UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
FORM 10-K (Mark One)
___X__Annual report pursuant to Section 13 or 15
(d) of the Securities
Exchange Act of 1934 (Fee Required) for
The fiscal year ended OCTOBER 31, 1997.
____Transition report pursuant to section 13 or 15 (d)
of the Securities
Exchange Act of 1934 (No Fee Required)
For the transition period from
_____to_____.Commission File No.-0-20217
CONTINENTAL WELLNESS CASINOS, INC.
(Exact name of registrant as specified in its charter)
____________COLORADO__________________________________ 84-0687501
(State or jurisdiction of incorporation) (IRS EMPLOYER ID No.)
1820 E. Garry Ave., Suite 109, Santa Ana, California
92705
(Address of principal executive offices)
Registrant's telephone number, including area
code:(714)477-0370
Securities Registered Pursuant to Section 12 (b) of the
Act;
Title of each class
Name of
each exchange on
which registered NONE
NONE
Securities Registered Pursuant to Section 12 (g) of the Act:
Common Stock, $.003 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has
filed all reports
required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter
period that the
registrant was required to file such reports,) and (2) has
been subject to
such filing requirements for the past 90 days.
YES___X___NO_____
Indicate by check mark if disclosure of delinquent
filers pursuant to
Item 405 of Regulation S-K is not contained herein, and
will not be contained,
to the best of registrant's knowledge, in definitive proxy or
information
statements incorporated by reference in PART III of this
Form- 10-K.
The aggregate market value of the voting stock held by
non-affiliated of the
Registrant is none, because there are no affiliates owning
any stock of the
Registrant. See Item 5. Market for Registrant's Common
Equity and Related
Matters.
The number of shares of common stock outstanding as
of October 31, 1997
was 90,028,877
Documents Incorporated by Reference
See Exhibit Index
ITEM 1. BUSINESS
Continental Wellness Casinos, Inc. was incorporated in
Colorado in October
22, 1974. In this report the term "The Company" refers to
continental Wellness
Casinos, Inc. Individually, or as a corporate entity, as the
context requires.
The company owns 3 unpatented mining claims and one
mill site covering
approximately 750 acres in Quincy, Plumas County,
California about eight miles
from Quincy, California. The properties ores are AU gold
and silver with ample
proven reserves.
ITEM 2. PROPERTIES
The mining properties are located on Buck Lake
Road, Quincy, California
approximately eight miles from Quincy, California in
the High Sierras
Mountains.
ITEM 3. LEGAL PROCEDURES
There are no legal proceedings.
ITEM 4. SUBMISSION OF MATTER TO VOTE OF
SECURITY HOLDERS
No matter was submitted during fourth quarter of the
fiscal year covered
by this report to a vote of security holders, through the
solicitation of
proxies or otherwise.
ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY AND
RELATED STOCKHOLDERS MATTERS
The principal United States market in which the
Company's common stock is
traded is the over-the-counter market. There is no other
trading market.
The following table sets forth the period indicating the
range of the high and
low bid quotations for the company's common stock as
reported. The reported bid
quotations reflect inter-dealer prices, without retail
markup, markdown, or
commissions, and may not necessarily represent actual
transactions.
1997 LOW HIGH
1 st Quarter No Trading No Trading
2 nd Quarter 6 3/8 7
3 rd Quarter 6 (r) 7
4 th Quarter 6 5/8 7
1996 LOW HIGH
3rd Quarter No Trading No Trading
1995 LOW HIGH
1 st Quarter No Trading No Trading
2nd Quarter No Trading No Trading
3rd Quarter No Trading No Trading
4th Quarter No Trading No Trading
1994 LOW HIGH
1st Quarter No Trading No Trading
2nd Quarter No Trading No Trading
3rd Quarter No Trading No Trading
4th Quarter No Trading No Trading
On September 30, 1997, the company's transfer agent
reported that there
were approximately 509 holders of record of the
company's common stock.
Dividends on the Company's common stock have never
been paid. See "Item 7",
Management's Discussions and Analysis of Financial
Condition and Results of
Operation" and note to Financial Statement.
