SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate Box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CENTURION MINES CORPORATION
---------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Registrant)
---------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Commission File No. 0-17048
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies: ______
2. Aggregate number of securities to which transaction applies: _________
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): __________
4. Proposed maximum aggregate value of transaction: _____________________
5. Total Fee paid
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the off-
setting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
1. Amount Previously Paid: [ ]
2. Form Schedule or Registration
Statement No.: [ ]
3. Filing Party: [ ]
4. Date Filed: [ ]
<PAGE>
P R E L I M I N A R Y C O P Y
(Subject To Completion, Dated December 11, 1997)
CENTURION MINES CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January 30, 1998
To the Shareholders:
Notice is hereby given that the Annual Meeting of the Shareholders of Centurion
Mines Corporation (the 'Company') will be held for fiscal year 1998 at [time to
be specified in definitive filing], Mountain Standard Time, on Friday, January
30, 1998, at [location, in Utah, to be specified in definitive filing].
The following matters are on the agenda for the Meeting:
1. To elect Directors to serve for a term of one year each;
2. To ratify the appointment of Jones, Jensen & Company, CPA's, as independent
auditors for the current fiscal year;
3. To consider and vote upon a proposal from the Board of Directors recom-
mending the adoption of a 1 for 10 reverse split (share consolidation) of
the issued and outstanding common stock of the Company;
4. To consider and act upon a proposal from the Board of Directors recommend-
ing an amendment to the Company's 1991 Stock Option and Award Plan, as
amended (the "Plan"), to authorize the administration under the Plan of an
additional Two and One-Half Million shares (2,500,000) of Common Stock
(equivalent to 250,000 shares following a 1-for-10 reverse split);
5. To consider and vote upon a proposal from the Board of Directors recom-
mending an amendment to the Company's Articles of Incorporation to change
the name of the Company to "Grand Central Silver Mines, Inc."; and
6. To transact any other business that may properly come before the Meeting
or any adjournment or postponement.
The Directors have fixed the close of business on November 26, 1997, as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting or any adjournment or postponement. The transfer books of
the Company will not be closed. A complete list of the record shareholders will
be available at the Company's office during regular business hours and shall be
open to the examination of any record shareholder for any purpose relevant to
the Meeting.
A record of the Company's activities and the audited financial statements for
fiscal 1997 are contained within the annual report that accompanies this proxy
statement. The Company expects to file its Annual Report on Form 10-K with the
Securities and Exchange Commission on or before December 29, 1997, and will send
a copy of it (without charge) to any shareholder who requests one in writing.
You are cordially invited to attend the Meeting. Any Shareholder who does not
expect to attend the Meeting in person is requested to complete, date, and
sign the enclosed form of Proxy and return it promptly to the Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Spenst Hansen
_________________________________________
Spenst Hansen
Chairman of the Board of Directors,
President, and Chief Executive Officer
Salt Lake City, Utah
December __, 1997
<PAGE>
YOUR VOTE IS IMPORTANT TO CENTURION. EVEN IF YOU EXPECT TO ATTEND THE ANNUAL
MEETING, WE URGE YOU TO COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN
IT PROMPTLY IN THE ENVELOPE PROVIDED. COMPLETING THE ENCLOSED PROXY WILL NOT
PREVENT YOU FROM VOTING YOUR SHARES IN PERSON IF YOU DO ATTEND THE MEETING.
(This proxy solicitation is on behalf of the Board of Directors)
[COMPANY LOGO]
CENTURION MINES CORPORATION
PROXY STATEMENT FOR THE 1998 ANNUAL MEETING OF SHAREHOLDERS
To Be Held January 30, 1998
INFORMATION CONCERNING SOLICITATION AND VOTING
DATE, TIME, AND PLACE
The enclosed proxy is solicited on behalf of the directors of Centurion Mines
Corporation ('Centurion' or the 'Company') for use at the Annual Meeting of
Shareholders for Fiscal 1998 ('Meeting') to be held Friday, January 30, 1998,
at [time to be specified in definitive filing], Mountain Standard Time, at
[location, in Utah, to be specified in definitive filing]. The purposes for
holding the Meeting are set forth in the preceding Notice of Meeting. These
proxy solicitation documents were first delivered to shareholders on or about
December __, 1997.
VOTING SECURITIES, RECORD DATE, AND PRINCIPAL STOCKHOLDERS
The only voting security of the Company is its Common Stock, par value $0.01
per share ('Common Stock'). Only holders of record of Common Stock at the
close of business on November 26, 1997, the Record Date for the Meeting, are
entitled to notice of and to vote at the meeting. On November 26, 1997, there
were 36,375,905 shares of Common Stock outstanding. Not less than one-third of
such shares, present in person or represented by proxy, is required to
constitute a quorum. Each share of Common Stock is entitled to one vote on each
proposal. All voting is non-cumulative.
Information about the principal holders of the voting securities is furnished
in the section entitled 'Security Ownership of Certain Beneficial Owners and
Management,' below. The closing average bid and ask price of the Company's
Common Stock on the Nasdaq SmallCap Market on November 26, 1997, was $0.344
per share.
REVOCABILITY OF PROXY
Any shareholder who returns a proxy may revoke it before the proxy is exercised
by filing a written statement to that effect with the Company Secretary, and
either appearing in person and voting at the Meeting, or returning a duly
executed proxy bearing a later date.
