1
<PAGE>
FORM 10-Q/A <r/>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
-------------- ------------
Commission File Number 2-2274
ALTA GOLD CO.
------------
(Exact Name of Registrant as specified in its charter)
Nevada 87-0259249
------ ----------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
601 WHITNEY RANCH DRIVE, SUITE 10
HENDERSON, NEVADA 89014
----------------- -----
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 433-8525
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
---- ----
The number of shares outstanding of the Registrant's Common Stock
as of March 31, 1995 was 27,991,685.
<PAGE>
ALTA GOLD CO.
<TABLE>
<CAPTION>
INDEX
Page
PART I Financial Information Number
<S> <C>
Item 1 Financial Statements
Condensed Balance Sheets as of
March 31, 1995 and December 31, 1994 . . . . . . . . . . . . 3
Condensed Statements of Operations for the
Three Months Ended March 31, 1995 and 1994 . . . . . . . . . . 5
Condensed Statements of Cash Flows for the
Three Months Ended March 31, 1995 and 1994 . . . . . . . . . . 6
Notes to Condensed Financial Statements . . . . . . . . . . . 8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . 11
PART II Other Information
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 13
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
<r/>
</TABLE>
<PAGE>
ALTA GOLD CO.
CONDENSED BALANCE SHEETS
(Unaudited)
(In thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 658 $ 471
Short-term investments 350 262
Receivables 106 428
Inventories 4,510 3,806
Prepaid expenses and other 668 437
------- --------
Total current assets 6,292 5,404
PROPERTY, BUILDINGS AND EQUIPMENT, net
Mining properties and claims 18,399 18,399
Buildings and equipment 13,766 11,611
Construction in progress - 2,044
------- --------
32,165 32,054
Less - accumulated depreciation ( 5,643) ( 5,740)
--------- ---------
Total property and equipment, net 26,522 26,314
DEFERRED MINE DEVELOPMENT COSTS, net 6,971 6,308
OTHER ASSETS 462 429
-------- -------
Total assets $40,247 $38,455
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed balance
sheets.
<PAGE>
ALTA GOLD CO.
CONDENSED BALANCE SHEETS (continued)
(Unaudited)
(In thousands, except share and par value data)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March, 31, December 31,
1995 1994
----------- ----------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $755 $2,205
Accrued liabilities 1,212 840
Current portion of long-term debt 5,000 4,750
------- --------
Total current liabilities 6,967 7,795
LONG-TERM DEBT, net of current portion 4,282 4,256
DEFERRED INCOME TAXES 755 755
OTHER LONG-TERM LIABILITIES 1,719 1,711
-------- --------
Total liabilities 13,723 14,517
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value; authorized
40,000,000 shares, issued 27,991,685 and
27,950,851 shares, respectively 28 28
Additional capital 41,846 41,799
Accumulated deficit (15,350) (17,889)
-------- --------
Total stockholders' equity 26,524 23,938
-------- ---------
Total liabilities and stockholders' equity $40,247 $38,455
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
balance sheets.
