-----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, WjdmY1l77v//67rEcYKZkpubn2WDZ3XDwwMgSMyT4NjGDJLDFTdGj0/GWquyEr1P aWU+qXSEZW39RkpSfe+ilw== 0000731727-96-000011.txt : 19960805 0000731727-96-000011.hdr.sgml : 19960805 ACCESSION NUMBER: 0000731727-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960710 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SILVERADO MINES LTD CENTRAL INDEX KEY: 0000731727 STANDARD INDUSTRIAL CLASSIFICATION: 1040 IRS NUMBER: 980045034 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12132 FILM NUMBER: 96592814 BUSINESS ADDRESS: STREET 1: SUITE 505 1111 WEST GEORGIA ST STREET 2: STE 505 CITY: VANCOUVER BC CANADA STATE: A1 BUSINESS PHONE: 6046891535 MAIL ADDRESS: STREET 1: 1111 WEST GEORGIA STREET STREET 2: STE 505 CITY: VANCOUVER BC STATE: AL 10-Q 1 QUARTERLY REPORT FOR SILVERADO MINES LTD. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED May 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Commission file number 0-12132 SILVERADO MINES LTD. (Exact name of registrant as specified in its charter) British Columbia, Canada (State or other jurisdiction of incorporation or organization) 98 -0045034 (I.R.S. Employer I.D. No.) Suite 505, 1111 West Georgia Street Vancouver, British Columbia, Canada V6E 4M3 (Address of Principal Executive Offices) (604) 689-1535 (Registrant's telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 13(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for a 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class: Outstanding at May 31, 1996 45,056,493 (Common stock (npv)) 1 SILVERADO MINES LTD. CONSOLIDATED BALANCE SHEETS (EXPRESSED IN U.S. DOLLARS) As at May 31 November 30 1996 1995 ------------ ------------ ASSETS Current Assets Cash and cash equivalents $ 858,862 $ 155,849 Gold inventory (Note 2) 310,002 389,119 Accounts receivable 8,265 1,010 Prepaid expenses 31,515 72,005 ------------ ------------ 1,208,644 617,983 Mineral Properties and Development Claims and options 1,815,811 1,755,811 Deferred exploration and development expenditures 10,385,130 10,084,116 ------------ ------------ 12,200,941 11,839,927 Less accumulated amortization (1,260,834) (1,260,834) ------------ ------------ 10,940,107 10,579,093 Building, Plant and Equipment 3,709,482 3,806,350 Deferred Financing Fees (net of amortization of $68,438; 1995 - $49,838) 117,562 136,162 ------------ ------------ $ 15,975,795 $ 15,139,588 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities (Note 4) $ 488,600 $ 527,352 Loans payable secured by gold inventory 140,052 176,568 Unsecured loan 100,000 -- Current portion of mineral claims payable 119,000 330,000 Capital lease obligations - current 169,023 203,203 Payable to related parties 21,887 851,610 ------------ ------------ 1,038,562 2,088,733 Long Term Liabilities Mineral claims payable 200,000 200,000 Capital lease obligations 144,576 194,569 Convertible debenture (Note 6) 2,000,000 2,000,000 ------------ ------------ 2,344,576 2,394,569 Shareholders' Equity Share capital (Note 5) Authorized: 75,000,000 common shares Issued and outstanding: May 31, 1996 - 45,056,493 shares 33,150,211 28,775,211 November 30, 1995 - 37,431,493 shares Capital surplus 46,352 46,352 Deficit (20,603,906) (18,165,277) ------------ ------------ 12,592,657 10,656,286 ------------ ------------ $ 15,975,795 $ 15,139,588 ============ ============ See accompanying notes to consolidated financial statements 2 SILVERADO MINES LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (EXPRESSED IN U.S. DOLLARS) Six Months Ended May 31 1996 1995 ------------ ------------ Revenue from gold sales $ 98,648 $ 1,520,173 ------------ ------------ Operating costs Mining and processing costs 79,118 1,519,573 Amortization of property and development costs -- 186,268 ------------ ------------ Net Gain (Loss) 19,530 (185,668) Miscellaneous Revenue -- 46,518 Administrative expenditures 2,458,159 1,219,868 Loss for the period (2,438,629) (1,359,018) Accumulated deficit at beginning of period (18,165,277) (14,070,722) ------------ ------------ Accumulated deficit at end of period $(20,603,906) $(15,429,740) ============ ============ Loss per share $ (0.060) $ (0.039) ============ ============ See accompanying notes to consolidated financial statements 3 SILVERADO MINES LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN U.S. DOLLARS) Six Months Ended May 31, 1996 1995 ----------- ----------- CASH PROVIDED BY (USED FOR): Operations: Net earnings (loss) for the year $(2,438,629) $(1,359,018) Items not involving cash: Contracted services 1,656,778 399,763 Depreciation 100,281 83,336 Amortization of deferred financing fees 18,600 18,600 Changes in non-cash operating working capital (38,178) 45,012 ----------- ----------- (701,148) (812,307) Financing: Shares issued for cash 2,830,000 298,350 Loans payable secured by gold inventory and forward sales (36,516) 140,000 Increase in unsecured loan 100,000 -- Decrease in payable to related parties (829,723) 554,009 Decrease in mineral claims payable (211,000) -- Decrease in capital lease obligation (84,173) (94,429) ----------- ----------- 1,768,588 897,930 Investments: Mineral claims and options (60,000) (24,900) Deferred exploration and development expenditures (301,014) (203,917) Purchases of equipment (3,413) (45,904) ----------- ----------- (364,427) (274,721) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 703,013 (189,098) Cash and cash equivalents: Beginning of period 155,849 190,724 End of period 858,862 1,626 ----------- ----------- Supplemental cash flow information Interest paid $ 80,000 $ -- =========== =========== See accompanying notes to consolidated financial statements 4 SILVERADO MINES LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed In U.s. Dollars) May 31, 1996 (Unaudited) 1. Basis of Presentation The financial information at May 31, 1996 and for the six month periods ended May 31, 1996 and May 31, 1995 included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. These consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States. The results of operations for the six month period ended May 31, 1996 are not necessarily indicative of the results to be expected for the full year. 2. Inventories Gold inventory is valued at the lower of weighted average cost or estimated net realizable value. 3. Deferred Production Expenditures Costs associated with waste removal and preparation for gold recovery are deferred and charged to production on a unit of production basis. 4. Accounts Payable Accounts payable and accrued liabilities consists of: May 31, November 30, 1996 1995 ============ ============ Accounts payable 272,348 360,941 Accrued interest 66,520 66,411 Accrued contract services (Note 5) 71,449 -- Accrued reclamation expenses 78,283 100,000 ============ ============ $ 488,600 $ 527,352 ============ ============ 5. Share Capital (a) Increase in Authorized Shares. At the Company's Annual Meeting on May 13, 1996, the shareholders approved an increase in the Company's authorized capital from 50,000,000 shares to 75,000,000 shares. (b) Employee Options. From time to time the Company issues options for the purchase of common shares to selected part time employees as sole compensation for contracted services in accordance with the terms and conditions of its April 20, 1994, Stock Option and Stock Bonus Plan. On January 7, 1996, the Company's directors increased the number of shares authorized under this plan from 3,250,000 to 7,600,000; to 9,100,000 shares on April 19, 1996; and to 12,100,000 shares on May 28, 1996. At May 31, 1996, 9,655,250 shares had been exercised. (c) Directors Options. The Company has reserved 3,475,000 shares for issuance in accordance with the terms and conditions of its December 12, 1994, Stock Option Plan. No changes have occurred in this original authorization. (d) Other Share Transactions. The Company has reserved 400,000 shares for issuance with respect to its purchase of the Marshall Dome property; and has reserved 1,000,000 shares for issuance upon the potential conversion of a convertible debenture. 