FORM 10-Q
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 quarterly period ended March 31, 1997
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: 0-23022
HANOVER GOLD COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2740461
(State or other jurisdiction (IRS Employer or
incorporation) Identification No.)
1000 Northwest Boulevard, Suite 100
Coeur d'Alene, Idaho 83814
(Address of principal executive offices)
Registrant's telephone number, including area code: (208) 664-4653
Securities registered pursuant to Section 12(g) of the Act: None
Securities registered pursuant to Section 12(b) of the Act:
Common Stock The Nasdaq SmallCap Market
Title of each class Name of each exchange on which registered
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 preceding 12 months
(or for such shorter period as 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 [ ]
The number of outstanding shares of the registrant's common stock
at May 6, 1997 was 23,204,411 shares, which amount includes
3,317,968 shares deemed outstanding pursuant to presently
exercisable options.
<PAGE>
HANOVER GOLD COMPANY, INC. QUARTERLY REPORT
ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1997
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements 1
Item 2: Management's Discussion and Analysis
of Financial Condition and Results of
Operation 1
PART II - OTHER INFORMATION
Item 1: Legal Proceedings 3
Item 2: Changes in Securities 3
Item 3: Defaults upon Senior Securities 3
Item 4: Submission of Matters to a Vote of
Security Holders 3
Item 5: Other Information 3
Item 6: Exhibits and Reports on Form 8-K 3
SIGNATURES
[The balance of this page has been intentionally left blank.]
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements of the Company for the periods
covered by this report are included elsewhere in this report,
beginning at page F/S-1.
The unaudited condensed financial statements have been prepared
by the Company in accordance with generally accepted accounting
principles for interim financial information with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the
Company's management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three-month period
ended March 31, 1997 are not necessarily indicative of the
results that may be expected for the full year ending
December 31, 1997.
For further information refer to the financial statements and
footnotes thereto in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 incorporated by reference
herein.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 Compared to Three Months Ended
March 31, 1996.
During the three months ended March 31, 1997, the Company
generated no revenue. Approximately $3,500 in revenues was
realized during the three-month period ended March 31, 1996
resulting from the sale of carbon product stockpiled at the
Company's inactive mine. General and administrative expenses
decreased to $185,000 for the three-month period ended March 31,
1997 as compared to $320,000 for the three-month period ended
March 31, 1996. The decrease is principally attributed to
expenses incurred in 1996 related to the Company relocating its
headquarters from New York to Idaho. For the quarter ended March
31, 1997, the Company experienced a loss of $192,000 or $0.01 per
share, compared to a loss of $285,000, or $0.02 per share, during
the comparable period in the previous year.
[The balance of this page has been intentionally left blank.]
1
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES.
The Company is responsible for certain landowner rental and
royalty obligations on its Alder Gulch mining claims. At
December 31, 1996 the rental and royalty obligations payable in
1997 totaled $1,358,000. Management believes the Company will
meet its 1997 obligations, with existing funds and funds to be
derived from the anticipated sale of additional shares of its
common stock. In an effort to raise the needed funds, the Company
anticipates filing a registration statement under the Securities
Act of 1933, as amended, relating to, among other things, shares
of common stock to be offered and sold by the Company, at
prevailing market prices, during the twelve month period the
registration statement is declared effective by the SEC. The
Company has received a $1,298,750 advance against some of the
shares that will be included for registration in the Company's
registration statement. If the SEC fails to declare the
registration statement effective, for whatever reason, the
advance will be returned with interest. Funds derived from the
offering will be used by the Company for working capital. If the
Company is unable to sell shares to raise funds sufficient to
meet its rental and royalty obligations for 1997, the payments
will be made by an affiliate pursuant to a guaranty to pay the
Company's rental and royalty obligations through August 7, 1998.