<PAGE>
ALTA GOLD CO.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1995 1994
-------- --------
<S> <C> <C>
REVENUE:
Sales of gold and other metals $2,695 $ 917
------ --------
OPERATING COSTS AND EXPENSES:
Direct mining, production and
holding costs 1,826 587
General and administrative 365 322
Exploration 9 58
Depreciation, depletion and amortization 344 267
-------- -------
2,544 1,234
-------- -------
Income (loss) from operations 151 (317)
------- -------
OTHER INCOME (EXPENSE), net:
Gain on sale of assets 2,425 -
Interest income and other 46 216
Interest expense and other (83) (145)
-------- ---------
2,388 71
-------- --------
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES 2,539 ( 246)
PROVISION FOR INCOME TAXES - -
-------- --------
NET INCOME (LOSS) $2,539 ($ 246)
======== ========
NET INCOME (LOSS) PER SHARE $ 0.09 ($ 0.01)
======== =======
WEIGHTED AVERAGE SHARES
OUTSTANDING 27,991,685 27,048,073
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
<PAGE>
ALTA GOLD CO.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1995 1994
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $2,539 ($ 246)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation, depletion and amortization 344 267
Net gain on sale of assets (2,425) -
Stock compensation 47 50
Interest accrued on zero coupon debt 26 -
Interest expense on term loan payable
to Mase Westpac, Ltd. - 142
Decrease (increase) in-
Short-term investments (88) (65)
Receivables 322 (189)
Inventories (704) (1,292)
Prepaid expenses and other (231) 62
Other 5 17
Increase (decrease) in-
Accounts payable (1,450) (262)
Accrued liabilities 372 (92)
------- -------
<r/>
Net cash used in operating activities (1,243) (1,608)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, buildings and
equipment (526) (46)
Additions to deferred mine development costs (719) (236)
Proceeds from sale of property, buildings
and equipment 2,425 -
----- ------
Net cash provided by (used in)
investing activities 1,180 (282)
----- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,250 -
Payment on debt (1,000) (38)
Increase in restricted short-term investments - (137)
----- ------
Net cash provided by (used in)
financing activities 250 (175)
----- ------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 187 (2,065)
CASH AND CASH EQUIVALENTS, beginning of period 471 3,432
----- ------
CASH AND CASH EQUIVALENTS, end of period $658 $1,367
===== ======
<PAGE>
ALTA GOLD CO.
CONDENSED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
(In thousands)
Three Months Ended March 31,
1995 1994
--------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest,
net of amount capitalized $49 $3
Cash paid during the period for income taxes $45 $-
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
During the three months ended March 31, 1994, the Company transferred gold
in process totalling $709 from deferred development costs to gold
inventories.
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>
ALTA GOLD CO.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENT POLICIES AND DISCLOSURES
The unaudited, condensed financial statements of Alta Gold Co. (the
"Company") included herein have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally required in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
These interim, unaudited, condensed financial statements should be
read in conjunction with the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, as filed with the Securities and Exchange
Commission. In the opinion of Management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three month period ended
March 31, 1995 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995.
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
For purposes of the balance sheets and statements of cash flows, the
Company considers all investments with an original maturity of three months
or less to be cash equivalents.
RECLAMATION COSTS
Minimum standards for mine reclamation have been established by
various governmental agencies which affect certain operations of the
Company. The Company's general policy is to accrue estimated
reclamation costs during the property's productive life based on estimated
reserves using the units of production method. As of March 31, 1995 and
December 31, 1994, the Company had reserved approximately $1,971,000
and $2,088,000, respectively, for reclamation activities of which
approximately $252,000 is expected to be expended during the last nine
months of 1995.
NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed based on the weighted-average
number of shares and common stock equivalents, if dilutive, actually
outstanding during the period. For primary weighted-average purposes,
common stock equivalents are the shares that would be outstanding
assuming exercise of dilutive stock warrants and stock options having
exercise prices less than the average market price of the common stock
using the treasury stock method.
<PAGE>
On a fully diluted basis, the common stock equivalents are adjusted
to reflect exercise prices less than the period end market price (when
greater than the average market price).
No common stock equivalents were included in the computations for
the period ended March 31, 1994, because they were anti-dilutive.
NOTE 2. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
Precious metals:
Refined product $ 11,000 $ 7,000
In process 4,319,000 3,657,000
Consumable supplies 180,000 142,000
----------- -----------
$4,510,000 $3,806,000
=========== ===========
</TABLE>
Inventories of in-process metals, mined ore, and consumable supplies
are valued at the lower of cost (using the first-in, first-out method) or
market. Inventories of refined product are valued at market.
NOTE 3. EXTINGUISHMENT OF DEBT
On May 23, 1994 the Company entered into a Settlement Agreement
and Mutual Release ("Settlement Agreement") with Mase Westpac, Ltd.,
one of the Company's former lenders, and related parties ("Mase") in regard
to certain litigation which had been ongoing since the first quarter of 1991.