DISSENTERS' RIGHT OF APPRAISAL
In accordance with both the Company's governing rules and Utah state law,
certain corporate actions, generally, may create shareholders' rights of
dissent and entitlement to payment of the fair market value of shares held.
However, none of the proposals at the Annual Meeting creates such shareholder
dissenters' rights.
THE SOLICITATION
The Company is soliciting proxies and will bear all costs. Certain directors,
officers, and employees of the Company may also solicit proxies in person or
by mail, telephone or facsimile without special compensation for their services.
<PAGE>
Arrangements have been made with brokerage firms and other nominee holders to
mail solicitation material to the beneficial owners of Common Stock held of
record by them. Centurion has agreed to pay reasonable out-of-pocket expenses
incurred in mailing solicitation material to beneficial owners.
PROXY CARDS
The enclosed Proxy Card serves to appoint proxies for record holders of the
Company's Common Stock. Shares represented by a Proxy delivered to the Company
and not revoked will be voted at the meeting in accordance with the markings
and instructions on the Proxy Card.
IF NO MARKINGS OR INSTRUCTIONS ARE INDICATED, THE PROXY CARD WILL BE VOTED 'FOR'
ALL NOMINATED DIRECTORS AND 'FOR' ALL OTHER PROPOSALS ON THE MEETING AGENDA.
VOTING PROCEDURES AND TABULATION
The Company will appoint one or more inspectors of election to act at the
Meeting and report the results. Prior to the meeting, each inspector will sign
an oath to perform his duties in an impartial manner and according to the best
of his ability. Inspectors will ascertain the number of shares outstanding and
the voting power of each, determine the shares represented at the Meeting and
the validity of proxies and ballots, count all votes and ballots, and perform
certain other duties as required by law. Inspectors will tabulate the number of
votes cast for or withheld in the election of directors, and the number of votes
cast for or against all other proposals, including abstentions and non-votes.
The required quorum necessary to transact business at this Meeting shall consist
of not less than one-third of the issued Common Stock outstanding on the Record
Date. If a quorum is present, directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election. Action on all amendments to
the Company's Articles of Incorporation are approved by a majority of the votes
cast by the shares entitled to vote at the Meeting. Action on all other matters
is approved if the votes cast favoring the action exceed the votes cast opposing
the action, unless the Articles of Incorporation or Utah law requires a greater
number of affirmative votes. Abstentions and broker non-votes will be counted
to determine if a quorum is present, but will not otherwise affect the voting
on any proposal.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The Company is not aware of any person who has been a director or executive
officer of the Company at any time since October 1, 1996, who has had any
substantial interest, direct or indirect, in the matters proposed to be acted
upon at the Meeting in which such person receives any extra or special benefit
not shared on a pro rata basis by all other holders of Common Stock.
Proposal One
ELECTION OF DIRECTORS
GENERAL INFORMATION. A Board of six directors is to be elected at the Meeting.
No director nominee has declined the nomination or is unable or unfit to serve.
Under the Articles of Incorporation, the Company must have a minimum of three
and a maximum of nine directors. The directors of the Company are elected to
serve until the next annual shareholders' meeting or until their respective
successors are elected and qualify. Interim replacements for resigning directors
are appointed by the Board of Directors.
The following table sets forth information about the directors and nominee(s).
<PAGE>
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD DIRECTOR SINCE
<S> <C> <C> <C>
Spenst Hansen 63 Director, CEO and President November 1984
Orson Mabey, III 34 Director, Vice President February 1990
J.D.H. Morgan 59 Director April 1991
Howard M. Crosby 45 Nominee --
John Ryan 35 Nominee --
Larry Keyes __ Nominee --
</TABLE>
No family relationships exist among any directors or officers of the Company.
SPENST HANSEN has been principally employed by Centurion since November
of 1984. Mr. Hansen has worked on mining projects in the western United States
for more than 30 years, and has been directly involved with Centurion's Tintic
District mining properties since 1979. From 1982 to 1989, he also conducted an
independent geophysical and geologic contracting business as a sole proprietor-
ship under the name Axis Geophysics Company, over which he still retains owner-
ship. Mr. Hansen has a Ph.D. degree in geology from the University of Missouri,
Columbia, Missouri, a Masters degree in mining engineering from the Missouri
School of Mines, Rolla, Missouri, and a B.S. degree in geological engineering
from the University of Utah, Salt Lake City, Utah. Mr. Hansen is a registered
professional geologist in California (#2067) and Idaho (#38). He presently
serves as a director and executive officer of the subsidiaries of the Company,
and of a related company, Keystone Surveys, Inc.
ORSON MABEY, III is a Senior Trading Analyst developing commercial trading
applications for Tosco Corporation, the largest independent petroleum refiner
on the eastern coast of the United States. From 1987 to 1993, Mr. Mabey was
employed by Amerada Hess Corporation as Senior Trading Analyst. Mr. Mabey
has a Masters degree in international management from the American Graduate
School of International Management in Glendale, Arizona, and a B.A. degree in
Finance from the University of Utah, Salt Lake City, Utah.
J.D.H. (DAVID) MORGAN has been principally employed by Lehman Brothers during
the last five years. Mr. Morgan has worked in the metals industry for over
25 years. He holds an engineering degree from Cambridge University and a
Masters degree in mineral processing from the Royal School of Mines, London
University. He is a Chartered Engineer and a member of the Institution of
Mining and Metallurgy. For the past ten years, Mr. Morgan has been a securities
analyst specializing in mining equities covering North America and most of the
world's other main mining markets. He is a member of the International Stock
Exchange, London, and the Institute of Investment Management and Research. From
1985 to 1994, he was a Director of Equity Research with Lehman Brothers Interna-
tional. Currently, he is an independent mining share specialist based in London
and a consultant to Rodman & Renshaw, Inc. in Chicago.
