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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
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
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 .
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definite proxy or
information statements incorporated in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. XX
State issuer's revenues for its most recent fiscal year. $ 12,662
The aggregate market value of the registrant's voting common stock held by
non-affiliates was $303,000 as of March 19, 2001 based on the average of the
bid and ask prices quoted on the OTC Bulletin Board. As of February 28, 2001,
the number of shares of common stock outstanding was 11,622,290.
TABLE OF CONTENTS
Page
Glossary of Significant Mining Terms 2
PART I
Item 1. Description of Business. 4
Item 2. Description of Property. 6
Item 3. Legal Proceedings. 12
Item 4. Submission of Matters to a Vote of Security Holders. 12
PART II
Item 5. Market for Common Equity and And Related Stockholder Matters. 12
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 13
Item 7. Financial Statements. 13
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure. 22
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act. 22
Item 10. Executive Compensation. 23
Item 11. Security Ownership of Certain Beneficial Owners. 24
Item 12. Certain Relationships and Related Transactions. 25
Item 13. Exhibits and Reports on Form 8-K. 26
GLOSSARY
Ag- Silver.
Au- Gold.
Alluvial- Adjectivally used to identify minerals deposited over time by
moving water.
Argillites- Metamorphic rock containing clay minerals
Arsenopyrite- An iron-arsenic sulfide. Common constituent of gold
mineralization.
Bedrock- Solid rock underlying overburden.
CIL- A standard gold recovery process involving the leaching with cyanide in
agitated tanks with activated carbon. CIL means "carbon-in-leach."
Crosscut- A nominally horizontal tunnel, generally driven at right angles to
the strike of a vein.
Deposit- A mineral deposit is a mineralized body which has been intersected
by sufficient closely-spaced drill holes or underground sampling to support
sufficient tonnage and average grade(s)of metal(s)to warrant further
exploration or development activities.
Development Stage- As defined by the SEC- includes all issuers engaged in the
preparation of an established commercially mineable deposit (reserves) for
its extraction which are not in the production stage.
Drift- A horizontal mine opening driven on the vein. Driving is a term
used to describe the excavation of a tunnel.
Exploration Stage- As defined by the SEC- includes all issuers engaged in
the search for mineral deposits (reserves) which are not in either the
development or production stage.
Fault- A fracture in the earth's crust accompanied by a displacement of one
side of the fracture with respect to the other and in a direction parallel to
the fracture.
Galena- A lead sulfide mineral. The most important lead mineral in the
Coeur d'Alene Mining District.
Grade- A term used to assign the concentration of metals per unit weight
of ore. An example - ounces of gold per ton of ore (opt). One ounce per ton
is 34.28 parts per million.
Mineralization-The presence of minerals in a specific area or geologic
formation.
Ore- A mineral or aggregate of minerals which can be mined and treated at a
profit. A large quantity of ore which is surrounded by non-ore ore sub-ore
material is called an orebody.
Production Stage- As defined by the SEC - includes all issuers engaged in the
exploitation of a mineral deposit (reserve).
Pyrite- An iron sulfide. A common mineral associated with gold
mineralization.
Quartz- Crystalline silica (SiO2). An important rock-forming and gangue
material in gold veins.
Quartzites- Metamorphic rock containing quartz.
Raise- An opening driven upward generally on the vein.
Reserves- That part of a mineral deposit which could be economically and
legally extracted or produced at the time of the reserve determination.
Reserves are subcategorized as either proven (measured) reserves, for which
(a) quantity is computed from dimensions revealed in outcrops, trenches,
workings, or drill holes, and grade and/or quality are computed from the
results of detailed sampling, and (b) the sites for inspection, sampling, and
measurement are spaced so closely and geologic character is so well defined
that size, shape, depth, and mineral content are well-established; or
probable(indicated) reserves, for which quantity and grade and/or quality are
computed from information similar to that used for proven (measured) reserves,
yet the sites for inspection, sampling and measurement are farther apart.
Tetrahedrite- Sulfosalt mineral containing copper, antimony and silver.
Vein- A zone or body of mineralized rock lying within boundaries separating it
from neighboring wallrock. A mineralized zone having a more or less regular
development in length, width and depth to give it a tabular form and commonly
inclined at a considerable angle to the horizontal.
Wallrock- Barren rock surrounding a vein.
PART I
ITEM 1.
DESCRIPTION OF THE BUSINESS
BUSINESS DEVELOPMENT
Form and Year of 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. The partnership
consisted of Mine Systems Design, Inc. [75%], Plainview Mining Company [13%],
Silver Trend Mining Company [10%], Mark C. Brackebusch [1%], and Mascot
Silver-Lead Mines, Inc. [1%]. The New Jersey Joint Venture brought the New
Jersey mine into production by building a 100 ton per day concentrator with
a gravity circuit for gold recovery.
Any Bankruptcy, Receivership or Similar Proceedings
There have been no bankruptcy, receivership or similar proceedings.
Any Material Classification, Merger, Consolidation, or Purchase or Sale of a
Significant Amount of Assets Not in the Ordinary Course of Business.
On March 12, 1998 New Jersey Mining Co. and Plainview Mining Co.
a merger with New Jersey Mining Co. being the surviving corporation. A
majority of Plainview shareholders (59%) approved the merger at a Special
Meeting of Shareholders held on January 27, 1998. The merger involved
Plainview delivering all of its assets to New Jersey in exchange for stock
with 2 shares of New Jersey Mining Co. common stock being exchanged for each
share of Plainview Mining Co. common stock. The Articles of Merger were
filed with the Idaho Secretary of State on March 27, 1998. The Articles of
Merger are incorporated as an Exhibit by reference.
BUSINESS OF THE COMPANY
General Description of the Business
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 four mineral properties in the Coeur d'Alene
Mining District: the New Jersey mine, the Silver Strand mine, 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
two properties are exploration stage properties. The New Jersey mine is
located 3 miles east of Kellogg, Idaho.
The Company's New Jersey mine property has an area of approximately 370 acres
and includes a group of mineral leases. A mineral lease from Gold Run Gulch
Mining Company includes 5 patented claims containing 62 acres, four
unpatented claims surrounding the patented claims, and mineral rights to
fee land containing 108 acres. The known orebody is located on the patented
claims. Another mineral lease from William Zanetti in the New Jersey mill
area contains about 60 acres. Both mineral leases carry a 5% Net Smelter
royalty.
The Company's Silver Strand mine consists of fifteen unpatented lode claims
on federal land administered by the U.S. Forest Service. The claims were
acquired from Trend Mining Company pursuant to a purchase agreement dated
July 14, 2000.
Effect of Existing or Probable Governmental Regulations on the Business
All operating plans have been made in consideration of existing governmental
regulations. Regulations that would most affect operations are related to
water quality. Plans of operation will be required before exploration or
mining activities can be conducted on Federal land that is administered by the
Bureau of Land Management. The Bunker Hill Superfund site is located about 1
mile west of the New Jersey mine. It is possible that Superfund status could
be applied to the area around the New Jersey mine because of historic mining
activities. There is no known evidence that previous operations at the New
Jersey mine prior to 1910 caused any ground water or stream pollution or
discharged any tailings into the South Fork of the Coeur d'Alene River;
however such evidence could be discovered. Historic mine tailings from
upstream mining operations located near the New Jersey mill may have to be
covered or removed if Superfund status is applied. The Bureau of Land
Management is currently revising its regulations relative to exploration
and mining operations, but the planned changes are not thought to have major
effects on planned operations at the New Jersey mine.
