UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: June 30, 1996 Commission File Number: 33-16653-A
GOLDEN ORE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1320206
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
17 Hill Street, London, England W1X 7FB
(Address of principal executive offices) (Zip Code)
011-44-171-495-6669
(Registrant's telephone number, including area code)
640 Fifth Avenue, New York, New York 10019
(Former name, former address and former fiscal year,
if changed since last report.)
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 preceeding 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.
[ X ]Yes [ ]No
Indicate the number of shares outstanding of each of the issuer/s
classes of common stock, as of the last practicable date:
Number of Shares
Outstanding
Class At June 30, 1996
Common Stock, Par Value 25,357,143
$.0001
<PAGE>
GOLDEN ORE, INC. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE><CAPTION>
June 30 December 31
1996 1995
<S> <C> <C>
ASSETS
Current Assets
Cash
$ 180,948 $ 6,641
Property and Equipment
Mining plant and equipment 735,779 586,883
Office Furniture and equipment 4,442 0
Mining Properties 1,145,548 0
Other Assets
Deposits 0 $104,291
Other Assets 1,200 1,200
Total Assets $ 2,067,917 $ 699,015
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable - Trade Creditors $ 87,114 $ 37,291
Total Current Liabilities $ 87,114 $ 37,291
COMMITMENTS AND CONTINGENCIES
Common Stock $.0001 Par Value
50,000,000 Shares Authorized
25,357,143 (20,505,845 at 12/31/95)
Shares Issued and Outstanding $ 2,536 $ 2,051
Additional Paid in Capital $ 9,485,280 $ 8,891,041
Accumulated Deficit $ (7,507,013) $ (8,231,368)
TOTAL STOCKHOLDERS EQUITY $ 1,980,803 $ 661,724
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 2,067,917 $ 699,015
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GOLDEN ORE, INC. AND ITS SUBSIDIARIES
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM
_____________________________________________________________________________
<TABLE>
January 1, 1996 January 1, 1995 January 1, 1994
through through through
June 30, 1996 December 31, 1995 December 31, 1994
<S> <C> <C> <C>
Net sales $ 1,301,403 $ - $ -
Operating expenses
Acquisition and other
related mining costs 118,200 5,966,824
General and Administrative 458,849 403,985
Total Expenses 577,049 6,370,809
Income (loss) from operations 724,354 (6,370,809) -
Other income and (expenses):
Utilization of operating
loss carryforward - 136,250 8,490
Income (loss) before
extraordinary item 724,354 (6,234,159) 18,490
Extraordinary item:
Gain on the expiration of
debt net of applicable
income taxes - 253,215 73,945
Net income (loss) $ 724,354 $ (5,981,244) $ 92,435
Per share information:
Net income (loss) before
extraordinary item $ .03 $ (1.13) $ .06
Extraordinary item 0 .15 .23
Net Income (loss) per share $ .03 $ (1.08) $ .29
Weighted average shares
outstanding 25,357,143 5,513,754 316,156
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GOLDEN ORE, INC. AND ITS SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM
_____________________________________________________________________________
<TABLE>
January 1, 1996 January 1, 1995 January 1, 1994
through through through
June 30, 1996 December 31, 1995 December 31, 1994
<S> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss) $ 724,354 $ (5,981,244) $ 92,435
Adjustments to reconcile
net income (loss) to
net cash from operations:
Gain on debt settlements 0 (389,565)
Common shares issued for
mining rights etc. 594,724 6,057,798
Equipment deposits made by
third parties 102,500 (104,291)
Shareholder contribution
to capital 0 40,700
Common shares issued for
services 0 333,750
Common shares issued for
subsidiary 0 285
Changes in assets and liabilities:
Increase (decrease) in
other assets 0 (1,200)
Increase in accounts payable 49,823 37,291 (91,995)
Accrued expenses 0 0 (440)
Total adjustments 747,047 5,974,768 (92,435)
Net cash provided by (used
in) operating activities 1,471,401 (6,476) -
Cash flows from investing
activities:
Acquisition of equipment (153,338) (586,883)
Acquisition of mining assets (1,145,548) 0
Net cash provided by (used
in) investing activities (1,298,886) (586,883)
Cash flows from financing
activities:
Common shares issued for cash 0 600,000
Net cash provided by
financing activities 0 600,000 -
Increase (decrease) in cash 172,515 6,641 -
Cash and cash equivalents,
beginning of year 6,641 0 -
Cash and cash equivalents,
end of year $ 179,156 $ 6,641 $ -
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GOLDEN ORE, INC. AND ITS SUBSIDIARIES
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE PERIOD DECEMBER 31, 1992 THROUGH MARCH 31, 1995
_____________________________________________________________________________
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance, December 31, 1992 316,156 $ 32 $ 1,860.527 $(2,342,559)
Net income for the year -
Balance, December 31, 1993 316,156 32 1,860,527 (2,342,559)
Net income for the year 92,435
Balance, December 31, 1994 316,156 32 1,860,527 (2,250,124)
Issuance of common shares
pursuant to reorganization -
- March, 1995 2,845,404 285
Issuance of common shares
for services 795,000 80 333,670
Issuance of common stock
for cash 1,500,000 150 599,850
Issuance of common shares
for mining Interests and
related items 15,049,285 1,504 6,056,294
Capital contributed by
shareholder
Net loss for the year (5,981,244)
Balance December 31, 1995 20,505,845 2,051 8,891,041 (8,231,368)
March, 1996 quarter
Issuance of common shares
for mining Interests and
related items 4,851,298 485 594,239
Net profit for period
to June 30, 1996 724,354
Balance June 30, 1996 25,357,143 2,536 $9,485,280 $(7,507,014)
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Golden Ore, Inc. and its Subsidiaries
Notes to Consolidated Financial Statements
1. Basis of Preparation
a) The unaudited information included herein includes, in the opinion of
management, all adjustments necessary for a fair presentation of the
results of operations for the period covered hereby.
b) The accompanying consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries, First International
Resources, Inc. and Golden Ore (Tanzania) Ltd. Intercompany transactions and
balances have been eliminated in consolidation.
c) The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates.
d) Equipment is recorded at cost and will be depreciated over the estimated
useful life of the assets commencing when the assets are placed in service.
