UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X
- ----- QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
--------------
- ----- TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ------- to -------
Commission File Number: 1-1819-2
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SOUTH STANDARD MINING COMPANY
-----------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Utah 87-0267357
- ------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)
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1111 Walker Center, Salt Lake City, Utah 84111
- ------------------------------------------------------------------------
(Address of principal executive offices)
(801) 322-5841
- ------------------------------------------------------------------------
(Issuer's Telephone Number)
N/A
- ------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has ben subject to such filing requirements
for the past 90 days. X
----- Yes ----- No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
----- Yes ----- No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
1,241,717 shares of common stock as of April 30, 1996.
- ----------------------------------------------------- X
Transitional Small Business Disclosure Format ----- Yes ----- No
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
- ------ --------------------
SOUTH STANDARD MINING COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
ASSETS 3/31/96 12/31/95
------- --------
Current Assets:
Cash $ 34,245 $ 1,442
U.S. Treasury Bills, at cost - 63,212
Accounts Receivable 2,341 1,700
-------- --------
Total Current Assets 36,586 66,354
-------- --------
Reclamation Surety Bond 39,800 39,800
-------- --------
Investment in Tintic Uranium Stock 853 853
-------- --------
Property and Equipment:
Oil and Gas Leaseholds 30,250 30,250
Developed Mining Property 754,371 754,371
Less: Accumulated Depletion and
Depreciation (442,721) (442,152)
Other 17,798 17,798
-------- --------
Net Property and Equipment 359,698 360,267
-------- --------
TOTAL ASSETS $436,937 $467,274
======== ========
See Note to Condensed Financial Statements.
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SOUTH STANDARD MINING COMPANY
CONDENSED BALANCE SHEETS (Continued)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
3/31/96 12/31/95
------- --------
Current Liabilities:
Accounts Payable $ 20,287 $ 9,395
Accrued Liabilities 1,736 1,718
-------- --------
Total Current Liabilities 22,023 11,113
-------- --------
Stockholders' Equity:
Common Stock, $.10 par value,
1,300,000 shares issued 130,000 130,000
Less: 58,283 common shares held in
treasury, at cost and par value (7,609) (7,609)
Additional Paid-in Capital 608,743 608,743
Accumulated Deficit (316,220) (274,973)
-------- --------
Total Stockholders' Equity 414,914 456,161
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $436,937 $467,274
======== ========
See Note to Condensed Financial Statements.
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SOUTH STANDARD MINING COMPANY
CONDENSED STATEMENTS OF OPERATIONS
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
Quarter Ended Quarter Ended
3/31/96 3/31/95
------------- -------------
Revenues:
Sale of Flux Materials $ - $138,548
Oil and Gas Production - 32
Grazing Fees 641 641
-------- --------
Total Revenues 641 139,221
Cost of Revenues - 109,653
-------- --------
Gross Margin 641 29,568
General and Administrative Expenses 44,489 23,631
-------- --------
Income (Loss) from Operations (43,848) 5,937
Interest Income 2,601 1,676
-------- --------
Net Income (Loss) Before Income Taxes (41,247) 7,613
Provision for Income Taxes - -
-------- --------
Net Income (Loss) $(41,247) $ 7,613
======== ========
Net Income (Loss) Per Common Share (based
on 1,241,717 weighted average shares
outstanding) $ (.03) $ .01
======== ========
See Note to Condensed Financial Statements.
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SOUTH STANDARD MINING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
Increase (Decrease) in Cash
Quarter Ended Quarter Ended
3/31/96 3/31/95
------------- -------------
Cash Flows from Operating Activities:
Net Income (Loss) $(41,247) $ 7,613
Adjustments to Reconcile Net Income
(Loss) to Net Cash (Used In)
Operating Activities
Depreciation 569 569
Change in Assets and Liabilities:
(Increase) in Accounts Receivable (641) (34,780)
Increase (Decrease) in Accounts
Payable and Accrued Liabilities 10,910 2,713
-------- --------
Net Cash Used in Operating Activities (30,409) (23,885)
Cash Flows From Investing Activities:
Sale of U.S. Treasury Bills 63,212 521
-------- --------
Net Increase (Decrease) in Cash 32,803 (23,364)
Cash at Beginning of Period 1,442 43,858
-------- --------
Cash at End of Period $ 34,245 $ 20,494
======== ========
See Note to Condensed Financial Statements.
