SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number: 000-27667
Metalline Mining Company
(Exact name of registrant as specified in its charter)
Nevada 91-1766677
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
1330 E. Margaret Ave.
Coeur d'Alene, ID 83815
(Address of principal executive offices)
Registrant's telephone number, including area code: (208)665-2002
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock The OTC-Bulletin Board
Title of each class Name of each exchange on which
registered.
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 as 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 [ ]
METALLINE MINING COMPANY QUARTERLY REPORT
ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED APRIL 30, 2001
TABLE OF CONTENTS Page
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements . . . . . . . . . . . . . . . . . 1
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operation . . . . . 1
PART II - OTHER INFORMATION
Item 1: Legal Proceedings . . . . . . . . . . . . . . . . . . 4
Item 2: Changes in Securities . . . . . . . . . . . . . . . 5
Item 3: Defaults upon Senior Securities . . . . . . . . . . . 5
Item 4: Submission of Matters to a Vote of Security Holders . 5
Item 5: Other Information . . . . . . . . . . . . . . . . . . 5
Item 6: Exhibits and Reports on Form 8-K . . . . . . . . . . . 5
Index to Financials . . . . . . . . . . . . . . . . . . . . . . . . 6
Signatures . . . . . . . . . . . . . . . . . . . . . . . . F/S-13
[The balance of this page has been intentionally left blank.]
(i)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The reviewed financial statements of the Company for the
period covered by this report are included elsewhere in this
report, beginning at page F/S-1.
The reviewed financial statements have been prepared in
accordance with generally accepted accounting principles for the
interim financial information with the instructions to Form 10-Q
and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of the Company's management, all
adjustments (consisting of only normal accruals) considered
necessary for a fair presentation have been included. Operating
results for the six-month period ended April 30, 2001 are not
necessarily indicative of the results that may be expected for
the full year ending October 31, 2001.
For further information refer to the financial statements and
footnotes thereto in the Company's Annual Report on Form 10-K for
the year ended October 31, 2000 incorporated by reference herein.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS FOR THE PERIOD ENDED APRIL 30, 2001.
Six months ended April 30, 2001 compared to the six months
ended April 30, 2000:
During the six months ended April 30, 2001, the Company realized
other income of $17,210 as the initial proceeds from the sale of
zinc carbonate ore from the Company's San Salvadore mine, in
accordance with a contract announced in May 2001 with Fireborn,
Inc. of Atlanta, Georgia. General and administrative expenses
increased to $1,496,718 for the six-month period ended April 30,
2001 as compared to $332,951 for the six-month period ended April
30, 2000. The increase is due to the issuance of options for
services and charged to expense. For the six months ended April
30, 2001, the Company experienced a loss of $1,475,255, or $0.15
per share, compared to a loss of $463,786, or $0.06 per share,
during the comparable period in the previous year.
LIQUIDITY AND CAPITAL RESOURCES.
Metalline Mining Company (the "Company") is an exploration
stage enterprise formed under the laws of the State of Nevada, on
August 20, 1993, to engage in the business of mining. The Company
has no operating history and is subject to all the risks inherent
in a new business enterprise. The likelihood of success of the
Company must be considered in light of the problems, expenses,
difficulties, complications and delays frequently encountered in
connection with a new business, and the competitive and
regulatory environment in which the Company will operate.
From inception until May 1996, the Company was essentially
dormant having as its only asset unpatented mining claims located
in the State of Montana ("Kadex Property"). Since May 1996, the
focus of the Company has been the Sierra Mojada Project in
Mexico, and the Company has dropped the Kadex Property claims.
Page 1
The Company has insufficient funds to carry on operations
during the next twelve months. In order to maintain operations,
the Company will have to raise additional capital through loans
or through the sale of securities. If the Company is unable to
raise additional capital, it may have to cease operations. The
Company's plan of operation, subject to maintaining sufficient
funds, calls for continued geologic mapping of the surface and
underground workings, sampling, and drilling to explore for
additional mineralization and to develop an ore reserve and
compilation of the data into a computer data base for reserve
calculation.