The Company's equipment consists of equipment related to its exploration
programs and to its proposed mining operations.
e) From January 1, 1996 it is the policy of the Company to capitalize all
exploration and development costs related to its mining projects until the
properties are brought into commercial production, sold or abandoned.
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion of the operating results and financial position of
the Company for the 6 month period ended June 30, 1996 should be read in
conjunction with the consolidated financial statements and related notes
thereto.
Results of Operations
The primary operations of the Company continue to consist of
acquiring and maintaining mineral property interests or options to acquire
mineral property interests, and conducting mineral exploration on such
properties. There were no mineral property acquistions during the six months
ended June 30, 1996 and for that period expensed exploration costs were
$118,200 as compared to $5,966,824 for the year ended December 31, 1995 and
deferred exploration costs were $1,145,548 as compared to nil in 1995.
The Company incurred general and administrative expenses of
$458,849 for the six months ended June 30, 1996 as compared to $403,985
during 1995. The principal factors in the higher expenses during the period
relate to substantial increase in time and expense providing shareholder
information and promoting the Company, to higher consultants costs, to
increased legal costs principally relating to agreements in respect of its
various mineral property interests and to the fact that the Company now
maintains a full office infrastructure.
Such costs were paid from the proceeds of (i) the issuance of
4,851,298 shares of common stock of the Company for $1,455,389 and (ii) the
sale to Ste-Genevieve Ressource Ltd., a Canadian mining company, a 30% fully
participating interest in all the mineral properties held by the Company as
at December 31, 1995, for the sum of $1,300,000.
Revenue for the six months ended June 30, 1996 comprised the sale
of the 30% fully participating interest to Ste-Genevieve Ressource Limited in
the sum of $1,300,000 as compared to nil in 1995, and interest received
$1,403 as compared to nil in 1995. In the current period the Company
determined to treat exploration costs as deferred until the properties are
put into commercial production, sold or abandoned. In 1995 all exploration
costs were expensed. This change, together with the sale of the 30%
participating interest, resulted in a profit for the period of $724,354 as
compared to a loss of $5,908,944 for 1995.
In May, 1996 the Company contracted to acquire interests in another
Tanzanian prospecting license for the consideration of $150,000 and 2,000,000
common stock; payment by the Company of such consideration is due on
August 23, 1996.
Liquidity and Capital Resources
As of June 30, 1996 the Company had cash and cash equivalents of
$180,948. Further substantial amounts will be required to enable the Company
to carry out its planned work programs on its Tanzanian interests.
An agreement in principle has been reached with Ste-Genevieve Resources,
Inc., a Canadian company, to raise sufficient funds to meet these
commitments; this agreement is subject to due diligence and there can be no
certainty that funds will ultimately be forthcoming from that source.
Ste-Genevieve has provided limited interim funding pending finalization of the
agreement and has taken a working interest in the Company's mining licences
pending the determination thereof. No further funding is available from this
source until additional assay results are received over the course of the
next few months that are satisfactory to Ste-Genevieve and proposed stock
brokers. Therefore, alternative sources of funding will be needed to be
established to enable the Company to carry out its planned work programs on
its Tanzanian interests.
The Company has commitments from Randos AG and certain other
sources to provide funds to finance certain of its mining operations. A
failure by the Company to raise additional funds could have a material
adverse effect on the results of operations of the Company and its future
business prospects. The Company had no income from operations in the period
to which this report relates. The Company has no internal or external
sources of liquidity.
Part II- Other Information
Item 1 - Legal Proceedings
The Company is not currently a party to any legal action
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
1. AGL Agreement in respect of Tanzanian Prospecting License
(b) No current reports on Form 8-K were filed by the Company during the
period to which this report relates.
<PAGE>
Exhibit Index
1. Purchase Agreement between African Gems Limited and the Company dated
May 17, 1996.
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) 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.
GOLDEN ORE, INC.
(Registrant)
By: /s/ Francis Joslin
Francis Joslin
Director
SIGA HILLS CONSIDERATION TERMS
DATED: 17th May 1996
BETWEEN:
(1) AFRICAN GEMS LIMITED a company incoporated under the laws of United
Kingdom, registered number 2718850, and having its registered address at
21 Leopold Road, Leighton Buzzard, Bedfordshire, LU7 7QU in the United
Kingdom, ("AGL")
(2) GOLDEN ORE, INC. a company incorporated under the laws of the State of
Delaware and having its registered office at Level 15, 640 Fifth Avenue,
New York, New York 10019 in the United States of America, ("GOIN").
WHEREAS:
(A) AGL, (the "Assignor") is the holder of the Prospecting License for Siga
Hills which is situated in the United Republic of Tanzania.
(B) The parties have agreed to apply to the Minister of Water, Energy and
Minerals of the United Republic of Tanzania for his consent to the assignment
of the License.
(C) In consideration of AGL agreeing to the Deed of Assignment dated today,
GOIN has agreed the following terms in full and final settlement of it's
purchase consideration responsibilities:
- -- A payment of US$150,000
- -- 2,000,000 shares in GOIN to be issued to AGL or any party nominated named
by AGL.
Signed for and on behalf of Golden Ore, Inc.
John Beckett
Director
Signed for and on behalf of African Gems Limited
Wally Lamb
Director
