SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
June 30, 2008
Commission file number:
2-99518-D
Colorado
(State of incorporation)
74-2446999
(I.R.S. employer identification number)
GOLD HILL CORPORATION
2233 West Lindsey
Suite 117
Norman, Oklahoma 73069
Registrant's telephone number, including area code:
(405) 321-8371
Securities registered pursuant to Section 12 (G) of the Act:
(Title of Each Class)
Common Stock, $0.002 Par Value
Name of each exchange on which registered: None
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 shorter period that the registrant was required to file such reports,)
Yes X
and (2) has been subject to such filing requirements for the past 90 days.
No X
The number of shares of the common stock of the registrant outstanding as of June 30, 2008:
5,835,822 shares
PART I
ITEM 1. BUSINESS
Results of Operations: Earnings and Cash Flows from Operating Activities.
For the year ending June 30, 2008, Gold Hill Corporation ("the Company") realized a net gain of $118,237.46
Summary of Business this Year
ITEM 1: BUSINESS
Mineral Exploration.
During the year, the Company continued its search for gold in Nevada, primarily in the north Goldfield area, where it has 156 lode mining claims covering about 3,000 acres. The Company also conducted reconnaissance exploration along the Goldfield-Round Mountain trend in Big Smokey Valley, Nevada, where it is participating in a property called Jumping Jack.
North Goldfield Gold Prospect
The Company continues to evaluate its North Goldfield gold prospect located 10-15 miles north of the town of Goldfield, Nevada, where it holds 156 unpatented lode mining claims encompassing over 3,000 acres in a contiguous block.
Additional drill holes are planned on the prospect 2000 ft northerly of our old drill hole #1, which contained strong evidence of an epithermal gold vein system. A detailed field study was made in January of the current year to reconfirm several drill sites that were made last year but not drilled due to a severe drill rig shortage. The study indicated that the proposed drill sites are located where mineralization should be much shallower. Other evidence for the existence of a gold deposit to the north of drill hole #1 is that the area may be the source of placer gold that can be traced to the west toward Alkali Flats. Also, based on rock cuttings from previous drill holes, the epithermal vein system appears to be trending deeper to the south, particularly as shown in holes GN3-14, which are all south and east of GN hole Number 1.
The Goldfield deposits were in an epithermal vein system of narrow veins or shoots, but of unusually high gold values. In 1904, the average grade of gold produced in that year was 10-15 oz per ton. The average grade of all the gold produced during the life of the Goldfield mines was around 5 oz/ton. Total production was reportedly 4.5 million ounces. The host rock was hydrothermally altered rhyodacite, similar to the rock type encountered in our hole GN-1. The host rock was called ledge matter in USGS Professional Bulletin 66, The Geology and Ore Deposits of Goldfield, Nevada, by Frederick Ransome, published in 1909.
The Company is presently exploring ways to find a drill rig to test our North Goldfield prospect. The major companies have most of the rigs tied up for long periods of time.
In the event of an important gold discovery, it is the intent of management to seek out a joint venture industry partner. The demand for a new gold deposit discovery is high because most companies have been rapidly depleting their reserves each year.
The price of gold, which is presently near $900 per ounce, has inspired a significant amount of exploration. This, in turn, has caused a shortage of drill rigs and higher costs of exploration.
Management is presently seeking a drill rig, but one may not be available until after the drilling season or until winter weather sets in.
Jumping Jack Gold Prospect
The Company has entered into a new venture to acquire and stake claims in a new gold venture, called the Jumping Jack Long Face Prospect, located in the Moores Creek District, Nye County, Nevada, 10 miles north of the Round Mountain gold mine. The district is located on the edge of the Mount Jefferson caldera on the west side of the Toquima Range. The prospect is on trend with the Gold Hill (unrelated to the company), Round Mountain, Manhattan, and Midway gold deposits. The Gold Hill deposit, currently being developed as an open pit gold mine, is located five miles south of Jumping Jack. The Round Mountain mine, located 10 miles south of Jumping Jack, is an open pit operation producing 750,000 ounces of gold per year.
