UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For The Quarterly Period Ended: March 31, 2004
_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934. (NO FEE REQUIRED)
For the Transition Period from _________to ___________.
Commission File Number: 0-16468
MOTHER LODE GOLD MINES CONSOLIDATED
(Exact name of Company as specified in its charter)
CALIFORNIA 94-2236016
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1312 CONCANNON BOULEVARD, LIVERMORE, CA 94550
(Address of principal executive offices)
(925) 606-5939
Issuers telephone number
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEEDING FIVE YEARS
Check whether the registrant filed all documents and records
required to be filed by Section 12, 13 0r 15(d) of the Exchange Act after
the distribution of the securities under a plan confirmed
by a court. ? Yes ? No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
TRADING SYMBOL: MLGM
Class Outstanding
Common Stock, 6,535,536
without par value as of March 31, 2004
Transitional Small Business Disclosure Format (Check One): Yes ? No ?
Total Pages: 21
Exhibit Index on Page: 11
PART I - FINANCIAL INFORMATION
Item 1. Financial information required by Item 310(b) of Regulation
S-B and by Rule 10.01 of Regulation SX, for the Company's fiscal quarter
ended March 31, 2004 The Company has prepared this information without
independent audit.
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
TABLE OF CONTENTS
Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003 3
Consolidated Statement of Operations for the 3-month period ending
March 31, 2004. 4
Consolidated Statement of Cash Flows for the 3-month period ending
March 31, 2004 5
Consolidated Statements of Stockholder's Equity from inception on
February 8, 1974 to March 31, 2004 6
Notes to Consolidated Statements 7
(The balance of this page is intentionally left blank)
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
BALANCE SHEETS
(1990 through 2004 Unaudited)
ASSETS
March 31 December 31
2004 2003
(Unaudited) (Unaudited)
Current Assets
Cash $205 $106
Total current assets 205 106
Other Assets
Property rights 618,332 618,332
Note receivable from
Amador United Gold Mines 99,868 98,756
Total other assets 718,200 717,088
Total Assets $718,405 $717,194
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Accounts payable $45,887 $43,790
California income tax 11,256 11,256
Total current liabilities 57,143 55,046
Non-current liabilities
Notes payable 22,941 18,748
Deferred fees payable 58,303 58,303
Total non-current liabilities 81,244 77,051
Stockholders equity
Common stock, without par value,
Authorized, 7,500,000 shares:
Issued and outstanding, March 31,
2004: 6,535,536
2003: 6,483,528 6,834,752 6,796,008
Paid-in capital representing rights to
acquire a maximum of 697,945 shares
(See Note 3) 530,713 569,457
Deficit accumulated (6,785,447) (6,780,367)
Net stockholder's equity 580,018 585,098
Total Liabilities and Shareholder's Equity $718,405 $717,194
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(1990 through 2004 Unaudited)
Three Months Ended
Mar 31 Mar 31
2004 2003
Pre-operating revenues:
Payments received under
joint venture agreements: $0 0
Interest Income 1,112 1,361
Miscellaneous Income 150 0
Sub-total 1,262 1,091
Pre-operating Expenses
Evaluation of mining properties 2,400 0
Legal and accounting 25 25
Interest expense 2,386 2,650
Other administrative expense 1,002 1,111
Depreciation/Amortization 0 0
California Franchise tax 50 50
Other Expenses 1,481 1,709
Sub-total 6,342 5,554
Net operating income (5,079) (4,193)
Net gain/(loss) ($5,079) $(4,193)
Primary gain/(loss) per share $(0.001) $(0.001)
Fully diluted gain/(loss) per share $(0.001) $(0.001)
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(1990 through 2004 Unaudited)
Three Months Ended
Mar 31 Mar 31
2004 2003
Cash flows from operating activities: ($5,079) $(4,193)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 0 0
Salaries and fees 0 0
(Increase) Decrease in deposits 0 0
(Increase) Decrease in pre-paid expenses 0 0
(Increase) Decrease in loans receivables (1,112) (1,100)
Increase (Decrease) in accounts payables 2,097 2,211
Increase (Decrease) in long term loans 0 0
Incr (Decr) in deferred officer salaries 0 0
Incr (Decr) in income taxes payable 0 0
Incr (Decr) Minority Interest due to Dissolution 0 0
Incr (Decr) in property loss from abandonment 0 0
Gross cash used in operating activities (4,095) 1,111
Cash flow from investing activities:
Minority investment 0 0
Purchase of mining property 0 0
Net cash provided by (used in) investing 0 0
Cash flows from financing activities:
Issuance of Series B Stock 0 0
(Inc)Dec Conversion Series A to Common (38,745) (38,745)
