-----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, TZrPRbCmOTFUdmcQRrgr152Wu4VdMYIZ4wNLixjGccAwgbTsF03v4OFk0Fg8ojrB 5H0QQ1ba6ckLBdwcr+l/lw== 0001047469-97-003942.txt : 19971114 0001047469-97-003942.hdr.sgml : 19971114 ACCESSION NUMBER: 0001047469-97-003942 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19971112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SILVERADO GOLD MINES LTD CENTRAL INDEX KEY: 0000731727 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 980045034 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-12132 FILM NUMBER: 97713651 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: A1 FORMER COMPANY: FORMER CONFORMED NAME: SILVERADO MINES LTD DATE OF NAME CHANGE: 19940722 10-Q/A 1 FORM 10-Q/A FORM 10-Q/A NO. 1 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 February 28, 1997. 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 98 -0045034 (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) Suite 505, 1111 West Georgia Street Vancouver, British Columbia, Canada V6E 4M3 (604) 689-1535 (Address of Principal Executive Offices) (Registrant's telephone number) 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 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 April 7, 1997 (Common stock (npv)) 64,071,493 SILVERADO MINES LTD. CONSOLIDATED BALANCE SHEETS AS AT EXPRESSED IN U.S. DOLLARS FEBRUARY 28 NOVEMBER 30 1997 1996 --------------------------- Assets Current Assets Cash and cash equivalents $ 478,828 $ 1,925,469 Gold inventory (Note 2) 190,795 213,004 Accounts receivable 17,698 11,265 Prepaid expenses to related parties 610,971 479,959 Receivable from related parties 451,869 - Deferred employment contract expense - 350,000 -------------------------- 1,750,161 2,979,697 Mineral Properties and Development Claims and options 2,352,660 2,327,025 Deferred exploration and development expenditures 11,800,489 11,286,816 -------------------------- 14,153,149 13,613,841 Less accumulated amortization (1,384,338) (1,384,338) -------------------------- 12,768,811 12,229,503 Building, Plant and Equipment 4,474,663 4,423,428 Less accumulated depreciation (1,036,285) (920,246) -------------------------- 3,438,378 3,503,182 Deferred Financing Fees (net of amortization of $96,338: 1996 - $87,038) 89,662 98,962 -------------------------- $ 18,047,012 $18,811,344 -------------------------- -------------------------- Liabilities and Shareholders' Equity Current Liabilities Accounts payable and accrued liabilities (Note 4) $ 248,013 $ 351,154 Loans payable secured by gold inventory - 66,511 Current portion of mineral claims payable 119,000 179,000 Capital lease obligations - current 56,414 64,939 -------------------------- 423,427 661,604 Long Term Liabilities Capital lease obligations 92,214 92,214 Convertible debenture (Note 6) 2,000,000 2,000,000 -------------------------- 2,092,214 2,092,214 Shareholders' Equity Share capital (Note 5) Authorized: 75,000,000 common shares Issued and outstanding: February 28, 1997 - 59,071,493 shares 39,635,590 38,506,711 November 30, 1996 - 56,406,493 shares Capital surplus - 46,352 Deficit (24,104,219) (22,495,537) -------------------------- 15,531,371 16,057,526 -------------------------- $ 18,047,012 $18,811,344 -------------------------- -------------------------- See accompanying notes to consolidated financial statements SILVERADO MINES LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT EXPRESSED IN U.S. DOLLARS THREE MONTHS ENDED FEBRUARY 28 FEBRUARY 29 1997 1996 ---------------------------- Revenue from gold sales $ 57,902 $ 69,585 Less Mining and processing costs 22,914 47,684 ---------------------------- Income from Operations 34,988 21,901 Administrative Expenditures 572,980 347,799 Employment contract expense (Note 5d) 1,070,690 531,085 ---------------------------- Loss for the period (1,608,682) (856,983) Accumulated deficit at beginning of period (22,495,537) (18,165,277) ---------------------------- Accumulated deficit at end of period $(24,104,219) $(19,022,260) ---------------------------- ---------------------------- Loss per share $ (0.028) $ (0.02) ---------------------------- ---------------------------- See accompanying notes to consolidated financial statements SILVERADO MINES LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS EXPRESSED IN U.S. DOLLARS THREE MONTHS ENDED FEBRUARY 28 FEBRUARY 29 1997 1996 -------------------------- CASH PROVIDED BY (USED FOR): Operations: Loss for the period $(1,608,682) $(856,983) Items not involving cash: Employment contract expense 