U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended OCTOBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-17386
FISCHER-WATT GOLD COMPANY, INC.
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(Exact name of small business issuer as specified in its charter)
NEVADA 88-0227654
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1621 North 3rd Street, Suite 1000, Coeur d'Alene, ID 83814
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(Address of principal executive offices)
(208) 664-6757
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ] No [ X ]
The number of shares of Common Stock, $0.001 par value, outstanding as of
October 31, 1996 was 31,296,760. Transitional Small Business Disclosure Format
(check one): Yes [ ] No [X]
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Part 1 - Financial Information
Item 1. Financial Statements
FISCHER-WATT GOLD COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
October 31,
ASSETS 1996
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(Unaudited)
<S> <C>
CURRENT ASSETS:
Cash ...................................................... $ 1,039,000
Certificate of Deposit .................................... 500,000
Accounts receivable ....................................... 341,000
Due from related parties .................................. 496,000
Inventories ............................................... 839,000
Prepaid Expenses .......................................... 20,000
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Total current assets .................................... 3,235,000
MINERAL INTERESTS, net ...................................... 3,946,000
PLANT, PROPERTY, AND EQUIPMENT .............................. 1,892,000
LESS ACCUMULATED DEPRECIATION ............................... (65,000)
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FOREIGN TAX REFUNDS ......................................... 725,000
OTHER ASSETS ................................................ 57,000
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Total assets ............................................ $ 9,790,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
and accrued expenses .................................... $ 1,713,000
Notes payable to others ................................... 400,000
Notes payable to banks (Note 6) ........................... 228,000
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Total current liabilities ................................. 2,341,000
LONG-TERM LIABILITIES:
Notes Payable(Note 6) ..................................... 700,000
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Total liabilities ......................................... 3,041,000
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COMMITMENTS AND CONTINGENCIES,
Notes 1,3
SHAREHOLDERS' EQUITY:
Preferred Stock, non-voting,
convertible, $2.00 par value,
250,000 shares authorized;
0 shares outstanding
Common stock, $0.001 par value,
50,000,000 shares authorized;
31,296,760 shares outstanding
at October 1996 ........................................ 31,000
Additional paid-in capital ................................ 12,772,000
Foreign Currency translation
adjustments ............................................. 294,000
Deficit ................................................... (6,348,000)
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Total shareholders' (deficit) equity ........................ 6,749,000
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Total liabilities and
shareholders' equity ...................................... $ 9,790,000
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</TABLE>
The accompanying notes are an integral part of these balance sheets.
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FISCHER-WATT GOLD COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
October 31, October 31,
1996 1995 1996 1995
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SALES OF PRECIOUS METALS ....................................... $1,243,000 $ 595,000 $ 3,212,000 $ 595,000
COSTS APPLICABLE TO SALES ...................................... (1,014,000) (344,000) (3,015,000) (344,000)
------------ ------------ ------------ ------------
INCOME FROM MINING ............................................. 229,000 251,000 197,000 164,000
GAIN ON SALE OF MINERAL INTEREST ............................... -0- 887,000 -0- 1,530,000
COSTS AND EXPENSES:
Abandoned and impaired
mineral interests .......................................... -0- 4,000 3,000 183,000
Selling, general and administrative .......................... 502,000 80,000 1,337,000 244,000
Exploration .................................................. 117,000 -0- 333,000 3,000
------------ ------------ ------------ ------------
619,000 84,000 1,673,000 430,000
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest income (expense) .................................... 12,000 (119,000) 72,000 (143,000)
Unrealized gain on trading securities ........................ -0- -0- -0- 206,000
Other (expense) income ....................................... (31,000) (135,000) (20,000) (98,000)
Currency exchange losses, net ................................ 56,000 -0- (244,000) -0-
------------ ------------ ------------ ------------
37,000 (254,000) (192,000) (35,000)
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Net (loss) income before income taxes .......................... (353,000) 713,000 (1,668,000) 1,229,000
TAX PROVISION .................................................. -0- (61,000) -0- (72,000)
------------ ------------ ------------ ------------
NET (LOSS) INCOME .............................................. $ (353,000) $ 652,000 $ (1,668,000) $1,157,000
------------ ------------ ------------ ------------
(LOSS) INCOME PER SHARE AND
COMMON EQUIVALENT .......................................... $ (.01) $ .04 $ (.06) $ .08
------------ ------------ ------------ ------------
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING .............................. 31,213,427 15,193,000 29,274,760 12,344,000
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these statements
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FISCHER-WATT GOLD COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
October 31,
1996 1995
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Net cash used in
operating activities ................ $(3,238,000) $ (176,000)
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Net cash (used in) provided by
investing activities ................ (551,000) 94,000
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Net cash provided by
financing activities ................ 5,062,000 570,000
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NET INCREASE IN CASH ...................... 1,273,000 488,000
CASH, at beginning of period .............. 266,000 6,000
CASH, at end of period .................... $ 1,539,000 $ 494,000
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period
for interest ........................ $ 32,000 $ 7,000
Cash paid during the period for taxes.. 164,000 -0-
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT
NONCASH ACTIVITIES:
Liabilities assumed in connection
with purchase of Oronorte ........... $ -0- $ 887,000
Application of bonus on unproven
property to offset accrued
interest expense ..................... $ -0- $ 1,000,000
Short term debt incurred in
connection with purchase of
shares of Greenstone Resources
of Colombia Ltd. .................... $ -0- $ 25,000
Cost basis of trading securities
sold in connection with loss on
trading securities .................. $ -0- $ 564,000
Short-term debt eliminated in
connection with sale of
mineral interest .................... $ -0- $ 605,000
Accrued interest eliminated in
connection with sale of
mineral interest .................... $ -0- $ 52,000
Cost basis in mineral interest
sold in connection with
debt eliminated ..................... $ -0- $ 164,000
Common stock issued in exchange for
professional services rendered ...... $ 21,000 $ -0-
Common stock issued in exchange for
certain unpatented mining claims .... $ 50,000 $ -0-
Long-term debt incurred in connection
with purchase of mineral interest ... $ 700,000 $ -0-
</TABLE>
The accompanying notes are an integral part of these statements.
4
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FISCHER-WATT GOLD COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Financial Condition and Liquidity
The accompanying financial statements are unaudited; however, in the opinion of
management, all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation have been made. These financial statements and
notes thereto should be read in conjunction with financial statements and
related notes included in Fischer-Watt Gold Company, Inc.'s ("Fischer- Watt" or
the "Company") Annual Report on Form 10-KSB for the year ended January 31, 1996
("Form 10-KSB").
Future Financing and Realization
While Fischer-Watt reported net income in fiscal 1996 principally as a result of
realizing gains on the sale of exchange of non-producing mineral properties, it
has an accumulated deficit of $6,348,000 and continues to experience negative
cash flow from operations. Management believes that as the recently acquired
producing gold mine property is further developed and production levels
increase, sufficient cash flows will exist to fund the Company's continuing
mining operations and exploration and development efforts in other areas.
