SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM N/A TO _______
Commission File Number: 0-17048
CENTURION MINES CORPORATION
(Exact name of registrant as specified in its charter)
UTAH
(State or other jurisdiction of Incorporation or organization)
87-0429204
(I.R.S. Employer Identification Number)
331 South Rio Grande, Suite 201, Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)
801-534-1120
(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 ______
The number of shares outstanding at March 31, 1996:
24,428,021 shares
PAGE -1- <PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS OF CENTURION MINES CORPORATION
(Hereinafter referred to as Registrant or Company)
The condensed, consolidated financial statements of
the Registrant included herein have been prepared by the
Registrant from its own books and records. In the opinion
of management, the financial statements included in this
quarterly report present fairly in all material respects,
the financial position of Registrant and subsidiaries as
of March 31, 1996, and September 30, 1995, the results
of operations for the three months and six months ended
March 31, 1996 and 1995, and the cash flows for the six
months ended March 31, 1996 and 1995, in conformance with
generally accepted accounting principles.
As discussed in Item 2, a substantial portion of
Registrant's assets consist of investments in mineral
properties for which additional exploration is required
to determine if they contain ore reserves that are
economically recoverable. The realization of these
investments is dependent upon the success of future
property sales, the existence of economically recoverable
reserves, the ability of the Company to obtain financing or
make other arrangements for development, and upon future
profitable production. Accordingly, no provision for any
asset impairment that may result, in the event the Company
is not successful in developing or selling these properties,
has been made in the accompanying consolidated financial
statements.
PAGE -2-<PAGE>
<TABLE>
<CAPTION>
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS As of As of
March September
31, 1996 30, 1995
<S> <C> <C>
CURRENT ASSETS:
Cash $ 54,313 $ 17,510
Accounts receivable 5,166 5,000
Advances to related parties 19,550 197,839
Prepaid expenses 112,324 89,747
Marketable securities (Note 3) -- --
Total current assets 191,353 310,096
MINERAL PROPERTIES 8,209,687 7,974,092
PROPERTY AND EQUIPMENT:
Leasehold improvements 8,845 8,845
Furniture and equipment 225,640 215,530
Vehicles 100,220 100,220
Field Equipment 426,457 314,512
Less: Accumulated depreciation
and amortization (328,215) (270,716)
Total property and equipment 432,947 368,391
OTHER ASSETS:
Deposits 5,052 4,453
Other assets 6,438 1,438
Total other assets 11,490 5,891
TOTAL ASSETS $ 8,845,477 $ 8,658,470
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of these condensed consolidated statements.
PAGE -3-
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
As of As of
March September
31, 1996 30, 1995
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 238,638 $ 216,649
Accrued compensation payable 15,187 11,818
Payable to related party -- --
Advances from shareholder 33,400 33,400
Short-term notes payable 95,000 100,000
Total current liabilities 382,225 361,867
MINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES 30,077 30,741
SHAREHOLDERS' EQUITY:
Common stock - $.01 par value;
30,000,000 shares authorized;
24,428,021 and 23,804,671 shares
issued and outstanding, respectively 244,280 238,047
Additional paid-in capital 18,103,426 17,045,090
Accumulated deficit (9,891,281) (8,994,025)
Receivable related to sale of common stock (23,250) (23,250)
Total shareholders' equity 8,433,175 8,265,862
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 8,845,477 $ 8,658,470
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of these condensed consolidated statements.
PAGE -4-
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES:
Management and consulting fees $ 7,500 $ -- $ 15,000 $ --
Total revenues $ 7,500 $ -- $ 15,000 $ --
OPERATING EXPENSES:
General and administrative 388,246 482,103 795,064 913,889
Cost of Properties Abandoned -- 203,092 -- 203,092
Mineral leases 72,247 36,636 147,919 69,703
Depreciation and amortization 29,022 41,200 58,506 49,127
Total operating expenses 489,515 763,031 1,001,489 1,235,811
OTHER INCOME (EXPENSE):
Other income 8,142 7,327 11,338 15,399
Interest expense (470) (971) (1,145) (1,210)
Gain on Sale of Assets 14,722 -- 79,040 --
Total other income 22,394 6,356 89,233 14,189
LOSS FROM OPERATIONS (459,621) (756,675) (897,256) (1,221,622)
LOSS FROM DILUTION OF EQUITY
INVESTMENT IN SUBSIDIARY -- -- -- --
LOSS BEFORE MINORITY INTERESTS (459,621) (756,675) (897,256) (1,221,622)
MINORITY INTERESTS IN LOSS (INCOME)
OF CONSOLIDATED SUBSIDIARIES 328 48,749 664 66,506
NET LOSS $ (459,293) $ (707,926) $ (896,592)$(1,155,116)
NET LOSS PER COMMON
SHARE: (Note 2) $ (.02) $ (.03) $ (.04) $ (.05)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 24,187,142 22,928,652 24,085,847 22,709,317
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of these condensed consolidated statements.
