-----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, TDFThIp2oqTqjkrzHvtmGkYx9IJcysteQPBYO3PyJmnzaM/82qsEla/0VKnSVxKo hE0OP7MOPgB/ZkcOPry4/g== 0000931731-01-500490.txt : 20020412 0000931731-01-500490.hdr.sgml : 20020412 ACCESSION NUMBER: 0000931731-01-500490 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011031 FILED AS OF DATE: 20011129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISHER WATT GOLD CO INC CENTRAL INDEX KEY: 0000844788 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880227654 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17386 FILM NUMBER: 1801671 BUSINESS ADDRESS: STREET 1: 1621 NORTH 3RD STREET STREET 2: SUITE 1000 CITY: COEUR D'ALENE STATE: ID ZIP: 83814-3340 BUSINESS PHONE: 2086646757 MAIL ADDRESS: STREET 1: 1621 NORTH 3RD ST STREET 2: STE 1000 CITY: COEUR DALENE STATE: ID ZIP: 83814 FORMER COMPANY: FORMER CONFORMED NAME: FISCHER WATT GOLD CO INC DATE OF NAME CHANGE: 19920703 10QSB 1 fwg10qsb.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) [X] NINE MONTHS REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Nine months period ended October 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-17386 FISCHER-WATT GOLD COMPANY, INC. (Exact name of registrant as specified in its charter) Nevada 88-0227654 ------ ---------- (State or other jurisdiction (I.R.S. of incorporation or organization) Employer Identification No.) 1621 North 3rd Street, Suite 1000, Coeur d'Alene,ID 83814 --------------------------------------------------------- (Address of principal executive office) (208)-664-6757 -------------- (Registrant's telephone number, including area code) 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 [ ] The number of shares outstanding of each of Issuer's classes of common equity as of October 31, 2001. Common Stock, par value $.001 44,398,384 ----------------------------- ---------- Title of Class Number of Shares Transitional Small Business Disclosure Format Yes [ ] No [X] i Index Exchange Rates...............................................................1 - -------------- Conversion Table.............................................................1 - ---------------- Forward Looking Statements...................................................1 - -------------------------- Part 1 - Financial Statements................................................1 - ----------------------------- 1.1 Consolidated Balance Sheet.......................................2 ----------------------------------- 1.4 Basis Of Presentation.................................................5 ------------------------- 1.6 Stockholders' Equity..................................................5 ------------------------ Part 2 - Management's Discussion and Analysis or Plan of Operations..........5 - -------------------------------------------------------------------- 2.1 Organization and Business.............................................5 ----------------------------- 2.2 Liquidity and Capital Resources.......................................5 ----------------------------------- 2.2.1 Short Term Liquidity.............................................5 -------------------------- 2.2.2 Long Term Liquidity..............................................6 ------------------------- 2.3 Results of Operations.................................................6 ------------------------- 2.4 Revenues..............................................................6 ------------ 2.5 Costs and Expenses....................................................6 ---------------------- 2.6 Commitments and Contingencies.........................................7 --------------------------------- 2.7 Foreign Currency Exchange.............................................7 ----------------------------- 2.8 Going Concern Consideration...........................................7 ------------------------------- 2.9 Other.................................................................7 --------- 2.10 Cautionary Note Regarding Forward-Looking Statements.................9 --------------------------------------------------------- Part 3 - Other Information...................................................9 - -------------------------- 3.1 Legal Proceedings.....................................................9 --------------------- 3.2 Changes in Securities.................................................9 ------------------------- 3.4 Submission of Matters to a Vote of Security Holders...................9 ------------------------------------------------------- 3.5 Other information.....................................................9 --------------------- 3.6 Exhibits and Reports on Form 8-K.....................................10 ------------------------------------ ii Exchange Rates Except as otherwise indicated, all dollar amounts described in this Report are expressed in United States (US) dollars. Conversion Table For ease of reference, the following conversion factors are provided: ------------------------------- --------------------------------- 1 mile = 1.6093 kilometers 1 metric tonne = 2,204.6 pounds ------------------------------- --------------------------------- 1 foot = 0.305 meters 1 ounce (troy) = 31.1035 grams ------------------------------- --------------------------------- 1 acre = 0.4047 hectare 1 imperial gallon = 4.5546 liters ------------------------------- --------------------------------- 1 long ton = 2,240 pounds 1 liter = 1.057 U.S. quarts ------------------------------- --------------------------------- Forward Looking Statements The Company desires to take advantage of the "safe harbor" provisions contained in Section 27A of the Securities Act of 1933, as amended (the "1933 Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is including this statement herein in order to do so: From time to time, the Company's management or persons acting on the Company's behalf may wish to make, either orally or in writing, forward-looking statements (which may come within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act), to inform existing and potential security holders regarding various matters including, without limitation, projections regarding financial matters, timing regarding transfer of licenses and receipts of government approvals, effects of regulation and completion of work programs. Such forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believes," "expect," "anticipate," "goal" or other words that convey the uncertainty of future events or outcomes. Forward-looking statements by their nature are subject to certain risks, uncertainties and assumptions and will be influenced by various factors. Should one or more of these forecasts or underlying assumptions prove incorrect, actual results could vary materially. 1 FISCHER-WATT GOLD COMPANY, INC. AND SUBSIDIARIES Part 1 - Financial Statements 1.1 Consolidated Balance Sheet
Consolidated Balance Sheet October 31, 2001 (Unaudited) ASSETS Current assets: Cash $ 4,417 ------------ Property and equipment, net 2,261 Other assets 34,889 ------------ 37,150 $ 41,567 LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities: Accounts payable $ 87,802 Notes payable - shareholders 110,500 Accounts payable and accrued expenses - shareholders 828,363 ------------ Total current liabilities 1,026,665 ------------ Stockholders' (Deficit): Preferred stock, non-voting, convertible, $2 par value, 250,000 shares authorized, none outstanding Common stock, $.001 par value, 50,000,000 shares authorized, 44,398,384 shares issued and outstanding 44,398 Additional paid-in capital 14,643,734 Accumulated deficit (15,673,230) ------------ (985,098) $ 41,567
See the accompanying notes to the consolidated financial statements. 2 Consolidated Statements of Operations Three Months and Nine Months Ended October 31, 2001 and 2000 (Unaudited)
Three Months Nine Months 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Revenue $ -- $ -- $ -- $ -- ------------ ------------ ------------ ------------ Costs and expenses: Exploration 42,351 -- 75,156 -- General and administrative 82,888 99,225 244,959 270,703 ------------ ------------ ------------ ------------ 125,239 99,225 320,115 270,703 ------------ ------------ ------------ ------------ (Loss) from operations (125,239) (99,225) (320,115) (270,703) ------------ ------------ ------------ ------------ Other income and (expense): -- -- -- -- ------------ ------------ ------------ ------------ Other income (expense), net -- -- -- -- ------------ ------------ ------------ ------------ (Loss) from continuing operations (125,239) (99,225) (320,115) (270,703) Discontinued operations: (Loss) from the operations of Oronorte -- (427,314) -- (529,576) ------------ ------------ ------------ ------------ Net (loss) $ (125,239) $ (526,539) $ (320,115) $ (800,279) ============ ============ ============ ============ Per share information - basic and fully diluted Discontinued operations $ -- $ (0.01) $ -- $ (0.01) Continuing operations (0.00) (0.00) (0.01) (0.01) ------------ ------------ ------------ ------------ et (loss) per share $ (0.00) $ (0.01) $ (0.01) $ (0.02) ============ ============ ============ ============ Weighted average shares outstanding 44,398,384 41,665,050 44,398,384 40,753,940 ============ ============ ============ ============