High-grade gold mineralization occurs on the Jumping Jack Claims in exposed epithermal quartz veins. Some early day mining was done on these narrow veins, but the amount of gold that was produced is unknown. Recent sampling has yielded assays up to two ounces of gold per ton (2 oz of Au/ton) and 20 ounces of silver / ton (20 oz of Ag/ton). Most of the past drilling on this property was done during the 1980s in search for large low-grade deposits similar to those of Gold Hill and Round Mountain mines, directly to the south. Most of the area is still unexplored and highly prospective, particularly in the welded tuffs underlying the younger and less prospective unwelded tuffs. The high-grade epithermal vein system is essentially untested, partially due to the very rugged terrain of unwelded tuffs and pediment gravels that cover much of the target areas. The current trend in the industry today is in the search for high-grade epithermal gold veins rather than massive low grade deposits because of higher profitability and less surface disturbance. The mines along the trend, especially Round Mountain, contain very high-grade veins within the low grade disseminated gold mass.
The Company is conducting a geological and geophysical study of the district to outline the anomalous gold areas and define drilling targets. If the study is encouraging, the Company will then seek a joint venture drilling partner. Preliminary studies of the property using proprietary detection methods are promising. Several companies have shown an interest in the Jumping Jack.
The Company continues to be optimistic about the potential of finding a major gold deposit on the Company claims. The areas are in an excellent geological setting where rich gold-silver deposits were discovered in the past, including Goldfield, Tonopah, and others.
ITEM 2: PROPERTIES
Oil and Gas Properties.
The Company is also continuing to focus its efforts toward oil and gas exploration. The Company is currently in search of oil and gas prospects in east-central and northern Oklahoma, and in Texas. The prospects currently under study in Oklahoma have the potential of several million barrels each, while those in Texas have greater potential. The prospects are considered wildcat plays with significant potential, but as wildcats these prospects should be considered high risk. The Company is planning to participate in a large oil and gas prospect currently being assembled in northern Oklahoma.
All of our prospects are generated in-house. Currently, the Company has been focusing on an oil prospect, called Deer Creek, located in Grant County, northern Oklahoma. The objective formation is the Red Fork. Drilling depth is about 4,600 feet. Leasing has already commenced. The primary objective is the Red Fork, projected in the prospect area to form a sand channel nearly three miles long and three quarters of a mile wide, covering 800 acres.
Although crude oil prices are presently over $100 per barrel, they have fluctuated considerably during the reporting period, due to instability in the marketplace. Such volatility has stimulated exploration efforts, resulting in higher costs and equipment shortages. High costs and shortages are further exacerbated by a shale gas boom presently in progress over large areas of the country, and resulting increases in the rates of inflation.
With the high price of crude oil, the Company is searching for a joint venture partner to develop oil reserves still remaining in the Layton oil sand at our Wanette oil unit. An estimate of recoverable reserves is up to 3 million barrels. The Company owns a 75 percent interest in the property with West Star as the operator owning a 25 percent interest.
The Company proposes to drill downdip to our West Star 1-6 gas well. The potential is in what is known as the the Calvin sand, where a suspected channel could contain several million barrels of oil plus several billion cu ft of gas. The gas well and downdip potential are also owned 75 percent by Gold Hill ad 25 percent by West Star.
ITEM 3: OPERATIONS
General Operations.
Gold Hill will continue its conservative policy of avoiding debt and maintaining very low overhead
costs. No salaries will be paid or allowed to accrue at this time. Gold Hill will not be charged for the use of office space currently provided by its president.
Private Placement.
Gold Hill is continuing to make a private placement of its shares of its common stock in order to finance a portion of the costs of the projects described above.
Competition and Risks.
The business environment is very competitive and there are a number of significant risks associated with oil and gas, and mineral exploration and production, including operations as well as exploration.
Gold Hill Corporation intends to seek high-potential prospects as well as lower-risk, lower-potential development ones. However, the major effort will be towards wildcat prospects with potential of 1,000,000 bbls or greater. All of Gold Hill prospects are internally generated.
Regulation.
The domestic exploration for minerals, including oil and gas is subject to various state and federal environmental laws, rules, and regulations.
Operators in the industry are subject to the Clean Water Act and damages which could arise out of environmental pollution.
