership.
At March 31, 1995, Barrick Management and Prudential Securities Incorporated,
an affiliate of PB Minerals, owned 52,049 and 31,419 depositary units,
respectively.
E. Commitments and Contingencies
On or about December 20, 1989 an action captioned Gopman v. Prudential-Bache
Securities Inc., Prudential-Bache Minerals and Gold Company of America (89 Civ.
2828) was filed in the United States District Court for the Southern District of
Florida. Plaintiff sought recovery pursuant to federal statutes, including
Section 17 of the Securities Act of 1933, Rule 10b-5 under the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt Organizations Act
(``RICO''), as well as various Florida statutes. On February 18, 1990 plaintiff
filed a first amended complaint, seeking, among other things, to convert the
case into a class action purportedly on behalf of all Florida persons and
entities who had purchased units of the Partnership in the initial offering in
November 1984 and their successors in interest. On July 27, 1990 the court
granted the motion to compel arbitration of the Gopman claims made by Prudential
Securities Incorporated (``PSI''), and directed that the court action proceed
against PB Minerals and the Partnership. The court certified the class of
Florida purchasers by order dated May 10, 1994.
By order dated August 3, 1994 the Judicial Panel on Multidistrict Litigation
(the ``Panel'') transferred the action to the United States District Court for
the Southern District of New York for coordinated and consolidated pretrial
proceedings with certain other actions, under the caption In re Prudential
Securities Incorporated Limited Partnerships Litigation (MDL Docket No. 1005).
On November 15, 1994, the court ordered that Prudential Securities Incorporated
be reinstated as a party defendant in the Gopman action.
On June 8, 1994 plaintiffs in other federal district court actions that had
been transferred by orders of the Panel dated April 14 and May 4, 1994 filed a
complaint that consolidated their previously filed complaints and named as
defendants, among others, Prudential Securities Incorporated, certain of its
present and former employees and the General Partners. The Partnership is not
named a defendant in the consolidated complaint, but the name of the Partnership
is listed as being among the limited partnerships at issue in the case. The
consolidated complaint alleges violations of RICO, fraud, negligent
misrepresentation, breach of fiduciary duties, breach of implied covenants and
violations of New Jersey statutes in connection with the marketing and sales of
limited partnership interests. Plaintiffs request relief in the nature of
rescission of the purchase of securities, and recovery of all consideration and
expenses in connection therewith, as well as compensation for lost use of money
invested, less cash distributions; compensatory damages; consequential damages;
treble damages for defendants' RICO violations (both federal and New Jersey);
general damages for all injuries resulting from negligence, fraud, breaches of
contract, and breaches of duty in an amount to be determined at trial;
disgorgement and restitution of all earnings, profits, benefits and compensation
received by defendants as a result of their unlawful acts; costs and
disbursements of the action; reasonable attorneys' fees; and such other and
further relief as the court deems just and proper.
On December 20, 1994, PSI and PB Minerals, along with various other
defendants, moved to dismiss the entire consolidated complaint. That motion is
pending. By order dated March 13, 1995 the transferee court dismissed the
Partnership as a defendant in the Gopman action without prejudice and without
notice to members of the Gopman class. The General Partners and PSI believe they
have meritorious defenses to the complaint and intend to vigorously defend
themselves in this action. Pursuant to the terms of the Partnership Agreement,
the General Partners may be entitled to indemnification for any loss suffered as
a result of the consolidated actions, including their attorneys' fees.
F. Subsequent Events
On April 26, 1995, all of the Partnership's gold on hand was distributed to
limited partners who were holders of record on April 1, 1995. The Partnership
has retained cash to satisfy its remaining liabilities. Any cash not needed will
be distributed to limited partners. The record date for investors who will be
entitled to receive liquidating distributions in subsequent calendar quarters
will be the first day of each such quarter.
5
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GOLD COMPANY OF AMERICA
(The Prudential-Bache/Barrick Gold Acquisition Partnership,
a California Limited Partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(in process of liquidation)
March 31, 1995
Liquidity and Capital Resources
In January 1993 the General Partners determined that it would be in the best
interests of all the partners to terminate the Camflo Gold Acquisition Agreement
(including the Camflo Security Agreements and all other security agreements
entered into in connection therewith), dissolve the Partnership and distribute
the Partnership's remaining assets to the limited partners. The Managing General
Partner, on behalf of the Partnership, and Barrick Minerals reached an agreement
(the ``Camflo Termination Agreement'') whereby the Partnership released Barrick
Minerals from its obligations under the Camflo Gold Acquisition Agreement, the
Camflo Security Agreements and all other security agreements entered into in
connection therewith in exchange for Barrick Minerals paying to the Partnership
$425,000, which represented an estimate of the gross salvage value of the
remaining assets of the Camflo Mine upon its closure and the residual gold
estimated to be recoverable from the mill, net of extraction costs, when
dismantled. PB Minerals and Barrick Minerals signed the Camflo Termination
Agreement as of August 3, 1993. The termination of the relevant agreements
became effective on August 12, 1993 upon acknowledgement of receipt by the
Partnership of the $425,000 payment by Barrick Minerals.
