(NOTIFY) 72731,347
(CONTACT-NAME) David A. Kain
(CONTACT-PHONE) (312) 861-6050
PAGE 0
DOCUMENT HEADER
DOCUMENT TYPE 1
COUNT 13
SECTIONS
Financial Statements 2
Notes To Financial Statements 6
Management's Discussion 7
Accountants' Reports 10
Other Information 12
Signatures 13
PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(x) Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1994
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 1-9569
FMC Gold Company
(Exact name of registrant as specified in its charter)
Delaware 88-0226676
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5011 Meadowood Way, Reno, Nevada 89502
(Address of principal executive offices) (Zip Code)
(702) 827-3777
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
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 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 March 31, 1994
Common Stock, par value $0.01 per share 73,484,395
PAGE 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FMC Gold Company
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
THREE MONTHS
ENDED MARCH 31
1994 1993
Sales $ 22,301 $35,471
Costs and expenses
Cost of sales 15,053 30,098
Exploration costs 3,005 2,436
Selling, general and
administrative expenses 1,511 1,567
Total costs and expenses 19,569 34,101
Earnings before interest and taxes 2,732 1,370
Interest income 2,168 2,090
Income before income taxes 4,900 3,460
Provision for income taxes 252 649
Net income $ 4,648 $ 2,811
Earnings per common share $ 0.06 $ 0.04
Number of common shares used in earnings
per share computation 73,484 73,484
See accompanying notes to consolidated financial statements.
PAGE 3
FMC Gold Company
Consolidated Balance Sheets
(In thousands, except per share data)
March 31
1994 December 31
Assets (Unaudited) 1993
Current assets:
Cash $ 99 $ -
Loans due from FMC Corporation 166,500 167,326
Amounts due from FMC Corporation 1,114 -
Trade receivables 1,936 2,527
Inventories (Note 2) 4,822 3,776
Other current assets 970 1,236
Total current assets 175,441 174,865
Property, plant and equipment, net 60,830 60,605
Deferred income taxes 2,527 2,527
Other assets 794 638
Total assets $239,592 $238,635
Liabilities and Stockholders' Equity
Current liabilities:
Outstanding checks in excess of
bank balances $ - $ 542
Accounts payable, trade and other 5,063 8,206
Accrued and other liabilities 13,046 11,935
Amounts due to FMC Corporation - 1,069
Income taxes payable 5,173 4,922
Total current liabilities 23,282 26,674
Other long-term liabilities 12,017 12,316
Stockholders' equity:
Preferred stock, $1.00 par value, authorized
100,000 shares; none issued or outstanding - -
Common stock, $0.01 par value, authorized
150,000,000 shares; issued and outstanding
73,484,395 shares 735 735
Capital in excess of par value 68,609 68,609
Retained earnings 134,949 130,301
Total stockholders' equity 204,293 199,645
Total liabilities and stockholders' equity $239,592 $238,635
See accompanying notes to consolidated financial statements.
PAGE 4
FMC Gold Company
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
Three Months
Ended March 31
1994 1993
Increase (Decrease) in Cash and Cash
Equivalents
Net cash provided by operating activities $ 2,731 $ 9,813
Cash flows from investing activities:
Capital spending (2,881) (1,717)
Disposal of property, plant and equipment,
net 121 4
Increase in other assets (156) (15)
Net cash used in investing activities (2,916) (1,728)
Increase (decrease) in cash and cash
equivalents (185) 8,085
Cash and cash equivalents, beginning of period 166,784 154,316
Cash and cash equivalents, end of period $166,599 $162,401
Reconciliation of Net Income to Net Cash
Provided by Operations
Net income $ 4,648 $ 2,811
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for depreciation and amortization 2,535 9,125
(Increase) decrease in assets:
Trade receivables 591 (107)
Inventories (1,046) 187
Other current assets 266 (214)
(Decrease) increase in liabilities:
Accounts payable, trade and other (3,143) (164)
Accrued and other liabilities 1,111 143
Amounts due to FMC Corporation (2,183) (815)
Income taxes payable 251 (676)
Other long-term liabilities (299) (477)
Net cash provided by operating activities $ 2,731 $ 9,813
See accompanying notes to consolidated financial statements.
