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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE COMMISSION ACT OF 1934
For the fiscal year ended August 31, 1997
Commission File Number: 1-5970
SILVER BUTTE MINING COMPANY
(Exact name of registrant as specified in its charter)
IDAHO 84-0263301
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
2501 E. SHERMAN AVENUE, #215, COEUR D'ALENE, ID 83814
(Address of Principal Executive Offices) (Zip Code)
(208) 664-0880
Registrant's telephone number, including area code
Securities registered under Section 12(b) of the Exchange Act:
Title of each class: Name of exchange on which registered:
Common stock, $ .05 per share None
* The shares of the issuer are quoted by the Spokane Quotation Bureau.
Securities registered under section 12(g) of the Exchange Act:
None
Check whether the issuer (1) 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 ( ) No (X)
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will 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. ____
State issuer's revenues for its most recent fiscal year: $ 6,243
The aggregate market value of voting stock held by nonaffiliates
computed by reference to the average bid and asked prices as of November 17,
1997, was $192,682.
The number of shares of Common Stock, $ .05 par value, outstanding as of
August 31, 1997, was 7,828,748.
DOCUMENTS INCORPORATED BY REFERENCE: FORM 8-K dated November 28, 1997
This Form 10-KSB contains 22 pages. The Table of Contents is on page 2.
*****************************************************************************
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
TABLE OF CONTENTS
PART I
Item 1. Description of Business 3
Item 2. Description of Property 4
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II
Item 5. Market for Common Equity and Related Stockholders' Matters 4
Item 6. Management's Discussion and Analysis or Plan of Operations 5
Item 7. Financial Statements 6
Item 8. Changes In and Disagreements with Accountants on Matters of
Financial Disclosure 6
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16 (a) of the Exchange Act 7
Item 10. Executive Compensation 8
Item 11. Security Ownership of Certain Beneficial Owners and Management 8
Item 12. Certain Relationships and Related Transactions 9
Item 13. Exhibits and Reports on Form 8-K 9
Signature Page 9
Financial Statements F1-F7
Exhibit 10. Documents relating to the Sale of Real Property 18-21
Exhibit 27. Financial Data Schedule 22
2
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 1. DESCRIPTION OF BUSINESS.
(a) The issuer was incorporated under the laws of the State of Idaho on
January 19, 1965 and was a mining company in the exploration stage from its
inception until it decided to abandon its status as a development stage
enterprise by ceasing all exploration activities in 1994. The issuer was
previously engaged in exploring for non-ferrous and precious metals, principally
silver and lead. However, it was unable to develop any commercial ore deposits,
following many years of extensive exploration through geologic sampling and
mapping, core drilling, and tunneling. The properties of the issuer are located
in Bonner County, Idaho. See Item 2 for a further description of the
registrant's properties.
The issuer's meager financial resources severely limit its ability to
carry out the type of exploration activity that it performed in past years,
and management considers it unlikely that the company will obtain
additional funding with which to undertake such exploration.
(b) (1) The issuer does not produce any significant product, nor does it
provide any significant service.
(2) There are no distribution requirements, because there are no
products or services.
(3) There have been no publicly announced new products or services.
(4) There is no competition to the issuer in maintenance of its
properties.
(5) The issuer does not make significant use of raw materials.
(6) The issuer does not have any significant customers.
(7) The issuer does not have any patents, trademarks, licenses,
franchises, concessions or labor contracts. The issuer has a mineral
lease with the State of Idaho that requires royalty payments on
production. However, there has been no significant production from
that lease.
(8) The issuer would need government approval to reactivate any
future exploration programs; however, the issuer has no plans of
engaging in future exploration.
(9) Government regulations have not had a significant effect on the
issuer's business.
(10) The issuer has not engaged in research and development activities
in the past two fiscal years.
(11) There has been no material effect on or cost to the issuer's
business as a result of complying with government regulations
protecting the environment. The issuer has a $5,000 certificate of
deposit held by the State of Idaho that serves as a bond to assure
that the leased property will be returned to the State in
satisfactory condition.