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SOUTH STANDARD MINING COMPANY
NOTE TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note A - Financial Statements
The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. These condensed financial
statements reflect all adjustments which, in the opinion of management,
are necessary to present fairly the results of operations for the
interim periods presented. All adjustments are of a normal recurring
nature. Certain information and disclosures normally included 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. It is suggested that these condensed financial statements
be read in conjunction with the financial statements and the notes
thereto included in the Company's most recent annual report on
Form 10-KSB.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
---------------------------------------------------------
The Merger
SOUTH STANDARD MINING COMPANY ("THE COMPANY") LOST ITS PRIMARY SOURCE OF
OPERATING INCOME IN 1995. AS OF THE DATE OF THIS REPORT, THE COMPANY
HAS NO IMMEDIATE PROSPECT FOR GENERATION OF SIGNIFICANT REVENUES. A
MERGER WITH CHIEF CONSOLIDATED MINING CO. HAS BEEN PROPOSED AS DESCRIBED
BELOW. THE BOARD OF DIRECTORS BELIEVES THE COMPANY'S SUCCESS DEPENDS ON
SHAREHOLDER APPROVAL OF THE PROPOSED MERGER. WITHOUT APPROVAL OF THE
MERGER, MANAGEMENT BELIEVES THAT THE SALE AND/OR DISSOLUTION OF
REGISTRANT IS LIKELY. ALTHOUGH MANAGEMENT BELIEVES THE MERGER WILL
PROCEED, THERE IS NO GUARANTEE THE MERGER WILL BE CONSUMMATED. A
SHAREHOLDERS MEETING TO VOTE ON THE PROPOSED MERGER WILL BE HELD ON
JUNE 14, 1996.
On July 12, 1995, South Standard and Chief Consolidated Mining
Company, an Arizona corporation, entered into a Letter of Intent to
proceed with the merger of South Standard with and into Chief Gold
Mines, Inc., a Delaware corporation, to be formed as a wholly owned
subsidiary of Chief. An Agreement and Plan, effective September 20,
1995, was approved by South Standard's and Chief's Boards of Directors.
In the proposed Merger, South Standard's shareholders are to receive 0.3
share of Chief's stock for each share of South Standard stock. Upon
consummation of the Merger, the assets and liabilities of South Standard
will become the assets and liabilities of Chief Gold Mines, Inc., the
new wholly owned subsidiary of Chief. Cash will be paid to South
Standard's shareholders in lieu of fractional shares. THERE CAN BE NO
ASSURANCE THAT THIS MERGER WILL BE CONSUMMATED.
Conditions of the Merger
Consummation of the Merger is subject, among other things, to
(i) the approval of the Merger by the majority vote of South Standard's
shareholders; (ii) Chief's not exercising its right to terminate the
Merger Agreement, if the holders of more than 3% of South Standard's
shareholders exercise their dissenters' rights; and (iii) Chief's not
exercising its right to terminate the Merger Agreement, if the Merger
has not been consummated by June 30, 1996.
South Standard's Reasons for the Merger
The Board of Directors of South Standard are of the view that the
interests of the shareholders would best be served by acquiring
interests in new mining properties by means of a merger into a
corporation whose principal asset is mining properties. The fact that
Kennecott had recently terminated its flux ore contract with South
Standard, thus eliminating South Standard's principal source of income,
played an important role in the Board of Directors' decision to seek a
merger partner. The properties of South Standard are contiguous to
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those of Chief, and the Board of Directors of South Standard considered
the merger with Chief as a natural fit, with South Standard's
shareholders obtaining a stock interest in Chief's overall mining
properties and thus continuing their stock interest in the properties of
the Tintic District.
Plan of Operation
Management's plan of operation for the next twelve months is to
seek shareholder approval and consummation of the proposed merger with
Chief Consolidated Mining Company. If the Merger is not consummated,
the Company's continued success will depend on the development of a
viable operating plan, the immediate leasing and operation of the
Company's mining properties, or the sale of the Company's properties.
Liquidity and Capital Resources
The Company's liquidity and capital resources decreased during the
first quarter of 1996 when compared to the final quarter of 1995,
primarily due to the continued effect of the cancellation of the
Kennecott flux ore contract. Total revenues for the first quarter of
1996 were $641 compared to $139,221 for the first quarter of 1995.
Expenses increased for the first quarter of 1996 compared to the
first quarter of 1995 due to legal, accounting and other fees
resulting from preparing for the proposed Merger.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
Exhibit 27
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter for which
this Form is filed.
SIGNATURE
In accordance with the requirements of the Securities Exchange Act
of 1934, the Registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SOUTH STANDARD MINING COMPANY
Dated: May 14, 1996 By /s/ J. MURRAY RUBY
--------------------------------
J. Murray Ruby
Secretary and Treasurer
(Principal Financial Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 34,245
<SECURITIES> 853
<RECEIVABLES> 2,341
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 436,937
<PP&E> 359,698
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 436,937
<CURRENT-LIABILITIES> 22,023
<BONDS> 0
0
0
<COMMON> 130,000
<OTHER-SE> 284,914
<TOTAL-LIABILITY-AND-EQUITY> 436,937
<SALES> 641
<TOTAL-REVENUES> 641
<CGS> 0
<TOTAL-COSTS> 44,489
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (41,247)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (41,247)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
<FN>
<F1>Amount is not separately provided in interim financial statements
<F2>Amount is included in figure for property, plant and equipment
</FN>
</TABLE>
