-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O28Rx0zIng/2q0hWMgEdIaCnBHhSu0Inj+ufgNfhlg7on8AuK5mWXYxmM1cbf+lF 008/TDjMy+Zja+C7RsfvkA== 0000914233-96-000100.txt : 19960814 0000914233-96-000100.hdr.sgml : 19960814 ACCESSION NUMBER: 0000914233-96-000100 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LA TEKO RESOURCES LTD CENTRAL INDEX KEY: 0000357281 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 870483319 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10104 FILM NUMBER: 96611204 BUSINESS ADDRESS: STREET 1: 180 EAST 2100 SOUTH #204 CITY: SALT LAKE CITY STATE: UT ZIP: 84115 BUSINESS PHONE: 8014661402 MAIL ADDRESS: STREET 1: 180 EAST 2100 SOUTH STREET 2: STE 204 CITY: SALT LAKE CITY STATE: UT ZIP: 84115 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Amendment Number One [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 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 0-10104 LA TEKO RESOURCES LTD. (Exact name of Registrant as specified in its charter) British Columbia, Canada 87-0483319 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 180 East 2100 South, #204 Salt Lake City, Utah 84115 (Address of principal executive offices) (Zip Code) (801) 466-1402 (Registrant's telephone number, including area code) N/A Former name, former address and former fiscal year, if changed since last report) 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 ----- As of August 9, 1996, the registrant had 23,416,258 shares of its common stock issued and outstanding. LA TEKO RESOURCES LTD. Part I - Financial Information ITEM 1. FINANCIAL STATEMENTS The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10- K for the year ended December 31, 1995. The accompanying financial statements have not been examined by independent accountants in accordance with generally accepted auditing standards, but in the opinion of management such financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to summarize fairly the Company's financial position and results of operations. LA TEKO RESOURCES LTD. Condensed Consolidated Balance Sheets ASSETS June 30, December 31, 1996 1995 (Unaudited) (Audited) Current Assets Cash and short-term deposits $ 2,142,038 $ 2,972,278 Receivables 53,084 124,876 Inventories 6,295 6,295 Pre-paid expenses 89,889 176,541 ----------- ----------- Total current assets 2,291,306 3,279,990 Mineral properties and deferred costs 10,292,061 10,155,234 Plant and equipment 209,503 204,589 Investments 231,069 231,069 ----------- ----------- $13,023,939 $13,870,882 =========== =========== LIABILITIES Current Liabilities Accounts payable and accrued expenses $ 118,999 $ 240,441 Current portion of long-term debt 868,000 712,296 ----------- ----------- Total current liabilities 986,999 952,737 Long-term debt 15,000 360,289 ----------- ----------- Total liabilities 1,001,999 1,313,026 ----------- ----------- SHAREHOLDERS' EQUITY Common capital stock, no par value; authorized 100,000,000 shares; issued and outstanding: 23,416,258 and 23,318,478 18,029,617 17,807,169 Accumulated deficit (6,007,677) (5,249,313) ----------- ----------- 12,021,940 12,557,856 ----------- ----------- $13,023,939 $13,870,882 =========== ===========
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated financial statements. LA TEKO RESOURCES LTD. Condensed Consolidated Statements of Operations (Unaudited) For the Three-Month Periods Ended June 30, 1996 1995 Sales of gold and silver $ - $ - ----------- ----------- Expenses Operating and mine maintenance costs 75,132 47,207 New prospect evaluation 6,855 - General and administrative expenses 344,839 177,279 Depreciation 15,460 11,106 Royalty and lease expenses 37,500 71,726 ----------- ----------- 479,786 307,318 ----------- ----------- Income (loss) from operations ( 479,786) ( 307,318) Other Income (Expense) Gain from disposition of mineral property - 404,953 Gain on sale of equipment 3,532 - Interest income/expense (net) 21,446 ( 27,616) ----------- ----------- Net income (loss) before income taxes ( 454,808) ( 70,019) Income taxes - - Net income (loss) $( 454,808) $ 70,019 ----------- ----------- Income (loss) per share $( .019) $( .003) =========== =========== Weighted average shares outstanding 23,372,240 23,179,082 =========== ===========