Two-thirds of the guaranty has been assigned by the affiliate to
several non affiliates who are secondarily liable for the
obligations. Irrespective of the Company's ability to sell shares
in order to fund its obligations or of the guaranty, unless the
Company is able to negotiate a joint venture or other agreement
with a major mining company for the continued exploration and
development of the Alder Gulch claims, it may continue to
experience a shortage of working capital.
The Company has incurred aggregate losses of $6,100,000 from
inception through March 31, 1997 primarily because it has not yet
been able to place the Alder Gulch properties into large-scale
production. The Company's inability to achieve this objective is
attributable to a number of factors, including Kennecott's
unexpected withdrawal from the mining venture and the Company's
lack of success, judged at least historically, in consolidating
the various claims and interests in the area. Although the
Company was able to conduct fairly extensive exploration and
limited development of the properties, largely as the result of
its former arrangement with Kennecott, significant additional
work must be performed to support further development efforts.
The Company has received expressions of interest from a number of
North American mining companies regarding a joint venture or
other economic arrangement to explore and develop the properties,
but has not yet concluded such an arrangement. Although,
management initially believed it would acquire a joint venture
partner during 1996, the uncertainty within the mining industry,
caused by the Montana Clean Water Citizens Initiative prevented
this from happening. With the defeat of the Initiative and the
culmination of the consolidation of the Alder Gulch area through
the potential acquisition of Easton-Pacific and Riverside Mining,
as previously reported, management now believes such an
arrangement can be concluded in 1997.
As previously reported, the Company restructured its management
in 1995 and early 1996 and took a number of significant steps to
consolidate the Alder Gulch mining properties. In addition, the
Company has completed a compilation of geologic and other
technical data generated from its and Kennecott's prior
exploration activities. Management believes these activities
will have a positive effect on the Company's performance during
1997, and that they will enhance the Company's ability to
successfully negotiate a joint venture or other arrangement with
a major mining company to explore and, if warranted, develop its
properties.
Although the Company's operations are subject to general
inflationary pressures, these pressures have not had a
significant effect on operations, particularly since early 1995
when mining and processing operations were suspended for lack of
funds.
2
<PAGE>
If the Company resumes exploration and development activities,
which can be expected during 1997 if it is successful in
negotiating a joint venture or other economic arrangement with
another mining company, inflation will result in an increase in
the cost of goods and services necessary to its mining
operations.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As previously reported on October 4, 1996, the Company initiated an action
against Tabor Resources Corporation and Washington Trust Bank, in its capacity
as escrow agent, in United States District Court for the Eastern District of
Washington (Case No. CS-96-663 FVS) for breach of contract and injunctive
relief. There were no material developments in this litigation during the
period covered by this report.
ITEM 2. CHANGES IN SECURITIES.
Neither the constituent instruments defining the rights of the
registrant's securities holders nor the rights evidenced by the
registrant's outstanding common stock have been modified, limited
or qualified.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The registrant has no outstanding senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the registrant's security
holders during the period covered by this report.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits. The following exhibit is filed as part of this report:
Exhibit 27.0 Financial Data Schedule
Reports on Form 8-K.
A report on Form 8-K disclosing a change of auditors was
filed by the registrant on January 16, 1997.
A report on Form 8-K disclosing a letter agreement between the registrant
and Easton-Pacific and Riverside Mining Company was filed by the
registrant on March 10, 1997.
3
<PAGE>
HANOVER GOLD COMPANY, INC.
TABLE OF CONTENTS
Page
----
Condensed Balance Sheets as of March 31, 1997
and December 31, 1996 F/S-2
Condensed Statements of Operations for the Three Months Ended
March 31, 1997 and 1996, and for the period from inception
(May 2, 1990) to March 31, 1997 F/S-3
Condensed Statements of Changes in Stockholders' Equity for the
period from inception (May 2, 1990) to March 31, 1997 F/S-4
Condensed Statements of Cash Flow for the Three Months Ended
March 31, 1997 and for the period from inception (May 2,1990)
to March 31, 1997 F/S-6
Notes to Condensed Interim Financial Statements F/S-8
[The balance of this page has been intentionally left blank.]
