SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended July 31, 2001 Commission File Number 0-18616
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ST. GEORGE METALS, INC.
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(Exact name of registrant as specified In its charter)
Nevada 88-0227915
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or organization)
9020 Stony Point Parkway, Suite 145, Richmond, Virginia 23235
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (804) 272-9020
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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
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As of July 31, 2001, the number of shares of Common Stock outstanding
was 14,487,159.
NOTE: The information presented in this Form 10-QSB is unaudited, but in the
opinion of management reflects all adjustments (which include only
normal recurring adjustments) necessary to fairly present such
information.
ST. GEORGE METALS, INC.
FORM 10-QSB
QUARTER ENDED JULY 31, 2001
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Interim Consolidated Balance Sheets....................................... 3
Interim Consolidated Statement of Income and Deficit...................... 4
Interim Consolidated Statement of Cash Flows.............................. 5
Notes to the Interim Consolidated Financial Statements.................... 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................. 7
PART II - OTHER INFORMATION
Items 1 - 6............................................................... 8-9
Signatures................................................................ 10
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ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED BALANCE SHEETS
AS OF JULY 31, 2001 AND JANUARY 31, 2001
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
JULY 31, JANUARY 31,
2001 2001
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ASSETS
CURRENT
Cash $ 2 $ 3
OTHER - Reclamation Deposit 78 78
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$ 80 $ 81
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LIABILITIES
CURRENT
Advances from shareholder 529 527
Accrued interest payable 5,765 5,253
Accrued mineral interests reclamation costs 90 90
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6,384 5,870
LONG TERM-DEBT
Other 1,888 1,888
Related parties 5,003 5,003
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TOTAL LIABILITIES 13,275 12,761
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SHAREHOLDERS' DEFICIT
SHARE CAPITAL
Authorized
10,000,000 Preferred shares -
Par value $.01 per share
30,000,000 Common shares -
Par value $.01 per share
Issued and paid in capital
1,450 Series A Preferred shares 1,450 1,450
166,417 Series B Preferred shares 499 499
14,487,159 Common shares 9,285 9,285
Deficit accumulated during development stage (24,429) (23,914)
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(13,195) (12,680)
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TOTAL $ 80 $ 81
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PREPARED BY MANAGEMENT
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ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENT OF LOSS AND DEFICIT
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 31, 2001 AND 2000
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
THREE MONTHS SIX MONTHS
ENDED JULY 31 ENDED JULY 31
2001 2000 2001 2000
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REVENUE
Income $ - $ - $ - $ -
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ADMINISTRATION COSTS
General and administrative 2 1 3 1
Interest 259 258 512 500
Professional fees 1 - 1 -
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TOTAL ADMINISTRATIVE COSTS 262 259 516 501
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NET LOSS BEFORE INTEREST INCOME 262 259 516 501
INTEREST INCOME - 1 1 2
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NET LOSS 262 258 515 499
DEFICIT BEGINNING OF PERIOD 24,167 23,196 23,914 22,955
DEFICIT END OF PERIOD $ 24,429 $ 23,454 $ 24,429 $ 23,454
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BASIC LOSS PER SHARE IN U.S. DOLLARS $ .02 $ .02 $ .03 $ .03
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 14,487,159 14,487,159 14,487,159 14,487,159
PREPARED BY MANAGEMENT
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ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 2001 AND 2000
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
THREE MONTHS
ENDED JULY 31,
2001 2000
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FUNDS PROVIDED (USED) BY OPERATING
ACTIVITIES
Net loss $ (515) $ (499)
CHANGES IN OTHER
WORKING CAPITAL ITEMS 514 500
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NET INCREASE (DECREASE) IN CASH (1) 1
CASH BALANCE BEGINNING OF PERIOD 3 6
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CASH BALANCE END OF PERIOD $ 2 $ 7
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PREPARED BY MANAGEMENT
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ST. GEORGE METALS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENT
JULY 31, 2001
(EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
1. ACCOUNTING POLICIES
These interim consolidated financial statements have been prepared in
accordance with accounting principles and practices that are generally
accepted in the United States. The notes to the Company's (unaudited)
consolidated financial statements as of January 31, 2001, substantially
apply to the interim financial statements at July 31, 2001, and are not
repeated here.
2. INTERIM ADJUSTMENTS
The unaudited interim financial information reflects all adjustments
which are, in the opinion of management, necessary to a fair statement
of the results for the interim period presented. These adjustments are
of a normal recurring nature.
