SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange act of 1934 for the transition period from ______ to________.
For the fiscal year ended March 31, 1996
Commission File Number: 0-6334
AURIC METALS CORPORATION
(Exact name of Registrant as specified in its Charter)
NEVADA 87-0281240
-------------------------------- ----------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1475 Terminal Way, Suite D
Reno, Nevada 89502
- ---------------------------------------- ------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number including Area Code: (318) 343-4448
1800 East Sahara, Suite 107
Las Vegas, Nevada 89104
- ----------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
------------------- ---------------------
None None
Securities Registered Pursuant to Section 12(g) of the Act:
None
-------------
(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 [ ]
The aggregate market value of the Registrant's voting stock held by
non-affiliates computed with reference to the bid prices in the over-the-counter
market on July 8, 1996, was approximately $366,000.
As of July 8, 1996, the Registrant had outstanding 1,000,000 shares of its
common stock, par value $.01.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document
is incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. None.
<page 1>
TABLE OF CONTENTS
Page
Item Number and Caption Number
PART I
1. Business 3
2. Properties 8
3. Legal Proceedings 8
4. Submission of Matters to a Vote of Security
Holders 8
PART II
5. Market for Registrant's Common Equity and
Related Stockholder Matters 9
6. Selected Financial Data 10
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
8. Financial Statements and Supplementary Data 11
9. Changes in and Disagreements on Accounting and
Financial Disclosure 11
PART III
10. Directors and Executive Officers of the Registrant 12
11. Executive Compensation 13
12. Security Ownership of Certain Beneficial Owners
and Management 14
13. Certain Relationships and Related Transactions 15
PART IV
14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 17
15. Signatures 18
<page 2>
PART I
ITEM 1. BUSINESS
GENERAL/HISTORY
Auric Metals Corporation (the "Company") is a Nevada Corporation which
holds interests in several natural resource properties, and a minority
interest in a hotel operation in New Mexico. Over the past several years, the
Company has principally been engaged in the acquisition, exploration and
development of interests in various natural resource properties, primarily
through participation with other parties in natural resource joint ventures or
other arrangements.
The Company was originally organized under the laws of the state of Utah.
In 1985, the Company became a Nevada corporation by merging with a wholly-owned
Nevada corporation created solely for the purpose of changing the Company's
state of domicile. The Company has one wholly-owned subsidiary, Auric Minerals
Corporation.
The Company was organized in 1969 for the purpose of engaging in mineral
exploration (principally silver, copper, gold, lead and zinc) on a mining
property located in Beaver County, Utah. In February 1970, the Company
completed a public offering under Regulation A of the Securities Act of 1933,
as amended, from which it raised approximately $350,327 in net proceeds for
its proposed exploration. In 1979, the Company's exploration activities on its
Beaver County mining claims were terminated, following the determination by the
Company that further exploration would be unproductive.
Since the termination of exploration activities in Beaver County, Utah, in
1979, the Company has participated in a number of natural resource joint
ventures, and has performed limited exploration and assessment work on other
natural resource properties, with a view towards evaluating such properties for
future exploration and development.
The Company holds interests in a number of natural resource properties in
Utah, Nevada, Oklahoma, and California. The Company presently holds a working
interest in one oil and gas well near Oklahoma City, Oklahoma, which has
provided the Company with nominal revenue over the past few years. The Company
also holds a working interest in various patented and unpatented mining claims
in the Tintic Mining District of Utah. The Company subleases forty-five (45)
mining claims to USX, formerly United States Steel Corporation. These claims
have, in turn, been assigned to other parties which have conducted limited
exploration on these claims.
In the fiscal year ended March 31, 1994, Auric Minerals Corporation, the
Company's wholly-owned subsidiary, acquired from an unrelated third party, a
50% interest in 7 patented mining claims and 11 unpatented claims in the Tintic
mining area west of the Company's Rex claims. The 7 patented mining claims were
terminated during the fiscal year ended March 31, 1995, due to title problems.
The Company has maintained its interest in the 11 unpatented claims. Over the
past several years, the Company has additionally held a 19% interest in a
limited partnership which holds certain sulfur and gold property in Inyo County,
California. Mining operations on this property were abandoned during the fiscal
year due primarily to a loss in demand for sulfur products. (See "BUSINESS,"
under this caption).
During the fiscal year ended March 31, 1991, the Company purchased, in a
private transaction, a total of 89,600 shares of restricted common stock of
Dynamic Oil Limited, at an average price of $1.98 per share. Dynamic Oil
Limited is a publicly-held British Colombia corporation which is engaged in oil
and gas exploration. The Company has now held such securities in excess of two
years, and is, therefore, able to dispose of this investment subject to
compliance with the requirements of Rule 144 of the Securities Act of 1933, as
amended. As of July 3, 1996, the market value of these securities was
approximately $44,775.
<page 3>
In addition to its natural resource investments, described above, the
Company is a principal shareholder in Corporation de La Fonda, Inc., a
corporation which owns the La Fonda Hotel in Santa Fe, New Mexico. This
investment has generated dividend revenues to the Company for the past several
years. Dividend revenue from this investment of $12,000 during the past fiscal
year, represents a decrease in dividend revenue from $15,000 in dividend revenue
for the 1995 fiscal year, and $27,000 in dividend revenue for the 1994 fiscal
year.
BUSINESS
During the fiscal year, the Company limited its activities to required
maintenance of its unpatented mining claims in the Tintic Mining District near
Eureka, Utah, and the continued search for suitable natural resource
opportunities for acquisition, participation or other involvement by the
Company. In September, 1995, the Company acquired a minority interest in 107
unpatented lode mining claims on Bureau of Land Management land, located close
to the Company's Ivanho claims near Elko, Nevada. (See "Acquisition of
Interest in Robbie Claims," below).
The Company conducted no exploration activities during the fiscal year,
and has realized no income from its mineral exploration activities to date.
The Company has realized most of its income from its interests in properties
developed and explored by other firms, and from lease payments and dividend
payments on the Company's equity holdings. The following is a general
description of the Company's holdings and business activities during the fiscal
year.
Hillcrest Claims
Since 1981, the Company has subleased forty-five (45) unpatented mining
claims covering approximately 600 acres north west of Elko, Nevada, to USX,
formerly United States Steel Corporation. The Company acquired this lease from
Hillcrest Mining Company ("Hillcrest") in 1981. The Company obtained the lease
for an initial term of three years, ending August 31, 1984, in consideration of
the agreement to do all the assessment work on the lease during its term at a
cost of $100 per claim per year, and to actively market the property during
such term. The lease grants to the Company the option to extend the lease
year by year for an additional twenty years by making advance royalty payments
of $6,000 to Hillcrest. The lease further provides that the Company will pay to
Hillcrest a royalty equal to 50% of the Company's earnings from the property,
after deducting all direct costs incurred by the Company in the development of
the property, exclusive of the Company's overhead.
