x
|
ANNUAL
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED October
31, 2006.
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE TRANSITION PERIOD OF _________ TO
_________.
|
Nevada
|
91-1766677
|
State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization
|
Identification
No.)
|
·
|
competition
from a large number of companies, many of which are significantly
larger
than the Company, in the acquisition, exploration, and development
of
mining properties;
|
||
·
|
the
Company, the concession holder, might not be able raise enough
money to
pay the fees, taxes and perform labor necessary to maintain the
concessions in good force
|
||
·
|
exploration
for minerals is highly speculative and involves substantial risks,
even
when conducted on properties known to contain significant quantities
of
mineralization, and most exploration projects do not result in
the
discovery of commercially mineable deposits of ore;
|
·
|
the
probability of an individual prospect ever having reserves that
meet the
requirements of Securities Act Industry Guide 7 is extremely remote,
and
in all probability the properties do not contain any reserves,
and any
funds spent on exploration will probably be lost;
|
||
·
|
operations
are subject to a variety of existing laws and regulations relating
to
exploration and development, permitting procedures, safety precautions,
property reclamation, employee health and safety, air quality standards,
pollution and other environmental protection controls and the Company
may
not be able to comply with these regulations and controls;
|
||
·
|
a
large number of factors beyond the control of the Company, including
fluctuations in metal prices, inflation, and other economic conditions,
will affect the economic feasibility of mining;
|
||
·
|
mining
activities are subject to substantial operating hazards some of
which are
not insurable or may not be insured due to economic considerations;
and
|
||
·
|
the
availability of water, which is essential to mining and milling
operations.
|
·
|
political
instability and violence;
|
||
·
|
war
and civil disturbance;
|
||
·
|
expropriation
or nationalization;
|
||
·
|
changing
fiscal regimes;
|
||
·
|
fluctuations
in currency exchange rates;
|
||
·
|
high
rates of inflation;
|
||
·
|
underdeveloped
industrial and economic infrastructure; and
|
||
·
|
unenforceability
of contractual rights.
|
·
|
production
restrictions;
|
||
·
|
price
controls;
|
||
·
|
export
and import controls;
|
||
·
|
income
and other taxes;
|
||
·
|
maintenance
of claims;
|
||
·
|
environmental
legislation;
|
||
·
|
foreign
ownership restrictions;
|
||
·
|
labor;
|
||
·
|
welfare
benefit policies;
|
||
·
|
land
use;
|
||
·
|
land
claims of local residents;
|
||
·
|
water
use; and
|
||
·
|
mine
safety.
|
Concession
|
Title
No.
|
hectares
|
||||||||
Sierra
Mojada
|
198513
|
4,767.3154
|
||||||||
Mojada
2*
|
227585
|
3,500.0000
|
||||||||
El
Retorno*
|
216681
|
817.6548
|
||||||||
Mojada
3
|
new
title (reduced)
|
226756
|
772.0000
|
|||||||
Unificacion
Mineros Nortenos
|
169343
|
336.7905
|
||||||||
Esmeralda
I (97.6839)
|
187776
|
145.0000
|
||||||||
Esmeralda
|
212169
|
117.5025
|
||||||||
La
Blanca
|
220569
|
33.5044
|
||||||||
Fortuna
|
160461
|
13.9582
|
||||||||
Los
Ramones*
|
223093
|
8.6039
|
||||||||
El
Retorno Fracc. 1*
|
223154
|
5.5071
|
||||||||
Vulcano
|
83507
|
4.4094
|
||||||||
Total
|
10,522.2462
|
*
|
Documentation
of the acquisition of these concessions was not available until fiscal
year beginning November 1, 2006. Total cost for these concessions
was
approximately $32,000 in the
aggregate.
|
Concession
|
A
grant of a tract of land made by a government or other controlling
authority in return for stipulated services or a promise that the
land
will be used for a specific
purpose.
|
Exploration
expenditures
|
Costs
incurred in identifying areas that may warrant examination and in
examining specific areas that are considered to have prospects that
may
contain mineral deposit reserves.
|
|
Mineralized
Material
|
Zinc
bearing material that has been physically delineated by one or more
of a
number of methods including drilling, underground work, surface trenching
and other types of sampling. This material has been found to contain
a
sufficient amount of mineralization of an average grade of metal
or metals
to have economic potential that warrants further exploration evaluation.