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated financial statements. LA TEKO RESOURCES LTD. Consolidated Statement of Changes in Shareholders' Equity For the Years Ended 1994, 1995 and the Six-Month Period Ended June 30, 1996 (Expressed in U.S. Dollars) Common Stock Accumulated Shares Amount Deficit Total Balance December 31, 1993 34,933,849 $20,566,202 $(3,514,645) $17,051,557 ---------- ----------- ----------- ----------- 1994 Common stock issued for: Private placement stock sales 450,000 738,000 - 738,000 Public offering stock sales 379,480 952,500 - 952,500 Exercise of options 75,000 42,164 - 41,164 Exercise of warrants 444,480 841,600 - 841,600 Exercise of warrants issued for services 5,000 12,500 - 12,500 Less public offering and private placement costs - ( 143,987) - ( 143,987) Compensatory stock options - 43,500 - 43,500 Net income (loss) - - (1,369,811) (1,369,811) ---------- ----------- ----------- ----------- 1,353,960 2,486,277 (1,369,811) 1,116,466 ---------- ----------- ----------- ----------- Balance,December 31,1994 36,287,809 23,052,479 (4,884,456) 18,168,023 ---------- ----------- ----------- ----------- 1995 Common stock issued for: Public offering sales/$2.51 70,520 177,005 - 177,005 Exercise of $2.51 warrants 371,120 814,061 - 814,061 Short-swing profits - 2,100 - 2,100 Less public offering and private placement costs - ( 45,360) - ( 45,360) Compensatory stock options - 64,190 - 64,190 Net income (loss) - - ( 364,857) ( 364,857) ---------- ----------- ----------- ----------- 441,640 1,011,996 ( 364,857) 647,139 ---------- ----------- ----------- ----------- Balance, December 31, 1995 36,729,449 24,064,475 (5,249,313) 18,815,162 ---------- ----------- ----------- ----------- 1996 Common stock issued for: Exercise of warrants 97,780 156,448 - 156,448 Compensatory stock options - 66,000 - 66,000 Net income (loss) for the six-month period ended June 30, 1996 - - ( 758,364) ( 758,364) ---------- ----------- ----------- ----------- 97,780 222,448 ( 758,364) 535,916) ---------- ----------- ----------- ----------- 36,827,229 24,286,923 (6,007,677) 18,279,246 ---------- ----------- ----------- ----------- Less cost of treasury shares (13,410,971) (6,257,306) - (6,257,306) Balance, June 30, 1996 23,416,258 $18,029,617 $(6,007,677) $12,021,940 ========== =========== =========== ===========
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. LA TEKO RESOURCES LTD. Condensed Consolidated Statements of Operations (Unaudited) For the Six-Month Periods Ended June 30, 1996 1995 Sales of gold and silver $ - $ - ----------- ----------- Expenses Operating and mine maintenance costs 105,333 59,278 New prospect evaluation 39,333 - General and administrative expenses 526,755 301,309 Depreciation 26,797 23,051 Royalty and lease expenses 75,000 143,451 ----------- ----------- 773,218 527,089 ----------- ----------- Income (loss) from operations ( 773,218) ( 527,089) Other Income (Expense) Gain from disposition of mineral property - 404,953 Interest income/expense (net) 7,447 ( 57,864) Gain (loss) on sale of equipment 7,407 ( 8,112) Other expense - ( 1,872) ----------- ----------- Net income (loss) before income taxes ( 758,364) ( 189,984) ----------- ----------- Income taxes - - ----------- ----------- Net gain/(loss) $( 758,364) $( 189,984) =========== =========== Gain/(loss) per share $( .032) $( .008) =========== =========== Weighted average shares outstanding 23,350,331 23,059,149 =========== =========== The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated financial statements. LA TEKO RESOURCES LTD. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six-Month Periods Ended June 30, 1996 1995 Cash Flows From Operating Activities Net gain/(loss) $( 758,364) $( 189,984) Charges (credits) to operations not affecting cash: Gain on disposition of property - ( 404,953) (Gain)/loss on sale of equipment ( 7,407) 8,112 Adjust gold and silver inventory to fair market value - 1,872 Depreciation 26,797 23,051 Compensatory expense - stock options granted 66,000 - ----------- ----------- ( 672,974) ( 561,902) ----------- ----------- Net changes (Increase)/decrease in gold inventory - 5,109 (Increase)/decrease in accounts receivable and pre-paid expenses 158,444 ( 10,927) Increase/(decrease) in current portion of long-term debt 155,704 - (Decrease)/increase in accounts payable and accrued expenses ( 121,441) ( 105,174) ----------- ----------- 192,707 ( 110,992) ----------- ----------- Net cash used in operating activities ( 480,267) ( 672,894) ----------- ----------- Cash Flows From Investing Activities Investment in mineral properties ( 15,000) ( 250,000) Exploration costs capitalized ( 121,828) ( 175,676) Proceeds from sale of equipment 9,800 2,500 Purchase of plant and equipment ( 34,104) ( 1,685) Cash proceeds from disposition of property - 2,500,000 ----------- ----------- Net cash provided (used) by investing activities ( 161,132) 2,075,139 ----------- ----------- Cash Flows From Financing Activities Short-term loans - 200,000 Reduction of long-term debt ( 345,289) ( 201,283) Cash proceeds from stock issuance 156,448 769,666 Public offering costs - ( 19,627) Short-swing profits - 2,100 ----------- ----------- Net cash provided by financing activities ( 188,841) 750,856 ----------- ----------- Net increase (decrease) in cash and cash equivalents ( 830,240) 2,153,101 Cash and cash equivalents, beginning of period 2,972,278 275,364 ----------- ----------- Cash and cash equivalents, end of period $ 2,142,038 $ 2,428,465 =========== =========== Supplemental Disclosures of Cash Flow Information Cash paid during the period for interest $ 58,565 $ 69,623 Cash paid during the period for income taxes $ 300 $ - Supplementary Schedule of Non-cash Investing and Financing Activities Depreciation capitalized into deferred costs $ - $ 3,767 Depreciation costs in accounts receivable $ - $ 2,723