1,070,690 531,085 Depreciation 116,042 50,140 Amortization of deferred financing fees 9,300 9,300 Changes in non-cash operating working capital: Increase in accounts receivable (6,433) (51,055) Decrease in gold inventory 22,209 47,684 Decrease (increase) in prepaid expenses to related parties (131,012) 40,515 Increase in receivable from related parties (451,869) - Decrease in accounts payable and accrued liabilities (76,554) (124,210) ------------------------- (1,056,309) (353,524) Financing: Shares issued for cash 335,250 835,915 Increase in unsecured loan - 130,000 Decrease in loans payable secured by gold inventory (66,511) (10,087) Decrease in payable to related parties - (252,174) Decrease in mineral claims payable (60,000) - Decrease in capital lease obligation (8,525) (36,521) ------------------------- 200,214 667,133 Investments: Mineral claims and options (25,635) (110,000) Deferred exploration and development expenditures (513,673) (166,173) Purchases of equipment (51,238) - ------------------------- (590,546) (276,173) Increase (decrease) in cash and cash equivalents (1,446,641) 37,436 Cash and cash equivalents at beginning of year 1,925,469 155,849 ------------------------- Cash and cash equivalents at end of the year $ 478,828 $ 193,285 ------------------------- ------------------------- Supplemental cash flow information Interest paid $ 80,000 $ 80,000 ------------------------- -------------------------
See accompanying notes to consolidated financial statements SILVERADO MINES LTD. notes to consolidated financial statements (EXPRESSED IN U.S. DOLLARS) (UNAUDITED) FEBRUARY 28, 1997 BASIS OF PRESENTATION The financial information at February 28, 1997 and for the three month period ended February 28, 1997 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 three month period ended February 28, 1997 are not necessarily indicative of the results to be expected for the full year. INVENTORIES Gold inventory is valued at the lower of weighted average cost or estimated net realizable value. 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. ACCOUNTS PAYABLE Accounts payable and accrued liabilities consists of: FEBRUARY 28, NOVEMBER 30, 1997 1996 --------------------------- ACCOUNTS PAYABLE 84,703 118,858 ACCRUED INTEREST 26,666 64,065 ACCRUED EMPLOYMENT CONTRACT EXPENSE (NOTE 5d) 71,644 98,231 ACCRUED RECLAMATION EXPENSES 65,000 70,000 --------- --------- $ 248,013 $ 351,154 --------- --------- --------- --------- SHARE CAPITAL (a) COMMON SHARES. Authorized: 75,000,000 common shares, without par value. (b) DIRECTORS OPTIONS. The Company has reserved 3,475,000 shares for issuance, exercisable until August 14, 2004, in accordance with the terms and conditions of its December 12, 1994, Stock Option Plan; and 450,000 shares for issuance, exercisable until June 1, 1997, in accordance with the terms and conditions of its June 1, 1992, Stock Option Plan. (c) WARRANTS. The Company has reserved a total of 1,200,000 shares for issuance with respect to a warrant for 600,000 shares exercisable until March 6, 1998, and a warrant for 600,000 shares exercisable until September 6, 1999. SILVERADO MINES LTD. notes to consolidated financial statements (EXPRESSED IN U.S. DOLLARS) (UNAUDITED) FEBRUARY 28, 1997 (d) EMPLOYEE OPTIONS AND OTHER SHARE TRANSACTIONS. From time to time, the Company issues options for the purchase of common shares to selected part time independent contractors as sole compensation for employment contract expense in accordance with the terms and conditions of its April 20, 1994, Stock Option and Stock Bonus Plan. The Company accounts for compensation arising from these options in accordance with APB 25. If the market price of the Company's shares exceed the exercise price of the options at the date the options are granted, then this excess is accrued and expensed as contracted services over the term of the employment contracts, on a straight line basis. When the options are exercised, share capital is credited based on the market price at the date the options were granted. The company has reserved 1,029,750 shares for issuance, exercisable until October 21, 1998, in accordance with the terms and conditions of this plan. The Company has also reserved 1,000,000 shares for issuance upon the potential conversion of a convertible debenture. 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 are being amortized on a straight line basis over the five year term of the debenture. 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. 