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 December 31, 2001
Commission File No. 1-3871
CALIFORNIA-ENGELS MINING COMPANY
Incorporated in the State of California
IRS Employer I.D. No. 94-0357560
117 Crescent Street
P. O. Box 778
Greenville, California 95947-0778
Telephone Number (530) 284-6191
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT
Title of Each Class - Capital Stock, par value, $0.25 per share.
Number of Shares outstanding: 759,315.94
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, and
(2) has been subject to such filing requirements for the past 90
days. Yes: X No:
As of March 4, 2001, 759,315.94 capital shares were outstanding,
and the aggregate market value of the common shares of California-
Engels Mining Company held by nonaffiliates was approximately
$195,977.
Documents Incorporated by Reference: NONE
Filing Contains 32 Pages
<page>
PART 1
ITEM 1. BUSINESS
Registrant was incorporated under the laws of the State of
California on July 12, 1922, under the name of California Copper
Corporation, as a holding company for the shares of its operating
company Engels Copper Mining Company which was incorporated under
the laws of the State of California on June 19, 1901. Engels
Copper Mining Company was merged into California Copper Corporation
on March 3, 1936, and the name of the merged company was changed to
California-Engels Mining Company. Exploration and development
commenced at the Engels Mine, Lights Creek Mining District, Plumas
County, California, upon organization of Engels Copper Mining
Company; but it was not until 1914 that milling facilities were
available and actual production of copper started. From 1914 until
operations were suspended due to the low price of copper in July,
1930, approximately 4,700,000 tons of ore were mined from the
Engels and Superior mines and milled producing 160,170,000 pounds
of copper and substantial values in gold and silver. Out of
profits of this operation, the Registrant retired a bond issue of
$500,000 and paid out more than $1,285,000 in dividends. During
the 1930's the mining and milling plant, Engelmine townsite and the
Indian Valley Railroad subsidiary were dismantled and sold.
Registrant's mining properties were continuously leased from
September, 1947, to March, 1951; from March, 1951, to December,
1959; from November, 1960, to October, 1979; from August, 1980, to
August, 1990; and from November, 1990, to April 1993. The lessee
from 1964 to 1993 was Placer Dome U.S. Inc., the U.S. Subsidiary of
Placer Dome Inc., Vancouver, B.C., Canada. The Mining Lease With
Option to Purchase, between the Registrant (Lessor) and Placer Dome
U.S. Inc. (Lessee) was terminated by Placer Dome U.S. Inc.
effective April 20, 1993. Registrant has received a substantial
amount of technical data on its mining properties and maintains a library
on the Plumas Copper Belt. Thousands of feet of drill core
from the Superior Mine, Sulphide Ridge and the Engels Mine are
stored at Crescent Mills, California. Registrant's mineral
deposits and prospects are not deemed economically attractive under
current conditions for the mining industry in California and the
United States, nor are they likely to be so in the foreseeable
future.
The Non-Industrial Timber Management Plan on Registrant's mining
properties was approved by the California Department of Forestry
and became effective July 2, 1999. The permitting process for this
project began in August, 1994 with the start of the archaeological
survey and the February, 1995 agreement with Shasta Land
Management Consultants to prepare the Plan.
<page>
The Non-Industrial Timber Management Plan is an assessment of
the timber inventory, conditions and potential of the entire
property broken down into units with similar growing conditions
within each unit. Its intent is to demonstrate a long-term
commitment to appropriately manage the resource. It functions as
a coordinated collection of individual Timber Harvest Plans and its
advantage is that, once approved, the paperwork necessary to
initiate individual timber harvests is minimal. Under the Plan the
Registrant is restricted in management options to those
silvicultural systems that produce uneven-aged stands of timber.
Uneven-aged management means the management of a specific forest
with the goal of establishing a well-stocked stand of various age
classes of trees scattered over the forest. It will permit the
periodic harvest of all size classes as individual or small groups
to realize yield. Over the long term, forest growth and yield will
be balanced. The Registrant will also have the advantage of
being able to time harvests for favorable market conditions. It will
take a number of years to fully implement the Plan.
After the effective date of the Non-Industrial Timber
Management Plan the Registrant filed a Notice of Timber Operations
for a helicopter harvest on its Green Ledge and Austrian Syndicate
parcels on Ward Creek pursuant to the Plan. The project harvested
377,520 board feet of timber and was completed on October 28, 1999.
Registrant made application to the California Tree Farm
Committee of the American Tree Farm System for approval of its
Engelmine Forest timber lands on Lights Creek as a tree farm. Its
Engelmine Forest was accepted as California Tree Farm No. 2611 on
June 17, 1999.