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes certain selected financial
data for the periods
indicated. The data for the years ending October 31, 1997
and 1996 should be
read in conjunction with the more detailed audited
Financial Statement and
Notes thereto appearing elsewhere herein, including the
Independent Auditor's
Report.
CONTINENTAL WELLNESS CASINOS, INC.
SELECTED FINANCIAL DATA
(NOT COVERED BY INDEPENDENT AUDITOR'S
REPORTS)
Year Ending October 31,1997
1992 1993 1994 1995 1996
(Dollars in thousands, except per
share)
As of the end period:
Total assets; $.00 $.00 $.00 $25,841 $25,841
Working capital: $.00 $.00 $.00 $.00 $.00
(Deficiency)
Long Term
Debt &
capital lease
obligation: $.00 $.00 $.00 $.00 $.00
Shareholder's
Equity: $.00 $.00 $.00 $25,759 $25,841
Book Value per
common share $.00 $.00 $.00 $1.22 $1.23
CONTINENTAL
WELLNESS CASINOS, INC.
ITEM 7. Management's Discussion and Analysis of
Financial Condition and
Results of Operations
Results of Operations:
Summary of significant Accounting Policies Nature of the
business - Continental
Wellness Casinos, Inc., a Colorado corporation was
incorporated October 22,
1974.The company is engaged in the discovery and
development of precious metals
mining properties located in Quincy, Plumas County,
California which consists of
750 acres of land where 39 unpatented mine claims are
located.
All assessment work has been done at the mines and all the
exports had been filed
with the Bureau of Land Management, Sacramento,
California and the County of
Plumas in accordance with the mining rules and
regulations. The company has
permit to operate in small scale the mines from the United
States Forestry
Department, Quincy, California. The company intends in
going into a big mining
venture to recover the gold and silver in the proven
reserves as soon as the
price of gold increases in value.
The company is in the process of getting their Live Longer
Center, a Longevity
Members Association, with the purpose of helping people
to live longer by using
Preventative Medicine with gene testing for discovery of
predominant illnesses
in the different subjects and repair said genes by genetic
engineering, followed
by a program of exercise and nutrition. The members sign
for a period of ten
years and receive one week of care at the center. The cost
for this program is
$1,000.00 per year per member and the fee is refundable
by the member group
insurance and it is also tax deductible making it good way
to slow down the cost
of medical treatments that are out of control. In starting
this program, the
company is using the real-estate that was acquired.
CONTINENTAL WELLNESS CASINOS, INC.
ITEM 8. FINANCIAL STATEMENTS &
SUPPLEMENTARY DATA
The Financial Statement and Supplementary data of
continental Wellness Casinos,
Inc., are located in adjacent pages and are listed and
included under Item 14,
Exhibits are incorporated herein by reference.
ITEM 9. There are no disagreements with accountants on
accounting and
financial disclosures.
ITEM 10. DIRECTORS AND EXECUTIVE
OFFICERS OF THE REGISTRANT
The By-Laws of the Company provide that the number of
directors constituting the
entire Board shall be nine. Directors are elected at each
annual meeting of
shareholders to hold office until the next annual meeting
and until a successor
has been elected and qualified. The Company has held an
annual meeting of
stockholders on August 22, 1996 annual meeting of
shareholders, one has resigned,
and one has died, and the two vacancies thereby created
have been filed.
As a result, the number of directors currently serving is
seven.
The directors elect from their number the chairman of the
board and the
president of the Company, which offices are occupied by
Fred Cruz. The board
appoints other officers as the board deems suitable, to
serve at the pleasure of
the board. The officers of the company hold office for the
term for which such
officer is appointed and until his successor has been
elected and qualified.
Currently there are no Executive Officers of the Company
who do not also serve
as directors.
Identified herein are all directors and executive officers of
the Company. The
information set forth as to each director and executive
officer has been
furnished by such person.
FRED CRUZ,M.D., 74, is and has been since October
1987, a director, chairman
of the board, and president of the company. Dr. Cruz
holds two doctorate degrees.
Doctor of Podiatric Medicine and Doctor of Medicine. Dr.
