FORM 10-Q
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, 1997
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
of incorporation or Identification
organization) Number)
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, 1997
was 29,043,692.
-1-
<PAGE>
ALTA GOLD CO.
INDEX
Page
PART I Financial Information Number
------
Item 1 Financial Statements
Condensed Balance Sheets as of
March 31, 1997 and
December 31, 1996 . . . . . . . . 3
Condensed Statements of
Operations for the Three Months
Ended March 31, 1997 and 1996 . . 5
Condensed Statements of Cash
Flows for the Three Months
Ended March 31, 1997 and 1996 . . 6
Notes to Condensed Financial
Statements . . . . . . . . . . . 8
Item 2 Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . 12
PART II Other Information
Item 6 Exhibits and Reports on Form 8-K . 16
SIGNATURE . . . . . . . . . . . . . . . . 18
-2-
<PAGE>
ALTA GOLD CO.
--------------
CONDENSED BALANCE SHEETS
------------------------
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash
equivalents $ 294,000 $ 518,000
Inventories 5,056,000 4,568,000
Prepaid expenses
and other 360,000 133,000
---------- ----------
Total current assets 5,710,000 5,219,000
PROPERTY AND EQUIPMENT, net
Mining properties and
claims 20,515,000 20,500,000
Buildings and equipment 13,903,000 13,851,000
---------- ----------
34,418,000 34,351,000
Less - accumulated
depreciation (10,583,000) (10,237,000)
---------- ----------
Total property and
equipment, net 23,835,000 24,114,000
DEFERRED MINE DEVELOPMENT
COSTS, net 17,488,000 16,037,000
OTHER ASSETS 1,045,000 1,251,000
----------- -----------
Total assets $48,078,000 $46,621,000
=========== ===========
</TABLE>
The accompanying notes to condensed financial statements
are an integral part of these statements.
-3-
<PAGE>
ALTA GOLD CO.
-------------
CONDENSED BALANCE SHEETS (continued)
-----------------------------------
(Unaudited)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
March 31, December 31,
1997 1996
--------- ----------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 1,816,000 $ 1,378,000
Accrued liabilities 856,000 1,058,000
Current portion of
long-term debt 2,877,000 5,417,000
---------- ----------
Total current liabilities 5,549,000 7,853,000
LONG-TERM DEBT, net of current
portion 5,642,000 1,993,000
DEFERRED INCOME TAXES 662,000 662,000
OTHER LONG-TERM LIABILITIES 522,000 509,000
---------- ----------
Total liabilities 12,375,000 11,017,000
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
authorized 40,000,000 shares,
issued 29,043,692 and
29,022,371 shares,
respectively 29,000 29,000
Additional capital 44,348,000 44,328,000
Accumulated deficit (8,674,000) (8,753,000)
---------- ----------
Total stockholders' equity 35,703,000 35,604,000
---------- ----------
Total liabilities and
stockholders' equity $48,078,000 $46,621,000
=========== ===========
</TABLE>
The accompanying notes to condensed financial statements
are an integral part of these statements.
-4-
<PAGE>
ALTA GOLD CO.
------------
CONDENSED STATEMENTS OF OPERATIONS
---------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
REVENUE:
Sales of gold and other metals $2,858,000 $5,185,000
---------- ----------
OPERATING COSTS AND EXPENSES:
Direct mining, production,
reclamation and maintenance
costs 2,384,000 4,034,000
General and administrative 399,000 373,000
Exploration 26,000 2,000
--------- ---------
2,809,000 4,409,000
--------- ---------
Income from operations 49,000 776,000
--------- ---------
OTHER INCOME (EXPENSE), net:
Interest income and other 30,000 28,000
Interest expense and other - (71,000)
--------- --------
30,000 (43,000)
--------- --------
INCOME BEFORE PROVISION FOR
INCOME TAXES 79,000 733,000
PROVISION FOR INCOME TAXES - -
--------- --------
NET INCOME $ 79,000 $ 733,000
========= ========
NET INCOME PER SHARE:
Primary $ - $ 0.02
========= ========
Fully diluted $ - $ 0.02
========= ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
Primary 30,606,219 31,335,582
========== ==========
Fully diluted 30,606,219 31,509,315
========== ==========
</TABLE>
The accompanying notes to condensed financial statements
are an integral part of these statements.