While this material is not currently or may never be classified as
reserves, it is reported as mineralized material only if the potential
exists for reclassification into the reserves category. This material
cannot be classified in the reserves category until final technical,
economic and legal factors have been determined. Under the United
States
Securities and Exchange Commission’s standards, a mineral deposit does not
qualify as a reserve unless the recoveries from the deposit are expected
to be sufficient to recover total cash and non-cash costs for the
mine and
related facilities and make a profit.
|
|
Ore,
Ore Reserve, or Mineable Ore Body
|
The
part of a mineral deposit which could be economically and legally
extracted or produced at the time of the reserve
determination.
|
|
Reserves
|
Estimated
remaining quantities of mineral deposit and related substances anticipated
to be recoverable from known accumulations, from a given date forward,
based on:
(a)
analysis of drilling, geological, geophysical and engineering
data;
(b)
the use of established technology; and
(c)
specified economic conditions, which are generally accepted as being
reasonable, and which are disclosed.
|
|
Resources
|
Those
quantities of mineral deposit estimated to exist originally in naturally
occurring accumulations.
Resources
are, therefore, those quantities estimated on a particular date to
be
remaining in known accumulations plus those quantities already produced
from known accumulations plus those quantities in accumulations yet
to be
discovered.
Resources
are divided into:
(a)
discovered resources, which are limited to known accumulations;
and
(b)
undiscovered resources.
|
|
Stratigraphic
units
|
A
body of rock established as a distinct entity, geologically classified,
based on any of the properties or attributes or combinations thereof
that
rocks possess.
|
|
Tonne
|
A
metric ton which is equivalent to 2,200 pounds.
|
|
Unproved
property
|
A
property or part of a property to which no reserves have been specifically
attributed.
|
Proposal
#1 -Increase Authorized Common Stock
|
For
|
Against
|
Abstain
|
Broker
Non-Votes
|
|||||||||
Approval
of an amendment to the Company's
Articles
of Incorporation to increase
the
authorized
shares of Common Stock from
50,000,000
shares to 160,000,000 shares.
|
22,781,856
|
677,562
|
39,463
|
—
|
Fiscal
Quarter
|
High
Bid Price
|
Low
Bid Price
|
||||||||
Fiscal
Year End
October
31, 2006
|
4th
Quarter
(8/1/06 –
10/31/06)
3rd
Quarter
(5/1/06 – 7/31/06)
2nd
Quarter
(2/1/06 – 4/30/06)
1st
Quarter
(11/1/05 – 1/31/06)
|
|
$
$
$
$
|
3.24
5.67
2.97
2.39
|
$
$
$
$
|
1.51
2.45
1.82
0.72
|
||||
Fiscal
Year End
October
31, 2005
|
4th
Quarter
(8/1/05 – 10/31/05)
3rd
Quarter
(5/1/05 – 7/31/05)
2nd
Quarter
(2/1/05 – 4/30/05)
1st
Quarter
(11/1/04 – 1/31/05)
|
|
$
$
$
$
|
1.25
1.45
2.09
2.31
|
$
$
$
$
|
0.84
0.90
1.35
1.55
|
Plan
Category
|
Number
of securities to be
issued
upon exercise of
outstanding
options, warrants
and
rights
|
Weighted
average exercise
price
of outstanding
options,
warrants and rights
|
Number
of securities
remaining
available for
future
issuance
|
|||
Equity
compensation
plans
approved by
security
holders
|
3,360,000(1)
|
$2.41
|
2,426,000(2)
|
|||
Equity
compensation
plans
not approved by
security
holders
|
227,353(3)
|
$1.25
|
—
|
|||
Total
|
3,587,353
|
$2.34
|
2,426,000
|
(1)
|
Includes:
(i) options to acquire 610,000 shares of Common Stock under the Company’s
2000 Equity Incentive Plan; and (ii) options to acquire 2,750,000
shares
of common stock under the Company’s 2006 Stock Option Plan.
|
(2)
|
Includes:
(i) 230,000 shares of Common Stock under the Company’s 2000 Equity
Incentive Plan; and (ii) 2,196,000 shares of common stock under the
Company’s 2006 Stock Option Plan.
|
(3)
|
Includes
(i) warrants to purchase 6,103 shares of Common Stock as compensation
for
services to Tomlinson Programs Inc., (ii) warrants to purchase 204,000
shares of Common Stock as compensation for services to Aegis Capital
Inc.,
and (iii) warrants to purchase 17,250 shares of Common Stock to an
independent director of the
Company.