(12) The issuer had one employee and one contract employee during the
year. Each of these employees worked part time.
3
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 2. DESCRIPTION OF PROPERTY.
The registrant holds the following mining properties:
1. Mineral rights only of 11 patented mining claims covering
approximately 165 acres situated in Sections 1, Township 55 North, Range 2
West Boise Meridian, and Sections 5, 6 and 8, Township 55 North, Range 1
West Boise Meridian, Bonner County, Idaho.
2. One acre of deeded land encompassing the "Stidwell Adit" adjacent
to Mirror Lake in Section 31, Township 56 North, Range 1 West Boise
Meridian, Bonner County, Idaho.
3. Mineral lease number 4004 with the State of Idaho dated January 1,
1988, on the East 1650 feet of Section 36, Township 56 North, Range 1 West
Boise Meridian, Bonner county Idaho, comprising about 200 acres. This
lease provides for annual minimum rent of $200 per year, and graduated
production royalties of 2.5% to 10% on the value of ore produced. The
lease expires on December 31, 1997 and is renewable.
There are no known commercial ore deposits on any of the properties.
ITEM 3. LEGAL PROCEEDINGS.
There are no legal proceedings pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) MARKET INFORMATION. There is no established market for the issuer's
common stock. The following bid prices are compiled by the Spokane Quotation
Service. These over-the-counter bid prices reflect inter-dealer prices
without retail mark-up, mark-down or commission, and may not necessarily
represent actual transactions.
Fiscal Year End 8/31/97 Fiscal Year End 8/31/96
_______________________ _______________________
High Low High Low
________ ________ ________ ________
1st Quarter Ending 11/30 $ 0.01 $ 0.01 $ 0.01 $ 0.01
2nd Quarter Ending 2/28 0.01 0.01 0.01 0.01
3rd Quarter Ending 5/31 0.01 0.01 0.01 0.01
4th Quarter Ending 8/31 0.01 0.01 0.01 0.01
(b) As of August 31, 1997, there were approximately 1,650 holders of record
of the issuer's Common Stock.
(c) The issuer has never paid cash dividends, and has no plans of paying
dividends in the foreseeable future. There are no restrictions on the issuer's
ability to pay dividends.
The issuer has sold no securities within the last three years.
4
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
(a) Does not apply.
(b) Management's Discussion and Analysis of Financial condition and Results
of Operations:
REVENUES. The issuer has no material revenue from operations. The most
significant source of revenue of the issuer is interest from funds deposited
in interest bearing accounts, and gains from the sale of the issuer's real
and personal properties. In 1997, the issuer's interest earned rose to
$4,767 from $1,887 in 1996. The increase resulted from a higher level of
funds in interest bearing accounts in 1997 as a result of the sale of real
property in fiscal year 1996. The issuer's interest income is determined by
market interest rates and the types of interest bearing accounts or
instruments in which the funds are invested. During 1996, the issuer sold
approximately seven of the approximately eight acres of real property that
the issuer owned prior to the sale. This sale resulted in a gain from the
sale of $39,372. The issuer had no property sales in 1997. The issuer
expects that its interest income will decrease in future years because there
will be a decreasing level of funds invested in interest bearing accounts.
EXPENSES. The issuer's expenses are incurred for the maintenance of the
issuer's mining properties, including leased property, and for the general
and administrative expenses of the issuer. The issuer's expenses in 1997
were $9,950 compared to $9,824 in 1996. A decrease in expenses related to
property maintenance in 1997, was offset by an increase in the expenses
related to its accounting and reporting activities. The issuer expects that
its expenses may decrease in future years because it has terminated its
exploration activities, and it will incur lower maintenance costs on it's
properties.
FINANCIAL POSITION. Cash and cash equivalents increased from $81,090 on
August 31, 1996 to $84,297 on August 31, 1997. This was primarily caused by
an increase in payables for the expenses at August 31, 1997. The issuer
expects that its cash balance will decrease in 1998 because it intends to
invest a significant portion of its funds in highly secure, interest bearing,
temporary investments. The issuer doe not have any commitments or plans for
capital expenditures that will require significant amounts of cash.