USX acquired the claims from the Company for a primary term of two years,
expiring December 31, 1983, for which the Company received $9,000, $4,500 of
which was paid to Hillcrest. USX has the right to renew the options for
twenty additional one year terms by paying an advance royalty of $25,000 in
1984 and 1985 and $50,000 per year thereafter for the term of the lease or as
long as there is production. USX has paid the advance royalty for each year
to and including fiscal year ended March 31, 1992, and has paid for all
assessment work required during the term of the sublease. Pursuant to the
terms of a modification of the lease between Auric and Hillcrest, resulting in
an equal interest between Auric and Hillcrest, the Company and Hillcrest each
now receive a 1% royalty interest for gold, calculated on the basis of net
smelter returns, and a 3% royalty interest on other metals, calculated on the
same basis.
Since January 1987, Cornucopia Resources, Ltd. ("Cornucopia"), a Canadian
corporation listed on the Vancouver Stock Exchange and the Toronto Stock
Exchange, has held all of the leasehold interest of USX in the Hillcrest
Claims, subject to its obligation to comply with the terms of USX's sublease.
Cornucopia subsequently entered into a joint venture with Galactic Resources,
Ltd. ("Galactic"), providing for the mining and exploration of the Hillcrest
claims and adjacent properties. Under the terms of the joint venture, Galactic
earned a 50% interest in the project by providing a feasibility study and by
funding an initial phase of mining on the project.
In 1992, Newmont Mining Company ("Newmont") acquired the leasehold
interest held by the Company in its Ivanho property near Elko, Nevada,
<page 4>
covering 85,000 acres. In the past three years, a deep drilling program with
drillsites on the Ivanho property, has been conducted. In 1995, Newmont and
Cornucopia entered into a joint venture arrangement providing for the joint
development of the Ivanho property. Newmont has recently advised its joint
venture partner that it is withdrawing from the Ivanho property, and Cornucopia
is presently seeking a new joint venture partner. If Cornucopia is
unsuccessful in finding a new partner, the leasehold interest may be reclaimed.
Accordingly, the Company does not know when the Company's leased acreage will
be developed, or the extent of such development.
The Company has been advised that a substantial amount of capital has been
expended for initial mining and exploration activities on the Ivanho property,
of which the Company's property is a part. A 1992 report from Galactic and
Cornucopia indicates that in 1991 the joint venture produced 60,000 ounces of
gold from the USX pit located on a portion of the Ivanho property. The Company
has been further advised that gold and other minerals have been extracted by the
joint venture parties and their operator, Touchstone, on claims adjoining the
Company's claims. In August, 1994, a high-grade vein was drilled near the
western margin of the Clementine prospects of the Ivanho property. Cornucopia
has reported in a letter to its shareholders that preliminary analysis of the
drilling encompassing the Clementine, Velvet and Butte prospects has developed
a geologic resource of 9,106,000 tons grading 0.035 ounces of gold per ton, or
320,000 ounces of gold. As indicated, the Company cannot predict at this time
what further exploration and development, if any, will be undertaken on these
properties.
Tintic Claims
The Company holds a 52% working interest in eighteen (18) unpatented
mining claims located in the Tintic Mining District, near Eureka, Utah. The
Company will retain its interest in the claims as long as it makes required
annual payments on such claims, which the Company has paid through the fiscal
year ended March 31, 1996. Applicable government regulations increased the
annual fee for assessment and related work to $200 per claim during the fiscal
year ended March 31, 1993. These claims, acquired in 1984, have been held since
1965 by directors and shareholders of the Company.
During the 1996 fiscal year, the Company paid the required lease payment
to the Bureau of Land Management of $100 per claim, as required in lieu of
exploration by drilling. The Company has reduced the number of its claims from
43 to 18, to reduce its annual fees associated with these claims.
The Company's claims are located on the south side of a caldera, or
ancient volcano. Sunshine Mining Company operates the Bergen Mine on the north
side of the caldera, which is located approximately twelve miles from the
Company's claims. The Company has been advised that Cornucopia Resources has
conducted exploration west of the Company's claims. The Company has also been
advised that Centurion Mines Corporation has staked adjoining claims. The
Company is aware of exploration activity in the area, there is no such activity
close to the Company's claims.
In October, 1993, Auric Minerals Corporation, the Company's wholly-owned
subsidiary, acquired by lease from unrelated third parties, a 50% working
interest in 7 patented mining claims, and a 50% interest in 11 additional
unpatented mining claims located in the Tintic Mining District approximately
15 miles west of the Company's Rex claims. The Company's interest in the 7
patented mining claims terminated in the fiscal year ended March 31, 1995, due
to certain title and related problems. The Company has maintained its interest
in the 11 unpatented mining claims, by payment of the required annual fee to the
BLM of $100 per claim. Any profits on the claims are to be shared equally
between the Company and the lease holder.
Inyo Claims
For the past several years, the Company has held an interest in the Crater
Limited Partnership, a California limited partnership (the "Partnership".)
During the fiscal year ended March 31, 1989, the Company paid an additional
$12,000 to increase its interest in the Partnership from 14% to 19%. The
Partnership owns a sulfur and gold property in Inyo County, Nevada, located
northwest of Death Valley.
<page 5>
Subsequent to its organization, the Partnership subleased the property to
an independent third party for extraction of sulfur for agricultural use.
During the 1993 and 1994 fiscal years, the Company earned a nominal profit
from its interest in the Partnership. However, during 1993, the government
has prohibited the use of sulfur as a fertilizer for grapes. Additionally,
during the 1994 fiscal year, an access road to the property was closed to
protect a wilderness area, which has resulted in a loss of the market for
sulfur products in Nevada. Moreover, during the fiscal year ended March 31,
1995, the Company lost its contractor on the property, resulting in no profit
to the Partnership. Flooding in California in 1995 has also resulted in a
major loss of market demand for sulfur in 1995. As a result of these
developments, continuation of sulfur extraction on the property is no longer
viable, and these mining efforts have been abandoned.
Investment in Dynamic Oil Limited
During the fiscal year ended March 31, 1991, the Company purchased, in two
private transactions, a total of 89,600 shares of restricted common stock of
Dynamic Oil Limited, an unaffiliated publicly traded British Columbia
corporation ("Dynamic"), at a total purchase price of $175,880, or an average
cost of $1.98 per share. The Company's holdings in Dynamic represented, at
the time of purchase, approximately 1% of the outstanding common stock of
Dynamic. The stock was purchased at a price of 15% below the market value of
Dynamic common stock on the respective dates of purchase. In connection with
these transactions, Auric was granted a warrant with each share of Dynamic
purchased, which warrants have expired.
Dynamic is a publicly held corporation incorporated in British Columbia,
which is engaged in oil and gas exploration. Auric has been advised that
Dynamic is a party to a joint venture agreement with Conoco Oil and British
Columbia Gas, providing for the development of a source of gas for Vancouver,
Canada. In 1994 and 1995, Dynamic reported that it participated in drilling
three successful horizontal oil wells in S.E. Saskatchewan, a new gas well in
N.W. Alberta, and doubled its landholdings in the Boundary Bay prospect area of
S.W. British Columbia. Dynamic has additionally reported that it has conducted
an extensive geochemistry program and successfully obtained permission from the
British Columbia government to drill two new Fraser Delta gas exploration wells
in 1995. In 1994, Dynamic reported that it purchased an additional 20%
interest in its St. Albert 01-30 gas project near Edmonton, Alberta,
increasing its interest in the project to 70%. More recently, Dynamic reported
the drilling of a dry hole on its Frazier Valley leases, which caused, in large
part, a sharp drop in the price of Dynamic's stock over the past few months.