|
·
|
The
amount and nature of future capital, development and exploration
expenditures;
|
·
|
The
timing of exploration activities;
|
·
|
Business
strategies and development of our business plan;
and
|
Item 8. |
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
Item 9. |
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION
16(A) OF THE EXCHANGE ACT
|
Name
of Director or Officer
and
Position in the Company
|
Officer
or
Director
Since
|
Age
|
Office(s)
Held and Other Business Experience
|
|||
Merlin
Bingham
President
and Chairman of the Board of Directors
|
1996
|
73
|
Since
October 1996, Mr. Bingham has been the President and Chairman of
the Board
of Directors of the Company. From 1963 to 1983 Mr. Bingham worked
in
exploration for mining and oil companies in the western U.S. and
Alaska,
Zambia, the United Arab Emirates, Ecuador and Mexico. From 1983 to
1996,
Mr. Bingham has been a consulting geologist. Mr. Bingham received
a B.S.
degree in Mineralogy from the University of Utah in
1963
|
|||
Roger
Kolvoord,
Executive
Vice President
and
Director
|
Director
since 2002; Officer since 2003
|
67
|
Dr.
Kolvoord has been a director of the Company since August 2002 and
was
appointed Vice President, Business in April 2003. Dr. Kolvoord has
a B.S.
degree in geology from the University of Michigan, a M.S. in Mineralogy
form the University of Utah, and a Ph.D. in geochemistry from the
University of Texas at Austin. He worked in exploration and exploration
research for Kennecott Copper Company, Ranchers Exploration and
Development Corporation, and ARCO, and operated a services company
providing field services to oil and gas and mining companies. He
has
extensive mining and energy exploration experience. He was a manager
with
the Boeing Company for 14 years, working mainly in program management
and
new business development capacities in information systems and in
remote
sensing and geospatial information (mapping) ventures. An Associate
Technical Fellow of the Boeing Company, he returned to private consulting
practice in 2000. Mr. Kolvoord is an active member of the American
Association of Petroleum Geologists and the Society of Mining Engineers.
He resides in the Puget Sound region of
Washington.
|
Name
of Director or Officer
and
Position in the Company
|
Officer
or
Director
Since
|
Age
|
Office(s)
Held and Other Business Experience
|
|||
Wesley
Pomeroy, Director
|
2005
|
52
|
Mr.
Pomeroy was appointed to the Board of Directors in September 2005.
Mr. Pomeroy is currently President of The Joe Dandy Mining Company,
which has had gold properties in Cripple Creek, Colorado since
1887. He is
a member of the Front Range Oil and Gas LLC and the POMOCO LLC
(Pomeroy
Oil Company). He is also currently a consulting geologist with
Vortex
Petroleum Inc. and has been associated since 1977 with various
exploration
and oil and gas companies. Also since 1977 Mr. Pomeroy has been
a member
in good standing of the American Association of Petroleum Geologists
and
the Rocky Mountain Association of Geologists. Mr.
Pomeroy received a Bachelor of Science degree in geology from Colorado
State University in 1977 and an MBA from the University of Colorado
in
1990. Mr. Pomeroy is a registered Professional Geologist for the
State of
Wyoming. He resides in the Denver, Colorado area.
|
|||
Robert
Kramer, Director
|
2006
|
60
|
Robert
Kramer, C.A., was elected to the Board of Directors in July 2006.
Mr. Kramer is the co-founder and Chief Executive Officer of Current
Technology Corporation (OTCBB:CRTCF). The company was formed in
1987 to
research, develop and commercialize electrotherapeutic products
for the
treatment of hair loss. An entrepreneur by nature, with a particular
interest in the financial sector, he has been a founder/principal
of a
number of private companies offering commercial mortgages, venture
capital
and tax driven investments. Prior to co-founding Current Technology,
he
was a joint venture partner in an enterprise that raised funding
for
approximately 20 public mining companies conducting exploration
activities
in Western Canada. A graduate of the University of California,
Berkeley
with a degree in economics, Mr. Kramer has been a member of the
Canadian
Institute of Chartered Accountants and the Institute of Chartered
Accountants of British Columbia for over 30 years. Mr. Kramer is
a
Registered Certified Public Accountant in the State of
Illinois. In 2005 he was admitted as a Fellow to The Institute of
Chartered Securities and Administrators.
|
Name
of Director or Officer
and
Position in the Company
|
Officer
or
Director
Since
|
Age
|
Office(s)
Held and Other Business Experience
|
|||
Terry
Brown,
Vice
President-Operations
|
2005
|
47
|
Mr.
