SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2002
NEW JERSEY MINING COMPANY
--------------------------
(Name of small business issuer in its charter)
IDAHO 82-0490295
- --------------------------- -----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
P.O. Box 1019 (Street: 89 Appleberg Road)
Kellogg, Idaho 83837
- ------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(208)783-3331
- ---------------------------
Issuer's telephone number
Securities registered under Section 12(b) of the Act: None
Common OTCBB
- ------------------- ------------------------------
Title of each class Name of each exchange on which
registered
Securities registered under Section 12(g) of the Act:
Common Stock- No Par Value
--------------------------
Title of Class
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 XX No .
------ ------
The number of outstanding shares of the registrant's common stock at October
28, 2002 was 14,700,775 shares
-----------------
1
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis 3
Item 3. Controls and Procedures 4
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 4
Item 2. Changes in Securities 4
Item 3. Defaults Upon Senior Securities 4
Item 4. Submission of Matters to a Vote of Security Holders 4
Item 5. Other Information 4
Item 6. Exhibits and Reports on Form 8-K 4
SIGNATURES 5
2
PART I
ITEM 1.
FINANCIAL STATEMENTS
The unaudited financial statements of the Company for the periods covered by
this report are included elsewhere in this report, beginning at page F/S-1.
The unaudited financial statements have been prepared by the Company in
accordance with generally accepted accounting principles for interim
financial information with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. 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 normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the nine
month period ended September 30, 2002 are not necessarily indicative of the
results that may be expected for the full year ending December 31, 2002.
For further information refer to the financial statements and footnotes
thereto in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001 incorporated by reference herein.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Cash increased to $110,684 for the current quarter compared to $211 at the
end of the last fiscal year and $493 for the quarter ending September 30,
2001. The increase in cash was due to the completion of a private placement
of stock completed in May 2002 pursuant to Rule 506 Regulation D of the
Securities Act of 1933, as amended.
Expenses increased to $43,932 for the current quarter compared to $3,603 for
the quarter ended September 30, 2001 primarily due to the exploration program
at the New Jersey mine. Capital lease obligations declined from $4,674 one
year ago to $0 in the current quarter as equipment leases were paid off.
The Company currently leases the New Jersey mill and mine facilities to the
largest shareholder. The Company is in the midst of an exploration program at
its New Jersey mine, Silver Strand mine and Lost Eagle project funded by the
stock placement. It is planned to meet cash requirements in the foreseeable
future from the private placement proceeds, royalty payments by the lessee,
and monthly payments due from the lessee of the CAMP project.
During the quarter ended September 30, 2002, the Company's board of directors
approved an exchange offer to Gold Run Gulch Mining Company (GRG). The
Company offered 0.875 of a common share of New Jersey Mining Co. in exchange
for one common share of GRG. GRG leases the New Jersey mine property to the
Company. Subsequent to September 30, 2002, the shareholders of GRG approved
the exchange offer. New Jersey Mining Company will issue 1,916,250 shares of
restricted stock to the shareholders of GRG to complete the merger. The
merger gives the Company title to 62 acres of patented mining claims,
mineral rights to 108 acres of fee land, and 130 acres of unpatented claims.
A Net Smelter Royalty (NSR) of 5% due GRG on gold production will now be
eliminated.
The company is involved in exploring for and developing gold, silver and base
metal ore resources in the Coeur d'Alene Mining District of northern Idaho.
The Company has a portfolio of five mineral properties in the Coeur d'Alene
Mining District: the New Jersey mine, the Silver Strand mine, the Lost Eagle
project, the CAMP project and the Wisconsin-Teddy project. The New Jersey
mine and the Silver Strand mine are the Company's development stage
properties while the other three properties are exploration stage properties.
For a more complete description of the Company's properties refer to the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2001.
3
ITEM 3.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Based on their
evaluation, as of a date within 90 days prior to the date of the filing of
this Form 10-QSB, of the effectiveness of the Company's disclosure controls
and procedures, as defined in Rules 13a-14(c) and 15d-14(c) of the Securities
Exchange Act of 1934, the principal executive officer and the principal
financial officer of the Company have each concluded that such disclosure
controls and procedures are effective and sufficient to ensure that
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified by the SEC's rules and forms.
Changes in Internal Controls. Subsequent to the date of their evaluation,
there have not been any significant changes in the Company's internal controls
or in other factors that could significantly affect these controls, including
any corrective action with regard to significant deficiencies and material
weaknesses.