Registrant received approval on July 28, 2000 for a 103 acre
hand thinning project from the California Department of Forestry
pursuant to their California Forest Improvement Program. The
Department will reimburse 75% of the $48,670 cost to the Registrant
over the three year life of the agreement. Other hand thinning
projects funded by the Registrant are ongoing on other overstocked
areas of its property.
Registrant filed a Notice of Timber Operations pursuant to its
Non-Industrial Timber Management Plan on September 7th and December 15,
2000, for mechanical thinning and chipping/biomass projects on its
Engels and Smith parcels. A Timber Harvest Plan was filed for
its Henry parcel on November 27, 2000. Thinning began on December
11, 2000 by Pew Forest Products, Crescent Mills, California using
two Timbco feller buncher machines, a stroke delimber, shovel
loader, chipper, logging trucks and other equipment. The thinning
and timber harvest completed on July 13, 2001, products 1,432,000
board feet of small logs generating sufficient funds to pay for the
projects. The purpose of the thinning harvest was to reduce fire
danger, improve the timber stand, provide wildlife protection,
remove hazard timber and improve aesthetics.
<page>
Registrant is subject to a State of California General
Industrial Activities Storm Water Permit. During the year,
pursuant to the Registrant's Storm Water Pollution Prevention Plan,
catch and evaporation basins and monthly water sampling records
were maintained.
ITEM 2. PROPERTIES
(a) Registrant is the fee owner of 36 patented lode mining
claims totaling 736 acres, plus 245.28 acres of other patented
lands at Engelmine, Lights Creek Mining District, Plumas County,
California. None of the claims or patented lands are subject
to any encumbrance.
(b) Registrant is the fee owner of five patented lode mining
claims totaling 100 acres in the Genesee Mining District, Plumas
County, California. None of the claims are subject to any
encumbrance.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. MARKET FOR THE REGISTRANT'S CAPITAL STOCK AND RELATED
SHAREHOLDER MATTERS
(a) Principal Markets.
Registrant's shares of Capital Stock are quoted on the Over-
the-Counter Market in the "pink sheets" which are published daily
by the Pink Sheets LLC under the symbol "CAEN".
The following table shows the high and low bid prices of
Registrant's Capital Shares in the Over-the-Counter Market for the
past two years:
<table>
<caption>
High Bid Low Bid
2001 Market Price $.50 $ .25
2000 Market Price $.50 $ .125
</table>
<page>
(b) Approximate number of holders of capital stock.
The approximate number of holders of record of Registrant's
Capital Stock as of March 4, 2002, is 904.
(c) The Registrant has never paid a dividend on its Capital
Stock because it has had an accumulated deficit since the merger in
1936. The Board of Directors of the Registrant is endeavoring to
earn income from the sale of timber, sale of land, sale of sand and
rock and its bookkeeping business so funds are available for the
maintenance of its mining properties and the implementation of its
Timber Management Plan. It is not the intention of the Registrant
to pay dividends in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
<table>
Year Ended December 31
<caption>
Selected Financial Data 2001 2000 1999 1998 1997
- ----------------------- ---- ---- ---- ---- ----
Operating Revenues 635,903 45,358 257,502 43,314 39,212
Net Income (Loss) 760 78,900 28,936 22,228 (5,101)
Income (loss) from
continuing operations
per capital share .001 .104 .038 .029 (.007)
Total Assets 615,213 632,120 562,585 350,531 347,884
Working Capital 50,814 39,462 71,295 10,128 24,896
Shareholder's Equity 457,819 456,738 377,914 347,259 344,684
</table>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(a) Financial condition, changes in financial condition and
results of operations.
During the 30 years its mining properties were leased, the Board
of Directors of the Registrant endeavored to increase working
capital, total assets and shareholder's equity in the event that
its lessee, Placer Dome U.S. Inc., terminated its Mining Lease
With Option to Purchase agreement and return the mining properties
to the Registrant. This event occurred effective April 20, 1993.
Thus funds were available to begin preparation of the Non-Industrial
Timber Management Plan. Because timber and land sale
revenues are infrequent, in order to provide regular monthly income
the President of the Registrant, on January 1, 2000, transferred
his bookkeeping business to the Registrant. Changes in working
capital, total assets and shareholder's equity for the past five
years are summarized as follows:
<page>
<table>
<caption>
Changes 2001 2000 1999 1998 1997
- ------------- ---- ---- ---- ---- ----
Working
Capital ($) 50,814 39,462 71,295 10,128 24,896
Total Assets 615,213 632,120 562,585 350,531 347,884
Shareholders Equity 457,819 456,738 377,914 347,259 344,684
</table>
The objective of the Board of Directors of the Registrant is to
earn income from the sale of timber, sale of land, sale of sand and
rock and its bookkeeping business so that funds are available for
the maintenance of its mining properties and the implementation of
its Non-Industrial Timber Management Plan.