HOWARD CROSBY, director nominee, is the President and a member of the Board of
Directors of Royal Silver Mines, Inc., since February 1994. Since 1989, Mr.
Crosby has been president of Crosby Enterprises, Inc., a family-owned business
advisory and public relations firm. From September 1992 to May 1993, Mr. Crosby
was employed by Digitran Systems, Inc., of Logan, Utah, in the marketing depart-
ment. In May of 1993, Mr. Crosby entered into a business consulting relation-
ship with Centurion and has served as president and a director of two of the
Company's subsidiaries, Mammoth Mining Company and The Gold Chain Mining
Company. Mr. Crosby received a B.A. degree from the University of Idaho in 1974.
<PAGE>
JOHN RYAN has been a member of the Board of Directors of Royal Silver Mines,
Inc., since April 1997, and its Vice President of Corporate Development since
September 1996. Mr. Ryan is a professional mining engineer. Mr. Ryan has served
as a consultant in mining engineering services, and will continue in these
activities during his tenure, if elected. In addition to his professional degree
in Mining Engineering, which he received from the University of Idaho, Mr.
Ryan also holds a juris doctorate (J.D.) law degree from the Boston College
of Law.
(Biographical information about all other nominees will be supplied in the
definitive proxy statement.)
BOARD MEETINGS. The Board of Directors held four formal meetings during fiscal
year 1997, attended by all directors in person or by telephone. All other Board
business and corporate actions were undertaken by unanimous consent resolutions
without a meeting, pursuant to Utah State law.
STANDING AUDIT, NOMINATING, COMPENSATION, AND SIMILAR COMMITTEES. In fiscal year
1997, the Board of Directors established an Audit Committee, consisting of
Directors David Morgan and Mark Dotson. In addition, the Board established a
Compensation Committee, consisting of Directors Orson Mabey and David Morgan.
The Company does not have a standing nominating committee or other committees
performing similar functions.
DIRECTOR LIABILITY LIMITATION. At the 1991 annual meeting, shareholders approved
an amendment to Centurion's Articles of Incorporation limiting the personal
liability of directors to the Company and its shareholders to the extent allowed
by Utah law. In effect, the shareholders approved the adoption of statutory pro-
visions which permit a Utah corporation to eliminate the personal liability of
directors for monetary damages for breach of fiduciary duty.
COMPENSATION OF DIRECTORS. No contractual arrangements exits with any member of
the Board of Directors. Directors receive for their services a retainer fee
payable in shares of the Company's Common Stock, currently at the rate of 5,000
shares earned per quarter of completed service. During fiscal year 1997, 80,000
shares were earned, of which 60,000 were issued during fiscal 1997 and the
remaining 20,000 will be issued during the first quarter of fiscal 1998.
As additional compensation, directors receive options, vesting at a rate of
10,000 options per quarter. See footnote 2 to the "Summary Compensation Table"
below. During fiscal year 1997, 160,000 options were earned, of which 120,000
were issued during fiscal 1997, and the remaining 40,000 will be issued during
the first quarter of fiscal 1998. No options were exercised during fiscal 1997.
During fiscal 1997, the Company approved the authority of the Board to allow
for an entitlement, at a later date, of a one-time grant of out-of-the-money
options to purchase Common Stock, but only upon the satisfaction of certain
terms and conditions, as follows: the grant, vesting, and issuance of these
options is conditional upon the market price of the stock achieving before the
end of fiscal 1999 an average price, over a period of 30 or more consecutive
trading days, of at least $1.20 per share, which is 25% greater than the
market price on the date of Board approval ($0.94 per share). Upon doing so,
the authorization to grant the out-of-the-money options would be triggered and,
upon subsequent vesting, the options would have an exercise price of $1.44,
which was set at a price that is 150% of the closing price on the date of
Board approval. These out-of-the-money options would then be exercisable until
September 30, 2000. To date, the conditions have not been met and, therefore,
no out-of-the-money options have been authorized, vested, or exercised.
EXECUTIVE OFFICERS. Officers of the Company hold office until the meeting of
the Board of Directors immediately following the next annual shareholders'
meeting or until removal by the Board of Directors. Interim replacements for
resigning officers are appointed by the Board of Directors. The following
table sets forth the name, age, position(s) held, and length of service for
each of Centurion's executive officers:
<PAGE>
<TABLE>
<CAPTION>
NAME AGE POSITIONS OFFICER SINCE
<S> <C> <C> <C>
Spenst Hansen SEE TABLE OF DIRECTORS ABOVE.
Orson Mabey, III SEE TABLE OF DIRECTORS ABOVE.
David Nahmias 45 Vice President of Corporate Development April 1997
Carlos M. Chavez 45 Secretary June 1994
Randy W. Sutherland 40 Treasurer August 1995
LaRoy D. Orr 40 Assistant Secretary/Treasurer April 1997
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934. Section
16(a) of the Securities and Exchange Act of 1934 requires officers, directors,
and persons who own more than ten percent of the Centurion's Common Stock to
file initial reports of beneficial ownership and to report changes in such
ownership with the Commission and the National Association of Securities
Dealers. They are also required to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based on review of the copies of Forms 3, 4, and
5 furnished to the Company or written representations that no other trans-
actions were required, the Company has determined that the pertinent officers,
directors, and principal shareholders have complied with all applicable Section
16(a) requirements during fiscal year 1997 to the date of this filing.