Inflation does not have a material effect on the issuer's financial results.
CASH FLOWS. In 1996, cash used by the issuer for operating activities
exceeded its income from interest proceeds and other operating activities by
$5,813. The issuer received $59,372 from the sale of property in 1996, as
discussed above. In 1997, the issuer received $3,207 more than it expended,
due to deferring payment of expenses discussed above. The issuer expects
future cash required by operating activities will continue to exceed the cash
that the issuer receives from interest income.
5
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 7. FINANCIAL STATEMENTS
The issuer meets the requirements of an "Inactive Registrant" according to
Section 210.3-11 of Regulation S-X. Those requirements, which describe the
issuer for the fiscal year ended August 31, 1997, are as follows:
(a) Gross receipts from all sources for the fiscal year are not in excess
of $100,000.
(b) The registrant has not purchased or sold any of its own stock, granted
options therefor, or levied assessments upon outstanding stock.
(c) Expenditures for all purposes for the fiscal year are not in excess
of $100,000.
(d) No material change in the business has occurred during the fiscal year,
including any bankruptcy, reorganization, readjustment or succession or
any material acquisition or disposition of plants, mines, mining
equipment, mine rights, or leases; and,
(e) No exchange upon which the shares are listed, or governmental
authority having jurisdiction, requires the furnishing to it or the
publication of audited financial statements.
The issuer's financial statements have been prepared by management in
accordance with generally accepted accounting principles, and they are
unaudited.
The financial statements are appended as pages F-1 through F-8 following
page 9.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
The issuer's last audited financial statements were issued for the fiscal
year ended August 31, 1990. The issuer terminated audits of its financial
statements following that year because the costs of the annual audits were
seriously impairing the company's limited financial resources.
6
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
(a) Identification of Directors and Officers:
Name and Years Term Background Shares of Common
Positions Held Age Served Expires Past 5 Years Stock Owned
______________ ___ ______ _______ ____________ _____________
R. Richard Rice
President 8 5/1/98
and Director 53 16 5/1/98 Accountant 29,000
Robert J. Evans
Sec/Treas. 8 5/1/98
and Director 73 16 5/1/98 Retired miner 8,000
Marvin W. Farmer
Vice President 15 5/1/98
and Director 67 20 5/1/98 Retired educator 7,000
Joseph Zinger
Vice President 1 5/1/98 Asst.
and Director 58 5 5/1/98 Superintendent 1,000
Terry McConnaughey Retired
Director 62 1 5/1/98 Law Enforcement 56,457
Wayne Hohman
Director 58 1 5/1/98 Retired educator 20,000
(b) There are no other significant employees of the issuer.
(c) There are no family relationships among the directors.
(d) There has been no involvement by the directors in any legal
proceedings during the past five years involving:
(1) Bankruptcy;
(2) Conviction in a criminal proceeding;
(3) An order, judgement, or decree, limiting his involvement in
any type of business, securities or commodities law; or,
(4) Violation of a federal or state securities or commodities law.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Officers, directors and beneficial owners of 10% or more of the issuer's
Common Stock that failed to file on a timely basis the reports required by
section 16(a) of the Exchange Act based on a review of Forms 3, 4, and 5:
None
7
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth, for the fiscal years ended August 31, 1997,
1996, and 1995, compensation paid by the issuer to the President, and paid
by Iron Mask Mining Company to the Secretary/Treasurer for work performed for
the benefit of the issuer. The issuer reimburses Iron Mask Mining Company for
its payments on the issuer's behalf. These are the only officers that
received compensation in any of these years. The issuer has provided no stock
options, warrants, or stock appreciation rights. There are no other employment
contracts or incentive pay agreements with the officers, who are paid on an
hourly basis for work performed according to the terms and rates approved by
the Board of Directors.