The Partnership Agreement contains an apparent inconsistency in the
provisions regarding the General Partners' obligation to restore the deficits in
their capital accounts. Under the provision determined by the General Partners
to best reflect the business intent of the Partnership Agreement, the General
Partners are required to and will pay $408,600 upon the liquidation of the
Partnership. Under another provision, the restoration obligation would be
significantly greater.
The Partnership had approximately 2,879 ounces of gold on hand valued at the
March 31, 1995 COMEX price of $392.20 per ounce. The decrease in the price of
gold since September 30, 1994 caused the liquidation value of the net assets of
the Partnership to decrease by approximately $5,800 from September 30, 1994. In
addition, estimated net liquidation costs to be incurred of approximately
$104,350 were accrued. Cash equivalents contributed interest of approximately
$5,600.
On April 26, 1995, all of the Partnership's gold on hand was distributed to
limited partners who were holders of record on April 1, 1995. The Partnership
has retained cash to satisfy its remaining liabilities. Any cash not needed will
be distributed to limited partners. The record date for investors who will be
entitled to receive liquidating distributions in subsequent calendar quarters
will be the first day of each such quarter.
Results of Operations
As a result of the Partnership's adopting liquidation accounting in
accordance with generally accepted accounting principles as of September 30,
1992 there are no results of operations to report.
Other
In connection with the anticipated termination of the Partnership, in
February 1993 the Managing General Partner made certain amendments to the
Partnership Agreement effective October 1, 1992 so that the allocations made in
connection with the Partnership's liquidation would be respected by the Internal
Revenue Service pursuant to regulations adopted by it after the organization of
the Partnership. These amendments have the effect of causing any losses incurred
in connection with the operations of the Partnership after September 30, 1992,
as well as all losses resulting from the termination of the agreements with
Barrick Minerals, the dissolution of the Partnership and the distribution of its
assets, to be allocated solely to the limited partners. In addition, the
amendments cause all distributions after September 30, 1992 to be made
exclusively to the limited partners. The amendments result in the allocation of
losses to limited partners which may be utilized by the limited partners to
offset certain taxable income. Investors should consult their personal tax
advisors.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings--This information is incorporated by reference to Note
E to the financial statements filed herewith in Item 1 of Part I of the
Registrant's Quarterly Report.
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--None
Item 6. (a) Exhibits
Description:
4.1 Depositary Agreement dated as of November 27, 1984 by and
between the Registrant, Prudential-Bache Investor Services
Corporation, Prudential-Bache Minerals Inc. and The Bank of New
York (filed as an exhibit to Registration Statement on Form 8-A
filed with the Commission of February 14, 1985 and incorporated
herein by reference)
4.2 The Registrant's Amended and Restated Partnership Agreement
dated as of November 21, 1984 (filed as an exhibit to
Registration Statement No. 2-92710 dated November 21, 1984
and incorporated herein by reference)
4.3 Amendment to Amended and Restated Partnership Agreement
dated as of February 12, 1993 (filed as an exhibit to
the Registrant's Form 10-Q for the quarter ended
December 31, 1992 and incorporated herein by reference)
4.4 Camflo Termination Agreement dated as of August 3,
1993 (filed as an exhibit to the Registrant's Form
10-Q for the quarter ended June 30, 1993 and
incorporated herein by reference)
(b) Reports on Form 8-K--None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GOLD COMPANY OF AMERICA
(The Prudential-Bache/Barrick Gold Acquisition Partnership,
A California Limited Partnership)
By: Prudential-Bache Minerals Inc.
A Delaware corporation, General Partner
By: /s/ Barbara J. Brooks Date: May 12, 1995
----------------------------------------
Barbara J. Brooks
Vice President-Finance, Chief Financial
Officer, and Treasurer
By: Barrick Management Corporation
A Delaware corporation, General Partner
By: /s/ Gregory C. Wilkins Date: May 12, 1995
----------------------------------------
Gregory C. Wilkins
Vice President, Chief Financial Officer,
Treasurer, Secretary and Director
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<TABLE> <S> <C>
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<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Gold Company of America
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000751260
<NAME> Gold Company of America
<MULTIPLIER> 1
<FISCAL-YEAR-END> Sep-30-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Mar-31-1995
<PERIOD-TYPE> 3-Mos
<CASH> 386,375
<SECURITIES> 0
<RECEIVABLES> 408,600
<ALLOWANCES> 0
<INVENTORY> 1,129,144
<CURRENT-ASSETS> 1,924,119
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,924,119
<CURRENT-LIABILITIES> 176,502
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,747,617
<TOTAL-LIABILITY-AND-EQUITY> 1,924,119
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
