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, 2003 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 September 30, 2003 was 17,262,690 shares ----------------- i TABLE OF CONTENTS Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements 1 Item 2. Management's Discussion and Analysis 1 PART II - OTHER INFORMATION Item 1. Legal Proceedings 2 Item 2. Changes in Securities 2 Item 3. Defaults Upon Senior Securities 2 Item 4. Submission of Matters to a Vote of Security Holders 2 Item 5. Other Information 3 Item 6. Exhibits and Reports on Form 8-K 3 ii 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, 2003 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2003. 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, 2002 incorporated by reference herein. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS The Company's financial condition and operations were similar for the first 9 months of 2003 as for the same period of 2002 but were diminished for the comparable third quarter periods. No new capital from financing activities was received in the third quarter of 2003 so exploration activities were limited compared to the corresponding period of 2002. The cash balance at the end of the third quarter of 2003 was $16,300 compared to $110,684 for the corresponding quarter of 2002. Because of current financing activities in the fourth quarter of 2003, it is anticipated that exploration activities will begin to increase in the fourth quarter of 2003. Operating and administrative expenses were $57,000 in the third quarter of 2003, partially due to the write-off of goodwill, compared to $4,361 in the third quarter of 2002 even though operating activities were at a reduced level in the current quarter. During the third quarter of 2003, management compared the fair value of its net assets held as a result of the Plainview Mining Company merger and determined that an impairment charge should be recorded against the carrying value of its goodwill. As a result, and in accordance with the provisions of FASB 142 "Goodwill and Other Intangible Assets", an impairment charge of $30,950 was recognized during the third quarter. In the current quarter funds used for exploration caused the deferred development account to increase slightly from $358,000 to $377,000. Plan Of Operations The Company presently relies upon financing activities to meet operating and administrative expenses as well as for exploration activities. Permitting of a mining operation at the Silver Strand mine is underway, but expenditures 1 for development of the mine are not contemplated for 2003 because of the anticipated delay of the permitting effort. Expenditures for permitting will probably be less than $10,000 in 2003. Improvements to the New Jersey mill to include the flotation process may commence in the next 6 months depending on the success of financing activities. Production of ore from the New Jersey mine may occur in 2004 but higher gold and silver prices will be required for production from the open pit mine. Formal agreements have been signed to enable exploration to commence at the Golden Chest mine, but funds from financing activities are required before starting such activities. 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 six mineral properties in the Coeur d'Alene Mining District: the New Jersey mine, the Silver Strand mine, the Golden Chest mine, the Lost Eagle project, the CAMP project and the Enterprise project. 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, 2002. 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 The Annual Meeting of shareholders was held on September 25, 2003 at the Company's offices in Kellogg, Idaho. Of 17,262,690 common shares eligible to vote, a majority, 9,777,442 shares, voted in favor of each of the following proposals: 1)The following directors were elected to one year terms or until a successor is elected and qualified: Charles Asher, Fred Brackebusch, Grant Brackebusch, Ron Eggart and M. Kathy Sims. 2)The Articles of Incorporation 2 were amended to increase the authorized no par value common stock of the Company from 20,000,000 to 50,000,000 shares. No other business was conducted at the Annual Meeting. ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits 31.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Reports on Form 8-K The Company filed a Form 8-K on September 29, 2003 concerning the results of votes on proposals at the Annual Meeting of Shareholders. 