Due to the Company's lack of revenues, the Company's
independent certified public accountants included a paragraph in
the Company's 2000 financial statements relative to a going
concern uncertainty. The Company has financed its obligations
during the 1999-2000 fiscal year by its sale of 2,525,500 shares
at prices ranging between $0.86 and $2.77 per share. During the
current period, the Company has realized $15,210 from the sale of
41,000 shares and has received a refund of $490,500 for Mexican
taxes previously paid.
The Company is engaged in the business of mining. The Company
currently owns one mining property located in Mexico known as the
Sierra Mojada Property. The Company conducts its operations in
Mexico through its wholly owned subsidiary corporation, Minera
Metalin S.A. de C.V. ("Minera Metalin").
The Sierra Mojada Property is comprised of eight concessions
totaling 7,060 hectares (17,446 acres). The concessions were
acquired by purchase agreements from the titled owners. The
Company controls 100% of the concessions. The Company is current
on its annual payments.
The Sierra Mojada Mining District is located in the west
central part of the state of Coahuila, Mexico, near the Coahuila-
Chihuahua state border some 200 kilometers south of the Big Bend
of the Rio Grande River. The principal mining area extends for
some 5 kilometers in an east-west direction along the base of the
precipitous, 1,000 meter high, Sierra Mojada Range.
Vehicle access from Torreon is by 200 kilometers on paved road
to the Penoles chemical plant at Laguna del Rey and then another
50 kilometers of gravel road to Sierra Mojada. There is a well
maintained, 1200 meter, gravel airstrip. The District has high
voltage electric power and is served by a rail line, which was
constructed from Escalon to the district in 1891 and later
connected to Monclova.
The initial discovery of silver ore in the Sierra Mojada
Property was made in 1879. Over the next 12 years numerous small
mines developed along an oxidized silver lead ore body known as
the "lead manto" (a bed, layer or strata). The lead manto was
mined continuously for 3 kilometers and discontinuously for
another 2 kilometers. Ore was selectively mined and hauled by
wagon to Escalon on the railroad main line from El Paso to Mexico
City; from there it went to smelters in Mexico and the United
States.
In September of 1891 the Mexican Northern Railroad completed
its spur line from Escalon to the district. Rail access
stimulated development and the period from 1891 to the late
1920's was the peak of productivity of the district. The main
lead manto was nearly mined out by 1905, the same year that the
discovery of the first silver-copper ore body was made.
Additional discoveries of silver, silver-copper, and silver-
copper-zinc-lead ores provided production through the 1930's.
Between 1922 and 1931 additional lead manto silver-lead ore was
discovered and mined to the southwest for some 1,400 meters under
the Sierra Mojada range. This manto was eventually mined for more
than 2 kilometers.
Page 2
By the mid 1920's many of the mines were under control of Penoles
Corporation ("Penoles") and ASARCO Incorporated ("ASARCO").
ASARCO ceased mining in the district in the late 1930's. Both
companies still owned properties during the 1940's and Penoles
mined until the late 1950's when the Mineros Nortenos Cooperative
acquired the Penoles properties. The Mineros Nortenos Cooperative
("Mineros Nortenos") has operated the San Salvador, Encantada
and Fronteriza mines since 1957 and direct shipped high-grade
oxide zinc and lead-silver ore to smelters in Mexico.
The lead manto produced 3 to 3.5 million tons prior to 1905
with another 1.5 million tons of similar ore coming from other
ore bodies to the west and to the southwest.
Mineros Nortenos has mined about 600,000 tons of predominantly
oxide zinc ore with grades of 20 to 50% zinc. Some of this ore
was oxide silver-lead and silver, copper, zinc and lead sulfide
at grades of 1 to 4 kilogram silver per ton, 1 to 5% copper, 10
to 30% zinc and 30 to 70% lead. Production records from 1978 to
1981 for the San Salvador mine average 33.5% zinc.