COMPENSATION OF EXECUTIVE OFFICERS. The following table sets forth the compen-
sation paid by Centurion during each of the last three fiscal years to its
Chief Executive Officer and to the other four most highly compensated officers
and executive officers, whose individual total annual salary and bonus exceeded
$100,000 for Fiscal 1997 (the "Named Executive Officer"). This information
includes the dollar value of base salaries and bonus awards, the number of stock
options granted, and certain other compensation, if any.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- -------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------- ---- ------- ----- ----------- -------- ---------- ------- -------
Name Securities
and Other Re- Underlying All
Princi- Annual stricted Options/ LTIP Other
pal Po- Compen- Stock SAR's Pay- Compen-
sition Year Salary Bonus sation Award(s) (#) outs($) sation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------- ---- ------- ----- ----------- -------- ---------- ------- -------
CEO
Spenst 1997 $72,000 $0 $44,531<F1> $0 420,000<F2> $0 $0
Hansen 1996 36,000 0 92,812 0 0 0 0
1995 36,000 0 97,500 0 270,000 0 0
____________________________________________________________________________________
<FN>
<F1> Column (e) represents the dollar value of all awards of stock received
under the Company's 1991 Stock Option and Award Plan, as amended, as part of
non-cash compensation that Mr. Hansen earned during each of fiscal 1997, 1996,
and 1995 in lieu of fees of 5,000 shares per quarter for service in each of
three positions, as director, as president and as CEO of the Company, for a
total quarterly award of 15,000 shares.
<PAGE>
The aggregate number of shares that have been authorized and reserved
under this award to Mr. Hansen, but which had not vested, and thus had not
been issued, as of September 30, 1997, was 135,000 shares, and their fair
market value at the end of fiscal year 1997 was $46,440, based on the closing
price of $0.344 on September 30, 1997. Of the 135,000 shares that remained
unissued at the end of fiscal year 1997, 15,000 shares vested on, and were
issued subsequent to, October 1, 1997. The remaining 120,000 shares will vest
quarterly in blocks of 15,000 shares each on the following dates (all of
which are less than three years from January 30, 1997, the grant date):
January 1, April 1, July 1, and October 1 of 1998; and January 1, April 1,
July 1, and October 1 of 1999. Vesting is immediate upon a change of control.
No dividends are paid on any of the awards of stock reported in column (e).
<F2> This amount is a combination of options including: (i) 120,000 vested,
but unexercised options that were renewed and extended on March 31, 1997;
(ii) 30,000 options that vested on July 1, 1997; (iii) 30,000 options that
vested on October 1, 1997; and 240,000 options that will vest January 1,
April 1, July 1, and October 1 of 1998; and January 1, April 1, July 1, and
October 1 of 1999. These options vest at a quarterly rate of 30,000 options,
consisting of three awards of 10,000 options each for service as director,
president, and CEO, respectively, of the Company. Vesting is immediate upon
a change of control. The options are exercisable through September 30, 2000,
at a price of $1.50 per share, the closing price on the grant date.
</FN>
</TABLE>
Other than the Company's incentive stock option plan, there are no retirement,
pension, or profit sharing plans for the benefit of officers and directors.
OPTION/SAR GRANTS TABLE. Information concerning individual grants of stock
options, whether or not in tandem with stock appreciation rights ('SARs'), and
freestanding SARs made during fiscal 1997 to each of the Named Executive
Officers is reflected in the table below.
<TABLE>
<CAPTION> OPTION/SAR GRANTS IN FISCAL 1997
Potential
Realizable Value
at Assumed Annual Alternative
Rates of Stock to (f) and
Price Appreciation (g): Grant
Individual Grants for Option Term Date Value
______________________________________________ _______________________ ___________
(a) (b) (c) (d) (e) (f) (g) (h)
<S> <C> <C> <C> <C> <C> <C> <C>
Percent of Total
Number of Options/ Exer-
Securities SARs Granted cise Grant
Underlying to Employees or Expir- Date
Options/SARs in Fiscal Base ation Present
Name Granted (#) Year Price Date 5%($) 10%($) Value ($)
______ ___________ ____________ _____ _________ ________ _______ ___________
Spenst
Hansen 300,000<F1> 50 percent $1.50 9/30/2000 $ 0 $ 0 $ 0
<FN>
<F1> See footnote 2 ("<F2>") to the "Summary Compensation Table" above.
</FN>
</TABLE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL 1997 YEAR-END OPTION/SAR VALUE TABLE.
The following table sets forth certain information with respect to each exercise
of stock options and SARs during fiscal 1997 by each of the Named Executive
Officers, and the fiscal 1997 year-end value of unexercised options and SARs.
<PAGE>
The dollar values in columns (c) and (e) are calculated by determining the dif-
ference between the exercise or base price of the options and the fair market
value of the underlying stock at the time of exercise and at fiscal year-end if
unexercised, respectively. The unexercised options, some of which may be exer-
cisable, have not been exercised; it is possible they might never be exercised.