Name and Long Term
Principal Annual Compensation Compensation All Other
Position Year Salary Bonus Awards Compensation
________________ ____ _______ _____ ____________ ____________
R. Richard Rice
President 1997 $ 2,210 0 0 0
1996 0 0 0 0
1995 0 0 0 0
Robert J. Evans
Sec/Treas. 1997 $ 1,350 0 0 0
1996 2,445 0 0 0
1995 870 0 0 0
Compensation of Directors: Each director receives $30 for each Board of
Directors or committee meeting that the Director attends.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners: No person of record
is known to own more than 5% of the registrant's Common Stock.
(b) Security ownership of management:
Name of Amount and Nature Percent
Title of Class Beneficial Owner of Beneficial Ownership of Class
______________ ________________ _______________________ ________
Common Stock R. Richard Rice 29,000 0.37%
2501 E. Sherman Ave #215
Coeur d'Alene, ID 83814
Common Stock Robert J. Evans 8,000 0.10%
P.O. Box 178
Ponderay, ID 83852
Common Stock Directors and
Executive Officers
as a Group 121,457 1.55%
(c) There are no contractual arrangements known to issuer that may result
in a change in control of issuer.
8
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits and index of exhibits:
Form 10-KSB
Exhibit No. Exhibit Description Page No.
___________ ___________________ ___________
10 Sale of Real Property
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the last quarter of the fiscal
year ended August 31, 1997.
****************************************************************************
SIGNATURES
****************************************************************************
In accordance with section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SILVER BUTTE MINING COMPANY
(Registrant)
/s/ R. Richard Rice
_________________________ Date: November 28, 1997
R. Richard Rice
Title: President
In accordance with the 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.
/s/ R. Richard Rice
_________________________ Date: November 28, 1997
President and Director (Principal Accounting and Executive Officer)
/s/ Robert J. Evans
_________________________ Date: November 28, 1997
Sec./Treas. and Director
/s/ Marvin W. Farmer
_________________________ Date: November 28, 1997
Vice Pres. and Director
/s/ Joseph Zinger
_________________________ Date: November 28, 1997
Vice Pres. and Director
/s/ Terry McConnaughey
_________________________ Date: November 28, 1997
Director
/s/ Wayne Hohman
_________________________ Date: November 28, 1997
Director
9
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-KSB ANNUAL REPORT
August 31, 1997
INDEX TO FINANCIAL STATEMENTS
Page No.
Balance Sheets, August 31, 1997, and 1996 F2
Income Statements for the years ended August 31, 1997, and 1996 F3
Cash Flow Statements for the years ended August 31, 1997, and 1996 F4
Statements of Changes in Stockholders' Equity for the years
ended August 31, 1997 and 1996 F5
Notes to Financial Statements F6-F7
F1
<PAGE>
<TABLE>
SILVER BUTTE MINING COMPANY
BALANCE SHEETS
August 31, 1997, and 1996
1997 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 84,297 $ 81,090
Certificate of deposit for State lease 5,000 5,000
Prepaid expenses - 2,240
Accounts receivable 1,092 96
_________ _________
TOTAL CURRENT ASSETS 90,389 88,426
_________ _________
PROPERTY, PLANT & EQUIPMENT
Properties 3,000 3,000
Equipment and machinery 19,704 19,704
Accumulated depreciation (19,704) (19,704)
_________ __________
3,000 3,000
_________ _________
TOTAL ASSETS $ 93,389 $ 91,426
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,910 $ 2,240
_________ __________
TOTAL CURRENT LIABILITIES 7,910 2,240
_________ __________
SHAREHOLDERS' EQUITY
Capital stock, par value 5 cents per share,
authorized 10,000,000 shares, issued and
outstanding, 7,828,748 391,437 391,437
Additional paid-in capital 392,953 392,953
Accumulated deficit (698,911) (695,204)
_________ _________
TOTAL SHAREHOLDERS' EQUITY 85,479 89,186
_________ _________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 93,389 $ 91,426
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