Brown was appointed Vice President-Operations in September 2005.
Mr.
Brown has 22 years experience in the mining industry in the United
States,
Mexico and Chile and has most recently been active as a consulting
geologist in Mexico. His background is in exploration and project
management, mine development and feasibility studies, and mining
operations. Mr. Brown is a Certified Professional Geologist and
is a
member of the American Institute of Professional Geologists and
the
Society of Economic Geologists. He received a Bachelor of Science
degree
in geology from the New Mexico Institute of Mining & Technology in
1983. Mr. Brown resides in Chihuahua, Mexico.
|
|||
Wayne
Schoonmaker, Treasurer and Secretary
|
1997
|
69
|
Mr.
Schoonmaker was appointed Secretary & Treasurer of the Company in
August 1997 and has held that position since that time. He is also
Secretary & Treasurer and Director of Independence Lead Mines Company
of Wallace, Idaho. During the period of 1979 through 1993, Mr.
Schoonmaker
was employed at Asarco Incorporated as Chief Accountant of the
Troy Mine
and as Financial Manager of Asarco's Northwest Mining Department.
From
July 1978 to December 1978, Mr. Schoonmaker was Assistant Treasurer
of the
Bunker Hill Mining Company, and from 1964 to 1978, he was Assistant
Secretary of Hecla Mining Company. Mr. Schoonmaker received a Bachelor
of
Science degree in Accounting from the University of Montana in
1962 and an
MBA from the University of Idaho in 1987. Mr. Schoonmaker is a
Certified
Public Accountant in the states of Idaho and
Montana.
|
FISCAL
YEAR COMPENSATION
|
LONG
TERM COMPENSATION
|
||||||||||||||||||||||||
Awards
|
Payouts
|
||||||||||||||||||||||||
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual
Compensation(4)
|
Securities
Underlying
Option/SARs
Granted
|
Restricted
Shares
or
Restricted Share
Units
|
LTIP
Payouts
($)
|
All
other
Compensation
($)
|
|||||||||||||||||
Merlin
Bingham, President
|
2006
2005
|
$
$
|
206,000
201,563
|
$
$
|
0
0
|
$
$
|
0
0
|
1,000,000
0
|
0
0
|
0
0
|
0
0
|
||||||||||||||
2004
|
$
|
101,563
|
$
|
0
|
$
|
60,938
|
(1)
|
0
|
0
|
0
|
0
|
||||||||||||||
Roger
Kolvoord, Executive Vice President
|
2006
2005
|
$
$
|
187,000
81,250
|
$
$
|
0
0
|
$
$
|
0
0
|
750,000
0
|
0
0
|
0
0
|
0
0
|
||||||||||||||
2004
|
$
|
118,750
|
$
|
0
|
$
|
74,479
|
(1)
|
0
|
0
|
0
|
0
|
||||||||||||||
|
|||||||||||||||||||||||||
Terry
Brown,
Vice
President, Operations
|
2006
2005
2004
|
$
$
|
125,000
56,160
0
|
$
$
$
|
0
0
0
|
$
$
$
|
0
0
0
|
250,000
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
(1) |
Represents
the value of the shares of the Company’s Common Stock issued as
compensation for services rendered, based on the fair market value
of such
shares on the date of issuance.