Proceeds from sale of company stock 38,745 38,745
Increase (Decrease) in expiration of:
Series A Preferred Stock 0 0
1984 Option Plan 0 0
Net borrowing from notes payable 4,193 2,983
Net cash provided by financing activities 4,193 2,983
Net increase (decrease) in cash $99 $(99)
Cash, beginning of period 105 115
Cash, end of period $205 $16
A. Supplemental disclosures of cash flow information for the 350 month
since inception to March 31, 2004
Cash paid for: Interest $719,084
Income taxes $37,755
B. Supplemental schedule of non-cash investing and financing activities
for the 350 months from inception to March 31, 2004:
The Company has satisfied various liabilities (Note 3) by issuance
of stock or options (Exercise price: $0.0001 per share)
to acquire common stock:
Stock Options Stock
Salaries $492,402
Lease Payments 47,748
Equipment _ 0 $5,000
Total $540,150 $5,000
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(1990 through 2004 Unaudited)
Deficit Accumulated
Issued and Outstanding Paid-in Since Inception
Shares Amount Capital February 1974
From Inception, February 24, 1974 thru December 31, 2001
6,021,759 $6,453,367 $912,098 ($6,759,568)
No shares were sold from Jan thru Dec 2002
Series A Preferred shares converted
to common shares 253,737 187,663 (187,663)
Paid-in capital representing options to acquire
a cumulative maximum of 924,918 common shares 0
December 31, 2002 pre-operating
net gain (loss) 0 0 0 (9,429)
As of December 31, 2002 6,275,496 $6,641,029 $724,435 ($6,768,997)
No shares were sold from Jan thru Dec 2003
Series A Preferred shares converted
to common shares 208,032 154,978 (154,978)
Paid-in capital representing options to acquire
a cumulative maximum of 924,918 common shares 0
December 31, 2003 pre-operating
net gain (loss) 0 0 0 (11,370)
As of December 31, 2003 6,483,528 $6,796,008 $569,457 ($6,780,367)
No shares were sold from Jan thru Mar 2004
Series A Preferred shares converted
to common shares 52,008 38,745 (38,745)
Paid-in capital representing options to acquire
a cumulative maximum of 697,949 common shares 0
March 31, 2004 pre-operating
net gain (loss) 0 0 0 (5,079)
As of March 31, 2004 6,535,536 $6,834,752 $530,713 ($6,785,447)
See accompanying notes
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared by the Company in accordance with generally accepted
accounting principles for interim financial information and
with the instructions
to Form 10-QSB and Article 10 of Regulation S-X. Accordingly,
they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments considered necessary for a fair presentation have
been included.
Operating results for the three-month period ended March31, 2004 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Form 10KSB for
the year ended December 31, 2003.
Effective January 1, 2001, the company has ceased to be a development
company since the sole activity is identification and exploration
of properties
that the Company believes have the potential for economic recovery of minerals,
especially gold. In order to develop the property into an economic
mining operation,
the Company will form a joint venture for that specific property.
2. POTENTIAL MINING PROPERTIES
a. Big Canyon Mining and Cattle Corporation Property. The lease,
with an option to purchase for surface and mineral rights on 584.07 acres, made
effective July 1, 1996 was amended on January 1, 2001. The lease expires
December 31, 2004. An extension of the lease will be proposed before that date.
b Minimum Annual Land Lease Payments
Assuming these properties are retained, and the payment schedule agreed to
for the Big Canyon property is unchanged, the minimum payments are as follows:
Year Amount
2004(9 months) $2,400
2005 To be determined
2006 To be determined
3. STOCK OPTION PLANS
The Company has two active stock option plans (1995 Stock
Option Plan and Directors' Stock Option Plan).
The Company options are valued at the amount of the salary or other
amounts owed, and are recorded in these amounts as paid-in capital, with
offsets to expense, or accounts payable as appropriate. As of the date of this
Form 10-QSB, they are summarized as follows:
A. Option plans for employees, directors and consultants:
Plan Expiration
Price Under Option Future Grant
1. Mother Lode Gold Mines Consolidated, unissued shares of common stock:
1995 Plan Jun 2005 $2.00 100,000 0
Director's Jun 2005 $2.00 40,000 60,000
Total 140,000 60,000
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
The exercise prices of the foregoing incentive options were
above market prices at the date of grant, so no compensation expense, or capital
credit has been accounted for in connection with these options.