Under the terms of the Settlement Agreement, in addition to the
release of all litigation, the Company released the entire balance held in an
investment escrow fund having an estimated value of approximately
$16,200,000 in exchange for a cash payment of $4,500,000 plus Mase's
release of claims of approximately $14,200,000 in amounts owed under a
revolving credit agreement.
In the second quarter of 1994, the Company recorded $2,182,000 as
Extraordinary Gain - Extinguishment of Debt, which amount recognizes the
aforementioned settlement net of $286,000 in associated litigation expense
incurred by the Company in 1994.
<PAGE>
NOTE 4 - LONG-TERM DEBT
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
Note payable due February 1995; interest
at 10.5%; secured by equipment $ - $ 500,000
Note payable due February 1995; interest
at 10%; unsecured - 500,000
Note payable due April 1995; non-interest
bearing; secured by Kinsley 1,500,000 1,500,000
Note payable due July 1995; interest at
prime plus 2% payable quarterly;
secured by Olinghouse 2,250,000 2,250,000
Note payable, half due August 1995 and the
remainder due February 1996; interest
at 12%; secured by buildings and equipment 1,250,000 -
Subordinated debenture due June 1996; interest
at 6% payable quarterly; convertible at
the option of the debt holder through
maturity into common stock at a conversion
price of $4.00 per share 1,500,000 1,500,000
Subordinated debenture due June 1998; interest
at 6% payable quarterly; convertible at
the option of the debt holder through
maturity into common stock at a
conversion price of $4.00 per share 1,500,000 1,500,000
Subordinated zero coupon debenture with a
redemption price of $4,000,000 due
June 2008; discounted at 9% compounded
per annum 1,282,000 1,256,000
--------- ---------
9,282,000 9,006,000
Less - current portion (5,000,000) (4,750,000)
--------- ---------
Total long-term debt $4,282,000 $4,256,000
========== ==========
</TABLE>
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
COMPARISON OF THREE-MONTH PERIODS ENDED MARCH 31, 1995
AND MARCH 31, 1994.
In the first quarter of 1995, the Company had $2,695,000 in revenue
from the sale of 6,900 ounces of gold at an average price of $390/oz, as
compared to $917,000 in revenue in 1994 from the sale of 2,400 ounces of
gold at an average price of $380/oz. In the first quarter of 1995, the
Company produced 6,911 ounces of gold, 4,052 ounces from the Easy Jr.
mine at an average cash cost of $274/oz and 2,859 ounces from the
recently opened Kinsley mine at an average cash cost of $231/oz. In the
first quarter of 1994, Easy Jr. produced 3,308 ounces at an average cash
cost of $227/oz.
Mining began at Kinsley in the fourth quarter of 1994 and gold
production began in late January 1995. Mining at Easy Jr. was completed
in the third quarter of 1994; however, gold production is expected to
continue through year-end 1995 as the stockpiled ore is crushed and
processed. The increase in revenue from $917,000 to $2,695,000 between
comparable periods is principally due to having two mines in production in
1995 as compared to only one in 1994. The increase in direct mining,
production and holding costs from $587,000 to $1,826,000 between
comparable periods is directly related to the increase in revenue.
The increase in general and administrative expenses from $322,000
in 1994 to $365,000 in 1995 is due to many factors, including increased
investor awareness activities in 1995.
The decrease in exploration expenses from $58,000 in 1994 to $9,000
in 1995 is due to the continuing progression from exploration to
development of Olinghouse, Copper Flat and Griffon.
The increase in depreciation, depletion and amortization from $267,000
in 1994 to $344,000 in 1995 is due to depreciation, depletion and
amortization of various costs associated with Kinsley, which began
producing gold in 1995.
