10QSB 1 0001.txt 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, 2000 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 Bank of America 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, 2000, 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, 2000 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 -2- ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) INTERIM CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 31, 2000 AND JANUARY 31, 2000 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
OCTOBER 31, JANUARY 31, 2000 2000 ----------- ----------- ASSETS CURRENT Cash $ 3 $ 6 OTHER - Reclamation deposit 78 78 ----------- ----------- $ 81 $ 84 ----------- ----------- LIABILITIES CURRENT Accounts payable $ $ Advances from shareholders 527 552 Accrued interest payable 4,982 4,218 Accrued mineral interests reclamation costs 90 90 ----------- ----------- 5,599 4,860 LONG TERM-DEBT Other 1,888 1,888 Related parties 5,030 5,057 ----------- ----------- TOTAL LIABILITIES 12,517 11,805 ----------- ----------- 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 (23,670) (22,955) ------------ ----------- (12,436) (11,721) ------------ ----------- TOTAL $ 81 $ 84 ----------- -----------
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, 2000 AND 1999 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
THREE MONTHS NINE MONTHS ENDED OCT. 31 ENDED OCT. 31 2000 1999 2000 1999 ---- ---- ---- ---- REVENUE Option fees 25 - 25 15 --------- ------- --------- -------- ADMINISTRATION COSTS General and administrative 3 6 4 7 Interest 238 279 738 603 Reclamation and other costs (24) - (42) Professional fees 1 7 1 9 --------- ------- --------- -------- TOTAL ADMINISTRATIVE COSTS 242 268 743 577 --------- ------- --------- -------- NET LOSS BEFORE INTEREST INCOME 217 268 718 562 INTEREST INCOME 1 1 3 3 --------- ------- --------- -------- NET LOSS 216 267 715 559 DEFICIT BEGINNING OF PERIOD 23,454 22,460 22,955 22,168 --------- -------- --------- -------- DEFICIT END OF PERIOD 23,670 22,727 23,670 22,727 --------- ------- --------- -------- BASIC LOSS PER SHARE IN U.S. DOLLARS $ .01 $ .02 $ .04 $ .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, 2000 AND 1999 (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
NINE MONTHS ENDED OCTOBER 31, 2000 1999 ---- ---- FUNDS PROVIDED (USED) BY OPERATING ACTIVITIES Net loss recovery $ (715) $ (559) CHANGES IN OTHER WORKING CAPITAL ITEMS 739 572 ----------- ----------- TOTAL 24 13 ----------- ----------- FINANCING ACTIVITIES Long-term debt (27) (14) ----------- ----------- NET INCREASE (DECREASE) IN CASH (3) (1) CASH BALANCE BEGINNING OF PERIOD 6 6 ----------- ----------- CASH BALANCE END OF PERIOD $ 3 $ 5 ----------- -----------
PREPARED BY MANAGEMENT -5- ST. GEORGE METALS, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2000 (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, 2000, substantially apply to the interim financial statements at October 31, 2000, 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, 2000, 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. The Company had revenues of $25,000 during the quarter ended October 31, 2000, compared to no revenues during the comparable quarter in fiscal 2000. For the nine months ended October 31, 2000, the Company had revenues of $25,000 compared to $15,000 during the nine months ended October 31, 1999. The revenue in the current quarter was attributable to the annual renewal fee on a previously reported sublease to Triband Resources U.S. Inc. of the Company's remaining 63 claim blocks in the AMAX/Draco property and its leasehold interest in the Whiskey Canyon and Red Cap properties, all as described in the Company's Form 10-KSB for the year ended January 31, 2000. Costs and Expenses. During the quarter ended October 31, 2000, the Company had total administrative costs of $242,000 compared to $268,000 in the comparable period in the prior year. The Company had a recovery on reclamation costs during the prior period of $24,000. Administrative costs consisted primarily of accrued interest, which was $238,000 during the current period, compared to $279,000 during the quarter ended October 31, 1999. For the nine months ended October 31, 2000, total administrative costs were $743,000 compared to $577,000 in the comparable period ended October 31, 1999. The increase was attributable to higher interest costs ($738,000 for the current period versus $603,000 for the comparable nine month period in the prior period) and a recovery of reclamation costs in the nine months ended October 31, 1999 of $42,000. There was no recovery of reclamation costs in the nine months ended October 31, 2000. Interest Income. The Company had interest income during the period of $1,000, compared to $1,000 during the comparable period in the preceding year. Net Loss. The Company had a net loss for the quarter ended October 31, 2000, of $216,000 (or $.01 per share), compared to $267,000 (or $.02 per share) for the comparable period in the prior year. For the nine months ended October 31, 2000, the Company had a net loss of $715,000 ($.04 per share) compared to $559,000 ($.04 per share) in the nine months ended October 31, 1999. Analysis of Financial Condition ------------------------------- The Company had no material liquidity or capital resources at quarter ended October 31, 2000. At that date, the Company had current assets of $3,000 and current liabilities of $5.6 million. Current liabilities include $5.0 million of accrued interest payable which is in arrears. A substantial portion of the Company's current liabilities and other indebtedness is owed to related parties. The Company obtained no new financing during the three-month period ended October 31, 2000. The Company continues to seek to satisfy its trade creditors and other operational expenses other than through a court supervised process. The Company does not presently expect to be in a position to make any payments on its Operations Advances (which are payable solely from net cash flow from the Company's now-terminated Dean Mine operations) or on its Gold Delivery Contracts and $4.3 million principal amount of term debt, both of which categories have been voluntarily subordinated by the holders to the payment of the Operations Advances. -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, 2000, 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. Inability to Pay Indebtedness. Management does not presently anticipate that any of its outstanding obligations under its -8- 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. There was no change in the status of the Company's properties during the quarter ended October 31, 2000, except that Triband Resources U.S. Inc. renewed for one year its previously disclosed sublease of the Company's AMAX/Draco, Whiskey Canyon and Red Cap claims, under the lease agreement described in the Company's Form 10-KSB for the year ended January 31, 2000. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: Exhibit 27 Financial Data Schedule, filed herewith. (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 8, 2000 By: /s/ C. B. Robertson, III -------------------------------------------- C. B. Robertson, III - Chairman and Principal Executive Officer December 8, 2000 /s/ Harrison Nesbit, II -------------------------------------------- Harrison Nesbit, II - Treasurer and Chief Financial and Accounting Officer -10-