B. Compensatory options issued for services and/or in satisfaction of
Company indebtedness.
a. Options on Series A preferred stock, callable at $10 per share, $.0001
exercise price, each convertible to common stock for a minimum of
2.1316 shares,
increasing at a rate of 10% per annum to a maximum of 3.3368 shares after
five years, and if the common stock has not been registered under
the Securities
Act of 1933, then increasing at 10% per annum to a maximum of
5.4901 shares,
until final expiration at the end of an additional five years.
Through March 31, 2004, a total of 127,131 options for preferred shares were
issued and outstanding for salaries and fees to officers and others,
at prices ranging
from $10.00 to $1.53/share of preferred stock
Shares on Exercise Common Shares Amount of Expense
Conversion Price/Share Under Option or Debt Relief
Maximum, 10 years class: .0001 697,949
697,949 $492,409
b. Options on Series B preferred stock, callable at $10 per share, $.0001
exercise price, each convertible to common stock for a minimum of 5.00 shares,
increasing at a rate of 0.05 shares per annum to a maximum of 5.20 shares after
four years, and if the common stock has not been registered under
the Securities
Act of 1933, at a rate of 5.25 shares from the fifth anniversary, until final
expiration a
t the end of an additional five years.
Through March 31, 2004 a total of 4,775 options for preferred shares
were issued for lease payments due to third parties at $10.00/share of
preferred stock.
Shares on
Exercise Common Shares
Amount of Expense Conversion Price/Share
Under Option or Debt Relief
Maximum, 5 year Class .0001 25,068 $ 47,748
Total amount of expense relief (Series A and Series B) $540,150
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
c. Changes in options outstanding, as of March 31, 2004 follow:
Compensatory Options, Maximum Shares of common stock:
January 1, 2004
Series B Preferred 25,069
Series A Preferred, 10-year expiration class 749,952
Total 775,021
Net Changes, 2004
Series B Preferred, 10 year expiration 0
Series A Preferred, 10-year expiration class (52,008)
Balance, March 31, 2004 723,018
4. OFFICE LEASE
The Company shares an office with Pacific FarEast Minerals in a Class A
low rise building in a
garden office park at 1312 Concannon Boulevard, in Livermore, California.
(The balance of this page intentionally left blank)
Part I - Financial Information (continued)
Item 2. Management's Discussion an Analysis of Financial
Condition and Results of Operations.
On February 11, 2004, the Company's Board of Directors adopted:
(1) The Code of Ethical Conduct of Mother Lode Gold Mines Consolidated,
and (2) Charter of the Audit Committee Of the Board of Directors of Mother
Lode Gold Mines Consolidated. These two documents are attached as
Exhibit A and Exhibit B respectively
Summary of Financial Results. Mother Lode Gold Mines Consolidated and
its consolidated subsidiaries (the "Company")showed a First Quarter 2004
loss of $5,079.
The Company has no cash income from the properties in which the
Company has an
interest. Sources of cash flow to the Company have historically been
derived from:
(1) mining contracts with other mining companies, (2) securities offerings and
(3) drilling programs.
As of March 31, 2004 the Company had outstanding advances
for land and administrative services to Amador United Gold Mines of $101,586,
a subsidiary corporation. Pacific FarEast Minerals, Inc.,
a subsidiary corporation
has a loan to the Company in the amount of $3869
The total number of common shares of the Company as of March 31,
2004 is 6,535,536.
Cash payments for officer's compensation were suspended effective
October 1, 1988, and remain in effect through March 31, 2004 and are in effect
as of the date of this report. To date, 350,000 shares have been authorized and
options for 127,131 shares of Series A Preferred Stock that have been
granted remain active.
Preparation of Financial Statements. The consolidated financial
statements of March 31, 2004, and for the three-month period then ended, were
prepared by the Company and have not been reviewed by independent auditors
prior to filing.
Amador United Gold Mines ("AUGM"). There was no activity by
this corporation during the First Quarter 2004. The Company owns
00.20 % of the common stock (the only outstanding security) of AUGM.