-5-
<PAGE>
ALTA GOLD CO.
-------------
CONDENSED STATEMENTS OF CASH FLOWS
----------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 79,000 $ 733,000
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation,
depletion and
amortization 487,000 755,000
Stock compensation - 80,000
Decrease (increase)
in:
Inventories (488,000) 699,000
Prepaid expenses
and other (21,000) (131,000)
Increase (decrease)
in:
Accounts payable 438,000 (725,000)
Accrued and other
liabilities (202,000) (189,000)
--------- ----------
Net cash provided by operating
activities 293,000 1,242,000
--------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Additions to property,
buildings and
equipment (67,000) (227,000)
Additions to deferred
mine development
costs (1,547,000) (647,000)
---------- --------
Net cash used in investing
activities (1,614,000) (874,000)
---------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance
of debt 1,400,000 500,000
Payment on debt (323,000) (433,000)
Proceeds from exercise of
stock options 20,000 -
--------- --------
Net cash provided by
financing activities 1,097,000 67,000
--------- --------
NET INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS (224,000) 435,000
CASH AND CASH EQUIVALENTS,
beginning of period 518,000 369,000
--------- --------
CASH AND CASH EQUIVALENTS,
end of period $ 294,000 $ 804,000
========= =========
Supplemental Disclosure of Cash
Flow Information:
Cash paid during the period
for interest, net of
amount capitalized $ - $ 71,000
Cash paid during the period
for income taxes $ - $ 10,000
</TABLE>
-6-
<PAGE>
ALTA GOLD CO.
-------------
CONDENSED STATEMENTS OF CASH FLOWS (Continued)
----------------------------------------------
(Unaudited)
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
During the three months ended March 31, 1997 and
1996, the Company capitalized interest of $32,000
and $29,000, respectively, on zero coupon bond
debentures to deferred mine development costs.
The accompanying notes to condensed financial
statements are an integral part of these
statements.
-7-
<PAGE>
ALTA GOLD CO.
--------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
----------------------------------------
(Unaudited)
Note 1. Interim Financial Statement Policies and
- -------------------------------------------------
Disclosures
- -----------
The interim, 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, 1996, 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 months ended March
31, 1997 are not necessarily indicative of the
results that may be expected for the year ending
December 31, 1997.
Cash and Cash Equivalents
- -------------------------
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 each property's
productive life based on estimated reserves using
the units of production method. As of March 31,
1997 and December 31, 1996, the Company had
reserved approximately $707,000 and $958,000,
respectively, for reclamation activities of which
approximately $185,000 is expected to be expended
during the last nine months of 1997.
Income Taxes
- ------------
No provision for income taxes was required in
either 1997 or 1996 because of the utilization of
net operating loss carryforwards. As of March 31,
1997, the Company estimates that it has
approximately $24,922,000 in remaining net
operating loss carryforwards. These net operating
loss carryforwards are scheduled to expire during
the period from 2005 to 2011.
-8-
<PAGE>
Net Income Per Share
- --------------------
Net income per share is computed based on the
weighted-average number of shares of common stock
and common stock equivalents, if dilutive,
actually outstanding during the period.
On a primary basis, net income per share is
based on common stock equivalents adjusted to
reflect additional shares that would be
outstanding using the treasury stock method
assuming exercise of dilutive stock warrants and
stock options having exercise prices less than the
average market price.
On a fully diluted basis, net income per
share is based on common stock equivalents
adjusted to reflect additional shares that would
be outstanding using the treasury stock method
assuming exercise of dilutive stock warrants and
stock options having exercise prices less than the
period end market price (when greater than the
average market price).