Costs and Effects of Compliance with Environmental Laws (Federal, State and
Local)
No major Federal permits [except EPA storm water permit which is a blanket
state-wide permit] are required for the New Jersey mine because most
operations are on private land and there are no process discharges to streams.
Any exploration program conducted by the Company on unpatented mining
claims, usually administered by the U.S. Bureau of Land Management (BLM),
requires a Plan of Operation permit. With respect to the Silver Strand mine
any exploration, development or production would require a Plan of Operation
to be submitted to the U.S. Forest Service for approval and permit issuance.
The Company is also subject to the rules of the U.S. Department of Labor,
Mine Safety and Health Administration (MSHA) for the New Jersey mine
operations. When the mine is operating, MSHA performs a series of inspections
to verify compliance with mine safety laws.
With respect to the New Jersey mine, two important State of Idaho permits
are necessary to perform the mining and milling operation, both of which are
in hand. The first is an Idaho Cyanidation Permit and the second is a
reclamation plan for surface mining operations. An Idaho cyanidation permit
was applied for, and the permit was granted October 10, 1995 [No. CN-000027]
The Idaho Cyanidation Permit was obtained through a 1 year permitting effort,
which is quite speedy compared to several other cases. The operation of the
cyanidation mill did not prove to be controversial locally, probably due to
the long mining history in the established Coeur d'Alene Mining District.
The deposition of tailings using paste technology is a unique part of the
permit. Tailings will be dewatered to a paste consistency using a high density
thickener. Cyanide will be destroyed in the paste using bleach, and the
tailings will be deposited on a sloped stack. Fred W. Brackebusch has
received a U.S. patent (5,636,942) on this new tailings technology.
Reclamation of the tailings stack will be done concurrently with mining. The
Cyanidation permit requires quarterly surface and groundwater monitoring prior
to startup of the CIL plant and monthly sampling once operations commence.
The current water monitoring program costs the company about $2,000 on an
annual basis. The estimated annual cost for sampling after CIL operations
begin is $25,000.
The surface mining reclamation plan was approved by the Idaho State Department
of Lands in 1993.The plan calls for grading of steep fill slopes and
planting of vegetation on the area disturbed by the open pit mine. A bond
of $2,073 is held in a joint account to ensure that reclamation is completed.
The Company complies with local building codes and ordinances as required by
law.
Number of Total Employees and Number of Full Time Employees
The Company's total number of employees is three including the President Fred
Brackebusch, the Vice President Grant Brackebusch and the Secretary Tina
Brackebusch. There are no full-time employees at this time.
REPORTS TO SECURITY HOLDERS
The Company is not required to deliver an annual report to shareholders,
however, it has delivered an annual report to shareholders in each of the
past three years. The annual report delivered to shareholders in 1998 did
contain audited financial statements while the recent 2000 annual report
letter did not contain audited financial statements. It is expected in the
future that the Company may deliver annual reports with audited financial
statements. The Company may also rely on the Internet in the future to
deliver annual reports to shareholders.
The Company filed a Form 10-SB with the Securities and Exchange Commission
on January 11, 2000. The filing became effective on January 27, 2000. The
Company has filed the required annual 10-KSB and quarterly 10-QSB reports
since that time.
The public may read a copy of any materials the Company files with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site (http://www.sec.gov)that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC.
ITEM 2.
DESCRIPTION OF PROPERTIES
NEW JERSEY MINE
Location
The New Jersey mine is located in the Gold Run Gulch area, comprising about
15 square miles in the Coeur d'Alene Mining District just east of Kellogg,
Idaho. The mine is adjacent to Interstate 90 and is easily accessed by local
roads through the entire year. The area is underlain by argillites and
quartzites of the Prichard formation [member of Belt Supergroup], which
commonly hosts gold mineralization. The controlled property, known as the
New Jersey mine, has an area of approximately 370 acres and includes a group
of mineral leases and property held by the Company.
Mineral Leases
A mineral lease from Gold Run Gulch Mining Company includes 5 patented claims
containing 62 acres, seven unpatented claims surrounding the patented claims,
and mineral rights to fee land containing 108 acres. The known orebody is
located on the patented claims. Another mineral lease from William Zanetti in
the New Jersey mill area contains about 60 acres. Alliance Title and Escrow
Corporation of Wallace, Idaho has issued a Commitment for Title Insurance for
the fee simple property leased from Gold Run Gulch Mining Company and
William Zanetti. The unpatented claims leased from Gold Run Gulch Mining
Company are on federal land administered by the U.S. Bureau of Land
Management. 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
lessors may terminate the leases upon the Company's failure to perform under
the terms of the leases. The leases provide for royalties of 5% of net sales
of ores or concentrates less transportaton also know as a Net Smelter Return.
Additional royalties of 1% to 5% are due if the gold price exceeds $ 559
per ounce as of December 31, 1999. This additional royalty gold price is
indexed to the Consumer Price Index with 1987 as the base year. Also, annual
advance royalties totaling $2900 per year are required under the leases. The
advance royalties are accumulated and will be credited against the royalty
obligations. Both the Zanetti and Gold Run Gulch lease agreements are
incorporated as exhibits by reference to the Company's Form 10-SB filing.
History
There are at least 14 gold prospects in or near the New Jersey mine area.
Most of the prospecting activity was completed before the turn of the
century, and almost no work has been done for at least 50 years. Just after
the turn of the century, at the New Jersey mine, more than 2,500 feet of
development workings including drifts, crosscuts, shafts, and raises, were
driven by the New Jersey Mining and Milling Company to develop the Coleman
vein and the northwest branch of the Coleman vein. A 10 stamp gravity mill
was built and operated for a short period. The amount of money spent from
1899 to 1910 appears to have been $500,000 to $1,000,000 in 1996 dollars.
The operation was discontinued because of the difficulty in recovering fine
gold without cyanidation technology, because of the lower price of gold
relative to mining costs, and because of inadequate drilling and mining
technology. For example, the Coleman vein, a hard quartz vein, was so
difficult to drill using hand steel that drifts along the vein were not
driven to any great lengths. A considerable portion of the gold is in
free grains, so there is a strong nugget effect.
Hershey [1916], a well known Coeur d'Alene district geologist, noted the
nugget effect and lack of drifting on the vein: "The average gold-content is
known to be very low, though it is said that one small shoot carried $55
gold per ton (2.66 ounces per ton @ $20.67 per ounce which was the gold price
at that time). The great variation in the assays indicates a pockety
distribution. This suggests that if this fine large vein were developed for
2000 ft. instead of merely 200 ft., a commercial ore-shoot might be found."
Present Condition and Work Completed on the Property
Presently, operations at the New Jersey mine are suspended due to the low
price of gold. Operations were suspended in mid 1997. During the period
from 1994 through the suspension of operations in 1997 many projects were
completed on the property. Several of the historic underground workings,
namely the 2400 level adit and the Keyhole tunnel, were opened up. This
permitted personnel to sample, map and evaluate the Coleman vein and
associated gold bearing structures.