Management anticipates achieving levels of production sufficient to fund the
Company's operating needs by the end of fiscal 1998 and until then will fund
operations with the cash raised in its March 1996 offering (see Note 7), and the
anticipated receipt of funds from the exercise of in the money stock warrants
expiring August of 1997. The ability of the Company to achieve its operating
goals and thus positive cash flows from operations is dependent upon the future
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market price of gold, and the ability to achieve future operating efficiencies
anticipated with increased production levels and cost cutting measures to be
implemented. Management's plans may require additional financing or disposition
of some of the Company's non-producing assets. While the Company has been
successful in raising cash from these sources in the past, there can be no
assurance that its future cash raising efforts and anticipated operating
improvements will be successful.
2. Unaudited Pro Forma Information
The following unaudited pro forma information has been prepared on the basis
that the acquisitions of Greenstone Resources of Columbia Ltd. ("GRC") and Great
Basin Management Co. Inc., ("GBM") had both occurred at the beginning of fiscal
1995. The unaudited pro forma information includes adjustments to depreciation
and depletion expense based on the allocation of the purchase price to the
property, plant, equipment and mineral interests acquired.
Quarter ended October 31, 1995:
Sales of precious metals $ 2,559,000
Net income $ 451,000
Net earnings per common share $ .03
3. Accounts Receivable
Accounts receivable at October 31, 1996 consist of:
Trade $ 163,000
Other 178,000
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Total accounts receivable $ 341,000
4. Inventories
Inventories at October 31, 1996 consist of:
Finished products and products in process $ 339,000
Supplies, materials and spare parts 500,000
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Total inventories $ 839,000
5. Mineral Interests
Capitalized costs for mineral interests at October 31, 1996 consist of:
Operating mining property:
El Limon Mine, Oronorte District $ 758,000
Less accumulated depletion (259,000)
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499,000
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Non-operating properties,
net of reserves:
El Carmen, Colombia 772,000
La Aurora, Colombia 130,000
Juan Vara, Colombia 87,000
Afghan-Kobeh, Nevada 647,000
Castle, Nevada 700,000
Coal Canyon, Nevada 578,000
Red Canyon, Nevada 334,000
Tempo, Nevada 50,000
Sacramento Mountains, California 60,000
Water Canyon, Nevada 3,000
Amador, Nevada 3,000
Oatman, Arizona 10,000
Modoc, California 73,000
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Total mineral interests $3,946,000
6. Notes Payable
The Company has a $500,000 line of credit with a bank. Advances under the line,
which totaled $228,000 at October 31, 1996, accrue interest at rates from 26% to
39% and are collateralized by $500,000 placed into a certificate of deposit
which bears interest at 3.9%.
The Company delivered to Kennecott Exploration Company a promissory note in the
amount of $700,000, which bears interest at an annual interest rate equal to the
prime or base rate, or legal rate, if less. Principal and interest are due on
September 30, 1998 or at the option of the Company, by issuance of 1,000,000
(one million) shares of the Company's stock.
7. Equity and Common Stock
In November 1995, the Company completed a private placement of 6,067,500 common
shares and 3,033,750 warrants to purchase common shares. The net proceeds from
this private placement of $816,000 are to be used to finance the expansion and
operation of the Company's El Limon gold mine in Colombia. Each warrant can be
exercised to purchase a common share for $0.30 through August 1997. Costs of
issuing these common shares and stock warrants totaled $94,000 and were
subtracted from the gross proceeds in determining the amount of additional paid
in capital.
The Company issued 4,125,660 common shares on January 29, 1996 in exchange for
all of the issued and outstanding common shares of GBM. The shares had an
estimated fair market value of $1,234,000 and the costs of the issuance of
$21,000 were subtracted from the proceeds in determining the amount of
additional paid in capital.
On March 12, 1996, the Company sold 9,960,000 common shares and 4,980,000
warrants to purchase common shares to investors located outside of the United
States pursuant to a Regulation S offering.
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The net proceeds from this offering of $4,930,000 are to finance the Company's
capital equipment and working capital needs related to the further development
and expansion of the Colombian gold mining operation and the Company's
exploration and development activities in Colombia and Nevada.
Each of these warrants issued entitles the holder to purchase one additional
share of Fischer-Watt common stock at an exercise price of $.75 through February
28, 1998. These securities were not registered under the Securities Act of 1933
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. Costs of issuing these
common shares and warrants totaled $348,000 and will be subtracted from the
gross proceeds in determining the amount of additional paid in capital.
In March 1996, the Company issued 50,000 common shares in exchange for
professional services rendered. The shares had an estimated fair market value of
$17,762.
In June 1996, the Company issued 9,600 common shares in exchange for
professional services rendered. The shares had an estimated fair market value of
$3,000.
Item 2. Management's Discussion and Analysis or Plan of
Operation
The following is a discussion of Fischer-Watt Gold Company, Inc.'s (the
"Company") current financial condition as well as its operations for the three
months and nine months ended October 31, 1996 (fiscal 1997) and October 31, 1995
(fiscal 1996). This discussion should be read in conjunction with the Financial
Statements in Item 1 of this report as well as the Financial Statements in Form
10-KSB for the fiscal year ended January 31, 1996 on file with the Securities
and Exchange Commission, as the discussion set forth below is qualified in its
entirety by reference thereto.
Liquidity and Capital Resources
Short-Term Liquidity
As of November 30, 1996, the Company had $1,249,000 in cash and accounts payable
of $1,302,000. While Fischer-Watt reported net income in fiscal 1996 principally
as a result of realizing gains on the sale or exchange of non-producing mineral
properties, it has an accumulated deficit of $6,348,000 and has continued to
experience negative cash flow from operations. Management believes that as the
recently acquired producing gold mine property is further developed and
production levels increase, sufficient cash flows will exist to fund the
Company's continuing mining operations and exploration and development efforts
in other areas. Management anticipates achieving levels of production sufficient
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to fund the Company's operating needs by the end of fiscal 1998 and until then
will fund operations with the cash raised in its March 1996 offering(see Note 7)
and the anticipated receipt of funds from the exercise of in the money stock
warrants expiring in August of 1997. The ability of the Company to achieve its
operating goals and thus positive cash flows from operations is dependent upon
the future market price of gold, and the ability to achieve future operating
efficiencies anticipated with increased production levels and cost cutting
measures to be implemented. Management's plans may require additional financing
or disposition of some of the Company's non-producing assets. While the Company
has been successful in raising cash from these sources in the past, there can be
no assurance that its future cash raising efforts and anticipated operating
improvements will be successful.