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. THREE MONTHS 1997 V. 1996 Revenue during the first three months of 1997 is from continued sales of gold from the Company's gold inventory. Current liabilities decreased from $661,604 to $423,427 due to the Company's continued reduction of its trade payables; while current assets decreased from $2,979,697 to $1,750,161 as a function of the Company's commitment of funds to its drilling and exploration programs on its Fairbanks, Alaska, properties. Prepaid expenses represent contractual payments to the Company's principal contractor to fund this exploration and development work. The Company's remaining long term liabilities consist primarily of a $2,000,000 convertible debenture. LIQUIDITY AND CAPITAL RESOURCES AT FEBRUARY 28, 1997 At February 28, 1997, the Company's cash position was reduced to $478,828 as it continued to fund active exploration and development programs on several of its Fairbanks, Alaska, gold properties. During the quarter funds were received from sales of gold inventory, and through the exercise of new and outstanding options, and subsequent to the quarter, from shares issued in accordance with Regulation "S" (see Item 5). Management believes that the $1,227,280 raised by these subsequent issues restores the Company's liquidity to its fiscal year-end level. RESULTS OF OPERATIONS (a) Ester Dome Gold Project At Ester Dome, near Fairbanks, Alaska, the Company is continuing to define the St. Paul ore zone through an active drilling and trenching program, and has completed drilling on 20 exploration holes. The Company is presently seeking additional capital in order to bring this project into production, though there is no commitment for such capital at this time. (b) CHATANIKA PROPERTY This property was newly staked by the Company in late 1996 in response to aerial and ground anomalies which it observed. The property consists of 774 mining claims and 24 prospecting sites which the Company plans to explore and define in 1997. (c) NOLAN GOLD PROJECT At the Nolan Gold Project in northern Alaska, the Company continued limited production in 1996 as it refocused its primary efforts on its Fairbanks properties, but still plans to continue further development of both its placer and lode deposits in 1997. As reported previously, the Company was successful in reducing its cash cost of production (production cost exclusive of depreciation and amortization) at Nolan to $292 per ounce. This reduction was attributable to the amortization of initial start-up costs and the effect of cost cutting measures the Company implemented as it became more knowledgeable of the site, and therefore, it expects costs to stabilize at or near $292 per ounce upon the resumption of production. (d) HAMMOND PROPERTY This property, located adjacent to the Company's Nolan Gold Project in northern Alaska, has a history of gold production which the Company plans to further explore and define in 1997 in conjunction with its activities on the Nolan Gold Project. OTHER INFORMATION ITEM 4 None. ITEM 5 OTHER INFORMATION. On February 28, 1997, the Company's President, J.P. Tangen, relinquished his office to the Company's previous President, Garry Anselmo, who assumed those duties on an unpaid basis. Mr. Tangen resigned as a director on March 14, 1997. On March 23, 1997, the Company entered into an agreement to issue 1,000,000 of its common shares, at price of $0.31 per share, in an offshore placement conducted under the provisions of Regulation "S". The shares will be sold for cash with an 8% commission payable to the placement agent in cash or in shares valued at the offering price. The offer was made by the offshore placement agent to a limited number of investors who are not "U.S. persons". On April 3, 1997, the Company entered into an agreement to issue 4,000,000 Units of securities at a price of $0.252 per share, less a nine percent commission payable to the Company's placement agent, in an offshore placement conducted under the provisions of Regulation "S". Each Unit consists of one Common Share and one-half of a Warrant. One Warrant is exercisable until April 4, 1999, to purchase one Common Share at a price of $0.42. The securities were offered by an offshore placement agent to a limited number of investors who are not "U.S. persons". ITEM 6 None. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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. /s/ G.L. Anselmo -------------------------------- G.L. Anselmo President / CEO / CFO -----END PRIVACY-ENHANCED MESSAGE-----