PAGE -5-
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash
Six Months Ended March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(897,256) $ (1,155,116)
Adjustments to reconcile net loss to
net cash used in operating activities:
Compensation and other expenses paid
through issuance of common stock 517,671 435,439
Depreciation and amortization 57,498 49,127
Minority interests (664) 182,544
Change in assets and liabilities:
Accounts receivable (166) 295,000
Receivable from related party 178,290 (14,039)
Prepaid expenses (22,578) (16,526)
Mineral properties (235,594) (896,550)
Other assets (5,600) (803)
Accounts/notes payable 16,988 200,798
Payable to related party -- --
Accrued compensation payable 3,369 (6,246)
Net cash used in operating activities (388,042) (926,372)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (85,178) (252,689)
Net cash used in investing activities (85,178) (252,689)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 510,023 812,500
Net cash provided by financing activities 510,023 812,500
NET INCREASE (DECREASE) IN CASH 36,803 (366,561)
CASH, BEGINNING OF PERIOD 17,510 710,026
CASH, END OF PERIOD $ 54,313 $ 343,465
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of these condensed consolidated statements.
PAGE -6-
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<PAGE>
CENTURION MINES CORPORATION
Condensed Consolidated Statements of Cash Flows - Continued
Supplemental disclosure of noncash investing and financing
activities:
During the three months ended March 31, 1996, the Company:
- - - issued 48,200 shares of common stock valued at $79,913 for
services of employees and contractors.
- - - issued 60,000 shares of common stock valued at $96,875 for
Directors' fees.
- - - issued 30,000 shares of common stock valued at $45,000 for a
promissory note receivable from an officer and director for
options previously granted.
- - - issued 20,000 shares of common stock valued at $36,875 for
mineral properties acquisition.
The accompanying Notes to Condensed Consolidated
Financial Statements are an integral part of these
condensed consolidated statements.
PAGE -7-<PAGE>
CENTURION MINES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(1) The condensed consolidated financial statements
included herein have been prepared by the Company, without
audit, in accordance with generally accepted accounting
principles for interim financial information and pursuant
to the rules, regulations and instructions of the Securities
and Exchange Commission pertaining to Form 10-Q and Article
10 of Regulation S-X. These condensed consolidated financial
statements reflect all adjustments which, in the opinion of
management, are necessary to present fairly the results of
operations for the interim period presented. All adjustments
are of a normal recurring nature. Certain information,
footnotes and disclosures normally included in complete
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 following disclosures are
adequate. It is suggested that these condensed consolidated
financial statements be read in conjunction with the
consolidated financial statements and the notes thereto
included in the Company's annual report on Form 10-K for
the year ended September 30, 1995.
(2) Net loss per common share is based on the weighted
average number of common shares outstanding during the
period.
(3) The Company carries its marketable securities at the
lower of cost or market value:
Royal Silver Mines, Inc. COST FMV
$-0- $3,929,798
FMV is based on the closing or average price of Royal
common stock of $2.39 per share on April 1, 1996, the
first trading day following the quarter ended March 31, 1996.
These Notes to Condensed Consolidated Financial
Statements are an integral part of the financial
statements.
PAGE -8-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Financial Condition, Liquidity and Capital Resources
Since inception on June 21, 1984, the Company has
been engaged in exploration, acquisition, and
development of mineral properties primarily through
joint ventures. The Company's principal capital
resources have been acquired through issuance of
common stock, through joint venture operations, and
through sales of various properties. The Company has
primarily relied upon joint venture partners to
finance the on-going costs of holding and developing
properties.
At March 31, 1996, the Company had deficit working capital of
$190,872 compared to deficit working capital at September 30, 1995,
of $51,771. This decline in working capital was primarily the result
of a reduction in the amount owed to the Company on advances to related
parties. The Company has no long term debt, thus all capital
received is available for funding the ongoing operations.
At March 31, 1996, the Company owned 1,644,267 shares of Royal Silver
Mines, Inc. common stock, a related company, which is approximately 20
percent of the total shares of Royal common stock outstanding as of
March 31, 1996. The market value of Royal common stock on the first
trading day after March 31, 1996 was $2.39 per share (Note 3).
The Company's assets consist primarily of interests
in mineral properties. The total assets increased from
$8,658,470 on September 30, 1995, to $8,845,477 as
of March 31, 1996. The increase in total assets is
primarily due to the exploration of mineral properties
and the acquisition of additional mineral rights.
These condensed consolidated financial statements
include the following companies, with the state of
incorporation and percentage of ownership as shown:
Centurion Mines Corporation, Utah, 100%; Centurion
Exploration, Incorporated, Utah, 100%; Mazama Gold
Corporation, Washington, 100%; Dotson Exploration
Company, Nevada, 100%; Mammoth Mining Company, Nevada,
81.8%; The Gold Chain Mining Company, Utah, 61.1%; and
Tintic Coalition Mines, Utah, 80%.