See the accompanying notes to the consolidated financial statements 3 Fischer-Watt Gold Company, Inc. and Subsidiaries Consolidated Statements of Cash Flows Nine Months Ended October 31, 2001 and 2000 (Unaudited) 2001 2000 --------- --------- Cash flows from operating activities: Net cash (used in) operating activities $(141,533) $(146,576) --------- --------- Cash flows from investing activities: Net cash provided by (used in) investing activities -- -- --------- --------- Cash flows from financing activities: Net cash provided by financing activities 125,563 159,500 --------- --------- Increase (decrease) in cash and cash equivalents (15,970) 12,924 Cash and cash equivalents, beginning of period 20,387 6,185 --------- --------- Cash and cash equivalents, end of period $ 4,417 $ 19,109 ========= ========= See the accompanying notes to the consolidated financial statements 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2001 (UNAUDITED) 1.4 Basis Of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and Item 310(b) of Regulation SB. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements of the Company as of January 31, 2001 and for the two years then ended, including notes thereto included in the Company's Form 10-KSB. The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. 1.5 Loss per Share Basic loss per common share was computed using the weighted average number of common shares outstanding for the periods presented. Diluted information is not presented, as the effect of common stock equivalents would be anti-dilutive 1.6 Stockholders' Equity During the period ended October 31, 2001 a shareholder of the Company contributed $125,563 to the capital of the Company. Part 2 - Management's Discussion and Analysis or Plan of Operations. The following discussion and analysis covers material changes in financial condition since January 31, 2001 and material changes in the results of operations for the nine months and three months ended October 31, 2001, as compared to the same period in 2000. This discussion and analysis should be read in conjunction with "Management's Discussion and Analysis and Results of Operations" included in the Company's Form 10-KSB for the year ended January 31, 2001. 2.1 Organization and Business Fischer-Watt Gold Company, Inc. ("Fischer-Watt" or the "Company"), its subsidiaries, and joint ventures are engaged in the business of mining and mineral exploration. Operating activities of the Company include locating, acquiring, exploring, developing, improving, selling, leasing and operating mineral interests, principally those involving precious and base metals. The Company presently has mineral interests in North Central Colombia and Central Mexico. The Company's presently has mineral interests near Lazaro Cardenas, Michoacan, in West Central Mexico. The Company, together with its consolidated subsidiaries, currently operates in one business segment, mining. 2.2 Liquidity and Capital Resources 2.2.1 Short Term Liquidity 5 As of October 31, 2001, the Company had $4,417 in cash and accounts payable and accrued expenses of $1.0 million. On October 31, 2001, the Company's current ratio of current assets to current liabilities was less than 1:1 A current ratio of less than 1:1 indicates that the Company does not have sufficient cash and other current assets to pay its bills and other liabilities incurred at the end of its fiscal year and due and payable within the next fiscal year. To help eliminate this problem the Company sold its Colombian operation during calendar year 2000 and is concentrating its efforts in Mexico. After taxes, Fischer-Watt incurred net loss of $320,000 for the first Nine months of 2001 and a net loss of $801,000 for the period ended October 31, 2000. The $481,000 improvement was due to a one-time adjustment in 2000 for loss related to the sale of Oronorte. For the three months ending in October 2001 and 2000 the net loss was $125,000 and $527,000 respectively. The loss was due to the lack of income producing operations and costs related to the development of the Mexican property. On October 31, 2001 the accumulated deficit was $15.7 million. 2.2.2 Long Term Liquidity It is likely that the Company will need to supplement anticipated cash from operations with future debt or equity financing and dispositions of or joint ventures with respect to mineral properties to fully fund its future business plan that includes exploration projects and property development. While the Company has been successful in capital raising endeavors in the past, there can be no assurance that its future efforts will be successful. There can be no assurance that the Company will be able to conclude transactions with respect to its mineral properties or additional debt or equity financing or that such capital raising opportunities will be available on terms acceptable to the Company, or at all. 2.3 Results of Operations The Company had net loss of $320,000 ($0.01 per share) compared to net loss of $801,000 ($0.02 per share) in the Nine-month's ended October 31, 2001 and 2000, respectively. For the comparable three months the net loss was $125,000 ($nil per share) and $527,000 ($0.01 per share). 