Cruz had operated many
medical clinics in the State of California, and at the present
is retired from
his profession, but he had engaged in many business
ventures and been working
with precious metals for the past 30 years.
FRANK COBERLY, 82, retired naval officer, United
States Navy. Holds position
of administrative and supervisorial in nature. Since
retirement, he has been
involved in private investment banking, selling and
purchasing securities for his
portfolios. He has great experience in corporate
management of many millions in
assets.
DONALD STUDER, Attorney at Law, in practice since
January 9, 1969. Experience
in contract law, corporate law, labor law and business
administration. President
and Director of Grand American International Corporation
since 1984 to present.
Attorney and Sub-Trustee of Grand American Bank Trust
since 1984 to present.
Negotiated the acquisition of a full service bank in the
United Arab Emirates.
Engaged in the general practice of law, with emphasis on
business, real-estate
and labor law. Conducted a real-estate brokerage for 3
years. Negotiated over 300
collective bargaining agreements. Represented clients in
more than 100, each NLRB
proceedings, Superior Court and Federal Court actions.
Worked with Brundage,
Williams & Zellman Law Firm as a Staff Attorney,
specializing in labor law.
Opened own law office while still employed with Ryan
Aeronautical Company.
Handled over 300 cases including criminal, divorce,
personal injury, probate,
bankruptcy and contract matters. Phi-Kappa Phi, Sigma Pi
Sigma, Sigma Tau Sigma,
Phi Delta Phi, State Bar of California, San Diego County
Bar Association,
California real-estate broker, listed in Who's Who in
American Law (1st edition).
Received a B.S. degree in Physics, with honors, from the
University of Florida
in April 1963, and a JD degree, Magna Cum Laude, from
the University of San
Diego, in 1968.
BASIL COSTIN, 47, Secretary and Officer of the
Company since November
1996. Costin is a former United Nations Diplomat, based
in Geneva, Switzerland,
and has completed several diplomatic missions for the
U.N. throughout Europe,
the Mid-East and Asia, involving support services to the
domestic economical
infrastructures of developing nations. He also has over 15
years of extensive
international business experience, specializing in
international marketing,
related to the manufacturing-export industries, and he is
also experienced in
international banking, financing, investments, as well as in
technical
engineering services related to the engineering and
building industries. He has
worked in many regions of the world with major American
corporations in
management & executive level positions. In 1981, he
formed his own international
company, Costin International, Ltd., specializing in
international marketing,
consulting-management, and business consulting services.
He holds an M.S. degree
from Pacific Western University, 1979, in structural
engineering, A.A. degree in
Business Administration, Los Angeles Valley College, and
an A.S. degree in
Science Applications from Los Angeles Technical College.
FRANK VARIOUS, M.D., 67, Doctor of Medicine with
specialty in Internal
Medicine, Life Extension and Nutrition. Practice for last
30 years at Laguna
Medical Arts Medical Complex. Emphasis on Preventative
Medicine and Life
Extension. Author of many publications on the subject of
preventative medicine,
nutrition and life extension. Graduate from a recognized
Medical School with
credentials in the medical field.
JOHN MAVROS, Mavros has a broad background on
three continents involving
the operations and sales of hotels and suite properties. Has
held key management
positions over a period of several years with the Westin
Century Plaza Hotel in
Los Angeles, opened the Westin Philippine Plaza in
Manila, was general manager
of the Grande Bretagne Hotel in Athens, Greece, served as
Vice President and
General Manager of he Registry Hotel Corporation in
Irvine and Universal City,
California, served as Senior Vice President of California
Hotels Corporation.
Mavros is also a member of the University of Arizona
Presidents Club, and holds
a Certified Hotel Administrator designation from the
Educational Institute of the
American Hotel-Motel Association.
LEWIS AKMAKJIAN, 75, Graduate in business and
financing with major in
securities transactions and operations. Has been
stockbroker since 1958 and
worked as follows in the Securities Business: 1966,
Toluca Pacific Securities
Corporation, Manager, 1990 to 1995. H.J. Mayer and
Company, Broker-Manager,
1975 to 1988. C.L., McKinne, broker and manager, 1972
to 1975. G.L. Bisbak as
manager, 1958 to 1972. Foreman and company as
Securities Broker Manager,
1955 to 1958. J. Logan and Company as stockbroker
manager. Specialist
securities analyst, broker/dealer, underwriting, selling and
purchase of stocks
and bonds. License; CRD 2204 with approval granted in
California, National
Association of Securities Dealers and New York Stock
Exchange.