F/S-1
<PAGE>
HANOVER GOLD COMPANY, INC.
CONDENSED BALANCE SHEET
ASSETS
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED) (AUDITED)
----------- -----------
Current assets:
Cash $ 935,560 $ 96,353
Supplies Inventory 10,000 10,000
Prepaid expenses and other
current assets 72,532 97,369
--------- --------
Total current assets 1,018,092 203,722
Resource properties and claims:
Exploration, engineering and site
development 2,288,508 2,288,508
Mining properties 8,437,842 8,202,314
--------- ---------
Total resource properties
and claims 10,726,350 10,490,822
Property and equipment, at cost 187,954 151,258
Less accumulated depreciation 90,889 63,076
--------- ----------
Net property and plant and equipment 97,065 88,182
Other assets 23,424 23,424
------------ -----------
Total assets $11,864,931 $10,806,150
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,316 $ 70,136
Notes payable-shareholder 73,405 73,405
Accrued expenses 34,920 85,859
Current Portion of long-term debt 29,929 23,653
------- -------
Total current liabilities 158,570 253,053
Long-term debt, less current portion 199,295 194,065
---------- ----------
Total liabilities $ 357,864 $ 447,118
========= ==========
Stockholders' equity:
Preferred stock, $0.001 par value;
shares authorized 2,000,000, no
shares outstanding $ - $ -
Common Stock, $.0001 par value,
authorized 48,000,000 shares;
issued and outstanding 19,886,443
and 19,843,022 shares respectively 1,989 1,984
Additional paid-in capital 16,311,391 16,270,146
Deposits on Common Stock 1,298,750 -
Deficit accumulated during the
development stage (6,105,063) (5,913,098)
Total stockholders' equity 11,507,067 10,359,032
Total liabilities and ---------- ----------
stockholders' equity $11,864,931 $ 10,806,150
=========== ===========
F/S-2
<PAGE>
HANOVER GOLD COMPANY, INC.
CONDENSED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
<TABLE>
<CAPTION>
Date of Inception Three Months
(May 2, 1990) Ended Three Months
through March 31,'97 Ended
March 31, 1997 (Restated) March 31,'96
----------------- ------------ -------------
<S> <C> <C> <C>
Revenue $1,151,958 $ - $ 3,511
Cost of goods mined 1,987,483 - -
--------- -------- --------
Gross profit (loss) (835,525) - 3,511
Depreciation and amortization 103,050 4,769 8,152
Provision for bad debt 779,921 - -
General and administrative
expenses 4,407,477 180,683 312,072
--------- ------- -------
Loss from operations (6,125,973) (185,452) (316,713)
Interest and other income 60,452 1,741 32,239
Loss on disposition of assets (39,543) (8,255) -
---------- --------- --------
Net loss ($6,105,064) ($191,966) ($284,474)
Net loss per share ($0.01) ($0.02)
Weighted average common
shares outstanding (1) 19,861,838 15,970,933
</TABLE>
(1) As of March 31, 1997, 19,886,443 shares of common stock were outstanding
and an additional 3,317,968 shares were deemed outstanding pursuant to
presently outstanding options.
[The balance of this page has been intentionally left blank.]
