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: December 31, 1997
Commission File Number: 0-17048
CENTURION MINES CORPORATION
(Exact name of registrant as specified in its charter)
UTAH 87-0429204
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
860 SOUTH 500 WEST ST, MAIN FLOOR, 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 December 31, 1997: 36,854,148 shares
Page 1 of 9
<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 December 31, 1997,
and September 30, 1997, and the results of operations and cash flows for
each of the three months ended December 31, 1997, and 1996, 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 of 9
<PAGE>
<TABLE>
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
--------
<CAPTION>
As of As of
December September
31, 1997 30, 1997
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 33,812 $ 30,080
Accounts receivable -- --
Accounts receivable - related parties 6,098 26,312
Prepaid mining leases 27,280 41,606
Marketable securities (Note 3) 150,000 150,000
------------ ------------
Total Current Assets 217,190 247,998
------------ ------------
MINERAL PROPERTIES 11,186,768 9,648,747
------------ ------------
PROPERTY AND EQUIPMENT
Furniture and equipment 249,000 249,000
Field equipment 581,754 580,999
Leasehold improvements 7,517 7,517
Vehicles 125,151 125,151
Leased automobiles & equipment 84,620 84,620
Less: Accumulated depreciation and amortization (590,759) (547,436)
------------ ------------
Total Property and Equipment 457,283 499,851
------------ ------------
OTHER ASSETS
Deposits 1,690 1,690
Other assets 1,538 13,788
------------ ------------
Total other assets 3,228 15,478
------------ ------------
TOTAL ASSETS $ 11,864,469 $ 10,412,074
============ ============
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed consolidated statements.
Page 3 of 9
<PAGE>
<TABLE>
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<CAPTION>
As of As of
December September
31, 1997 30, 1997
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 344,761 $ 295,301
Accrued expenses 16,711 24,029
Payable to related party 9,512 476
Advances from shareholder 84,315 84,315
Leases payable - current portion 16,435 30,835
Notes payable - current portion -- --
------------ ------------
Total Current Liabilities 471,734 434,956
------------ ------------
LONG-TERM DEBT
Leases payable 22,041 22,041
Note payable - related party -- --
Note payable 71,004 71,004
------------ ------------
Total Long-Term Debt 93,045 93,045
------------ ------------
TOTAL LIABILITIES 564,779 528,001
------------ ------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 32,724 32,745
------------ ------------
STOCKHOLDERS' EQUITY
Common stock - $.01 par value; 40,000,000
shares authorized; 36,854,148 and 30,575,796
shares issued and outstanding, respectively 368,541 305,758
Additional paid-in capital 23,558,920 21,871,474
Accumulated deficit (12,648,995) (12,314,383)
Receivable related to sale of common stock (11,500) (11,500)
------------ ------------
Total Stockholders' Equity 11,266,966 9,851,349
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 11,864,469 $ 10,412,074
============ ============
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed consolidated statements.
Page 4 of 9
<PAGE>
<TABLE>
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Three Months Ended
December 31,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES
Operating revenue $ -- $ --
------------ ------------
Total Revenues -- --
------------ ------------
OPERATING COSTS
General and administrative 276,932 432,522
Mineral leases 26,127 76,531
Depreciation and amortization 43,323 40,528
------------ ------------
Total Operating Costs 348,382 549,581
------------ ------------
LOSS FROM OPERATIONS (348,382) (549,581)
------------ ------------
OTHER INCOME (EXPENSE)
Interest and other income 13,956 2,155
Interest expense (6,186) (4,052)
Gain (loss) from disposition of assets 6,000 12,433
------------ ------------
Total Other Income (Expense) 13,770 10,536
------------ ------------
NET LOSS BEFORE MINORITY INTERESTS (334,612) (539,045)
MINORITY INTERESTS IN (GAIN) LOSS OF
CONSOLIDATED SUBSIDIARIES -- --
------------ ------------
NET LOSS $ (334,612) $ (539,045)
============ ============
NET LOSS PER COMMON SHARE (Note 2) $ (.01) $ (.02)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 33,694,972 26,638,590
============ ============
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these condensed consolidated statements.