The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these consolidated financial statements. LA TEKO RESOURCES LTD. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Share Capital Authorized - 100,000,000 shares having no par value Issued - 23,416,258 During the second quarter of 1996, 51,550 shares were issued upon exercise of employee and director stock options. Options, Warrants and Convertible Securities Options Outstanding Total Exercisable June 30, June 30, Grant Expiration 1996 1996 Date Date Price DIRECTORS 200,000 200,000 11/16/95 11/16/2000-03 $ 1.60 100,000 100,000 11/24/95 11/24/2000-03 $ 1.60 100,000 100,000 03/07/96 03/07/2001 $ 2.50 200,000 50,000 06/18/96 06/18/2001-04 $ 2.53 PREVIOUS DIRECTORS 100,000 100,000 08/17/94 08/17/1999 $ 1.60 100,000 100,000 11/16/95 11/16/2000 $ 1.60 25,000 25,000 11/16/95 06/05/1997 $ 1.60 25,000 25,000 11/16/95 06/05/1997 $ 1.60 OTHERS 100,000 100,000 04/01/93 04/01/1998 $ 2.13 170,000 170,000 08/17/94 08/17/1999 $ 1.60 105,000 105,000 11/16/95 11/16/2000 $ 1.60 During 1996, directors purchased 25,000 shares and employees purchased 72,780 shares pursuant to options exercised. Options to purchase 20,155 shares expired as a result of employee termination. Effective June 5, 1996, each of the five directors became eligible to purchase 25,000 shares each as part of the 100,000-share option granted each director exercisable over a four-year period. Director options to acquire 150,000 shares expired as the service of two directors was terminated on June 5, 1996. Exercise of all options outstanding is contingent upon the optionees continued employment and/or association with the Company. Warrants Outstanding None Convertible Securities The Company has $883,000 debentures payable which are convertible into shares of stock as follows: Shares Conversion Reserved For Amount Maturity Date Prices Conversion $ 500,500 Jul-Dec 1996 $ 3.13 159,904 75,000 Jan-Aug 1997 $ 3.13 23,962 40,000 Jan-Aug 1997 $ 3.75 10,667 252,500 May-Jun 1997 $ 2.81 89,858 15,000 Sep-Oct 1997 $ 3.13 4,792 ---------- ------- $ 883,000 289,183 ========== ======= ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The financial statements of the Company include the consolidated operations of its wholly-owned subsidiaries La Teko Resources, Inc., a Nevada corporation and Ryan Lode Mines, Inc., an Alaska corporation. All dollar amounts included herein respecting Management's Discussion and Analysis are in U.S. dollars except where noted otherwise as Canadian dollars (CAN). During April 1996, the Company consummated a five-year agreement with the University of Alaska to explore its Twin Buttes property. The property is located 28 miles northeast of Fairbanks, Alaska, adjacent to La Teko's 16,131- acre Juniper property. The Twin Buttes property contains 12,640 acres and is situated on the northeast-trending Chatanika Terraine and aeromagnetic anomaly. A geochemical sampling program will be undertaken during the 1996 exploration season to assess the near future expression of mineralization. This program will be complemented by more sophisticated exploration methods in 1997 and 1998. In the event La Teko's exploration of the Twin Buttes is successful, it has the opportunity to acquire an exclusive development and mining lease on or before the expiration of five years. The combined Twin Buttes and Juniper properties, totalling 28,771 acres (approximately 45 square miles), represent one of the largest blocks of exploration property on the Chatanika Trend. CAPITALIZED COSTS Costs of acquisition and deferred exploration expenditures associated with the Company's mineral properties are summarized as follows: Capitalized Capitalized Balance Additions Additions Balance December 31, (Deletions) (Deletions) June 30, 1995 1st Q 1996 2nd Q 1996 1996 ----------- ---------- ---------- ----------- RYAN LODE $ 4,839,376 $ - $ - $ 4,839,376 Acquisition cost Deferred exploration and development expenses 4,882,993 26,687 17,911 4,927.591 ----------- -------- -------- ---------- Total Ryan Lode 9,722,369 26,687 17,911 9,766,967 ----------- -------- -------- ---------- MARGARITA Acquisition cost 350,100 - - 350,100 Deferred exploration and development expenses 4,554 65,354 1,220 71,128 ----------- -------- -------- ---------- Total Margarita 354,654 