SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB
(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 0-18616
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ST. GEORGE METALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0227915
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
125 NATIONSBANK PLAZA
RICHMOND, VIRGINIA 23219
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
ST. GEORGE METALS, INC. COMMON STOCK, $.01 PAR VALUE
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 [ ]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-KSB OR ANY
AMENDMENT TO THIS FORM 10-KSB. [ ]
THE REGISTRANT HAD REVENUES IN ITS MOST RECENT FISCAL YEAR OF $65,000.
AS A DEVELOPMENT STAGE COMPANY, ALL REVENUES WERE NETTED AGAINST MINING COSTS.
AS OF MARCH 31, 1999, 14,487,159 SHARES OF THE REGISTRANT'S COMMON STOCK
WERE OUTSTANDING. THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S COMMON STOCK
HELD BY NON-AFFILIATES WAS LESS THAN $10,000 BASED ON THE CLOSING SALES PRICE
($0.001 PER SHARE) IN FEBRUARY, 1999, THE LAST REPORTED TRADE DATE.
<PAGE>
PART I
ITEM 1. BUSINESS
SIGNIFICANT DEVELOPMENTS DURING YEAR ENDED JANUARY 31, 1999
During the year ended January 31, 1999, the Company engaged in no
significant business activities other than the sale or sub-lease of certain
properties as described in Item 2 below, and certain environmental remediation
work undertaken with the supervision of the Nevada Division of Environmental
Protection (NDEP) at its former Dean Mine property. As previously reported, the
Company posted a $220,000 cash bond with NDEP in fiscal 1996 to cover
reclamation costs associated with the Dean Mine. Following discussions with and
review of plans by NDEP, the Company commissioned reclamation work during
calendar year 1997. Principal items included closure and sealing of adits (mine
openings), road regrading, waste dump reclamation, heap leach pad regrading and
related matters. As work was certified by NDEP during the years ended January
31, 1998 and 1999, NDEP authorized partial releases from the cash bond to pay
for work performed. At January 31, 1999, $80,000 remained available under the
cash bond. In order to permit the Company to pay its independent contractor for
reclamation work completed but not yet funded under its cash bond, shareholders
of the Company have advanced funds to the contractor. These advances have been
recorded on the Company's books as shareholder advances, which will be repaid as
further releases from the cash bond are authorized. At January 31, 1999,
shareholder advances totaled $562,000, as increase of $242,000 from the $320,000
outstanding at January 31, 1998.
At the present time, the Company's financial resources have been
substantially exhausted and management does not know of any additional financing
available to the Company. The Company has no continuing on-going business
activities at this time other than holding certain of its properties subject to
options to purchase by unrelated third parties. Although the Company is still
interested in the possibility of participating in other mining projects, it has
no meaningful available financial resources, and only minimal personnel
resources. The Company has liquidated substantially all its assets and paid off
its trade creditors to the extent possible in a continuing effort to wind up its
business other than through a court supervised process, which would entail
significant administrative expenses. The Company has paid most of its trade debt
(other than to related parties) and it is unlikely any payments will be made on
its other indebtedness, which has been voluntarily subordinated to the Company's
trade creditors.
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 has been and remains doubtful. Accordingly, the Company may not be able to
continue filing periodic reports with the Securities and Exchange Commission. As
was the case in 1997 and 1998, the financial statements included with this Form
10-KSB are not audited because the Company was not able to incur the expense of
an audit.
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. Correspondingly,
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.
OTHER MATTERS
Until 1995, the Company had been engaged in the acquisition, exploration
and, if warranted, development of natural resource properties. At the present
time, the Company has ceased all active operations, and is in the process of
winding up its business. The Company had or has an interest in various
properties located primarily in the Battle Mountain and Carlin areas of central
Nevada, which properties were acquired in the expectation they could have
economic potential for gold and silver mineralization (ore deposits). There can
be no assurance any of its remaining properties have a commercially mineable ore
body unless and until further exploration and feasibility studies are concluded.
For a number of years, the only active operations were those being undertaken at
the Company's Dean Mine site. These activities and other information concerning
properties still held by the Company are described in "Item 2 - Properties"
below.
<PAGE>
EMPLOYEES; OFFICES. While it was engaged in active exploration and
development operations, the Company relied almost exclusively upon independent
contractors and consultants to provide equipment, geological, technical and
professional and other administrative services. With the cessation of active
business operations the Company has terminated all employees and most of its
consultant relationships. During the fiscal years ended January 31, 1997, 1998
and 1999, the Company had no employees. The Company previously owned a house and
small office building, both in Battle Mountain, Nevada, which functioned as an
office and as employee housing. These properties were sold in December, 1994,
and June, 1995, respectively. At the present time the Company's executive office
in Richmond, Virginia, is maintained in the office of its Board Chairman, C. B.
Robertson, III. The Company does not reimburse Mr. Robertson any portion of his
lease expense but has reimbursed him from time to time for certain telephone and
other operating expenses incurred in connection with the Company's business. See
"Item 12 - Certain Relationships and Related Transactions" below.
ITEM 2. PROPERTIES
MINING PROPERTIES. The Company's former and remaining properties are
located in the Battle Mountain area of north central Nevada. The Battle Mountain
area comprises the central portion of the Battle Mountain-Eureka Gold Belt, a
chain of over 14 known metal deposits which stretch approximately 100 miles from
the Marigold deposit in the northwest, to the Windfall Mine in the southeast.
Four of the 14 known deposits are located in the Battle Mountain area, the most
significant of which is the Fortitude Mine of Battle Mountain Gold Company.
TITLE MATTERS. Over the years, the Company acquired ownership and
leasehold interests in a number of patented (titled or deeded) and unpatented
(not titled or deeded, but where the holder has mineral rights to the land,
providing assessment work is done annually) mining claims. In most cases, the
Company's purchase price or lease obligations, as the case may be, extend over a
period of time not yet completed and are not paid in full. Also, each of the
purchase or lease agreements has obligated the Company to pay royalties to the
sellers or lessors if production commences. Failure to comply with these
agreements, or with the law and regulations which govern the maintenance of
unpatented mining claims, could cause a loss of the Company's interest in these
properties.
Under federal law, unpatented mining claims grant the holder equitable
title to the claim, with fee title remaining with the United States Government
as the owner of public lands. An unpatented mining claim permits the holder to
exclusive use of all minerals and to the non-exclusive use of the surface
subject to the right of the United States Government and other non-mining uses
of the land. Unpatented claims are acquired by staking, posting, and recording a
claim, and are maintained by performing annual work and recording affidavits
with the U.S. Bureau of Land Management. Patented claims are acquired by filing
applications with the United States Government. A patented claim grants the
holder exclusive fee title to the surface and minerals. In light of the time and
expense required to secure a patented claim, and the policy of the United States
Government to retain title to public lands, patent applications customarily are
not filed. Unpatented claims are, therefore, widely held and recognized in the
mining industry.