A 100 ton per day gravity mill has been built and commissioned. A crushing
plant was built and commissioned in 1996. An open pit mining program on the
Coleman vein was initiated in 1995. A series of haulage roads were also
upgraded in order to provide access from the open pit operation to the gold
plant (mill). Approximately 5,000 tons of ore were processed at the mill
during 1995 through 1996. A gravity concentrate was produced and sold to
ASARCO in East Helena, Montana. Gold recovery from the ore using gravity
methods of concentration was relatively low (approx. 60%) so the decision was
made to upgrade the mill to a CIL (Carbon-In-Leach) process. Testwork using
the CIL process on New Jersey ores determined gold recovery rates up to 95%
were achievable. As previously stated the Company has received a Cyanide
Permit from the State of Idaho (Permit No. CN-000027). In late 1996, the
Company began construction the permitted CIL mill upgrade with work mainly
consisting of the concrete foundation work for the new process facilities.
Other work included carpentry and metal working tasks. This work was
suspended in the spring of 1997 after completion of all the required concrete
work due to an inability of the company to raise sufficient funds. Since 1997
only regular maintenance and upkeep (including environmental monitoring) and
some geological work have been performed at the project site. During 2000,
management of the Company completed a modest construction project, a 32 foot
by 48 foot pole type building adjacent to the existing mill building.
During the fall of 2000 the Company completed a small geophysical exploration
program which included induced polarization and resistivity testing of the
Coleman Vein and the projected extension of that vein.
The Company's proposed program of exploration and development for the New
Jersey mine is listed below:
1. Diamond Drilling - The Company would drill approximately 10,000 feet of
diamond drill holes. A portion of this drilling, about 5,000 feet, would be
done to increase the amount and certainty of gold resources on the Coleman
vein. Some of this drill footage would also be more exploratory in nature and
would test geophysical anomalies and other vein prospects. This program
would cost about $250,000.
2. Mill Upgrade - The upgrade of the current gravity mill to a CIL process
would be completed. This is also expected to cost $250,000.
Both of the above programs are dependent on the Company's ability to raise
money through a private placement and will not be completed until such a
placement takes place.
Geology and Reserve/Resource
The description of the geology of the New Jersey mine and the calculation of
mineral resources have been completed by the Company and not an independent
third party. The description of the geology of the area can be verified from
third party published reports by the U.S. Geological Survey and unpublished
reports by Oscar Hershey, former Coeur d'Alene District geologist. The Company
is solely responsible for the resource calculations.
Geology
The Prichard formation, which is 25,000 feet in thickness, underlies the New
Jersey mine area which is adjacent to and north of the major Osburn fault.
The Osburn fault is in the center of a Proterozoic rifting basin. The
Prichard formation is divided into nine rock units of alternating argillites
and quartzites, and the units exposed in the New Jersey mine area appear to
belong to the lower members. A broad domal structure with a series of
tighter folds near the Osburn fault typifies the structure of the area. South
of the Osburn fault, the Wallace formation is exposed on the north flank of
the Big Creek anticline.
Gold mineralization is associated with sulfide-bearing quartz veins which cut
the bedding in Prichard argillite and quartzite. Associated sulfides are
pyrite, arsenopyrite, chalcopyrite, low-silver tetrahedrite, galena, and
sphalerite. Most commonly in the Coleman vein of the New Jersey mine visible
gold is associated with the tetrahedrite. Gold prospects are concentrated in
the New Jersey mine area possibly because of the presence of lower Prichard
stratigraphic members, an anticlinal structure, and/or the existence of a gold
source. Gold is associated with arsenic, copper, and antimony. Igneous dikes
are relatively rare. Some wallrock alteration has been observed. The
Coleman vein shows a characteristic brecciation The strike length of the
veins on the property based on exposures in drifts, outcrops and float is
about 1,500 feet.
Reserves
The only reserves at the New Jersey mine as of this date are those contained
within the open pit on the Coleman vein. Open pit reserves are from the
planned pit which extends from the south portal north to the terminus of the
Coleman Vein. The vertical extent of the pit is from the surface outcrop down
to the Keyhole Tunnel level. Grade estimation for the blocks in the pit
reserve is based upon calculated head grades from 5,000 tons of gravity-mill
production. Other sources include channel samples from the outcrop and also
from the Keyhole Tunnel
Open Pit Reserve (Proven and Probable)
============================================================================
Ore Blocks Tons Grade Ounces
(Au ounces/ton) (Au)
----------------------------------------------------------------------------
Coleman (17+00-21+00) 62,300 0.133 8,306
Coleman Split (21+0-23+00) 23,500 0.103 2,420
North Vein (21+00) 3,300 0.250 825
----------------------------------------------------------------------------
Total 89,100 0.130 11,551
============================================================================
The open pit reserve tonnages are diluted. That is, the expected dilution from
open pit mining is accounted for in the grade and tonnage of the reserve
blocks. The ounces stated in the above table are contained ounces. According
to metallurgical testwork, approximately 95% of the gold contained in the
open pit reserve will be recovered at the mill using the CIL process.
SILVER STRAND MINE
Location
The Silver Strand mine is located in Kootenai County, Idaho about 12 miles
east-northeast of Coeur d'Alene, Idaho. The property consists of 15
unpatented lode claims. It is situated on Lone Cabin Creek, a tributary of
Burnt Cabin Creek and of the Little North Fork Coeur d'Alene River. Primary
access is from Coeur d'Alene via paved and dirt roads from Fernan Lake to
Lone Cabin Creek where the mine is located.
Mineral Lease
On July 14, 2000 the Company entered into a purchase agreement for the Silver
Strand mine with Trend Mining Company. The purchase agreement covers 15
unpatented lode claims (approximately 300 acres)located on land administered
by the U.S. Forest Service. Upon execution of the purchase agreement the
Company issued 50,000 shares of Common Stock to Trend Mining Company. The
purchase agreement requires New Jersey Mining Company to spend $200,000 in
exploration and development work commitments on the Silver Strand Mine over
three years from the date of the agreement. The work commitment calls for
New Jersey to spend $25,000 in year one, $50,000 in year two and $125,000 in
year three. Excess expenditures in any year may be applied towards the next
year's work commitment. At the option of the Company, the work commitment is
also payable in New Jersey Mining Company Common Stock should the Company
fail to meet the work commitment. The value of the Common Stock would be the
average of the bid and ask prices for last month of the project year. Trend
Mining Company retains a 1.5% Net Smelter Royalty (NSR) capped at $50,000
after which the NSR decreases to 0.5%.
History
The Silver Strand deposit was discovered during nearby logging activity
during the 1960's and mined during the 1970's and 1980's for siliceous
smelter flux. Production was 13,752 tons grading 0.093 ounces per ton gold,
9.6 ounces per ton silver and 87.1% silica. The mining operation was shut
down when the ASARCO Tacoma smelter closed in the early 1980's. Previous
owner/operators include Silver Strand Mining Company, Silver Trend Mining
Company and Trend Mining Company. Mine Systems Design, Inc. (MSD) had an
exploration agreement with Silver Trend Mining Company that was terminated
in 1997. During the term of that lease, MSD made an agreement with U.S.