During the fiscal year ended March 31, 1996, the Company sold a total of
10,000 shares of Dynamic, at a price of $14,608, or a loss of approximately
$5,021. The Company continues to own 79,600 shares of Dynamic. The common
stock of Dynamic is quoted on NASDAQ under the symbol "DYOLF." As of July 3,
1996, the market value of the common stock of Dynamic held by the Company, was
approximately $44,775, based on the bid prices of Dynamic's stock.
Acquisition of Interest in Robbie Claims
In September, 1995, the Company entered in a partnership agreement with
Hi-Tech Exploration, Ltd. ("Hi-Tech"), Hillcrest Mining Company ("Hillcrest"),
and James Fouts ("Fouts"), the Company's President, pursuant to which the
Company, Hillcrest and Fouts each purchased from Hi-Tech a 25% interest in 107
unpatented lode mining claims, known as the "Robbie Claims," for the sum of
$3,566.67 each. The Robbie claims are located within one-half mile of the
Company's Ivanho claims near Elko, Nevada, on Bureau of Land Management land.
These claims are believed to be deep gold prospects. The partnership agreement
requires the parties to maintain the mining claims, and make required annual
payments to the BLM, for a minimum period of 20 years. The interest held by
each of the parties cannot be assigned without approval by the other partners,
and any such assignment shall carry with it the obligation to share in the
annual maintenance of the claims. Each party is required to notify the other
parties on or before June 15 of each year, as to whether such party will pay
his or its share of the required annual fee to the BLM for the following year.
Failure to notify the other parties will result in a default of such failing
party's interest in the claims.
<page 6>
The partners are presently evaluating the Robbie claims, and do not have
any present intention to explore or develop the claims.
La Fonda Investment
For the past several years, the Company has owned a total of 12,000 shares
of restricted common stock, or approximately 12% of the presently outstanding
stock, of Corporation de La Fonda, Inc. ("La Fonda"), a New Mexico corporation
which owns and operates the historic La Fonda Hotel in Santa Fe, New Mexico.
The operations of La Fonda have been profitable for the past several years.
La Fonda reported net earnings, after taxes, of $1,022,451, $990,261 and
$1,180,000 for its fiscal years ended October 31, 1995, 1994 and 1993,
respectively, as compared to net earnings, after taxes, of $841,695 for its
fiscal year ended October 31, 1992. The majority of the profits of La Fonda
have been reinvested in improvements to the hotel. Over the past three years,
La Fonda has undertaken substantial renovations and improvements to the hotel,
including a major addition to the hotel, the installation of security, fire
sprinkler and heating and cooling systems, at a cost of several million dollars.
In 1991, La Fonda expended approximately $3,000,000 for the construction of a
large banquet hall, which has received a considerable amount of recognition and
national attention. Similarly, in 1987 and 1988, La Fonda expended in excess of
$560,000 to complete a renovation of its hotel rooms. La Fonda has reported
that these improvements have contributed to the continued operating success of
La Fonda.
During the fiscal years ended March 31, 1996, 1995, 1994, 1993, 1992, 1991
and 1990, the Company earned dividend income from its investment in La Fonda of
$12,000, $15,000, $27,000, $30,000, $6,000, $38,400 and $36,600, respectively.
Dividends during the 1996, 1995 and 1994 fiscal years decreased from 1993 as a
result of La Fonda's reinvestment of profits into improvements in the hotel,
and its decision to reduce improvements loans before undertaking a future
expansion planned for the hotel.
James Fouts, president, is a director and holder of 705 shares of La Fonda.
In addition, Elizabeth B. Fouts has recently been elected a director of La
Fonda. In October, 1989, the Company and the other shareholders holding a
total of approximately 45% of the outstanding common stock of La Fonda,
entered into a Voting Trust Agreement with Samuel Ballen, James Fouts and
James Russell, trustees, under the terms of which all of the voting rights of
La Fonda held by such shareholders were assigned to the trustees until
December 31, 1999. The purpose of the Voting Trust is to protect the
assets of La Fonda and to reduce the likelihood of an unfriendly takeover
attempt.
OTHER ACTIVITIES
All of the Company's oil and gas exploration, development and production
is conducted through various joint ventures in which the Company is a
participant.
During the fiscal year, the Company did not conduct any exploration
activities, and did not incur any expenditures in connection with oil and gas
exploration activities.
During the fiscal year ended March 31, 1989, the Company formed Auric
Minerals Corporation, a wholly-owned Nevada subsidiary, to hold the Company's
interest in the Hugoton Joint Venture, a joint venture organized to acquire oil
and gas lease options in western Oklahoma. In 1989, Petroleum Consultants
Energy Corporation ("Petroleum Consultants"), a joint venture partner located
in Northfield, Illinois, assumed control of the joint venture under an
arrangement whereby it has agreed to assume all future expenditures of the
project in exchange for an interest in the project equal to its pro rata
share of the entire investment in the project since inception. The Company's
interest in the joint venture, as well as the interest of other parties, has
been and will continue to be reduced as Petroleum Consultants expends sums on
behalf of the joint venture. The Company currently holds a net revenue
interest of approximately 10% in the joint venture.
>page 7>
The Company is advised that the Hugoton Joint Venture presently held
lease options covering approximately 35,000 acres in Texas County, Oklahoma.
In 1991, the Joint Venture commenced a lawsuit in an attempt to reduce the
spacing required between oil wells or drill sites, in order to make the
purchase and exploration of the venture's lease options more attractive. In
addition, the Joint Venture initiated a lawsuit against the venture's former
attorney's, seeking damages for malpractice. During the 1993 fiscal year,
this lawsuit was settled, and the Company received the sum of $52,650 as its
portion of the settlement proceeds. During the 1993 fiscal year, the Company
paid the sum of $5,000 for a 10% interest in a proposal to drill horizontal
wells in old shallow oil fields, for the purpose of extending the useful life
of the nearly-depleted oil field. In recent years, the Company's investment in
this project had been reduced on the accounting records of the Company to
recognize impairment in the value of the property interest. During the fiscal
year ended March 31, 1996, the Company reduced the remaining value of its
interest to zero, reflecting its assessment that there is no realistic
recoverable value.
EMPLOYEES
The Company has no regularly paid employees. The Company paid The
Fremont Corp., a corporation of which James Fouts is president and a principal,
a total of $12,000 during the fiscal year for secretarial services, office
space and clerical services. In addition, the Company has reimbursed James F.
Fouts for his expenses incurred on behalf of the Company. In the past, the
Company has also engaged the part-time services of others in connection with
exploration work conducted on its mining claims.
ITEM 2. PROPERTIES
NATURAL RESOURCE PROPERTIES
As discussed in "ITEM 1 - BUSINESS", the Company holds interests in
various natural resource properties in Utah, Nevada, California and Oklahoma.
For a more detailed discussion of the Company's interest in these properties
and exploration and development activities relating to such properties,
reference is made to "ITEM 1 - BUSINESS: Business Activities During Fiscal
Year".