3 NEW JERSEY MINING COMPANY INDEX TO FINANCIAL STATEMENTS Page Balance Sheets as of September 30, 2003 and December 31, 2002. F/S-1 Statements of Operations for the three and nine month periods ended September 30, 2003 and 2002. F/S-2 Statements of Cash Flow for the nine month period ended September 30, 2003 and 2002. F/S-3 Notes to Interim Financial Statements F/S-4 NEW JERSEY MINING COMPANY BALANCE SHEET ASSETS September 30 December 31 2003 2002 -------- --------- Current Assets Cash $ 16,271 $ 40,436 Property & Equipment Building $ 35,911 $ 35,301 Equipment $ 246,536 $ 246,536 Mining Equipment $ 5,504 0 Other Assets Capitalized Development Costs $ 377,042 $ 256,952 Investment in LumaLite, Inc. $ 3,000 $ 3,000 Investment in Mining Claims $ 470,204 $ 470,204 Mining Reclamation Bond $ 2,347 $ 2,301 Goodwill $ 0 $ 30,950 Total Assets $1,156,815 $1,085,680 LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities Accounts Payable & accrued expenses $ 18,792 $ 7,926 Current Maturities of Capital Lease Obligations $ 0 $ 0 Total Current Liabilities $ 18,792 $ 7,926 Capital Lease Obligations (less current maturities) $ 0 $ 0 Total Liabilities $ 18,792 $ 7,926 Stockholders Equity Preferred Stock No shares issued Common Stock No Par Value, 50,000,000 shares authorized 2003 September 30, 2003 17,262,690 Issued $1,540,917 2002 December 31, 2002 16,636,175 Issued $1,390,918 Treasury Stock $ (136,300) $ (136,300) (1,947,744 shares) Retained Earnings $ (101,984) $ (50,678) Accumulated Deficit $ (74,879) $ (74,879) Net Loss $ (89,731) $ (51,307) Total Stockholders Equity $1,138,023 $1,077,754 Total Liabilities and Stockholders Equity $1,156,815 $1,085,680 F/S-1 STATEMENT OF OPERATIONS For the Three and Nine month Periods Ending September 30, 2003 and 2002. September 30, 2003 September 30, 2002 ---------------------- --------------------- Three Nine Three Nine Months Months Months Months -------- ------- -------- ------- Revenues $ 1,800 $ 2,462 $ 559 $ 3,407 Operating and Administrative Expenses $ 57,076 $ 92,194 $ 4,361 $ 43,932 Net Income from Operations(Loss) $(55,276) $(89,732) $( 3,802) $(40,525) Net Gain (Loss) $(55,276) $(89,732) $( 3,802) $(40,525) Basic Earnings (Loss) Per Share $ nil $ nil $ nil $ nil F/S-2 STATEMENT OF CASH FLOWS For the nine months Ending September 30 September 30 2003 2002 -------- -------- INCREASE (DECREASE) IN CASH Cash Flows From Operating Activities Net Income (Loss) $(89,732) $ (40,525) Adjustment to reconcile net loss to net cash used in Operating Activities: Decrease in accounts payable and accrued expenses $ 10,867 $ (570) Write-off of Goodwill $ 30,950 Net cash from operating activities $ (47,915) $ (41,095) Cash Flows From Investing Activities Additions to Property and equipment $ (6,114) $ (1,407) Capitalized Development $(120,090) $ (96,000) Increase in Reclamation Bond $ (46) $ (104) Net cash from investing activities $(126,250) $ (97,511) Cash Flows From Financing Activities Sale of Common Stock $ 150,000 $ 255,000 Principal Payments on capital lease obligations $ 0 $ (5,921) Net cash provided by financing activities $ 150,000 $ 249,079 Net Increase (Decrease)in Cash $ (24,165) $ 110,473 Cash, Beginning of Period $ 40,436 $ 211 Cash, End of Period $ 16,271 $ 110,684 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, 2003 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2003. 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, 2002 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 a mining lease with William Zanetti. The lease provides for the Company's exploration, development and mining of minerals on fee land through October 2008 and thereafter as long as mining operations are deemed continuous. The lease provides for production royalties of 5% of net sales of ores or concentrates. Additional production royalties of 1% to 5% are due if gold exceeds $597 per troy ounce. Also, annual advance royalties totaling $500 are required under the lease. The advance royalties, charged to expenses as incurred, are accumulated and will be credited against the production royalty obligations. The lessor may terminate the lease upon the Company's failure to perform under these terms of the lease. The Company may also terminate the lease at any time. 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. The Company has an exploration lease with a mining lease option on the Golden Chest mine located near Murray, Idaho. The agreement calls for a 2.5 year exploration period during which the Company will issue 10,000 shares of common stock per six month period. If the mining lease is executed, the Company would issue 100,000 common shares and pay a sliding scale net smelter return royalty on gold production which increases with the gold price. The royalty is 3% up to $400/oz gold and then increases to a maximum of 6% at higher gold prices, but the trigger prices for higher royalties will be adjusted for inflation. Also, the Company would issue 50,000 common shares for each 10,000 ounces of gold produced at the Golden Chest. 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 12, 2003 By /s/ FRED W. BRACKEBUSCH ----------------- --------------------------------- Fred W. Brackebusch, President, Treasurer & Director Date: November 12, 2003 By /s/ GRANT A. BRACKEBUSCH ------------------ --------------------------------- Grant A. Brackebusch, Vice President & Director 4