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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE COMMISSION ACT OF 1934
For the period ended May 31, 1998
Commission File Number: 001-05970
SILVER BUTTE MINING COMPANY
(Exact name of registrant as specified in its charter)
IDAHO 82-0263301
(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
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)
The number of shares of Common Stock, $.05 par value, outstanding as of
May 31, 1998, was 7,828,748.
DOCUMENTS INCORPORATED BY REFERENCE: Form 8-K dated April 10, 1998.
Transitional Small Business Disclosure Format (Check One): Yes ( ) No (X)
*****************************************************************************
<PAGE>
SILVER BUTTE MINING COMPANY
FORM 10-QSB QUARTERLY REPORT
May 31, 1998
INDEX
Page
Number
Part I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Balance Sheets, May 31, 1998,
and August 31, 1997 3
Condensed Income Statements for the three and nine
month periods ended May 31, 1998, and 1997 4
Condensed Statements of Cash Flows for the nine months
ended May 31, 1998, and 1997 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 -8
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signature Page 10
2
<PAGE>
SILVER BUTTE MINING COMPANY
CONDENSED BALANCE SHEETS
May 31, 1998 and August 31, 1997
<TABLE>
May 31, August 31,
1998 1997
____________ ____________
<C> <S> <S>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,251 $ 84,297
Certificate of deposit for State lease 5,000 5,000
Marketable securities 71,383 -
Accounts receivable 1,091 1,092
Prepaid expenses 1,685 -
____________ ____________
TOTAL CURRENT ASSETS 80,410 90,389
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 $ 83,410 $ 93,389
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,270 $ 7,910
____________ ____________
TOTAL CURRENT LIABILITIES 4,270 7,910
____________ ____________
SHAREHOLDERS' EQUITY
Common stock, $.05 par value
authorized 10,000,000 shares,
issued and outstanding,
7,828,748 shares 391,437 391,437
Additional paid-in capital 392,953 392,953
Accumulated deficit (705,250) (698,911)
____________ ____________
TOTAL SHAREHOLDERS' EQUITY 79,140 85,479
____________ ____________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 83,410 $ 93,389
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
SILVER BUTTE MINING COMPANY
CONDENSED INCOME STATEMENTS
For the Three and Nine Months Ended May 31, 1998 and 1997
<TABLE>
Three Months Ended Nine Months Ended
__________________________ __________________________
May 31, May 31, May 31, May 31,
1998 1997 1998 1997
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
REVENUES
Dividend income $ 1,331 $ - $ 1,882 $ -
Interest income 84 1,258 1,030 3,607
Rock sales - - 780 1,077
Misc. other income - - - 399
____________ ____________ ____________ ____________
Total Revenues 1,415 1,258 3,692 5,083
____________ ____________ ____________ ____________
EXPENSES
Wages and other
compensation 640 425 5,350 1,935
Professional
services 288 517 2,692 2,339
Rent & royalties - - 390 200
Office expense 211 27 560 304
Dues, taxes and
licenses 29 56 709 420
Miscellaneous 1 521 330 637
____________ ____________ ____________ ____________
Total Expenses 1,169 1,546 10,031 5,835
____________ ____________ ____________ ____________
INCOME (LOSS) BEFORE 246 (288) (6,339) (752)
INCOME TAXES
INCOME TAXES - - - -
____________ ____________ ____________ ____________
NET INCOME (LOSS) $ 246 $ (288) $ (6,339) $ (752)
============ ============ ============ ============
Income (Loss) per Share
Of Common Stock
Outstanding $ (0.0000) $ (0.0000) $ (0.0008) $ (0.0001)
============ ============ ============ ============
Weighted Average Number
Of Common Shares
Outstanding 7,828,748 7,828,748 7,828,748 7,828,748
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
SILVER BUTTE MINING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
For the Nine Months Ended May 31, 1998 and 1997
<TABLE>
Nine Months Ended
______________________________
May 31 , May 31,
1998 1997
____________ ____________
<C> <S> <S>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (6,339) $ (752)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Increase (decrease) in payables (3,640) 1,730
Decrease (increase) prepaid expenses (1,685) 2,240
Decrease (increase) receivables 1 (2,092)
____________ ____________
Net cash provided by (used in)
operating activities (11,663) 1,126
____________ ____________
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in marketable securities (71,383) -
____________ ____________
Net cash used in investing
activities (71,383) -
____________ ____________
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (83,046) 1,126
Cash and Cash Equivalents at Beginning
of Period 89,297 86,090
____________ ____________
Cash and Cash Equivalents at End of Period $ 6,251 $ 87,216
============ ============
Interest expense paid $ - $ -
============ ============
Income taxes paid $ - $ -
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
SILVER BUTTE MINING COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
Note 1. Presentation of Interim Information
The accompanying unaudited condensed financial statements have been
prepared by Silver Butte Mining Company's management. In management's
opinion, these condensed financial statements include all normal
adjustments considered necessary to present fairly the financial position
as of May 31, 1998, and the results of operations for the three and nine
months ended May 31, 1998 and 1997, and cash flows for the nine months
ended May 31, 1998 and 1997. Interim results are not necessarily
indicative of results for a full year. The Company's sales of rock are
seasonal in nature.