Pacific FarEast Minerals, Inc. ("PFEM"). During the First Quarter 2004,
to fund the activities in The Peoples Republic of China, Pacific
FarEast Minerals, Inc.
issued a Private Placement Memorandum, effective January
1, 2004, for an amount
of $250,000, consisting of 625,000 shares of common stock
at $0.40 per share, with
Warrant A and Warrant B. PFEM reserved the right to increase
the offering to $300,000.
The exercise price for Warrant A is 25% greater than the Base Purchase Price of
$0.40 per share of the Private Placement and Warrant B, 50% greater than
the Base
Purchase Price of the per share Offering Price of a proposed
$3,000,000 offering.
The private placement closed on March 31, 2004, having raised $195,000
represented by 487,500 shares. The total issued and outstanding
shares of Pacific
FarEast Minerals, Inc. is 8,403,862 as of March 31, 2004. The
Company owns 26.1%
of the common stock (the only outstanding security) of Pacific
FarEast Minerals, Inc.
On February 22, 2004, PFEM formed ChengDe Great Wall Minerals Co.,
Ltd ("CGWMC") to comply with obligations under the Agreement.
Mr. Frank M. Orrell
was named a "Legal Person" according to the laws of the
People's Republic of China.
Concurrent with the formation of CGWMC, PFEM deposited US$151,000
in the ChengDe branch of the Bank of China for the account of CGWMC. PFEM
owns 100% of the common stock (the only outstanding security) of CGWMC.
ChengDe Great Wall Minerals Co., Ltd. plans to conduct an extensive
search for all available data in Weichang County under the direction of its
company executives.
CGWMC will conduct an intensive investigation of the land area, using
its internal expertise and a team of highly qualified experts. PFEM shall bear
100% of the costs associated with exploration of the project area
prior to forming
a joint venture with the Gold Company of Weichang County.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not aware of any material legal proceedings to which
the Company or any subsidiary is a party or of which any of their properties is
subject, nor does the Company know of any such proceedings currently
contemplated by any governmental agency.
Item 2. Changes in Security: Not Applicable.
Item 3. Default Upon Senior Securities: Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders: Not applicable.
Item 5. Other Information:
Not applicable.
Item 6. Exhibits and Reports on Form 8-K. Not Applicable.
Exhibit 11. Statement re Computation of Per Share Earnings Page 15.
Exhibit A. Code of Ethical Conduct of Mother Lode Gold
Mines Consolidated Page 17
Exhibit B. Charter of the Audit Committee of the Board
of Directors of Mother Lode Gold Mines Consolidated Page 19
No reports on Form 8-K were filed during the period of this Form 10-QSB.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MOTHER LODE GOLD MINES CONSOLIDATED
By:
o/s Frank M. Orrell__ _o/s Byron S. James
Frank M. Orrell, Byron S. James,
Chairman, CEO Chief Financial Officer
Date: October 13, 2004 Date: October 13, 2004
CERTIFICATION OF PERIODIC REPORT
We, Frank M. Orrell, Chief Executive Officer and Byron S. James,
Chief Financial Officer, respectively of Mother Lode Gold Mines Consolidated
(the "Company"), do certify, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 18 U.S.C. Section 1350, that:
(1) the Annual Report on Form 10KSB of the Company for the quarterly
period ended March 31, 2004 (the "Report") fully complies with the
requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78m
or 78o(d); and
(2) the information contained in this unaudited Report fairly presents,
in all material respects, the financial condition and results of
operations of the
Company to the best of our knowledge.
o/s Frank M. Orrell__ _o/s Byron S. James
Frank M. Orrell, Byron S. James,
Chairman, CEO Chief Financial Officer
Date: October 13, 2004 October 13, 2004
The Balance of this Page Intentionally Left Blank
I, Frank M. Orrell, certify that:
1. I have reviewed this annual report on Form l0KSB of Mother
Lode Gold Mines Consolidated;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements. and other
financial information included in this quarterly report, fairly
present in all material
respects the financial condition, quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
m Exchange Act Rules l3a-14 and 15d-14) for the registrant and we have:
a) designated such disclosure contro1s and procedures to ensure t
hat material information relating to the registrant, including
its consolidated subsidiaries.
is made known to us by others within those entities particularly
during the period in
which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and
procedures as of a date within 90 days prior to the filing
date of this quarterly
report (the "Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based
on our most recent evaluation, to the registrant's auditors and
the audit committee
of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to r
ecord, process,
summarize and report financial data and have identified for
the registrant's auditors
any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have
ndicated in this
quarterly report whether or not there were significant changes in
internal controls or
in other factors that could significantly affect internal controls
subsequent to the
date of our most recent evaluation, including any corrective
actions with regard
to significant deficiencies and material weaknesses.