ITEM II. EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid
or accrued including
bonuses paid or accrued, to the following persons during
1972, for services
rendered in all capacities to the company.
Name of Individual Capacities in which served
or Number in Group
Cash Compensation during 1996
None None
None
The Company pays no compensation to directors for
services as a director.
ITEM 12. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The table shown below (1) contains certain information
with respect to any
person (including any "group" as that term is used in Sec.
13 (d) (3) of the
Exchange Act, who are known to the company to be
beneficial owners (as that
term defined in rules and regulations of the Securities and
Exchange
Commission under the Federal Securities Laws) of more
than 5 % of the
company's common stock. No person is known to the
company to be the beneficial
owner of more than 5 % of the company's common stock.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership
Outstanding
Percent of
Common
stock
Grand American Bank Trust 64,958,512
71 %
25872 Evergreen Rd.
Laguna Hills, Ca. 92653
The table shown below (1) contains certain information
with respect to the
company's common stock beneficiary owned (as that term
is defined in rules and
regulations of the Securities and Exchange Commission
under the Federal
Securities Laws) by all directors, and directors and officers
of the company
as a group.
Name of Beneficial Owner Amount and Nature of
None of Beneficial Ownership
Percent
Common Stock Outstanding
0 % 0 %
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
There are no certain relationships and related transactions
involving the Company.
CONTINENTAL WELLNESS CASINOS, INC.
BALANCE SHEET
October 31, 1997 and October 31, 1996
CONTINENTAL WELLNESS CASINOS, INC.
October 31, 1997 and October 31, 1996
CONTENTS
Pages
Independent Auditor's Report 1
Financial Statements 2
Balance Sheets 3 - 5
Notes to Financial Statements
LUIS R. HIDALGO
Certified Public Accountant
2056 Stevely Ave., Long Beach, Ca. 90815
Telephone (310) 430-4249 Fax (310) 430-3382
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors and Stockholders
Continental Wellness Casinos, Inc.
Santa Ana, California
I have audited the accompanying balance sheets of
Continental Wellness
Casinos, Inc. As of October 31, 1997 and October 31,
1996. These financial
statements are the responsibility of the Company's
management. My
responsibility is to express an opinion on these financial
statements based on
my audit.
I conducted my audit in accordance with generally
accepted auditing standards.
These standards require that I plan and perform the audit
to obtain reasonable
assurance about whether the financial statements are free
of material
misstatements. An audit includes examining, on a test
basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit
also includes assessing the accounting principles used and
significant estimates
made by management, as well as evaluating the overall
financial statement
presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the balance sheets referred to above,
present fairly, in all
material respects, the financial position of Continental
Wellness Casinos, Inc.
As of October 31, 1997 and October 31, 1996 in
conformity with generally accepted
accounting principles.
(S)LUIS R. HIDALGO
Luis R. Hidalgo
Certified Public Accountant
November 29, 1997
CONTINENTAL WELLNESS CASINOS, INC.
BALANCE SHEETS
October 31, 1997 and October 31, 1996
1997 1996
(Dollars In Thousands)[CAPTION]
ASSETS Gold in storage (Note 2)
$ 27,317 $ 27,317
Deferred charges and other assets
Deferred mining exploration costs (Note 3) 3,253 3,253
Deferred promotion and operating expenses 112
Total assets $ 30,682 $ 30,570
LIABILITIES AND STOCKHOLDER'S EQUITY
Loans Payable-Note 12 $ 31
STOCKHOLDER'S EQUITY
Common stock, Class "A" $0.003 par value
Authorized shares - 500,000,000 in 1996;
100,000,000 in 1995
Issued and outstanding - 90,028,877 in 1996;
38,803,405 in 1995. $ 270 $ 116
Common stock, Class "B" no par value
Authorized shares - 50,000,000 in 1996 and 1995
Issued and outstanding-3,266,960 in 1997 and 1996 33 33
Capital in excess of par 30,348 30,421
Total Stockholder's equity $30,651
Total Liabilities and Stockholder's Equity $ 30,682 $30,570
See accompanying notes to Financial Statements.