65,354 1,220 421,228 ----------- -------- -------- ---------- JUNIPER Deferred exploration and development expenses 78,211 2,729 3,368 84,308 ----------- -------- -------- ---------- Total Juniper 78,211 2,729 3,368 84,308 ----------- -------- -------- ---------- TWIN BUTTES Deferred exploration and development expenses - - 3,451 3,451 ----------- -------- -------- ---------- Total Twin Buttes - - 3,451 3,451 ----------- -------- -------- ---------- DISCOVERY Acquisition cost - - 15,000 15,000 Deferred exploration and development expenses - - 1,107 1,107 ----------- -------- -------- ---------- Total Discovery - - 16,107 16,107 ----------- -------- -------- ---------- Total mineral properties and deferred costs $10,155,234 $ 94,770 $ 42,057 $10,292,061 =========== ========= ========== ===========
RESULTS OF OPERATIONS As a result of not having been in production since 1989, the Company will continue to sustain its financial expenditures through utilization of existing cash resources, anticipated additional cash that may be received from Newmont, sale of common stock and/or proceeds from corporate borrowings at such time as debt financing may be needed and available. It is anticipated that the Company will receive $2.5 million from Newmont on or before December 31, 1996 if Newmont opts to continue with its acquisition of 65% of the True North Joint Venture property. Operating and mine maintenance expenses increased approximately $46,000, principally as a result of labor surcharges and employee benefits associated with employee stock options exercised during 1996. Also, salaries and wages classified as general project overhead expense not otherwise capitalized with individual project exploration and development costs contribute to this increase. Commencing in 1996, the Company initiated an accelerated effort to procure new mining projects for potential future development. It incurred $39,333 respecting evaluation of properties considered for subsequent acquisition. No comparable expense was incurred in 1995. In addition to the costs associated with new project evaluation, in the Second Quarter of 1996 the Company expended $19,558 for capitalized acquisition and development costs associated with its newly-acquired Twin Buttes and Discovery properties as discussed herein under the CAPITALIZED COSTS caption of this MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. An additional $22,499 was expended in the Second Quarter of 1996 for development of the Company's Ryan Lode, Margarita and Juniper properties. These amounts combined with the $94,770 capitalized during the First Quarter of 1996 aggregate $136,827 for the first six months of 1996. General and administrative expenses for the six-month periods ended June 30, 1996 and 1995 are presented as follows: June 30, 1996 1995 ---- ---- Director fees $ 34,289 $ 5,250 Rent 15,378 15,416 Salaries and employee benefits 199,078 128,625 Contract services 90,016 1,225 Accounting 15,687 12,788 Shareholder expense 31,918 22,258 Transfer agent fees 1,773 3,998 Travel 27,375 19,908 Office and general 14,805 14,253 Telephone and utilities 10,079 10,026 Equipment rental 1,368 1,745 Insurance 5,482 11,465 Legal 53,676 38,049 Regulatory fees 4,410 5,901 Other 21,421 10,402 ----------- ----------- $ 526,755 $ 301,309 =========== =========== Details with respect to significant changes are as follows: . Director fees reflect an increase of approximately $29,000. The principal item of change is $22,000 compensatory stock option expense relative to stock options granted to two new directors at the 1996 annual meeting of shareholders. See Note 1 of Notes to Condensed Consolidated Financial Statements attached hereto. Additional director meetings, by telephone and in person, account for the additional increase. . Salaries, payroll taxes and employee benefits increased approximately $70,000, principally as a result of compensatory stock options granted the corporate president and two directors and related labor surcharges and liability insurance associated with the 1996 options granted and options exercised in 1996 wherein current-period payroll tax expense only is recognized. . Contract services for the first six months of 1996 include $60,000 professional fees and related expenses respecting management and strategic business planning and $25,000 associated with analysis, interpretation and evaluation of the Company's mineral properties to assist management and the corporate board of directors in formulating a business plan for future development of the Company's mineral properties. $5,000 was paid to the Company's past president as part of a consulting arrangement to facilitate a transition in personnel as a result of the recent change in corporate presidency and directorship of the Company. . Shareholder expense