Actual gains realized, if any, on stock option exercises and common stock
holdings are dependent on the future performance and value of the Common Stock
and overall stock market conditions. There can be no assurance that the pro-
jected gains and values shown in this Table will be realized.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1997
AND OPTION/SAR VALUES AT SEPTEMBER 30, 1997
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Dollar Options/SARs Options/SARs
Acquired Value at FY-End(#) at FY-End($)
on Exer- Real- Exercisable/ Exercisable/
Name cise (#) ized($) Unexercisable Unexercisable
___________________________________________________________________
<S> <C> <C> <C> <C>
Spenst 0 n/a 150,000/ n/a <F2>
Hansen 270,000 <F1>
<FN>
<F1> The 150,000 exercisable options consist of 120,000 vested options renewed
on March 31, 1997, and 30,000 options that vested on July 1, 1997. The
270,000 unexercisable options had not vested prior to the end of fiscal
1997, including 30,000 options that vested October 1, 1997.
<F2> None of the options that were unexercised at fiscal year-end had any
in-the-money value at that date.
</FN>
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS. The Company does not have any formalized
long-term incentive plans, excluding restricted stock, stock option and SAR
plans, that provide compensation intended to serve as incentive for performance
to occur over a period longer than one fiscal year, whether such performance is
measured by reference to financial performance of the Company or an affiliate,
the Company's stock price, or any other measure.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. There are no com-
pensation committee interlocks. With respect to insider participation, officers
Spenst Hansen and Orson Mabey, III participated in deliberations of the Com-
pany's Board of Directors during fiscal 1997 concerning executive officer com-
pensation.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION. The following is
a summary of the Executive Compensation Report of the Board of Directors:
The Board of Directors reviews and sets compensation levels of the executive
officers of the Company by evaluating their respective performance in light of
a number of factors, including the Board's assessment of the performance of the
Company, as well as the range of compensation paid by the Company in comparison
to the range of compensation paid by similar mining companies in the western
United States, and in the mining industry in general. The Board also evaluates
other factors as well, including the officer's performance relative to the
financial condition of the Company in relation to those areas of the Company's
business that are influenced by the officer's duties, and the progress of the
Company's exploration, development, and production related activities in rela-
tion to that officer's performance.
<PAGE>
The Company's executive compensation policy continues to look at three variable
elements: base salary, stock awards and option grants. The policy factors which
determine the setting of these compensation elements are largely aimed at
attracting and retaining executives considered essential to the Company's long-
term success. The granting of stock and/or options is designed as an incentive
to increasingly focus management's interests in closer alignment with the in-
terests of shareholders. The Company's executive compensation policy seeks to
engender committed leadership and strategic management to favorably posture the
Company for continued growth, stability and strength of shareholder equity.
For fiscal years 1994, 1995 and 1996, the compensation of Spenst Hansen, the
Company's Chief Executive Officer, was $36,000 per year. Mr. Hansen had declined
any increase in order to keep payroll expenses at a minimum. For that reason,
the amount of his compensation was not based on his performance. In fiscal 1997,
the Board of Directors determined that Mr. Hansen's compensation should be
increased to $72,000 per year. Nevertheless, in comparison with CEO salaries
within this sector of the mining industry, Mr. Hansen's salary continues to be
significantly lower. No other Named Executive Officer received a salary increase
during fiscal 1997. Furthermore, the Board of Directors did not modify the
amount of shares or options that directors, the president or the CEO are
entitled to receive as partial compensation for their services.
PERFORMANCE GRAPH. The following is a line graph comparing (1) the yearly per-
centage change in the Company's cumulative total shareholder return on its Com-
mon Stock with (2) the cumulative total return of the Nasdaq Stock Market for
all U.S. companies and (3) the cumulative total return of a peer group of simi-
larly capitalized mining companies.
[THE PERFORMANCE GRAPH WILL BE CONTAINED IN THE PRINTED PROXY STATE-
MENT, BUT CANNOT BE REPRODUCED IN THE EDGAR FILING OF THIS DOCUMENT.
THUS, FOR PURPOSES OF EDGAR DISCLOSURE, THE DATA COMPRISING THE FIVE
YEAR CUMULATIVE TOTAL RETURNS WILL BE PRESENTED IN THE DEFINITIVE
PROXY STATEMENT THAT WILL FILED VIA EDGAR WITH THE SEC.]
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Centurion rents certain tech-
nical geological equipment and field vehicles from Axis Geophysics Company
(Axis), a sole proprietorship operated by Spenst Hansen, an officer, director,
and principal shareholder of Centurion. The Company is billed approximately 25
to 50 percent less for this equipment than prevailing rates for similar services
in the industry. Centurion paid Axis approximately $27,224, $36,000, and
$30,000, during the years ended September 30, 1997, 1996, and 1995, respec-
tively. Although the transactions were not the result of arm's length negotia-
tions, they were unanimously approved by the Company's Board of Directors and
are believed by management to be more favorable than could have been obtained
from unrelated third parties.
Prior to December 1994, Keystone Surveys, Inc. ('Keystone'), a corporation owned
by Mr. Hansen, leased non-management personnel to Centurion. The Company was
charged 123 percent of the gross wages as payment in full of covered employees'
wages and Keystone's costs, including all employer paid federal, state, and
local taxes (approximately 16 percent of gross wages), and administrative
charges (approximately 7 percent). Centurion paid Keystone approximately
$26,800, $0, and $10,800, during the years ended September 30, 1997, 1996, and
1995, respectively.
ADVANCES TO RELATED PARTIES. No advances were made to Keystone Surveys or other
related parties during fiscal 1997, 1996 or 1995 on behalf of other companies
controlled by Mr. Hansen, or to any other business entity not a subsidiary of
the Company.