Date: October 13, 2004
_o/s Frank M. Orrell
Chairman, CEO
I, Byron S. James, certify that:
1. I have reviewed this annual report on Form l0KSB of Mother Lode
Gold Mines Consolidated;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this quarterly report;
3. Based on my knowledge, the financial statements and other financial
information included in this quarterly report, fairly present in
all material respects
the financial condition, quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures
(as defined in Exchange
Act Rules l3a-14 and 15d-14) for the registrant and we have:
a) designated such disclosure contro1s and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries
is made known to us by others within those entities particularly
during the period
in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing
date of this quarterly
report (the "Evaluation Date); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based
on our most recent evaluation, to the registrant's auditors and
the audit committee
of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process,
summarize and report financial data and have identified
for the registrant's auditors
any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: October 13, 2004
_o/s Byron S. James
Secretary, CFO
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDARIES
EARNINGS PER SHARE
(FULLY DILUTED)
CUMULATIVE 3 MO TO 3 MO TO 12 MO TO
DATE SHARES SHARES MONTHS 3/31/04 3/31/03 12/31/03
For the period 02/08/74 thru 12/31/00 (A,B,C)323
01/01/01 (C) 4,935,768 3
03/31/01 (C,E) 1,163,447 6,099,215 3
06/30/01 (C,F) 487,626 6,587,841 3
09/30/01 (C) 75,495 6,663,336 3
12/31/01 (C) 75,495 6,738,831 3
03/31/02 (C) 75,495 6,814,326 3
06/30/02 (C) 74,226 6,888,552 3
09/30/02 (C) 52,008 6,940,560 3
12/31/02 (C) 52,008 6,992,568 3 20,977,704 20,977,704
03/31/03 (C) 52,008 7,044,576 3 21,133,728
06/30/03 (C) 52,008 7,096,584 3 21,289,752
09/30/03 (C) 52,008 7,148,592 3 21,445,776
12/31/03 (C) 52,008 7,200,600 3 21,601,800 0 0
03/31/04 (C) 52,008 7,252,608 0
362 21,601,800 20,977,704 84,846,960
MONTHS 3 3 12
WEIGHTED AVERAGE SHARES 7,200,600 6,992,568 7,070,580
NET INCOME/(LOSS) $(5,079) $(4,193) $(11,370)
EARNINGS/(LOSS) PER SHARE, FULLY DILUTED $(.001) $(0.001) $(0.002)
NOTES:
(A) Share amounts have been restated for the following: 5:1 stock split - 1977;
15:1 stock split - 1978; 10% stock dividend - 1984.
(B) Includes February 1992 cancellation of shares held by Northern Mines, Inc.,
an 82% owned subsidiary of Mother Lode Gold Mines Consolidated.
(C) Exercise of Series A options plus assumption of the exercise o
f Series A preferred shares previously
issued which could be converted on this date for the minimum number of shares.
(D) Exercise of 1984 Stock Option Plan deferred compensation options for
common stock of the Company.
(E) Includes 993,177 shares issued for conversion of MLGM long term
obligations and 98,130 shares
for assumption of AUGM debt.
(F) Includes 416,486 shares issued by MLGM to shareholders of
Northern Mines Inc., an 82% owned subsidiary of MLGM, upon
the dissolution of NMI.
