UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
¨ 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: 000-28837
NEW JERSEY MINING COMPANY
(Exact name of registrant as specified in its charter)
| Idaho | 82-0490295 |
| (State or other jurisdiction | (IRS employer identification no.) |
| of incorporation) |
89 Appleberg Road, Kellogg, Idaho 83837
(Address of principal executive offices)
Registrant’s telephone number, including area code: (208) 783-3331
| Common Stock | The OTC-Bulletin Board |
| Title of each class | Name and 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 filing
requirements for the past 90 days.
Yes x No ¨
At July 19, 2005, there were 22,036,230 shares of the registrant’s common stock outstanding.
NEW JERSEY MINING COMPANY
QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2005
TABLE OF CONTENTS
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PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
NEW JERSEY MINING COMPANY
(An Exploration Stage Company)
BALANCE SHEET
June 30, 2005
(Unaudited)
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | $ | 17,162 | |
| Accounts receivable | 33,924 | ||
| Total current assets | 51,086 | ||
| Buildings and equipment | 665,85 | ||
| Mineral properties and deferred development costs | 852,274 | ||
| Total assets | $ | 1,569,215 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
| Current liabilities: | |||
| Accounts payable | $ | 32,580 | |
| Accrued payroll and payroll related expenses | 9,186 | ||
| Stock subscription payable | 20,000 | ||
| Obligation under capital lease, current | 13,334 | ||
| Total current liabilities | 75,100 | ||
| Accrued reclamation costs | 12,500 | ||
| Obligation under capital lease, noncurrent | 50,555 | ||
| Total liabilities | 138,155 | ||
| Stockholders’ equity: | |||
| Preferred stock, no par value; 1,000,000 | |||
| shares authorized; no shares issued or outstanding | |||
| Common stock, no par value; 50,000,000 shares | |||
| authorized; 22,036,230 shares issued and outstanding | 3,220,285 | ||
| Deficit accumulated during the development stage | (1,789,225 | ) | |
| Total stockholders’ equity | 1,431,060 | ||
| Total liabilities and stockholders’ equity | $ | 1,569,215 | |
The accompanying notes are an integral part of these financial statements.
NEW JERSEY MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
For the Three and Six Month Periods ended June 30, 2005 and 2004 and for
the period from
inception (July 18, 1996) through June 30, 2005
(Unaudited)
| From Inception | |||||||||||||||
| (July 18, 1996) | |||||||||||||||
| June 30, 2005 | June 30, 2004 | Through | |||||||||||||
| Three Months | Six Months | Three Months | Six Months | June 30, 2005 | |||||||||||
| Sales: | |||||||||||||||
| Gold | $ | 9,150 | $ | 9,150 | $ | 9,150 | |||||||||
| Concentrate | 21,283 | 46,097 | 46,097 | ||||||||||||
| Total sales | 30,433 | 55,247 | 55,247 | ||||||||||||
| Cost of sales | 80,155 | 118,497 | 118,497 | ||||||||||||
| Gross profit (loss) | (49,722 | ) | (63,250 | ) | (63,250 | ) | |||||||||
| Operating expenses: | |||||||||||||||
| Expenses paid with common stock | |||||||||||||||
| Management fees | 38,800 | 62,113 | 252,512 | ||||||||||||
| Directors fees | 3,600 | 3,600 | 62,050 | ||||||||||||
| Services and other | 10,478 | 20,278 | $ | 1,000 | $ | 2,500 | 54,718 | ||||||||
| Exploration | 7,000 | 12,500 | 6,600 | 6,600 | 32,500 | ||||||||||
| Exploration expense | 1,732 | 23,492 | 329,237 | 364,954 | 641,882 | ||||||||||
| General and administrative expenses | 63,858 | 153,119 | 59,673 | 118,446 | 635,383 | ||||||||||
| Total operating expenses | 125,468 | 275,102 | 396,510 | 492,500 | 1,679,045 | ||||||||||
| Other (income) expense: | |||||||||||||||
| Royalty and other income | (11,770 | ) | (12,202 | ) | (1,025 | ) | (1,843 | ) | (74,020 | ) | |||||
| Write-off of goodwill | 30,950 | ||||||||||||||
| Write-off of investment | 90,000 | ||||||||||||||
| Total other (income) expense | (11,770 | ) | (12,202 | ) | (1,025 | ) | (1,843 | ) | 46,930 | ||||||
| Net loss | $ | 163,420 | $ | 326,150 | $ | 395,485 | $ | 490,657 | $ | 1,789,225 | |||||
| Net loss per common share-basic | $ | 0.007 | . | $ | 0.015 | . | $ | 0.020 | $ | 0.025 | $ | 0.123 | |||
| Weighted average common shares | |||||||||||||||
| outstanding-basic | 21,959,769 | 21,841,976 | 20,165,555 | 19,884,972 | 14,594,210 | ||||||||||
The accompanying notes are an integral part of these financial statements.
