-----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, Uih5uslkhag65Lw2PY+AsYAqP6cizYzQMbIyckShpkQhNTHiQGW/tdmF1sRGtYVn 8NAHZKw5oU+iL0nRGcGu3w== 0000916641-98-001323.txt : 19981211 0000916641-98-001323.hdr.sgml : 19981211 ACCESSION NUMBER: 0000916641-98-001323 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19981210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ST GEORGE METALS INC CENTRAL INDEX KEY: 0000848626 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880227915 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-18616 FILM NUMBER: 98766951 BUSINESS ADDRESS: STREET 1: 125 NATIONSBANK CENTER CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 7139774471 MAIL ADDRESS: STREET 1: 125 NATIONSBANK PLAZA CITY: RICHMOND STATE: VA ZIP: 23219 10QSB 1 3RD QUARTER REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 1O-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended October 31, 1998 Commission File Number 0-18616 - -------------------------------------- ------------------------------ ST. GEORGE METALS, INC. ------------------------------------------------------ (Exact name of registrant as specified In its charter) Nevada 88-0227915 - ------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) Incorporation or organization) 125 NationsBank Plaza, 1111 E. Main St., Richmond, Virginia 23219 - ----------------------------------------------------------- ---------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (804) 644-3434 -------------- 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 October 31, 1998, the number of shares of Common Stock outstanding was 14,487,159. NOTE: The information presented in this Form 10-QSB is unaudited, but in the opinion of management reflects all adjustments (which include only normal recurring adjustments) necessary to fairly present such information. ST. GEORGE METALS, INC. FORM 10-QSB QUARTER ENDED OCTOBER 31, 1998 INDEX PAGE ---- PART I - FINANCIAL INFORMATION Interim Consolidated Balance Sheets...................................... 3 Interim Consolidated Statement of Income and Deficit..................... 4 Interim Consolidated Statement of Cash Flows............................. 5 Notes to the Interim Consolidated Financial Statements................... 6 Management's Discussion and Analysis of Financial Condition and Results of Operations................................................ 7 PART II - OTHER INFORMATION Items 1 - 6.............................................................. 8-9 Signatures............................................................... 10 ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) INTERIM CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 31, 1998 AND JANUARY 31, 1998 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS) OCTOBER 31, JANUARY 31, 1998 1998 ----------- ----------- ASSETS CURRENT Cash $ 12 $ 4 OTHER - Reclamation deposit 78 120 ----------- ----------- $ 90 $ 124 ----------- ----------- LIABILITIES CURRENT Accounts payable $ 86 $ 199 Advances from shareholders 562 320 Accrued interest payable 3,190 2,600 Accrued mineral interests reclamation costs 90 100 ----------- ----------- 3,928 3,219 LONG TERM-DEBT Other 1,888 1,888 Related parties 5,057 5,111 ----------- ----------- TOTAL LIABILITIES 10,873 10,218 ----------- ----------- SHAREHOLDERS' DEFICIT SHARE CAPITAL Authorized 10,000,000 Preferred shares - Par value $.01 per share 30,000,000 Common shares - Par value $.01 per share Issued and paid in capital 1,450 Series A Preferred shares 1,450 1,450 166,417 Series B Preferred shares 499 499 14,487,159 Common shares 9,285 9,285 Deficit accumulated during development stage (22,017) (21,328) ------------ ----------- (10,783) (10,094) ------------ ----------- TOTAL $ 90 $ 124 ----------- ----------- PREPARED BY MANAGEMENT -3- ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) INTERIM CONSOLIDATED STATEMENT OF INCOME AND DEFICIT FOR THE THREE MONTHS AND NINE MONTHS ENDED OCTOBER 31, 1998 AND 1997 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS) THREE MONTHS NINE MONTHS ENDED OCT. 31 ENDED OCT. 31 1998 1997 1998 1997 --------- ------- --------- -------- REVENUE Option fees 45 30 45 30 --------- ------- --------- -------- ADMINISTRATION COSTS General and administrative 2 - 6 3 Interest 196 111 536 376 Reclamation and other costs - 129 171 141 Professional fees 6 - 28 9 --------- ------- --------- -------- TOTAL ADMINISTRATIVE COSTS 204 240 741 529 --------- ------- --------- -------- NET LOSS BEFORE INTEREST INCOME 159 210 696 499 INTEREST INCOME 1 1 7 11 --------- ------- --------- -------- NET LOSS 158 209 689 488 DEFICIT BEGINNING OF PERIOD 21,859 20,714 21,328 20,435 --------- -------- --------- -------- DEFICIT END OF PERIOD 22,017 20,923 22,017 20,923 --------- -------- --------- -------- BASIC LOSS PER SHARE IN U.S. DOLLARS $ .01 $ .02 $ .05 $ .04 --------- -------- --------- -------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 14,487,159 14,487,159 14,487,159 14,487,159 ---------- ---------- ---------- ---------- PREPARED BY MANAGEMENT -4- ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED OCTOBER 31, 1998 AND 1997 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