On October 31, 1996, the Company's current ratio was 1.4:1 based on current
assets of $3,235,000 and current liabilities of $2,341,000. On October 31, 1995,
Fischer-Watt's current ratio was 1:1 based on current assets of $1,568,000 and
current liabilities of $1,574,000. The improvement in the current ratio at
October 31, 1996 as compared to October 31, 1995 is primarily related to an
increase in cash which resulted from the November and March stock offerings, and
an increase in accounts receivable and inventory balances associated with the
increased operational activity at the mine; all of which are partially offset by
the increased accounts payable related to the increased operational activity at
the mine, and the addition of a note payable incurred with the acquisition of
GBEM (see discussion below).
Pursuant to agreements among Greenstone Resources Ltd. ("Greenstone"), Dual
Resources Ltd. ("Dual"), and the Company, Greenstone made a payment of $300,000
to Dual to acquire 2,800,000 shares of Oronorte common stock for the benefit of
the Company. The Company's obligation to repay Greenstone this $300,000 is
evidenced by a note payable which bears interest at the rate of 10% per annum.
This note became payable, in full, on June 20, 1996 at which time the Company
withheld payment while negotiating the settlement of amounts owed to the Company
by Greenstone. In October 1996, the Company filed suit against Greenstone
seeking payment of these excess Oronorte liabilities.
Prior to its acquisition by the Company, GBEM, borrowed funds from Serem Gatro
Canada Inc. This loan was evidenced by a note. The note payable is for monies
lent and advanced to GBEM by SGC during the period April 1, 1995, to May 31,
1995, as provided under the share purchase agreement among Serem Gatro, GBEM and
GBM made as of May 31, 1995. The note was to be repaid not later than September
30, 1995. and bears interest at 8%. Repayment of this note payable and related
interest is currently being negotiated with SGC.
The Company has a $500,000 line of credit with a bank. Advances under the line,
which totaled $228,000 at October 31, 1996, accrue interest at rates from 26% to
39% and are collateralized by $500,000 placed into a certificate of deposit
which bears interest at 3.9%.
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Management believes that the Company has adequately reserved its reclamation
commitments.
Long-Term Liquidity
Cash flows from operations during fiscal 1998 are expected to be sufficient to
fund operating, administrative expenses and exploration expenses. The Company is
anticipating that additional funding from the exercise of stock warrants with a
thirty cent per share exercise price, will be received in August 1997. The
Company may need additional funding from equity or borrowings if a major
expansion at its Oronorte property is neccesary and cost justified, or to fund
the development of other properties, or if an acquisition opportunity arises. At
October 31, 1996 the Company had no long term debt.
As of September 30, 1996, the Company purchased certain unpatented mining claims
located in Esmeralda County, Nevada (the "Property"), from Kennecott Exploration
Company. At closing, the Company delivered to Kennecott Exploration Company a
promissory note in the amount of $700,000, due September 30, 1998, as the
purchase price for the Property, which is payable under certain conditions, at
the option of the Company, by the issuance of 1,000,000 (one million) shares of
the Company's stock.
Results of Operations
Three months ended October 31, 1996 compared with three months ended October 31,
1995.
The Company had net loss of $353,000 ($.01 per share) compared to net income of
$652,000 ($.04 per share) in the quarter ended October 31,1996 and 1995,
respectively. The primary reasons for the change relates to the recognition of a
gain on sale of mineral interest of $887,000 in the quarter ended October 31,
1995, for which no comparable gain was recognized in the quarter ended October
31, 1996. Additionally, selling, general and administrative expenses increased
$335,000 as a result of increased operational activity at the mine, and
increased legal, accounting, and travel costs associated with the administration
of an active, growing public company, coupled with the acquisition of GBM which
resulted in an increase in exploration expenses of $117,000 in the quarter ended
October 31, 1996, as compared to the quarter ended October 31, 1995. The above
items were partly offset by an increase in interest income (expense) of $131,000
which resulted from the elimination of high interest rates on outstanding debts
and unpaid taxes of the Colombian unit during the quarter ended October 31,
1995.
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Revenues
The Company had sales of precious metals of $1,243,000 representing 3,786 ounces
of gold in the quarter ended October 31, 1996, and sales of precious metals of
$595,000 representing 1,367 ounces of gold in the quarter ended October 31,
1995. The increase in revenues from 1995 relates to production for a full
quarter in 1996 versus two months in 1995, coupled with increased average
monthly production in 1996 resulting from further development of the mine. The
Company does not presently employ forward sales contracts or engage in any
hedging activities.
Costs and Expenses
Production costs totaled $626,000 and $344,000 for the three month period ended
October 31, 1996 and 1995, respectively. Production costs as a percentage of
revenues were 50 percent and 58 percent during the quarter ended October 31,
1996 and 1995, respectively. The improvement relates to operational efficiencies
gained with increased production levels and the implementation of cost cutting
measures.
The cost of abandoned mineral interests decreased from $4,000 to $-0- in
quarters ended October 31, 1995 and 1996, respectively. In the quarter ended
October 31, 1995 the El Cerrito, a property in Mexico held by the Company's
Minera Montoro subsidiary was abandoned after Montoro's joint venture partner's
exploratory drilling program did not produce encouraging results, and
consequently, the property was returned to Minera Montoro.
Abandonments are a natural result of the Company's ongoing program of
acquisition, exploration and evaluation of mineral properties. When the Company
determines that a property lacks continuing economic value, it is abandoned. It
cannot be determined at this time when or if any of the Company's current
property interests will be abandoned.
Selling, general and administrative costs increased from $167,000 to $502,000 in
quarters ended October 31, 1995 and 1996, respectively. The increase of $335,000
primarily relates to an increase in general and administrative expenses
associated with mining operations of $203,000, coupled with an increase in
accounting and legal expenses associated with the acquisitions of GRC and GBM,
and the increasing activity level of the Company. Additionally, the positions of
a Vice President and Chief Financial Officer were added during the quarter ended
July 31, 1996.
Exploration expense increased $117,000 in the third quarter of fiscal 1997 from
$-0- in the third quarter of fiscal 1996. This increase is due to the
acquisition of GBM.
Net interest income (expense) increased from $(119,000) in the third quarter of
1995 to $12,000 in the third quarter of 1996.
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This increase is due to the elimination of high interest rates on outstanding
debts and unpaid taxes of the Colombian unit during the prior year coupled with
interest earned in the proceeds from the November and March stock offerings.
Nine months ended October 31, 1996 compared with nine months ended October 31,
1995.
The Company had net loss of $1,668,000 ($.06 per share) compared to net income
of $1,157,000 ($.08 per share) in the nine months ended October 31, 1996 and
1995, respectively. The primary reasons for the change relates to the
recognition of a gain on sale of mineral interest of $1,530,000 and an
unrealized gain on trading securities of $206,000 in the nine months ended
October 31, 1995, for which no comparable gains were recorded in the nine months
ended October 31, 1996. Additionally, the acquisition of the Oronorte project,
which reported income from mining of $197,000, offset by general and
administrative expenses associated with mining operations of $791,000 and a loss
from currency exchange of $244,000 in the nine months ended October 31, 1996 as
compared to income from mining of $251,000, offset by general and administrative
expenses associated with mining operations of $87,000 in the nine months ended
October 31, 1995. Additionally, selling, general and administrative expenses
increased by $1,006,000, of which $791,000 relates to expenses associated with
mining operations, and the remainder is related to an increase in SEC
accounting, legal, and corporate relations expenses. Further, the acquisition of
GBM resulted in an increase in exploration expenses of $330,000 in the nine
months ended October 31, 1996, as compared to the nine months ended October 31,
1995.