In February 1997, the Financial Accounting
Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share"
("SFAS No. 128") which establishes a new
accounting standard for the computation and
reporting on net income per share. SFAS No. 128
is effective for financial statements issued for
periods ending after December 15, 1997, and early
adoption is prohibited. The Company expects that
there will be no material effect upon implementing
SFAS No. 128 on its net income per share
computations.
Note 2. Inventories
- --------------------
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Precious metals:
Refined products $ 21,000 $ 132,000
In process 4,904,000 4,293,000
Consumable supplies 131,000 143,000
---------- ----------
$5,056,000 $4,568,000
========== ==========
</TABLE>
Inventories of in-process metals and consumable
supplies are valued at the lower of cost (using
the first-in, first-out method) or market.
Inventories of refined products are valued at
market.
-9-
<PAGE>
Note 3 - Long-Term Debt
- -------------------------
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Note payable to Gerald Metals,
Inc. ("Gerald Metals");
interest at LIBOR plus 2%;
due March 31, 1999: secured
by a first priority mortgage
on Kinsley and Griffon $4,700,000 $4,900,000
Zero coupon $4,000,000
subordinated debenture;
discounted at an imputed rate
of 9%; due June 2008 1,524,000 1,492,000
Note payable; interest at 12%;
due January 1998; secured
by property and equipment 1,400,000 -
Notes payable; interest at
various rates of 8.5% to 16.1%;
due at various dates between
April 1998 and June 1999;
secured by equipment 895,000 1,018,000
--------- ----------
8,519,000 7,410,000
Less - current portion (2,877,000) (5,417,000)
---------- ----------
Total long-term debt $5,642,000 $1,993,000
========== ==========
</TABLE>
On March 25, 1997, Gerald Metals agreed to defer
until 1998 amortization of the outstanding balance
of the note payable to Gerald Metals. The
deferral was in the form of a Loan Agreement
dated April 10, 1997, among the Company, Gerald
Metals and BHF-Bank Aktiengesellschaft ("BHF
Bank") to borrow up to $8.5 million. The loan is
evidenced by two promissory notes, each in
the original principal amount of $4.25 million,
payable to Gerald Metals and BHF Bank,
respectively.
The notes payable to Gerald Metals and BHF-BANK
contain certain covenants that impose various
restrictions on the ability of the Company to,
among other things, change the Company's corporate
structure, pay dividends on or repurchase the
Company's common stock, and create or suffer to
exist any liens (other than certain permitted
liens) on the Company's assets or properties. In
addition, the Company is required to sell 100% of
its gold production to Gerald Metals through March
31, 1999. All sales to Gerald Metals are made at
the market price prevailing at the time of sale.
-10-
<PAGE>
On April 14, 1997, the Company completed a private
placement of $10,000,000 in convertible debentures
the "Debentures") to a small group of accredited
investors. The Debentures were sold pursuant to
an exemption from the registration requirements of
the Securities Act of 1993. In connection with
the sale of the Debentures, the Company agreed to
file a registration statement with the Securities
and Exchange Commission within 30 days to register
the common stock which will be issued upon a
conversion, if any, of the Debentures. The
Debentures accrue interest at an annual rate of
four percent and mature on April 14, 1999. The
Debentures may be converted into the Company's
common stock at a conversion price equal to the
lesser of (i) 90% of the average of the closing
bid prices of the Company's common stock for the
five trading days preceding a notice of
conversion, or (ii) $4.00. The Debentures may be
converted on the earlier of (i) the effective date
of the registration statement, (ii) six months
from the date of the Debentures, or (iii) five
business days prior to the record date of a
special meeting of stockholders to approve, or if
there is no such record date, five business days
prior to the consummation of, a merger,
consolidation, exchange of shares,
recapitalization, reorganization or other similar
event. The Debentures contain certain covenants
that impose restrictions on the ability of the
Company to, among other things, pay dividends on
or repurchase the Company's common stock.