<PAGE>
LEGAL PROCEEDINGS. The Company is not aware of any pending legal proceedings
incidental to the Company's business or properties that involve primarily a
claim for damages in excess of ten percent of current assets excluding interest
and costs. In the ordinary course of its business during fiscal 1997, the Com-
pany was involved in routine legal proceedings as plaintiff and as defendant,
none of which involved claims greater than ten percent of current assets. For
that reason no adjustments to the financial statements have been made to
reflect any material uncertainty regarding the Company's exposure to liability
in these proceedings.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of September 30, 1997, the beneficial owner-
ship of Common Stock with respect to: (1) All persons known to the Company to be
the beneficial owners of more than five percent of the outstanding shares of
Common Stock (the 'Principal Shareholders'); (2) Each director and director nom-
inee of the Company; (3) Each Named Executive Officer (as that term is defined
in the section entitled 'Executive Compensation' above) who is listed in the
'Summary Compensation Table' above; and (4) All directors and executive officers
as a group.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED <F1>
NO. OF SHARES PERCENT OF CLASS
------------- ----------------
<S> <C> <C>
1. NAME AND ADDRESS OF
PRINCIPAL SHAREHOLDER(S)
Spenst M. Hansen 2,220,562 <F2> 6.1%
860 South 500 West Street
Salt Lake City, UT 84101
2. DIRECTORS
Spenst M. Hansen 2,220,562 <F2> 6.1%
Orson Mabey, III 373,333 <F3> 1.1%
J.D.H. (David) Morgan 340,000 <F4> 1.0%
Mark D. Dotson 150,000 <F5> 0.5%
3. "NAMED EXECUTIVE OFFICERS" (EXCLUDING
ANY DIRECTOR NAMED ABOVE)
None n/a n/a
4. ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP
7 Persons 3,597,495 <F6> 9.9%
<FN>
<F1> In determining beneficial ownership, for purposes of this table only, the
amount reported for each individual or group listed above includes all shares
that such person or group has the right to acquire within 60 days of September
30, 1997, such as, but not limited to, all awards of shares that will vest
within such 60-day period, and all shares purchasable through the exercise of
options, warrants or rights within such 60-day period. Unless otherwise noted,
all shares are owned beneficially and of record.
<F2> Includes 15,000 shares for director, president and CEO fees that vest on
October 1, 1997, and options to purchase 180,000 shares, of which 150,000
have vested and are currently exercisable, and of which 30,000 vest on October
1, 1997, and become immediately exercisable within 60 days.
<F3> Includes 5,000 shares for director fees that vest on October 1, 1997,
and options to purchase 180,000 shares, of which 170,000 have vested and
are currently exercisable, and of which 10,000 vest on October 1, 1997,
and become immediately exercisable within 60 days.
<PAGE>
<F4> Includes 5,000 shares for director fees that vest on October 1, 1997,
and options to purchase 180,000 shares, of which 170,000 have vested and
are currently exercisable, and of which 10,000 vest on October 1, 1997,
and become immediately exercisable within 60 days.
<F5> Includes 5,000 shares for director fees that vest on October 1, 1997,
and options to purchase 100,000 shares, of which 90,000 have vested and
are currently exercisable, and of which 10,000 vest on October 1, 1997,
and become immediately exercisable within 60 days.
<F6> Includes 40,200 shares for director, and officer service fees, and for
awards of shares that vest within 60 days, and options to purchase
680,000 shares, of which 620,000 have vested and are currently exercisable,
and of which 60,000 will vest and become immediately exercisable within
60 days.
</FN>
</TABLE>
RECOMMENDATION AND VOTE REQUIRED
The Board recommends that the shareholders vote "FOR" all of the directors and
director nominee(s) to serve for another year. The affirmative vote of a
majority of all of the issued and outstanding shares entitled to vote at the
Meeting vote is required for approval. See "Voting Securities and Principal
Holders Thereof" above.
Proposal Two
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Jones, Jensen & Company served as the independent accountants for the Company
for fiscal year 1997. There have been no disagreements during the three fiscal
years ended September 30, 1997, 1996 and 1995, or at any other time with the
Company's present or former independent public accountants. Management of the
Company intends to continue with its selection of Jones, Jensen & Company for
the fiscal year ending September 30, 1998. A representative of Jones, Jensen &
Company is expected to be present at the Meeting.
RECOMMENDATION AND VOTE REQUIRED
The Board recommends that the shareholders vote "FOR" this proposal to ratify
the appointment of Jones, Jensen & Company as independent accountants. See
"Voting Securities and Principal Holders Thereof" above.
Proposal Three
AUTHORIZATION TO IMPLEMENT SHARE CONSOLIDATION
(Reverse Stock Split)
The Board of Directors has proposed, subject to shareholder approval, to
implement a plan of consolidation whereby ten shares of the Company's
currently outstanding shares of Common Stock, or such other number as the
board alternatively may recommend prior to the mailing of the definitive
proxy statement to shareholders, will be exchanged for one post-split share
of Common Stock. There are presently 36,375,905 shares outstanding. The share
consolidation would reduce this number by a factor of 10, or by that
number which corresponds otherwise to the exchange ratio that the Board of
Directors recommends. The number of authorized shares of the Company will
not be changed.