Revenues
The Company had sales of precious metals of $3,212,000 representing 9,124 ounces
of gold in the nine months ended October 31, 1996, and $595,000 representing
1,367 ounces of gold in the nine months ended October 31, 1995. The increase in
revenues is primarily attributed to production during nine months of 1996 as
compared to two months in 1995. The Company does not presently employ forward
sales contracts or engage in hedging activities.
Cost and Expenses
Production costs totaled $3,015,000 and $344,000 for the nine months ended
October 31, 1996 and 1995 respectively. Production costs as a percentage of
revenues were 94 percent and 58 percent during the nine months ended October 31,
1996 and 1995 respectively. The increase in production costs as a percentage of
revenues in the nine months ended October 31, 1996 relates to the costs
associated with further development of the mine and mill for the improvement of
future operating efficiencies. The results of the development, coupled with cost
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cutting implementations dropped the production costs as a percentage of revenue
to 50 percent in the third quarter of fiscal 1997.
The cost of abandoned mineral interests decreased from $183,000 to $3,000 in the
nine months ended October 31, 1995 and 1996, respectively. During the nine
months ended October 31, 1996, the La Victoria was abandoned in the amount of
$3,000. In the nine months ended October 31, 1995 the Oatman property in Arizona
was partially abandoned in the amount of $125,000, the Tuscara was partially
abandoned in the amount of $32,000, the Rio Tinto was abandoned in the amount of
$22,000 and the El Cerrito was abandoned in the amount of $4,000.
Abandonments are a natural result of the Company's ongoing program of
acquisition, exploration and evaluation of mineral properties. When the Company
determines that a property lacks continuing economic value, it is abandoned. It
cannot be determined at this time when or if any of the Company's current
property interests will be abandoned.
Selling, general and administrative costs increased from $331,000 to $1,337,000
in the nine months ended October 31, 1995 and 1996, respectively. The increase
of $671,000 primarily relates to an increase in general and administrative
expenses associated with mining operations of $704,000, coupled with an increase
in SEC accounting, legal and corporate relations expenses. Additionally, the
positions of a Vice President and Chief Financial Officer were added during the
six months ended July 31, 1996.
Exploration expense increased $330,000 in the first nine months of fiscal 1997
from $3,000 in the first nine months of fiscal 1996. This increase is primarily
due to the acquisition of GBM.
Net interest income (expense) increased from $(143,000) in the first nine months
of fiscal 1996 to $72,000 in the first nine months of fiscal 1997. This increase
is primarily due to the elimination of interest accrued on the $500,000 note to
Kennecott, coupled with the elimination of high interest rates on outstanding
debts and unpaid taxes of the Colombian unit during the prior year, partly
offset by the interest earned in the proceeds from the November and March stock
offerings.
The Company accounts for foreign currency translation in accordance with the
provisions of Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation" ("SFAS No.52"). The assets and liabilities of the
Colombian unit are translated at the rate of exchange in effect at the balance
sheet date. Income and expenses are translated using the weighted average rates
of exchange prevailing during the period. The related translation adjustments
are reflected in the accumulated translation adjustment section of shareholders'
equity. The Company recognized a currency exchange loss of $240,000 in the nine
months ended October 31, 1996. There was no comparable gain or loss in the nine
months ended October 31, 1995.
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Commitments and Contingencies
Upon the purchase of GRC, the Company assumed GRC's liabilities related to
transactions governed by Colombian law concerning the movement of foreign
currency into and out of Colombia. The Colombian government has the right to
request an audit of foreign currency movement within a two year time frame. No
request of notice of an audit has been received from the Colombian government to
date. Therefore, the likelihood of a loss resulting from the actions of GRC
prior to the Company's purchase cannot presently be determined.
Oronorte is currently the defendant in several claims relating to labor
contracts and employee terminations which occurred during a labor strike. This
strike and the resulting terminations took place during the former ownership of
Oronorte. The estimated amount of the claims against Oronorte totals
approximately $200,000. In the event of an unfavorable outcome from Oronorte's
perspective, there is a likelihood that the Company would have the right to
claim indemnity from Greenstone Resources Canada Ltd. pursuant to the terms of
the agreements related to the acquisition of Oronorte.
In connection with the purchase of GRC, Greenstone agreed to reimburse the
Company for certain liabilities existing at the date of purchase in excess of
$1,000,000. At the present time, the Company has paid or identified as current
payables approximately $309,000 in excess of the $1,000,000. Management is
seeking to recover these excess liabilities in accordance with the terms of the
purchase agreement and accordingly has not recorded a receivable from Greenstone
as of October 31, 1996.
Statements which are not historical facts contained herein are forward looking
statements that involve risks and uncertainties that could cause actual results
to differ from projected results. Such forward-looking statements include
statements regarding expected commencement dates of mining or mineral production
operations, projected quantities of future mining or mineral production, and
anticipated production rates, costs and expenditures, as well as projected
demand or supply for the products that FWG and/or FWG Subsidiaries produce,
which will affect both sales levels and prices realized by such parties. Factors
that could cause actual results to differ materially include, among others,
risks and uncertainties relating to general domestic and international economic
and political risks associated with foreign operations, unanticipated ground and
water conditions, unanticipated grade and geological problems, metallurgical and
other processing problems, availability of materials and equipment, the timing
of receipt of necessary governmental permits, the occurrence of unusual weather
or operating conditions, force majeure events, lower than expected ore grades
14
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and higher than expected stripping ratios, the failure of equipment or processes
to operate in accordance with specifications and expectations, labor relations,
accidents, delays in anticipated start-up dates, environmental costs and risks,
the results of financing efforts and financial market conditions, and other
factors described herein and in FWG's annual report on Form 10-KSB. Many of such
factors are beyond the Company's ability to control or predict. Actual results
may differ materially from those projected. Readers are cautioned not to put
undue reliance on forward-looking statements. The Company disclaims any intent
or obligation to update publicly these forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
applicable laws.