-11-
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Section 21E of the Securities Exchange Act of
1934 provides a "safe harbor" for forward-looking
statements. Certain information included herein
contains statements that are forward-looking, such
as statements regarding management's expectations
about future production and development activities
as well as other capital spending, financing
sources and the effects of regulation. Such
forward-looking information involves important
risks and uncertainties that could significantly
affect anticipated results in the future and,
accordingly, such results may differ from those
expressed in any forward-looking statements made
herein. These risks and uncertainties include,
but are not limited to, those relating to the
market price of metals, production rates,
production costs, the availability of financing,
the ability to obtain and maintain all of the
permits necessary to put and keep properties in
production, development and construction
activities and dependence on existing management.
The Company cautions readers not to place undue
reliance on any such forward-looking statements,
and such statements speak only as of the date
made.
RESULTS OF OPERATIONS
- ---------------------
COMPARISON OF THREE-MONTH PERIODS ENDED MARCH 31,
1997 AND MARCH 31, 1996.
In the first quarter of 1997, the Company had
$2,858,000 in revenue from the sale of 8,159
ounces of gold at an average price of $350/oz, as
compared to $5,185,000 in revenue in the first
quarter of 1996 from the sale of 12,900 ounces of
gold at an average price of $402/oz. In the first
quarter of 1997, the Company mined 417,066 tons of
ore at Kinsley with an average grade of 0.0313
oz/ton gold containing 13,051 ounces of gold and
produced 8,092 ounces of gold from Kinsley at an
average cash cost of $223/oz. In the first
quarter of 1996, the Company mined 262,483 tons of
ore at Kinsley with an average grade of 0.0367
oz/ton gold containing 9,636 ounces of gold and
produced 12,417 ounces of gold, 11,092 ounces from
Kinsley at an average cash cost of $243/oz and
1,325 ounces from pad rinsing at Easy Junior.
Although gold mined at Kinsley increased by over
35% between comparable periods, from 9,636 ounces
mined in the first quarter of 1996 to 13,051
ounces mined in the first quarter of 1997, actual
gold production between both periods decreased
from 12,417 ounces to 8,092 ounces because of (1)
colder weather conditions at Kinsley in the first
quarter of 1997 than in the first quarter of 1996
and (2) the completion of gold production from
Easy Junior at the end of 1996. The colder
weather conditions at Kinsley in the first quarter
of 1997 caused Kinsley's leach pad to freeze over,
thereby causing a temporary build-up of in-process
gold. As weather conditions improve, Kinsley gold
production is expected to increase through both
regularly scheduled production and the drawdown of
the in-process gold that was frozen-in during the
first quarter of 1997.
Direct mining, production, reclamation and
maintenance costs decreased from $4,034,000 in the
first quarter of 1996 to $2,384,000 in the first
quarter of 1997 principally due to (1) decreased
gold production at Kinsley, (2) lower cash
production costs at Kinsley and (3) the completion
of gold production from Easy Junior at the end of
1996. The decrease in cash production costs at
Kinsley
-12-
<PAGE>
between comparable periods is attributed
principally to an improvement in stripping ratios.
For the first quarter of 1997 the stripping ratio
at Kinsley was 1.93:1.00 as compared to a much
less favorable stripping ratio of 5.64:1.00 in the
first quarter of 1996.
The change in general and administrative
expenses and exploration expenses between
comparable periods were de minimis. General and
administrative expenses increased slightly from
$373,000 to $399,000 and exploration expenses
increased from $2,000 to $26,000.
The change in interest income and other between
comparable periods from $28,000 to $30,000 was
deminimis. The decrease in interest expense and
other from $71,000 to $0 was due to increased
capitalization of interest in the first quarter of
1997.