PAGE 5
FMC Gold Company
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
Supplemental disclosure of cash flow information:
Cash and cash equivalents consists of:
March 31
(Unaudited) December 31
1994 1993 1993 1992
Loans due from FMC Corporation $166,500 $162,500 $167,326 $154,826
Cash 99 - - -
Outstanding checks in excess of
bank balances - (99) (542) (510)
Total cash and cash equivalents $166,599 $162,401 $166,784 $154,316
PAGE 6
FMC Gold Company
Notes to Consolidated Financial Statements (Unaudited)
Note 1: Financial Information
The consolidated balance sheet at March 31, 1994, and
the related statements of income and cash flows for
the interim periods ended March 31, 1994 and 1993
have been reviewed by the company's independent
auditors. The review is discussed more fully in
their report included herein. In the opinion of
management, such financial statements have been
prepared in conformity with generally accepted
accounting principles and reflect all adjustments
necessary for a fair statement of the results of
operations for the interim periods. All such
adjustments are of a normal recurring nature. The
results of operations for the three-month periods
ended March 31, 1994 and 1993 are not necessarily
indicative of the results of operations for the full
year.
The accounting policies followed by the company are
set forth in Note 1 to the company's financial
statements in the 1993 FMC Gold Company Annual
Report, which is incorporated by reference in Form 10-
K.
Note 2: Inventories
Inventories included in current assets were:
(In Thousands)
March 31 December 31
1994 1993
Gold and silver dore $ 1,523 $ 482
Materials and supplies 3,299 3,294
$ 4,822 $ 3,776
Gold and silver inventories are in the form of dore
which is suitable for delivery to precious metal
treatment facilities. These inventories are
generally sold to and further processed by these
facilities into forms suitable for end uses.
Note 3: Accounting Standards Adopted
Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits"
was implemented by the company effective January 1,
1994. Statement No. 112 requires accrual of the
expected cost of providing certain benefits to
former or inactive employees after employment but
before retirement. The effect of implementation was
not material, and accordingly, has been included as
part of costs and expenses.
PAGE 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Cash to meet the company's operating needs, finance
capital expenditures and fund exploration activities
was generated primarily from operations. Cash
generated in excess of these requirements is loaned
to FMC Corporation ("FMC") at varying maturities,
repayable on demand. As of March 31, 1994, loans to
FMC totalled $166.5 million. As of March 31, 1994,
FMC's cash on hand and available credit lines were
more than adequate to allow for repayment of these
loans.
Known cash requirements for the remainder of 1994
are approximately $63 million for planned capital
expenditures, $10 million for exploration costs and
$3.7 million for dividends, based on the current
dividend rate. The company expects to fund these
requirements from existing cash and cash equivalents
and cash flow from operations. The company believes
any unexpected cash requirements could be funded
through borrowings.
On March 31, 1994, FMC increased its ownership
interest in the company to 80 percent. Due to this
increased ownership percentage, the company is now
required to be included in FMC's federal tax return.
The company has filed separate consolidated returns
for tax periods beginning May 16, 1990 and will
continue to do so through the March 31, 1994 tax
period. For tax periods beginning April 1, 1994,
the company will be included in FMC's federal tax
return under a tax sharing agreement whereby the
company will pay to FMC amounts generally equal to
the tax the company would have been required to pay
had it filed a separate return.
On May 4, 1994, the company announced plans to
invest $57 million to develop the Beartrack property
located near Salmon, Idaho. The decision to proceed
with the development was based largely on improved
project economics related to increased labor and
capital equipment efficiencies and a ruling by the
National Marine Fisheries Service (NMFS) that the
project is "not likely to jeopardize" the Chinook
Salmon which has been designated a threatened
species. The Beartrack project encompasses
approximately 30 square miles of mining claims,
contains approximately one million ounces of proven
and probable reserves, and is expected to start
production in 1995.
First Quarter of 1994 Compared with First Quarter of
1993
Sales in the first quarter of 1994 were $22.3
million, $13.2 million lower than last year's
quarter due to lower gold production and a 87
percent decline in silver production. Realized gold
prices climbed from $329 per ounce to $383 per
ounce. Net income was $4.6 million, or $0.06 per
share, compared with net income of $2.8 million, or
$0.04 per share in 1993 due primarily to the
increase in gold prices.
First quarter gold production was 62,000 ounces
compared with 102,000 in the first quarter of 1993.