F/S-3
<PAGE>
HANOVER GOLD COMPANY, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION (MAY 2, 1990) THROUGH MARCH 31, 1997
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
---------------- Paid in Subscription Development
Shares Amount Capital Receivable Stage Total
------ ------ ---------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common
stock for cash
($0.53 per share) 752,562 $ 75 $ 402,425 $ - $ - $402,500
Issuance of common
stock for cash
($0.07 per share) 86,250 9 6,009 - - 6,018
Cash contributed to
capital - - 5,000 - - 5,000
Net loss - - - - (141,114) (141,114)
- --------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1990 838,812 84 413,434 - (141,114) 272,404
Issuance of common stock
to directors
($0.0001 /share) 200,000 20 - - - 20
Issuance of common
stock for claims
and engineering costs
($2.50 per share) 229,007 23 572,496 - - 572,519
Issuance of common
stock for cash
($0.06 per share) 2,957,506 296 166,374 - - 166,670
Issuance of common
stock for cash
($0.42 per share) 268,586 27 113,723 - - 113,750
Exercise of stock
purchase warrants
($0.60 per share) 74,400 7 44,633 - - 44,640
Exercise of stock
purchase warrants
($1.25 per share) 111,500 11 139,363 - - 139,374
Cash contributed
to capital - - 73,850 - - 73,850
Net loss - - - - (179,866) (179,866)
- --------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1991 4,679,811 468 1,523,873 - (320,980) 1,203,361
Issuance of common
stock for cash
($2.00 per share) 712,500 71 1,424,929 - - 1,425,000
Issuance of common
stock for cash
($0.18 per share) 218,537 22 39,978 - - 40,000
Exercise of stock
purchase warrants
($1.25 per share) 41,600 4 51,996 - - 52,000
Net loss - - - - (314,878) (314,878)
- --------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1992 5,652,448 565 3,040,776 - (635,858) 2,405,483
Issuance of common
stock for interest
in mineral property
($1.50 per share) 150,000 15 224,985 - - 225,000
Issuance of common
stock to officer
($0.01 / share) 127,165 13 737 - - 750
Exercise of stock
purchase warrants
($1.60 per share) 3,061,703 306 4,749,912 (649,360) - 4,100,858
Net loss - - - - (256,769) (256,769)
- --------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1993 8,991,316 899 8,016,410 (649,360) (892,627) 6,475,322
Exercise of stock
purchase warrants
($1.60 per share) 1,328,897 133 2,126,102 - - 2,126,235
Cancellation of
subscribed shares
($1.60 per share) (250,000) (25) (399,975) 400,000 - -
Cash contributed
to capital - - 98,393 - - 98,393
Net loss - - - (1,362,954) (1,362,954)
- --------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1994 10,070,213 $1,007 $9,840,930 $(249,360) $(2,255,581) $7,336,996
F/S-4
<PAGE>
HANOVER GOLD COMPANY, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION (MAY 2, 1990) THROUGH MARCH 31, 1997
(continued)
Common Stock Additional During the
---------------- Paid in Subscription Development
Shares Amount Capital Receivable Stage Total
------ ------ ---------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December
31, 1994 10,070,213 $1,007 $9,840,930 $(249,360) $(2,255,581) $7,336,996
Issuance of common
stock for cash
($0.35 per share) 2,142,856 214 749,786 - - 750,000
Issuance of common
stock for cash
($0.35 per share) 714,286 71 249,929 - - 250,000
Issuance of common
stock for cash
($1.00 per share) 200,000 20 199,980 - - 200,000
Issuance of common
stock in satisfaction
of vendor obligations
($1.06 per share) 69,679 7 74,089 - - 74,096
Issuance of common
stock in satisfaction
of vendor obligations
($1.00 per share) 200,000 20 199,980 - - 200,000
Issuance of common
stock for cash
($1.00 per share) 1,000,000 100 999,900 - - 1,000,000
Issuance of common
stock to officer 197,835 20 - - - 20
Issuance of common
stock pursuant to
Convertible debt 1,348,295 135 281,313 - - 281,448
Cash received for
subscribed shares - - - 249,360 - 249,360
Repurchase of previously