NINE MONTHS ENDED OCTOBER 31, 1998 1997 ----------- ----------- FUNDS PROVIDED (USED) BY OPERATING ACTIVITIES Net loss recovery $ (689) $ (488) CHANGES IN OTHER WORKING CAPITAL ITEMS 751 572 ----------- ----------- TOTAL 62 84 ----------- ----------- FINANCING ACTIVITIES Long-term debt (54) (97) ----------- ----------- NET INCREASE (DECREASE) IN CASH 8 (13) CASH BALANCE BEGINNING OF PERIOD 4 20 ----------- ----------- CASH BALANCE END OF PERIOD $ 12 $ 7 ----------- -----------
PREPARED BY MANAGEMENT -5- ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 1998 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS) 1. ACCOUNTING POLICIES These interim consolidated financial statements have been prepared in accordance with accounting principles and practices that are generally accepted in the United States. The notes to the Company's (unaudited) consolidated financial statements as of January 31, 1998, substantially apply to the interim financial statements at October 31, 1998, and are not repeated here. 2. INTERIM ADJUSTMENTS The unaudited interim financial information reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. These adjustments are of a normal recurring nature. 3. STATUS OF BUSINESS The Company is not engaged in any active business. There was no change during the quarter ending October 31, 1998, with respect to the Company's continuing efforts to reach an out-of-court accord with its trade creditors. See Item 5, Other Information, of Part II of this Form 10-QSB. PREPARED BY MANAGEMENT -6- Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Financial Revenues. During the three months ended October 31, 1998, the Company received $45,000 in option fees compared to $30,000 in the comparable prior year period. The $45,000 was comprised of $30,000 received from Cameco (U.S.) Inc. under an option agreement expiring October 9, 1999, and an initial $15,000 payment received from Triband Resources U.S. Inc. in connection with a sub-lease and purchase option on certain Company properties. Costs and Expenses. Total administrative costs were $204,000 for the three months ended October 31, 1998, compared to $240,000 for the same period in 1997, a decrease of $36,000 (17.6%), mostly attributable to an increase in accrued interest. Accrued interest expense on the Company's term debt was $196,000 for the quarter compared to $111,000 for the period ended October 31, 1997. The Company also incurred professional fees ($6,000), compared to none in the comparable prior period, primarily as a result of the Company's efforts to sub-lease or sell certain additional properties. Interest Income. Interest income during the three months ended October 31, 1998 was $1,000 which was the same as the comparable period in 1997. The amount of the Company's cash bond posted with NDEP was reduced from $120,000 at January 31, 1998, to $78,000 at October 31, 1998, as funds have been released from the bond periodically upon fulfillment of certain of the Company's reclamation obligations with respect to its former Dean Mine property. Net Loss. For the three months ending October 31, 1998, the Company had a net loss of $158,000 ($.01 per share), compared with a net loss of $209,000 ($.01 per share) for the same period in 1997. The Company's cumulative net loss at October 31, 1998 was $22.017 million compared to $20.923 million at the end of the same period in 1997, an increase of $10.94 million. Analysis of Financial Condition Liquidity and Capital Resources. The Company's liquidity and capital resources remain extremely limited. At October 31, the Company's cash position had increased from January 31 ($12,000 at October 31 versus $4,000 at January 31), due to the receipt of option fees during the quarter. However, the Company's outstanding trade debt at October 31 ($648,000, including approximately $562,000 representing advances from shareholders for operating expenses) significantly exceeded the Company's current assets at that date. During the quarter ended October 31, the Company received a cash payment of $30,000 under an option agreement granted to Cameco (U.S.) Inc. and $15,000 from the sub-lease of certain additional properties. See Item 5 of Part II below. Proceeds were applied to outstanding trade debt. After the close of the quarter, the Company concluded a sale of one parcel of land for $20,000. The Company does not expect any further cash receipts during the year ending January 31, 1999. The Company continues to seek a resolution of its outstanding trade debt other than through a