The Company obtained various title opinions with respect to each of its
properties which has been the subject of significant exploration activity. The
opinions obtained to date typically suggested that the Company undertake various
curative actions which, if not taken, could materially impair the Company's
property interests. The Company has endeavored to cure any deficiencies of which
it is aware.
The Company has no patents, trademarks, licenses, franchises or
concessions material to its operations.
DEAN MINE PROPERTY
The Company's principal property used in it business during the past
five years was its Dean Mine leasehold and a 560-acre mill site owned in fee.
The Company's Form 10-K for the year ended January 31, 1995, contains a detailed
description of exploratory mining activities conducted at the Company's Dean
Mine leasehold site, which activities were concluded during the year ended
January 31, 1995. No further mining efforts were conducted at the Dean Mine
property during the fiscal years ended January 31, 1996, 1997 and 1998.
<PAGE>
In March, 1996, the Company received written notice of termination of
its lease on the Dean Mine property from Cascade Resources Joint Venture, the
lessor, for non-payment of rent, aggregating $38,400, since June, 1995. The
Company accepted the notice of termination, which became effective March 11,
1996, but denied the lessor's contention that the Company owed a $75,000
production fee under the lease agreement. This matter was resolved by payment of
all back rent claimed by the lessor in settlement of all claims under the lease
agreement. By its terms, the Company's ten-year lease on the Dean Mine property
would have expired in October, 1996, had it not been terminated earlier. See
Item 1 above.
On November 5, 1996, the NDEP issued a Finding of Alleged Violation and
Order, requiring compliance with the terms and conditions of the Order by the
dates specified in the Order, a copy of which is filed as Exhibit 10.37. These
terms and conditions related generally to mine closure requirements. Subsequent
to issuance of the Order, the Company responded to NDEP in writing concerning
its plan to meet each of the points raised in NDEP's Order. At the present time,
the Company believes that it has satisfied the requirements of the Order in all
material respects.
As previously reported, during the year ended January 31, 1996, the
Company completed posting a cash bond in the amount of $220,000 as required by
the Nevada Division of Environmental Protection, to cover reclamation costs on
the Dean Mine property. As a result of reclamation efforts undertaken by the
Company during fiscal 1998 and 1999, the balance remaining under the foregoing
cash bond at January 31, 1999 was $80,000.
Information concerning the Company's remediation and reclamation
activities during fiscal 1999 at the Dean Mine property is contained in Item 1
above under "Significant Developments During Year Ended January 31, 1999."
AMAX/DRACO AND HANCOCK CANYON PROPERTIES
The Company's principal remaining properties, known as AMAX/Draco and
Hancock Canyon, are described below. The Company carries these interests on its
books at a nominal $1.00 value.
AMAX/Draco. As described in the Company's Form 10-KSB for the year ended
January 31, 1996, the Company acquired a group of claims known as the AMAX/Draco
property from Luning Gold, Inc. pursuant to a purchase agreement dated August 8,
1990. These claims are in the Lewis Mining District, Lander County, Nevada,
approximately 15 miles southeast of Battle Mountain. The claim block consists of
three separate blocks containing a total of 107 claim blocks. A production
payment ($300,000 due from the lesser of 25% of production or $25,000 payable
quarterly after the start of production) is still due, but only after the
project goes into production. As previously reported, the Company has granted an
option on a portion of this property (44 claim blocks) to Cameco (U.S.) Inc., a
U.S. subsidiary of Cameco Corporation, a Canadian corporation. The Agreement
provides for an option expiring October 9, 1999, pursuant to which the optionee
may purchase the subject property (described as the "BXA" group of unpatented
lode claims in Lander County, Nevada) for a purchase price of $75,000, subject
to a reserved 1% net smelter royalty to the Company. The option price payable to
the Company aggregates $70,000, paid $10,000 upon satisfaction of certain
conditions, with the balance paid $10,000 on the first anniversary of the
effective date, $20,000 on the second anniversary, and $30,000 on the third
anniversary. The optionee retains the right to terminate the option at any time.
The optionee made its third and final anniversary payment in the fall of 1998.
As previously reported, in August 1998, the Company concluded an
agreement with Triband Resources U.S. Inc. for the sub-lease of various
properties, including the remaining 63 claim blocks in the AMAX/Draco property.
Upon execution of the agreement with Triband, the Company received an initial
cash payment of $15,000; an additional $15,000 is payable on the first
anniversary; and $25,000 is payable on the second anniversary and annually
thereafter, subject to escalation in certain circumstances. Under the agreement,
the Company has retained a 4% net smelting royalty, subject to reduction in the
event of the exercise of certain option rights granted to Triband Resources.
Hancock Canyon. The Company acquired various properties from Auritech in
1987. The mining lease encompassed five properties, Indian Grouse, Horse Canyon,
Hancock Canyon, Mill Creek and Trenton Canyon. The lease obligated the Company
initially to issue to Auritech 250,000 shares of Common Stock. Further, the
lease contemplated the issuance of 150,000 shares of Common Stock for each
property brought to production. A net smelter royalty of 0.5% would also be due
in the event of production on the properties. Annual lease payments are paid to
Santa Fe Minerals pursuant to an underlying lease. These properties were subject
to various joint venture agreements,
<PAGE>
all of which were later terminated. Additionally, the Company has terminated the
leases for the Horse Canyon, Indian Grouse, Mill Creek and Trenton Canyon
properties.
The Company has retained the Hancock Canyon property. This property,
consisting of 58 claims, is located on the western side of the Shoshone Range,
approximately 2 miles north of Mill Creek and approximately 25 miles south of
Battle Mountain. In 1994, the Company undertook additional steps to clear title
to the Hancock Canyon property in anticipation of a possible joint venture with
another mining company, but no such joint venture was ever agreed upon. The
Company has obtained title to Hancock Canyon, but it still is obligated to
Barringer Technologies, Inc., the successor to the prior owner, for the net
smelter royalty and, after the Company has spent $80,000 on drilling into that
property, a payment in the form of 150,000 shares of Company Common Stock.
As previously reported, in November, 1996, the Company granted an option
on the Company's Hancock Canyon property to Cameco (U.S.) Inc. for a purchase
price of $65,000, which was paid $10,000 upon execution of the options agreement
with the balance payable $10,000 on the first anniversary of the execution date
(paid October, 1997), $15,000 on the second anniversary and $30,000 on the third
anniversary, subject to a reserved 2.5% net smelter royalty. In April 1998,
Cameco gave notice of termination of its option agreement on the Hancock Canyon
property.
Also, although the Company terminated the lease for Trenton Canyon, it
has staked over that property. Lode claims, Mill 1 through 31, have been staked
in the Battle Mountain area on the west side of Antler Peak which adjoins Santa
Fe's North Peak project to the west. If the Company should ever develop that
property, it may be obligated to pay the prior owner the net smelter royalty of
0.5%.
As previously reported, the Hancock and Trenton Canyon properties were
written down, together with certain other properties, to a nominal $1.00 value
at year-end January 31, 1995.