Bureau of Mines, Spokane Research Center to conduct a mining research
product at the Silver Strand mine. The USBM monitored water quality and
flows from the mine, maintained the underground openings and conducted some
diamond drilling.
Present Condition and Work Completed on the Property
The Silver Strand mine is an underground mine that was mined during the
1970's. No mining has taken place at the property since that time. Since
mining was suspended only limited exploration has taken place at the Silver
Strand including geochemical sampling and diamond drilling. In 1997, Silver
Trend Mining Company completed a four hole surface diamond drilling program
which totaled 2,600 feet. The mine is accessed by three horizontal openings
called levels: the No. 2 Level, the No. 225 Level and the No. 3 Level which
is the lowest level and is located at the creek bottom adjacent to forest road
No. 411. All three levels are accessible from the surface via a network of
dirt roads. The USBM installed a large culvert at the portal of the No. 3
Level in order to stabilize that entrance. No surface infrastructure
presently exists at the Silver Strand. There is no energy available at the
site. Any electrical energy requirements would have to be satisfied with an
on-site generator.
As of December 31, 2000 the Company had spent $3,441 since the acquisition of
the property in July, 2000. Activities included lode claim maintenance,
metallurgical testwork on Silver Strand ore and preliminary environmental
activity. The Company plans to submit a Plan of Operation to the U.S. Forest
Service this year for a seasonal mining and exploration program at the Silver
Strand. The proposed operation would consist of mining the remaining
reserves and the Silver Strand and shipping the ore to the New Jersey mill.
The approval of a Plan of Operation for the Silver Strand is not guaranteed.
If the Company receives approval of a Plan of Operation, the commencement of
an operation is still dependent on the improvement of current silver and
gold prices and the ability of the Company to raise sufficient funds.
Geology and Reserve/Resource
The description of the geology of the Silver Strand mine has been completed
by the Company and an independent third party, Don Springer - a former
Coeur d'Alene District consulting geologist. The description of the geology
of the area can be verified from third party published reports by Alfred L.
Anderson of the Idaho Bureau of Mines and Geology (Pamphlet 53). Mr. Springer
completed the calculations of the proven reserves while the Company is
responsible for the probable reserve calculations.
Geology
The Silver Strand is located in the Belt Basin about 25 miles northwest of
the Coeur d'Alene Mining District. The upper part of the Revett Formation
outcrops at the mine. The upper Revett member contains alternating sequences
of quartzite and siltite-argillite. Beds dip shallowly to moderately
northerly (30 -50 degrees). Alfred L. Anderson of the Idaho Bureau of Mines
and Geology mapped the geology and discussed the mineral resources of
Kootenai County in 1940 (Pamphlet 53). Anderson combined the Burke and
Revett formations and estimated the combined thickness to be from 1,000 to
3000 feet. There are no major intrusive rocks near the Silver Strand mine.
A major diabase dike has intruded the Silver Strand mineralized zone. The
diabase dike is weathered and altered near the surface, but appears fresh in
deeper drill hole intercepts. The Burnt Cabin fault is the major geologic
structure near the Silver Strand mine.
The Silver Strand orebody consists of a nearly-vertical, silicified (quartz)
replacement zone which cuts the flat to moderately dipping Revett beds. The
zone is not a fissure-filling vein. The boundaries and shape of the
silicified zone were determined to some extent by the 1997 diamond drilling
program. The sulfide ore mined to date appears to be enclosed within the
quartz zone. The ore is black and very fine-grained. Sulfide minerals are
not easy to identify because of the fine-grained texture. Occasional
euhedral crystals of pyrite can be observed, and tetrahedrite is visible in
the higher grade ore. Minerals observed by microscopic study during
metallurgical tests include: pyrite, tetrahedrite, tennatite, sphalerite,
arsenopyrite and stibnite.
Reserves
The Silver Strand orebody was mined by underground methods from the surface
to a depth of approximately 150 feet. The orebody has a mining width of
about 15 feet and a strike length of just under 100 feet. The proven reserve
block of 4,500 tons resides between the No. 3 and No. 225 Levels and is
exposed vertically by a raise. The probable reserve block is a projection of
the orebody 75 feet below the No. 3 level. Grades for the reserve blocks
are based on previous ore production grades and channel sampling of the raise.
Silver Strand Mine Reserve (Proven and Probable)
============================================================================
Ore Blocks Tons Gold Grade Silver Grade
(Au ounces/ton) (Ag ounces/ton)
----------------------------------------------------------------------------
No. 3 Block (Proven) 4,500 0.093 9.6
No. 4 Block (Probable) 7,000 0.093 9.6
----------------------------------------------------------------------------
Total 11,500 0.093 9.6
============================================================================
The reserve tonnages are diluted. That is, the expected dilution from
underground mining is accounted for in the grade and tonnage of the reserve
blocks.
CAMP PROJECT
Location
The CAMP project is an exploration project located south of and adjacent to
the City of Osburn, Idaho. The CAMP is accessed by the Mineral Point mine
road otherwise known as the McFarren Gulch road. The CAMP is located in the
approximate center of the silver belt of the Coeur d'Alene Mining District.
The CAMP project covers approximately 380 acres. The Company controls 17.75%
of the land in the CAMP. Merger Mines and Coeur d'Alene Mines Corp.(CDE:NYSE)
control the remainder. Coeur d'Alene Mines Corp. is the operator of the
property. This property was acquired by the Company in its January 1998
merger with Plainview Mining Co. The CAMP area extends from the surface to
900 feet below sea level. Sunshine Mining Company owns the mineral property
beneath the CAMP property.
Mineral Lease
As part of a July 26, 1978 lease agreement with Coeur d'Alene Mines Corp.
(Coeur), New Jersey Mining Co. will receive a 7.1% Net Profits Interest
(NPI),if the property is put into production. However, according to the
agreement Coeur can retain 93.925% of the net profits until Coeur is
reimbursed in total for its advance payments and expenditures. The term
of the lease is 61 years. The Agreement also calls for Coeur to spend
$50,000 annually on exploration. However, a December 18, 1992 Amendment
to the Agreement allowed Coeur to fulfill the exploration work requirement
until 2006 by applying past work in the amount of $1,436,243 towards the
exploration work requirement.
History
Originally the CAMP project was leased to ASARCO during the period from 1969
through 1972. ASARCO developed an exploration drift on the 1400 level of the
Coeur d'Alene mine (aka Mineral Point mine), before terminating the drift
1000 feet short of its planned termination. The drift extended 1,000 feet
into the CAMP project area before terminating. A series of diamond drill
holes were planned along the 1400 level drift, but ASARCO terminated the
lease agreement before any drilling could take place.
In 1978, Coeur d'Alene Mines Corp. signed a new lease agreement with Merger
Mines and Plainview Mining Co. Coeur began an exploration program soon
thereafter consisting of geochemical soil sampling, trenching, an exploration
tunnel and diamond drilling (surface & underground). The exploration
program continued through 1982. Coeur spent a total of $1,436,243 on the
project. The property has not received any more exploration activity since
1982 and to the best of our knowledge Coeur has no plans for exploration.