(b) Results of operations.
Registrant's principal sources of income are from the sale of
timber, sale of land, sale of sand and rock, bookkeeping business,
interest and dividends. There is no assurance that any of the
sources of income will continue at current rates into the future.
The termination of the Mining Lease With Option to Purchase
agreement substantially increased Registrant's property maintenance
expenses.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements relying on Rule 3-11 of Regulation S-X
which allows the filing of unaudited statements of inactive
registrants are listed in the index to financial statements and
schedules, and are included under PART IV, Item 14, of this report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There were no disagreements on accounting and financial
disclosure matters required to be disclosed in this item.
<page>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<table>
(a) Identification of Directors.
<caption>
Director' Name Positions Year First Principal
and Age and Offices Elected Occupation
- ------------- ----------- ---------- ---------
Norman A. Lamb President 1978 Mining
(65) & Director Executive
Greenville,
CA
Thomas J. Reardon Vice President 1975 Retired
(80) & Director Daly City, CA
James E. Brousseau Secretary- 1987 Mining
(70) Treasurer & Executive
Director Vallejo, CA
Richard C. Poulton Director 1993 Consultant
(58) San Mateo, CA
M. Blair Ogden Director 2000 Attorney at Law
(69) San Francisco,
CA
</table>
There are no arrangements or understandings between any of the
foregoing persons and any other person or persons pursuant to which
any of the foregoing persons were named as directors.
<page)
<table>
(b) Identification of Executive Officers.
<caption>
Name of Officer Age Office Held
- --------------- ---- -----------
Norman A. Lamb 65 President
James E. Brousseau 70 Secretary-Treasurer
</table>
There are no arrangements or understandings between any of the
foregoing persons and any other person or persons pursuant to which
any of the foregoing persons were named as executive officers.
(c) Identification of certain significant employees.
None
(d) No family relationships exist between any of the above
named directors and executive officers of the Registrant.
(e) Business experience.
(1) Norman A. Lamb is a Mining Executive and an officer and
director of several public mineral companies. He serves the
Registrant as President, was Secretary-Treasurer until November 16,
1987, and has been a Director since 1978.
(2) Thomas J. Reardon is retired and formerly was a
Department Manager for Foremost Dairies. He serves the Registrant
as Vice-president and has been a Director since 1975.
(3) James E. Brousseau is a Mining Executive and an officer
and director of several public mineral companies. He was elected
Secretary-Treasurer and a Director on November 16, 1987.
(4) Richard C. Poulton is a Consultant. He was elected
a Director of the Registrant on March 27, 1993.
(5) M. Blair Ogden is a practicing attorney in San Francisco and an
officer
and director of several public mineral companies. He was elected a Director
of
the Registrant on May 21, 2000.
(f) Involvement in certain legal proceedings.
There have been no events under any bankruptcy act, no criminal
proceedings and no judgments or injunctions material to the
evaluation of the ability and integrity of any director or
executive officer during the past five years.
<page>
(g) Compliance with Section 16(a) of the Exchange Act
Registrant is not aware of any person who at any time during the
year 2001 was a director, officer or beneficial owner of more than
10 percent of Registrant's capital stock who failed to file on a
timely basis reports required by Section 16(a) during 2001 or prior
years.
ITEM 11. Executive Compensation
(a) Cash Compensation.
<table>
<caption>
Name of Individual or Capacity Cash Compensation
Number in Group
- --------------------- --------- -------------------
Norman A. Lamb President $0.00
Officers and Directors
as a group - Five persons
including those named above. $2,500.00
</table>
(b) Compensation pursuant to plans.
During the fiscal year, Norman A. Lamb was reimbursed for out-
of-pocket expenses.
(c) Other compensation.
None
(d) Compensation of directors.
During the fiscal year, directors received a fee of $500.00 each
for their services as directors.
(e) Termination of employment and change of control
arrangement.
None
<page>
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management
(a) Security ownership of certain beneficial owners.