|
Name
|
Number
of
Securities
Underlying
Options/SARs
Granted
(#)
|
%
of Total
Options/SARs
Granted
to
Employees
in
Fiscal
Year
|
Exercise
or
Base
Price ($)
|
Expiration
Date
|
|||||||||
Merlin
Bingham
|
1,000,000
|
50
|
%
|
$
|
2.59
|
May
1, 2016
|
|||||||
Roger
Kolvoord
|
750,000
|
37.5
|
%
|
$
|
2.59
|
May
1, 2016
|
|||||||
Terry
Brown
|
250,000
|
12.5
|
%
|
$
|
2.59
|
May
1, 2016
|
Name
|
Shares
Acquired on
Exercise
(#)
|
Value
Realized ($)
|
Number
of Securities Underlying Unexercised Options/SARs at FY-End
(#)
Exercisable/
Unexercisable
|
Value
of
Unexercised
Options/SARs at
FY-End
($)
Exercisable/
Unexercisable
|
|||||||||
Merlin
Bingham
|
Nil
|
Nil
|
Nil
|
Nil
|
|||||||||
Roger
Kolvoord
|
Nil
|
Nil
|
Nil
|
Nil
|
|||||||||
Terry
Brown
|
Nil
|
Nil
|
Nil
|
Nil
|
Name
and Address of Beneficial Owner
|
Position
|
Amount
and Nature of Metalline
Beneficial
Ownership
|
Percent
of Metalline
Common
stock
|
|||
Merlin
Bingham
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
President
and Director
|
2,445,639(1)
|
6.9%
|
|||
Roger
Kolvoord
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
Executive
Vice President and Director
|
1,210,406(2)
|
3.5%
|
|||
Wayne
Schoonmaker
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
Treasurer,
Secretary
|
89,568
|
*
|
|||
Wesley
Pomeroy
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
Director
|
592,000(3)
|
1.7%
|
|||
Terry
Brown
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
Vice
President-Operations
|
312,500(4)
|
*
|
|||
Robert
Kramer
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
|
Director
|
529,250(5)
|
1.5%
|
|||
All
current directors, executive officers and named executive officers
as a
group (six persons)
|
5,179,363(6)
|
13.9%
|
Plan
Category
|
Number
of securities to be
issued
upon exercise of
outstanding
options, warrants
and
rights
|
Weighted
average exercise
price
of outstanding
options,
warrants and rights
|
Number
of securities
remaining
available for
future
issuance
|
|||
Equity
compensation
plans
approved by
security
holders
|
3,360,000(1)
|
$2.41
|
2,426,000(2)
|
|||
Equity
compensation
plans
not approved by
security
holders
|
227,353(3)
|
$1.25
|
—
|
|||
Total
|
3,587,353
|
$2.34
|
2,426,000
|
(1)
|
Includes:
(i) options to acquire 610,000 shares of Common Stock under the Company’s
2000 Equity Incentive Plan; and (ii) options to acquire 2,750,000
shares
of common stock under the Company’s 2006 Stock Option Plan.
|
(2)
|
Includes:
(i) 230,000 shares of Common Stock under the Company’s 2000 Equity
Incentive Plan; and (ii) 2,196,000 shares of common stock under the
Company’s 2006 Stock Option Plan.
|
(3)
|
Includes
(i) warrants to purchase 6,103 shares of Common Stock as compensation
for
services to Tomlinson Programs Inc., (ii) warrants to purchase 204,000
shares of Common Stock as compensation for services to Aegis Capital
Inc.,
and (iii) warrants to purchase 17,250 shares of Common Stock to an
independent director of the Company.
|
Item
13.
|
EXHIBITS
|
|
(a)
|
Exhibits
|
|
3.1(a)
|
Articles
of Incorporation.1
|
|
3.1(b)
|
Certificate
of Amendment to Articles of Incorporation,2
and
enclosed herewith.
|
|
3.2
|
Bylaws.2
|
|
4.1
|
2000
Equity Incentive Plan, enclosed herewith.
|
|
4.2
|
2006
Stock Option Plan, enclosed herewith.
|
|
10.1
|
Subscription
Agreement between the Company and subscribers, dated March 6,
2006.3
|
|
10.2
|
Employment
Agreement with Merlin Bingham, effective January 1, 2007, enclosed
herewith.
|
|
10.3
|
Employment
Agreement with Roger Kolvoord, effective January 1, 2007, enclosed
herewith.
|
|
10.4
|
Employment
Agreement with Terry Brown, effective January 1, 2007, enclosed
herewith.
|
|
14
|
Code
of Ethics, enclosed herewith.
|
|
21.1
|
Subsidiaries
of the Registrant, enclosed herewith.
|
|
31.1
|
Certification
of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
|
31.2
|
Certification
of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
|
32.1
|
Certification
of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section
906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
32.2
|
Certification
of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section
906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
99.1
|
Sierra
Mojada location map.4
|
(1)
|
Incorporated
by reference from Form 10-SB, filed October 15,
1999.
|
(2)
|
Incorporated
by reference from Form 10-QSB, filed September 19,
2006.