PART II
ITEM 1.
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not
aware of any pending or potential legal actions.
ITEM 2.
CHANGES IN SECURITIES
Neither the constituent instruments defining the rights of the registrant's
security holders nor the rights evidenced by the registrant's outstanding
common stock have been modified, limited or qualified.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
The registrant has no outstanding senior securities.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the registrant's security holders
during the period covered by this report.
ITEM 5.
OTHER INFORMATION
None.
ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 99.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
Exhibit 99.2 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Company during the
three month period ended September 30, 2002.
4
NEW JERSEY MINING COMPANY
INDEX TO FINANCIAL STATEMENTS
Page
Balance Sheets as of September 30, 2002 and September 30, 2001. F/S-1
Statements of Operations for the nine months ended
September 30, 2002 and 2001. F/S-2
Statements of Cash Flow for the nine months ended
September 30, 2002 and 2001. F/S-3
Notes to Interim Financial Statements F/S-4
NEW JERSEY MINING COMPANY
(A Development Stage Company)
BALANCE SHEET
ASSETS
------
September 30 September 30
2002 2001
---------- ----------
Current Assets
Cash $ 110,684 $ 493
---------- ----------
Property & Equipment
Building $ 35,301 $ 33,894
---------- ----------
Equipment $ 246,536 $ 246,536
---------- ----------
Other Assets
Capitalized Development
Costs $ 176,881 $ 80,881
---------- ----------
Investment in LumaLite,
Inc. $ 3,000 $ 3,000
---------- ----------
Investment in Mining
Claims $ 205,204 $ 74,704
---------- ----------
Mining Reclamation Bond $ 2,301 $ 2,196
---------- ----------
Goodwill $ 30,950 $ 30,950
---------- ----------
Total Assets $ 810,857 $ 472,654
========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable &
accrued expenses $ 0 $ 0
---------- ----------
Current Maturities of
Capital Lease Obligations $ 0 $ 4,245
---------- ----------
Total Current Liabilities $ 0 $ 4,245
---------- ----------
Capital Lease Obligations
(less current maturities) $ 0 $ 4,674
---------- ----------
Total Liabilities $ 0 $ 8,919
---------- ----------
Stockholders Equity
Preferred Stock
No shares issued
Common Stock
No Par Value, 20,000,000 shares authorized
2002 Sept 30, 2002
16,648,519 Issued $1,113,239
2001 Sept 30, 2001
14,894,984 Issued $ 720,899
Treasury Stock $ (136,300) $ (136,300)
(1,947,744 shares)
Retained Earnings $ (50,678) $ (44,229)
Deficit Accumulated in
the Development Stage $ (74,879) $ (74,879)
---------- ----------
Net Income $ (40,525) $ (1,756)
---------- ----------
Total Stockholders Equity $ 810,857 $ 463,735
---------- ----------
Total Liabilities and
Stockholders Equity $ 810,857 $ 472,654
========== ==========
The accompanying notes are an integral part of these financial statements.
F/S-1
STATEMENT OF OPERATIONS
September 30 September 30
2002 2001
---------- ----------
Revenues $ 3,407 $ 1,847
Operating and Administrative Expenses $ 43,932 $ 3,603
---------- ----------
Net Income from Operations(Loss) $ (40,525) $ (1,756)
========== ==========
Loss on Devaluation of Investments $ -0- $ -0-
Net Gain (Loss) $ (40,525) $ (1,756)
========== ==========
Basic Earnings (Loss) Per Share $ (0.003) $ (0.000)
========== ==========
The accompanying notes are an integral part of these financial statements.
F/S-2
STATEMENT OF CASH FLOWS
September 30 September 30
2002 2001
---------- ----------
INCREASE (DECREASE) IN CASH
Cash Flows From Operating Activities
Net Income (Loss) $ (40,525) $ (1,756)
Adjustment to reconcile net loss
to net cash used in Operating Activities:
Capital Loss on sale of stock $ 0 $ 2,608
Decrease in accounts payable
and accrued expenses $ (570) $ 0
---------- ----------
Net cash from operating
activities $ (41,094) $ 852
---------- ----------
Cash Flows From Investing Activities
Proceeds from Sale of
Investments $ 0 $ 1,392
Additions to property and
equipment $ (1,407) $ 0
Capitalized Development $ (96,000) $
Increase in Reclamation Bond $ (105) $ (123)
Net cash from investing
activities $ (97,512) $ 1,269
---------- ----------
Cash Flows From Financing Activities
Sale of Common Stock $ 255,000
Principal payments on capital
lease obligations $ (5,921) $ (3,400)
Net cash provided by
financing activities $ 249,079 $ (3,400)
---------- ----------
Net Increase (Decrease)in Cash $ 110,473 $ (1,279)
---------- ----------
Cash, Beginning of Year $ 211 $ 1,772
---------- ----------
Cash, End of 3rd Quarter $ 110,684 $ 493
========== ==========
The accompanying notes are an integral part of these financial statements.