The following table shows, as of March 4, 2002, the number of
shares of Capital Stock held by every person owning of record or
known by the Registrant as owning beneficially more than five
percent of the outstanding stock:
<table>
<caption>
Security Ownership of Certain Beneficial Owners
Title of Class Name and Address Amount and Nature Percent
of Owner of Ownership of Class
- -------------- --------------- ----------------- -------
Capital Stock James E. Brousseau 179,147 shares 23.6%
Par Value 270 Peppercorn Ct. owned of record and
$0.25/share Vallejo, CA beneficially *
94591
Norman A. Lamb 271,742 shares 35.8%
P.O. Box 778 owned of record and
Greenville, CA beneficially **
95947
M. Blair Ogden 178,147 shares 23.5%
33 New Montgomery St owned
San Francisco, CA beneficially ***
94108
Poulton Trust 50,253 shares 6.6%
551 West 30th Ave owned of record
San Mateo, CA
94403
Reardon Family Trust 44,366 shares 5.8%
162 East Market St owned of
Daly City, CA record
94403
</table>
* Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington Corporation, of which Mr. Brousseau is Secretary-
Treasurer, a Director and substantial shareholder. Includes 85,000
shares owned by The Flowery Gold Mines Company of Nevada, a Nevada
corporation, of which Mr. Brousseau is Secretary-Treasurer, a
Director and major shareholder.
<page>
** Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington Corporation, of which Mr. Lamb is President, a
Director and major shareholder. Includes 85,000 shares owned
by The Flowery Gold Mines Company of Nevada, a Nevada corporation
of which Mr. Lamb is President, a Director and major shareholder.
*** Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington corporation, of which Mr. Ogden is Vice-President and
a Director. Includes 85,000 shares owned by The Flowery Gold
Mines Company of Nevada, a Nevada corporation, of which Mr. Ogden
is Vice-President, a Director and substantial shareholder.
(b) Security ownership of management.
The following table shows as of March 4, 2002 all shares of
Capital Stock beneficially owned by all directors and all directors
and officers of Registrant as a group:
<table>
<caption>
Capital Stock Beneficially Owned
Title
of Class Name of Beneficial Amount and Nature of Percent
Owner Beneficial Ownership of Class
- -------------- ------------------ -------------------- --------
Capital Stock James E. Brousseau 179,147 shares owned 23.6%
Par Value of record and
$0.25 per share beneficially *
Norman A. Lamb 271,742 shares owned 35.8%
of record and
beneficially **
M. Blair Ogden 178,147 shares owned 23.5%
beneficially ***
Richard C. Poulton 50,253 shares owned 6.6%
beneficially ****
Thomas J. Reardon 44,366 shares owned 5.8%
beneficially *****
All directors and 367,361 shares 48.4%
officers as a group
(five persons)
</table>
<page>
* Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington corporation, of which Mr. Brousseau is Secretary-
Treasurer, a Director and substantial shareholder. Includes 85,000
shares owned by The Flowery Gold Mines Company of Nevada, a Nevada
corporation, of which Mr. Brousseau is Secretary-Treasurer, a
Director and major shareholder. Mr. Brousseau may be deemed to
have shared voting and investment power with respect to such
shares.
** Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington corporation, of which Mr. Lamb is President, a
Director and major shareholder. Includes 85,000 shares owned by
The Flowery Gold Mines Company of Nevada, a Nevada corporation, of
which Mr. Lamb is President, a Director and major shareholder. Mr.
Lamb may be deemed to have shared voting and investment power with
respect to such shares.
*** Includes 93,045 shares owned by Nevex Corporation, a Nevada
corporation and wholly owned subsidiary of Jenex Gold Corporation,
a Washington corporation, of which Mr. Ogden is Vice-President and
a Director. Includes 85,000 shares owned by The Flowery Gold
Mines Company of Nevada, a Nevada corporation, of which Mr. Ogden
is Vice-President, a Director and substantial shareholder. Mr.
Ogden may be deemed to have shared voting and investment power with
respect to such shares.
**** Includes 50,253 shares owned by the Poulton Trust, of which
Mr. Poulton is co-trustee. Mr. Poulton may be deemed to have
shared voting and investment power with respect to such shares.
***** Includes 44,366 shares owned by the Reardon Family Trust of
which Mr. Reardon is co-trustee. Mr. Reardon may be deemed to
have shared voting and investment power with respect to such
shares.
(c) Changes in control.
Mr. Lamb may be deemed the "parent" or a "control person" of
Registrant, as those terms are defined under the Securities
Exchange Act of 1934, as amended. There are no arrangements known
to Registrant the operation of which may at a subsequent date
result in a change of control of Registrant.
ITEM 13. Certain Relationships and Related Transactions
None
<page>
PART IV
ITEM 14. Exhibits, Financial Statements, Schedules and Reports on
Form 8-K
(a) Financial Statements: Page
Balance Sheets as of December 31, 2001 2-3
and December 31, 2000.
Statements of Operations for the Years Ended
December 31, 2001, December 31, 2000, and
December 31, 1999. 4-5
Statements of Accumulated Deficit and
Accumulated Other Comprehensive Income (Loss)
for the Years Ended December 31, 2001,
December 31, 2000, and December 31, 1999. 6
Statements of Cash Flows for the years ended
December 31, 2001, December 31, 2000, and
December 31, 1999. 7-8
(b) Notes to Financial Statements 9-18
(c) Exhibits
None
(d) No reports on Form 8-K were filed during the last
quarter of 2001.