The Sierra Mojada Property has produced in excess of 10
million tons of high-grade ore that graded in excess of 30% lead,
20% zinc, 1% copper and 1 kg (31 ounces) silver per ton that was
shipped directly to the smelter. The district has never had a
mill to concentrate ore. All of the mining was done selectively
for ore of sufficient grade to direct ship; mill grade ore was
left unmined. More than 50 kilometers of underground workings are
spread through the 5 kilometer by 2 kilometer area from which
more than 45 mines have produced ore. The deepest workings have
ore grade mineralization and provide some of the best targets for
reserve development. In spite of the amount of historic work,
when a map of all of the historic workings is viewed there is
much more unexplored area in the 5 by 2 kilometer area than has
been explored and the vertical extent greater than 100 meters is
totally unexplored.
The sediments are predominantly carbonate with some sandstone
and shale and the attitudes are near horizontal. The mines are
dry and the rocks are competent, there is very little unstable
ground and the ore thickness is amenable to high volume
mechanized mining methods. Sierra Mojada has ideal mining
conditions and high grades, to enable it to be a low-cost
producer.
Based upon the foregoing, the Company is of the opinion that
the magnitude of the Sierra Mojada mineral system and its
exploration potential is capable of providing new reserves for
many more years of mining. However, there is no assurance as to
the quantity or quality of the undeveloped reserves.
There is potential for long-term reserve expansion within the
known extent of the mineral systems. There is potential to
discover ore deposits in unexplored portions of the land position
and at depth in unexplored stratigraphy. There is however, no
assurance that the Company will have the monetary resources to
continue to explore for, develop, or retrieve any of the minerals
located in the Sierra Mojada Property.
In October, 1999 Minera Metalin signed a Joint Venture Letter
Agreement with Minera North S. de R.L. de C.V. a wholly owned
subsidiary of North Limited of Melbourne Australia, a major
international mining company. The agreement allowed North to
acquire a 60% participating interest in Sierra Mojada by
exploring and completing a feasibility study over a "Earn In
Period" of not more than 5 years.
Page 3
In August, 2000 Rio Tinto Ltd. purchased North Limited for
its iron ore holding and has subsequently terminated the agreement
with Minera Metalin. Metalline has shown the project to a number
of major mining companies who are interest in a Joint Venture.
Metalline is currently in negotiations with these companies for a
Joint Venture on Sierra Mojada.
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131 ("SFAS No.
131"), Disclosures about Segments of an Enterprise and Related
Information, which supersedes SFAS No. 14, Financial Reporting
for Segments of a Business Enterprise, establishes standards for
the new way that public enterprises report information about
operating segments in annual financial statements and requires
reporting of selected information about operating segments in
interim financial statements issued to the public. It also
establishes standards for disclosures regarding products and
services, geographic areas and major customers. SFAS No. 131
defines operating segments as components of an enterprise about
which separate financial information is available that is
evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
As the Company operates within one segment, the adoption of SFAS
No. 131 by the Company in 1998, did not have a significant impact
on the Company's financial position.
In February 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 132 ("FAS
No. 132"), Employer's Disclosures about Pensions and other Post-
retirement Benefits, which standardizes the disclosure
requirements for pension and other post-retirement benefits. The
adoption of SFAS No. 132 did not materially impact the Company's
current disclosures.
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
Accounting for Derivative Instruments and Hedging Activities.
SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It
requires that an entity recognize all derivatives as either
assets or liabilities in the balance sheet and measure those
instruments at fair value. At April 30, 2001, the Company has not
engaged in any transactions that would be considered derivative
instruments or hedging activities.
CASH FLOWS FOR THE SIX MONTHS ENDED APRIL 30, 2001 WERE AS
FOLLOWS:
During the six-month period ended April 30, 2001, the Company's
cash position decreased by $100,127, to $450,430. During the six-
month period, the Company used $97,254 in operating activities,
which was less than the reported $603,898 net loss due to changes
in operating assets and liabilities and the receipt of a refund
of Mexican taxes paid of $490,500. In addition, the Company
realized $15,210 from the sale of Company stock. The only use of
cash other than for operating activities was the purchase of
property for $13,083.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None.
Page 4
ITEM 2. CHANGES IN SECURITIES.