court-supervised process, which would entail significant administrative expense. -7- PART II - OTHER INFORMATION Item 1. Legal proceedings. (a) See Item 5 below. Item 2. Changes in securities. (a) None (b) None Item 3. Defaults upon senior securities. Under the Company's Phase I and II Loan Commitments, non-payment of interest constitutes an event of default; however, a note holder must advise the Company in writing that he declares his debt to be in default. As previously reported, two note holders, one a former related party of the Company, advised the Company in January, 1994, that the Company was in default with respect to the Company's debt obligations to them. The Company advised such holders that it did not agree with their position. Item 4. Submission of matters to a vote of security holders. None Item 5. Other information. General. The Company's financial resources have been substantially exhausted and management does not know of any significant additional financing available to the Company. The Company has no continuing on-going business operations at this time. The Company has been seeking, since early 1995, to satisfy its trade debt other than through a court supervised process, which would entail significant administrative expenses. The Company has been able to satisfy a substantial portion of its trade debt, but in light of its financial position, it is unlikely any payments will be made on its other indebtedness, which has been voluntary subordinated to the Company's trade creditors. SEC Reporting Obligations. Because of the Company's financial condition and its consequent difficulty paying the attendant legal and accounting expenses, its ability to continue to meet its reporting obligations under the Securities Exchange Act of 1934 remains questionable. The financial statements included with its Form 10-KSB for the year ended January 31, 1998, were not audited by an independent certified accountant, because the Company could not afford the cost of an audit. The Company sought and obtained administrative relief from the staff of the Securities and Exchange Commission from the requirement that it obtain an audited financial statement for its Form 10-KSB filing. -8- Inability to Pay Indebtedness. Management does not presently anticipate that any of its outstanding obligations under its Operations Advances, Gold Delivery Contracts and term debt, a substantial portion of which outstanding obligations are held by members of the Company's board of directors, can be satisfied. Accordingly, management does not believe, as a practical matter, that there is any remaining value to be ascribed to the Company's outstanding preferred stock or common stock. Status of Properties. As previously reported, in August, 1998, the Company concluded an agreement with Triband Resource U.S. Inc., for the sub-lease of various properties, including the Company's leasehold interest in a group of claims identified as Whisky Canyon, Red Cap and North Cap, as well as the remaining portion of the Draco/AMAX property not under separate option to Cameco (U.S.) Inc. These properties are described in the Company's Form 10-KSB for the year ended January 31, 1998. Upon execution of the agreement with Triband, the Company received an initial cash payment of $15,000; an additional $15,000 is payable on the first anniversary; and $25,000 on the second anniversary and annually thereafter, subject to escalation in certain circumstances. Under the agreement, the Company has retained a 4% net smelting royalty, subject to reduction in the event of the exercise of certain option rights granted to Triband Resource. Effective October 30, 1998, the Company concluded an agreement with a third-party for the sale of the Company's approximate 560 acre tract (known as the Dean Mine mill site) for a sale price of $20,000. The sale proceeds were received after October 31, 1998, and are not reflected in the statement of operations for the period ended October 31, 1998. Item 6. Exhibits and Reports on Form 8-K. (a) None (b) Reports on Form 8-K: None -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. St. George Metals. Inc. (Registrant) December 5, 1998 By: /s/ C. B. Robertson, III - ---------------- -------------------------- C. B. Robertson, III - Chairman and Principal Executive Officer December 5, 1998 /s/ Harrison Nesbit, II - ---------------- ----------------------- Harrison Nesbit, II - Treasurer and Chief Financial and Accounting Officer -10- EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED FINANCIAL STATEMENTS OF ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) INCLUDED IN ITS FORM 10-QSB FOR THE QUARTER ENDED OCTOBER 31, 1998 1,000 9-MOS JAN-31-1988 OCT-31-1998 12 0 0 0 0 12 0 0 90 3928 6945 0 1949 9285 (22017) 90 0 45 0 204 0 0 196 (158) 0 (158) 0 0 0 (158 (.01) (.01)
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