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NEW JERSEY MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
For the Six-Month Periods ended June 30, 2005 and 2004 and for the period
from
inception (July 18, 1996) through June 30, 2005
(Unaudited)
| From Inception | |||||||||
| June 30, | June 30, | Through | |||||||
| 2005 | 2004 | June 30, 2005 | |||||||
| Cash flows from operating activities: | |||||||||
| Net loss | $ | (326,150 | ) | $ | (490,657 | ) | $ | (1,789,225 | ) |
| Adjustments to reconcile net loss to net cash | |||||||||
| used by operating activities: | |||||||||
| Depreciation and amortization | 13,892 | 13,892 | |||||||
| Write-off of equipment | 11,272 | 11,272 | |||||||
| Write-off of goodwill and investment | 120,950 | ||||||||
| Stock issued for: | |||||||||
| Management fees | 62,113 | 252,512 | |||||||
| Directors fees | 3,600 | 62,050 | |||||||
| Services and other | 20,278 | 2,500 | 54,718 | ||||||
| Exploration | 12,500 | 6,600 | 32,500 | ||||||
| Change in: | |||||||||
| Accounts receivable | (33,924 | ) | (33,924 | ) | |||||
| Other assets | 2,346 | (3,463 | ) | 1,722 | |||||
| Accounts payable | 24,469 | 119,680 | 29,610 | ||||||
| Accounts payable to related party | (2,000 | ) | |||||||
| Accrued payroll and related payroll expenses | 3,471 | 9,186 | |||||||
| Accrued reclamation costs | 12,500 | ||||||||
| Net cash used by operating activities | (206,133 | ) | (367,340 | ) | (1,222,237 | ) | |||
| Cash flows from investing activities: | |||||||||
| Purchases of building and equipment | (27,283 | ) | (162,277 | ) | (396,151 | ) | |||
| Purchases of mineral property | (5,904 | ) | |||||||
| Cash of acquired companies | 38,269 | ||||||||
| Deferral of development costs | (23,830 | ) | (225,535 | ) | |||||
| Net cash used by investing activities | (27,283 | ) | (186,107 | ) | (589,321 | ) | |||
| Cash flows from financing activities: | |||||||||
| Exercise of stock purchase warrants | 222,500 | 599,500 | |||||||
| Sales of common stock, net of issuance costs | 85,000 | 373,500 | 1,283,807 | ||||||
| Received for stock not yet issued | 20,000 | 20,000 | |||||||
| Principal payments on capital lease | (6,186 | ) | (54,587 | ) | |||||
| Payments on note payable to bank | (20,000 | ) | |||||||
| Net cash provided by financing activities | 98,814 | 596,000 | 1,828,720 | ||||||
| Net change in cash | (134,602 | ) | 42,553 | 17,162 | |||||
| Cash, beginning of period | 151,764 | 346,268 | 0 | ||||||
| Cash, end of period | $ | 17,162 | $ | 388,821 | $ | 17,162 | |||
| Interest paid in cash | $ | 3,374 | $ | 4,767 | |||||
| Non-cash investing and financing activities: | |||||||||
| Common stock issued for: | |||||||||
| Buildings and equipment | $ | 5,850 | $ | 5,850 | |||||
| Mineral properties and deferred development costs | $ | 65,000 | $ | 264,300 | |||||
| Acquisitions of companies, excluding cash | $ | 743,653 | |||||||
| Capital lease obligation for equipment acquired | $ | 93,275 |
The accompanying notes are an integral part of these financial statements.
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NEW JERSEY MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation:
The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-QSB. 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 recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the six-month period ended June 30, 2005 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2005.
For further information refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-KSB/A for the year ended December 31, 2004.
2. Description of Business
New Jersey Mining Company (“the Company”) was incorporated as an Idaho corporation on July 18, 1996. The Company's primary business is exploring for and developing gold, silver and base-metal resources in Idaho.
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operation
General
This report contains both historical and prospective statements concerning the Company and its operations. Prospective statements (known as "forward-looking statements") may or may not prove true with the passage of time because of future risks and uncertainties. The Company cannot predict what factors might cause actual results to differ materially from those indicated by prospective statements.