F2
<PAGE>
<TABLE>
SILVER BUTTE MINING COMPANY
INCOME STATEMENTS
For the Years Ended August 31, 1997, and 1996
1997 1996
___________ ___________
<S> <C> <C>
REVENUES
Interest income $ 4,767 $ 1,887
Gain on sale of property - 39,372
Miscellaneous other income 1,476 937
___________ ___________
Total revenue 6,243 42,196
EXPENSES
Wages and other compensation 3,949 3,975
Professional services 3,860 2,005
Dues, taxes and licenses 613 2,105
Rent 200 802
Office expense 548 461
Miscellaneous 780 323
Interest expense - 133
Depreciation - 20
___________ ___________
Total expenses 9,950 9,824
___________ ___________
INCOME (LOSS> BEFORE INCOME TAXES (3,707) 32,372
INCOME TAXES - -
___________ ___________
NET INCOME (LOSS) $ (3,707) $ 32,372
=========== ===========
Income (Loss) per Share of Common
Stock Outstanding $ ( 0.0005) $ 0.0041
=========== ===========
Weighted Average Number of Common
Shares Outstanding 7,828,748 7,828,748
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
F3
<PAGE>
<TABLE>
SILVER BUTTE MINING COMPANY
STATEMENTS OF CASH FLOWS
For the Years Ended August 31, 1997, and 1996
1997 1996
___________ ___________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (3,707) $ 32,372
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation - 20
Gain on sale of property - (39,372)
Increase (decrease) in payables 5,670 2,240
Decrease (increase) in prepaid expenses 2,240 (1,054)
Decrease (increase) in receivables (996) (19)
___________ ___________
Net cash provided by (used in)
operating activities 3,207 (5,813)
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property - 59,372
___________ ___________
Net cash provided by (used in)
investing activities - 59,372
___________ ___________
NET INCREASE IN CASH AND
CASH EQUIVALENTS 3,207 53,559
Cash and Cash Equivalents at Beginning of Year 81,090 27,531
___________ ___________
Cash and Cash Equivalents at End of Year $ 84,297 $ 81,090
=========== ===========
Interest Expense paid $ - $ 133
========== ===========
Income taxes paid $ - $ -
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
F4
<PAGE>
<TABLE>
SILVER BUTTE MINING COMPANY
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Years Ended August 31, 1997, and 1996
Common Stock
______________________ Additional Accum-
Number Par Paid-In ulated
Of Shares Value Capital Deficit Total
__________ __________ __________ ___________ _________
<S> <C> <C> <C> <C> <C>
Balances,
August 31, 1995 7,828,748 $ 391,437 $ 392,953 $ (727,576) $ 56,814
Net Income - - - 32,372 32,372
__________ __________ __________ ___________ _________
Balances,
August 31, 1996 7,828,748 391,437 392,953 (695,204) 89,186
Net Loss - - - (3,707) (3,707)
__________ __________ __________ ___________ _________
Balances,
August 31, 1997 7,828,748 $ 391,437 $ 392,953 $ (698,911) $ 85,479
========== ========== ========== =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements
F5
<PAGE>
SILVER BUTTE MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
August 31, 1997, and 1996
Note 1 - COMPANY BUSINESS
The Company was incorporated under the laws of the State of Idaho on January
19, 1965, and was in the exploratory mining stage from its inception until it
decided to abandon its status as a development stage enterprise by ceasing all
exploration in 1994. The Company's exploration efforts developed no commercial
ore deposits, and all capitalized mining costs were written off. The Company
continues to search for business opportunities in the mining industry, and will
also investigate opportunities in other industries. The Company's meager
financial resources severely limit it's ability to carry out the type of
exploration activity that it performed in past years, and the Company's
management considers it unlikely that the Company will obtain additional
funding with which to undertake such exploration.
Note 2 - ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Company's management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results may differ from those estimates.