6. Convertible Debenture In July, 1994, the Company issued an 8% convertible callable debenture which is unsecured and is due July 2, 1999, subject to prior redemption or conversion. The debenture may be converted in whole or in part by the holder into common shares of the Company at a Conversion Price of $2.00 U.S. per share (the Conversion Price). In addition, the Company may require the holder to convert the debenture at the Conversion Price, in whole or in part, if the average market price of the Company's shares has exceeded 125% of the Conversion Price for a period of 20 consecutive trading days. Financing fees paid related to the debenture have been deferred and are being amortized on a straight line basis over the five year term of the debenture. 5 7. Commitments and Contingencies The Company has a lease agreement for office premises for a term of 10 years commencing April 1, 1994, with an approximate annual rate of $120,000 (Cdn.) including operating costs. 8. Subsequent Events On June 10, 1996, the Company amended its Purchase and Sale Agreement for the Marshall Dome property by making a cash payment of $200,000.00 in lieu of the issuance of 400,000 shares of its stock. 6 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain factors which have significantly affected the Company's financial position and operating results during the period included in the accompanying condensed consolidated financial statements. Six Months 1996 v. 1995 - - ----------------------- Revenue during the first six months of 1996 was derived from continued sales of gold from the Company's gold inventory. Administrative expenses increased primarily as a function of the increase in the expense of contracted services (see Note 5). Current assets showed an overall reduction attributable to a reduction in the Company's gold inventory, though the cash portion of current assets showed a substantial increase. Current liabilities were reduced as a result of a reduction in accounts payable and a reduction in payables to related parties. Long term liabilities remained relatively unchanged. Liquidity and Capital Resources at May 31, 1996 - - ----------------------------------------------- At May 31, 1996, the Company's cash position was significantly greater than at November 30, 1995. Funds were received from sales of gold inventory, and through the exercise of options. Results of Operations - - --------------------- (a) Ester Dome Gold Project At Ester Dome, near Fairbanks, Alaska, the Company continued a number of geophysical surveys on gold-bearing target areas selected from previous data the Company developed on the project. The Company is presently preparing a summer drilling program at this site and is seeking the financing necessary to bring this project into production, though there is no commitment for such financing at this time. (b) Marshall Dome Gold Project At Marshall Dome, also near Fairbanks, Alaska, the Company has continued reconnaissance and surface exploration, initially commenced in 1995, which have disclosed areas of gold and arsenic mineralization in the soils, and gold mineralization in the rock. (c) Nolan Gold Project At the Nolan Gold Project in northern Alaska, the Company plans to continue its production efforts based upon the expanded base of knowledge it developed from previous years operations. (d) Hammond Property This property, located adjacent to the Company's Nolan Gold Project in northern Alaska, has a history of gold production and the Company anticipates that it will add to the potential for developing additional gold reserves. The property also has lode gold and antimony potential. 7 OTHER INFORMATION Item 4 Submission of Matters to a Vote of Security Holders * - - -------------------------------------------------------------- The Annual Meeting of Shareholders was held on May 13, 1996. Results of voting were as follows: (a) Election of Directors --------------------- In Favor Against Withheld ---------- ---------- ---------- Garry L. Anselmo 22,706,978 48,095 47,403 J.P. Tangen 22,693,603 52,670 56,203 K. Maxwell Fleming 22,724,528 51,145 26,803 James F. Dixon 22,725,928 50,145 26,403 (b) KPMG Peat Marwick Thorne as Auditors ------------------------------------ In Favor Against Withheld ---------- ---------- ---------- 23,103,338 390,205 8,728 (c) Increase Authorized Shares to 75,000,000 ---------------------------------------- In Favor Against Withheld ---------- ---------- ---------- 21,176,242 2,209,826 32,403 * 18,309,200 Shares Not Voted Item 5 Other Information. - - --------------------------- None. Item 6 Exhibits and Reports on Form 8-K. - - ------------------------------------------- (a) Exhibit 3.