SHARES OF LA FONDA
The Company is the holder of 12,000 shares or approximately 12% of the
outstanding common stock of Corporation de La Fonda, Inc., a corporation which
owns the La Fonda Hotel in Santa Fe, New Mexico. (See "ITEM 1 - BUSINESS".)
OKLAHOMA OIL AND GAS INTERESTS
The Company currently has a working interest in one producing oil and gas
well located near Oklahoma City, Oklahoma. This oil well has negligible
reserves and, therefore, no estimates of proved oil and gas reserves is
available or material. Production from the well has declined to a nominal
amount over the past five years. All other oil and gas wells in which the
Company has had a working interest are no longer productive.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings, and
to the best of its knowledge, no such proceedings by or against the Company
have been threatened.
<page 8>
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.
PART II
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The common stock of the Company is traded in the over-the-counter market.
There is currently a very limited trading market for the Company's common stock.
The Company's shares of common stock are eligible for quotation on the NASD
Electronic Bulletin Board under the symbol "AMLS." The following sets forth,
for the respective periods indicated, the high and low bid prices of the
Company's common stock in the over-the-counter market, based on inter-dealer
bid prices, without retail markup, markdown, commissions or adjustments
(which do not represent actual transactions), as reported by the National
Quotation Bureau's "Pink Sheets".
Quarter Ended High Bid Low Bid
1991 Fiscal Year:
June 30, 1991 $.375 $.25
September 30, 1991 .375 .25
December 31, 1991 .375 .25
March 31, 1991 .375 .25
1992 Fiscal Year:
June 30, 1991 $.50 $.25
September 30, 1991 .50 .50
December 31, 1991 .50 .50
March 31, 1992 .50 .50
1993 Fiscal Year:
June 30, 1992 $.25 .25
September 30, 1992 .25 .25
December 31, 1992 .25 .25
March 31, 1993 .25 .25
1994 Fiscal Year:
June 30, 1993 $.25 .25
September 30, 1993 .25 .25
December 31, 1993 .25 .25
March 31, 1994 .25 .50
<page 9>
1995 Fiscal Year:
June 30, 1994 $.625 .50
September 30, 1994 .625 .625
December 31, 1994 .625 .625
March 31, 1995 .75 .625
1996 Fiscal Year:
June 30, 1995 $.875 .625
September 30, 1995 .875 .625
December 31, 1995 .875 .625
March 31, 1996 .875 .625
On July 8, 1996, the average high and low bid prices quoted by
broker-dealer firms effecting transactions in the Company's common stock,
were $.875 and $.625, respectively.
Since inception, no dividends have been paid on the Company's common
stock, and the Company does not anticipate paying dividends in the foreseeable
future.
At July 8, 1996, there were approximately 726 holders of record of the
Company's common stock.
ITEM 6.
SELECTED FINANCIAL DATA
The following selected financial data of the Company is covered by an
opinion of a certified public accountant and should be read in conjunction
with the financial statements and related notes thereto.
INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED MARCH 31
1996 1995 1994 1993 1992
Total Revenue $37,481 $40,851 $52,507 $56,320 $36,073
Revenues from
natural resource
investments 25,402 25,786 $25,507 25,698 26,145
Net Income (loss) 37,662 (12,868) (12,995) 13,183 (5,081)
Net Income (loss)
per common share (.0387) (.0131) ($.0132) $0.013 $0.005
<page 10>
BALANCE SHEET INFORMATION
AS OF MARCH 31
1996 1995 1994 1993 1992
Total Assets $229,309 $314,694 $351,071 $407,474 $490,513
Long-term
debt 0 0 0 0 0
Cash dividends
declared per
common share 0 0 0 0 0
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's current assets as of March 31, 1996 of $29,261 represents an
increase in current assets of $11,779 from current assets of $17,482 one year
earlier. Total assets at March 31, 1996, of $229,309, represents a decrease in
total assets of $85,385 from total assets of $314,696 one year earlier, which
is attributable in large part to certain write-offs of interests in natural
resource properties, and a reduction in value of approximately $45,594 of the
marketable value of the securities of Dynamic Oil Ltd. held by the Company.
Similarly, stockholders' equity of $228,795 at March 31, 1996 represents a
decrease in stockholders' equity of $85,006 from stockholders' equity of
$313,640 at March 31, 1995. As indicated, this decrease can be attributed in
large part to a reduction in value of marketable securities and write-offs in
natural resource properties.
The Company does not have sufficient liquidity or capital resources to
finance any major developments by the Company. Should ongoing exploration
produce favorable results, any adequate exploration or development would
require substantial additional financing or the participation of a larger,
better-financed company.
RESULTS OF OPERATIONS
During the fiscal year ended March 31, 1996, the Company had total revenue
of $37,481, and expenses of $75,143, resulting in a net pre-tax loss of
$37,662, as compared to a net pre-tax loss of $12,868 for the fiscal year
ended March 31, 1995. The Company's decrease in revenue is a result of a
reduction in dividends received on shares of stock of Corporation De La Fonda
held by the Company over the past two years. While total revenue during the
fiscal year ended March 31, 1996, was only $3,370 less than total revenue in
the fiscal year ended March 31, 1995, expenses during the fiscal year ended
March 31, 1996 were $21,424 greater than the fiscal year ended March 31, 1995,
due to losses on a natural resource property, and a valuation allowance on an
unproved property ($19,443).
During the fiscal years ended March 31, 1996 and 1995 and 1994, operating
revenues from the Company's interest in oil wells in Oklahoma was nominal.
The Company received a $25,000 advance royalty payment during the fiscal year
on its leased mining claims in Nevada, after paying the same amount to
Hillcrest under the terms of the Company's lease with Hillcrest. Dividend
income of $12,000 from the Company's investment in La Fonda during the year
represents a decrease in dividend income of $3,000 and $15,000 from the fiscal
years ended March 31, 1995 and 1994, respectively.
<page 11>
Management does not believe that the Company's operations have been more
adversely impacted by inflation than other similar businesses, although
increased expenses have affected the cost of minerals exploration.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are included beginning at
page F-1.
ITEM 9.
CHANGES IN AND DISAGREEMENTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
During the fiscal year there has been no disagreement with accountants on
any matter of accounting principles or practices or financial statement
disclosure as provided in Regulation S-K, Item 304.
PART III
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
LIST AND TERMS OF OFFICE
The table below sets forth the name, age, and position of each executive
officer and director of the Company.
Officer or
Name Age Position Director Since(1)
James F. Fouts 77 Director, President 1969
and Chief Executive
Officer
George W. Wortley 84 Director, Vice President 1974
and Assistant Secretary/
Treasurer
Dan Ligino 72 Director and Vice President 1974
Elizabeth F. White 46 Director 1985(2)
Elizabeth B. Fouts 68 Secretary/Treasurer and 1975(2)
Principal Financial
Officer
____________
(1) All directors and executive officers serve for a term of one year or
until their successors are chosen and qualified.
<page 12>
(2) James F. Fouts is the father of Elizabeth F. White and the husband of
Elizabeth B. Fouts. There are no other family relationships among any of the
above-named directors, executive officers, or nominees.
- -------------
James F. Fouts. Mr. Fouts has been president of the Company since 1975.