Neither the constituent instruments defining the rights of the
registrant's securities holders nor the rights evidenced by the
registrant's outstanding common stock have been modified,
limited, or qualified. The Company sold 41,000 shares of its
common stock for an average price of $0.37 per share in the three
month period ended April 30, 2001 as a result of options
exercised. The Company also recognized an expense for services in the
amount of $43,260 for the above referred options.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The registrant has no outstanding senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
In February 2001 a notice of annual meeting and proxy
statement were mailed to shareholders of record January 5, 2001
regarding matters to be considered at the annual shareholders
meeting scheduled for March 1, 2001. Matters considered were (1)
election of directors, (2) consideration and approval of the
Company's 2001 Stock Option Plan, (3) consideration and approval
of a proposed amendment to the Company's Articles of
Incorporation to authorize a class of Preferred Shares, (4) election
of outside auditor.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS. The following exhibit is filed as part of this report:
Exhibit 27.0 Financial Data Schedule.
REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the
registrant during the period covered by this
report.
[The balance of this page has been intentionally left blank.]
Page 5
METALLINE MINING COMPANY
INDEX TO FINANCIAL STATEMENTS PAGE
Financial Statements:
Balance Sheets as of April 30, 2001
and October 31, 2000 . . . . . . . . . . . . . . F/S-1
Statements of Operations for the three and six-month
periods ended April 30, 2001 and April 30, 2000, and
for the period from inception (November 8, 1993)
to April 30, 2001 . . . . . . . . . . . . . . . . . F/S-2
Statements of Changes in Stockholder's Equity
for the period from inception (November 8, 1993)
to April 30, 2001 . . . . . . . . . . . . . . . . . F/S-4
Statements of Cash Flow for the six-month periods
ended April 30, 2001 and April 30, 2000, and for the
period from inception (November 8, 1993) to
April 30, 2001 . . . . . . . . . . . . . . . . . F/S-10
Notes to Financial Statements . . . . . . . . . . . F/S-11
Signatures . . . . . . . . . . . . . . . . . . . . F/S-12
[The balance of this page has been intentionally left blank.]
Page 6
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS
April 30, October 31,
2001 2000
(Unaudited)
------------ -----------
ASSETS
CURRENT ASSETS
Cash $ 450,430 $ 550,557
Accounts Receivable 59,288 547,237
Prepaid expenses 4,060 3,228
Employee advances 11,146 10,864
---------- ---------
Total Current Assets 524,924 1,111,886
---------- ---------
MINERAL PROPERTIES 4,360,285 4,348,785
---------- ---------
PROPERTY AND EQUIPMENT
Office equipment 88,082 81,499
Mining equipment and vehicles 86,047 86,047
Less: Accumulated depreciation (102,407) (88,158)
---------- ---------
Total Property and Equipment 71,722 79,388
---------- ---------
TOTAL ASSETS $ 4,956,931 $ 5,540,059
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 9,838 $ 5,625
Accrued liabilities 17,511 16,167
--------- ---------
Total Current Liabilities 27,349 21,792
--------- ---------
COMMITMENTS AND CONTINGENCIES - -
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value;
50,000,000 shares authorized,
9,781,595 and 9,740,595 shares
issued and outstanding at
4/30/01 and 10/31/00
respectively. 97,817 97,407
Additional paid-in capital 9,286,150 9,217,330
Stock options and warrants 1,073,920 543,980
Deficit accumulated during
exploration stage (5,528,305) (4,340,450)
---------- ---------
Total Stockholders' Equity 4,929,582 5,518,267
---------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,956,931 $5,540,059
========== =========
See accompanying notes to these financial statements.
