SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-QSB
[X] Quarterly report under Section 13 or 15 (d) of the
Securities Exchange Act
of 1934
For the quarterly period ended March 31, 1996
OR
[ ] Transition report under section 13 or 15 (d) of the
Exchange Act
Commission File Number 0-14136
CASMYN CORP.
_________
(Exact name ofregistrant as specified in Charter)
___________________________Colorado_____________________________
(State or other jurisdiction of incorporation)
_________________________84-0987840_____________________________
(IRS Employer Identification No.)
1335 Greg Street, Unit #104
Sparks, Nevada 89431
______________________(702) 331-5524__ _________________________
(Address and Telephone Number of Principal Executive Offices)
Check whether the issuer (1) filed all reports required
to be filed by section 13 or 15 (d) of the Exchange Act
during the past 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 [X] No [ ].
As of May 13, 1996, 6,675,931 shares of the issuer's common
stock were outstanding.
This report contains 11 pages. There are no exhibits.
<PAGE>
CASMYN CORP.
FORM 10-QSB
INDEX
Page
PART I. Financial Information: No.
Condensed Consolidated Balance Sheet - March 31,1996 3
Condensed Consolidated Statements of Operations - Three
Months and Six Months ended March 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows - Six
Months ended March 31,1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis or Plan of Operation 8
PART II. Other Information:
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 11
<PAGE>
CASMYN CORP.
Condensed Consolidated Balance Sheet
March 31, 1996
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 12,027,949
Accounts receivable, net 337,311
Inventories 909,383
Prepaid expenses and other assets 95,925
Total Current Assets 13,370,568
Investment in Related Party 197,227
Equipment and Improvements, net 1,302,214
Mineral Properties 5,697,908
Other Assets 1,317,919
Total Assets $ 21,885,836
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and aacrued liabilities $ 1,833,402
Due To Related Parties, net 119,209
Convertible Debt 5,000,000
Stockholders' Equity:
Preferred stock, $.10 par value;
20,000,000 sharesauthorized;
2,707,000 shares issued and outstanding 270,700
Common stock, $.04 par value;
300,000,000 shares authorized;
6,675,931 shares issued and outstanding 267,037
Additional paid-in capital 20,958,450
Accumulated deficit ( 6,489,827)
Foreign currency translation adjustment ( 73,135)
Total Stockholders'Equity 14,933,225
Total Liabilities and
Stockholders' Equity $ 21,885,836
See accompanying notes to condensed, consolidated financial statements.
<PAGE>
CASMYN CORP.
Condensed Consolidated Statements of Operations
For the Three Months and Six Months Ended March 31, 1996 and
1995
(Unaudited)
For the Six Months For the Three Months
Ended March 31, Ended March 31,
1996 1995 1996 1995
_________________________________________________
Sales $ 659,657 $ 395,795 $ 418,878 $ 289,888
Cost of Goods Sold 433,419 446,820 161,239 366,407
Gross Profit 226,238 ( 51,025) 257,639 ( 76,519)
Costs and Expenses:
Selling, general and
administrative expense 2,772,610 1,442,130 1,314,018 654,817
Depreciation, depletion
and amortization 48,183 39,274 26,225 14,573
Mineral exploration
expense 319,783 291,867 113,291 106,521
Research and
development 165,860 305,708 63,462 101,441
Total 3,306,436 2,078,979 1,516,996 877,352
Loss From Operations (3,080,198) (2,130,004) (1,259,357) ( 953,871)
Other Income:
Minority interest in net
loss of consolidated
subsidiary 498,663 1,751,200 - 875,600
Interest and other income 251,511 111,159 96,016 62,422
Interest expense ( 92,020) ( 23,376) ( 42,006) ( 12,438)
Total 658,154 1,838,983 54,010 925,584
Loss from Continuing
Operations (2,422,044) ( 291,021)(1,205,347) ( 28,287)
Gain from Discontinued
Operations - 32,429 - 109,783
Net Income (Loss) $(2,422,044) $( 258,592)$(1,205,347) $ 81,496
Income (Loss) Per
Common Share:
Loss from Continuing
Operations $ (.28) $ (.04) $ (.14) $ -
Income from
Discontinued Operations - .01 - .01
Income (Loss) $ (.28) $ (.03) $ (.14) $ .01
Weighted Average
Common Shares Outstanding 8,619,666 7,490,236 8,634,861 7,534,073
See accompanying notes to condensed, consolidated financial statements.