From 1969 to 1975, he served as secretary/treasurer of the Company and has
served as director of the Company since its incorporation in 1969. Since 1967
he has also been employed as president of Fremont Corporation, a private
corporation and an affiliate of the Company engaged in holding and managing
investments (chiefly real estate), with its principal office and place of
business in Louisiana. Mr. Fouts graduated from Texas A&M University in 1940
with a bachelor's degree in chemical engineering. From 1940 to 1959, he was
employed as division superintendent for Bariod Division of the National Lead
Company, supervising oil well logging operations in the western United States
and Canada, with headquarters in Casper, Wyoming. From 1940 through 1966, he
was engaged in the business of technical reproduction and oil well log
distribution in Canada and the United States. He is a member of the American
Association of Petroleum Geologists; Intermountain Association of Petroleum
Geologists; and a past vice president of the Wyoming Geological Association.
He was formerly a director of the Rocky Mountain Oil & Gas Association. He is
presently a director of Corporation de La Fonda, an affiliate of the Company
engaged in the hotel business. Mr. Fouts and his wife also own 3,000 shares of
the common stock of La Fonda. Mr. Fouts is also a director of High Plains
Natural Gas Company, a pipeline company serving five counties in the Texas
Panhandle.
George W. Wortley. Mr. Wortley is retired. He continues to devote part-time
as vice president, assistant secretary/treasurer and director of the Company,
positions he has held since 1974. Prior to his retirement, he was active in
independent mining exploration services for 27 years. Mr. Wortley is also a
director of Gold Ventures, Inc., a publicly-held company subject to the
reporting requirements of Section 15(d) of the Securities Exchange Act of 1934.
Dan Ligino. Mr. Ligino has served as vice president and a director of the
Company since 1974. He is and has been for approximately the past sixteen
years a director of State Bank of East Moline, Illinois, and is a director of
the Colona Avenue State Bank in East Moline. He is a retired businessman.
Prior to his retirement, he had 23 years of experience in the Dairy Queen
business; 20 years of experience, including serving as president of Hub City
Implement Company, as a John Deere equipment distributor; and over 25 years of
experience in real estate.
Elizabeth F. White. Mrs. White as been a director of the Company since 1985.
She graduated from Newcomb College of Tulane University, New Orleans, Louisiana,
in 1971. She was employed by Traveler's Insurance Company for five years,
where she was resident agent at Houma, Louisiana specializing in
investigations in oil exploration and offshore drilling accidents. In 1977,
she moved with her family to California and presently resides in Monte Sereno,
California with her husband and two children. She has founded, owned and
operated a successful business importing and selling European chocolate candy.
Since 1981, she has been a computer consultant for children's education and
has had several children's programs authored by her published. She has
consulted for Apple Computer and has served on the Apple Computer Grant
Committee. Mrs. White was a director of a science and computer school located
in San Jose, California. Mrs. White was a partner in Empower-Net, a business
consulting firm. Presently, Mrs. White is an instructor in AVATAR, a business
program.
Elizabeth B. Fouts. Mrs. Fouts has served as secretary/treasurer of the
Company since 1975. She is a graduate of Newcomb College of Tulane University,
New Orleans, Louisiana. She obtained a master of science degree in psychology
from Northeast Louisiana University of Monroe, Louisiana. For a period of
fifteen years until July, 1987, when she retired, she was employed as a
psychology consultant by the County School System of Ouachita Parish to July
1987. In December, 1993, Mrs. Fouts was elected a director of La Fonda. Mrs.
Fouts is also secretary/treasurer for Fremont Corporation, an affiliate of the
Company, and has held similar positions in other companies.
<page 13>
ITEM 11.
EXECUTIVE COMPENSATION
REMUNERATION DURING FISCAL YEAR
During the fiscal year ended March 31, 1996, no officer or director received
compensation exceeding $60,000.
The following table sets forth the compensation paid by the Company during
the fiscal year to all officers and directors as a group:
Name/Position Cash Compensation*
All officers and directors as
a group (5 persons) $14,396*
* Consists of $12,000 paid to Fremont Corporation, a corporation of which
James Fouts is an officer and principal shareholder, for office use and
bookkeeping, secretarial and clerical services; and $2,396 paid in
directors' fees.
The directors are compensated $500 per year for board membership, and are
paid $100 per meeting attended, plus expenses. The Company has held only one
formal board meeting per year for the past several years.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table shows, as of July 8, 1996, the number of shares of common
stock, par value $.01, of the Company owned of record or beneficially by each
person who owned of record, or was known by the Company to own beneficially,
more than 5% of the Company's common stock, and the name and shareholdings
of each officer and director, and all officers and directors of the Company as
a group:
Amount and Nature of Ownership(1)
---------------------------------------------------
Sole Voting Shared
and Voting and Percent
Name of Person Investment Investment of
or Group Power Power Class(1)
Principal Shareholders:
Alan E. Fouts(2)(4) 96,250 9.63
4002 Bon Aire Drive
Monroe, Louisiana 71203 12,800(2) 1.28
Donovan B. Fouts(2)(4) 96,250 9.63
4002 Bon Aire Drive
Monroe, Louisiana 71203 0 0.00
James F. Fouts(2)(4) 33,500 3.35
4002 Bon Aire Drive
Monroe, Louisiana 71203 76,250(3) 7.63
<page 14>
Elizabeth B. Fouts(2)(4) 0 0.00
4002 Bon Aire Drive
Monroe, Louisiana 71203 76,250(3) 7.63
Dan Ligino 87,425 8.74
1407 19th Street
East Moline, IL 61244 43,500(5) 4.35
Elizabeth F. White(2)(4) 122,400 12.24
243 Via la Posada
Los Gatos, CA 95030 0 0.00
George W. Wortley 0 0.00
1781 Texas Street
Salt Lake City, Utah 84108 0 0.00
Amount and Nature of Ownership(1)
-----------------------------------------------
Sole Voting Shared
and Voting and Percent
Name of Person Investment Investment of
or Group Power Power Class(1)
Officers and Directors:
James F. Fouts ------------------------See Above---------------
Elizabeth B. Fouts ------------------------See Above---------------
Dan Ligino ------------------------See Above---------------
Elizabeth F. White ------------------------See Above---------------
George W. Wortley ------------------------See Above--------------
All officers and directors 236,975 23.70
as a group (5 persons)(3)(4)(5) 119,750(3) 11.98
- ------------
(1) The percentages are calculated based on the number of outstanding
shares (1,000,000) of the Company as of the Record Date, after deducting a
total of 15,511 shares held by the Company in treasury.
(2) Alan E. Fouts, Donovan B. Fouts and Elizabeth F. White are the sons
and daughter, respectively, of James F. Fouts and Elizabeth Fouts, husband and
wife. With respect to Alan E. Fouts, of the shares reflected under "Shared
Voting and Investment Power", 12,800 shares are held in a family trust.
(3) Consists of 76,250 shares owned directly by James F. Fouts and
Elizabeth B. Fouts, his wife, in joint tenancy.