Other Leasehold Interests. The Company also holds under lease a group of
claims on properties in the Battle Mountain area known as Whiskey Canyon and Red
Cap. As previously reported, in August 1998, the Company entered into an
agreement with Triband Resources U.S. Inc., as described above. This agreement
covered the Company's leasehold interest in the Whiskey Canyon and Red Cap
claims, as well as the AMAX/Draco claims described above.
Dean Mine Mill Site. As previously reported, effective October 30, 1998,
the Company concluded an agreement with an unrelated third-party for the sale of
the Company's approximate 560 acre tract (known as the Dean Mine mill site) for
$20,000.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The reported high and low bid prices for the Company's common stock on
the bulletin board over-the-counter trading system operated by the NASD (Symbol:
SGGM) for the periods shown were as follows:*
Fiscal Year ended January 31,
1998 1999
High Bid Low Bid High Bid Low Bid
First Quarter $ 0.001 $0.0001 $ 0.001 $0.0001
Second Quarter 0.001 0.0001 0.001 0.0001
Third Quarter 0.001 0.0001 0.0001 0.0001
Fourth Quarter 0.001 0.0001 0.0001 0.0001
First Quarter fiscal 1999 (through March 31, 1999): 3 trades reported.
High/low prices unchanged from Fourth Quarter.
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* The trading information listed in this table may not be representative
because the trading of Company Common Stock reflected by the NASD
bulletin board is sporadic and no trades were reported during a number
of months. Approximately 13 trades were reported during fiscal 1999.
The over-the-counter market quotations reflect interdealer prices,
without retail mark-up, mark-down or commission, and may not represent actual
transactions.
As of March 31, 1999, there were approximately 720 shareholders of
record, holding an aggregate of 14,487,159 shares of Common Stock outstanding.
The Company paid no cash dividends in either of the two most recent
fiscal years.
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(a) Results of Operations for the Year Ended January 31, 1999
During the year ended January 31, 1999, the Company engaged in no
material business activities other than (i) to undertake certain
environmental remediation work at its former Dean Mine site in Battle
Mountain, Nevada area; and (ii) to sell or lease, in the ordinary course
of business, certain of its remaining properties.
During the year the Company had cash receipts of $65,000. These
consisted of a $30,000 payment under one existing lease agreement, a
$20,000 payment under a contract for the sale of one piece of property,
and a $15,000 payment upon the commencement of a new sub-lease agreement
for certain properties. The Company continued to incur substantial
remediation expenses in order to comply with certain requirements of the
Nevada Division of Environmental Protection (NDEP) with respect to the
Company's former Dean Mine leasehold. Although accounts payable at
January 31, 1999, decreased from $199,000 the prior year to $52,000,
advances from shareholders, which were made to permit the Company to pay
for certain of this work, increased from $320,000 to $562,000 at January
31, 1999.
The Company had a net loss of $840,000 ($.05 per share) for the year
compared to a net loss of $895,000 ($.06 per share) the prior year.
Accrued interest for the year, was $717,000, compared to $554,000 the
prior period; reclamation expenses were $159,000 compared to $363,000
the prior period. Professional fees were $29,000 compared to $13,000 the
prior period, mostly as a result of new property sale and lease
transactions.
Total assets at year end were $86,000, with $6,000 in cash and $80,000
in other assets (balance of reclamation bond posted with NDEP). At
year-end the Company had current liabilities of $4,075,000, an increase
of $856,000 over the prior year (of this increase, $771,000 was
attributable to accrued interest expense), and long-term debt of
$6,945,000. Shareholder equity was negative ($10,934,000), compared to
($10,094,000) at January 31, 1998.
(b) Results of Operations for the Year Ended January 31, 1998
During the year ended January 31, 1998, the Company engaged in no
material business activities other than (i) to undertake certain
environmental remediation work at its former Dean Mine site in the
Battle Mountain, Nevada area; and (ii) to continue to explore possible
arrangements for the lease or sale of certain of its remaining
properties.
During the year the Company had cash receipts of $30,000 under its two
existing option agreements with Cameco (U.S.), Inc. for the purchase of
certain Company properties. The Company incurred substantial remediation
expenses in order to comply with certain requirements of the Nevada
Division of Environmental Protection (NDEP) with respect to the
Company's former Dean Mine leasehold. As a result, accounts payable at
January 31, 1998, increased to $199,000 from $44,000 the prior year and
shareholder advances, which were made to permit the Company to pay for
certain of this work, increased from $131,000 in the prior year to
$320,000 at January 31, 1998.
The Company had a net loss of $893,000 ($.06 per share) compared to net
recovery of $65,000 ($.00 per share) for the previous year. Accrued
interest was $554,000 compared to $425,000 the prior period; reclamation
expenses were $333,000 compared to zero for the prior period.
Professional fees were $13,000 compared to $12,000 for the prior year;
and general and administrative expenses were $5,000 compared to $1,000
the prior year.
Total assets at year end were $124,000, with $4,000 cash and $120,000 in
other assets (balance of reclamation bond posted with NDEP). At year-end
the Company had current liabilities of $3,219,000, an increase of
$874,000 over prior year (of this increase, $650,000 was attributable to
accrued interest expenses), and long term debt of $6,999,000.
Shareholder equity was negative ($10,094,000), compared to ($9,201,000)
at January 31, 1997.
<PAGE>
(c) Liquidity and Capital Resources at Year End January 31, 1999
The Company had no material liquidity or capital resources at year end,
January 31, 1998. At that date, the Company had current assets of $6,000
and current liabilities of $4.075 million. Current liabilities include
$3.371 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 (other than through payments under option agreements for the
sale of certain capital assets and in the form of advances from a
principal shareholder) during the twelve-month period ended January 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 Dean Mine Net Cash Flow) 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.
(d) Accounting Changes
In February, 1993, the Financial Accounting Standards Board issues
Statement No. 109, "Accounting for Income Taxes". Statement No. 109
requires a change from the deferred method of accounting for income
taxes to the asset and liability method of accounting for income taxes.
Under the asset and liability method, deferred tax assets and
liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
basis. Effective February, 1994, the Corporation adopted Statement No.
109 on a prospective basis. There is no effect on the Corporation's
statement of operations for the year ended January 31, 1995 as a result
of the adoption of Statement No. 109. The effective tax rate and
components of income tax expense at January 31, 1995 did not change
significantly from that at January 31, 1994.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements (unaudited) and related schedules and notes are
set forth beginning at Page F-1 of the report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None. Because of the Company's financial position it has not retained
any certified public accountants to audit its financial statements for the year
ended January 31, 1999.
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; COMPLIANCE WITH
SECTION 16(a)
Each of the members of the Board of Directors of the Company was elected
by the shareholders on August 12, 1993. The Company has not had an annual
meeting of shareholders since that time due to a variety of factors, including
extreme financial difficulties and management turnover.
DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITIONS HELD SINCE
<S> <C>
Harrison Nesbit II 71 Director 1989
Fred G. Pollard 80 Director 1993
C. B. Robertson III 63 Director; Chairman of the Board 1993
effective September 1, 1993
Ralph D. Rooney 73 Director 1984
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</TABLE>
Harrison Nesbit, II has served since 1961 as Chairman of Godine, Nesbit,
McCabe, an insurance firm located in Charlottesville, Virginia. Mr. Nesbit also
serves as a director of Figgie International, Inc., an operating company
servicing consumer, technical, industrial and service markets worldwide.
Fred G. Pollard has been an attorney since 1942. He is presently Of
Counsel to the law firm of Williams, Mullen, Christian & Dobbins in Richmond,
Virginia.
C. B. Robertson, III has been engaged for more than five years in real
estate development through CBR Associates, Inc. in Richmond, Virginia.
Ralph D. Rooney was elected Senior Chairman and member of the Board of
Directors of the Company in 1984. Mr. Rooney has, for many years, been
self-employed as a prospector.
EXECUTIVE OFFICERS
NAME POSITIONS HELD SINCE
C. B. Robertson III Chairman of the Board 1993
effective September 1, 1993
Harrison Nesbit, II Treasurer 1995
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There are no other individuals who are considered by the Company to be
"significant employees." There are no family relationships among the directors
and executive officers.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is registered pursuant to Section 12 of the Securities
Exchange Act of 1934. As a result, Section 16(a) of the Exchange Act requires
directors and executive officers, and any persons holding more than 10% of the
Company's Common Stock, to report their initial ownership of the Company's
equity securities and any subsequent changes in that ownership to the Securities
and Exchange Commission ("SEC"). The Company is required to disclose
<PAGE>
in the Annual Report on Form 10-KSB or in the proxy statement for the annual
meeting any failure to file a required report by its due date during the fiscal
year ended January 31, 1999. The Company is not aware of any transactions in
securities of the Company requiring the filing of any required report during the
year ended January 31, 1999.
ITEM 10. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table provides certain summary
information concerning compensation paid or accrued during the fiscal years
ended January 31, 1999, 1998 and 1997 to the Company's Chief Executive Officer.
There were no other executive officers of the Company, determined as of the end
of the last fiscal year, whose annual compensation exceeded $100,000.
<TABLE>
<CAPTION>
Long term compensation
Annual compensation Awards
Year Other Restricted
Ended Annual Stock
Jan. 31 Salary Bonus Compensation Awards Options(1)
<S> <C>
Name and principal position
C.B. Robertson(2) 1999 $ 0 -- -- --
Chairman of the Board 1998 $ 0 -- -- --
and acting CEO 1997 $ 0 -- -- --
</TABLE>
(1) No stock options were granted in the fiscal years ending January 31,
1997, 1998 or 1999.
(2) Mr. Robertson was appointed CEO and Chairman effective September 1,
1993. He has accepted no compensation for this position. See Item 12,
Certain Relationships and Related Transactions.
OPTION GRANTS IN LAST FISCAL YEAR. No stock options were granted to the
Chief Executive Officers (or any other officer) during the fiscal year ended
January 31, 1999 under the 1989 Stock Plan (the "Plan").
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION
VALUES. No stock options were awarded to, held by or exercised by the Chief
Executive Officer during the fiscal year ended January 31, 1999 under the Plan.
COMPENSATION PLANS. In 1989, the Board of Directors of the Company
approved a non-qualified stock option plan ("Plan") which provided for the grant
to officers, employees, consultants and independent contractors of the Company
of options to purchase shares of Common Stock. All options granted under the
Plan have expired without exercise.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock, including the effect of its Series A
and Series B Preferred Stock, at January 31, 1999 by (i) each person known to be
the beneficial owner of, directly or indirectly, or to control or direct, as of
January 31, 1999, more than five percent of the outstanding shares of Common
Stock, (ii) each director and officer named in the Summary Compensation Table
(See "Executive Compensation") and (iii) all officers and directors as a group.
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP
OF COMMON PERCENTAGE OF
NAME AND ADDRESS TITLE OF CLASS STOCK* ** CLASS OWNED*
<S> <C>
Richard O. Hunton Common Stock 1,177,210 (1) 7.60%
10555 Westpark Drive
Houston, Texas 77042
Harrison Nesbit, II Common Stock 1,034,899 (2) 7.14%
P. O. Drawer 5287
Charlottesville, Virginia 22905
Fred G. Pollard Common Stock 1,100,000 (3) 7.10%
1021 Cary Street
Richmond, Virginia 23219
C. B. Robertson, III Common Stock 1,128,605 (4) 7.29%
125 NationsBank Center
Richmond, Virginia 23277
Ralph D. Rooney Common Stock 484,134 3.36%
St. George Metals, Inc.
P. O. Box 548
Battle Mountain, Nevada
Neal O. Wade, Jr. Common Stock 1,158,536 (5) 7.48%
750 Bering Drive
Suite 606
Houston, Texas 77057
All directors and Common Stock 3,747,638 22.73%
executive officers
as a group (4 in group)
</TABLE>
* The beneficial ownership table reflects Company Common Stock holdings, which
figures include holdings of Preferred Stock adjusted to reflect each series'
respective initial conversion ratio into Company Common Stock. In accordance
with rules and regulations of the SEC, beneficial ownership and percentages
assume, for each individual shown, the conversion of all Preferred Stock held
by such individual but not any other shareholder, thus potentially overstating
such person's beneficial ownership in the Company. Beneficial ownership for
all directors and executive officers as a group assumes the conversion of all
Preferred Stock held by all such individuals in the group but not by any other
shareholder, thus potentially overstating the beneficial ownership of such
group.
**These calculations do not include shares convertible into Company Common
Stock by persons holding Operations Advances. Pursuant to those Operations
Advances, holders may convert each $1.00 in Operations Advances into seven
shares of Company Common Stock. However, such conversion rights are not
practically effective pursuant to the terms of those Operations Advances
unless and until the Company's articles of incorporation are amended to
increase the number of authorized shares of Company Common Stock to a number
sufficient to permit conversion of those Operations Advances. No such
shareholder approval had been sought or obtained as of the date of this
report. Holders of more than five percent of the Company's outstanding Common
Stock, and directors and officers named in the Executive Compensation Table
above hold Operations Advances as follows: Mr. Hunton: $100,000; Mr. Nesbit:
$42,000; Mr. Pollard: $625,000; and Mr. Robertson: $575,000.
(1) Includes 1,000,000 shares which Mr. Hunton may acquire upon conversion of
250 shares of Series A Preferred Stock.
<PAGE>
(2) Includes 2,500 shares held by an IRA controlled by Mr. Nesbit, 3,000 shares
held by a company of which Mr. Nesbit is an officer and shareholder and
60,000 shares owned by Mr. Nesbit's spouse as to which Mr. Nesbit disclaims
beneficial ownership.
(3) Includes 1,000,000 shares which Mr. Pollard may acquire upon conversion of
250 shares of Series A Preferred Stock.
(4) Includes 88,605 shares held by a controlled partnership, 15,000 shares held
by Mr. Robertson's wife, and 1,000,000 shares which Mr. Robertson may
acquire upon conversion of 250 shares of Series A Preferred Stock.