No provision for income taxes was recognized in
either the first quarter of 1997 or the first
quarter of 1996 because of the utilization of net
operating loss carryforwards. As of March 31,
1997, the Company estimates that it has
approximately $24,922,000 in remaining net
operating loss carryforwards. These net operating
loss carryforwards are scheduled to expire during
the period 2005 to 2011.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of March 31, 1997, the Company had $161,000
in working capital, a $2,795,000 increase from the
December 31, 1996 working capital deficit of
$2,634,000. The increase in working capital was
principally due to a change made in the principal
repayment schedule of a loan facility and to funds
generated from gold production at Kinsley. The
Company believes that production from Kinsley will
provide adequate liquidity for the Company's
operational needs during the remainder of 1997.
The ability of the Company to satisfy the cash
requirements of its operations, however, will be
dependent upon the future performance of Kinsley
which will continue to be influenced by the
prevailing market price of gold and other factors,
certain of which are beyond the control of the
Company. Additional financing will be required to
complete site development and construction at
Olinghouse. The Company anticipates that these
additional funds will be obtained through
equipment and project financing and/or offerings
of equity or debt securities, although no
assurance can be made that such funds will be
available or on terms acceptable to the Company.
See "Outlook" below.
INVESTING AND FINANCING ACTIVITIES
- ----------------------------------
During the first quarter of 1997, the Company
expended $1.6 million for deferred mine
development costs, principally for the permitting
and development of Olinghouse and Griffon and the
permitting of Copper Flat and $67,000 for
equipment for Griffon and Olinghouse. During the
same period, the Company received $1.4 million in
short-term financing and $20,000 from the exercise
of stock options and retired $0.3 million of debt.
On April 10, 1997, the Company entered into a
loan agreement to borrow up to $8.5 million from
Gerald Metals and BHF Bank. The Company used
approximately $4.7 million of the loan to
-13-
<PAGE>
repay certain indebtedness due to Gerald Metals.
The remaining funds are to be used for the
construction of Griffon, working capital and the
payment of certain expenses. The loan accrues
interest at LIBOR plus two percent. Interest is
payable monthly commencing on April 30, 1997, and
principal is payable in fifteen equal monthly
installments commencing on January 31, 1998. The
loan is secured by a first priority mortgage on
Kinsley and Griffon, and a first priority security
interest in all of the Company's tangible and
intangible personal property. The loan contains
certain covenants that impose restrictions on the
ability of the Company to, among other things,
change the Company's corporate structure, pay
dividends on or repurchase the Company's common
stock, and create or suffer to exist any liens
(other than permitted liens) on the Company's
assets or properties. The Company cannot make
requests for advances in excess of $6.5 million
unless the Company has satisfied certain
conditions, including obtaining all permits and
approvals necessary to conduct business at
Griffon. As of May 12, 1997, the Company had
drawn down $6.0 million of the loan.
On April 14, 1997, the Company completed a
private placement of $10.0 million in convertible
debentures (the "Debentures") to a small group of
accredited investors. The Debentures were sold in
reliance upon the exemption from registration
under Rule 506 of the Securities Act of 1933.
Monetary Advancement International, Inc. acted as
the placement agent. The Debentures accrue
interest at an annual rate of four percent and
mature on April 14, 1999. The Debentures may be
converted into the Company's common stock at a
conversion price equal to the lesser of (1) 90% of
the average of the closing bid prices of the
Company's common stock for the five trading days
preceding a notice of conversion, or (2) $4.00.
The Debentures may be converted on the earlier of
(1) the effective date of a registration statement
registering the underlying shares of common stock,
(2) six months from the date of the Debentures, or
(3) five business days prior to the record date of
a special meeting of stockholders to approve or if
there is no such record date, five business days
prior to the consummation of, a merger,
consolidation, exchange of shares,
recapitalization, reorganization or other similar
event. The Debentures contain certain covenants
that impose restrictions on the ability of the
Company to, among other things, pay dividends on
or repurchase the Company's common stock.
