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: June 30, 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)
State or other jurisdiction of
Incorporation or organization: UTAH
I.R.S. Employer I.D. No.: 87-0429204
Address of Principal Executive Offices:
331 South Rio Grande, Suite 201
Salt Lake City, Utah 84101
Registrant's Telephone No.: 801/534-1120
Indicate by check mark whether the registrant has:
(1) 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) been subject
to such filing requirements for the past 90 days.
Yes X No ______
The number of shares outstanding at June 30, 1996: 25,108,521 shares
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 June 30, 1996, and
September 30, 1995, the results of operations for the
three months and nine months ended June 30, 1996 and 1995,
and the cash flows for the nine months ended June 30, 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>
CENTURION MINES CORPORATION
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS As of As of
--------- June September
30, 1996 30, 1995
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 240,647 $ 17,510
Accounts receivable 6,327 5,000
Advances to related parties 24,133 197,839
Prepaid expenses 100,013 89,747
Marketable securities (Note 3) -- --
------------- -------------
Total current assets 371,120 310,096
------------- -------------
MINERAL PROPERTIES: 8,506,878 7,974,092
------------- -------------
PROPERTY AND EQUIPMENT:
Leasehold improvements 8,845 8,845
Furniture and equipment 240,122 215,530
Vehicles 162,271 100,220
Field Equipment 414,479 314,512
Less: Accumulated depreciation
and amortization (357,662) (270,716)
------------- -------------
Total property and equipment 468,055 368,391
------------- -------------
OTHER ASSETS:
Deposits 4,752 4,453
Other assets 6,438 1,438
------------- -------------
Total other assets 11,190 5,891
------------- -------------
TOTAL ASSETS $ 9,357,243 $ 8,658,470
------------- -------------
The accompanying Notes to Condensed Consolidated
Financial Statements are an integral part of
these condensed consolidated statements.
</TABLE>
<TABLE>
CENTURION MINES CORPORATION
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY As of As of
- ------------------------------------- June September
30, 1996 30, 1995
------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 265,292 $ 216,649
Accrued compensation payable 23,883 11,818
Payable to related party -- --
Advances from shareholder 33,400 33,400
Short-term notes payable 33,000 100,000
------------- -------------
Total current liabilities 355,575 361,867
------------- -------------
MINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES: 29,750 30,741
------------- -------------
SHAREHOLDERS' EQUITY:
Common stock - $.01 par value;
30,000,000 shares authorized;
25,108,521 and 23,804,671
shares issued and outstanding,
respectively 251,085 238,047
Additional paid-in capital 18,900,865 17,045,090
Accumulated deficit (10,156,782) (8,994,025)
Receivable related to sale of
common stock (23,250) (23,250)
------------- -------------
Total shareholders' equity 8,971,918 8,265,862
------------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 9,357,243 $ 8,658,470
------------- -------------
The accompanying Notes to Condensed Consolidated
Financial Statements are an integral part of
these condensed consolidated statements.
</TABLE>
<TABLE>
CENTURION MINES CORPORATION
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
1996 1995 1996 1995
---------------------- ---------------------
REVENUES:
<S> <C> <C> <C> <C>
Management and
consulting fees $ 7,500 $ -- $ 22,500 $ --
Total revenues $ 7,500 $ -- $ 22,500 $ --
---------- --------- --------- --------
OPERATING EXPENSES:
General and administrative 556,641 532,984 1,351,705 1,446,873
Cost of Properties Abandoned -- -- -- 203,092
Mineral leases 63,727 47,178 211,646 116,881
Depreciation and amortization 28,439 23,543 86,945 72,670
Total operating expenses 648,807 603,705 1,650,296 1,839,516
---------- ---------- --------- --------
OTHER INCOME (EXPENSE):
Other income 16,500 3,616 27,838 19,015
Interest expense (1,668) (1,527) (2,813) (2,737)
Gain on Sale of Assets 362,617 -- 441,657 --
---------- ---------- --------- --------
Total other income 377,449 2,089 466,682 16,278
LOSS FROM OPERATIONS (263,858) (601,616) (1,161,114) (1,823,238)
---------- ---------- --------- --------
LOSS FROM DILUTION OF EQUITY
INVESTMENT IN SUBSIDIARY -- -- -- --
---------- ---------- --------- --------
LOSS BEFORE MINORITY INTERESTS (263,858) (601,616) (1,161,114) (1,823,238)
MINORITY INTERESTS IN LOSS (INCOME)
OF CONSOLIDATED SUBSIDIARIES 328 74,539 992 141,045
---------- ---------- --------- --------
NET LOSS $(263,530) $(527,077) $(1,160,122)$(1,682,193)
NET LOSS PER COMMON
SHARE: (Note 2) $ (.01) $ (.02) $ (.05) $ (.07)
---------- ---------- --------- --------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 24,681,892 23,323,000 24,383,870 22,859,000
---------- ---------- --------- --------
The accompanying Notes to Condensed Consolidated
Financial Statements are an integral part of
these condensed consolidated statements.