(5) Includes 1,000,000 shares which Mr. Wade may acquire upon conversion of 250
shares of Series A Preferred Stock.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As noted above, C. B. Robertson, III served as Chairman of the Board and
Chief Executive Officer without compensation during the year ended January 31,
1999. During the fiscal year ended January 31, 1998, Mr. Robertson advanced
$188,910 to the Company for the payment of operating expenses. During 1999, Mr.
Robertson advanced $192,000 to the Company for the payment of certain operating
expenses. During 1997, Mr. Robertson advanced $12,000 to the Company for
operating purposes which amount was repaid without interest during the year. See
Note 6 of Notes to Financial Statements.
<PAGE>
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(a)(1) Financial Statements (see Financial Statements at Page F1)
(a)(2) Financial Schedules
No Financial Schedules are required.
(a)(3) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
<S> <C>
3.1(1) Copy of Articles of Incorporation of Registrant.
3.2(1) Copy of Bylaws of Registrant.
10.7(1) Copy of Agreement dated June 19, 1987, between Auritech Joint Venture and St.
George Minerals Inc., as amended.
10.19(1) Copy of Registration Rights Agreement, dated effective as of July 1, 1990,
among St. George Metals, Inc. and the participants in the Private Placement.
10.20(1) Copy of Purchase Agreement dated March 21, 1990, between Luning Gold, Inc. and
St. George Minerals Inc., together with the First Amendment thereto, dated
June 14, 1990.
10.21(1) Copy of Promissory Note of St. George Metals, Inc. dated August 8, 1990, in
the original principal amount of $140,000 payable to Luning Gold, Inc.
10.25(3) Subscription Agreement for Private Placement of Series A Preferred Stock.
10.26(4) Certificate of Designation, Preferences, Rights and Limitations of Series A
Preferred Stock, $.01 par value, of St. George Metals, Inc.
10.27(4) Loan Agreement between St. George Metals, Inc. and borrowers (plus exhibits).
10.30(6) Certificate of Designation, Preferences, Rights and Limitations of Series B
Preferred Stock.
10.31(6) Subscription Agreement for Private Placement of Series B Preferred Stock.
10.33(7) Form of Operations Advance.
10.34(7) Form of Gold Delivery Contract.
10.35(8) Option Agreement dated as of February 21, 1996 between the Company and Cameco
(U.S.) Inc.
10.37(10) Finding of Alleged Violation and Order dated November 5, 1996 by the Nevada
Division of Environmental Protection
10.39(11) Mineral Lease and Option Agreement, effective July 8, 1998, between the
Company and Triband Resource (U.S.) Inc.
24 Powers of Attorney, filed herewith.
</TABLE>
- - ------------
(1) Filed as an exhibit to the Company's Registration Statement on Form 10,
dated May 25, 1990, as amended and incorporated herein by reference to
such filing.
(2) Filed as an exhibit to the Company's Annual Report on Form 10-KSB, for
fiscal year ended January 31, 1992.
(3) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, for
the fiscal quarter ended October 31, 1992, as amended and incorporated
herein by reference to such filing.
(4) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, for
the fiscal quarter ended July 31, 1992, as amended and incorporated
herein by reference to such filing.
(5) Filed as an exhibit to the Company's current report on Form 8-K, dated
June 15, 1992.
(6) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, for
the fiscal quarter ended July 31, 1994, as amended and incorporated
herein by reference to such filing.
(7) Filed as an exhibit to the Company's Annual Report on Form 10-K for
fiscal year ended January 31, 1995, as amended and incorporated herein
by reference to such filing.
(8) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB for
the fiscal quarter ended April 30, 1996, as amended and incorporated
herein by reference to such filing.
(10) Filed as an exhibit to the Company's Annual Report on Form 10-KSB, for
fiscal year ended January 31, 1997 and incorporated herein by reference
to such filing.
(11) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB for
the fiscal quarter ended July 31, 1998, and incorporated herein by
reference to such filing.
(b) Reports on Form 8-K
None
(c) Exhibits
(See Item (a)(3) above).
(d) Additional Financial Statements
(See Items (a)(1) and (a)(2) above).
<PAGE>
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) 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.
Dated: April 28, 1999 By:/S/ C. B. ROBERTSON, III
-------------------------------------
C. B. ROBERTSON, III
CHAIRMAN OF THE BOARD
IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF
THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C>
* /S/ C. B. ROBERTSON, III CHAIRMAN OF THE BOARD APRIL 28, 1999
- - ----------------------------- AND DIRECTOR (PRINCIPAL
C. B. ROBERTSON, III EXECUTIVE OFFICER)
* /S/ HARRISON NESBIT, II TREASURER (PRINCIPAL APRIL 28, 1999
- - ----------------------------- FINANCIAL AND
HARRISON NESBIT, II ACCOUNTING OFFICER)
* /S/ HARRISON NESBIT II DIRECTOR APRIL 28, 1999
- - -----------------------------
HARRISON NESBIT II
* /S/ FRED G. POLLARD DIRECTOR APRIL 28, 1999
- - -----------------------------
FRED G. POLLARD
* /S/ RALPH D. ROONEY DIRECTOR APRIL 28, 1999
- - -----------------------------
RALPH D. ROONEY
</TABLE>
* BY /S/ C.B. ROBERTSON, III
C. B. ROBERTSON, III
ATTORNEY-IN-FACT
<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED)
FINANCIAL STATEMENTS
JANUARY 31, 1999 AND 1998
(EXPRESSED IN THOUSANDS U.S. DOLLARS)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-1
<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED
BALANCE SHEETS
JANUARY 31, 1999 AND 1998
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
1999 1998
----------------------
<S> <C>
ASSETS
CURRENT
Cash $ 6 $ 4
OTHER - Reclamation deposit 80 120
------- -------
TOTAL $ 86 $ 124
------- -------
LIABILITIES
CURRENT
Accounts payable $ 52 $ 199
Advances from shareholders 562 320
Accrued interest payable 3,371 2,600
Accrued mineral interests reclamation costs 90 100
------- -------
4,075 3,219
LONG TERM-DEBT
Other 1,888 1,888
Related parties 5,057 5,111
------- -------
TOTAL LIABILITIES 11,020 10,218
------- -------
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 (22,168) (21,328)
-------- --------
(10,934) (10,094)
-------- --------
TOTAL $ 86 $ 124
-------- --------
</TABLE>
PREPARED BY MANAGEMENT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-2
<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED
STATEMENT OF LOSS AND DEFICIT
FOR THE YEARS ENDED JANUARY 31, 1999 AND 1998
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
CUMULATIVE YEARS ENDED
JANUARY 31, JANUARY 31,
1999 1999 1998
---- ---- ----
<S> <C>
REVENUE
Option fees and other $ 95 $ 65 $ 30
--------- --------- -----------
ADMINISTRATIVE COSTS
Related party administration charges $ 377 $ $
Related party fees 611
General and administrative 749 8 5
Interest 3,759 717 554
Reclamation and other costs 522 159 363
Professional fees 1,183 29 13
Salaries and benefits 892
Shareholder information 239
Loss on disposal of agreement
receivables 22
Fees and recoveries ( 247) - -
---------- --------- ----------
TOTAL ADMINISTRATIVE COSTS 8,107 913 935
--------- --------- ----------
LOSS BEFORE WRITE DOWN OF MINERAL
INTEREST 8,012 848 905
WRITE DOWN OF MINERAL INTEREST -
NET OF RECOVERIES 14,594 - -
--------- --------- ----------
NET LOSS BEFORE