<page>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) 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.
CALIFORNIA-ENGELS MINING COMPANY
Registrant
By Norman A. Lamb
Norman A. Lamb, President and
Chief Executive Officer
Date: March 19, 2002
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
By Norman A. Lamb
Norman A. Lamb
President and Director
March 19, 2002
By Thomas J. Reardon
Thomas J. Reardon
Vice-President and Director
March 19, 2002
By James E. Brousseau
James E. Brousseau
Secretary-Treasurer
Chief Financial and Accounting
Officer, March 19, 2002
By Richard C. Poulton
Richard C. Poulton
Director, March 19, 2002
By M. Blair Ogden
M. Blair Ogden
Director, March 19, 2002
<page>
CALIFORNIA-ENGELS MINING COMPANY
(A California Corporation)
FINANCIAL STATEMENTS
December 31, 2001
page 1
<page>
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
(Unaudited)
<table>
ASSETS
<caption>
2001 2000
--------- ---------
CURRENT ASSETS
Cash $ 50,814 $ 39,462
Deeds of Trust - current
portion $ 11,281 $ 11,842
Prepaid taxes $ 1,487 $ 5,874
Total Current Assets $ 63,582 $ 57,178
PROPERTY AND EQUIPMENT, net $ 342,211 $ 397,995
OTHER ASSETS
Investments available
for sale $ 62,861 $ 12,011
Investments held to
maturity $ 1,877 $ 2,472
Deeds of trust - net of
current portion $ 144,682 $ 162,464
TOTAL OTHER ASSETS $ 209,420 $ 176,947
TOTAL ASSETS $ 615,213 $ 632,120
</table>
The accompanying notes are an integral part of these financial
statements.
page 2
<page>
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
(Unaudited)
<table>
LIABILITIES AND STOCKHOLDERS' EQUITY
<caption>
2001 2000
--------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Deferred income taxes $ 17,582 $ 19,843
Accrued expenses $ 33,263 $ 40,976
Notes payable, current portion $ 8,766 $ 8,014
Total Current Liabilities $ 59,611 $ 68,833
Long-term Liabilities
Notes payable, net of current
portion $ 97,783 $ 106,549
Total Liabilities $ 157,394 $ 175,382
STOCKHOLDERS' EQUITY
Capital stock, par value $.25:
California-Engels Mining Company,
4,000,000 shares authorized
759,315.94 shares issued and
outstanding in 2001 and
760,915.94 shares issued and
outstanding in 2000 $ 189,829 $ 190,206
Accumulated other comprehensive
income (loss) $ 1,754 $ 308
Reduction surplus $2,800,108 $2,800,856
Accumulated deficit (2,533,872) (2,534,632)
Total Stockholders' Equity $ 457,819 $ 456,738
Total Liabilities and
Stockholders' Equity $ 615,213 $ 632,120
</table>
The accompanying notes are an integral part of these financial
statements.
page 3
<page>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(Unaudited)
<table>
<caption>
2001 2000 1999
----- ----- -----
REVENUE
Timber and rock revenue $ 594,648 $ 2,215 $ 248,928
Dividend income 2,606 1,769 1,580
Interest income 16,424 10,504 6,994
Office rent 6,475 12,470 -
Professional services 15,750 18,400 -
Total revenue 635,903 45,358 257,502
OPERATING AND GENERAL EXPENSES
Depreciation 9,679 1,751 5,510
Director fees 500 2,000 2,000
Rock expense - 616 -
Insurance 1,860 1,900 1,900
Miscellaneous 861 694 748
Office and storage rents 10,510 12,510 3,510
Office expenses 2,664 3,763 1,815
Payroll expense 10,891 12,344 -
Professional fees 5,020 5,245 2,026
Reclamation plan expense 240 12,738 -
Repairs and maintenance 1,396 2,131 4,787
Taxes and licenses 17,483 5,102 5,894
Travel and per diem 405 963 999
Vehicle expense 5,007 972 973
Total operating and
general expenses $ 66,516 $ 62,729 $ 30,162
Net income (loss) from
operations $ 569,387 $ (17,371) $ 227,340
</table>
The accompanying notes are an integral part of these financial
statements.