Geology
The CAMP area lies astride the Silver Belt of the Coeur d'Alene Mining
District east of the Sunshine mine and west of the Coeur and Galena mines.
The north limb of the Big Creek anticline trends through the CAMP area. Most
of the silver orebodies in adjacent properties are located in the north limb
of the Big Creek anticline. Prospective fault structures that trend through
the CAMP property include the Polaris fault, Silver Summit vein-fault, Chester
fault, and other structures. Favorable rock types are located in the
footwalL of the Polaris fault including the St. Regis and Revett formation.
WISCONSIN-TEDDY PROJECT
Summary
This project lies north of the New Jersey mine and is accessed by a local
frontage road. The Company's claims cover 83 acres. The claims are unpatented
and are on federal land administered by the U.S. Bureau of Land Management.
The project is a base metal exploration project in the Prichard formation.
Several tunnels with an aggregate length of 2,000 feet were driven on the
property prior to 1930. This development was related to two veins systems -
a copper-gold vein and a zinc-lead-silver vein. Preliminary field
investigations have delineated a large structure about 30 meters in width
which contains anomalous copper, lead and silver mineralization. One shallow
exploration hole (500 feet) is planned for an initial investigation of this
structure. This property may contain a vent or fracture system related to
Sullivan-type mineralization. During 2000, NJMC rehabilitated the portal to
the Teddy mine and inspected the tunnel and sampled mineralized areas. NJMC
has plans to open the Wisconsin underground workings and sample areas which
may indicate future drilling targets.
ITEM 3.
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not
aware of any pending or potential legal actions.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The Company's stock trades on the NASD's OTCBB under the symbol "NJMC". The
Company began trading on the OTCBB on January 28, 1998 following its merger
with Plainview Mining Company, Inc.
The following table sets forth, for the respective periods indicated, the
prices for the Company's Common Stock in the over-the-counter market
according to the NASD's OTC Bulletin Board. The bid prices represent
inter-dealer quotations, without adjustments for retail markups, markdowns or
commissions and may not necessarily represent actual transactions. All prices
in the following table have been rounded to the nearest whole cent.
Quarterly High/Low Bids
============================================================================
High Bid Low Bid
----------------------------------------------------------------------------
Fiscal Year Ending December 31, 2000
First Quarter $ 0.16 $ 0.03
Second Quarter $ 0.11 $ 0.06
Third Quarter $ 0.06 $ 0.06
Fourth Quarter $ 0.10 $ 0.05
----------------------------------------------------------------------------
Fiscal Year Ending December 31, 1999
First Quarter $ 0.19 $ 0.09
Second Quarter $ 0.19 $ 0.06
Third Quarter $ 0.16 $ 0.06
Fourth Quarter $ 0.16 $ 0.06
============================================================================
Shareholders
As of December 31, 2000 there were approximately 394 shareholders of record of
the Company's Common Stock. As of December 31, 2000 the Company had issued
and outstanding 11,622,290 shares of Common Stock.
Dividend Policy
The Company has not declared or paid cash dividends or made distributions in
the past and the Company does not anticipate that it will pay cash dividends
or make distributions in the foreseeable future. The Company currently intends
to retain and reinvest future earnings, if any, to finance its operations.
Transfer Agent
The transfer agent for the Company's Common Stock is Columbia Stock Transfer
Company, P.O. Box 2196, Coeur d'Alene, Idaho 83816-2196.
ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's cash requirements were slightly higher in 2000 than 1999, for
which the primary reason was investement related to the Silver Strand mine.
Operating and administrative expenses increased from $274 in 1999 to $5,906
in 2000. Royalty from the lease of the New Jersey mine and mill facilities
exceeded holding costs so the net income from operations in 2000 was $2,922
as compared to net income of $23,762 in 1999. The lease is continuing into
2001; therefore financial results in 2001 should be comparable to 2000.
In 2000, 150,000 shares of common stock in Consil Corporation were sold
generating $7,586 in cash proceeds and $22,414 in capital loss. At year end
2000, Consil had no business plans for increasing shareholder value. New
Jersey Mining Company's assets increased by $74,704 due to the aquisition of
the Silver Strand mine. Total liabilities decreased from $19,346 in 1999 to
$12,320 at the end of 2000.
With the acquisition of the Silver Strand mine, the Company's prospects for
the future are more equally related to silver and gold prices versus just
gold. Both gold and silver prices need to increase before the Company can
resume financing activities or resume construction of the mineral processing
plant or resume exploration and operations.
ITEM 7.
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
[Nathan Wendt, C.P.A. LETTERHEAD]
Board of Directors
New Jersey Mining Company
PO Box 1019
Kellogg, Idaho 83837
Directors:
We have audited the accompanying balance sheet of New Jersey Mining Company
(a development stage company)as of December 31, 2000 and the related
statements of operations, stockholders' equity and cash flows for the year
then ended. These financial statements are the responsibility of New Jersey
Mining Company. Our responsibility is to express an opinion on financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of New Jersey Mining Company at
December 31, 2000, and the results of its operation and its cash flow for the
year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in note 7 to the
financial statements, the Company has generated a loss to date and is in the
development stage. These conditions raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Nathan Wendt
----------------
Certified Public Accountant
Kellogg, Idaho
February 28, 2001
NEW JERSEY MINING COMPANY
(A Development Stage Company)
BALANCE SHEET
ASSETS
Dec. 31 Dec. 31 Dec. 31
2000 1999 1998
-------- --------- --------
Current Assets
Cash $ 1,772 $ 282 $ 85
Property & Equipment
Building $ 33,894 $ 33,894 $ 33,894
Equipment $246,536 $246,536 $246,536
Other Assets
Deferred Development
Costs $ 80,881 $ 80,881 $ 80,881
Investment in Silver
Strand $ 74,704
Investment in Consil
Corporation $ 7,000 $ 38,000 $ 85,500
Mining Reclamation Bond $ 2,073 $ 1,722 $ 1,722
Goodwill $ 30,950 $ 30,950 $ 30,950
Total Assets $477,810 $432,265 $479,568
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable &
accrued expenses $ 0 $ 0 $ 7,979
Current Maturities of
Capital Lease Obligations $ 6,645 $ 10,860 $ 11,500
Total Current Liabilities $ 6,645 $ 10,860 $ 19,479
Capital Lease Obligations
(less current maturities) $ 5,675 $ 8,486 $ 23,432
Total Liabilities $ 12,320 $ 19,346 $ 42,911
Stockholders Equity
Preferred Stock
No shares issued
Common Stock
No Par Value, 20,000,000 shares authorized
2000 Dec. 31, 2000
13,569,434 Issued $ 720,899
1999 Dec. 31, 1999 $647,836
13,457,334 Issued
1998 Dec. 31, 1998
13,378,634 Issued $ 647,836
Treasury Stock $(136,300) $(136,300) $(136,300)
(1,947,744 shares)
Retained Earnings $ (44,230) $(23,738)
Deficit Accumulated in
the Development Stage $ (74,879) $(74,879) $(74,879)
Total Stockholders Equity $ 465,490 $412,919 $436,657
Total Liabilities and
Stockholders Equity $ 477,810 $432,265 $479,568
STATEMENT OF OPERATIONS
Dec. 31 Dec. 31 Dec. 31
2000 1999 1998
-------- ------- --------
Revenues $ 8,828 $ 24,036 $ 761
Operating and Administrative Expenses $ (5,906) $ (274) $(31,466)
Net Income or (Loss and Deficit
Accumulated in the Development Stage) $ 2,922 $ 23,762 $(30,705)
Loss on Devaluation of Investments $(23,414) $(47,500)
Net Loss $(20,492) $(23,738) $(30,705)
Basic Earnings (Loss) Per Share $ (0.001) $(0.002) $(0.003)
STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock Treasury Accumulated
Stock Deficit
Shares Amount Total
------- -------- -------- ---------- ------
Balance at
Incorporation
July 18, 1996 -0- $-0- $-0- $ -0-
Issuance of
common shares
for New Jersey
Joint Venture
Interests
Dec. 31, 1996 10,000,000 $207,968 $-0- $207,968
Issuance of
common shares
for cash 1997 228,816 $110,115 $-0- $110,115
Issuance of
common shares
for services
1997 14,000 $-0- $-0- $-0-
Exchange of
common shares
for 743,874
shares of
Plainview
December 1997 1,487,564 $148,000 $-0- $148,000
Net Loss year
ended December
31, 1997 $(44,174) $(44,174)
Balance December
31, 1997 11,730,748 $466,083 $(44,174) $421,909
Retirement of
Common Shares
owned by
Plainview Mining
Company, Inc.