Plan of Operation
The Company is executing its plan to continue exploration for gold, silver and base metal deposits in the greater Coeur d’Alene Mining District of northern Idaho. The Company has three advanced-stage properties with reserves. One of the properties, the Silver Strand, owned by the Company has recently received a go-ahead decision from the U.S. Forest Service (USFS) and will be readied for production with production planned for June 2006. A favorable decision had been made in March of this year but an appeal by the Idaho Conservation League (ICL) has delayed commencement of operations. The ICL appeal was denied and the March decision was affirmed recently.
At the Golden Chest mine production commenced in May 2005 from the Katie Dora vein which was developed by a ramp in 2004. It is planned to mine about 3,000 tonnes grading 13 grams/tonne gold in 2005 from the Katie Dora reserves. The third advanced property, the Coleman vein in the New Jersey
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Area of Interest has an open pit which can be operated to fill out the mill production capacity, if necessary. Sulfide concentrates were produced in the second quarter of 2005 and sold to Barrick Goldstrike Mines, Inc. in Nevada. Other gold-bearing products were produced and sold to a gold refiner. Total gold production in the second quarter of 2005 was 76 troy ounces, most of which was from the Golden Chest mine. The second quarter was the startup phase for the Golden Chest mining operation. Currently, the production rate is approximately 300 troy ounces per quarter.
An exploration drilling program, consisting of three 150-meter core holes, is planned for the fourth quarter of 2005 depending on the availability of funding. Drilling will be done at the Golden Chest mine to test the continuity of deep mineralization discovered in 2004 on the Idaho vein. Reconnaissance exploration will continue to be done in the Company’s area of interests in the greater Coeur d’Alene Mining District.
The Company has sufficient funding to execute the planned production schedule for the next 12 months, as well as fund necessary management tasks such as auditing/accounting and SEC reporting. However, additional funding will be needed to execute the exploration plan and fund preparations for the development of the Silver Strand mine in 2005. The most likely source of additional funding is an equity offering.
The Company currently has seven employees and uses consultants or contractors for some project tasks. There are no plans to hire additional employees.
Item 3. Controls and Procedures
An evaluation was performed by the Company’s president and principal financial officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. And on that evaluation, the Company’s president and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2005, in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion.
There has been no change in the Company’s internal controls over financial reporting during the quarter ended June 30, 2005, that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities.
Neither the constituent instruments defining the rights of the registrant’s securities filers nor the rights evidenced by the registrant’s outstanding common stock have been modified, limited or qualified.
The Company issued 66,250 shares of restricted common stock to President Fred W. Brackebusch for management services rendered in the second quarter of 2005. A price of $0.40 per share was used to calculate the number of shares to be issued. In Management’s opinion, the securities were issued pursuant to exemptions from registration under Section 4(2) of the Securities Act of 1933 as amended.
The Company issued 10,400 shares of restricted common stock to Mine Systems Design, Inc., a Company controlled by our President, Fred W. Brackebusch, for office rent and mining equipment in the second quarter of 2005. A price of $0.40 per share was used to calculate the number of shares to be issued. In Management’s opinion, the securities were issued pursuant to exemptions from registration under Section 4(2) of the Securities Act of 1933 as amended.
During the second quarter of 2005, the Company issued 25,080 shares at an average price of $0.40 to various accredited and sophisticated individuals for services performed. In Management’s opinion the securities were issued pursuant to exemptions from registration under Section 4(2) and Rule 506 of Regulation D of the Securities Act of 1933 as amended.
Item 3. Defaults Upon Senior Securities
The registrant has no outstanding senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On July 13, 2005, Director Charles F. Asher passed away. Chuck was an original member of the Board of Directors of New Jersey Mining Company and will be missed. There are no plans to fill this position on the Board of Directors. There are currently five persons on the Board of Directors.
Item 6. Exhibits
| Exhibit Number |
Description |
| 31.1 | Section 302 Certification |
| 32.1 | Section 906 Certification |
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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.
| NEW JERSEY MINING COMPANY | ||
| By: | /s/ Fred W. Brackebusch | |
| Fred W. Brackebusch, its | ||
| President, Treasurer, & Director | ||
| Date: August 12, 2005 | ||
| By: | /s/ Grant A. Brackebusch | |
| Grant A. Brackebusch, its | ||
| Vice President & Director | ||
| August 12, 2005 | ||
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