The Company does not have sufficient capital to
fully explore and develop its mineral properties, nor
does the Company currently have continuing revenues,
except as noted below. The Company plans to continue
financing its exploration activities through joint
ventures, production activities, equity funding, or
by selling properties and retaining royalty interests.
PAGE -9-
Results of Operations
During the six months ended March 31, 1996, the Company's operations
used $388,042 of cash as compared to $926,372 during the six months
ended March 31, 1995. This reduction in cash flow is the result of a
change in management's objectives from that of actively acquiring mineral
properties to increasing the exploration and development of current
properties.
The Company had a loss for the three months ended
March 31, 1996, of $459,293 or $0.02 per share compared
with a loss for the three months ended March 31, 1995,
of $707,926 or $0.03 per share. This improvement is
generally the result of efforts at cost reduction, as
explained below.
The revenue for the quarter ended March 31, 1996 is
the result of an agreement with a related party in
which the Company received $2,500 per month. General
and administrative costs decreased by $93,857 to
$388,246 in the quarter ended March 31, 1996, compared
to the quarter ended March 31, 1995. Reduced accounting, audit
and legal expenses are the primary reasons for the decrease.
Management is unable to assess the impact that these efforts
at cost reductions may have on the operations. Management
believes there is no known certainty nor uncertainty that such
reductions may result in adverse consequences to the Company's
financial condition.
These improvements allowed the Company to concentrate
use of its funds in the areas of land acquisition and
exploration, and in the rehabilitation of tunnels and
water systems in certain previously-producing mines.
Also, the Company continued to invest additional funds in
equipment for exploration and analysis of
exploration data. These equipment acquisitions
will allow the Company to increase its move toward use of
Company personnel, rather than outside contractors. Increases in
lease expense for leased property partly offset the
decreases in operating expenses discussed above.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
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. Exhibits and Reports on Form 8-K.
Exhibit Sec. No. Document
4.02 4 Amendment No. 2 to 1991 Stock Option and
Stock Award Plan
27.01 27 Financial Data Statement for Quarter Ended
March 31, 1996
No Reports on Form 8-K were filed during the quarter.
PAGE -10-
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.
Dated: April 30, 1996
CENTURION MINES CORPORATION
By Its Chief Executive Officer:
/s/ Spenst Hansen
Spenst Hansen, President and
Chief Executive Officer
Dated: April 30, 1996
By Its Principal Financial
and Accounting Officer:
/s/ Randy W. Sutherland
Randy W. Sutherland, Treasurer/
Assistant Secretary, Principal
Financial and Accounting Officer
PAGE -11-
EXHIBIT 4.02
AMENDMENT NO. 2
TO THE 1991 STOCK OPTION AND
STOCK AWARD PLAN OF
CENTURION MINES CORPORATION
WHEREAS, Centurion Mines Corporation (the 'Company') adopted the 1991 Stock
Option and Stock Award Plan of Centurion Mines Corporation (the 'Plan') on
April 19, 1991; and
WHEREAS, an amendment to the plan was approved by the Board of Directors of
the Company on May 27, 1993, and approved by the shareholders of the
Company on May 27, 1993; and
WHEREAS, an amendment to the Plan was approved by the Board of Directors of
the Company on April 18, 1995, and approved by the shareholders of the
Company on April 19, 1995.
NOW THEREFORE, the Plan is hereby amended as follows:
1. Section 4 of the Plan shall be amended to increase the number of common
shares of the Company that may be subject to or issued under awards granted
pursuant to the terms of the Plan from 1,000,0000 to 1,500,000.
2. Except as amended hereby, the Plan remains unmodified in full force
and effect.
Page -12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS
INCLUDED IN REGISTRANT'S FORM 10-Q FOR THE QUARTER
ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO ITS FINANCIAL STATEMENTS.
</LEGEND>
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1996
<CASH> 54,313
<SECURITIES> 0
<RECEIVABLES> 36,206
<ALLOWANCES> 0
<INVENTORY> 112,324
<CURRENT-ASSETS> 202,843
<PP&E> 8,970,849
<DEPRECIATION> (328,215)
<TOTAL-ASSETS> 8,845,477
<CURRENT-LIABILITIES> 382,225
<BONDS> 30,077
<COMMON> 244,280
0
0
<OTHER-SE> 8,188,895
<TOTAL-LIABILITY-AND-EQUITY> 8,845,477
<SALES> 0
<TOTAL-REVENUES> 7,500
<CGS> 0
<TOTAL-COSTS> 489,515
<OTHER-EXPENSES> (22,864)
<LOSS-PROVISION> (328)
<INTEREST-EXPENSE> 470
<INCOME-PRETAX> (459,293)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (459,293)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