page 4
<page>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(Unaudited)
<table>
<caption>
2001 2000 1999
----- ----- -----
OTHER INCOME/(EXPENSE)
Depletion $ (54,014) $ - $ (15,202)
Timber expense $(499,651) $ (11,659) $(168,818)
Gain on sale of land $ - $ 143,226 $ -
Gain on sale of assets $ - 3,500 -
Interest $ (13,038) $ (16,161) $ (5,687)
Total other income
and (expense) $(566,703) $ 118,906 $(189,707)
Income Before Taxes $ 2,684 $ 101,535 $ 37,633
Provision for income taxes $ (1,924) $ (22,635) $ (8,697)
Net Income $ 760 $ 78,900 $ 28,936
Earnings Per Share $ 0.001 $ 0.104 $ 0.038
</table>
The accompanying notes are an integral part of these financial
statements.
page 5
<page>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF ACCUMULATED DEFICIT AND ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(Unaudited)
<table>
<caption>
2001 2000 1999
----- ----- -----
ACCUMULATED DEFICIT,
Beginning of year $(2,534,632) $(2,613,532) $(2,642,468)
Net Income $ 760 $ 78,900 $ 28,936
ACCUMULATED DEFICIT,
End of year $(2,533,872) $(2,534,632) $(2,613,532)
ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS),
Beginning of year $ 308 $ 288 $ (1,721)
Other Comprehensive Income
(Loss) $ 1,446 $ 20 $ 2,009
ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS),
End of year $ 1,754 $ 308 $ 288
</table>
The accompanying notes are an integral part of these financial
statements.
page 6
<page>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(Unaudited)
<table>
<caption>
2001 2000 1999
------ ------ -----
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income $ 760 $ 78,900 $ 28,936
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and depletion 63,693 1,751 20,712
Amortization of GNMA discount (216) (221) (423)
Gain on sale of land - (143,226) -
Gain on sale of assets - (3,500) -
Change in operating assets
and liabilities
Prepaid taxes 4,387 (5,874) -
Deposits - - 563
Taxes payable - (4,697) 1,425
Accrued expenses (7,713) (7,638) 48,614
Deferred income taxes (2,156) 19,789 -
Net Cash Provided
(Used) by
Operating Activities $ 58,395 $(64,716) $ 99,827
<caption>
CASH FLOWS FROM INVESTING ACTIVITIES
Payments received on
notes receivable $ 18,343 $ 5,069 $ 41,331
Issuance of notes
receivable - (143,228) -
Purchases of securities
and investments (49,149) (10,437) (36)
Proceeds from vehicle
disposition 15,604 3,500 -
Proceeds from sale
of securities - - 20,824
Proceeds from sale
of land - 195,045 -
Return of principal GNMA 811 539 1,205
Capital expenditures (23,513) (762) (233,004)
Net Cash Provided (Used)
by Investing Activities (37,904) 49,726 (169,680)
</table>
The accompanying notes are an integral part of these financial
statements.
page 7 <page>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
(Unaudited)
<table>
<caption>
2001 2000 1999
------ ------ ------
CASH FLOWS FROM
FINANCING ACTIVITIES
Purchase and retirement
of treasury shares (1,125) (96) (290)
Proceeds from notes payable - - 148,000
Payments on notes payable (8,014) (16,747) (16,690)
Net Cash Provided (Used) by
Financing Activities (9,139) (16,843) 131,020
Net Increase (Decrease) in
Cash and Cash Equivalents $ 11,352 $(31,833) $ 61,167
CASH AND CASH EQUIVALENTS,
Beginning of Year $ 39,462 $ 71,295 $ 10,128
<caption>
CASH AND CASH EQUIVALENTS,
End of Year $ 50,814 $ 39,462 $ 71,295
<caption>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for
Income taxes $ 53 $ 10,917 $ 2,650
Interest 13,038 16,161 5,687
<caption>
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING ACTIVITIES
Unrealized holding
gains (losses)
arising during period $ 1,701 $ 24 $ 2,363
</table>
The accompanying notes are an integral part of these financial
statements.
page 8
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of California-
Engels Mining Company (the Company) is presented to assist in
understanding the Company's financial statements. The financial
statements and notes are representations of the Company's
management who is responsible for their integrity and objectivity.
These accounting policies conform to Generally Accepted Accounting
Principles and have been consistently applied in the preparation of
the financial statements.
Nature of Activity
The Company's principal line of business is development of
mineral and timber properties. The principal revenue sources
currently consist of timber, land and rock sales, bookkeeping
business, and investment income. The Company's properties are
located in the western United States.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from
these estimates.
Basis of Accounting
The Company's books are maintained on the accrual method of
accounting.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments with a purchased maturity
of three months of less to be cash equivalents.
Concentration of Credit Risk
The Company places its temporary cash investments with financial
institutions and limits the amount of credit exposure to any one
financial institution.
page 9
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
Mineral and Timber Lands
Mineral and timber lands and depreciable property are stated at
book value less accumulated depletion and depreciation.