MOTHER LODE GOLD MINES CONSOLIDATED
AND SUBSIDARIES
EARNINGS PER SHARE
(PRIMARY
CUMULATIVE 3 MO TO 3 MO TO 12 MO TO
DATE SHARES SHARES MONTHS 3/31/04 3/31/03 12/31/03
For the period 02/08/74 thru 12/31/00(A,B,C) 323
01/01/01 (D) 44,646 4,218,696 3
03/31/01 (D,E) 1,163,447 5,382,143 3
06/30/01 (D,F) 487,626 5,870,769 3
09/30/01 (D) 75,495 5,946,264 3
12/31/01 (D) 75,495 6,021,759 3
03/31/02 (D) 75,495 6,097,254 3
06/30/02 (D) 74,226 6,171,480 3
09/30/02 (D) 52,008 6,223,488 3
12/31/02 (D) 52,008 6,275,496 3 18,826,488 18,826,488
03/31/03 (D) 52,008 6,327,504 3 18,982,512
06/30/03 (D) 52,008 6,379,512 3 19,138,536
09/30/03 (D) 52,008 6,431,520 3 19,294,560
12/31/03 (D) 52,008 6,483,528 3 19,450,584
03/31/04 (D) 0
362 19,450,584 `18,826,488 76,242,096
MONTHS 3 3 12
WEIGHTED AVERAGE SHARES 6,483,528 6,275,496 6,353,508
NET INCOME/(LOSS) $(5,079) $(4,193) $(11,370)
EARNINGS/(LOSS) PER SHARE, PRIMARY $(.001) $(0.001) $(0.002)
NOTES:
(A) Share amounts have been restated for the following: 5:1 stock split - 1977;
15:1 stock split - 1978; 10% stock dividend - 1984.
(B) Includes February 1992 cancellation of shares held by Northern Mines, Inc.,
an 82% owned subsidiary of Mother Lode Gold Mines Consolidated.
(C) Exercise of Series A options plus assumption of the exercise
of Series A preferred shares previously
issued which could be converted on this date for the minimum number of shares.
(D) Exercise of 1984 Stock Option Plan deferred compensation options for
common stock of the Company.
(E) Includes 993,177 shares issued for conversion of MLGM long term
obligations and 98,130 shares
for assumption of AUGM debt.
(F) Includes 416,486 shares issued by MLGM to shareholders of Northern
Mines Inc., an 82% owned subsidiary of MLGM, upon the dissolution of NMI.
EXHIBIT A
Code of Ethical Conduct
Of
Mother Lode Gold Mines Consolidated
The purpose of Mother Lode Gold Mines Consolidated's Code of Ethics
is to promote an ethical culture and to describe the philosophy which the
Company's directors and management are committed to apply to the treatment
of those to whom we have an obligation whether inside or outside
our organization.
Ethical Treatment of those whom Mother Lode Gold Mines
Consolidated has an Obligation
To our employees we are committed to honesty, just management,
fairness, providing a safe and healthy work environment free from fear of r
etribution, and respecting the dignity due everyone.
For our customers, suppliers, and partners we are committed to fair
competition and a sense of responsibility required of a good customer
and teammate.
For the communities in which we live and work, we are committed to
observe sound environmental business practices and to act as concerned
and responsible neighbors, reflecting all aspects of good citizenship.
For our shareholders, we are committed to pursuing sound growth and
earnings objectives and to exercising prudence in the use of our assets
and resources.
Obey the Law.
We will conduct our business in accordance with all applicable law
and regulations. Compliance with the law does not comprise our entire
ethical responsibility. Rather, it is a minimum, absolutely essential condition
for the performance of our duties.
Conflicts of Interest:
We will avoid any relationship, influence, or activity that might impair,
or even appear to impair, the ability of our directors, management, and
employees to make fair and objective decisions when performing their
duties for the Company. Playing favorites or having conflicts of interest, i
n practice or appearance, runs counter to the fair treatment to which
we are all entitled.
Our directors and executive officers are aware that it is unlawful for
the Company, directly or indirectly, including through a subsidiary, to extend
or maintain credit, to arrange for the extension of credit, or to renew an
extension of credit in the form of a personal loan to or for and director or
executive officer (or equivalent thereof) to the Company. The Company has a
zero tolerance policy regarding any such activities.
Keep Accurate and Complete Records:
We must maintain complete and accurate records. The Company
will record all transactions between the Company and outside individuals
and organizations promptly and accurately in the Company's books in
accordance with generally accepted accounting practices and principles.
No one should attempt to rationalize or even consider misrepresenting facts
or falsifying records. The Company has a zero tolerance policy regarding
any such activities.
Implementation:
These guidelines are intended to guide each of us whether we are a
director, executive officer, or employee of Mother Lode Gold Mines Consolidated
in making consistently good decisions. They are also meant to stimulate
awareness that ethical issues will confront us all on a daily basis. Doing
the right thing begins with every individual acting with honesty and integrity
coupled with good judgment and sensitivity to the way others see us and
how they interpret our actions
Any violation of this code must be reported immediately to any
member of the Audit Committee. Upon receipt of such notice the Audit
Committee will commence an impartial investigation within 72 hours.
