-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jFd9F+gkjEhWNj7CrS07md5rv7wpPVuSeA4AyryDDPruKMSBCqeiMMt/hC5noyg9 SaQ/ZnbLpx3iHiLUyhDeEw== 0000950134-95-001140.txt : 19950609 0000950134-95-001140.hdr.sgml : 19950609 ACCESSION NUMBER: 0000950134-95-001140 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTMISS GOLD INC CENTRAL INDEX KEY: 0000824590 STANDARD INDUSTRIAL CLASSIFICATION: 1040 IRS NUMBER: 640748908 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16484 FILM NUMBER: 95539188 BUSINESS ADDRESS: STREET 1: 5190 NEIL RD STE 310 CITY: RENO STATE: NV ZIP: 89502 BUSINESS PHONE: 7028270211 10-Q 1 FORM 10-Q 1 Form 10-Q UNITED STATES 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 Quarter Ended March 31, 1995 -------------------- 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: 0-16484 -------------------- FirstMiss Gold Inc. - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 64-0748908 - - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer ID No.) incorporation or organization) 5190 Neil Road, Suite 310, Reno, Nevada 89502 - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including Area Code: 702/827-0211 ----------------------------- 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 --- --- Class Outstanding at April 30, 1995 - - ---------------------------- ----------------------------- Common Stock, $.01 Par Value 18,180,500 2 Part I. Financial Information Item 1. Financial Statements FirstMiss Gold Inc. and Subsidiary Consolidated Balance Sheets (Unaudited. In Thousands of Dollars)
Mar. 31 June 30 1995 1994 -------------------------------------- Assets Current assets: Cash $ 1,641 1,979 Trade accounts receivable 1,349 2,190 Inventories: Ore and in process 4,980 7,488 Materials and supplies 6,286 5,266 -------- -------- Total inventories 11,266 12,754 -------- -------- Prepaid expenses and other current assets 899 181 Deferred income taxes, current 3,726 2,581 -------- -------- Total current assets 18,881 19,685 -------- -------- Property, plant and equipment, at cost 150,963 135,820 Less accumulated depreciation and depletion 76,062 69,022 -------- -------- Net property, plant and equipment 74,901 66,798 -------- -------- Deferred income taxes 2,394 2,264 -------- -------- $ 96,176 88,747 ======== ======= Liabilities and stockholders' equity Current liabilities: Accounts payable $ 4,876 5,165 Payable to First Mississippi 770 910 Income taxes payable 1,199 74 Other accrued expenses 576 555 -------- -------- Total current liabilities 7,421 6,704 -------- -------- Notes payable to First Mississippi 36,100 29,339 Other long-term liabilities 3,076 2,985 Stockholders' equity: Common stock 181 181 Contributed and paid-in capital 34,007 33,862 Retained earnings 15,391 15,676 -------- -------- Total stockholders' equity 49,579 49,719 -------- -------- $ 96,176 88,747 ======== ========
The accompanying notes are an integral part of these financials statements. 3 FirstMiss Gold Inc. and Subsidiary Consolidated Statement of Operations (Unaudited. In Thousands of Dollars, Except Per Share Amounts)
Three months ended Nine months ended March 31 March 31 --------------------- ---------------------- 1995 1994 1995 1994 --------------------- ---------------------- Net sales $ 18,456 24,658 58,228 69,989 Cost of Sales 15,594 20,638 52,835 59,830 -------- ------- ------- --------- Gross profit 2,862 4,020 5,393 10,159 Selling, general and administrative expenses 494 403 1,676 1,331 Exploration expenses 797 634 3,095 2,491 -------- ------- ------- --------- Earnings from operations 1,571 2,983 622 6,337 Interest and other income (loss) (1) 3 86 93 Interest expense 384 479 1,143 1,466 -------- ------- ------- --------- Earnings (loss) before income taxes 1,186 2,507 (435) 4,964 Income tax expense (benefit) 415 384 (150) 1,200 -------- ------- ------- --------- Net earnings (loss) before cumulative effect of change in accounting principle 771 2,123 (285) 3,764 Cumulative effect of change in accounting principal - - - 1,350 -------- ------- ------- --------- Net earnings (loss) $ 771 2,123 (285) 5,114 ======== ======= ======= ========= Earnings (loss) per common share: Before cumulative effect of accounting change $ 0.04 0.12 (0.02) 0.21 Cumulative effect of accounting change 0.00 0.00 0.00 0.07 -------- ------- ------- --------- Total earnings (loss) per common share $ 0.04 0.12 (0.02) 0.28 ======== ======= ======= ========= Average shares and equivalents outstanding 18,190 18,156 18,156 18,141 ======== ======= ======= =========
The accompanying notes are an integral part of these financial statements. 4 FirstMiss Gold Inc. and Subsidiary Consolidated Statements of Cash Flows (Unaudited. In Thousands of Dollars)