INTEREST INCOME 22,606 848 905
INTEREST INCOME 438 8 12
--------- --------- ----------
NET LOSS $ 22,168 840 893
---------
DEFICIT BEGINNING OF PERIOD 21,328 20,435
--------- ----------
DEFICIT END OF PERIOD $ 22,168 $ 21,328
--------- ----------
BASIC LOSS PER SHARE
IN U.S. DOLLARS $ .05 $ .06
WEIGHTED AVERAGE NUMBER OF 14,487,159 14,487,159
COMMON SHARES OUTSTANDING
</TABLE>
PREPARED BY MANAGEMENT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-3
<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 31, 1999 AND 1998
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
CUMULATIVE YEARS ENDED
JANUARY 31, JANUARY 31,
1999 1999 1998
---- ---- ----
<S> <C>
FUNDS PROVIDED (USED) BY OPERATING
ACTIVITIES
Net recovery (loss) for the period $(22,168) $ (840) $ (893)
WRITE DOWN OF MINERAL INTEREST 15,086 - -
CHANGES IN OTHER NON-CASH
WORKING CAPITAL ITEMS 4,075 856 874
-------- ------- -------
(3,007) 16 (19)
--------- ------- --------
FINANCING ACTIVITIES
ISSUED AND PAID IN CAPITAL
Preferred shares 1,949
Common shares 9,309
Share issue costs (24)
LONG-TERM DEBT 6,945 (54) (97)
-------- -------- --------
18,179 (54) (97)
-------- -------- --------
INVESTING ACTIVITIES
Reclamation deposits (80) 40 100
Mineral interest (recovery) (15,086) - -
--------- ------- -------
(15,166) - 100
--------- ------- -------
INCREASE (DECREASE) IN CASH 6 2 ( 16)
CASH BALANCE BEGINNING OF PERIOD - 4 20
-------- ------- -------
CASH BALANCE END OF PERIOD $ 6 $ 6 $ 4
-------- ------- -------
</TABLE>
PREPARED BY MANAGEMENT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-4
<PAGE>
ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
UNAUDITED
JANUARY 31, 1999 AND 1998
(EXPRESSED IN U.S. DOLLARS)
1. GOING CONCERN CONSIDERATIONS
The Company has been unable to attain profitable operations and generate
funds therefrom and/or raise equity capital to meet current and future
obligations.
At the present time, the Company's financial resources have been
substantially exhausted and management does not know of any additional
financing available to the Company. The Company has no continuing
on-going business activities at this time other than certain remediation
efforts at its former Dean Mine leasehold, and its activities holding
certain of its properties subject to options to purchase by unrelated
third parties. Although the Company is still interested in the
possibility of participating in other mining projects, it has no
meaningful available financial resources, and only minimal personnel
resources. The Company has liquidated substantially all its assets and
paid off its trade creditors to the extent possible in a continuing
effort to wind up its business other than through a court supervised
process, which would entail significant administrative expenses. The
Company has paid most of its trade debt (other than to related parties)
and it is unlikely any payments will be made on its other indebtedness,
which has been voluntarily subordinated to the Company's trade
creditors.
At year-end January 31, 1995, management reviewed the Dean Mine project
and concluded that it did not contain sufficient mineable ore to be
economically viable. The Company has ceased exploration and has written
down the carrying values of mineral interests to their estimated net
realizable value, as determined by management or subsequent disposition.
As at January 31, 1999 and 1998, the Company's liabilities exceeded
total assets by $10,934,000 and $10,094,000 respectively. The Company
was notified in 1994 by two holders of term notes that the Company was
in default under the terms of these agreements, although the Company
does not agree with this contention. See Note 8 to the financial
statements. During the year-ended 1997, the Company's leasehold interest
in the Dean Mine was terminated by the lessor.
As noted, management has been in the process of disposing of assets and
settling its trade liabilities as funds become available. The Company
has not made any proposals to the holders of its operations advances,
gold delivery contracts and term notes for settlement of amounts at less
than the face value of these debts. The Company is also required to
F-5
<PAGE>
complete reclamation on its Dean Mine project at an estimated cost of
$220,000. The estimate of reclamation costs has been accrued in the year
end financial statements. See Note 4 to the financial statements.
2. ACCOUNTING POLICIES
(a) Accounting Principles
These consolidated financial statements have been prepared in
accordance with accounting principles and practices that are
generally accepted in the United States.
(b) Mineral Interests
Through the fiscal year ended January 31, 1996, the Company
engaged in the exploration and development of mineral resource
properties. It recorded mineral interests at cost or at an
ascribed amount if the consideration was common shares. The
Company included in costs the lease and option payments and
advanced royalties on properties held under lease and option
agreements. The Company carried its investments net of recoveries
from former joint venture partners.
(c) Values of Mineral Interests
Historically, the amounts shown for mineral interests represented
nominal costs of retained properties and did not necessarily
represent present or future values. The recoverability of these
amounts was dependent upon the confirmation of economically
recoverable reserves, the ability of the Company to obtain
necessary financing to meet property purchase, lease, option and
minimum exploration commitments and to successfully complete
their development and upon subsequent profitable production. The
Company's investments in resource properties have been subject to
periodic review for permanent impairment. Generally, the Company
considered that impairment of a mineral interest occurred at the
earlier of a decision by management to abandon the claims or that
the carrying value of an investment in a mineral interest or
project will likely exceed the future net cash flows. As of
January 31, 1995, the Company's retained
F-6
<PAGE>
mineral interests were written down to a nominal amount. As of
January 31, 1997, the Company's retained mineral interests were
reduced to zero.
(d) Income Taxes
Effective February l, 1994, the Company adopted the method of
accounting for income taxes prescribed by Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes". Among
other requirements, tax benefits related to operating losses are
to be recognized in the accounts if management believes, based on
available evidence, that it is more likely than not that they
will be realized. Due to the nature of the Company's development
stage operations and the unlikelihood of realization within a
reasonable time, no fixture tax benefit has been recognized in
the accounts for the current or prior years.
(e) Loss Per Share
Basic loss per share is calculated on the weighted average number
of common shares outstanding during the year. Common stock
equivalents, convertible debt and convertible shares and other
adjustments in determining any diluted loss per share are not
included in the weighted average if they would reduce the
Company's reported loss per share.
3. MINERAL INTERESTS
The Company holds its remaining mineral interests under various mineral
agreements. The mineral interests are subject to royalties ranging from
3 % to 6 % of net smelter returns. Certain interests are subject to
production commencement payments and consumer price index adjustments.