F/S-1
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
Period from
Three Months Ended Six Months Ended November 8, 1993
------------------ ----------------------- (Inception)
April 30, April 30, April 30, April 30 through
2001 2000 2001 2000 April 30,
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ---------- ------------ ---------- -------------
REVENUES $ - $ - $ - $ - $ -
----------- ----------- ------------ --------- ------------
GENERAL AND ADMINISTRATIVE
EXPENSES
Salaries 54,000 54,000 108,000 108,000 764,394
Office and Administrative 36,599 26,793 68,650 46,290 248,621
Taxes and fees 15,196 40,965 36,408 41,050 86,893
Professional services 686,180 160,582 731,033 188,493 2,620,720
Property expenses 94,174 13,430 210,622 104,734 1,283,451
Marketing and research 30,567 31,089 40,356 43,491 169,598
Financing Costs - - - - 276,000
Depreciation 7,125 6,092 14,249 11,665 102,437
-------- -------- ---------- --------- ---------
Total Expenses 923,841 332,951 1,209,318 543,723 5,552,114
---------- ---------- ---------- --------- ----------
OPERATING LOSS (923,841) (332,951) (1,209,318) (543,723) (5,552,114)
---------- ----------- ------------ ---------- ------------
OTHER INCOME (EXPENSES)
Interest income 2,089 1,576 4,253 3,209 16,178
Interest expense - - - - (9,599)
Miscellaneous income 17,210 76,728 17,210 76,738 20
-------- ----------- ---------- --------- ----------
Total other income (expense) 19,299 78,304 21,463 79,937 23,809
-------- ----------- ------------ --------- ---------
LOSS BEFORE
INCOME TAXES $(904,542) $(254,647) $(1,187,855) $(463,786) $(5,528,305)
======== ======== ======== ======= =========
See accompanying notes to these financial statements. F/S-2
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
Period from
Three Months Ended Six Months Ended November 8, 1993
------------------ ----------------------- (Inception)
April 30, April 30, April 30, April 30 through
2001 2000 2001 2000 April 30,
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ---------- ------------ ---------- -------------
LOSS BEFORE
INCOME TAXES (carried forward) $(904,542) $(254,647) $(1,187,855) $(463,786) $(5,528,305)
INCOME TAXES - - - - -
--------- ---------- -------------- ---------- -------------
NET LOSS $(904,542) $(254,647) $(1,187,855) $(463,786) $(5,528,305)
======== ======== ======== ======== ==========
NET LOSS PER COMMON SHARE
BASIC AND DILUTED $ (0.09) $ (0.03) $ (0.12) $ (0.06) $ (1.30)
======== ======== ======== ======== =========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING
BASIC AND DILUTED 9,774,928 8,221,095 9,757,762 7,943,095 4,267,355
======== ======== ========= ========= ==========
See accompanying notes to these financial statements.
F/S-3
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
Accumulated
Common Stock Stock Stock Deficit
-------------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Issuance in August
1993 (prior to inception)
common stock without value 960,800 $ 9,608 $(9,608) $ - $ - $ - $ -
Reverse stock split
of 5:1, reducing common
stock to 192,160 shares (768,640) (7,686) 7,686 - - - -
Net loss for the year
ending October 31, 1994 - - - - - (8,831) (8,831)
------- ------- ------- ------- ------ ------- -------
Balances at October 31,1994 192,160 1,922 (1,922) - - (8,831) (8,831)
Stock split 3:1, increas-
ing common stock to
576,480 shares 384,320 3,843 (3,843) - - - -
Net loss for the year
ending October 31, 1995 - - - - - (7,861) (7,761)
------- ------- ------- ------- ------- ----- -----
Balance at October 31,1995 576,480 $ 5,765 $(5,765) $ - $ - $(16,592) $(16,592)
------- ------- ------- ------- ------- ------ ------
- -------------------------------------
Schedule continued on next page.
See accompanying notes to these financial statements.
F/S-4
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Accumulated
Common Stock Stock Stock Deficit
------------------ Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Balance brought forward 576,480 $ 5,765 $(5,765) $ - $ - $(16,592) $(16,592)
Issuance in November 1995 of
shares for cash at $0.01
per share 45,000 450 - - - - -
Issuance in November 1995 of
shares for cash at $1.00
per share 15,859 159 15,700 - - - 15,859
Issuance in June 1996 of shares
for cash at $0.10 per share 1,305,000 13,050 117,450 - - - 130,500
Issuance in June 1996 of shares
at $0.01 per share in exchange
for assignment of mineral
property rights valued
at $9,000 900,000 9,000 - - - - 9,000
Issuance in October 1996 of
shares for CAD computer
equipment at $0.10 per share 150,000 1,500 13,500 - - - 15,000
Issuance in October 1996 of
shares for services at
$0.10 per share 140,000 1,400 12,600 - - - 14,000
Net loss for the year ending
October 31, 1996 - - - - - (40,670) (40,670)
------- ------- ------- ------- ------- ------- ------
Balances at October 31, 1996 3,132,339 $31,324 $153,485 $ - $ - $(57,262) $127,547
------- ------- ------- ------- ------- ------- -------
- --------------------------------------
Schedule continued on next page.