Nine months ended Mar. 31 -------------------------- 1995 1994 -------------------------- Cash flows from operating activities: Net earnings (loss) $ (285) 5,114 Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation, depletion and amortization 11,663 13,401 Deferred compensation - 2 Loss on sale of property, plant and equipment 32 13 Net change in assets and liabilities: Trade accounts receivable 841 (1,182) Inventories 1,487 (324) Deferred income taxes (1,275) (3,208) Prepaid expenses and other current assets (719) (420) Accounts payable (288) (3,717) Payable to First Mississippi 2,140 1,442 Other accrued expenses 22 (226) Income taxes payable 1,125 3,058 Deferred use taxes - (6) Other long-term liabilities 90 408 --------- -------- Net cash provided by operating activities 14,833 14,355 --------- -------- Cash flows from investing activities: Capital expenditures (19,680) (6,621) Deferred stripping costs (319) (4,473) Proceeds from sale of property, plant and equipment 203 15 --------- -------- Net cash used by investing activities (19,796) (11,079) --------- -------- Cash flows from financing activities: Purchase of gold for repayment of gold loan - (7,127) Proceeds from issuance of common stock 144 - Proceeds from notes payable to First Mississippi 5,950 1,000 Repayment of notes payable to First Mississippi (1,469) - --------- -------- Net cash provided by (used in) financing activities 4,625 (6,127) --------- -------- Net decrease in cash and cash equivalents (338) (2,851) Cash and cash equivalents at beginning of period 1,979 3,690 --------- -------- Cash and cash equivalents at end of period $ 1,641 839 ========= ======== Supplemental disclosures: For the nine months ended March 31, 1995 and 1994, $2,280 and $1,310, respectively, in interest expense included in payables to First Mississippi was added to long-term notes payable as an addition to the notes. Cash paid during the period for: Interest, net of amounts capitalized $ 51 231 ========= ======== Income tax $ - - ========= ========
The accompanying notes are an integral part of these financial statements. 5 FirstMiss Gold Inc. and Subsidiary Notes to Consolidated Financial Statements (Unaudited) NOTE 1 - GENERAL The financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote 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. In the opinion of management, the financial statements reflect all adjustments (of a normal and recurring nature) which are necessary to present fairly the financial position, results of operations and cash flows for the interim periods. These financial statements should be read in conjunction with the Annual Report of the Company on Form 10-K for the year ended June 30, 1994. NOTE 2 - FORWARD SALES AGREEMENTS At March 31, 1995, the Company had hedge commitments under the spot deferred sales contracts for the delivery of gold as follows:
Average Price Delivery Date Per Ounce Ounces ------------- ----------- ------ 4/1/95-6/30/95 $393 60,400 7/1/95-6/30/96 $395 131,000
Based on the market price of gold on March 31, 1995, the unrealized loss on these contracts is $921. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Three months and nine months ended March 31, 1995, compared with the three months and nine months ended March 31, 1994. Results for the third quarter ended March 31, 1995, were earnings of $0.8 million, or $0.04 per share, compared to earnings of $2.1 million, or $0.12 per share, for the same period last year. Results for the nine months ended March 31, 1995, were a loss of $0.3 million, or $0.02 per share compared to earnings of $5.1 million, or $0.28 per share, for the same period last year when a required change in income tax accounting added $1.4 million, or $0.07 per share. Lower mill feed grades and lower heap leach tonnage were responsible for the decreased income in both the quarter and nine months. The following table highlights sales and production information:
Three Months Ended Nine Months Ended 03/31/95 03/31/94 03/31/95 03/31/94 ----------------------------------------------- Ounces sold 47,465 62,518 150,771 179,781 Average Realized Price/oz $389 $394 $386 $389 Average Market Price/oz. $380 $385 $383 $378 Ounces Produced: Mill 43,172 56,238 136,579 158,229 Heap Leach 4,293 6,329 14,192 21,652 Cash Cost/oz.: Mill $283 $287 $305 $289 Heap Leach $349 $172 $278 $177 Combined $289 $276 $302 $276 Total Cost/oz.: Mill $326 $346 $357 $352 Heap Leach $357 $186 $290 $188 Combined $329 $330 $350 $333
Sales for the quarter and year to date were off 25% and 17%, respectively, from a year earlier, the result of lower production from both the mill and heap leach. Increased dependence on lower grade stockpile ores during the current transition from open pit mining to underground mining led to an average grade of 0.174 ounces per ton and 0.166 ounces per ton for the year to date and quarter, respectively. Mill feed averaged 0.204 ounces per ton and 0.240 ounces per ton for the prior year to date and third quarter, respectively, when high grade North Pit ore was milled. Heap leach tons declined 35% and 17% for the quarter and year to date, respectively, as currently identified oxide reserves near depletion. Cost of sales for the quarter and year-to-date were down 24% and 12%, respectively, versus last year, despite higher mill throughput, primarily due to lower costs of stockpiled ore. 7 Total cost per ounce for the quarter was the same versus prior year but was up 5% for the nine months due to lower output from the mill and heap leach. Mill throughput for the quarter averaged 3,407 tons per day, up from 2,889 tons per day last year while mill throughput for the nine months averaged 3,296 tons per day compared to the prior year's 3,191 tons per day. Exploration expenditures totaled $2.1 million for the quarter and $5.5 million year to date, an increase of 47 % and 40%, respectively, over the same periods last year. The majority of the exploration spending was related