SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the financial period ended
December 31, 2008
Commission file number: 2-99518-D
State of incorporation: Colorado
I.R.S. employer identification number: 74-2446999
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 (B) of the Act:
Title of each class: None
Name of each exchange
on which registered: None
Securities registered pursuant to Section 12 (G) of the Act:
Common Stock, $0.002 Par Value
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,) and (2) has
been subject to such filing requirements for the past 90 days.
Yes: X
The number of shares of the common stock of the registrant outstanding as of the financial period listed above.
5,835,822 shares
PART I
ITEM 1. BUSINESS
Results of Operations.
Earnings and Cash Flows from Operating Activities.
For the current quarter, Gold Hill Corporation ("the Company") realized a small net loss which is detailed in the
financial section of this report. The decrease in earnings and cash flows reported for the period was due primarily
to a write-down of the Jumping Jack project, and lower prices received for oil and gas production.
Mineral Exploration.
The Company expects to drill 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.
Drilling is expected to commence in March during warmer weather.
Reclamation bonding has been approved by the BLM for three drill locations.
Several drill holes have been staked on the prospect to the north of our old drill hole #1, which confirmed the presence
of an epithermal gold vein system. Our geological studies indicate that gold mineralization in this area
of our claims could be quite shallow. Bed rock is expected at only 50 ft below the surface.
The prospective area across our claim block is north-south towards Goldfield. Based on previous drill holes,
depth to the epithermal vein system is progressively deeper southward. The prospect is located about 10 miles
north of Goldfield and is expected to have a similar geological setting.
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.
As discussed in previous reports, the Company entered into a 50-50 venture called the Jumping Jack, or,
Long Face Prospect located in the Moores Creek District, Nye County, Nevada, 10 miles north of the
Round Mountain gold mine. Even though our geological studies indicated the potential for another
Round Mountain, or Gold Hill type of deposit, the terrain is extremely rugged and difficult to access.
Drill sites would be expensive. Now, with the recent downturn in the mining industry joint venture drilling
capital is not readily available, nor expected to be available for a long time.
The Company, therefore, has reluctantly decided to abandon the Jumping Jack prospect.
The stock market crash in the mining industry over the past 3 months has caused many
companies to severely curtail exploration activity. Consequently, there is presently an abundance of
available drill rigs and possibly at cheaper rates.
ITEM 2: PROPERTIES
Oil and Gas Properties.
The Company is also continuing to focus efforts toward oil and gas exploration. The Company is
currently in search of oil and gas prospects in east-central and northern Oklahoma where several
prospects have been identified. The prospects are considered wildcat plays with significant potential,
but as wildcats these prospects should be considered high-risk. The Company is also evaluating
an oil and gas prospect in west Texas, where drilling depths are expected to be shallow.
The prospects currently under study have potential of several million barrels each, which if
successful could favorably impact the share value of Gold Hill stock.
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 been completed. 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 about 1,000 acres.
With the low 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% interest in the property with West Star
as the operator owning a 25 percent interest.
The company is intent upon drilling a test well either on its Deer Creek Red Fork prospect or
its South Wanette Calvin Prospect. The Company prefers, if possible, to retain maximum ownership
in the working interest without any joint venture partners. In the Deer Creek prospect, it presently holds
100 percent of the working interest, whereas in the Wanette prospect, it owns 75 percent.
West Star Operating is the operator, and it owns 25 percent working interest. At Wanette,
the objective reservoir is a Calvin (Skinner) channel sand extending downdip from the presently
producing gas well, which the Company drilled several years ago.
The proposed test well is considered a semi-wildcat, but if successful, the
75 percent working interest is large enough to significantly impact the value of Gold Hill stock.
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 principals.
Private Placement.
Gold Hill is continuing to make a private placement 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 wildcat prospects as well as lower-risk,
lower-potential development ones. However, the major effort will be towards wildcat oil prospects
with potential of 1,000,000 bbls or greater, and gold prospects with potential greater than 1,000,000 oz.
Over the past few months there has been a significant downturn in both the oil and mining industries
with oil and gas prices falling as much as 75% along with very tight credit markets.
The result has been a corresponding crash in stock prices and cash flows. This has been devastating
to those companies having large debts and excessive overhead. Gold Hill has not suffered as much
because it has no debt and its overhead is very low. Also, the value of its stock has not been
affected since it does not trade anywhere. In certain ways, the Company can benefit from the economic
downturn, i.e., lease costs are less, more acreage available to lease, lower drilling costs,
more drill rigs available, etc.
Regulation.
The domestic exploration for mineral, 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 and gas and gold prospects,
which if successful will significantly impact upon the value of the Company's stock. In addition to the
Nevada Gold prospects, 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's 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.
Although Gold Hill stock does not trade on any exchange, it does file its quarterly 10Q and annual 10K reports.
These are available online through the SEC.
Gold Hill's 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.
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-Q
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
December 31, 2008
Current Assets
BANK OF OKLAHOMA $ 391,386.60
BANK OF OKLAHOMA $ 4,322.35
ARVEST MONEY MARKET $ 120,525.17
A/R - Stockholders $
North Goldfield BLM Bond $ 6,782.00
Treasury Fund Account $ 116,935.94
A/R Stockholders $ 1,582.42
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Total Current Assets $ 641,534.48
Fixed Assets
Deer Creek O & G Project $ 286,418.00
FURNITURE AND FIXTURES $ 588.46
TANGIBLE EQUIPMENT $ 31,952.75
ACCUMULATED DEPRECIATION ( 32,091.21 )
WEST-STAR 1-6 $ 140,000.00
Total Fixed Assets: $ 426,868.00
- ----------------------------------------------------------------------------------
Total Assets $ 1,068,402.48
Current Liabilities: none
Equity
COMMON STOCK $ 1,593,900.00
RETAINED EARNINGS ( 770,779.72)
PAID-IN CAPITAL 247,904.00
YTD Current Income (Loss) ( 2,601.80)
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Total Equity $ 1,068,402.48
Total Liabilities and Equity $ 1,068,402.48
INCOME STATEMENT
for the period ending December 31, 2008
Revenue
INTEREST INCOME 2,571.89
OIL AND GAS REVENUE 27,378.20
Total Revenue 29,950.09
Cost of Sales 56,808.20
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Gross Profit (26,858.11)
Operating Expenses 2,688.55
NET INCOME (29,546.66)
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