The condensed financial statements and notes are presented as permitted
by Form 10-QSB, and do not contain certain information that is included
in the Company's annual financial statements.
Note 2. Marketable Securities
The Company has invested in certain money market fund equity securities
which it considers as available for sale according to Statement of
Financial Accounting Standards (SFAS) 115. Unrealized holdings gains
and losses on such securities are not expected, but will be excluded
from earnings and reported as a separate component of shareholders'
equity, if gains or losses occur. The cost of these marketable equity
securities, when sold, will be determined by the specific identification
method.
The fair value of these securities, in accordance with SFAS 107, is
considered to be the same as their cost, based on quoted market prices.
Note 3. 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 mill 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.
6
<PAGE>
SILVER BUTTE MINING COMPANY
Form 10-QSB QUARTERLY REPORT
May 31, 1998
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The Company was a mining company engaged in exploration activities from
its inception in 1965 through 1994. In 1994, the Company abandoned all
exploration activities, and is now seeking other business opportunities
in mining or other industries. The Company continues to hold and maintain
the properties on which it performed its exploration efforts. The
Company's fiscal year ends on August 31.
OVERVIEW
The Company's management determined in 1994 that the Company did not
have the financial resources to continue to explore for commercial ore
deposits after many years of unsuccessful efforts. The Company has
performed some reclamation work on its mining properties since 1994,
and is soliciting buyers for its remaining real estate and mining
equipment. The Company is seeking out other business opportunities.
Management is unaware of any such opportunities at this time, and will
disclose such opportunities when and if they should arise.
RESULTS OF OPERATIONS
REVENUES. The Company has had no meaningful sales activities in the last
21 months. The Company's interest income decreased by $1,174 to $84 for
the third fiscal quarter ended May, 31, 1998, compared to the third
quarter of fiscal 1997. This was the result of the Company investing a
significant portion of its funds in money market equity securities during
the second quarter of the fiscal year ended August 31, 1997. The Company
realized $1,331 of dividend income from its money market accounts during the
third quarter of fiscal 1998, compared to no dividend income for the third
quarter of fiscal 1997.
The Company's interest income decreased from $3,607 to $1,030 during the
three quarters ended May 31, 1998, compared to the three quarters ended
May 31, 1997, for the reason discussed above. The dividend income for
the first three quarters of fiscal 1998, exceeded the dividend income
for the first three quarters of fiscal 1997 by $1,882 as explained
above. The Company's rock sales decreased by $297 from the first
three quarters of fiscal 1997, compared to the first three quarters of
fiscal 1998.
7
<PAGE>
SILVER BUTTE MINING COMPANY
Form 10-QSB QUARTERLY REPORT
May 31, 1998
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION (Continued)
EXPENSES. The Company's expenses were slightly less ($377) in the third
quarter of the fiscal year ended May 31, 1998, than in the third quarter
of fiscal 1997.
Wages and other compensation were significantly higher in the first nine
months of fiscal 1998 when compared to the first nine months of fiscal
1997 because the Company renewed its SEC reporting. Other expenses for
the nine months ended May 31, 1998, did not differ significantly from
the nine months ended May 31, 1997.
FINANCIAL CONDITION
LIQUIDITY. Cash and cash equivalents decreased by $83,423 and marketable
securities increased by $71,383 during the first nine months of the fiscal
year 1998. The marketable securities are money market funds that allow
the Company immediate access to funds when the Company needs additional
cash. The Company has prepaid $500 in production royalties as a
requirement for the renewal of its lease with the State of Idaho, and
$879 of industrial insurance during the first nine months of the fiscal
year ending August 31, 1998.
CAPITAL REQUIREMENTS. The Company has no plans that will require
significant cash outlays during the foreseeable future other than normal
operating costs. The Company will continue with it's efforts to sell or
abandon a significant portion of its equipment and machinery. This will
not have a material effect on the Company's financial condition
because the machinery and equipment are fully depreciated, and the amount
of cash that may be generated from such sales is not expected to be
significant.
8
<PAGE>
SILVER BUTTE MINING COMPANY
Form 10-QSB QUARTERLY REPORT
May 31, 1998
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K
The Company reported on Form 8-K dated April 10, 1998, that the Company
had received from the State of Idaho an executed ten year renewal of its
mineral lease. The lease renewal is effective from January 1, 1998
through December 31, 2007. A copy of the lease was filed with the
Form 8-K dated April 10, 1998, and is incorporated herein by reference.
9
<PAGE>
****************************************************************************
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: July 15, 1998
R. Richard Rice
Title: President
(Principle Executive Officer and
Principle Accounting Officer)
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements at May 31, 1998 (Unaudited) and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> MAY-31-1998
<CASH> 1,251
<SECURITIES> 71,383
<RECEIVABLES> 1,091
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 80,410
<PP&E> 22,704
<DEPRECIATION> 19,704
<TOTAL-ASSETS> 83,410
<CURRENT-LIABILITIES> 4,270
<BONDS> 0
0
0
<COMMON> 391,437
<OTHER-SE> (312,297)
<TOTAL-LIABILITY-AND-EQUITY> 83,410
<SALES> 0
<TOTAL-REVENUES> 3,692
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,031
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,339)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,339)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,339)
<EPS-PRIMARY> (0.001)
<EPS-DILUTED> (0.001)
</TABLE>