Page 5 of 9
<PAGE>
<TABLE>
CENTURION MINES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION> For the Three Months Ended
December 31,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (334,612) $ (539,045)
------------ ------------
Adjustments to reconcile net (income) loss
to net cash used in operating activities:
Compensation and other expenses paid
through issuance of common stock 206,341 246,445
Depreciation and amortization 43,323 40,528
Minority interests -- --
Changes in assets and liabilities net of
effect of acquisitions:
Accounts receivable -- --
Accounts receivable - related party 20,214 24,464
Prepaid mining leases 14,326 (40,614)
Other assets 12,250 --
Accounts payable 49,460 87,540
Accounts payable - related party 9,036 13,719
Accrued expenses (7,318) (22,241)
------------ ------------
Net Cash Provided (Used) by 13,020 (189,204)
Operating Activities ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (755) (40,674)
Acquisition and exploration of
mineral properties (38,021) (271,919)
------------ ------------
Net Cash Provided (Used) by (38,776) (312,593)
Investing Activities ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash 43,888 523,000
Payments on leases payable (14,400) (10,313)
Payments on notes payable -- (50,393)
Advances from shareholder -- --
------------ ------------
Net Cash Provided (Used) by 29,488 462,294
Financing Activities ------------ ------------
NET INCREASE (DECREASE) IN CASH 3,732 (39,503)
CASH, BEGINNING OF PERIOD 30,080 133,556
------------ ------------
CASH, END OF PERIOD $ 33,812 $ 94,053
============ ============
</TABLE>
Page 6 of 9
<PAGE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During the three months ended December 31, 1997, the Company:
- issued 61,750 shares of common stock valued at $60,286 for services of
employees and contractors.
- issued 38,500 shares of common stock valued at $43,784 for promotional
services.
- issued 58,950 shares of common stock valued at $47,375 in lieu of cash
payments for outstanding debt. Centurion also issued 43,400 shares of
common stock for acquisition of mineral properties valued at $40,000.
________________________________________________________
| |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
|________________________________________________________|
(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, 1997.
(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 (FMV):
Royal Silver Mines, Inc. COST FMV
---- ---
$150,000 $ 613,838
FMV is based on the closing or average price of Royal common stock of
$.5625 per share on January 2, 1998, the first trading day following the
quarter ended December 31, 1997.
These Notes are an integral part of the condensed consolidated statements.
Page 7 of 9
<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 December 31, 1997, there was deficit working capital of $(254,544)
compared to deficit working capital of $(186,958) at September 30, 1997. This
change is primarily the result of decreased cash flow.
At December 31, 1997, the Company owned 1,091,267 shares of Royal
Silver Mines, Inc. common stock, which was approximately seven percent of the
total shares outstanding as of December 31, 1997. The current market value
of this stock is about $.56 per share (see Note 3).
The Company's total assets consist primarily of interests in mineral
properties. This asset increased from $9,648,747 at September 30, 1997, to
$11,186,768 as of December 31, 1997. The increase is due primarily to the
acquisition from Royal Silver Mines, Inc., of certain Coeur d'Alene silver
properties and other patented mining claims by the issuance of stock.
During the three months ended December 31, 1997, the Company's
operations provided $13,020 of cash, as compared to using $189,204 of cash
during the same period in 1996. This change in cash flow from the Company's
operations during the first quarter of fiscal 1998, is a significant
result of management's actions to reduce expenses to match decreased cash
flow. During the three months ended December 31, 1997, cash flows from
operations included the issuance of common stock valued at approximately
$206,000 in lieu of compensation and for the payment of services by
employees and contractors.
The Company does not have sufficient capital to fully explore and
develop its mineral properties, nor does the Company currently have continuing
revenues. The Company plans to continue financing its exploration activities
through joint ventures, production activities, equity or debt funding, or by
selling properties and retaining royalty interests. In addition, the Company
holds royalty interests on properties sold during fiscal years 1992 and 1997
that are currently under exploration and development by other, larger mining
companies.
Results of Operations
- ----------------------
The Company had a loss for the three months ended December 31,
1997, of $334,612 or $(0.01) per share, as compared with a loss for the
three months ended December 31, 1996, of $539,045, or $(0.02) per share.
These losses are primarily the result of the lack of revenues, but also are
attributable to the decrease in the valuation of the Company's equity and
other marketable securities.
General and administrative costs decreased for the quarter ended
December 31, 1997, from the amount expended during the same quarter in 1996.
The decrease is a result of the reduction in employees and contractors.