Part II - Other Information
Item 1. Legal Proceedings
On November 14, 1996, the Nevada Supreme Court upheld the December 7, 1994 jury
verdict in favor of the Company's Great Basin Exploration and Mining Company
relating to the lawsuit filed in 1993 by a reporter who sustained an injury
while covering a story on a property previously held by GBEM. (See Part II-Item
1. Legal Proceedings of Form 10-QSB for the quarter ended April 30, 1996.)
Item 2. Changes in Securities
On October 14, 1996 the Company obtained exploration rights with respect to
unpatented mining claims from a property owner by entering into a letter
agreement for a $10,000 cash payment and the issuance of 100,000 shares of
common stock to the property owner. The securities were issued pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act in a
private transaction to a sophisticated purchaser and are restricted from
transfer unless such transfer is registered under the Securities Act or made
pursuant to an exemption therefrom.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
Exhibit Item 601
No. Category Exhibit
- ------- -------- -------
1 2 Mining Property Purchase Agreement dated September
30, 1996, between Fischer-Watt Gold Company, Inc. and
Kennecott Exploration Company ("KEC") whereby FWG
purchased mining claims owned by KEC in Esmeralda
County, Nevada, and upon closing, delivered to KEC a
promissory Note in the amount of $700,000. Filed as
exhibit 6.2 to Form 10-QSB filed October 18, 1996 and
incorporated herein by reference.
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2 2 Letter agreement dated October 14, 1996, between
Steve Van Ert and Fischer-Watt Gold Company, Inc. known
as the Sacramento Mountains property. Filed as Exhibit
7.2 to Form 10-QSB filed November 15, 1996 and
incorporated herein by reference.
3 3 By-laws of the Corporation. Amended and restated.
4 10 Promissory note dated September 30, 1996, whereby
Fischer-Watt Gold Company, Inc. Promises to pay
$700,000 to Kennecott Exploration Company, Inc., filed
as exhibit 48-27 to form 10-QSB filed October 18, 1996
and incorporated herein by reference.
5 27 Financial Data Schedule for the nine month period ended
October 31, 1996.
(b) Reports on Form 8-K
During the quarter ended October 31, 1996, no reports on Form 8-K were filed by
the registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned,
thereunto duly authorized.
FISCHER-WATT GOLD COMPANY, INC.
December 16, 1996 By /s/ George Beattie
----------------------------
(Signature)
George Beattie, President,
Chief Executive Officer
(Principal Executive Officer),
Chairman of the Board and
Director
December 16, 1996 By /s/ Michele D. Wood
-----------------------------
(Signature)
Michele D. Wood,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
17
AMENDED AND RESTATED
BYLAWS
OF
FISCHER-WATT GOLD COMPANY, INC.
ARTICLE I
Offices
Section 1. Registered Office. The registered office of Fischer-Watt Gold
Company, Inc. (hereinafter referred to as the "Corporation"), shall be
maintained at such locations within the State of Nevada as the officers of the
Corporation from time to time shall designate. The Corporation shall maintain in
and in charge of such registered office an agent upon whom process against the
Corporation may be served.
Section 2. Other Offices. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Nevada, as the Board of Directors from time to time may determine or the
business of the Corporation may require.
ARTICLE II
Meetings of Shareholders
Section 1. Annual Meetings. The annual meeting of the shareholders of the
Corporation for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held on such date and
at such time as shall be designated by the Board of Directors and stated in the
notice of such meeting. If the election for directors shall not be held on the
day designated therefor or at any adjournment thereof, the directors shall cause
such election to be held at a special meeting of the shareholders as soon
thereafter as may be convenient. At such special meeting, the shareholders may
elect the directors and transact any other business with the same force and
effect as at an annual meeting duly called and held.
Section 2. Special Meetings. A special meeting of the shareholders for any
purpose or purposes, unless otherwise prescribed by statute, may be called at
any time and shall be called by the President or Secretary upon the direction of
the Board of Directors.
Section 3. Place of Meetings. All meetings of the shareholders of the
Corporation shall be held at the principal place of business of the Corporation
or at such other place, within or without the State of Nevada, as shall be
designated by the Board of Directors and stated in the notice of the meeting.
Section 4. Notice of Meetings. Except as otherwise provided by law, notice
of each meeting of the shareholders, whether annual, special, or adjourned,
shall be given, not less than ten (10) days nor more than sixty (60) days before
the day on which the meeting is to be held, to each shareholder of record
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entitled to vote at such meeting by delivering a written or printed notice
thereof to him personally or by mailing such notice in a postage prepaid
envelope addressed to him at his post office address as it appears upon the
records of the Corporation. Except where expressly required by law, no publica
tion of any notice of a meeting of shareholders shall be required. Notice of any
meeting of shareholders shall not be required to be given to any shareholder who
shall in person or by proxy waive notice, in writing, of any meeting, whether
before or after such meeting. Notice of any adjourned meeting of the
shareholders shall not be required to be given, except where expressly required
by law.
Section 5. Quorum. At each meeting of the shareholders, the presence in
person or by proxy of shareholders holding of record a majority of the
outstanding shares entitled to vote at such meeting shall be necessary and
sufficient to constitute a quorum for the transaction of business. In the
absence of a quorum, the shareholders entitled to vote who are present in person
or by proxy at the time and place of any meeting, or, if no shareholder entitled
to vote is so present in person or by proxy, any officer entitled to preside at
or act as secretary of such meeting, may adjourn the meeting from time to time,
without notice other than an announcement at the meeting, until a quorum shall
be present. At any such adjourned meeting at which a quorum may be present, any
business may be transacted which might have been transacted at the meeting as
originally called.
Section 6. Organization. At every meeting of the shareholders, the Chairman
of the Board, or, in his absence, the Vice Chairman of the Board, or, in the
absence of the Chairman and Vice Chairman of the Board, the President or, in his
absence, a chairman chosen by a majority in interest of the shareholders present
in person or by proxy and entitled to vote thereat, shall act as chairman. The
Secretary, or, in his absence, an Assistant Secretary, shall act as secretary at
all meetings of the shareholders. In the absence from any such meeting of the
Secretary or an Assistant Secretary, the chairman may appoint any person to act
as secretary of the meeting.
Section 7. Business and Order of Business. At each meeting of the
shareholders, such business may be transacted as may properly be brought before
such meeting, whether or not such business is stated in the notice of such
meeting or in a waiver of notice thereof, except as otherwise required by law or
expressly provided herein. The order of business at all meetings of the
shareholders shall be as determined by the chairman.
Section 8. Voting. At each meeting of the shareholders, each shareholder
shall be entitled to one vote in person or by proxy for each share of the
Corporation having voting rights registered in his name on the books of the
Corporation at the close of business on the date fixed as a record date for the
determination of the shareholders entitled to vote. Any shareholder entitled to
vote may vote in person or by proxy in writing; provided, however, that no proxy
shall be valid after six (6) months from the date of its creation, unless it is
coupled with an interest or unless the shareholder specifies in it the length of
time for which it is to continue in force, which may not exceed seven (7) years
from the date of its creation. The presence at any meeting of any shareholder
who has given a proxy shall not revoke such proxy.
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At each meeting of the shareholders, all matters other than those the
manner of deciding of which is expressly regulated by statute, the Articles of
Incorporation, or these Bylaws, shall be decided by a majority of the votes cast
by the holders of shares entitled to vote thereon.