OUTLOOK
- -------
During the remainder of 1997, the Company has
budgeted (1) $1.6 million for permitting and
holding costs at Olinghouse, Griffon and Copper
Flat, (2) $1.6 million in debt repayments and
associated interest, and (3) $0.2 million for
reclamation. An additional $25.5 million in
expenditures for site development, construction,
equipment and working capital has been tentatively
budgeted for 1997 - $19.6 million for Olinghouse
and $5.9 million for Griffon, as well as $4.8
million for drilling and related activities - $0.6
million for Kinsley, $2.7 million for Olinghouse,
$0.3 million for Griffon, $0.4 million for
Osceola, $0.3 million for Excalibur and $0.5
million for other properties that may be acquired.
In addition to the funds generated from gold
production at Kinsley, the Company's new $8.5
million loan facility and the net proceeds the
Company received from the $10.0 million in
convertible debentures that were issued in April
1997, the Company estimates that it will require
at least $19.0 million in additional financing to
cover these tentatively budgeted expenditures.
The timing of these expenditures is dependent upon
the receipt of all of the necessary
14
<PAGE>
permits and the availability of this additional
financing. The Company is currently in the process
of permitting Olinghouse, Griffon and Copper Flat,
and while it expects to obtain all of the
necessary permits, there is no assurance that the
Company will be able to do so. The Company is
investigating potential financing vehicles for
Olinghouse, but has not finalized commitments for
such financing at the present time. At such time
as permits are in place for Olinghouse, the
Company expects to complete the financing,
however, no assurance can be given at this time
that the Company will be able to obtain such
financing.
As of March 31, 1997, the Company had (1) sold
forward 800 ounces of gold for April 1997 delivery
at an average price of $349/oz, (2) purchased put
options for 108,500 ounces of gold at $335/oz,
of which options for 3,500 ounces mature each
month from June 1997 to December 1997 and options
for 7,000 ounces mature each month from January
1998 to December 1998, and (3) sold call options
for 45,000 ounces of gold at $390/oz, of which
options for 3,750 ounces mature each month from
January 1998 to December 1998.
No assurance can be given that any of the
Company's announced mining projects will be
permitted, financed, constructed or result in any
significant contribution to the Company's
reserves, cash flow or earnings.
The Company's business is subject to various
risk factors, some of which are discussed in the
Company's report on Form 10-K for the year ended
December 31, 1996, "Items 1. and 2. Business
and Properties - Risk Factors."
15
<PAGE>
PART II OTHER INFORMATION
Item 2. CHANGES IN SECURITIES
As described in Part I, "Item 1. Financial
Statements - Notes to Condensed Financial
Statements," Note 3, the Company is subject to
prohibitions against the payment of dividends and
the repurchase of common stock pursuant to the
terms of its $8.5 million loan facility and its
$10.0 million in convertible debentures.
Item 5. OTHER INFORMATION
In April 1997, a final Environmental Impact
Statement was published, and a Record of Decision
was issued by U.S. Department of Agriculture,
Forest Service for Griffon. The Record of
Decision is subject to a 45-day appeal period
pursuant to federal regulation.
In April 1997, the Company increased its land
position at Olinghouse by more than 50% from
approximately 4,300 acres to more than 6,700
acres. The Company increased its position by
staking an additional 140 mining claims in an area
which had previously been withdrawn by the federal
government. As a result, the Company has secured
the mineralized trend at Olinghouse, which is
approximately five-miles long and one-mile wide.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
4.01 Securities Purchase Agreement dated
as of April 14, 1997, is
incorporated by reference to the
Company's Form 8-K (file no. 2-
2274) for an event dated April 14,
1997.
4.02 Registration Rights Agreement dated
as of April 14, 1997, is
incorporated by reference to Alta
Gold Co.'s Form 8-K (file no. 2-
2274) for an event dated April 14,
1997.