issued shares
($1.60 per share) (23,000) (2) (36,798)
Net loss - - - - (2,329,190) (2,329,190)
- -------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1995 15,920,164 1,592 12,559,109 - (4,325,299) 7,975,930
Issuance of common
stock for mineral
property rights
($4.00 per share) 5,000 1 19,999 - - 20,000
Issuance of common
stock for mineral
property rights
($2.00 per share) 525,000 52 1,049,948 - - 1,050,000
Issuance of common
stock for mineral
property rights
($1.56 per share) 250,000 25 389,975 - - 390,000
Issuance of common
stock for cash
($0.50 per share) 2,142,858 214 1,071,215 - - 1,071,429
Issuance of common
stock for cash net
of issuance costs
of $70,000
($1.25 per share) 1,000,000 100 1,179,900 - - 1,180,000
Net loss - - - - (1,328,327) (1,328,327)
- --------------------------------------------------------------------------------------------------------
BALANCE, December
31, 1996 19,843,022 1,984 16,270,164 - (5,913,098) 10,359,032
Issuance of common
stock for
services rendered
($0.95 per share) 43,421 5 41,245 - - 41,250
Grant of option to
director as
compensation for
loan guaranty
(Note 7) 1,457,170 - - -
Deferred guaranty fee,
subject to grant
exercise
(Note 7) - - (1,457,170) - - -
Net loss - - - - (191,966) (191,966)
- -------------------------------------------------------------------------------------------------------
BALANCE,
March 31, 1997 19,886,443 $1,989 $16,311,391 - $(6,105,064) $10,208,316
</TABLE>
F/S-5
<PAGE>
HANOVER GOLD COMPANY, INC.
CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Date of Inception Three Months Three Months
(May 2, 1990) Ended Ended
through March 31,'97 March 31,'96
March 31,'97 (Restated)
----------------- ------------- -------------
<S> <C> <C> <C>
Operating activities:
Net loss ($6,105,064) ($191,966) ($284,475)
Adjustments to reconcile net loss
to cash used in operating
activities:
Depreciation and depletion 103,000 4,769 8,152
Issuance of common stock for services 41,250 41,250 -
Loss on disposition of assets 40,764 8,255 -
Common stock issued for public
relations fees 200,000 - -
Common stock issued to officers and
directors 40 - -
Write-off note receivable 779,921 - -
Changes in operating assets and liabilities:
(Increase) decrease in supplies inventory (10,000) - -
(Increase) decrease in prepaid expenses (72,532) 24,837 76,796
Increase (decrease) in accounts payable 94,412 (49,820) (86,032)
Increase (decrease) in accrued expenses 101,198 (50,939) 266,066
(Increase) decrease in accounts receivable 6,000 - -
(Increase) decrease in other assets (23,424) - -
-------- --------- --------
Net cash used in operating activities (4,850,435) (213,614) (19,493)
========= ========= =========
Investing activities:
Proceeds from sale of equipment 15,326 - -
Repayment (advances) under
notes receivable (1,089,219) - -
Purchase of furniture and equipment (296,596) (10,401) (30,891)
Additions to mining properties (7,843,641) (235,528) (1,437,748)
--------- --------- ---------
Net cash used in investing activities (9,214,130) (245,929) (1,468,639)
========= ======== =========
Financing activities:
Repurchase and retirement of common stock (36,800) - -
Proceeds from issuance of convertible debt 215,170 - -
Capital contributions 177,243 - -
Deposits on common stock 1,298,750 1,298,750 -
Borrowings under note payable
to shareholder 73,405 - -
Collection of subscription receivable 249,360 - -
Proceeds from sale of common stock 13,069,225 - 1,043,000
Repayment of long-term debt (46,228) - -
---------- --------- ---------
Net cash provided by financing activities 15,000,125 1,298,750 1,043,000
========== ========= =========
Net increase (decrease) in cash 935,560 839,207 (445,132)
Cash, beginning of period - 96,353 734,983
--------- --------- ---------
Cash, end of period 935,560 935,560 289,851
========= ========= =========
</TABLE>
F/S-6
<PAGE>
HANOVER GOLD COMPANY, INC.
CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Date of Inception Three Months Three Months
(May 2, 1990) Ended Ended
through March 31,'97 March 31,'96
March 31,'97 (Restated)
----------------- ------------- -------------
<S> <C> <C> <C>
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest $ 27,668 $ 3,623 -
Income taxes - - -
Supplemental schedule of non-cash
investing and financing activities
Mineral property rights acquired
in exchange for:
Issuance of common stock 1,460,000 - 1,043,000
Issuance of long-term debt 263,946 - -
Notes receivables 309,298 - 309,298
Fixed assets 66,177 - 35,453
Issuance of shares of common stock
in satisfaction of vendor
obligations 74,096 - -
Conversion of notes payable and
accrued interest to common stock 281,448 - -
</TABLE>
[The balance of this page has been intentionally left blank.]
F/S-7
<PAGE>
HANOVER GOLD COMPANY, INC.
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
Financing information presented in the Company's quarterly
reports follow the policies set forth in its Annual Report to
Stockholders and its Annual Report on Form 10-K filed with the
Securities and Exchange Commission. In accordance with generally
accepted accounting principles for interim financial information,
the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X,
these quarterly reports do not include all of the information and
footnotes.
In the opinion of the Company's management, all adjustments
(consisting of only normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 1996 are not
necessarily indicative of the results that may be expected for
the full year ending December 31, 1997.
1. Nature of business:
The objectives of the Company are to invest in precious metal
claims, namely gold and silver deposits having economic potential
for development and mining and related activities in the precious
metals and mining industries. The Company has been in the development stage
since its inception. The Company has no recurring source of revenue and has
incurred operating losses since inception. These conditions raise
substantial doubt as to the Company's ability to continue as a
going concern. Management of the Company has undertaken certain
actions to address these conditions. These actions include
proposed public and private offerings of the Company's common
stock, negotiating amendments to obligations on the Company's
mineral properties, and an active search for a joint venture
partner to provide the funding necessary to bring the mineral
properties into production. The financial statements do not
contain any adjustments which might be necessary if the Company
is unable to continue as a going concern.
2. Common Stock:
In March 1997, the Company issued a four year option to purchase
2,312,968 shares of the Company's common stock at $1.25 per share
to a shareholder in exchange for the shareholder's guaranty of
the Company's obligations for an eighteen month period ending in
September 1998. The fair value of these options, as determined
using the Black-Scholes option pricing model, is $1,450,000 and
will be amortized to expense over the guaranty period.
[The balance of this page has been intentionally left blank.]
F/S-8
<PAGE>
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 thereunto duly authorized.
HANOVER GOLD COMPANY, INC.
By: /s/ James A. Fish
------------------------------
its President
Date: May 9, 1997
By: /s/ Wayne Schoonmaker
------------------------------
its Principal Accounting
Officer
Date: May 9, 1997
F/S-9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM the
Company's unaudited condensed financial statements for the three-month period
ended March 31, 1997, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 935,560
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 10,000
<CURRENT-ASSETS> 1,018,092
<PP&E> 10,914,304<F1>
<DEPRECIATION> 90,889
<TOTAL-ASSETS> 11,864,931
<CURRENT-LIABILITIES> 158,570
<BONDS> 0
0
0
<COMMON> 1,989
<OTHER-SE> 11,505,078<F2>
<TOTAL-LIABILITY-AND-EQUITY> 11,864,931
<SALES> 0
<TOTAL-REVENUES> 1,741<F3>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 193,707
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (191,966)
<INCOME-TAX> 0
<INCOME-CONTINUING> (191,966)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (191,966)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
<FN>
<F1>Consists of $10,726,350 in resource properties and claims, and $187,954 in
property and equipment, at cost.
<F2>Consists of $16,311,391 in additional paid-in capital and $1,298,750 in
deposits on common stock, less a deficit of $6,105,063 accumulated during the
development stage.
<F3>Consists of $1,741 in interest income.
</FN>
</TABLE>