Production from the Paradise Peak mine was 20,000
ounces, down 39,000 ounces due to the mill closure
in 1993. The company's 30 percent share of
production from the Jerritt Canyon mine remained at
29,000 ounces as higher throughput offset declines
in grades and recoveries. Production from the Royal
Mountain King mine declined by 1,000 ounces due to
declines in recoveries, partially offset by high
mill throughput.
PAGE 8
Silver production was 63,000 ounces in the first
quarter of 1994 compared with 492,000 ounces in the
prior year period due to the mill closure at
Paradise Peak and the expected decline in grades.
Cost of sales declined to $15.1 million. Costs at
Paradise Peak declined $12.3 million, reflecting the
cessation of milling and mining in 1993. Royal
Mountain King mine had costs $2.5 million lower due
to reduced mine operating costs.
Exploration costs in the first quarter of 1994 were
$3.0 million and included continuing work within the
vicinity of the Jerritt Canyon operating property,
as well as exploration and evaluation of grassroots
properties in the United States, Mexico and Chile.
Administrative expenses were $0.1 million lower than
the year ago period.
The company remains debt free with interest income
of $2.2 million earned on cash loaned to FMC.
Interest income was $0.1 million higher than in 1993
reflecting the higher loan balances.
The provision for income tax of $0.3 million was
$0.4 million lower than the prior year period. The
5.1 percent effective tax rate is based on the
latest forecast for 1994.
PAGE 9
Following is a summary of key operating data for the
company for the three-month periods ended March 31,
1994 and 1993:
FMC Gold Company
Operating Data (Unaudited)
THREE MONTHS
ENDED MARCH 31
1994 1993
Tons of ore processed (thousands)
Paradise Peak
- Mill - 399
- Heap Leach - 830
Total - 1,229
Jerritt Canyon (FMC Gold share) 230 223
Royal Mountain King 332 323
Ore grade (ounces per ton milled)
Paradise Peak
- Gold - 0.107
- Silver - 1.905
Jerritt Canyon 0.135 0.153
Royal Mountain King 0.055 0.055
Mill recoveries
Paradise Peak
- Gold - 91.5%
- Silver - 59.2%
Jerritt Canyon 88.9% 89.8%
Royal Mountain King 74.6% 76.8%
Production (thousands of ounces)
Gold
Paradise Peak 20 59
Jerritt Canyon 29 29
Royal Mountain King 13 14
Total 62 102
Silver 63 492
Cash cost of production
($ per gold equivalent ounce)
Paradise Peak $ 68 $ 128
Jerritt Canyon $ 236 $ 217
Royal Mountain King $ 324 $ 367
Average $ 201 $ 183
PAGE 10
INDEPENDENT ACCOUNTANTS' REPORT
A report by KPMG Peat Marwick, the company's
independent accountants, on the financial statements
included in Form 10-Q for the quarter ended March
31, 1993 is included on page 11.
PAGE 11
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
FMC Gold Company:
We have reviewed the condensed consolidated balance
sheet of FMC Gold Company and consolidated
subsidiaries as of March 31, 1994, and the related
condensed consolidated statements of income and cash
flows for the three-month period ended March 31,
1994 and 1993, in accordance with the standards
established by the American Institute of Certified
Public Accountants.
A review of interim financial information consists
principally of obtaining an understanding of the
system for the preparation of interim financial
information, applying analytical review procedures
to financial data, and making inquiries of persons
responsible for financial and accounting matters.
It is substantially less in scope than an audit in
accordance with generally accepted auditing
standards, the objective of which is the expression
of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any
material modifications that should be made to the
condensed consolidated financial statements referred
to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with
generally accepted auditing standards, the
consolidated balance sheet of FMC Gold Company and
consolidated subsidiaries as of December 31, 1993,
and the related consolidated statements of income,
cash flows and changes in stockholders' equity for
the year then ended (not presented herein); and in
our report dated January 24, 1994, we expressed an
unqualified opinion on those consolidated financial
statements. In our opinion, the information set
forth in the accompanying condensed consolidated
balance sheet as of December 31, 1993, is fairly
presented, in all material respects, in relation to
the consolidated balance sheet from which it has
been derived.
Salt Lake City, Utah
April 22, 1994
PAGE 12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
quarter for which this report is filed.
PAGE 13
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.
FMC GOLD COMPANY
(Registrant)
Date: May 13, 1994
Steven E. Baginski
Vice President Finance