F/S-3
NEW JERSEY MINING COMPANY
NOTES TO INTERIM FINANCIAL STATEMENTS - UNAUDITED
These unaudited financial statements have been prepared by the Company in
accordance with generally accepted accounting principles for interim
financial information with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. 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 normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the nine
month period ended September 30, 2002 are not necessarily indicative of the
results that may be expected for the full year ending December 31, 2002. For
further information refer to the financials statements and footnotes thereto
in the Company's Annual Report on Form 10-KSB for the year ended December 31,
2001 incorporated by reference herein.
Note 1 - Form and Organization
New Jersey Mining Company (the company) is a corporation organized under the
laws of the State of Idaho on July 18, 1996. The Company was dormant until
December 31,1996, when all of the assets and liabilities of the New Jersey
Joint Venture ( a partnership) were transferred to the Company in exchange
for 10,000,000 shares of common stock. The New Jersey Joint Venture, a
partnership, was formed in 1994 to develop the New Jersey mine.
Note 2 - Leases of Mining Claims
The Company has been assigned mining leases with Gold Run Gulch Mining
Company and William Zanetti. The leases provide for the Company's
exploration, development and mining of minerals on patented and unpatented
claims through October 2008 and thereafter as long as mining operations are
deemed continuous. The leases provide for production royalties of 5% of net
sales of ores or concentrates. Additional production royalties of 1% to 5%
are due if gold exceeds $587 per troy ounce. Also, annual advance royalties
totaling $2,900 are required under the leases. The advance royalties, charged
to expenses as incurred, are accumulated and will be credited against the
production royalty obligations. The lessor may terminate the leases upon the
Company's failure to perform under these terms of the leases. The Company
may also terminate the leases at any time.
Note that the merger with Gold Run Gulch Mining Company, when completed, will
remove the Net Smelter Royalty and advance royalty payments due Gold Run
Gulch. The lease with William Zanetti remains unchanged.
The Company has a mining lease with Mine Systems Design, Inc., its majority
shareholder, which covers approximately 60 acres north of the New Jersey
mine. The lease has a fifteen year term and calls for a 3% NSR if production
is achieved. The NSR shall not exceed 10% of the gross proceeds.
F/S-4
SIGNATURES
In accordance with the requirements of the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
New Jersey Mining Company
Date: November 11, 2002 By /s/ FRED W. BRACKEBUSCH
----------------- ---------------------------------
Fred W. Brackebusch, President,
Treasurer & Director
Date: November 11, 2002 By /s/ GRANT A. BRACKEBUSCH
------------------ ---------------------------------
Grant A. Brackebusch, Vice President &
Director
5
Certifications
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Fred W. Brackebusch, Chief Executive Officer of New Jersey Mining
Company, (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of New Jersey
Mining Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 14, 2002
/s/ Fred W. Brackebusch
- ----------------------
Fred W. Brackebusch
Chief Executive Officer
6
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Fred W. Brackebusch, Principal Accounting Officer of New Jersey Mining
Company, (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of New Jersey
Mining Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 14, 2002
/s/ Fred W. Brackebusch
- ----------------------
Fred W. Brackebusch
Principal Accounting Officer
7
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of New Jersey Mining Company
(the "Company") on Form 10-QSB for the period ending September 30, 2002, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Fred W. Brackebusch, Chief Executive Officer of the Company,
certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
/s/ Fred W. Brackebusch
- -------------------------
Fred W. Brackebusch
Chief Executive Officer
November 12, 2002
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of New Jersey Mining Company (the
"Company") on Form 10-QSB for the period ending September 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the Report"),
Fred W. Brackebusch, Principal Accounting Officer of the Company, certifies,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
/s/ Fred W. Brackebusch
- ------------------------------
Fred W. Brackebusch
Principal Accounting Officer
November 12, 2002