These changes have allowed the Company to concentrate and better control the
use of its funds with respect to general and administrative costs. However,
management is unable to assess the impact that these changes may have on the
Company's operations. Further, management is unable to assure that such
changes will not result in adverse consequences to the Company's financial
condition.
Page 8 of 9
<PAGE>
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%; Dotson Exploration Company, Nevada,
100%; Mammoth Mining Company, Nevada, 81.8%; The Gold Chain Mining Company,
Utah, 61.1%; and Tintic Coalition Mines Corporation, Utah, 80%.
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.
The Company has scheduled the 1998 Annual Meeting of Shareholders
for January 30, 1998. The annual meeting will be held at the Company's
Mammoth, Utah office. In addition to the election of directors and
ratification of auditors, the following matters are being presented for
shareholder vote: adoption of a 1-for-10 reverse split of the Company's
common stock; approval of 2.5 million additional pre-split shares under
the Company's 1991 Stock Option and Award Plan; and a change in the
Company's name to "Grand Central Silver Mines, Inc."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
The Company filed a current report on Form 8-K, dated November 25, 1997.
There the Company reported a contemplated change in its business strategy
and plan, including a change in emphasis to silver, from that of gold and
copper. Since that filing, the Company has continued discussions with Royal
Silver Mines, Inc., regarding the possibility of an eventual combination of
assets or operations, or, perhaps, a corporate consolidation of some type
between the two companies. Prospectively, the Company also may consider
alternate business arrangements with one or more other mineral resource
companies regarding exploration and development of the Company's significant
mining properties on privately-owned land.
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.
CENTURION MINES CORPORATION
By Its Chief Executive Officer: By Its Principal Financial and
Accounting Officer:
/s/ Spenst Hansen /s/ Randy Sutherland
- -------------------------------- --------------------------------------
Spenst Hansen, President Randy Sutherland, Treasurer/Controller
Dated: January 16, 1998 Dated: January 16, 1998
Page 9 of 9
<PAGE>
<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 DECEMBER 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO ITS FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000836123
<NAME> CENTURION MINES CORPORATION
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1996
<PERIOD-END> DEC-31-1997 DEC-31-1996
<CASH> 33,812 94,053
<SECURITIES> 150,000 150,000
<RECEIVABLES> 6,098 9,378
<ALLOWANCES> 3,228 <F1> 11,190
<INVENTORY> 27,280 <F2> 117,192
<CURRENT-ASSETS> 220,418 <F3> 381,813
<PP&E> 12,234,810 10,063,167
<DEPRECIATION> (590,759) (425,940)
<TOTAL-ASSETS> 11,864,469 10,019,040
<CURRENT-LIABILITIES> 471,734 395,593
<BONDS> 125,769 <F4> 136,121
0 0
0 0
<COMMON> 368,541 271,961
<OTHER-SE> 10,898,425 9,215,365
<TOTAL-LIABILITY-AND-EQUITY> 11,864,469 10,019,040
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 348,382 549,581
<OTHER-EXPENSES> (19,956) <F5> (14,588)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 6,186 4,052
<INCOME-PRETAX> (334,612) (539,045)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (334,612) (539,045)
<EPS-PRIMARY> (.01) (.02)
<EPS-DILUTED> (.01) (.01)
<FN>
<F1> This field ("Allowances") represents the amount of "Total Other Assets"
reported on the Balance Sheets under "ASSETS" at page 3 of the Form 10-Q.
<F2> This field ("Inventory") represents the sum of "Prepaid mining leases",
also listed as "Prepaid expenses", reported on the Balance Sheets under
"ASSETS" at page 3 of the Form 10-Q.
<F3> This field ("Current Assets") represents the sum of "Total Other Assets"
and "Total Current Assets" reported on the Balance Sheets under "ASSETS"
at page 3 of the Form 10-Q.
<F4> This field ("Bonds") represents the sum of "Total Long-Term Debt" and
"Minority Interest in Consolidated Subsidiaries" reported on the Balance
Sheets under "LIABILITIES AND STOCKHOLDERS' EQUITY" at page 4 of the
Form 10-Q.
<F5> This field ("Other-Expense") represents the sum of "Interest and other
income" and "Gain (loss) from disposition of assets" reported on the
"STATEMENTS OF OPERATIONS" at page 5 of the Form 10-Q.
</FN>
</TABLE>