The significant accounting principles and practices of the Company are as
follow:
a. The financial statements are prepared on the accrual basis of accounting.
b. Properties, equipment and machinery are stated at cost.
c. Depreciation of machinery and equipment was computed using straight line
and accelerated methods of depreciation.
d. The Company considers cash equivalents to be highly liquid investments
with an original maturity of three months or less.
e. Accounting for income taxes is discussed in Note 5.
f. Earnings per share are computed using the weighted average number of
shares outstanding.
Note 3 - PROPERTIES
The Company owns mining properties consisting of the mineral rights to eleven
Patented Mining claims covering approximately 165 acres and one acre of
deeded land near Mirror Lake in Bonner County, Idaho. The Company is also
the lessee of a parcel of State of Idaho land which is more fully described
in Note 4.
On July 31, 1996, the Company sold the approximately seven acre Roof Tunnel
Claim for $61,500 and recorded a gain of $39,372.
The book values of the properties owned are:
Mineral rights to eleven patented mining claims $ 1,100
One acre of deeded land near Mirror Lake 1,900
_______
Total book value $ 3,000
=======
F6
<PAGE>
SILVER BUTTE MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
August 31, 1997, and 1996
Note 4 - MINERAL LEASE
The Company holds a mineral lease from the State of Idaho on approximately
200 acres of land in Bonner County, Idaho. The lease is dated January 1,
1988, has a 10 year life that expires on December 31, 1997, and is renewable
at the Company's option for another 10 years. The minimum rent is $200 per
year, and the total minimum rent commitment over the next five years, if the
Company should renew the lease, is $1,000. The lease contains a sliding
scale production royalty payable to the State of from 2.5% to 10% of the
value of the ore produced. There has been no significant production from the
lease. The Company has posted a $5,000 certificate of deposit with the State
as a surety bond.
Note 5 - INCOME TAXES
The Company had at August 31, 1997, $302,402 of net operating loss carryovers
for Federal income tax purposes that expire on August 31 of the years shown
below.
1998 $ 14,118
2001 2,299
2002 3,786
2003 2,922
2006 1,892
2007 762
2008 269,988
2009 2,989
2012 3,646
_________
TOTALS $ 302,402
=========
The Company accounts for income taxes in accordance with FAS No. 109. This
statement establishes the criteria to be used for recognizing the deferred
tax assets and deferred tax liabilities. These assets and liabilities result
from temporary differences between tax expense or benefit calculated for tax
reporting purposes and the tax expense or benefit calculated for financial
reporting purposes. The Company has no deferred tax liabilities. A deferred
tax asset for the remaining net operating loss carryovers is fully reserved
because management does not believe that it is more likely than not that the
carryovers will be utilized, and because it is uncertain if the Company will
realize any future taxable income.
Note 6 - COMMITMENTS AND CONTINGENCIES
The Company sold a seven acre parcel of land in the fiscal year ended
August 31, 1996, that contained mine waste rock and tailings. The Company
believes there is a remote possibility that this property may require some
cleanup, and an even more remote possibility that the Company may be required
to participate in the cost of such a cleanup, which the Company estimates
would be less than $10,000.
F7
<PAGE>
EXHIBIT 10. DOCUMENTS RELATING TO THE SALE OF REAL PROPERTY
<Company Logo> Date: 11/13/96
Sandpoint Title Insurance, Inc. Please direct correspondence to:
120 South Second Avenue
Sandpoint, Idaho 83864
Silver Butte Mining Company
2501 E. Sherman, #215 Escrow Number: 13212-LF
Coeur d'Alene, ID 83814 Property: Ptn. S6-T55N-R1W
, ID 83864
We have completed the above numbered escrow and enclose the following checked
items:
(only checked items included)
(X) Final Seller's Settlement Statement
(X) Copies of Closing Documents
Any recorded documents to which you may be entitled, and your policy of title
insurance, if not enclosed, will follow under separate cover.
Thank you for giving us the opportunity to serve you. We invite you to call
upon us whenever we can be of assistance.
Very truly yours,
/s/ Lora Fedak
P.S. On the back of this letter we have included certain tax information you
may find helpful.
(tax information excluded)
<PAGE>
<Company Logo>
Sandpoint Title Insurance, Inc.