In the first quarter of 1995, the Company sold its remaining interest in
the Robinson Copper Property for a net gain of $2,425,000; there were no
similar transactions in 1994. Interest income and other decreased from
$216,000 in 1994 to $46,000 in 1995 as the result of the settlement of
litigation with a former creditor (please refer to "Note 3. Extinguishment
of Debt" for further information). The decrease in interest expense and
other from $145,000 in 1994 to $83,000 in 1995 is also the result of this
settlement, as partially offset by additional financing costs incurred in
1995 associated with new borrowings.
No provisions for income taxes was required for income earned in
1995 because of the utilization of net operating loss carryforwards.
As of
March 31, 1995, the Company estimates that it has approximately $16,500,000
in remaining net operating loss carryforwards. These net operating loss
carryforwards are scheduled to expire during the period 2000 to 2008.<r/>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1995, the Company had a working capital deficit of
$675,000, a $1,716,000 improvement from the December 31, 1994 working
capital deficit of $2,391,000. This improvement was expected and is
principally due to internal funds generated since the initiation of gold
production at Kinsley in January 1995.
As Kinsley continues to build up to full production in the second and
third quarters of 1995, the Company anticipates the working capital deficit
will continue to improve and will shortly become positive. In order to provide
flexibility during this interim period, the Company obtained a short-term
loan for $1,250,000 in March 1995. In April 1995, the Company also obtained
a $2,250,000 short-term production advance facility and an additional short-
term loan of $1,000,000.
The $2,250,000 short-term production advance facility may be drawn down in
increments of $562,500, with interest thereon at prime plus 1.5%. The
production advance facility must be paid off in full by year-end 1995 and is
secured by Kinsley, Easy Jr. and Olinghouse. The $1,000,000 short-term loan,
with interest thereon at prime plus 2%, is due on October 31, 1995 and is
secured by equipment.<r/>
Between funds expected to be generated from gold production at
Kinsley and Easy Jr. and the funds and credit facility provided by outside
sources, the Company believes that it has adequate liquidity for its
operating and capital needs during the next twelve months.
INVESTING AND FINANCING ACTIVITIES
In the first quarter of 1995, the Company expended $526,000 for
facilities and equipment at Kinsley, $719,000 on the development of
Olinghouse, Copper Flat and Griffon and $1,000,000 in the retirement of
short-term debt. During the same period, the Company received
$2,425,000 from the sale of its remaining interest in the Robinson Copper
Property and $1,250,000 in short-term financing.
OUTLOOK
During the remaining nine months of 1995, the Company has budgeted cash
expenditures of $2,863,000 for asset acquisitions and mine development,
$199,000 for exploration and $252,000 for reclamation. These expenditures
are expected to be funded from revenues to be generated from gold production
from Kinsley and Easy Junior and the funding and sources of funding described
under "Liquidity and Capital Resources". The budgeted cash expenditures are
based upon future events which cannot be predicted with total accuracy and
which may be beyond the control of the Company, nevertheless, the Company
expects to meet its obligations.
As of March 31, 1995, the Company sold forward 17,000 ounces of gold for
delivery during the remainder of 1995 at an average price of $403 per ounce.<r/>
<PAGE>
PART II OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports have been filed on Form 8-K during the three-month
period ended March 31, 1995.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
ALTA GOLD CO.
-----------
(Registrant)
June 14, 1995 <r/> BY: John A. Bielun
------------- ----------------------------
(Date) John A. Bielun
Chief Financial Officer and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1008
<SECURITIES> 0
<RECEIVABLES> 106
<ALLOWANCES> 0
<INVENTORY> 4510
<CURRENT-ASSETS> 6292
<PP&E> 32165
<DEPRECIATION> 5643
<TOTAL-ASSETS> 40247
<CURRENT-LIABILITIES> 6967
<BONDS> 4282
<COMMON> 28
0
0
<OTHER-SE> 26496
<TOTAL-LIABILITY-AND-EQUITY> 40247
<SALES> 2695
<TOTAL-REVENUES> 2695
<CGS> 2170
<TOTAL-COSTS> 2170
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83
<INCOME-PRETAX> 2539
<INCOME-TAX> 0
<INCOME-CONTINUING> 2539
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2539
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