3. STATUS OF BUSINESS
The Company is not engaged in any active business. There was no change
during the quarter ending July 31, 2001, with respect to the Company's
continued its efforts to reach an out-of-court accord with its trade
creditors. See Item 5, Other Information, of Part II of this Form
10-QSB.
PREPARED BY MANAGEMENT
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Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations - Financial
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Revenues. The Company had no revenues during the quarter ended July 31,
2001. It had no revenues during the comparable period in the preceding year.
Costs and Expenses. During the quarter ended July 31, 2001, the Company
had total administrative costs of $262,000 compared to $259,000 in the
comparable period in the prior year. The increase in administrative costs was
due to a $1,000 increase in interest costs, a $1,000 increase in administrative
costs, and a $1,000 charge for professional fees. Accrued interest was $259,000
during the period, compared to $258,000 during the quarter ended July 31, 2000.
Interest Income. The Company had no interest income during the period,
compared to interest income of $1,000 in the comparable prior period.
Net Loss. The Company had a net loss for the quarter ended July 31,
2001, of $262,000 (or $.02 per share), compared to $258,000 (or $.02 per share)
for the comparable period in the prior year.
Analysis of Financial Condition
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The Company had no material liquidity or capital resources at quarter
ended July 31, 2001. At that date, the Company had current assets of $80,000 and
current liabilities of $6.4 million. Current liabilities include $5.8 million of
accrued interest payable which is in arrears. A substantial portion of the
Company's current liabilities and other indebtedness is owed to related parties.
The Company obtained no new financing during the three-month period ended July
31, 2001. The Company has paid or otherwise resolved virtually all of its trade
debt, but continues to seek to satisfy its remaining trade creditors and other
operational expenses other than through a court supervised process. The Company
does not presently expect to be in a position to make any payments on its
Operations Advances (which are payable solely from net cash flow from the
Company's now-terminated Dean Mine operations) or on its Gold Delivery Contracts
and $6.9 million principal amount of term debt, both of which categories have
been voluntarily subordinated by the holders to the payment of the Operations
Advances.
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PART II - OTHER INFORMATION
Item 1. Legal proceedings.
(a) See Item 5 below.
Item 2. Changes in securities.
(a) None
(b) None
Item 3. Defaults upon senior securities.
Under the Company's Phase I and II Loan Commitments,
non-payment of interest constitutes an event of default;
however, a note holder must advise the Company in writing that
he declares his debt to be in default. As previously reported,
two note holders, one a former related party of the Company,
advised the Company in January, 1994, that the Company was in
default with respect to the Company's debt obligations to
them. The Company advised such holders that it did not agree
with their position.
Item 4. Submission of matters to a vote of security holders.
None
Item 5. Other information.
General. The Company's financial resources have been
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substantially exhausted and management does not know of any
additional financing available to the Company. The Company has
no continuing on-going business operations at this time. The
Company has been seeking, since early 1995, to satisfy its
trade debt other than through a court supervised process,
which would entail significant administrative expenses. The
Company has been able to satisfy a substantial portion of its
trade debt, but in light of its financial position, it is
unlikely any payments will be made on its other indebtedness,
which has been voluntarily subordinated to the Company's trade
creditors.
SEC Reporting Obligations. Because of the Company's financial
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condition and its consequent difficulty paying the attendant
legal and accounting expenses, its ability to continue to meet
its reporting obligations under the Securities Exchange Act of
1934 remains questionable. The financial statements included
with its Form 10-KSB for the year ended January 31, 2001, were
not audited by an independent certified accountant, because
the Company could not afford the cost of an audit.
Inability to Pay Indebtedness. Management does not presently
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anticipate that any of its outstanding obligations under its
Operations Advances, Gold Delivery Contracts and term debt, a
substantial portion of which outstanding obligations are held
by members of the Company's board of directors, can be
satisfied. Accordingly, management does not believe, as a
practical matter, that there is any remaining value to be
ascribed to the Company's outstanding preferred stock or
common stock.
-8-
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: None.
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(b) Reports on Form 8-K: None
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SIGNATURES
Pursuant to the requirements 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.
St. George Metals. Inc.
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(Registrant)
September 10, 2001 By: /s/ C. B. Robertson, III
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C. B. Robertson, III - Chairman and Principal
Executive Officer
September 10, 2001 /s/ Harrison Nesbit, II
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Harrison Nesbit, II - Treasurer and Chief
Financial and
Accounting Officer
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