See accompanying notes to these financial statements.
F/S-5
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Accumulated
Common Stock Stock Stock Deficit
------------------ Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Balance brought forward 3,132,339 $ 31,324 $ 153,485 $ - $ - $(57,262) $127,547
Issuance in February 1997 of
shares for services at $0.30
and $0.35 per share 133,800 1,338 44,245 - - - -
Issuance in March and April of
shares for cash at
$0.35 per share 250,000 2,500 85,000 - - - 87,500
Issuance in May and June
1997 of shares for cash at
$0.35 per share 181,600 1,816 61,744 - - - 63,560
Issuance in May and June
1997 of shares for services
at $0.35 per share 62,500 625 21,250 - - - 21,875
Issuance in August 1997 of
shares for payment of loan
at $0.315 per share 100,200 1,002 30,528 - - - 31,530
Issuance in August 1997 of
shares for cash at $0.90
per share 420,000 4,200 373,800 - - - 378,000
Issuance in August 1997 of
shares for services at
$1.00 per share 95,000 950 94,050 - - - 95,000
Issuance in October 1997 of
shares for cash at $1.00
per share 75,000 750 74,250 - - - 75,000
Issuance of option(for 300,000
shares at $2.25 per share)for cash - - 3,000 - - - 3,000
Net loss for year ending
October 31, 1997 - - - - - (582,919) (582,919)
------- ------- ------- ------- ------- ------- -------
Balances at October 31,1997 4,450,439 $44,505 $941,352 $ - $ - $(640,181) $345,676
------------------------- ------- ------- ------- ------- ------- ------- -------
Schedule continued on next page.
See accompanying notes to these financial statements.
F/S-6
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Accumulated
Common Stock Stock Stock Deficit
------------------ Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Balance brought forward 4,450,439 $44,505 $941,352 $ - $ - $(640,181) $345,676
Issuance in November and
December 1997 of shares
for cash at $1.00/share 403,500 $4,035 $399,465 - - - 403,500
Issuance of options (for
1,200,000 shares at $0.90
per share) for cash - - 120,000 - - - 120,000
Issuance of options
for financing fees - - - - 60,000 - 60,000
Issuance of warrants for
consulting fees - - - - 117,000 - 117,000
Issuance in November and December
1997 of shares for services at
$0.35 and $1.00 per share 41,800 418 21,882 - - - 22,300
Issuance in February 1998 of shares
for mine data base at $1.625
per share 200,000 2,000 323,000 - - - 325,000
Issuance in February and March 1998
of shares for cash at $1.00 and
$0.87 per share 345,000 3,450 338,495 - - - 341,945
Issuance in June and July 1998 of
shares for cash at $1.00/share 95,000 950 94,050 - - - 95,000
Issuance in September and October
1998 of shares for cash and
receivables at $1.00 per share 555,000 5,550 519,450 (300,000) - - 225,000
Net loss for year ending
October 31, 1998 - - - - - (906,036) (906,036)
------- ------- ------- ------- ------- ------- -------
Balance at October 31, 1998 6,090,739 $60,908 $2,757,694 $(300,000) $177,000 $(1,546,217) $1,149,385
- -------------------------- ------- ------- ------- ------- ------- ------- -------
Schedule continued on next page.
See accompanying notes to these financial statements.