(i)(b) Articles of Amendment filed herewith. 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. SILVERADO MINES LTD. /J.P. Tangen/ - - ------------- President / CEO / CFO 8 EX-3.(I) 2 ORDINARY RESOLUTION FORM 20(Section 371) Certificate of Incorporation No. 57126 COMPANY ACT ORDINARY RESOLUTION The following ordinary resolution was passed by the undermentioned company on the date stated: Name of company: SILVERADO MINES LTD. Date resolution passed: MAY 13, 1996 Resolution: "RESOLVED, as an Ordinary Resolution, that the Memorandum of the Company be altered by increasing the authorized capital from 50,000,000 shares without par value to 75,000,000 shares without par value". The Memorandum As Altered Is Attached As Schedule A. CERTIFIED A TRUE COPY THE 13TH DAY OF MAY, 1996. /S. Morrow/ Signature Relationship to Company: Solicitor 9 SCHEDULE A Attached to the Ordinary Resolution of Silverado Mines Ltd. passed by the Members on the 13th day of May, 1996. MEMORANDUM (Altered) of SILVERADO MINES LTD. 1. The name of the Company is "SILVERADO MINES LTD." 2. The Company is restricted from carrying on all businesses except the following: (a) To acquire by purchase, lease, hire, discovery, location or otherwise, and hold mines, mineral claims, mineral leases, mining lands, prospects, licenses and mining rights of every description, and to work, develop, operate, turn to account, sell, or otherwise dispose thereof. (b) To dig, drill, or bore for, raise crush, wash, smelt, reduce, refine, amalgamate, assay, analyse, and otherwise treat gold, silver, copper, lead, iron, coal, petroleum, natural gas, and any other ore, deposit, metal, or mineral whatsoever, whether belonging to the Company or not, and to render the same merchantable, and to buy, sell, and deal in the same or any product thereof. (c) To engage in any branch of mining, smelting, milling, and refining minerals. (d) To acquire by purchase, lease, hire, exchange, or otherwise timber lands, leases, or claims, rights to cut timber, surface rights and rights-of-way, water rights and privileges, patents, patent rights and concessions, and other real or personal property. (e) To acquire by purchase, lease, hire, exchange, or otherwise, and to construct, operate, maintain, or alter, trails, roads, ways, tramways, reservoirs, dams, flumes, race and other ways, water-courses, canals, aqueducts, pipe-lines, wells, tanks, bridges, wharves, piers, mills, pumping plants, factories, foundries, furnaces, coke-ovens, crushing works, smelting-works, concentrating works, refining works, hydraulic, electrical, and other works and appliances, power devices and plants of every kind, laboratories, warehouses, boarding houses, dwellings, buildings, machinery, plant, and other works and conveniences, and to buy, sell, manufacture, and deal in all kinds of goods, stores, provisions, implements, chattels, and effects. (f) To build, purchase, lease, hire, charter, navigate, use and operate cars, wagons, and other vehicles, boats, ships, and other vessels. (g) To sell or otherwise dispose of ore, metal, oil, gas, or mineral product, and to take contracts for mining work of all kinds, and to accept as the consideration shares, stock, debentures, or other securities of any limited company, whatsoever incorporated and carrying on any business, directly or indirectly, conductive to the objects of a specially limited company, if such shares (except the shares of a company having non-personal liability), stock, debentures, or other securities are fully paid up, and to sell or to otherwise dispose thereof. 3. The authorized capital of the Company consists of 75,000,000 shares without par value. 10 EX-27 3 ART. 5 FDS FOR 2ND QUARTER 10-Q
5 6-MOS NOV-30-1996 MAR-1-1996 MAY-31-1996 858862 0 8265 0 310002 1208644 3709482 0 15975795 1038562 0 0 0 33150211 46352 15975795 98648 98648 79118 79118 2458159 0 0 (2438629) 0 (2438629) 0 0 0 (2438629) (0.06) 0
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