<page 15>
(4) In addition to the beneficial stock ownership of Mr. Fouts and his
immediate family, described above, other relatives of Mr. Fouts own the
following interests: 12,800 shares owned by a brother; 800 shares owned by
a sister; 38,325 shares owned by a brother-in-law; and 1,800 owned by a
sister-in-law. No agreement or understanding exists with respect to the
voting of these shares; however, it is anticipated that they will be voted as
Mr. Fouts recommends or that Mr. Fouts will be designated as proxy with respect
to the shares.
(5) These shares are held in joint tenancy by Mr. Ligino and his brother.
There are no arrangements known to the Company the operation of which may at
a subsequent date result in a change of control of the Company.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company employs officers and principal shareholders in the performance of
exploration work on its mineral claims and in evaluating new properties.
Compensation paid in connection with these services has been determined by the
Company to compare favorably with amounts which could be expected to be paid to
third parties. No amounts were paid during the last fiscal year.
No director, officer, nominee for director, or any associate of such
director, officer or nominee, has been indebted to the Company at any time
during the past several fiscal years.
The Company owns 12,000 shares or approximately 12% of the outstanding
common stock of Corporation de La Fonda. James F. Fouts, President, is also
a shareholder and director of Corporation de La Fonda. Because of these
relationships, any transaction between the Company and this entity cannot be
deemed to be at arm's length.
In August, 1993, the Company authorized the grant of options to purchase a
total of 12,000 shares of common stock to each of the Company's officers and
directors. These options are exercisable at a price of $.60 per share at any
time on or before August 14, 1996. Although the exercise price of the optioned
shares is higher than the bid price of the Company's common stock as of the
date of grant, and as of the present date, this transaction cannot be
considered the result of arms' length negotiations. During the fiscal year
ended March 31, 1995, options to purchase a total of 12,000 shares of the
Company's common stock were exercised by Elizabeth B. Fouts, a director and
wife of the Company's president.
On October 1, 1986, the Company loaned the sum of $100,000 in cash to Suite
Simpatica, Ltd. ("Debtor"), a New Mexico corporation, under the terms of a
Promissory Note (the "Note") of such date. The Note was payable on or before
October 1, 1989. Although the original terms of the Note provide for interest
at the rate of 8.1% per annum from October 1, 1986, the Company subsequently
verbally agreed to forego interest on the Note. The Note was subordinated to
all other indebtedness of the Debtor, including secured and unsecured debt.
In the end of 1990, the Company agreed to accept a discounted note in the
amount of $75,000. As a result of this transaction, a $25,000 loss to the
Company was recognized. In 1994, the discounted note had been paid in full.
The Company determined that it would discount the note because of the poor
financial condition of the Debtor. A majority of the equity of the Debtor is
owned by management of La Fonda, an affiliate of the Company. In addition,
James Fouts, President and a director of the Company, and a director of La
Fonda, is also a shareholder of approximately 5% of the Debtor, and the
president of La Fonda holds in excess of 50% of the Debtor. Therefore, the
terms of the loan transactions between the Company and the Debtor cannot be
considered to be the result of arm's length negotiations.
During the fiscal year ended March 31, 1996, the Company entered into a
partnership agreement whereby the Company acquired a 25% interest in the
"Robbie Claims," 107 unpatented mineral claim owned by Hi-Tech Exploration,
at a cost of $3,567. James F. Fouts, the Company's President, also acquired a
25% interest in such mining claims in the same transaction, at the same cost.
Therefore, this transaction cannot be considered the result of arms' length
negotiations.
<page 16>
PART IV
ITEM 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
A. INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
The index (table of contents) to the financial statements and schedules
appears at page 19.
B. EXHIBITS:
None.
C. REPORTS ON FORM 8-K
During the fiscal year ended March 31, 1996, the Company did not file any
reports on Form 8-K.
<page 17>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized.
REGISTRANT:
AURIC METALS CORPORATION
By /s/ James F. Fouts
James F. Fouts, President
Date: July 12, 1996
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:
/s/ James F. Fouts Director and President Date: July 12, 1996
James F. Fouts (Principal Executive Officer)
/s/ Elizabeth B. Fouts Secretary-Treasurer Date: July 12, 1996
Elizabeth B. Fouts (Principal Financial Officer)
/s/ Dan Ligino Vice President and Director Date: July 12, 1996
Dan Ligino
/s/ Elizabeth F. White Vice President and Director Date: July 12, 1996
Elizabeth F. White
<page 18>
AURIC METALS CORPORATION AND SUBSIDIARY
TABLE OF CONTENTS
Report of Independent Accountants. 1
Consolidated Balance Sheets for the years ended
March 31, 1995 and 1995. 2
Statements of Consolidated Income for the years
ended March 31, 1996, 1995 and 1994 3
Statement of Consolidated Stockholders' Equity for
the years ended March 31, 1996, 1995 and 1994. 4
Statements of Consolidated Cash Flows for the years
ended March 31, 1996, 1995 and 1994. 5
Notes to Financial Statements. 6 - 12
<page 19>
REPORT OF INDEPENDENT ACCOUNTANTS
Shareholders and
Board of Directors
Auric Metals Corporation
Salt Lake City, Utah
We have audited the accompanying balance sheets of Auric
Metals Corporation as of March 31, 1996 and 1995, and the related
statements of income, stockholders' equity, and cash flows for the
years ended March 31, 1996, 1995, and 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. 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 will as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Auric Metals Corporation as of March 31, 1996
and 1995, and the results of its operations and its cash flows for
the years ended March 31, 1996, 1995 and 1994, in conformity with
generally accepted accounting principles.