CONTINENTAL WELLNESS CASINOS, INC.
PRO-FORMA
PROFIT AND LOSS STATEMENT
PRO-FORMA
PROFIT AND LOSS STATEMENT
AS OF OCTOBER 31, 1997
(Dollars in
Thousands)
EARNINGS:
Life Extension Membership Club $100,000
Hotel and Casino Las Vegas, Nevada 75,000
Gold and Silver Mines Properties 150, 000
Total Earnings 350,000
EXPENSES
Life Extension Membership Club 61, 704
Hotel and Casino Las Vegas, Nevada 41,200
Gold and Silver Mines Properties 41,200
Total Expenses 154,858
PROFIT OR LOSS 195,142
2a
CONTINENTAL WELLNESS CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 1997
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
Description of Business - The Company is engaged in
the mining development
industry. Since October 22, 1974, the Company has
owned and operated thirty-nine
(39) mines and one (1) mill site at Quincy, Plumas County,
California, and is
engaged in the exploration of said mines for
the production of precious metal like gold and silver. The
Company also applied
for a license in Las Vegas, Nevada to conduct Life
Extension programs and to
operate hotels and casinos.
Currency Transactions - There are no assets and liabilities
of operations outside
the United States which need to be translated into U.S.
dollars using exchange
rates.
Development Costs - The Company will not capitalize
property taxes on its
mining properties until the mines are ready for operation
and development.
2. GOLD IN STORAGE AT BONDED
WAREHOUSE:
On October 9, 1990, the Company deposited at NDS,
United States Customs
Bonded Warehouse located at 19801 S. Santa Fe
Ave., Rancho Dominguez,
California, 90221, six (6) 55 gallon - drum containers of
gold dust (powder form)
999.5 pure weighing 76,112 troy ounces with a value of
$27,316,600 based on the
gold floor price of $358.90 per troy ounce. The market
values of gold per troy
ounce as of October 31, 1997 and October 31, 1996 are
$378.00 AND $384.30,
RESPECTIVELY. At these prices, the gold in storage
would carry fair market values
of $28,770,336 in 1997 and $29,249,841 in 1996.
3. DEFERRED MINING EXPLORATION COSTS
Deferred mining exploration costs were incurred in
prior years with the
amounts being estimated based on the prevailing costs
of mining exploration
at that time due to the absence of supporting
documentation. On April 13, 1996,
the Company issued shares of stocks valued at $3,252,669
to pay for its
obligations thereto.
4. RELATED PARTY TRANSACTIONS
Grand American Bank Trust owns approximately 71
% of the Company's Class
"A" common stock as of October 31, 1997.
5. PROVEN GOLD AND SILVER RESERVE:
The process of estimating reserves is very complex,
requiring significant
subjective decisions in evaluation
available geological, engineering and economic data for
each reserve. The data
for a given reserve may change substantially over time as a
result of additional
development activity, production under varying economic
conditions, etc.
Consequently, material revision to the existing reserve
estimates may occur in
the future. Although, every reasonable effort was made to
ensure that the
reserve estimates reported represent the most accurate
assessment possible, the
significance of the subjective decision required, the
variances in the available
data for various reserves, make these estimates generally
less precise than other
estimates in connection with financial disclosure. Proven
reserves are estimated
quantities of gold and silver which geological and
engineering data demonstrate,
with reasonable certainty, to be recoverable in future years
from known reserves
under existing economic and operating conditions.