4. OTHER ASSETS
1999 1998
---- ----
Reclamation deposits $80,000 $120,000
======= ========
Reclamation deposits are comprised of interest-bearing certificates of
deposit, which have been pledged as security with the State of Nevada
for the performance of the Company's
F-7
<PAGE>
reclamation commitments. The funds will not be available for general
working capital purposes until such time as the approved reclamation
program has been completed. During the year ended January 31, 1999 and
1998, the State of Nevada authorized the release of $40,000 and
$100,000, respectively, from the reclamation deposits as reclamation
work was performed.
5. FUNDS PROVIDED (USED BY) OTHER NON-CASH WORKING CAPITAL ITEMS
<TABLE>
<CAPTION>
Cumulative to Years Ended
January 31, January 31,
1999 1999 1998
---- ---- ----
<S> <C>
Accounts payable $ 52,032 $(147,022) $ 154,232
Accrued interest payable
- Term notes and advances 3,370,779 770,365 650,907
Accrued mineral interests
reclamation costs 90,000 (10,000) (120,000)
Advances from shareholder 561,910 242,000 188,910
---------- ---------- ----------
$4,074,721 $ 855,343 $ 874,049
========== ========== ==========
</TABLE>
6. ADVANCES FROM SHAREHOLDERS
Advances from shareholders bear interest at quoted bank prime rates
(year end rate - 8.5 %), are unsecured and repayable upon demand. No
interest was paid on the shareholder advances during the year. For the
year ended January 31, 1999, accrued interest on shareholder advances
was $12,900 for the year, and total accrued interest as of January 31,
1999, was $105,397.
F-8
<PAGE>
7. LONG-TERM DEBT
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C>
(a) Operations advances, non-interest bearing
Third parties $ 587,343 $ 587,343
Related parties 1,277,000 1,277,000
(b) Gold delivery contracts - related parties 781,260 835,000
(c) Term Notes payable, bearing interest at quoted bank prime rate plus
l %. (Effective rate - 9.5 %.)
Third parties 1,300,000 1,300,000
Related parties 3,000,000 3,000,000
---------- -----------
$6,945,603 $6,999,343
</TABLE>
(d) Operations Advances
In 1994, the Company authorized up to $2,000,000 of non-interest
bearing senior convertible promissory notes which, subject to
authorization of additional common shares, are convertible at the
option of the holder into 7 common shares for each dollar advanced.
No such authorization of additional common shares has been sought
or obtained, so the conversion privilege is not effective. The
notes are to be repaid in semi-annual installments from future net
cash flow from the Company's Dean Mine as calculated at January 31
or July 31 and payable April l and October 1 respectively. No
payments were made during the fiscal years ending January 31, 1999
and 1998.
(e) Gold Delivery Contracts - Related Parties
The holders of the gold delivery contracts have subordinated their
right to any repayment until such time as the operations advances
have been repaid in fill. The contracts are non-interest bearing
and are repayable by delivery of 2,694 ounces of gold. At January
31, 1999, the equivalent value of the gold obligation was
F-9
<PAGE>
$781,260, a reduction from the prior year of $53,740 to reflect
changes in the price of gold. Related party interest charges for
the fiscal years ended January 31, 1999 and 1998 include provisions
of $(53,740) and $(97,000), respectively, for decrease in the value
of the gold obligation during the periods shown.
(f) Term Notes Payable and Related Interest
The holders of the term notes payable have subordinated their right
to any repayment of principal or interest until such time as the
operations advances have been repaid in full.
No interest was paid by the Company during the fiscal years ending
January 3l, 1999 and 1998. In 1993, the Company made interest
payments of $120,290. Interest payable as at January 31, 1999 is
summarized as follows:
F-10
<PAGE>
<TABLE>
<CAPTION>
Third Related
Year Ended Parties Parties Total
<S> <C>
January 31, 1999 $ 250,220 $ 468,803 $ 719,023
January 31, 1998 222,833 416,939 639,772
January 31, 1997 197,682 369,718 567,400
January 31, 1996 182,181 340,727 522,908
January 31, 1995 142,950 267,357 410,307
January 31, 1994 110,473 206,613 317,086
January 31, 1993 30,975 57,911 88,886
Total Accrued Interest
---------- ----------- -----------
on Term Notes $1,137,314 $ 2,128,068 $ 3,265,382
Accrued on Shareholder Advances 105,397
----------
$3,370,779
</TABLE>
The Company was notified in 1994 by two holders of term notes
that the Company was in default under the terms of such notes and
the lenders demanded repayment of notes aggregating $900,000.
Management is of the opinion that the lenders have subordinated
their rights to repayment until the retirement of the operations
advances, and so advised the holders.
(g) Principal Payments
Due to the uncertainty of repayment of operations advances from
net cash flow, the conversion rights to common shares of the
operations advances and the subordination to the operations
advances of the gold delivery contracts and term notes payable,
these amounts are carried as non-current liabilities.
Principal payments of unsubordinated other long-term debt over
the next five years are: 2000 - $Nil; 2001 - $Nil; 2002 - $Nil;
2003 - $Nil; 2004 - $Nil.
The Company has agreed not to incur, create or assume any funded
debt ranking ahead of the term notes, declare or pay dividends on
its shares, purchase or redeem any of its outstanding share
capital or distribute any assets to its shareholders without the
prior written consent of the lenders.
F-11
<PAGE>
8. INCOME TAXES
The Company has incurred resource-related expenditures and operating
losses which are available to reduce future years taxable income. As at
January 31, 1998, tax losses of approximately $21,290,000 were available
for carry-forward. The future benefits in respect of these losses have
been offset by a valuation allowance arising from the Company's
assessment of likelihood of realization. The availability of these
losses expires as follows: 2000 - $3,000; 2002 - $378,000; 2003 -
$1,449,000; 2004 - $2,944,000; 2005 - $537,000; 2006 - $2,227,000; 2007
- $2,532,000; 2008 - $2,858,000; 2009 - $4,358,000; 2010 - $2,441,000;
2011 - $661,000; and 2013 - $893,000.
No income taxes were paid or payable by the Company during the two
fiscal years ending January 31, 1999.
9. COMPARATIVE FIGURES
The comparative figures have been restated where necessary to conform to
the current year's financial statement presentation.
10. SHARE CAPITAL
(a) Authorized Capital
30,000,000 common shares of $.01 par value per share
10,000,000 preferred shares of $.01 par value per share
The preferred shares may be issued in one or more series with the
rights, privileges, restrictions and conditions determined by the
directors prior to each issue.
The directors have designated 1,750 preferred shares as Series A,
participating, voting, convertible, $.01 par value (liquidation
value $1,000 each) and 1,500,000 preferred shares as Series B
participating, voting, convertible, $.01 par value (liquidation
value $3 each). Each preferred share is entitled to the number of
votes and dividends based on the conversion ratio, subject to
shareholder authorization of an increase in the Company's
F-12
<PAGE>
authorized common shares. The shares are currently convertible at
the option of the holder in the ratios of 4,000 common shares for
each Series A and 10 common shares for each Series B preferred
share. The conversion ratios for Series A and B are subject to
adjustments in the event of subsequent issues of shares or
convertible debt for consideration less than $.25 and $.30 per
common share, respectively.