Salt Lake City, Utah
July 5, 1996
<page 20>
AURIC METALS CORPORATION AND SUBSIDIARY
------------------------------------------------
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS
-------------------------------------------------------------
March 31, 1996
March 31, 1995
<page 21>
AURIC METALS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND 1995
1996 1995
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 29,261 $ 17,482
------------- ----------
Total Current Assets 29,261 17,482
------------- ----------
INVESTMENTS:
Marketable equity securities (Notes 3 and 7) 44,985 110,208
Other investments (Note 3) 154,356 166,539
------------- ----------
199,341 276,747
------------- ----------
PROPERTY AND EQUIPMENT AT COST
(successful efforts method):
Oil & gas properties - undeveloped (Note 2) 40,215 40,215
Equipment 1,573 1,573
------------- ----------
41,788 41,788
Accumulated depreciation, depletion,
amortization and valuation allowance ( 41,081) ( 21,323)
------------- ----------
707 20,465
------------- ----------
$ 229,309 $ 314,694
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued liabilities $ 514 $ 893
------------ ----------
Total current liabilities 514 893
------------ ---------
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value;
Authorized: 25,000,000 shares
Issued: 1,000,000 shares
(including treasury stock) 10,000 10,000
Additional paid-in capital 342,847 342,847
Net unrealized loss on non-current
marketable equity securities (Note 3) ( 111,266) ( 65,672)
Retained earnings ( 2,811) 34,851
Common stock in treasury at cost
15,511 shares 1996, 13,011 shares 1995 ( 9,975) ( 8,225)
------------ ----------
228,795 313,801
------------ ----------
$ 229,309 $ 314,694
============ ==========
The accompanying notes are an integral part of these
consolidated financial statements
<page 22>
AURIC METALS CORPORATION AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
YEARS ENDED MARCH 31, 1996, 1995, 1994
1996 1995 1994
----------- ------------ ------------
REVENUES:
Oil and gas sales $ 402 $ 786 $ 507
Mineral royalty 25,000 25,000 25,000
Interest income 79 65 -
Dividends 12,000 15,000 27,000
---------- ---------- ----------
37,481 40,851 52,507
---------- ---------- ----------
EXPENSES:
Oil and gas production expenses - 82 88
Loss (income) sulfur mine interest 15,750 5,614 ( 568)
Mineral exploration - 2,611 1,234
Mineral claims leasing 2,900 6,150 11,550
Valuation allowance, unproved property 19,443 5,215 15,557
Depreciation 315 315 236
Legal and accounting 5,234 5,275 7,450
Travel and lodging 4,382 5,754 6,996
Directors' fees 2,396 1,996 2,396
Office expense (Note 5) 12,000 12,000 12,000
General and administrative 7,702 8,707 7,015
Loss on sale of investment securities 5,021 - -
Interest - - 1,548
---------- ---------- ----------
75,143 53,719 65,502
---------- ---------- ----------
(LOSS) BEFORE INCOME TAX ( 37,662) ( 12,868) ( 12,995)
Provision for taxes on income - - -
---------- ---------- ----------
NET (LOSS) $( 37,662) $( 12,868) $( 12,995)
========== ========== ==========
NET (LOSS) PER COMMON SHARE $( .0387) $( .0131) $( .0132)
========== ========== ==========
Weighted average number of shares
outstanding (excluding treasury stock) 972,668 981,217 985,974
========== ========== ==========
The accompanying notes are an integral part of these
consolidated financial statements
<page 23>
AURIC METALS CORPORATION AND SUBSIDIARY
STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
Stock Stock Paid-in Accumulated Treasury Treasury Unrealized
Shares Amount Capital Earnings Shares Amount Loss
-------- -------- ------- ----------- --------- -------- ----------
BALANCE MARCH 31, 1993 1,000,000 $10,000 $343,327 $60,714 12,036 $( 7,151) -
Net loss year ended
March 31, 1994 - - - 12,995 - - -
Unrealized loss on non-current
marketable equity securities - - - - - - 39,680
Purchase of treasury stock - - - - 5,675 ( 3,575) -
----------- -------- --------- ---------- ------- --------- -------
BALANCE MARCH 31, 1994 1,000,000 $10,000 $343,327 $47,719 17,711 $( 10,726) $(39,680)
Net loss year ended
March 31, 1995 - - - (12,868) - - -
Unrealized loss on non-current
marketable equity securities - - - - - - (25,992)
Purchase of treasury stock - - - - 7,300 ( 5,179) -
Sales of treasury stock - - ( 480) - ( 12,000) 7,680 -
-------- --------- ---------- --------- ---------- --------- -------
BALANCE MARCH 31, 1995 1,000,000 $10,000 $342,847 $34,851 13,011 $( 8,225) $(65,672)
Net loss year ended
Mar 31, 1996 - - - (37,662) - - -
Unrealized loss on non-current
marketable equity securities - - - - - - (45,594)
Purchase of treasury stock - - - - 2,500 ( 1,750) -
--------- --------- --------- -------- --------- ------- -------
BALANCE MARCH 31, 1995 1,000,000 $10,000 $342,847 $(2,811) 15,511 $( 9,975) $(111,266)
========== ======= ======== ======= ====== ======= ==========
The accompany notes are an integral part of these
consolidated financial statements
<page 24>
AURIC METALS CORPORATION AND SUBSIDIARY
STATEMENT OF CONSOLIDATED CASH FLOWS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
1996 1995 1994
--------- ---------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $( 37,662) $( 12,868) $( 12,995)
--------- --------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, amortization
and valuation allowance 19,758 5,530 11,703
Equity in partnership (income) loss 12,183 5,614 ( 568)
(Gain) loss on disposal of property 5,021 - -
Increase (decrease) in accrued liabilities ( 379) 462 ( 153)
--------- --------- ---------
Total adjustments 36,583 11,606 10,982
--------- --------- ---------
Net cash (used) by operating activities ( 1,079) ( 1,262) ( 2,013)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil & gas properties - - ( 4,000)
Additions to equipment - - 2,951
Cost recovery - undeveloped property - 5,000 -
--------- --------- ---------
Net cash provided (used) by investing activities - 5,000 ( 1,049)
-------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock ( 1,750) ( 5,179) ( 3,575)
Sale of treasury stock - 7,200 -
Sale of investment stock 14,608 - -
Short-term borrowings - 32,000 90,000
Short-term loan payments - ( 32,000) ( 90,000)
--------- --------- ---------
Net cash provided (used) by financing activities 12,858 2,021 ( 3,575)
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 11,779 5,759 ( 6,637)
Cash and equivalents, beginning of period 17,482 11,723 18,360
--------- --------- ---------
Cash and equivalents, end of period $ 29,261 $ 17,482 $ 11,723
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest expense - - $ 1,548
========= ========= =========
The accompanying notes are an integral part of these
consolidated financial statements
<page 25>
AURIC METALS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
(1) Operations:
Auric Metals Corporation (the "Company") was incorporated in
Utah in May of 1969 to engage in mineral exploration. In
subsequent years, the Company has also engaged in oil and gas
exploration, development and production activities. The
Company holds working interests in various patented and
unpatented mining claims in the Tintic Mining District of
Utah. The Company leases mining claims near Elko, Nevada from
Hillcrest Mining Company of Denver and has subleased the
claims to United States Steel Corporation. The Company
presently holds a working interest in one oil and gas well
near Oklahoma City, Oklahoma which provides nominal revenue.
(2) Significant Accounting Policies:
Cash Equivalents:
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months to be cash equivalents.
Principles of consolidation:
The consolidated financial statements include the accounts of
Auric Minerals Corporation. Intercompany accounts and
transactions have been eliminated in consolidation.
Investment in unconsolidated affiliates:
Investments in affiliated companies in which ownership is 20%
or more are carried at the Company's original cost plus equity
in earnings since date of acquisition.
Investments in less than 20% owned affiliates are carried at
cost or estimated net realizable amounts, whichever is lower.
Mining:
Exploration and development expenditures are generally charged
to expenses as incurred until a decision is made to develop a
mineral reserve. Expenditures to bring new properties into
production and major expenditures of a nonrecurring nature are
deferred and amortized ratable over production benefitted.
Expenditures for continuing development required to maintain
production are charged to expenses as incurred.
<page 26>
AURIC METALS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(2) Significant Accounting Policies - continued:
Oil and gas properties:
Costs to acquire mineral interests in oil and gas properties,
to drill exploratory wells which find proved reserves, and to
drill and equip development wells are capitalized. Geological
and geophysical costs and costs to drill exploratory wells
which do not find proved reserves are expensed.
Unproved oil and gas properties which are individually
significant are periodically assessed for impairment of value
and a loss is recognized at the time of impairment by
providing an impairment allowance. The remaining unproved oil
and gas properties are aggregated and an overall impairment
allowance is provided based on the Company's prior experience.
Capitalized costs of proved oil and gas properties are
depreciated and depleted by the unit-of-production method
based on proved oil and gas reserves as estimated by the
Company's engineers.