<PAGE>
CASMYN CORP.
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended March 31, 1996 and 1995
(Unaudited)
1996 1995
Cash flows from operating activities $(3,423,237) $(1,187,797)
Cash flows from investing activities (5,563,118) ( 259,268)
Cash flows from financing activities 16,075,359 2,177,889
Net increase (decrease) in cash 7,089,004 ( 730,824)
Cash and cash equivalents,
beginning of period 4,938,945 820,852
Cash and cash equivalents,
end of period $ 12,027,949 $ 90,028
Disclosure of Accounting Policy:
For purposes of cash flows, the Company considers all short-
term investments with an original maturity of three months
or less to be cash equivalents.
See accompanying notes to condensed, consolidated financial statements.
<PAGE>
CASMYN CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
are unaudited; however, in the opinion of management, such
statements include all adjustments (which are of a normal,
recurring nature) necessary for a fair statement of the
results for the interim periods. The financial statements
included herein have been prepared by Casmyn Corp. (the
"Company") pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes that the disclosures included herein are adequate
to make the information not misleading.
The organization and business of the Company, accounting
policies followed by the Company and other information are
contained in the notes to the Company's consolidated
financial statements filed as part of the Company's
September 30, 1995 Form 10-KSB. The Form 10-KSB should be
read in conjunction with this quarterly report.
2. INVESTMENT IN RELATED PARTY
At March 31, 1996, the Company holds 425,750 shares of
common stock of Auromar Development Corporation ("Auromar"),
a related party. The Company has announced an agreement in
principle to merge with Auromar.
3. RELATED PARTY TRANSACTIONS
The Company conducts business with various companies that
are related through the existence of certain common
officers, directors and significant stockholders. These
related parties include: Diamond Fontein International
Limited; Auromar Development Corp.; Dahya Holdings, Inc.;
and Casmyn Research and Engineering, Ltd.. As a result of
these related party transactions, cash advances from and to
the Company and other transactions, the Company had a net
amount due to related parties at March 31, 1996 of $119,209.
This amount is non-interest bearing and contains no formal
repayment terms.
4. PROPOSED AUROMAR MERGER
On March 29, 1995, the Company announced that it had reached
an agreement in principle to effect a merger with Auromar
Development Corp. Under the terms of the agreement, as
amended October 11, 1995, shareholders of Auromar would
receive one (1) share of Casmyn Corp. common stock for two
and six tenths (2.6) shares of Auromar common stock. The
merger has been approved by the shareholders of Auromar
Development Corp. The agreement is subject to a Plan of
Arrangement by the British Columbia (Canada) Supreme Court.
<PAGE>
5. ZIMBABWE ACQUISITIONS
Effective February 1, 1996, in accordance with the terms and
conditions of a formal Purchase Agreement concluded in
September 1995, the Company completed the acquisition of
100% of the shares of a group of five (5) private mining
companies controlled by the Muir Family in Zimbabwe through
E.W.B. Properties (Private) Limited ("EWB"). The total
consideration for this acquisition was $4,071,415 million
plus applicable taxes which are currently estimated at
approximately $900,000. The acquisition includes several
producing gold mining properties covering approximately
1,200 hectares (approximately 2,965 acres) in the Bubi
Greenstone Gold Belt of Zimbabwe. These properties include
infrastructure, mining and milling equipment.
In a separate transaction, also effective February 1, 1996,
the Company completed the acquisition of a 100% interest in
the Dawn Mine property from Olympus Gold Mines Ltd. in
Zimbabwe for approximately $455,000. The Dawn Mine is
adjacent to the mines acquired in the EWB transaction.
The acquisitions were accounted for using the purchase
method. The purchase price has been allocated to mineral
properties. Proforma information has net been presented
because the required information is not yet available.