Depreciation is calculated using the declining balance method over
five to seven year lives. Timber depletion is calculated based
on units of production.
Comprehensive Income
Pursuant to Financial Accounting Standards Board ("FASB") Statement
No. 130, Reporting Comprehensive Income, the Company reports any
material components of comprehensive income in its financial statements.
Reclassification
Certain amounts in the prior year financial statements have been
reclassified to conform to the current years financial statement
presentation. Such reclassification had no effect on net equity
or net income.
NOTE 2 - PROPERTY AND EQUIPMENT
<table>
<caption>
Property and equipment consisted of the following at December 31:
2001 2000
------ ------
Furniture and equipment $ 24,612 $ 34,538
Land 239,702 239,702
Less: Accumulated depreciation (14,070) (22,226)
$ 250,244 $ 252,014
Timber management development $ 164,078 $ 164,078
Less: Accumulated depletion (72,111) (18,097)
$ 91,967 $ 145,981
Property and Equipment, net $ 342,211 $ 397,995
</table>
page 10
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 3 - MINING CLAIMS AND FEE LAND OWNED
At December 31, 2001, the Company was the owner of 36 patented
lode mining claims totaling 736 acres comprising the Engels and
Superior Mines and 245.28 acres of patented land at Engelmine,
Lights Creek Mining District, Plumas County, California.
At December 31, 2001, the Company was the owner of five patented
lode mining claims totaling 100 acres on Ward Creek in the Genesee
Mining District, Plumas County, California.
NOTE 4 - VALUATION OF MINERAL LANDS - DEFERRED INCOME TAXES
The Mineral lands carried on the books at a value of $10,000
less depletion have a historical cost basis from June 19, 1901 of
$1,000,000. Beginning in 1913, different valuations were placed on
these lands by the Commissioner of Internal Revenue. Under
instructions of the Commissioner, the values of the land were
written up on the books to a high of $4,500,000 on February 23,
1928.
In 1934, because of depressed conditions, the mineral lands were
written down to $10,000 without any tax benefit. In the event of
a sale of these lands the recognized gain for tax purposes will be
substantially reduced or eliminated. Consequently a deferred tax
asset of approximately $340,000 has been offset by a
corresponding valuation allowance of approximately $340,000 due to
the unlikelihood of the sale of the property in the near future.
It is estimated that the current market value of the properties
meets or exceeds the $1,000,000 historical cost basis; however, due
to the length of time the Company has reported the land values at
the written down value of $10,000, a change to the cost method has
not been deemed appropriate for reporting purposes.
page 11
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 5 - DEEDS OF TRUST
<table>
Trust deed notes receivable at December 31,
<caption>
2001 2000
--------------------------------- ------
Due within Due after
one year one year Total Total
---------- ---------- -------- -------
Douglas R. Friedrich
9% Note secured by
Plumas County,
California
real property $ 3,968 $ 21,602 $ 25,570 $ 28,305
Less unamortized
discount (619) (151) (770) (1,491)
--------- --------- --------- ---------
Total $ 3,349 $ 21,451 $ 24,800 $ 26,814
John and Tina Tucker
9% Note secured by
Plumas County,
California
real property $ 1,021 $ - $ 1,021 $ 4,264
Monte C. Wolford
8% Note secured by
Plumas County,
California
real property $ 2,740 $ 16,831 $ 19,571 $ 25,105
Jack P. McLaughlin, Jr.
10% Note secured by
Plumas County,
California
Real Property $ 935 $ 47,137 $ 48,072 $ 48,918
David J. Estrella
8% Note secured by
Plumas County,
California
real property $ 3,236 $ 59,263 $ 62,499 $ 69,205
-------- -------- -------- ---------
Total $ 11,281 $144,682 $155,963 $ 174,306
</table>
page 12
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 6 - INVESTMENT SECURITIES
At December 31, 2001 and 2000, the investment securities
portfolio is comprised of items classified as available-for-sale
and held-to-maturity. In accordance with the provisions of SFAS
No. 115, the available-for-sale securities are reported as an asset
at their fair market value with the unrealized gain or loss
excluded from earnings and reported as a component of
comprehensive income. The held-to-maturity securities are
stated at amortized cost, adjusted for amortization of premiums and
accretion of discounts to maturity. Realized gains and losses are
determined using specific identification of securities sold.
The following reflect the estimated fair values of investment
securities and amortized cost of debt securities held at
December 31, 2001, 2000, and 1999. Fair values are based on
management's estimate.
