SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended October 31, 1999 Commission File Number 0-18616
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ST. GEORGE METALS, INC.
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(Exact name of registrant as specified In its charter)
Nevada 88-0227915
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or organization)
125 Bank of America Plaza, 1111 E. Main St., Richmond, Virginia 23219
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (804) 644-3434
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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
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As of October 31, 1999, the number of shares of Common Stock
outstanding was 14,487,159.
NOTE: The information presented in this Form 10-QSB is unaudited, but in the
opinion of management reflects all adjustments (which include only
normal recurring adjustments) necessary to fairly present such
information.
<PAGE>
ST. GEORGE METALS, INC.
FORM 10-QSB
QUARTER ENDED OCTOBER 31, 1999
INDEX
PAGE
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PART I - FINANCIAL INFORMATION
Interim Consolidated Balance Sheets................................ 3
Interim Consolidated Statement of Income and Deficit............... 4
Interim Consolidated Statement of Cash Flows....................... 5
Notes to the Interim Consolidated Financial Statements............. 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 7
PART II - OTHER INFORMATION
Items 1 - 6........................................................ 8-9
Signatures......................................................... 10
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<PAGE>
<TABLE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 31, 1999 AND JANUARY 31, 1999
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<CAPTION>
OCTOBER 31, JANUARY 31,
1999 1999
----------- ----------
ASSETS
<S> <C> <C>
CURRENT
Cash $ 5 $ 6
OTHER - Reclamation deposit 80 80
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$ 85 $ 86
LIABILITIES
CURRENT
Accounts payable $ 18 $ 52
Advances from shareholders 552 562
Accrued interest payable 3,987 3,371
Accrued mineral interests reclamation costs 90 90
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4,647 4,075
LONG TERM-DEBT
Other 1,888 1,888
Related parties 5,043 5,057
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TOTAL LIABILITIES 11,578 11,020
SHAREHOLDERS' DEFICIT
SHARE CAPITAL
Authorized
10,000,000 Preferred shares -
Par value $.01 per share
30,000,000 Common shares -
Par value $.01 per share
Issued and paid in capital
1,450 Series A Preferred shares 1,450 1,450
166,417 Series B Preferred shares 499 499
14,487,159 Common shares 9,285 9,285
Deficit accumulated during development stage (22,727) (22,168)
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(11,493) (10,934)
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TOTAL 85 $ 86
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PREPARED BY MANAGEMENT
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<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENT OF INCOME AND DEFICIT
FOR THE THREE MONTHS AND NINE MONTHS ENDED OCTOBER 31, 1999 AND 1998
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
THREE MONTHS NINE MONTHS
ENDED OCT. 31 ENDED OCT. 31
1999 1998 1999 1998
---------------------------------------------------------
REVENUE
Option fees - 45 15 45
-------- -------- -------- --------
ADMINISTRATION COSTS
General and administrative 6 2 7 6
Interest 279 196 603 536
Reclamation and other costs (24) - (42) 171
Professional fees 7 6 9 28
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TOTAL ADMINISTRATIVE COSTS 268 204 577 741
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NET LOSS BEFORE
INTEREST INCOME 268 159 562 696
INTEREST INCOME 1 1 3 7
-------- -------- -------- --------
NET LOSS 267 158 559 689
DEFICIT BEGINNING OF PERIOD 22,460 21,859 22,168 21,328
-------- -------- -------- --------
DEFICIT END OF PERIOD 22,727 22,017 22,727 22,017
-------- -------- -------- --------
BASIC LOSS PER SHARE
IN U.S. DOLLARS $ .02 $ .01 $ .04 $ .05
-------- -------- -------- --------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 14,487,159 14,487,159 14,487,159 14,487,159
---------- ---------- ---------- ----------
PREPARED BY MANAGEMENT
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<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED OCTOBER 31, 1999 AND 1998
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
NINE MONTHS
ENDED OCTOBER 31,
1999 1998
----------------------------------
FUNDS PROVIDED (USED) BY OPERATING
ACTIVITIES
Net loss recovery $ (559) $ (689)
CHANGES IN OTHER
WORKING CAPITAL ITEMS 572 751
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TOTAL 13 62
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FINANCING ACTIVITIES
Long-term debt (14) (54)
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NET INCREASE (DECREASE) IN CASH (1) 8
CASH BALANCE BEGINNING OF PERIOD 6 4
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CASH BALANCE END OF PERIOD $ 5 $ 12
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</TABLE>
PREPARED BY MANAGEMENT
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<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1999
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
1. ACCOUNTING POLICIES
These interim consolidated financial statements have been prepared in
accordance with accounting principles and practices that are generally
accepted in the United States. The notes to the Company's (unaudited)
consolidated financial statements as of January 31, 1999, substantially
apply to the interim financial statements at October 31, 1999, and are
not repeated here.
2. INTERIM ADJUSTMENTS
The unaudited interim financial information reflects all adjustments
which are, in the opinion of management, necessary to a fair statement
of the results for the interim period presented. These adjustments are
of a normal recurring nature.
3. STATUS OF BUSINESS
The Company is not engaged in any active business. There was no change
during the quarter ending October 31, 1999, with respect to the
Company's continuing efforts to reach an out-of-court accord with its
trade creditors. See Item 5, Other Information, of Part II of this Form
10-QSB.
PREPARED BY MANAGEMENT
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<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations - Financial
Revenues. The Company had no revenues during the quarter ended October
31, 1999. It had revenues of $15,000 from one option payment during the
comparable period in the preceding year. For the nine months ended October 31,
1999, the Company had revenues of $15,000 compared to $45,000 during the nine
months ended October 31, 1998.