<PAGE>
REASONS FOR THE PROPOSED REVERSE STOCK SPLIT
Management of the Company is proposing the reverse stock split for the
following reasons: management believes a reverse stock split will assist the
Company in meeting the recently implemented requirements for continued listing
on the Nasdaq SmallCap Market, by helping to raise the trading price of the
Company's Common Stock. The Company has been advised by staff of Nasdaq that the
the new requirements will become effective beginning February 23, 1998. One of
the key requirements for continued listing is that the Company's stock must
maintain a minimum bid price above $1.00 per share. On December 8, 1997, the
closing bid price of the Company's Common Stock was $0.25 per share as reported
by Nasdaq. The foregoing quotation reflects inter-dealer prices, without retail
mark-up, mark-down, or commission and may not represent actual transactions.
Also, members of the brokerage and banking industries have advised the Company
that brokerage firms might be more willing to evaluate the Company's securities
as a possible investment opportunity for their clients and may be more willing
to act as a market maker in the Company's securities if the price range for the
Company's Common Stock were higher. Management believes that additional interest
by the investment community in the Company's stock, of which there can be no
assurance, is desirable.
Management of the Company also believes that if low trading prices of the Com-
pany's Common Stock persist, it may have a continuing adverse impact upon the
market for trading the Company's shares. In particular, brokerage firms often
charge higher commissions for trades of low-priced stocks than for trades of
higher priced stock at the same dollar amount. Morever, some brokerage firms
will not recommend investments in companies with low-priced stocks or make a
market in such stock. As a result, the liquidity for current shareholders and
the Company's ability to obtain additional equity financing could be adversely
affected.
POTENTIAL EFFECTS OF A REVERSE STOCK SPLIT
Shareholders should note that the effects of the reverse stock split upon
the market price for the Company's Common Stock cannot be accurately
predicted. The market price of the Company's Common Stock immediately prior
to the implementation of the reverse stock split theoretically should
increase immediately following the reverse stock split in direct proportion,
approximately, to the exchange ratio of the share consolidation. However,
there can be no assurance that post-split shares will trade at an increased
price level above the price of pre-split shares. Nor can there be an assurance
that an increased price level can be maintained, or for what length of time.
In any event, it is the Company's intention that the share consolidation, when
implemented, should result over the long term in a minimum bid price greater
than $1.00 per share in order to meet the compliance standards for continued
listing on the Nasdaq SmallCap Market.
Further, management believes that if a greater market price results from the
reverse split, that brokerage and banking firms may develop a greater
interest in Centurion, be more willing to recommend that their clients
invest in the Company, and perhaps, work to restore market maker confidence
in the Company.
Because the reverse stock split affects all Shareholders uniformly, it will
not cause a dilution of the percentage of aggregate equity ownership, voting
rights, earnings or net book value of Shareholders, except for those Share-
holders who hold a number of Common Shares not divisible by ten, and such Share-
holders will have their pro-rata ownership rounded up to the next whole
share. The per share earnings and net book value of the Company's Common
Shares will be increased because there will be fewer Common Shares out-
standing. The Company believes that the increase in per share earnings and
net book value should result in a greater market price for the Common Shares.
<PAGE>
Also, management believes that market interest in the Common Shares should
be stimulated as much by an increase in market price levels as by increases
in per share earnings and net book value. A reverse stock split will decrease
the number of Common Shares issuable upon exercise of outstanding options,
warrants or similar rights to 1/10th of the pre-stock split amount.
This proposal to implement a reverse stock split does not represent an effort
by management to take the company private, nor is it intended or anticipated
that this reverse split will eliminate, close out, or decrease the number of
shareholders of the Company because of holding less than one share after the
reverse split. As disclosed herein, the Company will round up to the nearest
whole share if the number of shares a shareholder has is not evenly divisible.
The reverse stock split will not result in the ownership of fractional shares.
PROCEDURES FOR IMPLEMENTING THE PROPOSED REVERSE STOCK SPLIT
It is anticipated that the reverse split will become effective and be imple-
mented immediately following shareholder approval, at which time ten shares
of pre-split Common Stock will immediately be given a value equivalent to one
share of post-split Common Stock. The number of shares of post-split shares
held by any record holder, will be determined by from the total number of
shares represented by all of the certificates issued in the name of that
record holder as are held in each account set forth on the records of the
Company's transfer agent, OTC Stock Transfer, Inc. (the "Transfer Agent")
on the Record Date hereof. If the above calculation results in a quotient
containing a fraction, the Company will round up to the nearest whole share
instead of issuing a fractional share.
Approval of the reverse split will require a change in the "CUSIP" number
assigned to the Company's Common Stock (used to identify, transfer and trade
publicly registered securities). It is important to note that Shareholders
may not be required to exchange their pre-split share certificates for post-
split share certificates. However, Shareholders who desire to do so may
request that new certificate(s) be issued to them in the amount(s) that
represent their post-split shareholdings, by surrendering their certificates
to the Transfer Agent at P.O. Box 15600, 231 East 2100 South, Salt Lake City,
Utah 84115 (1-801-485-5554), and paying the applicable transfer fee.
FEDERAL INCOME TAX EFFECTS OF THE PLAN
Holders of Common Stock will not be required to recognize any gain or loss if
the reverse stock split is effected. The tax basis of the aggregate shares of
post-split Common Stock received by present shareholders will be equal to the
basis of the aggregate shares of the pre-split Common Stock exchanged therefor.