</TABLE>
<TABLE>
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Increase (Decrease) in Cash
Nine Months Ended June 30,
1996 1995
-------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (1,160,122) $ (1,682,193)
Adjustments to reconcile net loss to
net cash used in operating activities:
Compensation and other expenses paid
through issuance of common stock 942,781 541,034
Depreciation and amortization 86,945 72,670
Minority interests (992) 139,630
Change in assets and liabilities:
Accounts receivable (1,327) 112,311
Receivable from related party 173,705 (64,302)
Prepaid expenses (10,267) (15,925)
Mineral properties (532,785) (649,861)
Other assets (5,300) (1,930)
Accounts/notes payable (18,357) 123,192
Payable to related party -- 7,131
Accrued compensation payable 12,065 --
Advances from shareholder -- (7,681)
------------ ------------
Net cash used in operating activities (513,654) (1,246,208)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (149,733) (255,115)
------------ ------------
Net cash used in investing activities (149,733) (255,115)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 886,524 812,500
------------ ------------
Net cash provided by financing activities 886,524 812,500
------------ ------------
NET INCREASE (DECREASE) IN CASH 223,137 (688,823)
CASH, BEGINNING OF PERIOD 17,510 710,026
------------ ------------
CASH, END OF PERIOD $ 240,647 $ 21,203
The accompanying Notes to Condensed Consolidated
Financial Statements are an integral part of
these condensed consolidated statements.
</TABLE>
<PAGE>
CENTURION MINES CORPORATION
Condensed Consolidated Statements
of Cash Flows - Continued
Supplemental disclosure of noncash investing
and financing activities:
During the three months ended June 30, 1996, the Company:
issued 34,850 shares of common stock valued
at $55,906 for services of employees and
contractors.
issued 145,000 shares of common stock valued
at $200,000 for Directors' fees.
issued 43,000 shares of common stock valued at
$72,562 for mineral properties acquisition.
These Notes to Condensed Consolidated
Financial Statements are an integral part of
the financial statements.
CENTURION MINES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENT
June 30, 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:
COST FMV
Royal Silver Mines, Inc. $ -0- $3,160,442
FMV is based on the closing or average price of Royal
common stock of $2.125 per share on July 1, 1996, the
first trading day following the quarter ended June 30,
1996.
These Notes to Condensed Consolidated
Financial Statements are an integral part of
the financial statements.
<PAGE>
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 June 30, 1996, the Company had working capital of $15,545
compared to deficit working capital at September 30, 1995,
of $51,771. This increase in working capital was primarily
the result of proceeds from the sale of Royal Silver Mines
stock during the period. The Company has no long term
debt, thus all capital received is available for funding
the ongoing operations.
At June 30, 1996, the Company owned 1,487,267 shares of
Royal Silver Mines, Inc. common stock, a related company,
which is approximately 15 percent of the total shares of
Royal common stock outstanding as of June 30, 1996. The market
value of Royal common stock on the first trading day after June
30, 1996, was $2.125 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 $9,357,243 as of June
30, 1996. The increase in total assets is primarily
due to the exploration of mineral properties, the
acquisition of additional mineral rights, and mining equipment.
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, sale of Royal Siler Mines, Inc. stock,
or by selling properties and retaining royalty interests.
Results of Operations
During the nine months ended June 30, 1996, the Company's
operations used $513,654 of cash as compared to $1,246,208
during the nine months ended June 30, 1995. This reduction in
cash flow is the result of a change in management's objectives
from that of actively acquiring additional mineral
properties to increasing the exploration and development
of current properties and the sale of Royal Silver Mines, Inc.
stock. During the three months ended June 30, 1996, cash
flows from operations included the issuance of common stock
to various entities, not including officers and directors,
for compensation and services, valued at $55,906.
The Company had a loss for the three months ended June 30,
1996, of $263,530 or $0.01 per share compared with a loss for
the three months ended June 30, 1995, of $527,077 or $0.02
share. This improvement is generally the result of efforts
at cost reduction, as explained below.
The revenue for the quarter ended June 30, 1996 is the result
of an agreement with a related party in which the Company
received $2,500 per month. General and administrative
costs increased by $23,657 to $556,641 in the quarter ended
June 30, 1996 compared to the quarter ended June 30, 1995.
The primary reason for the increase is the employment of
additional personnel who will develop the Company's mineral
properties so that production may begin. Management is unable
to assess the impact that these additional costs may have on
the operation. Management believes there is no known certainty
nor uncertainty that such additional costs 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 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.
The Registrant held its 1996 Annual Shareholders Meeting
on May 16, 1996. Shareholders voted on the following matters:
1. Election of directors: Spenst Hansen (19,155,514 for;
186,580 against), Orson Mabey, III, (19,138,694 for;
203,400 against), J.D.H. Morgan (19,138,694 for; 203,400
against) and Mark D. Dotson (19,128,514 for; 213,580 against).