The Audit Committee will attempt to resolve all such issues in an expedited
manner. The Committee has the authority and responsibility to take
whatever action it deems necessary to resolve such issues.
Adopted by the Board of Directors of Mother Lode Gold Mines Consolidated
February 11, 2004
EXHIBIT B
Charter of the Audit Committee
Of
the Board of Directors
of
Mother Lode Gold Mines Consolidated
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit
Committee's primary
duties and responsibilities are to:
* .Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and l
egal compliance.
* .Monitor the independence and performance of the Company's
independent auditors.
* .Provide an avenue of communication among the independent
auditors, management, and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct
access to the
independent auditors as well as to anyone in the organization. The Audit
Committee has the ability to retain, at the Company's expense, special
legal, accounting, or other consultants or experts it deems necessary
in the performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the
SEC, AICPA, and the Pacific Exchange. The Audit Committee shall be
comprised of three or more directors as determined by the Board, each
of whom shall be independent non-executive directors, free from any
relationship that would interfere with the exercise of his or her independent
judgment. All members of the Committee shall have a basic understanding
of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the
Committee shall have accounting or related financial
management expertise.
Audit Committee members shall be appointed by the Board. If an audit
committee Chair is not designated or present, the members of the Committee
may designate a Chair by majority vote of the Committee membership.
The Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall prepare
and/or approve an agenda in advance of each meeting. The Committee
should meet privately in executive session at least annually with management
and the independent auditors, as a committee, to discuss any matters that
the Committee or any of these believe should be discussed. In addition,
the Committee should communicate with management and the independent
auditors quarterly to review the Company's financial statements and significant
findings based upon the auditor's limited review procedures.
III. Audit Committee Responsibilities and Duties
Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the Charter to the Board of Directors for approval and have the document
published at least every three years in accordance with SEC regulations.
2. Review the Company's annual audited financial statements prior to filing
or distribution. Review should include discussion with management and the
independent auditors of significant issues regarding accounting principles,
practices, and judgments.
3. In consultation with the management and the independent auditors,
consider the integrity of the Company's financial reporting processes
and controls.
Discuss significant financial risk exposures and the steps management has
taken to monitor, control, and report such exposures. Review significant
findings
prepared by the independent auditors together with management's responses.
4. Review with financial management and the independent auditors the
Company's quarterly financial statements prior to filing or
distribution. Discuss
any significant changes to the Company's accounting principles and any items
required to be communicated by the independent auditors in accordance
with SAS 61.
Independent Auditors
5. The independent auditors are ultimately accountable to the
Audit Committee and the Board of Directors. The Audit Committee shall
review the independence and performance of the auditors and annually
recommend to the Board of Directors the appointment of the independent
auditors or approve any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid
to the independent auditors.
7. On an annual basis, the Committee should review and discuss
with the independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
8. Review the independent auditors engagement letter and
audit plan -discuss scope, staffing, locations, reliance upon management,
and general audit approach.
9. Prior to releasing the year-end earnings, discuss the effectiveness
of the audit procedure and the results of the audit with the
independent auditors.
Discuss certain matters required to be communicated to the audit committee
in accordance with AICP A SAS 61.
10. Consider the independent auditors' judgments about the quality
and appropriateness of the Company's accounting principles as applied
in its financial reporting.
Legal Compliance
11. On at least an annual basis, review with the Company's counsel,
any legal matters that could have a significant impact on the organization's
financial statement, the Company's compliance with applicable laws and
regulations, and inquiries received from regulators or governmental agencies.
Other Audit Committee Responsibilities
12. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be included in
the Company's annual proxy statement.
13. Perform any other activities consistent with this Charter, the
Company's Certificate of Incorporation, by-laws, and governing law, as the
Committee or the Board deems necessary or appropriate.
14. Maintain minutes of meetings and periodically report to the Board
of Directors on significant results of the foregoing activities, not later than
the next meeting of the Board.
Other Optional Charter Disclosures
15. Establish, review, and update periodically a Code of Ethical Conduct
and ensure that management has established a system to enforce this Code.
16. Periodically perform self -assessment of audit committee performance.
17. Review financial and accounting personnel succession planning
within the Company.
18. Annually review policies and procedures as well as audit results
associated with directors' and officers' expense accounts and perquisites.
Annually review a summary of directors' and officers' related
party transactions
and potential conflicts of interest.
Adopted by the Board of Directors of Mother Lode Gold Mines Consolidated
February 11, 2004
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