120 South Second Avenue
Sandpoint, Idaho 83864
SELLER'S CLOSING STATEMENT
Silver Butte Mining Company Date: 11/13/96
2501 E. Sherman, #215 Escrow Number: 13212-LF
Coeur d'Alene, ID 83814 Escrow Officer: Lora Fedak
Closing Date: 07/31/96
Property: Ptn. S6-T55N-R1W , ID 83864
Item Debits Credits
______________________________________________________ _________ __________
Sales Price Ptn. S6-T55N-R1W 61,500.00
Earnest money held by seller 100.00
Credit to Buyer for Environmental study 1,560.25
R.E. Taxes 01/01/96 to 07/31/96, 212 days @ $.6385/day 135.36
CUTA title Ins. Premium: 100% of Total Premium 428.00
Closing Fees: 50% of Total Closing Fees 125.00
Recording Fees 15.00
Due to Seller 59,136.39
_________ __________
TOTALS 61,500.00 61,500.00
<PAGE>
(Company Logo)
Sandpoint Title Insurance, Inc.
120 South Second Avenue
Sandpoint, Idaho 83864
WARRANTY DEED
Instrument No: 48915
Insurance company file number:#13212
For Value Received Silver Butte Mining Company, an Idaho Corporation, The
grantor(s) do(es) hereby grant, bargain, sell and convey unto, Steven L.
O'Connell and Sharon A. O'Connell, husband and wife, the grantee(s), whose
current address is 975 Talache Road, Sagle, ID 83860 the following described
premises in Bonner County, Idaho.
See Exhibit A attached hereto and made a part hereof.
TO HAVE AND TO HOLD the said premises, with their appurtenances
unto the said Grantee, their heirs and assigns forever. And the said Grantor(s)
do(es) hereby covenant to and with the said Grantee(s) he/she/they is/are the
owner(s) in fee simple of said premises; that they are free from all
encumbrances except specific matters of record as shown above, and that
he/she/they will warrant and defend the same from all lawful claims whatsoever.
Dated: June 14th, 1996
Silver Butte Mining Company
By: /s/ R. Richard Rice By: /s/ Robert J. Evans
_____________________________________ _________________________________
Richard Rice, President Robert J. Evans, Secretary
Notarized July 31, 1996
Recorded July 31, 1996
<PAGE>
Page Two of Warranty Deed
EXHIBIT A
IN THE STATE OF IDAHO, COUNTY OF BONNER
That the portion of the Roof Tunnel patented Lode Mining Claim situated
In the Southeast quarter of Section 6, Township 55 North, Range 1 East,
Boise Meridian, lying East of the county road at Talache, Bonner County,
Idaho
SUBJECT TO:
GENERAL TAXES FOR THE YEAR 1996, A LIEN NOT YET DUE AND PAYABLE.
ANY RIGHT, TITLE OR INTEREST TO ANY LAND OR RIGHTS THEREIN WITHIN SAID
PREMISES OR LYING BEYOND THE SIDE LINES EXTENDED DOWNWARD VERTICALLY.
SUCH RIGHTS MAY INCLUDE, BUT ARE NOT LIMITED TO, SUBSURFACE AND EXTRALATERAL
RIGHTS TO FOLLOW A VEIN OR LODE IN ITS COURSE
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements at August 31, 1997 (Unaudited) and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> AUG-31-1997
<CASH> 84,297
<SECURITIES> 0
<RECEIVABLES> 1,092
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 90,389
<PP&E> 22,704
<DEPRECIATION> 19,704
<TOTAL-ASSETS> 93,389
<CURRENT-LIABILITIES> 7,910
<BONDS> 0
0
0
<COMMON> 391,437
<OTHER-SE> (305,958)
<TOTAL-LIABILITY-AND-EQUITY> 93,389
<SALES> 0
<TOTAL-REVENUES> 6,243
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,950
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,707)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,707)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,707)
<EPS-PRIMARY> .0005
<EPS-DILUTED> .0005
</TABLE>