6. PREFERRED STOCK
On October 3, 1995, the Company converted 2,707,000 of its
common shares held directly or beneficially by the Company's
President, Chief Executive Officer and Chairman of the
Board, into 2,707,000 Series A preferred shares. Each
Series A preferred share is convertible, at the holder's
option, into one share of the Company's common stock and is
entitled to receive dividends equal to that of common
shares, without preference. Preferred shares are entitled
to vote with common shares with the further provision that
each preferred share will be entitled to the equivalent of
five (5) common share votes.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
RESULTS OF OPERATIONS
Six Months Ended March 31, 1996 Compared to the Six Months
Ended March 31, 1995
Revenues for the six months ended March 31, 1996, were
$659,657 compared to $395,795 for the six months ended March
31, 1995. The $263,862 increase was due to an increase of
$158,484 in sales of water purification systems and $105,378
from the sale of gold produced in Zimbabwe. Overall gross
profit for the six months ended March 31, 1996 was 34%
compared to a loss for the six months ended March 31, 1995.
Gross profit on water purification equipment sales was 26%
for the six month period ended March 31, 1996 compared to a
loss in the same period ended March 31, 1995 due to lower
freight charges and lower component costs. Gross profit on
gold sales was 77% for the six months ended March 31, 1996,
there were no gold sales in the six month period ended March
31, 1995.
Costs and expenses were $3,306,436 for the six months ended
March 31, 1996, compared to $2,078,979 for the six months
ended March 31, 1995, an increase of $1,227,457.
Compensation and benefits increased $445,867 for the six
month period ended March 31, 1996 compared to the six month
period ended March 31, 1995 due primarily to the Company
recording $243,040 in compensation expense related to the
granting of 246,000 non-qualified stock options and
increased staff levels in the six month period ended March
31, 1996 compared to the period ended March 31, 1995.
Expenses related to professional services, primarily legal,
audit and marketing increased by $393,961 in the six month
period ended March 31, 1996 compared to the six month period
ended March 31, 1995. Travel related expenses increased
$145,673 in the six month period ended March 31, 1996
compared to the six month period ended March 31, 1995 due to
increased trips to Africa, India and Vietnam related to the
Company's operations in those countries. Mineral
exploration expense and depreciation increased a total of
$26,825 in the six month period ended March 31, 1996
compared to the six months ended March 31, 1995. These
increases were offset by a decrease in research and
development related expenses of $139,848. General and
administrative costs increased $354,979 for the six months
ended March 31, 1996 compared to 1995 due primarily to
higher costs in related to business activities in Vietnam,
and increased costs related to the U.S. rollout of water
purification products. Minority interest in the net loss of
VETI decreased by $1,252,537 for the six months ended March
31, 1996 due to a limitation on the amount of loss which
could be absorbed by the minority shareholders.
Other income was $159,491 for the six month period ended
March 31, 1996, compared to $87,783 for the six months ended
March 31, 1995, an increase of $71,708. This increase was
due primarily to interest income earned on short term
investments made by the Company offset by interest expense.
The Company anticipates that expenditures related to
upgrading the newly acquired mining properties in Zimbabwe
will exceed revenues derived from the sale of gold from the
mines. The Company is in the process of preparing a capital
improvement budget for the Zimbabwe properties.
Additionally, the Company anticipates that expense levels
experienced in the six months ended March 31, 1996 relating
to active exploration programs in South Africa will continue
for the foreseeable future. The Company charges to expense
all mineral resource exploration and development costs until
the mineral property to which they relate is determined to
<PAGE>
have proven reserves for which recovery is economically
feasible. Costs are then capitalized until the mineral
property to which they relate is placed into production,
sold, abandoned or written down where there is an impairment
in value. Capitalized costs are to be charged to future
operations on a unit-of-production basis. The Zimbabwe
properties contain an estimated 5,000,000 ounces of gold in
a combination of proven, probable and possible reserves.
The gold occurs in sulfides, oxides and old mill tailings.
Three Months Ended March 31, 1996 Compared to the Three
Months Ended March 31, 1995
Revenues for the three months ended March 31, 1996 were
$418,878 compared to $289,888 for the three months ended
March 31, 1995. The $128,990 increase is due primarily to
the sale of gold produced at the Zimbabwe mine of $105,378
and an increase in sales of water purification equipment
Costs and expenses were $1,516,996 for the three months
ended March 31, 1996 compared to $877,352 for the three
months ended March 31, 1995, an increase of $639,644.