2.4 Revenues The Company had no sales during the period. 2.5 Costs and Expenses The cost of abandoned mineral interests was $-0- in Nine and three months ending October 31, 2001 and 2000, respectively. Abandonment's are a natural result of the Company's ongoing program of acquisition, exploration and evaluation of mineral properties. When the Company determines that a property lacks continuing economic value, it is abandoned. It cannot be determined at this time when or if any of the Company's current property interests will be abandoned. Selling, general and administrative costs decreased to $245,000 for the nine months ending October 31, 2001 from $271,000 for the nine months ending October 31, 2000. For the comparable three-month period the costs were $830,000 and $99,000. Exploration expense increased from $0 in the first nine months of fiscal 2000 to $75,000 in the first nine months of fiscal 2001. For the comparable three months period the costs increased from $0 to $42,000. This increase is due to development of the acquisition of the La Balsa copper property in Mexico. The Company had no interest expenses during the period. 6 Other income (expenses) was $-0- for the period. 2.6 Commitments and Contingencies Management is currently unaware of any legal action against the Company. 2.7 Foreign Currency Exchange The Company accounts for foreign currency translation in accordance with the provisions of Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS No.52"). The assets and liabilities of the Colombian unit are translated at the rate of exchange in effect at the balance sheet date. Income and expenses are translated using the weighted average rates of exchange prevailing during the period. The related translation adjustments are reflected in the accumulated translation adjustment section of shareholders' equity. 2.8 Going Concern Consideration As the independent certified public accountants have indicated in their report on the financial statements for the year ended January 31, 2001, and as shown in the financial statements, the Company has experienced significant operating losses that have resulted in an accumulated deficit of $15.7 million. These conditions raise doubt about the Company's ability to continue as a going concern. The ability of the Company to achieve its operating goals and thus positive cash flows from operations is dependent upon the future market price of gold, future capital raising efforts, and the ability to achieve future operating efficiencies anticipated with increased production levels. Management's plans will require additional financing, reduced exploration activity, or disposition of or joint ventures with respect to mineral properties. While the Company has been successful in these capital-raising endeavors in the past, there can be no assurance that its future efforts, and anticipated operating improvements will be successful. The Company does not currently have adequate capital to continue its contemplated business plan beyond the early part of fiscal 2001. The Company is presently investigating all of the alternatives identified above to meet its short-term liquidity needs. The Company believes that it can arrange a transaction or transactions to meet its short-term liquidity needs, however there can be no assurance that any such transactions will be concluded or that if concluded they will be on terms favorable to the Company. On November 21, 2000, the Company announced that it had signed a letter on intent to sell the Oronorte operations to Groupo de Bullet, a Colombian Company. This sale included the El Limon mine and its related support facilities as well as all of companies the exploration and development properties in the country. The sale price was US$3.7 million which will be paid as a 3% NSR. If Groupe de Bullet vends the property to a third party within two years the full amount will due upon sale, less a sales commission. 2.9 Other In August 2000, the Mexican government issued the Company the rights to a series of contagious mining concessions. The concessions cover approximately 500 hectares and are located 12 km north of Lazaro Cardenas, Michoacan. Work done by previous concession holders includes 42 diamond drill holes, 35 percussion drill holes and a very preliminary feasibility study. In October 2000 the Company retained K D Engineering, Tucson, Arizona, to perform a feasibility study on the Balsa Project. Simultaneously, Mintec, Inc., Tucson, Arizona, was retained to determine the ore reserves and complete a mine design. K D Engineering subcontracted the geotechnical portion of the study to the Tucson office of Golder Associates. A pre-feasibility study was completed on January 4, 2001 and is summarized below. 