Stickel and Associates, independent consultants in applied
geology, geophysics
and engineering, has estimated 7,000,000 troy ounces of
gold and 19,000,000
troy ounces of silver. The values of these reserves based
on average market
prices as of October 31, 1997 and October 31, 1996 are as
follows :
10-15-97 10-31-96
(Dollars in
Thousands)
Gold: 7,000,000 troy ounces
@ $378.00/troy ounce $2,646,000
@ $384.30/troy ounce $2,690,100
Silver:19,000,000 troy ounces
@$4.85/troy ounce 92,150
@$5.34/troy ounce 101,460
$ 2,791,560
$2,738,150
6. STOCKHOLDER'S EQUITY:
The Company is authorized to issue 50,000,000 shares of
no par value Class "B"
shares. The Company gave authority to its Board of
Directors to issue such "B"
stock in one or more series, and to fix the number of
shares in each series, and
all designations, relative rights, preferences and limitations
of the stock
issued in each series. As of April 13, 1994, the Board of
Directors had exercised
the authority granted.
7. CONTINGENCIES :
The Company is not involved in any legal proceeding
which is considered
to be ordinary routine litigation incident to its business.
8. TAXES :
The Company has not filed a federal income tax return
because there are
no earnings to export.
9. The Secretary of the State of Colorado
Corporation Office approved
the following on June 6, 1996:
a.) The name Grand American International
Corporation be changed to
Continental Wellness Casinos, Inc.
B.) The authorized capital stock, common shares Class
"A" of the Company
be increased from 100,000,000 shares to 500,000,000
shares with a $0.003 par
value per share.
10. ACQUISITION OF A HOTEL AND CASINO
LAS
VEGAS, NEVADA
The Company is in the process of concluding the
purchase of a hotel and
Casino in Las Vegas, Nevada.
.
11. THE INCREASE OF THE ISSUED AND
OUTSTANDING CLASS
"A" COMMON SHARES
The Company on December 6, 1995 by Company
Resolution approved the
issuance of 47,958,512 common "A" shares to pay the
mining exploration
cost of $3,252,669 that was paid by the Grand
American Bank Trust.
The Grand American Bank Trust could not accept the
shares until a legal
opinion is given by the Regulators.
The Legal opinion was given on February 15, 1996 and
the 47,958,512 class
"A" shares were issued to Grand American Bank Trust in
April 1996 by American
Securities Transfer, Inc., transfer agent. The Company by
Certificate of
Resolution that was approved on March 22, 1996 issued
3,266,960 class "A"
Restricted common shares to Joseph Witzman in payment
of the Company's obligation
to him of $180,953.75
The outstanding shares in 1996 of 90,028,877 and
38,803,405 in 1995 consist
of :
Balance 1/31/94 21,803,405
Issued to Grand American Bank Trust 17,000,000
Balance 10/31/95 38,803,405
Issued to Grand American Bank Trust 47,958,512
Issued to Joseph Witzman 3,266,960
Balance 10/31/96 90,028,877
12. LOANS PAYABLE - This represents the amount
owing to Dolores M.
Kelly, Successor Trustee of the Kelly Family Exemption,
UDT dated January 19,
1984, due January 1, 1997, and personally guaranteed by
Fred Cruz, President
of Continental Wellness Casinos, Inc. (Formerly Grand
American International
Corporation)
5
PART IV
ITEM 14. EXHIBITS, FINANCIAL
STATEMENT AND REPORTS
(a) The following documents are filed as part of this
report.
1. Financial Statement and Supplementary Data.
Independent Auditor's Report F-1
Grand American International Corporation
Financial Statements :
Balance sheets as of January 31, 1994 and 1993
F-2
Notes of Financial Statement, two years ended January
31, 1994 and 1993. F-3
2. EXHIBITS
2.01 Geological Reports of the mining properties
proven
The reserves used in the Financial Statements.
2.03 The NDS Bonded Warehouse Receipt for gold in
storage.
(b) Reports on Form 8-K
1. Amendment No. 2, dated March 6, 1996
2. Amendment No. 3, dated July 23, 1996
3. Amendment No. 4, dated July 25, 1996
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,
CONTINENTAL WELLNESS CASINOS, INC.
By: (S) FRED CRUZ,
FRED CRUZ, M.D.
Chairman of the Board
Chief Executive Officer
By:(S) BASIL COSTIN
BASIL COSTIN
Secretary
Dated: December 22, 1996
Pursuant in 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 date indicated.