<table>
<caption>
2001
-------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gain Loss Value
------ ---------- ---------- --------
Equity Securities
available-for-sale $ 60,799 $ 2,063 $ - $ 62,862
Mortgage-backed securities
held to maturity $ 1,877 $ - $ - $ 1,877
-------- -------- --------- --------
Totals $ 62,676 $ 2,063 $ - $ 64,739
</table>
page 13
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 6 - INVESTMENT SECURITIES, continued
<table>
<caption>
2000
---------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gain Loss Value
------ ---------- ---------- --------
Equity Securities
available-for-sale $ 11,650 $ 361 $ - $ 12,011
Mortgage-backed securities
held to maturity $ 2,472 $ - $ - $ 2,472
-------- --------- -------- --------
Totals $ 14,122 $ 361 $ - $ 14,483
<caption>
1999
----------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gain Loss Value
------ ---------- ---------- --------
Equity Securities
available-for-sale $ 1,212 $ 337 $ - $ 1,549
Mortgage-backed securities
held to maturity $ 2,790 $ - $ - $ 2,790
-------- --------- -------- ---------
Totals $ 4,002 $ 337 $ - $ 4,339
</table>
No equity securities were sold in 2001 or 2000. In 1999, equity
securities were sold at cost and resulted in no gains or losses.
NOTE 7 - CAPITAL STOCK
The Company acquired and subsequently retired odd lots from
estates totaling 1,510 shares of capital stock for $1,125 in 2001
and 128.40 shares for $96 in 2000.
page 14
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 8 - CONTINGENT LIABILITIES
The Company is not a defendant in any legal proceeding nor is
there any litigation in progress, pending or threatened against the
Company.
NOTE 9 - COMPREHENSIVE INCOME
The components of comprehensive income, net of tax, are as
follows for the years ended December 31:
<table>
<caption>
2001 2000 1999
------ ------ ------
Net Income $ 760 $ 78,900 $ 28,936
Other Comprehensive Income,
net of tax:
Unrealized gains on securities
Unrealized holding gains
arising during period $ 1,446 $ 20 $ 2,009
Less: reclassification
adjustment for (gains)
losses included in net income $ - $ - $ -
Total Other Comprehensive
Income (Loss) $ 1,446 $ 20 $ 2,009
Comprehensive Income $ 2,206 $ 78,920 $ 30,945
</table>
page 15
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
The following shows the tax effect of each component of
comprehensive income as of December 31:
<table>
<caption>
Calculation of Holding Gains
2001 2000 1999
------ ------ ------
Holding gains recognized
in other comprehensive income $ 1,701 $ 24 $ 2,363
Tax expense (255) (4) (354)
Total gain, net of tax $ 1,446 $ 20 $ 2,009
</table>
<table>
<caption>
Reclassification Adjustments
2001 2000 1999
------ ------ ------
Net income:
(Gain) loss on sale of
securities $ - $ - $ -
Income tax (expense) benefit - - -
Net gain (loss) realized in
net income $ - $ - $ -
</table>
Accumulated other comprehensive income is comprised of only
unrealized gains (losses) on investment securities.
page 16
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 10 - LONG-TERM DEBT
<table>
<caption>
2001 2000
--------------------------- -----
Due within Due after
one year one year Total Total
Note payable to Jenex Gold
Corporation in monthly
installments of $1,000
including interest at 9%
per annum $ 5,745 $ 66,344 $ 72,089 $ 77,341
Note payable to Volcanic
Gold, Inc. in monthly
installments of $500
including interest at
9% per annum $ 3,021 31,439 34,460 $ 37,222
Total $ 8,766 $ 97,793 $106,549 $114,563
</table>
The following table represents future principle payments for the
years ended December 31:
<table>
2002 $ 8,776
2003 9,589
2004 10,489
2005 11,472
2006 12,549
Thereafter 53,685
TOTAL $106,549
</table>
page 17
<page>
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 11 - INCOME TAXES
<table>
<caption>
The provision for income taxes consisted of the following for the years
ended December 31:
2001 2000 1999
----- ----- -----
Federal income tax - current $ 1,747 $ 1,472 $ 5,106
State income tax - current 1,592 1,374 3,591
Federal income tax - deferred (482) 12,451 -
State income tax - deferred (993) 7,338 -
Total provision $ 1,924 $22,635 $ 8,697
</table>
<table>
<caption>
Deferred income taxes consisted of the following at December 31:
2001 2000
------ ------
Deferred tax liabilities:
Federal
Unrealized gain on
securities $ 309 $ 54
Installment sale gain $10,868 $12,451
State
Unrealized gain on
securities $ - $ -
Installment sale gain $ 6,405 $ 7,338
Total deferred tax
liabilities $17,582 $19,843
</table>
page 18