The Board of Directors, in advance of any meeting of the shareholders, or
the chairman of the meeting, at such meeting, may appoint one or more inspectors
of election to act at the meeting or any adjournment thereof.
Section 9. Action by Shareholders Without a Meeting. Any action required or
permitted to be taken at a meeting of the shareholders under any provisions of
the Nevada Revised Statutes, the Articles of Incorporation, or these Bylaws may
be taken without a meeting if a majority of the shareholders entitled to vote
thereon consent in writing to such action being taken, except that if a
different proportion of voting power is required for such action at a meeting,
then that proportion of written consents is required. Whenever corporate action
is so taken, the consents of the shareholders consenting thereto shall be filed
with the minutes of proceedings of the shareholders of the Corporation.
ARTICLE III
Board of Directors
Section 1. General Powers. The property, affairs, and business of the
Corporation shall be managed by the Board of Directors.
Section 2. Number; Qualifications, and Term of Office. Except as otherwise
provided by the Articles of Incorporation of the Corporation, the number of
directors shall be fixed from time to time by resolution of the Board of
Directors, but in no instance shall there be less than three (3) directors nor
more than seven (7) directors constituting the Board of Directors. The directors
shall be elected annually at the annual meeting of the shareholders. Each
director shall hold office until his successor shall have been elected, until
his death, until he shall have resigned in the manner set forth in Section 12 of
this Article III, or until he shall have been removed in the manner set forth in
Section 13 of this Article III, whichever shall first occur. Any director
elected to fill a vacancy in the Board of Directors shall be deemed elected for
the unexpired portion of the term of his predecessor on the Board of Directors.
Each director, at the time of his election, shall be a natural person at least
eighteen (18) years of age, and need not be a shareholder of the Corporation.
Section 3. Election of Directors. At each meeting of the shareholders for
the election of directors, the directors shall be chosen by a plurality of the
votes cast at such election by the holders of shares entitled to vote thereon.
Section 4. Annual Meetings. The annual meeting of the Board of Directors
shall be held in each year immediately after the annual meeting of shareholders,
at such place as the Board of Directors from time to time may fix and, if so
held, no notice of such meeting need be given.
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Section 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times as the Board of Directors shall determine. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held on that
day shall be held at said place at the same hour on the next succeeding business
day that is not a legal holiday. Notice of regular meetings need not be given.
Section 6. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board, Vice Chairman of the
Board, President or any two (2) directors. Notice of each such meeting shall be
mailed to each director, addressed to him at his residence or usual place of
business, at least five (5) days before the day on which the meeting is to be
held, or shall be sent to him at such place by facsimile, telegraph, cable,
telex, or the equivalent, or be delivered personally or by telephone, not later
than the day preceding the day on which the meeting is to be held. Neither the
business to be transacted nor the purpose of the meeting need be specified in
the notice. Notice of any meeting of the Board of Directors need not be given,
however, if waived in writing either before or after such meeting.
Section 7. Place of Meeting. Meetings of the Board of Directors may be held
at such place or places within or without the State of Nevada as the Board of
Directors from time to time may designate.
Section 8. Quorum and Manner of Acting. A majority of the directors shall
be required to constitute a quorum for the transaction of business at any
meeting. The act of a majority of the directors present at any meeting while a
quorum is present shall be an act of the Board of Directors. In the absence of a
quorum, a majority of the directors present may adjourn any meeting from time to
time until a quorum be had. Notice of any adjourned meeting shall be given in
the same manner as notice of special meetings is required to be given as set
forth in these Bylaws. The directors shall act only as a board and the
individual directors shall have no power as such.
Section 9. Action by Written Consent. Any action required or permitted to
be taken at any meeting of the Board of Directors or any committee thereof may
be taken without a meeting if, prior or subsequent to such action, all members
of the Board of Directors or of such committee, as the case may be, consent
(hereto in writing and such written consents are filed with the minutes of the
proceedings of the Board of Directors or committee. Such consent shall have the
same effect as a unanimous vote of the Board of Directors or committee for all
purposes and may be stated as such in any certificate or other document filed
with the Secretary of State.
Section 10. Organization. At each meeting of the Board of Directors, the
Chairman of the Board or, in his absence, the Vice Chairman of the Board, or in
the absence of the Chairman and Vice Chairman of the board, the President or, in
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his absence, a chairman chosen by a majority of the directors present, shall act
as chairman. The Secretary, or, in his absence, an Assistant Secretary, or, in
the absence of the Secretary and the Assistant Secretaries, any person appointed
by the chairman, shall act as secretary of the meeting.
Section 11. Order of Business. At all meetings of the Board of Directors,
business may be transacted in such order as the Board of Directors may
determine.
Section 12. Resignations. Any director of the Corporation may resign at any
time by giving written notice to the President or to the Secretary of the
Corporation. The resignation of any director shall take effect at the time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 13. Removal of Directors. Any directors may be removed at any time,
either with or without cause, by a vote of two-thirds of the voting power of the
stock of the Corporation at any regular or special meeting of the shareholders
and the vacancy in the Board of Directors caused thereby may be filled by the
shareholders at the same meeting.
Section 14. Vacancies. Any vacancy in the Board of Directors, whether
caused by death, resignation, removal, disqualification, an increase in the
number of directors, or any other cause, may be filled by the act of a majority
of the remaining directors.
Section 15. Compensation. Unless otherwise established by resolution of the
Board of Directors, the directors shall receive no compensation for their
services as directors.
Section 16. Committees of Board of Directors. The Board of Directors may
designate one or more committees which, to the extent provided in the resolution
or resolutions establishing such committees, have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
corporation. The committee or committees must have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Each committee must include at least one director and may include natural
persons who are not directors.
ARTICLE IV
Officers
Section 1. Number. The officers of the Corporation shall be a President, a
Treasurer, and a Secretary, and, in the discretion of the Board of Directors, a
Chairman of the Board of Directors, a Vice Chairman of the Board of Directors,
and one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers,
and such other officers as may be deemed necessary.
Section 2. Election, Qualifications and Terms of Office. The officers shall
be elected annually by the Board of Directors. Each officer must be a natural
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person and shall hold office until his successor shall have been chosen, or
until his earlier death, resignation, or removal in the manner provided in these
Bylaws. Any person may hold more than one office.
Section 3. Resignations and Removals. Any officer may resign at any time by
giving written notice of such resignation to the Board of Directors, the
President, or the Secretary of the Corporation. Unless otherwise specified in
such written notice, such resignation shall take effect upon receipt of the
notice thereof by the Board of Directors or any such officer. Any officer may be
removed at any time, with or without cause, by the Board of Directors.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause shall be filled for
the unexpired portion of the term by the Board of Directors.
Section 5. The Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the shareholders and directors. He shall supervise
the carrying out of the policies adopted or approved by the Board of Directors.