and held as
investment at
December 31,
1998 (1,947,144) $(136,300) $(136,300)
Issuance of
common shares
for cash 1998 117,218 $ 29,753 $ 29,753
Issuance of
common shares
for services
1998 18,000 $ -0-
Exchange of
Common Stock for
756,126 shares of
Plainview Mining
Company,Inc.
December 1998 1,512,252 $152,000 $152,000
Net Loss year
ended December
31, 1998 $(30,705) $(30,705)
Balances
December
31, 1998 11,430,890 $647,836 $(136,300) $(74,879) $436,657
Issuance of
common shares
for services
1999 79,300 $ -0-
Net Loss year
ended December
31, 1999 $(23,738) $(23,738)
Balances
December
31, 1999 11,510,190 $647,836 $(136,300) $(98,617) $412,919
Issuance of
common shares
for investments
2000 50,000 $ 68,750 $ 68,750
Issuance of
common shares
for services
2000 62,100 $ 4,313 $ 4,313
Net Loss year
Ended December
31, 2000 $(20,492) $(20,492)
Balances
December 31,
2000 11,622,290 $720,899 $(136,300) $(119,109) $465,490
STATEMENT OF CASH FLOWS
Dec. 31 Dec. 31 Dec. 31
2000 1999 1998
-------- ------- --------
INCREASE (DECREASE) IN CASH
Cash Flows From Operating Activities
Net Income (Loss) $(20,492) $ 23,762 $(30,705)
Increase in investment in
Silver Strand $ 3,441
Decrease in accounts payable
and accrued expenses $ 0 $ (7,979) $ (2,303)
Net cash used in operating
activities $(17,051) $ 15,783 $(33,008)
Cash Flows From Investing Activities
Net Loss due to investing
activities $ 25,567
Additions to property and
equipment $ -0- $ -0- $( 5,561)
Proceeds from sale of
equipment $ -0- $ -0- $ 1,079
Proceeds from sale of
investments $ -0- $ -0- $ 4,500
Net cash used in investing
activities $ 25,567 $ -0- $ 18
Cash Flows From Financing Activities
Proceeds from sale of common
stock $ -0- $ -0- $ 29,753
Principal payments on capital
lease obligations $( 7,026) $(15,586) $(10,291)
Proceeds from purchase of
Plainview Mining Company $ -0- $ -0- $ 13,434
Net cash provided by
financing activities $( 7,026) $(15,586) $ 32,896
Net Increase (Decrease)in Cash $ 1,490 $ 197 $ (94)
Cash, Beginning of Year $ 282 $ 85 $ 179
Cash, End of Year $ 1,772 $ 282 $ 85
Supplemental Schedule of Noncash
Investing and Financing
Activities
Investment in Silver Strand $(71,263)
Capital Lease Obligation
for equipment acquired $ 6,641
Acquisition of Plainview
Mining Company, Inc. in
Exchange for Common Stock $152,000
Devaluation of Investment
in Consil Corporation $(47,500)
NOTES TO FINANCIAL STATEMENTS
2000
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
New Jersey Mining Company (the Company) was incorporated as an Idaho
corporation on July 18, 1996. The Company was dormant until December 31,
1996 when all of the assets and liabilities of New Jersey Joint Venture
(a partnership) were transferred to the Company in exchange for 10,000,000
shares of common stock. Such assets and liabilities, transferred at historical
cost, consisted of:
Assets acquired:
Cash $ 16,565
Property & Equipment $176,267
Other Assets $ 63,306
---------
$256,138
Liabilities assumed:
Accounts payable $ 2,969
Note payable to bank $ 20,000
Capitalized lease obligation $ 25,201
---------
$ 48,170
Net assets acquired December 31, 1997 $207,968
The Company owns and leases various patented and unpatented mining claims in
the Coeur d'Alene Mining District near Kellogg, Idaho. The Company is
considered to be a development stage company, as only nominal operations have
occurred to date. Planned principal operations include commercial open pit
mining and milling of ore to produce and sell gold concentrate.
Summary of Significant Accounting Policies:
a. Plant and equipment - Plant and equipment are stated at cost. No
b. depreciation has been recorded through December 31, 2000, as substantially
c. all assets are under construction or have not yet been placed into service.
Depreciation will be provided when the assets are placed into service,
d. using straight-line and accelerated methods over the estimated useful lives
e. of the assets.
b. Deferred development costs - Certain costs of developing the Company's
mining claims and related property have been capitalized. Such costs,
consisting principally of clearing, drilling, blasting, and similar activities,
less nominal sales of concentrate, will be amortized to expense based on
production. If production does not commence, the costs will be charged to
expense.
c. Impairment - Impairment is recognized when it is probable that a loss will
be incurred in the realization of a recorded asset. Management has determined
that no impairment of assets has occurred at December 31, 2000, as adequate
ore reserves are available for production and sale to recover all capitalized
costs.
d. Income taxes - Federal and state income taxes are provided for the tax
effects of transactions reported in the financial statements and consist of
taxes currently due and deferred tax assets and liabilities based on the
differences between their tax bases for financial and tax purposes. Such
differences relate principally to deferred development costs. In addition, a
deferred tax asset is recognized for tax-basis operating losses being carried
forward. A valuation allowance for deferred tax assets is also recognized
when appropriate.
e. Loss per share - Basic loss per share has been calculated on the basis of
the weighted average number of shares outstanding during the year.
f. Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets, liabilities,
revenue and expenses, and the disclosure of contingent assets and liabilities.
Significant estimates used in preparing these financial statements include
those relating to the evaluation of asset impairment. Actual results could
differ from these estimates.