Corporate History.
Gold Hill Corporation is an exploration company focused on large wildcat oil, gas, and gold prospects, which if successful will significantly impact upon the value of the Company stock. In addition to the Nevada Gold prospecting, Gold Hill is active in oil and gas exploration.
Although Gold Hill is a public company, it is considered to be a developing company and its stock does not presently trade. Management's policy is to withhold stock trading until an important discovery is made.
Gold Hill management is comprised of experienced and successful explorationists who are qualified to carry forth the goals and aspirations of the company. The primary goal of the company is to discover a major deposit while avoiding debt. At the same time, the company is focusing on retaining a large interest in each prospect so that a discovery will have a dramatic impact on stock value to the benefit of the shareholders.
Gold Hill executive and operations offices are located in Oklahoma at 2233 West Lindsey, Suite 117, Norman, Oklahoma 73069 (telephone 405-321-8371). Unless the context otherwise requires, the term "Gold Hill" as used herein refers to Gold Hill Corporation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual shareholder's meeting for the fiscal year ending June 30, 2008 was previously held by shareholders representing the majority of shares outstanding.
The present slate of officers were re-elected to serve for the upcoming year. They are:
Earl W. Smith (1) President and Director
T. J. Simek (2) Vice-President and Director
Paul W. Smith (3) Director
Susan Nash, Ph.D. (4) Secretary-Treasurer
(1) Earl W. Smith, President and Director: Mr. Smith has been actively involved in geological exploration and development since 1954, after receiving B.S. and M.S. degrees in Geology from the University of Oklahoma. He served as regional exploration geologist for Samedan Oil Corporation from 1954-1961. In addition to exploration geology in both mining and the oil industries, Mr. Smith possesses corporate management experience, serving as the president of Siskon Corporation, a public company engaged in mining exploration, from 1970-1981. Since 1981, he has been an independent geologist.
(2) T.J. Simek, Vice President and Director: Mr. Simek has been engaged in the oil and gas industry since 1959, gaining expertise in virtually every aspect of drilling and completion operations. In addition to field operations management, Mr. Simek is actively involved in land acquisition and leasing. Since 1978, Mr. Simek has served as the president of Simek Oil Properties, Inc., a private company engaged in oil drilling, completing, and producing.
(3) Paul W. Smith, Director: Mr. Smith has developed and supervised geological and geophysical field investigations for oil and gas, as well as gold exploration and development. Further, he has developed computer modeling programs that result in more accurate processing of gravity and magnetic data. While his degrees are in Geology (B.S. Oklahoma, 1982, M.S. Oklahoma, 1992), he has obtained additional training in geophysics, as well as valuable field experience, especially in the Nevada Basin and Range Province. In addition, he has managed oil and gas exploration and development programs, including the acquisition of existing production.
(4) Susan Nash, Ph.D. Secretary-Treasurer: Dr. Nash's academic credentials include a Bachelor of Science in Geology, a Master of Arts. in English, and extensive graduate work in economics. She holds a Ph.D. in English from the University of Oklahoma. She possesses extensive experience in marketing, fund-raising, and institutional development.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Markets for Common Stock.
The market for Gold Hill Common Stock is inactive at the present time, but the Company will be seeking a marketplace depending upon its asset growth. Alternatively, Gold Hill may seek an industry buyer or merger.
Private Placement.
The company is seeking to privately place shares of its restricted common stock at $1.00 per share or more. These units may only be offered and sold to those who meet the suitability standards for investment as expressed in an offering circular that accompanies the private placement memorandum.
Dividends.
Gold Hill paid no cash dividends during the fiscal year ended June 30, 2008. No dividends will be paid in the immediate future. All profits and proceeds are to be reinvested in the company. There is no open market for Gold Hill stock at this time, and none will be developed until conditions change to the satisfaction of management.
At June 30, 2008, 5,835,822 shares of common stock were outstanding. There are approximately 140 shareholders. Computershare in Denver, Colorado, is the Company transfer agent.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Gold Hill is considered a developing company, and management plans to obtain operating capital through joint ventures, geological consulting services, and private placements of restricted stock. The proceeds of private placements will be used to fund the development of oil and gas prospects and testing of its Nevada gold prospects.