F/S-7
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Accumulated
Common Stock Stock Stock Deficit
------------------ Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Balance brought forward 6,090,739 $60,908 $2,757,694 $(300,000) $177,000 $(1,546,217) $1,149,385
Prior period adjustment for
valuation of warrants issued
for services - - - - 488,980 (488,980) -
-------- -------- ---------- -------- ------- -------- --------
Balance, Oct. 31,1998 restated 6,090,739 60,908 2,757,694 (300,000) 665,980 (2,035,197) 1,149,385
Stock subscription received - - - 300,000 - - 300,000
Expiration of stock options - - 60,000 - (60,000) - -
Issuance of stock options for
financing fees - - - - 216,000 - 216,000
Exercise of stock warrants
at $0.90 per share 250,000 2,500 267,500 - (45,000) - 225,000
Issuance in November 1998 and
March - August, 1999 shares
for cash at $1.00 per share 776,000 7,760 768,240 - - - 776,000
Issuance in August 1999 of
shares for drilling fees at
$0.90 per share 55,556 556 49,444 - - - 50,000
Issuance in August 1999 shares
for cash at $1.75 per share 42,800 428 74,472 - - - 74,900
Net loss for year ending
October 31, 1999 - - - - - (1,423,045) (1,423,045)
------- ------- ------- ------- ------- ------- -------
Balance at October 31, 1999 7,215,095 $72,152 $3,977,350 $ - $776,980 $(3,458,242) $1,368,240
------- ------- ------- ------- ------- ------- -------
Schedule continued on next page.
See accompanying notes to these financial statements.
F/S-8
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Accumulated
Common Stock Stock Stock Deficit
------------------ Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Balance brought forward 7,215,095 $72,152 $3,977,350 $ - $776,980 $(3,458,242) $1,368,240
------- ------- --------- ----- ------- ------- -------
Exercise of options for
cash at $0.86 per share 950,000 9,500 1,090,750 - (288,000) - 812,250
Issuance of common stock for cash
at average of $2.77 per share 1,440,500 14,405 3,972,220 - - - 3,986,625
Issuance of common stock for
services at $1.28 per share 120,000 1,200 152,160 (360) - - 153,000
Stock subscription received - - - 360 - - 360
Issuance of common stock for
equipment at $1.67 per share 15,000 150 24,850 - - - 25,000
Warrants issued for services - - - - 55,000 - 55,000
Net loss for the year ended
October 31, 2000 - - - - - (882,208) (882.208)
-------- ------- -------- ------ --------- ------- -------
Balance at October 31, 2000 9,740,595 $ 97,407 $9,217,330 $ - $ 543,980 $(4,340,450) $5,518,267
---------- ------- ---------- ----- ------ --------- ---------
- -------------------------------
Schedule continued on next page.
See accompanying note to these financial statements.
F/S - 9
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(continued)
Accumulated
Common Stock Stock Stock Deficit
------------------ Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------ ------- ---------- -------- -------- ------
Balance brought forward 9,7401,595 $ 97,407 $9,217,330 $ - $543,980 $(4,340,450) $5,518,267
---------- ------ --------- ----- ------- ---------- ---------
Stock issued for cash and
services at $2.07 per share 21,000 210 43,260 - - - 43,470
Exercise of warrants for cash
at $0.75 per share 20,000 200 25,560 - (10,760) - 15,000
Options granted for consulting
services - - - - 540,700 - 540,700
Loss for the six months ended
April 30, 2001 - - - - - (1,187,855) (1,475,255)
--------- ----- -------- ------ ------- ---------- ----------
Balance at April 30, 2001
(unaudited) 9,781,595 $97,817 $9,286,150 $ - $1,073,920 $(5,528,305) $4,642,182
--------- ------ --------- ------ --------- --------- ---------
See accompanying notes to these financial statements.