Costs and Expenses. During the quarter ended October 31, 1999, the
Company had total administrative costs of $268,000 compared to $204,000 in the
comparable period in the prior year. The Company had a recovery on reclamation
costs during the period of $24,000. There were no reclamation costs or recovery
during the comparable period in the preceding year. Accrued interest was
$279,000 during the period, compared to $196,000 during the quarter ended
October 31, 1998. For the nine months ended October 31, 1999, total
administrative costs were $577,000 compared to $741,000 in the comparable period
ended October 31, 1998.
Interest Income. The Company had interest income during the period of
$1,000, compared to $1,000 during the comparable period in the preceding year.
Net Loss. The Company had a net loss for the quarter ended October 31,
of $267,000 (or $.02 per share), compared to $158,000 (or $.01 per share) for
the comparable period in the prior year. For the nine months ended October 31,
1999, the Company had a net loss of $559,000 ($.04 per share) compared to
$689,000 ($.05 per share) in the nine months ended October 31, 1998.
Analysis of Financial Condition
The Company had no material liquidity or capital resources at
quarter ended October 31, 1999. At that date, the Company had current assets of
$5,000 and current liabilities of $4.6 million. Current liabilities include $4.0
million of accrued interest payable which is in arrears. A substantial portion
of the Company's current liabilities and other indebtedness is owed to related
parties. The Company obtained no new financing during the three-month period
ended October 31, 1999. The Company continues to seek to satisfy its trade
creditors and other operational expenses other than through a court supervised
process. The Company does not presently expect to be in a position to make any
payments on its Operations Advances (which are payable solely from net cash flow
from the Company's now-terminated Dean Mine operations) or on its Gold Delivery
Contracts and $4.3 million principal amount of term debt, both of which
categories have been voluntarily subordinated by the holders to the payment of
the Operations Advances.
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<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings.
(a) See Item 5 below.
Item 2. Changes in securities.
(a) None
(b) None
Item 3. Defaults upon senior securities.
Under the Company's Phase I and II Loan Commitments,
non-payment of interest constitutes an event of default;
however, a note holder must advise the Company in writing that
he declares his debt to be in default. As previously reported,
two note holders, one a former related party of the Company,
advised the Company in January, 1994, that the Company was in
default with respect to the Company's debt obligations to
them. The Company advised such holders that it did not agree
with their position.
Item 4. Submission of matters to a vote of security holders.
None
Item 5. Other information.
General. The Company's financial resources have been
substantially exhausted and management does not know of any
significant additional financing available to the Company. The
Company has no continuing on-going business operations at this
time. The Company has been seeking, since early 1995, to
satisfy its trade debt other than through a court supervised
process, which would entail significant administrative
expenses. The Company has been able to satisfy a substantial
portion of its trade debt, but in light of its financial
position, it is unlikely any payments will be made on its
other indebtedness, which has been voluntary subordinated to
the Company's trade creditors.
SEC Reporting Obligations. Because of the Company's financial
condition and its consequent difficulty paying the attendant
legal and accounting expenses, its ability to continue to meet
its reporting obligations under the Securities Exchange Act of
1934 remains questionable. The financial statements included
with its Form 10-KSB for the year ended January 31, 1999, were
not audited by an independent certified accountant, because
the Company could not afford the cost of an audit. The Company
sought and obtained administrative relief from the staff of
the Securities and Exchange Commission from the requirement
that it obtain an audited financial statement for its Form
10-KSB filing.
-8-
<PAGE>
Inability to Pay Indebtedness. Management does not presently
anticipate that any of its outstanding obligations under its
Operations Advances, Gold Delivery Contracts and term debt, a
substantial portion of which outstanding obligations are held
by members of the Company's board of directors, can be
satisfied. Accordingly, management does not believe, as a
practical matter, that there is any remaining value to be
ascribed to the Company's outstanding preferred stock or
common stock.
Status of Properties. As previously reported, during the
quarter ended July 31, the Company entered into a verbal
agreement whereby it agreed to quit-claim any interest it may
have in the Hancock Canyon (58 claims) and Trenton Canyon (31
claims) properties in exchange for a full release from Sierra
Mining & Engineering L.L.C. ("SME") and its owner, James
Golden, for any and all work performed by SME in connection
with the reclamation of the Company's formerly leased Dean
Mine property or in any other respect. This conveyance and
settlement was finalized as of August 30, 1999. The Hancock
Canyon property had previously been under option to Cameco
(U.S.) Inc., as described in the Company's Form 10-KSB for the
year ended January 31, 1999, but as previously disclosed that
option was terminated by the optionee in April 1998. The
Company has previously terminated a lease it held on the
Trenton Canyon properties, but had staked over that property.
The Company no longer has the financial resources to pay the
necessary annual renewal fees to hold onto those claims.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: Exhibit 27 Financial Data Schedule, filed herewith.
(b) Reports on Form 8-K: None
-9-
<PAGE>
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.
St. George Metals. Inc.
----------------------------------------
(Registrant)
December 15, 1999 By: /s/ C. B. Robertson, III
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C. B. Robertson, III - Chairman and Principal
Executive Officer
December 15, 1999 /s/ Harrison Nesbit, II
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Harrison Nesbit, II - Treasurer and Chief Financial
and Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIAL STATEMENTS OF ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY)
INCLUDED IN ITS FORM 10-QSB FOR THE QUARTER ENDED OCTOBER 31, 1999
</LEGEND>
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<PERIOD-END> OCT-31-1999
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<BONDS> 6931
0
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<COMMON> 9285
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</TABLE>