has increased as a result of broader shareholder base of the corporate stock and added expenses associated with preparation and distribution of annual reports, proxy information, additional postage, consulting services, etc., associated with the Company's annual general meeting. . Travel expenses increased approximately $7,500 as a result of directors' travel associated with an additional directors' meeting and other required travel by directors in the business administration of the Company. . Legal fees increased approximately $15,600, partially as a result of a continuing requirement to supplement a Form S-2 filing with the United States Securities & Exchange Commission, which Form S-2 was associated with a May 1994 stock offering. The Form S-2 is currently being converted to a Form S-3 filing such that the requirements for continuing supplements will be eliminated. Other increased legal fees continue as a result of the consulting requirements associated with regulatory filings, property acquisitions, technical aspects of the corporation's annual general meetings and general business matters. TRUE NORTH JOINT VENTURE AND OTHER ACTIVITIES Newmont Exploration Limited commissioned its summer exploration effort at True North in June; the effort will continue, at Newmont's expense, through approximately October. Newmont advised on May 6, 1996 that it had completed a late winter 39-hole 11,320-foot core drilling program to explore areas that were not otherwise available for drilling during the summer. It has also announced that its summer exploration activity would be comprised of approximately 10,000 feet of core, 30,000-feet of reverse-circulation drilling and a 5,000-sample geochemical program. Exploration drilling between the Hindenburg and Shepard ore zones has verified that these two zones are continuous. The following map shows the relationship of the Hindenburg and Shepard ore zones and the extent of Newmont's drilling connecting the two. La Teko's 1993/1994 drilling program comprised of 235 reverse-circulation and 8 core holes, which were drilled within the Hindenburg and Shepard resource zones, shown as the shaded areas. Holes within the shaded area, not shown individually on this map, defined 445,800 ounces of proven/probable mineable gold, metallurgical recovery estimated at 80-90%. Two new mineralized areas, the Zepplin and the East Zones, are also depicted on the map. [This page contains a map or the True North project, showing certain 1995 and 1996 drill hole locations, the location and area of the Shepard and Hindenburg resources, the Central Zone connecting the Hindenburg and Shepard resources, and five additional non-contiguous target areas, including one identified as the Zeppelin Zone and one identified as the East Zone. The map legend identifies the five target areas and the symbols used within the map to designate completed core holes, 1996; completed core twins, 1996; and 1995 drill holes.] Newmont's second quarter 1996 core drilling at the True North was comprised of 6,601 feet of core in 25 holes, including 18 holes in the Central and East Zones. The remaining seven holes were core/reverse-circulation and core/core twins to test short-range variability and compare drilling methods and assays at the Hindenburg and Shepard. Most of the 6,601 second quarter footage was included in the 11,320 feet completed May 6, 1996 previously mentioned. A track-mounted reverse-circulation drill is currently being used to test trench and soil geochemical exploration targets and to complete step-outs beyond known mineralization. The most important result of the 1996 winter drilling was the discovery of a shallow, partially oxidized, low-angled shear hosted zone of gold mineralization in the Central Zone. This shallow mineralization, if successfully delineated with infill drilling, will significantly increase the mineable reserve. The 5,000-sample soil program under way will cover all previously unsampled areas of the True North property. By June 30, 1996, four drills had collected samples of the weathered bedrock interface from 881 sites 100 feet apart on lines spaced 400 feet apart. Infill sampling will reduce the line spacing to 200 feet where needed. Sampling to date has disclosed a large gold anomaly in the vicinity of the Soo vein system on the south edge of the property with values to 9,890 ppb. A grab sample from an old prospect pit in the anomalous area returned a value of 2.5 oz Au per ton. Results are pending on the majority of the samples collected. Reclamation and engineering studies are in progress on the Ryan Lode project. The effort includes heap contouring, fertilization using lime treated municipal sewage sludge, and seeding. The property is being studied to determine the underground mining possibilities. Mine Development