F/S - 10
METALLINE MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
Period from
Six Months Ended Nov 8, 1993
----------------------- (Inception)
April 30, April 30, through
2001 2000 April 30, 2001
(Unaudited) (Unaudited) (Unaudited)
--------- --------- ---------
>c>
Cash flows from operating activities:
Net loss $(1,187,855) $(463,786) $(5,528,305)
Adjustments to reconcile net loss to
cash used by operating activities:
Depreciation 14,249 11,665 102,407
Stock and options given in exchange
for services 583,960 90,000 1,601,115
Stock and options for operating expenses - - 602,527
Changes in operating assets and liabilities:
(Increase) decrease in refunds receivable 487,949 - ( 59,288)
(Increase) decrease in prepaid expenses (835) (634) (4,060)
(Increase) decrease in employee advances (282) - (11,146)
Increase (decrease) in accounts payable 4,216 5,565 9,839
Increase (decrease) in accrued liabilities 1,344 (36,650) 17,511
----- ----- -----
Net cash used by operating activities (97,254) (393,840) (3,269,400)
----- ----- -----
Cash flows from investing activities:
Purchase of property and equipment (6,583) (10,380) (134,127)
Acquisition of mineral properties (11,500) (79,234) (4,351,285)
----- ----- -----
Net cash used by investing activities (18,083) (89,614) (4,485,412)
----- ----- -----
Cash flows from financing activities:
Proceeds from sales of common stock 15,210 849,750 7,152,492
Proceeds from sales of options - - 935,250
Deposits for sale of stock - - 87,500
Proceeds from shareholders'loans - - 30,000
----- ----- -----
Net cash provided by financing activities: 15,210 849,750 8,205,242
----- ----- -----
Net increase (decrease) in cash (100,127) 366,296 450,430
Cash beginning of period 550,557 240,662 -
----- ----- -----
Cash at end of period $450,430 $606,958 $450,430
===== ===== =====
Supplemental cash flow disclosures:
Income taxes paid in cash - - $ 9,599
Interest paid in cash - - -
Non-cash financing activities:
Common stock issued for services - $90,000 $473,175
Common stock issued for expenses - - $326,527
Common stock issued for equipment - - $ 40,000
Common stock issued for payment of debt - - $ 80,000
Common stock options issued for services $540,700 - $648,100
Common stock options issued for financing fees - - $276,000
- -----
See accompanying notes to these financial statements.
F/S-11
METALLINE MINING COMPANY
An Exploration Stage Company
Notes to the Financial Statements
April 30, 2001
The interim financial statements of Metalline Mining Company included
herein have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange. Although certain
information normally included in financial statements prepared in
accordance with generally accepted accounting principles has been
condensed or omitted, the Company believes that the disclosures are
adequate to make the information presented no misleading. The
accompanying interim financial statements should be read in
conjunction with the audited financial statements and notes thereto
included in the Company's annual report on Form 10-K for the fiscal
year ended October 31, 2000.
The financial statements included herein reflect all normal recurring
adjustments that, in the opinion of management, are necessary for a
fair presentation of the results for interim periods. The results for
interim periods are not necessarily indicative of trends or of
results to be expected for a full year.
NOTE 1 - SUBSEQUENT EVENTS
In May 2001 the Company announced the signing of a contract with
Fireborn, Inc. of Atlanta, Georgia to supply zinc carbonate ore for
use as a mineral supplement to the fertilizer industry. The contract
calls for an initial annual production of 10,000 tons with planned
increases to 30,000 tons. During the three months ended April 30,
2001 the Company realized initial proceeds of $17,210 under the
contract.
NOTE 2 - OPTIONS
During the quarter ended April 30, 2001, the Company issued stock
options to various consultants at prices ranging from $1.75 to
$2.15 per share. The options, which represent a total of 400,000
shares of stock, have lives of seven to nine years.
The Fair value of each option is estimated on the issue date using
the Black-Scholes Option Price Calculation. The following assumptions
were made in estimating fair value: risk free interest is 5%,
volatility is .4958, and expected life is seven to nine years.
Consulting expenses recognized for these options for the quarter
ended April 30, 2001 were $540,700.
[The balance of this page was intentionally left blank.]
F/S - 12
METALLINE MINING COMPANY
An Exploration Stage Company
April 30, 2001
SIGNATURES
In accordance with Section 12, 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.
METALLINE MINING COMPANY
BY: /s/ Merlin Bingham
-----
Merlin Bingham,
its President
Date: June 14, 2001
By: /s/ Wayne L. Schoonmaker
-----
Wayne Schoonmaker, its
Principal Accounting Officer
Date: June 14, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
By: /s/ Merlin Bingham By: /s/ Jim Czirr
- ----- -----
Merlin Bingham Jim Czirr
Director Director
Date: June 14, 2001 Date: June 14, 2001
By: /s/ Daniel Gorski By: /s/ Wayne L. Schoonmaker
- ------- -------
Daniel Gorski Wayne Schoonmaker
Vice President/Director Secretary/Treasurer, Director
Date: June 14, 2001 Date: June 14, 2001
F/S - 13