The Company's oil and gas investment included $40,215 invested
in unproved and undeveloped properties. The investment was
made by the Company's wholly owned subsidiary, Auric Minerals
Corporation, as a joint venture partner in the Hugoton Joint
Venture. The Joint Venture was organized to acquire oil and
gas lease options in western Oklahoma. In previous years, this
investment had been reduced by additions to an offsetting
valuation allowance to recognize impairment in the value of
this property interest. During the current fiscal year, the
Company reduced the remaining value to zero, reflecting its
assessment of recoverable value.
Other equipment is recorded at cost and depreciated on a
straight-line method over a five year estimated useful life.
(3) Investments consist of the following at March 31, 1996 and
1995:
Crater investment
The Company has a 19% limited partner interest in the Crater
Limited Partnership. Crater engaged in sulfur mining in Inyo
County, California. The Company carried this investment at
cost or estimated net realizable value, whichever was lower.
During the current fiscal year, Crater abandoned its mining
operations, therefore, the Company reduced the value of this
investment to zero.
<page 27>
AURIC METALS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(3) Investments - continued:
Robbie claims investment
During the current fiscal year, the Company acquired a 25%
interest in the "Robbie" gold prospect claims owned by Hi-Tech
Exploration at a cost of $3,567. The Company's President, Mr.
James F. Fouts also a owner a 25% interest in these claims.
La Fonda investment
The Company owned, as of March 31, 1996, 12,000 shares of the
common stock of Corporation De La Fonda, Inc., or
approximately 12% of that company's outstanding shares. De La
Fonda, Inc. is a New Mexico hotel operation. Prior to 1984,
the Company owned more than 20% of De La Fonda and accounted
for its investment by the equity method. Since 1983, the
Company's investment has been less than 20% and the cost
method of accounting has been used. The carrying value of the
investment includes $123,177 of cumulative undistributed
earnings of La Fonda added to the investment under the equity
method. Income taxes have been recognized under the
assumption that undistributed earnings would eventually be
distributed as dividends, thereby qualifying for dividends-
received deductions. If the undistributed earnings are
eventually received in taxable transactions other than as
dividends, an unrecognized tax of approximately $41,880 under
current rates could result. The Company's equity in the
underlying net assets of La Fonda exceeds the carrying value
of the investment. Since the Company's President, Mr. James
F. Fouts, has positions, interests or shareholdings, in La
Fonda, any transaction between the Company and this entity
cannot be deemed to be at arm's length.
1996 1995
Crater investment $ - $ 15,750
Ro bbie claims investment 3,567
La Fonda investment 150,789 150,789
Other investments $154,356 $166,53
<page 28>
AURIC METALS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(3) Investments - continued:
Dynamic Oil Ltd.
Effective April 1, 1994, the Company adopted SFAS No. 115 on
accounting for certain investments in debt and equity
securities. This new standard requires that available-for-sale
investments in securities that have readily determinable
fair values be measured at fair value in the balance sheet and
that unrealized holding gains and losses for these investments
be reported in a separate component of stockholders' equity
until realized. At March 31, 1996 and 1995 marketable
investments classified as available for sale included the
following:
1996 1995
Dynamic Oil Ltd. shares at cost $156,251 $175,880
Dynamic Oil Ltd. shares at market *$ 44,985 *$110,208
Gross unrealized holding loss $111,266 $ 65,672
*Carrying values
(4) Stock options:
During the 1994 fiscal year, the Company granted stock options
to each officer and director for 12,000 shares of the
Company's common stock at $.60 per share. Options expire on
August 14, 1996. As of March 31, 1996, 12,000 of these
options had been exercised.
(5) Related party transactions:
The amounts paid to officers and directors have not been, in
any sense, negotiated at arm's length. Payments of $12,000
were made during the current fiscal year to The Fremont Corp.,
a corporation in which the Company's president is principal
shareholder. These payments are for office use, bookkeeping
and clerical services. Refer to Note (3) for additional
related party transactions related to the Robbie claims
investment and the La Fonda investment.
(6) Federal and state income tax:
Effective April 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income
Taxes. The cumulative effect of the change in accounting
principle is immaterial. At March 31, 1996, the Company had,
for federal tax reporting purposes, an operating loss
carryforward of approximately $251,000. This carryforward
begins to expire in 2004. No benefit has been reported in the
1996 financial statements, however, because the Company
believes there is at least a 50% chance that the carryforward
will expire unused. Accordingly, the tax benefit of the loss
carryforward has been offset by a valuation allowance of the
same amount.
<page 29>
AURIC METALS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994 (Continued)
(7) Subsequent event:
As of July 3, 1996, the market value of the Company's
investment in Dynamic Oil Ltd. was $44,775 resulting in an
increase in the unrealized loss of $210.
(8) Commitments and contingencies:
The Company is required to pay the Bureau of Land Management
$100 annually on 29 leased mining claims for $2,900. Rates
are subject to change and failure to pay results in loss of
mining rights. The payments to BLM are in lieu of assessment
work which was required previously. The leases are cancelable
annually upon notice to lessor.
<page 30>
AURIC METALS CORPORATION AND SUBSIDIARY
SUPPLEMENTAL OIL AND GAS INFORMATION
(unaudited)
Oil and gas exploration, development and production is
conducted through various joint ventures. At March 31, 1996,
the Company's oil and gas properties were located in Oklahoma,
U.S.A.
The following schedule represents the Company's capitalized
oil and gas property costs at the dates indicated:
March 31,
1996 1995
-------- -------
Unproved oil and gas properties $40,215 $40,215
Proved oil and gas properties - -
40,215 40,215
Accumulated depreciation, depletion
and amortization, and valuation
allowances 40,215 20,772
Net capitalized costs $ - $19,443
The Company retains an interest in one oil producing property
which has negligible reserves, therefore, no estimates of
proved oil and gas reserves is available or material, and
information regarding standardized measure of discounted
future net cash flows and changes therein relating to proved
oil and gas properties is not presented. Net capitalized
costs relating to proved oil and gas properties is zero.
Costs Incurred in Oil and Gas Property Acquisition
Exploration and Development Activities
For The Years Ending March 31, 1996, 1995 And 1994
United States
March 31, 1996:
Acquisition of properties $ -
March 31, 1995:
Acquisition of properties $ -
March 31, 1994:
Acquisition of properties $4,000
<page 31>
AURIC METALS CORPORATION AND SUBSIDIARY
SUPPLEMENTAL OIL AND GAS INFORMATION
(Unaudited)
Results of Operations From Production Activities
For The Years Ending March 31, 1996, 1995 And 1994
United States
March 31, 1996
Revenues - sales $ 402
Production costs -
Exploration expenses -
Depreciation, depletion and amortization -
Results of operations from producing activities
(excluding corporate overhead and interest costs) $ 402
March 31, 1995
Revenues - sales $ 786
Production costs ( 82)
Exploration expenses -
Depreciation, depletion and amortization -
Results of operation from producing activities
(excluding corporate overhead and interest costs) $ 704
March 31, 1994
Revenues - sales $ 507
Production costs ( 88)
Exploration expenses -
Depreciation, depletion and amortization -
Results of operations from producing activities
(excluding corporate overhead and interest costs) $ 419
<page 32>