to the Turquoise Ridge project, the Hansen Creek area south of the Main Pit and to the oxide project in Section 13. Interest expense for the quarter and the nine months was lower than last year reflecting the capitalization of $437 and $919 in interest, respectively, on the Main Underground development and payoff of the gold loan on June 30, 1994. Long term borrowing from First Mississippi increased to $36.1 million at 03/31/95 from $25.9 million a year ago primarily to cover development funding of the Main Underground mine. LIQUIDITY AND CAPITAL RESOURCES Operating cash flow for the nine months was $14.8 million, up slightly from a year ago. Investing activities for the nine months were up 79%, reflecting capital expenditures of $15.8 million for underground development. Cash from operations was insufficient to cover capital expenditures during the nine months and a net $4.5 million in cash was borrowed from First Mississippi Corporation. On February 1, 1995, a new revolving promissory note was executed with First Mississippi which extended the maturity date of borrowings to August 1, 1997. Additional outside funding may be needed to complete the Getchell Main Underground mine and to continue to develop Turquoise Ridge. First Mississippi has been the primary source of outside funding in recent years but is not obligated to make future advances. Prior to June 30, 1994, the Company's ability to access debt financing was restricted due to liens and covenants in its original gold loan agreement. With the gold loan paid, the Company may access traditional sources of debt financing. Financing may also be obtained by selling equity. First Mississippi has now received a favorable response from the IRS that would permit the tax-free distribution of First Mississippi's shares of FirstMiss Gold to First Mississippi shareholders. First Mississippi says it expects to proceed with the spin-off assuming favorable results for the Turquoise Ridge pre-feasibility study, continued mine and mill operations as expected, a viable financial outlook and approval of the First Mississippi and FirstMiss Gold boards of directors. First Mississippi shareholders would receive approximately 0.7 shares of FirstMiss Gold for each share of First Mississippi stock owned. 8 OUTLOOK Underground production is currently averaging approximately 500 tons per day grading in excess of 0.340 ounces per ton, with production of 1,000 tons per day expected to be reached in the fourth quarter. Costs associated with the start-up of the Main Underground may adversely impact fourth quarter earnings. Mill throughput is planned to continue at or above the 3,000 ton-per-day design capacity using a blend of underground, open pit and stockpiled lower grade ores with final open Main Pit ore milled by the end of the first quarter of fiscal 1996. There is sufficient lower grade stockpiled material to feed the mill for approximately three years at current rates, as efforts continue to develop new ore sources. If current oxide exploration programs are unsuccessful, mining of oxide ores will cease by the end of fiscal 1995. Drilling to date at Turquoise Ridge has identified mineralization over a strike and dip of approximately 2,000 feet by 1,000 feet, respectively, and the deposit remains open down dip and along strike in both directions. Twelve core drills are now working on a portion of the mineralization 700 feet by 1,000 feet, to complete a 35 hole in-fill program designed to provide data to support a mine pre-feasibility study scheduled for completion in July of this year. The study is being conducted by an engineering team consisting of internal staff complemented by independent consultants. An oxide drilling program initiated earlier in the year has identified a new oxide zone in Section 13 directly south of the Section 13 oxide ore body. Deeper drilling indicates there is also sulfide gold mineralization below the oxide. Drilling continues to encounter sulfide mineralization in and adjacent to the Getchell fault zone directly south of the Main Pit at Hansen Creek. Mineralization resembles that now being mined in the Main Underground. Additional drilling is planned for both of these projects. As of March 31, 1995, 191,400 ounces of gold have been sold for delivery over the next one and one-half years using spot deferred contracts at prices ranging between $387 and $419 per ounce. Part II. Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K Registrant filed a current report on Form 8-K dated February 8, 1995, including under "Other Event" information about the election of Robert L. Zerger to it's board of directors. 9 SIGNATURES 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. FIRSTMISS GOLD INC. 5/11/95 /s/ G. W. Thompson - - ------------------------ ------------------------------------------ Date G. W. Thompson President and Chief Executive Officer 5/11/95 /s/ Donald S. Robson - - ------------------------ ------------------------------------------ Date Donald S. Robson Vice President and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JUN-30-1995 JUL-01-1994 MAR-31-1995 1,641 0 1,349 0 11,266 18,881 150,963 76,062 96,176 7,421 39,176 181 0 0 49,398 96,176 58,228 58,228 52,835 52,835 4,685 0 1,143 (435) (150) (285) 0 0 0 (285) (0.02) (0.02)
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