7 - ---------------------------------------------------------------------- Class Type Tonne %Cu - ---------------------------------------------------------------------- Measured Clay Oxide 556,447 0.998 Rock Oxide 2,081,640 0.878 Sulphide 6,481,094 2.677 ---------------- --------------- Sub Total 9,119,181 2.164 Indicated Clay Oxide 103,041 0.939 Rock Oxide 1,246,182 0.548 Sulphide 2,147,934 0.206 ---------------- --------------- Sub Total 3,497,157 0.349 Inferred Clay Oxide 3,221 0.728 Rock Oxide 186,425 0.442 Sulphide 11,684,788 0.154 ---------------- --------------- Sub Total 11,874,434 0.159 Total Clay Oxide 662,709 0.99 Rock Oxide 3,514,247 0.74 Sulphide 20,313,816 0.96 ---------------- --------------- Total 24,490,772 0.93 - ---------------------------------------------------------------------- - ---------------------------------------------------------------------- Class Type Tonne %Cu - ---------------------------------------------------------------------- Measured Clay Oxide 659,488 0.989 and Rock Oxide 3,327,822 0.754 Indicated Sulphide 8,629,028 2.062 ---------------- --------------- Sub Total 12,616,338 1.661 - ---------------------------------------------------------------------- Total Tonne mined 3.5 million Average Grade of Ore Mined 1.42% Cu Striping Ratio (Waste to Ore) 0.68:1 Ton per day of refined copper 14 Process SX-EW Type of Copper Produced Electrolytic Total Capital Requirement $10 million (Approximately) Project Life 7.5 years Cash Cost per Lb of Cu $0.54 Revenue @ $0.85 per Lb of Cu $66 million In August 2001 Mexican authorities notified the Company that the challenges to the title had be resolved in the companies favor. Titles were issued the same month. On September 28, 2001 the Company began a drilling program at the La Balsa project. This program was initiated to conferm and expand the reserves, provide a better understanding of the geology, and to provide material for additional 8 metallurgical testing. The drilling consisted of 435 meters of core. The work was preformed by B.D.W. Drilling, Guadalajara, Jalisco and supervised by Resource Geosciences de Mexico, Hermosillo, Sonora. The samples from the drilling are currently in the Vancouver, B.C. laboratory of Bonder Clegg for analysis. Results are expected within 30 days. Concurrent with this work, Seegmiller and Associates, an international recognized slope stability firm based in Salt Lake City, Utah, preformed various rock mechanic studies and slope stability analysis. Aguayo and Associates of Hermosillo, Sonora, preformed environmental testing for potential acid rock drainage on representative samples. 2.10 Cautionary Note Regarding Forward-Looking Statements In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby providing cautionary statements identifying important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of the Company herein or orally, whether in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will result", "are expected to", "will continue", "is anticipated", "estimated", "projection" and "outlook") are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions, and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Such uncertainties include, among other, the following: (i) the Company's ability to obtain additional financing to implement its business strategy; (ii) adverse weather conditions and other conditions beyond the control of the Company; (iii) imposition of new regulatory requirements affecting the Company; (iv) a downturn in general or local economic conditions where the Company operates; (v) effect of uninsured loss and (vi) other factors which are described in further detail in the Company's filings with the Securities and Exchange Commission. The Company cautions that actual results or outcomes could differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors. Further, management cannot assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Part 3 - Other Information 3.1 Legal Proceedings None 3.2 Changes in Securities None 3.4 Submission of Matters to a Vote of Security Holders None 3.5 Other information None 9 3.6 Exhibits and Reports on Form 8-K A. Exhibits B. Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FISCHER-WATT GOLD COMPANY, INC. Date: November 29, 2001 By: /s/ George Beattie ---------------------- George Beattie, President, Chief Executive Officer (Principal Executive Officer) 10 -----END PRIVACY-ENHANCED MESSAGE-----