The Company has issued operations advances with conditional
conversion rights which, if exercised, will require the Company
to issue additional common shares in excess of the Company's
authorized common share capital. The Company has not requested
shareholder approval for any increase in its authorized common
shares, and consequently the conversion privilege is not
effective. The reported ratios for all convertible debt have not
been adjusted so as to assume that required approvals have been
obtained.
F-13
<PAGE>
(b) Issued Capital
<TABLE>
<CAPTION>
Price
Per Share Shares Consideration
--------- ------ -------------
<S> <C>
Preferred Shares - Series A
1992-cash $ 1,000 1,450 $1,450,000
Preferred Shares - Series B
1994-cash 3 228,917 $ 686,751
1996 - conversion to common (62,500) (187,500)
166,417 499,251
Common Shares
1987-cash $ 1 500 500
1988 - cash contributed to
capital by parent - 564,397
500 564,897
1990 - cash contributed to
capital by parent - 3,067,711
- cash via convertible
promissory notes 20,000 98 1,960,000
- cash and subscriptions on
private placement 20,000 180 3,600,000
- share issue costs other (78,071)
related parties - - (24,242)
</TABLE>
F-14
<PAGE>
(b) Issued Capital (continued)
<TABLE>
<CAPTION>
Price
Per Share Shares Consideration
--------- ------ -------------
<S> <C>
1991 - cash on private placement $ 20,000 l 20,000
- share issue costs - (13,295)
779 $ 9,097,000
1991 - Split on a 17,721 for 1 basis 13,804,659 $ 9,097,000
1992 - 1995 - No common shares were issued 13,804,659 9,097,000
1996 - Shares issued on conversion
of Series B Preferred 682,500 $ 187,500
14,487,159 $ 9,284,500
</TABLE>
(c) Stock Option and Share Purchase Warrants
Other Stock Option
An option to acquire 50,000 common shares at $.40 per share,
exercisable to October 28, 1998, expired during the year without
exercise. No options were outstanding at January 31, 1999.
Common Share Purchase Warrants
During the years ended January 31, 1999 and 1998, warrants
entitling holders to acquire 686,751 and 5,700,000 common shares,
respectively, expired without exercise.
Dilution assumes conversion privilege for operating advances
which is conditional upon shareholder approval of additional
authorized shares of common stock. No such shareholder approval
has yet been requested or obtained.
11. SEGMENTED INFORMATION
All of the Company's property interests are in the United States.
F-15
Exhibit 24
Powers of Attorney
St. George Metals, Inc.
Form 10-KSB
Year Ended January 31, 1999
SEC File No. 0-18616
<PAGE>
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint C. B. Robertson, III and F.
Claiborne Johnston, Jr., his true and lawful attorneys-in-fact, any of whom
acting singly is hereby authorized for him and in his name and on his behalf as
a director and/or officer of St. George Metals, Inc. (the "Company", to act and
to execute any and all instruments as such attorneys or attorney deem necessary
or advisable to enable the Company to comply with the Securities Exchange Act of
1934, and any rules, regulations, policies or requirements of the Securities and
Exchange Commission (the "Commission") in respect thereof, in connection with
the preparation and filing with the Commission of the Company's Annual Report on
Form 10-KSB for the fiscal year ended January 31, 1999, and any and all
amendments to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem necessary or
appropriate.
The undersigned does hereby ratify and confirm all his said attorneys or
attorney shall do or cause to be done by the virtue hereof.
WITNESS the execution this 21st day of April, 1999.
/s/ C. B. Robertson, III
----------------------------
(Signature)
C. B. Robertson, III
(Type or Print Name)
<PAGE>
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint C. B. Robertson, III and F.
Claiborne Johnston, Jr., his true and lawful attorneys-in-fact, any of whom
acting singly is hereby authorized for him and in his name and on his behalf as
a director and/or officer of St. George Metals, Inc. (the "Company", to act and
to execute any and all instruments as such attorneys or attorney deem necessary
or advisable to enable the Company to comply with the Securities Exchange Act of
1934, and any rules, regulations, policies or requirements of the Securities and
Exchange Commission (the "Commission") in respect thereof, in connection with
the preparation and filing with the Commission of the Company's Annual Report on
Form 10-KSB for the fiscal year ended January 31, 1999, and any and all
amendments to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem necessary or
appropriate.
The undersigned does hereby ratio and confirm all his said attorneys or attorney
shall do or cause to be done by the virtue hereof.
WITNESS the execution this 21st day of April, 1999.
/s/ Harrison Nesbit, II
----------------------------
(Signature)
Harrison Nesbit, II
(Type or Print Name)
<PAGE>
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint C. B. Robertson, III and F.
Claiborne Johnston, Jr., his true and lawful attorneys-in-fact, any of whom
acting singly is hereby authorized for him and in his name and on his behalf as
a director and/or officer of St. George Metals, Inc. (the "Company", to act and
to execute any and all instruments as such attorneys or attorney deem necessary
or advisable to enable the Company to comply with the Securities Exchange Act of
1934, and any rules, regulations, policies or requirements of the Securities and
Exchange Commission (the "Commission") in respect thereof, in connection with
the preparation and filing with the Commission of the Company's Annual Report on
Form 10-KSB for the fiscal year ended January 31, 1999, and any and all
amendments to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem necessary or
appropriate.
The undersigned does hereby ratio and confirm all his said attorneys or attorney
shall do or cause to be done by the virtue hereof.
WITNESS the execution this 22nd day of April, 1999.
/s/ Ralph D. Rooney
----------------------------
(Signature)
Ralph D. Rooney
(Type or Print Name)
<PAGE>
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint C. B. Robertson, III and F.
Claiborne Johnston, Jr., his true and lawful attorneys-in-fact, any of whom
acting singly is hereby authorized for him and in his name and on his behalf as
a director and/or officer of St. George Metals, Inc. (the "Company", to act and
to execute any and all instruments as such attorneys or attorney deem necessary
or advisable to enable the Company to comply with the Securities Exchange Act of
1934, and any rules, regulations, policies or requirements of the Securities and
Exchange Commission (the "Commission") in respect thereof, in connection with
the preparation and filing with the Commission of the Company's Annual Report on
Form 10-KSB for the fiscal year ended January 31, 1999, and any and all
amendments to such Report, together with such other supplements, statements,
instruments and documents as such attorneys or attorney deem necessary or
appropriate.
The undersigned does hereby ratify and confirm all his said attorneys or
attorney shall do or cause to be done by the virtue hereof.
WITNESS the execution this 26th day of April, 1999.
/s/ Fred G. Pollard
----------------------------
(Signature)
Fred G. Pollard
(Type or Print Name)