Private Placement.
Further efforts will continue to make a private placement of restricted stock at $1.00 per share or more.
The company plans to maintain a minimum price for the private placement restricted stock at $1.00 per share. In the event of drilling successes, Gold Hill may continue to market restricted stock in a private placement at a higher price per share, depending upon asset values. In line with its conservative policies, the management of Gold Hill will not market more stock than its immediate capital needs in order to keep the number of shares outstanding at a minimum.
Oil and Gas Leases.
Gold Hill is evaluating additional oil and gas prospects to lease in the forthcoming year as describe herein.
Salaries and Operations Overhead.
It was agreed that Gold Hill will continue its policy of paying no salaries to its officers and directors, and that it will continue to use the offices of its directors rent-free.
Stock Options.
It was agreed that no stock options will be offered at this time.
ITEM 8:
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report thereon of Ron Kirkpatrick, C.P.A., are contained within this report.
The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-K as prescribed by the Securities and Exchange Commission. All material adjustments which, in the opinion of Management, were necessary for a fair presentation of the results for the interim periods have been reflected.
Gold Hill Corporation
Balance Sheet
June 30, 2008
Current Assets
BANK OF OKLAHOMA $ 347,196.55
BANK OF OKLAHOMA 3,533.14
ARVEST MONEY MARKET 119,412.77
A/R - Stockholders 1,582.42
N. Goldfield Bond 6,782.00
Treasury Fund Account 115,629.40
- ----------------------
Total Current Assets $ 594,136.28
Fixed Assets
FURNITURE AND FIXTURES $ 588.46
WEST-STAR 1-6 140,000.00
TANGIBLE EQUIPMENT 31,952.75
DEER CREEK O&G PROJECT 286,418.00
JUMPING JACK GOLD 50,000.00
ACCUMULATED DEPRECIATION (32,091.21)
- --------------
Total Fixed Assets 476,868.00
Total Assets $ 1,071,004.28
Current Liabilities none
Equity
COMMON STOCK $ 1,593,900.00
RETAINED EARNINGS (889,037.18)
PAID-IN CAPITAL 247,904.00
Current Income (Loss) 118,237.46
- ----------------
Total Equity $ 1,071,004.28
Total Liabilities and Equity $ 1,071,004.28
INCOME STATEMENT
12 Months Ended June 30, 2008
Revenue
INTEREST INCOME 24,366.43
OIL AND GAS REVENUE 202,730.29
Total Revenue 227,096.72
Cost of Sales 87,317.98
- ---------------------------------------------------------------------
Gross Profit 139,778.74
Operating Expenses 21,541.28
NET INCOME 118,237.46
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
There were no salaries or other compensation paid to executives during the fiscal year ending June 30, 2008. The Company resolved to not pay salaries or compensation to executives during the upcoming year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Oil Creek Production, a privately-held corporation owned by Simek and Earl Smith, was the manager of the West Star 1-6 well through completion at cost. The well is now operated by West Star Producing Company. West Star Producing Company is wholly owned by director, Paul Smith. Mr. Earl Smith will retain a small royalty in the Nevada gold properties. Gold Hill is acquiring oil and gas leases owned by Oil Creek Production covering the Deer Creek prospect in northern Oklahoma.
Management stock.
Part of Gold Hill restricted stock is owned or controlled directly or indirectly by present management as follows:
Direct Indirect
T. J. Simek Director 810,235
Paul W. Smith Director 540,157
Earl W. Smith Director 1,080,394
Susan Nash secretary-treasurer
110,000 50,000
Stock owned by management, acquired in the open market:
Direct Indirect
Susan Nash
Secretary-Treasurer 1,000
T. J. Simek 52,982
Earl W. Smith Director 89,470
Total Direct shares: 111,000
Indirect shares: 2,623,238
Stock Options.
The Company does not have a plan to grant any stock options to any of its officers or directors.
SIGNATURES
Pursuant to the requirements of Sections 13 and 14 (D) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of Undersigned, there unto duly authorized.
GOLD HILL CORPORATION