Associates has been commissioned to ascertain the continuity of high-grade zones in the property that could be mined by underground methods. The Company will proceed with the evaluation of new prospects for possible future development. Geochemical soil sampling, rock sampling and geologic mapping are being employed to evaluate the Juniper, Twin Buttes, Discovery Gulch and Lucky Gulch prospects. LIQUIDITY AND CAPITAL RESOURCES At June 30, 1996, the Company had $2,142,038 cash and short-term deposits. Pursuant to the Newmont joint venture agreement, the Company could receive an additional $2.5 million on or before December 31, 1996. Cash currently on hand and to be received will be utilized by the Company to sustain its ongoing financial requirements. Working capital of the Company has been as follows: June 30, December 31, 1996 1995 1995 ----------- ----------- ----------- Current assets $ 2,291,306 $ 2,657,212 $ 3,279,990 Current liabilities 986,999 40,132 952,737 ----------- ----------- ----------- Working capital $ 1,304,307 $ 2,617,080 $ 2,327,253 =========== =========== ===========
Since June 30, 1996, the Company has expended $269,844 for the acquisition of 750,000 shares of International Freegold Mineral Development, Inc. pursuant to the exercise of warrants associated with a 1994 unit purchase agreement with Freegold. The Company now owns 1.5 million shares of Freegold stock. The current market price of Freegold stock is approximately $.65 (US). Freegold is aggressively exploring its Golden Summit property adjacent to the True North Newmont/La Teko joint venture project. Also, since June 30, 1996, La Teko paid Newmont $29,436 for its 35% interest in additional mineral property acquired by Newmont adjacent to the True North site. The Company anticipates the following additional expenditures for the remainder of 1996: Property Acquisition - exploration in new project evaluation $ 295,000 Project overhead 100,000 Corporate overhead 183,000 Debenture interest 38,500 Ryan Lode royalty 150,000 Retirement of debentures 500,500 ---------- $1,267,000 ========== As discusssed in Note 1 of NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, the Company has outstanding options to directors and employees for the future acquisition of 1,225,000 shares, 1,075,000 of which may be exercised immediately. During 1996, nine employees and a director exercised options to acquire 97,780 shares for $156,448. It is not known whether optionees will exercise stock options during the remainder of 1996. COMMITMENTS AND CONTINGENCIES Operations are subject to certain lease and royalty obligations previously described in notes to the Company's consolidated financial statements at December 31, 1995. The Company carries insurance against property damage including insurance on its machinery and equipment and motor vehicles and also comprehensive general liability and liability policies applicable to motor vehicles. The Company has elected not to insure against business interruption. Effective March 1, 1992, the Company initiated a health and medical insurance program available to all employees who have been employed by the Company for over 30 days. The Company pays 70% of the monthly premium with the employees responsible for the balance. The Company is evaluating other health and medical insurance programs in anticipation of making a change in current coverage. The basic aspects of the current coverage will be continued. The Company has no need at present to insure for environmental pollution and has elected not to insure for mine cave-in's, mine flooding, earthquake and other possible natural hazards consistent with industry practice. La Teko may in the future be exposed to contingencies relating to the foregoing or liabilities that may arise under governmental regulations relating to the environment. The Company is not aware of any existing material contingencies respecting compliance of its previous activities with environmental requirements. The Company has taken extra precautions to minimize the possibility of chemical spills, especially in its drilling and former heap-leaching operations and utilizes a special patented process in the neutralization of cyanide and other chemical solutions. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) Report on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LA TEKO RESOURCES LTD. Dated: August 8, 1996 By /s/Robert W. Gentry, President and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF JUNE 30, 1996, AND STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 2,142,038 231,069 53,084 0 6,295 2,291,306 209,503 675,170 13,023,939 986,999 15,000 18,029,617 0 0 0 13,023,939 0 0 0 773,218 (7,407) 0 (7,447) (758,364) 0 (758,364) 0 0 0 (758,364) (.32) (.32)
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