Signature Title Date
(S)FRED CRUZ Chairman of the Board
December 22,1996
Fred Cruz, M.D.,
Chief Executive Officer
(S)BASIL COSTIN Secretary
December 22, 1996
Basil Costin,
Secretary
GEOLOGIC EVALUATION OF GOLD CLAIMS IN
PLUMAS COUNTY, CALIFORNIA
Stickel & Associates P.O. Box 91, Tustin, Calif.
92681
(714) 751-4742
May 14, 1985
Minerals Mining and Energy Corp.
7750 El Camino Real, Suite K
Rancho La Costa, Ca. 92008
Attention: Stewart Douglas, President
Subject: Review of Literature and Inspection of Gold
Claims in
Plumas County, California, Blackhawk, Alan, MMC
and Dean Lode Claims
Consisting of 750 Acres.
References; 1) Geology of the Pulga and Bucks Lake
Quadrangles,
Butte and Plumas Counties California, USGS Prof.
Paper 731, date 1973.
2) Examination and Sampling of the Blackhawk and
Section 13 Claims,
Plumas County, California, by Wm. H. Bird, dated
June 1, 1976.
3) Bucks Lake Quadrangle, Map, USGS, 1:62,500,
date 1950.
Gentlemen :
This letter presents our present geological engineering
evaluation of the
subject gold and silver claims that are located in
Plumas County,
California.
We visited and inspected the property on April 19, and
20, 1985. The
property consists of approximately 750 acres of lode
claims with a reported
overlying of a few placer claims. The properties lie about 5
and 11 miles
directly west of Quincy on the Bucks Lake Road.
The claims are named Blackhawk, Alan, MMC, and
Dean. The Blackhawk,
Alan and MMC claims lie in Sections 21, 22, and 27 of
T24N, R8E. The Dean
claims lie in the northwest corner of Section 13, T24N,
R8E.
Consultants In Applied Geology, Geophysics and
Engineering
Letter Report
MM & E Corporation
May 14, 1985
Page 2
GEOLOGY
These claims lie along the southwest and northwest
borders of a northwest
trending zone or band of highly fractured peridotite altered
to serpentine. Broad
fault zones bound the peridotite bodies or bands and there
are no indications of
heat alteration. There has been no production from hard
rock mining, however,
significant placer hydraulicking and sluicing has occurred.
The placer deposits
occur in two periods of erosion, the Present and the
Tertiary. Although,
concentrations of gold have only been found in the
Blackhawk and Dean claims, it
does occur scattered throughout the peridotite.
PRESENCE OF GOLD AND SILVER
Reference 2 indicates that there is a conservative
10,000,000 tons of hard rock
ore reserves. Rock chip and channel samples were
obtained from 10 to 50 foot
sections of road cuts and outcrops on these claims and it is
reported
"consistently assayed high in gold (AU) ." The highest
gold value was 2.80
oz/ton, however, the overall average was .7 oz/ton. Silver
(Ag) ranged from a
trace to 2.62 oz/ton. These values varied greatly,
depending upon the freshness
of the outcrop. Assays also indicated the presence of
platinoid metals.
Total amount of gold and silver in these claims is
7,000,000 oz. Of gold and
19,000,000 oz. Of silver. These figures were compiled
from data presented in
Reference 2.
It is reported that during the summer of 1983,
approximately $30,000 worth of
placer gold was dredged from one of the creeks flowing
through the Blackhawk
claims. This gold was dredged from an area of the creek
about 100 yards long.
Stickel & Associates warrant that our services are
performed, within the limits
prescribed by our clients, with the usual thoroughness and
competence of the
geological engineering profession. No other warranty or
representation, either
expressed or implied, is included or intended in our
proposals or exports or
contracts.
Letter Report
MM & E Corporation
May 14, 1985
Page 3
We appreciate the opportunity of presenting this
report. If you have any
questions, please contact this office.
Very truly yours,
STICKEL & ASSOCIATES
(S) J.F. STICKEL
J. F. STICKEL, RG 2999
JFS/ hr
April 25, 1986
It is our opinion that the described and proven "indicated"
ore reserves are
based on data as described above.
STICKEL &ASSOCIATES
(S) J.F. STICKEL
J.F. STICKEL, RG 2999
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