The holding period for shares of post-split Common Stock will include the
holding period of the pre-split Common Stock when calculated for purposes of
taxation or sales under Rule 144 of the Rules and Regulations promulgated under
the Securities Act of 1933, as amended (the "Securities Act"). In accordance
with recent amendments to Rule 144, "restricted securities," as defined therein
must be held at least one year before routine sales can be made pursuant to the
the provisions of the Rule. Rule 144 provides that shares issued in a reverse
stock split are deemed to have been held from the date of acquisition of the
pre-split shares involved in the reverse stock split.
INTEREST OF CERTAIN PERSONS IN THIS PROPOSAL
To the Company's best knowledge and belief, there are no persons or entities
that have a substantial interest in this proposal, since all shareholders will
be affected equally and there are no transactions or other corporate action
that is dependent upon or affected by the approval of the reverse split.
<PAGE>
RECOMMENDATION AND VOTE REQUIRED
The Board recommends that the shareholders vote "FOR" this proposal to approve
the reverse stock split. The affirmative vote of a majority of the shares
represented at the Meeting and entitled to vote is required for approval.
See "Voting Securities and Principal Holders Thereof" above.
Proposal Four
AMENDMENT TO STOCK OPTION AND AWARD PLAN
At the 1991 Annual Meeting, shareholders approved the Company's Stock Option and
Stock Award Plan ('the Plan') as set forth in the 1991 proxy statement. The pur-
pose of the Plan is to enable Centurion to attract and retain experienced and
able directors, officers, and employees, by providing incentives to directors,
officers and employees to extend their best efforts for Centurion and its
shareholders.
<PAGE>
Under the Plan, the Board of Directors may grant incentive stock options or
stock awards only to eligible directors, officers, employees, or other persons
who make significant contributions to the continued well-being and successful
operation of the Company. To date, the shareholders have approved 5,000,000
shares of stock to be issued and administered under the Plan and the Company
has filed a Form S-8 registration statement and amendments for the purpose of
registering shares to be administered under the Plan. As of September 30, 1997,
3,624,296 shares of stock have been awarded, and unexercised options to acquire
860,000 shares of stock were vested and outstanding under the terms of the
Plan. The purpose of this proposal is to obtain shareholder approval to admin-
ister an additional 2,500,000 shares of common stock under the plan (equivalent
to 250,000 shares following a 1 for 10 reverse stock split) in order to ensure
the availability of shares under the Plan to effectively maintain and develop a
cohesive management team, attract additional qualified individuals, and reward
contributions to the Company's success. A summary of the Plan is available
upon request without charge to shareholders.
RECOMMENDATION AND VOTE REQUIRED
The Board recommends that the shareholders vote "FOR" this proposal to
authorize 2,500,000 additional shares of Common Stock for administration under
the Plan (equivalent to 250,000 shares in the event of a 1 for 10 reverse stock
split.) The affirmative vote of a majority of the shares represented and
entitled to vote is required for approval. See "Voting Securities and Principal
Holders Thereof".
Proposal Five
AUTHORIZATION TO CHANGE THE NAME OF THE COMPANY
The Board of Directors proposes that the Shareholders consider and vote upon
an amendment to the Company's Articles of Incorporation to change the name of
the Company. The Board recommends that a name change to "Grand Central Silver
Mines, Inc." Management believes that this change in the Company's name will
more closely identify the Company with the historic and significant Grand
Central Mine in the Tintic Mining District of Utah, which has been of central
importance and will reflect the focus of the Company's business strategy on
silver.
Consistent with this name change, the Company proposes to change its NASDAQ
trading symbol to "GSLM", subject to Nasdaq approval, for the purpose of making
it easier for new investors to remember the symbol and to access the Company's
share price. Management believes that this change will not hurt or diminish the
Company's presence in the market for potential investors who are seeking mining
companies in which to invest.
<PAGE>
This change in name will result in a change in the "CUSIP" number even if
the reverse split, described above, is not approved. Upon this change in the
Company's name and CUSIP number, Shareholders may, but are not required to,
exchange their Common Stock certificates for new certificates bearing the
new name and CUSIP number. New certificates may be obtained by following the
same procedure described in Proposal Three above.
RECOMMENDATION AND VOTE REQUIRED
The Board recommends that the shareholders vote "FOR" this proposal to
approve an amendment to the Company's Articles of Incorporation to change
the name of the Company. The affirmative vote of a majority of the shares
represented at the Meeting and entitled to vote is required for approval.
See "Voting Securities and Principal Holders Thereof" above.
Proposal Six
OTHER BUSINESS
The Company has not received any shareholder proposals for this Meeting. The
Board of Directors knows of no other business, other than that stated in this
proxy statement, to be presented for action at the 1998 Annual Meeting. If other
business is properly presented at the Meeting, however, which was not known,
or did not become known to the Board a reasonable time before the solicitation,
then the designated Proxy will vote, or refrain from voting, in accordance with
his best judgment.
INFORMATION REGARDING NEXT ANNUAL SHAREHOLDERS MEETING
Consistent with SEC regulations, shareholders may submit proposals appropriate
for shareholder action at the Company's Annual Meeting to be held for fiscal
1999. For proposals to be considered for inclusion in the proxy statement for
that meeting, they must be received by the Company no later than October 1,
1998. Shareholder proposals should be directed to Centurion Mines Corporation,
Attn: Secretary, 860 South 500 West Street, P.O. Box 2365, Salt Lake City,
Utah 84110-2365.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ Spenst Hansen
By: _________________________________________
Spenst Hansen, Chairman of the Board of
Directors, President and Chief Executive
Officer of Centurion Mines Corporation
[END OF PROXY SOLICITATION MATERIAL]