Compensation and benefits increased $287,141 for the three
month period ended March 31, 1996 compared to the three
month period ended March 31, 1995 due to $44,190 in
compensation expense related to certain non-qualified stock
options and increased staff levels in the three month period
ended March 31, 1996 compared to the three month period
ended March 31, 1995. Expenses related to professional
services, primarily legal, audit and marketing increased by
$349,648 in the three month period ended March 31, 1996
compared to the three month period ended March 31, 1995.
Depreciation and mineral exploration expense increased
marginally in the three months ended March 31, 1996 compared
to the prior year three month period. These increases were
partially offset by a decrease in research and development
related expenses of $37,979.
Minority interest in the net loss of VETI decreased by
$875,600 for the three months ended March 31, 1996 due to a
limitation on the amount of losses that could be absorbed by
the minority shareholders. Other income was $54,010 for the
three month period ended March 31, 1996, compared to $49,984
for the three months ended March 31, 1995, an increase of
$4,026. This increase is comprised of an increase in
interest income of $46,032 offset by interest expense of
$42,006.
CAPITAL RESOURCES AND LIQUIDITY
At March 31, 1996, the Company's working capital was
$11,537,166, including $12,027,949 in cash and cash
equivalents. The Company's mineral resource development
business segment has acquired certain mineral properties in
South Africa and on February 1, 1996 concluded the
acquisition of certain mining properties and assets in
Zimbabwe for $4,526,415. In addition, the water
purification business segment has begun sales and marketing
programs in North America and in various third world
countries.
Management anticipates that the net use of cash by
operations will increase during the foreseeable future due
to expenditures on mineral resource development projects in
South Africa, mineral exploration and facility upgrades in
the newly acquired Zimbabwe properties and development of
various markets for VETI's water purification technologies.
The Company will use current cash and cash equivalents to
fund the on-going projects in the short term and anticipates
that it will be able to secure additional debt and/or equity
financing, to fund longer term projects. As evidence of the
Company's ability to secure debt and/or equity financing in
<PAGE>
the six month period ended March 31, 1996 the Company has
received $8,872,500, net of commissions and other expenses
related to the transaction, through issuance of 750,000
shares of restricted common stock in an exempt private
transaction.
Net Cash Used in Operating Activities. Net cash used in
operating activities was $3,423,237 for the six months ended
March 31, 1996 compared to $1,187,797 for the six months
ended March 31, 1995. The increase in the net cash used in
operations in fiscal 1996 was due principally to the
increase in the net loss because of active exploration
programs conducted on mineral properties in fiscal 1996 and
expenses related to sales of water purification systems.
Net Cash Used in Investing Activities. Net cash used in
investing activities was $5,563,118 for the six months ended
March 31, 1996 compared to $259,268 for the six months ended
March 31, 1995. The increase in net cash used in investing
activities was due to the purchase of certain mineral
properties and assets in Zimbabwe, and purchases of
equipment and improvements, primarily related to a water
bottling plant under construction in Vietnam.
Net Cash Provided by Financing Activities. Net cash
provided by financing activities was $16,075,359 for the six
months ended March 31, 1996 compared to $2,177,889 for the
six months ended March 31, 1995. The increase is due to the
Company receiving $16,174,119 from the collection of funds
from private placements of common stock of the Company and
VETI, offset by the repayment of long-term debt of $98,760.
The Company is organized with a relatively small, highly
trained staff and anticipates that the overall staff level
will remain low in the foreseeable future because the
majority of mineral resource development activities are
performed by independent contractors on a project by project
basis. The Company believes that these arrangements will
not require a significant investment by the Company in
either personnel or facilities.
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
None
B. Forms 8-K
1. The Company filed an 8-K on February 15, 1996,
reporting that it completed its acquisition of 100% of the
shares of a group of five (5) private mining companies
located in Zimbabwe. The total consideration for this
acquisition was approximately $4,017,415 cash plus
applicable taxes of approximately $1,017,854 to be paid upon
assessment of said taxes as defined in the terms of the
acquisition agreement.
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 by the undersigned hereunto duly
authorized.
Casmyn Corp.
/s/ Dennis E. Welling
May 14, 1996 By
_____________________________
Dennis E. Welling, Controller
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