He shall have general executive powers, as well as the specific powers conferred
by these Bylaws. He shall also have and may exercise such further powers and
duties as from time to time may be conferred upon or assigned to him by the
Board of Directors.
Section 6. The Vice Chairman of the Board. The Vice Chairman of the Board
shall preside, in the absence of the Chairman of the Board, at all meetings of
the shareholders and directors. He shall also have and may exercise such further
powers and duties as from time to time may be conferred upon or assigned to him
by the board of directors.
Section 7. The President. The President shall be the chief executive
officer of the Corporation. In the absence of the Chairman and Vice Chairman of
the Board, the President shall preside at all meetings of the shareholders and
directors. Subject to the direction of the Board of Directors, he shall have
general charge of the business affairs and property of the Corporation and
general supervision over its officers and agents. He shall see that all orders
and resolutions of the Board of Directors are carried into effect. He may sign,
with any other officer thereunto authorized, share certificates of the
Corporation, the issuance of which shall have been duly authorized, and may sign
and execute, in the name of the Corporation, deeds, mortgages, bonds, contracts,
agreements, and other instruments duly authorized by the Board of Directors,
except in these instances where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent.
From time to time, he shall report to the Board of Directors all matters within
his knowledge which the interests of the Corporation may require to be brought
to their attention. He shall also perform such other duties as are given to him
by these Bylaws or as from time to time may be assigned to him by the Board of
Directors.
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Section 6. The Secretary. The Secretary shall (a) record all the
proceedings of the meetings of the shareholders and Board of Directors in a book
or books to be kept for that purpose; (b) cause all notices to be duly given in
accordance with the provisions of these Bylaws and as required by statute; (c)
be custodian of the records and of the seal of the Corporation and cause such
seal to be affixed to all certificates representing shares of the Corporation
prior to the issuance thereof and to all instruments the execution of which on
behalf of the Corporation under its seal shall have been duly authorized; (d)
see that the lists, books, reports, statements, certificates, and other
documents and records required by statute are properly kept and filed; (e) have
charge of the share record books of the Corporation and cause the same to be
kept in such manner as to show at any time the amount of shares of the
Corporation issued and outstanding, the names and addresses of the holders of
record thereof, the number of shares held by each, and the date when each became
such holder of record; (f) sign (unless the Treasurer shall sign) certificates
representing shares of the Corporation, the issuance of which shall have been
duly authorized; and (g) in general, perform all duties incident to the office
of Secretary and such other duties as are given to him by these Bylaws or as
from time to time may be assigned to him by the Board of Directors or the
President. At the request of the Board of Directors or the President, an
Assistant Secretary may exercise any and all powers and perform any and all
duties of the Secretary.
Section 9. The Treasurer. The Treasurer shall be the chief financial
officer of the Corporation and shall (a) have charge of and supervision over and
be responsible for the funds, securities, receipts, and disbursements of the
Corporation; (b) cause the moneys and other valuable effects of the Corporation
to be deposited in the name and to the credit of the Corporation in such banks
or trust companies, or with such bankers or other depositories, as shall be
selected in accordance with Section 3 of Article V of these Bylaws or to be
otherwise dealt with in such manner as the Board of Directors may direct; (c)
cause the funds of the Corporation to be disbursed by checks or drafts upon the
authorized depositories of the Corporation and cause to be taken and preserved
proper vouchers for all moneys disbursed; (d) render to the Board of Directors
or the President, whenever requested, a statement of the financial condition of
the Corporation and of all his transactions as Treasurer; (e) cause to be kept,
at the principal office of the Corporation or at such other office (within or
without the State of Nevada) as shall be designated by the Board of Directors,
correct books of account of all its business and transactions; (f) sign (unless
the Secretary shall sign) certificates representing shares of the Corporation,
the issuance of which shall have been duly authorized; and (g) in general,
perform all duties incident to the office of Treasurer and such other duties as
are given to him by these Bylaws or as from time to time may be assigned to him
by the Board of Directors or the President. At the request of the Board of
Directors or the President, an Assistant Treasurer may exercise any and all
powers and perform any and all duties of the Treasurer.
Section 10. The Vice Presidents. At the request of the Board of Directors
or the President, a Vice President shall perform all the duties of the President
and, when so acting, shall have all the powers of and be subject to all
restrictions upon the President. A Vice President may also sign, with any other
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officer thereunto duly authorized, share certificates of the Corporation, the
issuance of which shall have been duly authorized, and may sign and execute in
the name of the Corporation, deeds, mortgages, bonds, contracts, agreements, and
other instruments duly authorized by the Board of Directors, except in those
instances where the signing and execution thereof shall be expressly delegated
by the Board of Directors to some other officer or agent. Each Vice President
shall perform such other duties as are given to him by these Bylaws or as from
time to time may be assigned to him by the Board of Directors or the President.
Section 11. Salaries. The salaries of the officers of the Corporation shall
be fixed from time to time by the Board of Directors. No officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
Section 12. Surety Bonds. In the event the Board of Directors shall so
require, any officer or agent of the Corporation shall execute a bond to the
Corporation, in such sum and with such surety or sureties as the Board of
Directors may direct, conditioned upon the faithful discharge of his duties.
ARTICLE V
Contracts and Financial Matters
Section 1. Execution of Contracts. The President or any Vice President,
subject to the approval of the Board of Directors, may enter into any contract
or execute and deliver any instrument in the name and on behalf of the
Corporation. Such authorization may be general or confined to specific
instances.
Section 2. Checks and Drafts. All checks, drafts, or other orders for the
payment of money and all notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or officers or agent or
agents of the Corporation as shall be thereunto so authorized from time to time
by resolution of the Board of Directors.
Section 3. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to its credit in such banks or trust
companies or with such bankers or other depositories as the Board of Directors
may select or as may be selected by any officer or officers or agent or agents
authorized so to do by the Board of Directors. Endorsements for deposit to the
credit of the Corporation in any of its duly authorized depositories shall be
made in such manner as the Board of Directors from time to time may determine.
Section 4. General and Special Bank Accounts. The Board of Directors may
authorize from time to time the opening and keeping of general and special bank
accounts with such banks, trust companies, or other depositories as it may
designate and may make such special rules and regulations with respect thereto,
not inconsistent with the provisions of these Bylaws, as it may deem expedient.
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Section 5. Loans. No loans or advances shall be contracted on behalf of the
Corporation and no negotiable paper shall be issued in its name, unless and
except as authorized by the Board of Directors. Such authorization may be
general or confined to specific instances. Any officer or agent of the
Corporation thereunto so authorized may effect loans and advances for the
Corporation and for such loans and advances may make, execute, and deliver
promissory notes, bonds, or other evidences of indebtedness of the Corporation.
Any officer or agent of the Corporation thereunto so authorized may pledge,
hypothecate, or transfer, as security for the payment of any and all loans.
advances, indebtedness, and liabilities of the Corporation, any and all stocks,
bonds, other securities, and other personal property at any time held by the
Corporation and, to that end, may endorse, assign, and deliver the same and do
every act and thing necessary or proper in connection therewith.