2. Ratification of the appointment of Jones, Jensen &
Company as Registrant's independent auditors for the current
fiscal year (19,007,398 votes for; 166,050 against and
78,180 abstentions).
3. Approval of an amendment to the Articles of Incorporation
to allow for the issuance of 1,000,000 additional shares under
the 1991 Stock Option and Stock Award Plan (17,591,936
for; 1,376,611 against and 261,205 abstentions).
Item 5.Other Information.
On July 16, the Company filed a Form 8-K in which it
reported the following:
'The Registrant, Centurion Mines Corporation, today
announced that BHP Minerals, a unit of The Broken Hill
Proprietary Company Ltd. (NYSE: BHP), today exercised its
option to form a joint venture on the 'Little Bingham'
copper/gold mining property 70 miles southwest from Salt
Lake City, and 14 miles west from Eureka, Utah (USA).
The joint venture will involve approximately 12,000 acres,
and will be directed towards exploration for a large
commercial porphyry type copper/gold deposit. During the
option period, BHP performed extensive exploration
including geochemical, geophysical and geologic surveys.
'Under the terms of the joint venture, BHP may elect to
earn a 75% participating interest in the project by
paying all costs through completion of a positive
production feasibility study, with periodic cash payments
over five years to Centurion. After completion of the
feasibility study, Centurion may choose to maintain a
working interest by paying 25% of costs, or may convert
to a 15% net profits royalty interest with all costs being
paid by BHP.'
Item 6.Exhibits and Reports on Form 8-K.
Exh. Sec. No. Document
27.01 27 Financial Data Schedule for Quarter
Ending June 30, 1996 report appended
to this Form 10-Q.
No Reports on Form 8-K were filed during the quarter.
19.1 3 Report of BHP Joint Venture, disseminated
July 16, 1996 to shareholders and
other parties.
(As reported in Form 8-K, filed July 16, 1996)
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: July 18, 1996
CENTURION MINES CORPORATION
By Its Chief Executive Officer:
/s/ Spenst Hansen, President
Chief Executive Officer
By Its Principal Financial
and Accounting Officer:
/s/ Randy W. Sutherland,
Treasurer/Assistant Secretary
Principal Financial and
Accounting Officer
<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 JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO ITS FINANCIAL STATEMENTS.
</LEGEND>
<CAPTION>
FINANCIAL DATA SCHEDULE
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 240,647
<SECURITIES> 0
<RECEIVABLES> 30,460
<ALLOWANCES> 0
<INVENTORY> 100,013
<CURRENT-ASSETS> 371,120
<PP&E> 9,343,785
<DEPRECIATION> (357,662)
<TOTAL-ASSETS> 9,357,243
<CURRENT-LIABILITIES> 355,575
<BONDS> 29,750
<COMMON> 251,085
0
0
<OTHER-SE> 8,720,833
<TOTAL-LIABILITY-AND-EQUITY> 9,357,243
<SALES> 0
<TOTAL-REVENUES> 7,500
<CGS> 0
<TOTAL-COSTS> 648,807
<OTHER-EXPENSES> (379,117)
<LOSS-PROVISION> (328)
<INTEREST-EXPENSE> 1,668
<INCOME-PRETAX> (263,530)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (263,530)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
[COMPANY LOGO]
CENTURION MINES CORPORATION
331 S. RIO GRANDE ST., STE. 201
SALT LAKE CITY, UTAH 84101
TELE: 801/534-1120 FAX: 801/534-1129
FOR IMMEDIATE RELEASE CONTACT: LaRoy Orr
JULY 16, 1996 801-534-1120
BHP MINERALS EXERCISES OPTION TO FORM
JOINT VENTURE WITH CENTURION
SALT LAKE CITY, UTAH. Centurion Mines Corporation
(NASDAQ: CTMC) announced today that BHP Minerals, a unit of
The Broken Hill Proprietary Company Ltd. (NYSE: BHP), has
exercised its option to form a joint venture on the
'Little Bingham' copper/gold mining property 70 miles southwest
from Salt Lake City, and 14 miles west of Eureka, Utah (USA).
The joint venture will include 12,000 acres, and will be
directed towards exploration for a large commercial porphyry
type copper/gold deposit.
Under the terms of the joint venture BHP will have the option
to earn a 75% interest in the project by paying all costs
through a positive production feasibility study, with
periodic cash payments to Centurion. After earn-in,
Centurion can maintain a working interest by paying 25% of costs,
or may convert to a 15% net profits royalty interest with all
costs being paid by BHP.
During an option period, which began in January 1996, BHP
performed exploration, including geochemical, geophysical, and
geologic surveys. Centurion has been advised that the results
of this work are favorable.
BHP is one of the world's largest mining companies, the second
largest copper producer in the world, and is a major producer
of gold, coal, iron ore, and other minerals. Centurion Mines
is one of the largest holders of mining properties in the State
of Utah (USA), and is in the business of exploration, development,
and mining of gold, silver, and copper.
###
Centurion stock quotations are reported daily in
The Wall Street Journal, NASDAQ Small Cap issues as CntMne