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 the price of gold exceeds $578 per troy ounce. Also, advance royalties
totaling $2,900 are required under the lease. The advance royalties, charged
to expense as incurred, are accumulated and will be credited against the
production royalty obligations. The lessors may terminate the leases upon the
Company's failure to perform under the term of the leases. The Company may
also terminate the leases at any time. Mine Systems Design, Inc., the majority
shareholder of New Jersey Mining Company - 66.6%, has agreed to fulfill all
mineral lease requirements necessary for mineral lease permits.
NOTE 3 - PLAINVIEW MERGER
In October 1997, the Company made an exchange offer for the outstanding common
shares of Plainview Mining Company, Inc.(Plainview). The offer allowed
Plainview's stockholders to exchange their shares on the basis of one share
of Plainview stock for two shares of the Company's stock. Plainview was also
a minority shareholder of the Company as a result of its participation as
partner in New Jersey Joint Venture (see Note 1).
At December 31, 1998, a total of 1,500,000 (100%) shares of Plainview had been
exchanged for 3,000,000 shares of the Company. The Company is accounting for
the business combination of Plainview on the purchase method. The estimated
fair value of the Company's shares issued in the exchange ($0.10 per share)
was used to reflect the purchase price of the investment.
The acquisition of 1,947,144 shares of the Company's Common Stock owned by
Plainview was accounted for in 1998 as a purchase of treasury stock, based on
the fair value of the shares issued, $0.07, or $136,000.
At March 12, 1998, Plainview's summarized (unaudited) balance sheet consisted
of the following at fair values:
Assets:
Cash $ 12,750
Property & mining claims $ 30,000
Investment, at cost:
Consil Corporation $ 90,000
New Jersey Mining Company $136,300
(1,947,144 common shares)
Goodwill $ 30,950
--------
Total Assets $300,000
Stockholders' equity $300,000
NOTE 4 - INVESTMENTS
The Company owns 35,000 shares of Consil Corporation. These shares were
received from the merger with Plainview (see Note 3). At the date of the
merger these shares were valued at $0.45 per share or $85,500. During all of
2000, the price of these shares was below $0.15 per share. Due to Consil
Corporation's lack of a business plan, the value is not expected to rise above
$0.20 per share. Our value of shares owned is $7,000.
The Company purchased from Trend Mining Company on July 14, 2000 the Silver
Strand unpatented mining claims and property in exchange for stock and future
royalty commitments.
NOTE 5 - CAPITAL LEASE OBLIGATIONS
The Company leases certain equipment under capital lease obligations. The
capitalized cost of such equipment at December 31, 2000 totaled $54,273.
Amortization of the cost has not begun (see Note 1). In January 1999, the
Company entered into a royalty agreement with Mine Systems Design, Inc. (MSD).
The agreement states that MSD will pay all of the accounts payable, expenses,
and yearly lease obligations in exchange for use of the Company's equipment.
During 2000, the total royalties received were $7,026. Following are the
future minimum lease payments and net capital lease obligations at December 31,
2000:
Years Ending December 31 Amount
------------------------ -------
2001 $ 7,686
2002 $ 5,995
-------
Total minimum payments required $13,681
Less Interest $ 1,361
-------
Net capital lease obligations $12,320
Less current maturities $ 6,645
-------
Noncurrent capital lease obligations $ 5,675
Interest expense totaled $0 for 2000.
NOTE 6 - INCOME TAXES
At December 31, 2000, the Company had deferred tax assets of $20,000, which
were fully reserved by valuation allowances. For the year ended December 31,
2000, the Company has recognized the net tax benefit for its operating loss
in the statement of operations, as valuation allowances offset such benefit.
The Company has a tax-basis operating loss carry-forward of approximately
$119,109 that is available to offset future taxable income through 2015.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared on the basis that the
Company will continue as a going concern, although the Company is in the
development stage. As shown in the accompanying statement of operations, the
Company incurred a net loss of $20,492 in 2000. The ability of the Company
to recover its capitalized costs of assets and continue as a going concern is
dependent upon the Company's evolution to the operating stage, the success of
future operations, and obtaining additional capital and financing. The
financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors and Executive Officers
============================================================================
Name & Address Age Position Date First Term
Elected Expires
----------------------------------------------------------------------------
Fred W. Brackebusch 56 President 7/18/96
P.O. Box 1019 Director
Kellogg, Idaho 83837 Treasurer
----------------------------------------------------------------------------
Grant A. Brackebusch 31 Vice President 7/18/96
P.O. Box 131 Director
Silverton, ID 83867
----------------------------------------------------------------------------
Charles F. Asher 76 Director 1/1/97
15 Alvarado
Rancho Viejo
TX 78575
----------------------------------------------------------------------------
Tina C. Brackebusch 31 Secretary 1/1/97
P.O. Box 131
Silverton, ID 83867
----------------------------------------------------------------------------
Ronald Eggart 79 Director 1/1/97
HC-01 Box 187
Kellogg, ID 83837
----------------------------------------------------------------------------
Kurt J. Hoffman 34 Director 9/29/97
4005 E. Riverview Terrace
Post Falls, ID 83854
============================================================================
Directors are elected by shareholders at each annual shareholders meeting to
hold office until the next annual meeting of shareholders or until their
respective successors are elected and qualified.
Fred W. Brackebusch, P.E. is the President and a Director of the Company. He
has a B.S. and an M.S. in Geological Engineering both from the University of
Idaho. He is a consulting engineer with extensive experience in mine
development, mine backfill, mine management, permitting, process control and
mine feasibility studies. He has over 25 years of experience in the
Coeur d'Alene Mining District principally with Hecla Mining Co. He has been
the principal owner of Mine Systems Design, Inc., a mining consulting
business, since 1987. Mr. Brackebusch is also on the Board of Directors of
Mascot Silver-Lead Mines, Inc.
Grant A. Brackebusch, P.E. is the Vice President and a Director of the
Company. He holds a B.S. in Mining Engineering from the University of Idaho.
He worked for Newmont Gold Co. in open pit mine planning and pit supervision
for 3 years. Since that time he as worked with Mine Systems Design performing
various engineering and geotechnical tasks. He also supervised New Jersey
Mining Co.'s mining and milling operations prior to the suspension of
operations.
Charles Asher is a Director of the Company. He is also President and a
Director of Mascot Silver-Lead Mines Inc. He was formerly President of
Plainview Mining Co. and Silver Trend Mining Co. Mr. Asher has extensive
experience as an underground mine operator in the Coeur d'Alene Mining
District.
Tina C. Brackebusch is Secretary of the Company. She has served as Office
Manager for the Company. She holds a B.S. in Secondary Education from the
University of Idaho.
Ronald Eggart is a Director of the Company. He is a retired CPA with a long
record of experience with Coeur d'Alene Mining District mining ventures. He
is also a Director and Secretary for Mascot Silver-Lead Mines Inc.
Kurt J. Hoffman is a Director of the Company. He is President and a Director
of Trend Mining Co. and is also a director of Atlas Mining Co.
Family Relationships
Fred W. Brackebusch is the father of Grant A. Brackebusch. Tina C. Brackebusch
is the wife of Grant A. Brackebusch.