4.03 Form of Convertible Debenture dated
as of April 14, 1997, is
incorporated by reference to Alta
Gold Co.'s Form 8-K (file no. 2-
2274) for an event dated April 14,
1997.
10.01 Loan Agreement dated April 10,
1997, by and among Alta Gold Co.,
Gerald Metals Inc. and BHF-Bank
Aktiengesellschaft, New York
Branch, is incorporated by
reference to Alta Gold Co.'s Form
8-K (file no. 2-2274) for an event
dated April 10, 1997.
10.02 Deed of Trust With Assignment of
Rents and Royalties, Security
Agreement and Financing Statement
(Nevada) dated April 10, 1997, made
by Alta Gold Co. as Trustor, to
First American Title Company of
Nevada as Trustee for the benefit
of Gerald Metals, Inc. and BHF-Bank
Aktiengesellschaft, New York Branch
as beneficiaries, is incorporated
by reference to Alta Gold Co.'s
Form 8-K (file no. 2-2274) for an
event dated April 10, 1997.
-16
<PAGE>
10.03 Security Agreement dated April 10,
1997, by and among Alta Gold Co.,
Gerald Metals, Inc. and BHF-Bank
Aktiengesellschaft, New York
Branch, is incorporated by
reference to Alta Gold Co.'s Form
8-K (file no. 2-2274) for an event
dated April 10, 1997.
10.04 Secured Promissory Note dated April
10, 1997, made by Alta Gold Co. in
favor of Gerald Metals, Inc. in the
principal amount of $4,250,000, is
incorporated by reference to Alta
Gold Co.'s Form 8-K (file no. 2-
2274) for an event dated April 10,
1997.
10.05 Secured Promissory Note dated April
10, 1997, made by Alta Gold Co. in
favor of BHF-Bank
Aktiengesellschaft, New York Branch
in the principal amount of
$4,250,000, is incorporated by
reference to Alta Gold Co.'s Form
8-K (file no. 2-2274) for an event
dated April 10, 1997.
10.06 Agreement dated April 10, 1997, by
and between Alta Gold Co. and
Gerald Metals, Inc. regarding
future contracts for the sale and
purchase of gold and gold options,
is incorporated by reference to
Alta Gold Co.'s Form 8-K (file no.
2-2274) for an event dated April
10, 1997.
10.07 Purchase/Refining Agreement dated
April 10, 1997, by and between Alta
Gold Co. and Gerald Metals, Inc.
regarding the sale of gold to
Gerald Metals, Inc.; and Addendum 1
to Purchase/Refining Agreement
dated April 10, 1997, is
incorporated by reference to Alta
Gold Co.'s Form 8-K (file no. 2-
2274) for an event dated April 10,
1997.
27.01 Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K dated January 20, 1997, reporting
restatements of the Company Articles of
Incorporation and By-Laws.
Form 8-K dated April 10, 1997, reporting an
$8,500,000 loan agreement with Gerald Metals,
Inc. and BHF-Bank Aktiengesellschaft.
Form 8-K dated April 14, 1997, reporting the
issuance of $10,000,000 in 4% convertible
debentures due 2009.
-17-
<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)
May 13, 1997 BY: /s/ John A. Bielun
- ------------ -----------------------
(Date) John A. Bielun
Chief Financial Officer
and Principal Accounting
Officer
-18-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 294
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 5,056
<CURRENT-ASSETS> 5,710
<PP&E> 34,418
<DEPRECIATION> 10,583
<TOTAL-ASSETS> 48,078
<CURRENT-LIABILITIES> 5,549
<BONDS> 5,642
0
0
<COMMON> 29
<OTHER-SE> 35,674
<TOTAL-LIABILITY-AND-EQUITY> 48,078
<SALES> 2,858
<TOTAL-REVENUES> 2,858
<CGS> 2,384
<TOTAL-COSTS> 2,384
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 79
<INCOME-TAX> 0
<INCOME-CONTINUING> 79
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 79
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