Section 6. Proxies. Proxies to vote with respect to shares of stock of
other corporations owned by or standing in the name of the Corporation may be
executed and delivered from time to time on behalf of the Corporation by such
person or persons as shall be thereunto authorized from time to time by the
Board of Directors.
ARTICLE VI
Indemnification and Insurance
Section 1. Indemnification of Directors and Officers. The Corporation shall
indemnify each director and officer of the Corporation to the fullest extent
permitted by the Nevada Revised Statutes, as the same exists or may hereafter be
amended.
Section 2. Insurance. The Corporation may purchase and maintain insurance
on behalf of any director, officer, employee, or agent of the Corporation, or of
another corporation, partnership, joint venture, trust, or other enterprise,
against any expenses incurred in any proceeding and against any liabilities
asserted against him by reason of such person's being or having been such a
director, officer, employee, or agent, whether or not the Corporation would have
the power to indemnify such person against such expenses and liabilities under
the provisions of Section 1 of this Article VI.
ARTICLE VII
Shares and Their Transfer
Section 1. Share Certificates. Every holder of shares of the Corporation
shall be entitled to have a certificate, signed by the President or a Vice
President and either the Treasurer or the Secretary, certifying the number of
shares owned by him in the Corporation. In case any officer of the Corporation
who has signed any such certificate shall cease to be such officer, for whatever
cause, before the certificate shall have been delivered by the Corporation, the
certificate shall be deemed to have been adopted by the Corporation unless the
Board of Directors shall otherwise determine prior to the issuance and delivery
thereof and may be issued and delivered as though the person who signed it had
not ceased to be such officer of the Corporation. Certificates representing
shares of the Corporation shall be in such form as shall be approved by the
Board of Directors.
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Section 2. Share Record Books. The share record books and the blank share
certificate books shall be kept by the Secretary of the Corporation or by any
officer or agent designated by the Board of Directors.
Section 3. Transfers of Shares. Transfers of shares of the Corporation
shall be made on the books of the Corporation by the holder of record thereof or
by his attorney thereunto duly authorized by a power of attorney duly executed
in writing and filed with the Secretary of the Corporation and on surrender of
the certificate or certificates representing such shares. The Corporation shall
be entitled to treat the holder of record of any shares as the absolute owner
thereof for all purposes and, accordingly, shall not be bound to recognize any
legal, equitable, or other claim to or interest in such shares on the part of
any other person, whether or not it or they shall have express or other notice
thereof, except as otherwise expressly provided by statute; provided, however,
that whenever any transfer of shares shall be made for collateral security and
not absolutely and written notice thereof shall be given to the Secretary of the
Corporation, such fact shall be expressed in the entry of the transfer.
Notwithstanding anything to the contrary contained in these Bylaws, the
Corporation shall not be required or permitted to make any transfer of shares of
the Corporation which, if made, would violate the terms and provisions of any
agreement restricting the transfer of shares of the Corporation to which the
Corporation shall be a party; provided, however, that the restriction upon the
transfer of the shares represented by any share certificate shall be set forth
or referred to upon the certificate.
Section 4. Regulations. Subject to the provisions of this Article VII, the
Board of Directors may make such rules and regulations as it may deem expedient
concerning the issuance, transfer, and registration of certificates for shares
of the Corporation.
Section 5. Fixing of Record Dates. The Board of Directors shall have the
power to fix in advance a date, not more than sixty (60) days, preceding (a) the
date of any meeting of shareholders, (b) the date for the payment of any
dividend or allotment of any right, or (c) the date when any change, conversion,
or exchange of shares shall go into effect, or for the purpose of any other
action, as a record date for the determination of the shareholders entitled to
notice of and to vote at any such meeting, entitled to receive payment of any
such dividend or allotment of any right, entitled to exercise the rights in
respect to any such change, conversion, or exchange of shares, or entitled to
participate in or be entitled to the benefit of any such other action. Whenever
a record date has been so fixed, only shareholders of record on such date shall
be entitled to notice of and to vote at such meeting, to receive payment of any
such dividend or allotment of any right, to exercise such rights in respect to
any such change, conversion, or exchange of shares, or to participate in or be
entitled to the benefit of any such other action.
Section 6. Transfer of Regulation S Securities. With respect to any and all
equity securities offered and sold outside the United States pursuant to Rule
903(c)(3) of Regulation S under the Securities Act of 1933, as amended, the
Corporation shall refuse to register any transfer of such securities not made in
accordance with the provisions of Regulation S; provided, however, that if such
securities are in bearer form or foreign law prevents the Corporation from
refusing to register securities transfers, other reasonable procedures (such as
- 10 -
<PAGE>
a legend described in paragraph (c)(3)(iii)(B)(3) of Rule 903 of Regulation S)
shall be implemented to prevent any transfer of such securities not made in
accordance with the provisions of Regulation S.
ARTICLE VIII
Distributions
The Board of Directors may from time to time authorize, and the Corporation
may make, distributions to its shareholders in the manner and on the terms and
conditions provided by the laws of the State of Nevada and the Articles of
Incorporation, subject to any contractual restrictions to which the Corporation
is then subject.
ARTICLE IX
Corporation Seal
The Corporation may have a corporate seal which shall be in such form as
shall be approved from time to time by the Board of Directors.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall end on January 31 of each year
unless otherwise fixed by resolution of the Board of Directors.
ARTICLE XI
Accountants
The Board of Directors of the Corporation from time to time shall designate
the independent accountants of the Corporation.
ARTICLE XII
Amendments
All Bylaws of the Corporation shall be subject to amendment, alteration, or
repeal, and new Bylaws not inconsistent with any provision of the Articles of
Incorporation of the Corporation or any provision of law may be made, by the
shareholders or by the Board of Directors, except as otherwise expressly
required by statute.
ARTICLE XIII
Force and Effect
These Bylaws are subject to the provisions of the Nevada Revised Statutes
and the Articles of Incorporation of the Corporation, as the same may be amended
from time to time. If any provision in these Bylaws is inconsistent with an
express provision of either such Laws or the Articles of Incorporation, the
provision of such Laws or the Articles of Incorporation, as the case may be,
shall govern to the extent of such inconsistency.
- 11 -
<PAGE>
CERTIFICATE
I do hereby certify that the foregoing Amended and Restated Bylaws were
duly adopted as the Bylaws of Fischer-Watt Gold Company, Inc., a Nevada
corporation, as of December 3, 1996.
/s/ Gerald D. Helgeson
---------------------------------
(SEAL) Gerald D. Helgeson, Secretary
- 12 -
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED OCTOBER 31, 1996 CONTAINED IN
FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
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<PERIOD-END> OCT-31-1996
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<SECURITIES> 0
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0
0
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<INCOME-PRETAX> (1,668)
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