ITEM 10.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Name & Year Salary Bonus Other Restrct. Options LTIP
Principal ($) ($) Annual Stock SARs Payout
Position Comp.($) Awards($) ($)
----------------------------------------------------------------------------
F. 1998 -0- -0- -0- -0- -0- -0-
Brackebusch 1999 -0- -0- -0- -0- -0- -0-
President 2000 -0- -0- -0- 188 -0- -0-
----------------------------------------------------------------------------
G. 1998 -0- -0- -0- -0- -0- -0
Brackebusch 1999 -0- -0- -0- -0- -0- -0-
Vice Pres. 2000 -0- -0- -0- 188 -0- -0-
----------------------------------------------------------------------------
C. Asher 1998 -0- -0- -0- -0- -0- -0-
Director 1999 -0- -0- -0- -0- -0- -0-
2000 -0- -0- -0- 188 -0- -0-
----------------------------------------------------------------------------
T. 1998 -0- -0- -0- -0- -0- -0-
Brackebusch 1999 -0- -0- -0- -0- -0- -0-
Secretary 2000 -0- -0- -0- 188 -0- -0-
----------------------------------------------------------------------------
R. Eggart 1998 -0- -0- -0- -0- -0- -0-
Director 1999 -0- -0- -0- -0- -0- -0-
2000 -0- -0- -0- 188 -0- -0-
----------------------------------------------------------------------------
K. Hoffman 1998 -0- -0- -0- -0- -0- -0-
Director 1999 -0- -0- -0- -0- -0- -0-
2000 -0- -0- -0- 188 -0- -0-
============================================================================
There been no accruance for, any Officer or Director of the Company for cash
remuneration for services which are related to the duties of those Officers
or Directors. There are no immediate plans to pay any cash remuneration to
any Officers or Directors related to their respective duties until the Company
is able to afford payment.
The Board of Directors agreed to pay Officers and Directors for their services
3,000 shares of restricted (Rule 144) common stock per year for the years
1998, 1999 and 2000.. There are no plans at this time to change the number
of shares awarded to Directors and Officers of the Company. No value was
ascribed to the stock in 1998 and 1999. However, a value of $0.0625 per share
was ascribed to the shares in 2000. The Company does not have a standard
arrangement pursuant to which Directors or Officers are compensated for their
services.
ITEM 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as those who
own beneficially more than five percent of the Company's common stock
through the most current date - March 8, 2001.
Security Ownership of Certain Beneficial Owners and Management
============================================================================
Title Of Name and Address of Amount & Nature of Percent of
Class Beneficial Owner Beneficial Owner Class
----------------------------------------------------------------------------
Common Plainview Shareholders Trust 832,634 (a) 7.16%
Tina C. Brackebusch, Trustee
P.O. Box 1019
Kellogg, ID 83837
----------------------------------------------------------------------------
Common Fred W. Brackebusch 6,885,976 indirect(b) 59.41%
President & Director 19,000 direct
P.O. Box 1019
Kellogg, Idaho 83837
----------------------------------------------------------------------------
Common Grant A. Brackebusch 797,324 indirect(c) 7.08%
Vice Pres. & Director 25,676 direct
P.O. Box 131
Silverton, ID 83837
----------------------------------------------------------------------------
Common Charles F. Asher, Director 55,000 0.47%
15 Alvarado
Rancho Viejo, TX 78575
----------------------------------------------------------------------------
Common Tina C. Brackebusch, Secretary 9,000 0.08%
P.O. Box 131
Silverton, ID 83867
----------------------------------------------------------------------------
Common Ronald Eggart, Director 48,332 0.42%
HC-01 Box 187
Kellogg, ID 83837
----------------------------------------------------------------------------
Common Kurt Hoffman, Director 11,000 0.09%
4005 E. Riverview Terrace
Post Falls, ID 83854
============================================================================
(a) The Plainview Shareholders Trust was created in order to hold shares for
(b) those shareholders of Plainview Mining Company who have not participated
(c) in the merger with the Company as of this date. As Plainview shareholders
(d) exchange their shares for New Jersey shares, the number of shares in the
(e) Trust declines. Tina C. Brackebusch is the Trustee and retains the right
(f) to vote those shares. The Plainview Shareholders Trust does not have the
(g) right to acquire any securities pursuant to options, warrants, conversion
(h) privileges or other rights.
(b) Fred Brackebusch owns 89.6% of Mine Systems Design, Inc.(MSD) which is a
Schedule S corporation that owns 7,683,300 common shares of New Jersey Mining
Co. Neither MSD nor Fred Brackebusch have the right to acquire any securities
pursuant to options, warrants, conversion privileges or other rights.
(c) Grant Brackebusch owns 10.4% of Mine Systems Design, Inc.(MSD) which is
a Schedule S corporation that owns 7,683,300 common shares of New Jersey Mining
Co. Neither MSD nor Grant Brackebusch have the right to acquire any
securities pursuant to options, warrants,
conversion privileges or other rights.
None of the directors or officers have the right to acquire any securities
pursuant to options, warrants, conversion privileges or other rights.
ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 14, 2000 the Company entered into an agreement for the purchase of the
Silver Strand unpatented lode claims from Trend Mining Company. At the time
Mr. Fred Brackebusch was a Director of Trend Mining Company. Mr. Kurt Hoffman
is the CEO and a Director of Trend Mining Company. Mr. Fred Brackebusch has
since resigned as a Director of Trend Mining Company effective March 16, 2001.
The principal office, telephone, copier and other office equipment are
provided by Mine Systems Design Inc. which is the majority shareholder of the
Company. In exchange for the use of these facilities and services, Mine
Systems Design, Inc. was issued 49,200 shares of restricted Common Stock in
early 1999.
Because New Jersey Mining Company has no significant revenue source from
operations and has been unable to raise funds from investors due to the low
gold price, Mine Systems Design, Inc. has agreed, as of January 1, 1999, to
fulfill the requirements of mineral leases, pay maintenance costs including
property taxes, and to conduct environmental sampling required by permits.
ITEM 13.
EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 3.1 Articles of Incorporation - Filed as an exhibit to the
registrant's registration statement on Form 10-SB
(Commission File No. 000-28837) and incorporated by reference herein.
Exhibit 3.2 Bylaws - Filed as an exhibit to the registrant's registration
statement on Form 10-SB (Commission File No. 000-28837) and incorporated by
reference herein.
Exhibit 10.1 Lease Agreement with Gold Run Gulch Mining Company - Filed as
an exhibit to the registrant's registration statement on Form 10-SB
(Commission File No. 000-28837) and incorporated by reference herein.
Exhibit 10.2 Lease Agreement with William Zanetti - Filed as an exhibit to
the registrant's registration statement on Form 10-SB
(Commission File No. 000-28837) and incorporated by reference herein.
Exhibit 10.3 Articles of Merger For Plainview Mining Company Inc. and New
Jersey Mining Co. - Filed as an exhibit to the registrant's registration
statement on Form 10-SB (Commission File No. 000-28837) and incorporated by
reference herein.
Exhibit 27.1 Financial Data Schedule
No reports on Form 8-K have been filed by the Company.
SIGNATURES
In accordance with 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: March 21, 2001 By /s/ FRED W. BRACKEBUSCH
----------------- ---------------------------------
Fred W. Brackebusch, President,
Treasurer & Director
Date: March 21, 2001 By /s/ GRANT A. BRACKEBUSCH
------------------ ---------------------------------
Grant A. Brackebusch, Vice President
and Director
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