|
(3)
|
Incorporated
by reference from Form 8-K, filed March 6,
2006.
|
(4)
|
Incorporated
by reference from Form 10-KSB, filed January 31,
2006.
|
·
|
Preapprove
all audit services that the auditor may provide to us or any subsidiary
(including, without limitation, providing comfort letters in connection
with securities underwritings or statutory audits) as required by
§10A(i)(1)(A) of the Exchange Act (as amended by the Sarbanes-Oxley
Act of
2002).
|
·
|
Preapprove
all non-audit services (other than certain de
minimis
services described in §10A(i)(1)(B) of the Exchange Act (as amended by the
Sarbanes-Oxley Act of 2002)) that the auditors propose to provide
to us or
any of our subsidiaries.
|
METALLINE
MINING COMPANY
|
||
|
|
|
Date:
January 31, 2007
|
By: | /s/ Merlin Bingham |
Merlin
Bingham, President and Principal Executive
Officer
|
|
|
|
Date:
January 31, 2007
|
By: | /s/ Wayne Schoonmaker |
Wayne
Schoonmaker, Secretary and Principal Accounting
Officer
|
|
|
|
Date:
January 31, 2007
|
By: | /s/ Merlin Bingham |
Merlin
Bingham, Director
|
|
|
|
Date:
January 31, 2007
|
By: | /s/ Roger Kolvoord |
Roger
Kolvoord, Director
|
|
|
|
Date:
January 31, 2007
|
By: |
/s/
Wesley
Pomeroy
|
Wesley
Pomeroy, Director
|
|
|
|
Date:
January 31, 2007
|
By: |
/s/ Robert
Kramer
|
Robert
Kramer,
Director
|
PAGE
NO.
|
||
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Financial
Statements:
|
||
Consolidated
Balance Sheets
|
F-2
|
|
Consolidated
Statements of Operations
|
F-3
|
|
Consolidated
Statements of Changes in Stockholders’ Equity
|
|
F-4
- F-6
|
|
||
Consolidated
Statements of Cash Flows
|
F-7
|
|
Notes
to Consolidated Financial Statements
|
|
F-8
|
October
31,
|
|
October
31,
|
|
||||
|
|
2006
|
|
2005
|
|||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
689,994
|
$
|
213,369
|
|||
Marketable
securities
|
5,925,000
|
-
|
|||||
Accounts
receivable
|
35,934
|
23,620
|
|||||
Prepaid
expenses
|
14,288
|
13,242
|
|||||
Employee
advances
|
-
|
9,560
|
|||||
Total
Current Assets
|
6,665,216
|
259,791
|
|||||
PROPERTY
CONCESSIONS
|
|||||||
Sierra
Mojada, Mojada 3
|
15,875
|
15,875
|
|||||
Fortuna
|
76,725
|
76,725
|
|||||
Esmeralda
|
255,647
|
255,647
|
|||||
Esmeralda
I
|
180,988
|
180,988
|
|||||
U.M.
Nortenos, Vulcano
|
3,682,772
|
3,682,772
|
|||||
La
Blanca
|
122,760
|
122,760
|
|||||
Total
Property Concessions
|
4,334,767
|
4,334,767
|
|||||
EQUIPMENT
|
|||||||
Office
and mining equipment, net
|
611,966
|
490,884
|
|||||
Total
Equipment
|
611,966
|
490,884
|
|||||
TOTAL
ASSETS
|
$
|
11,611,949
|
$
|
5,085,442
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
238,198
|
$
|
86,189
|
|||
Accounts
payable - Related Parties
|
125,460
|
-
|
|||||
Accrued
liabilities and expenses
|
116,162
|
189,046
|
|||||
Other
liabilities
|
10,000
|
15,873
|
|||||
Note
payable, current portion
|
-
|
4,209
|
|||||
Total
Current Liabilities
|
489,820
|
295,317
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Note
payable, net of current portion
|
-
|
7,365
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
-
|
-
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Common
stock, $0.01 par value; 160,000,000 shares authorized,
|
|||||||
34,207,912
and 20,404,585 shares issued and outstanding,
respectively
|
342,079
|
204,047
|
|||||
Additional
paid-in capital
|
26,831,539
|
19,852,673
|
|||||
Stock
options and warrants
|
11,763,347
|
1,347,839
|
|||||
Deficit
accumulated during exploration stage
|
(27,814,836
|
)
|
(16,621,799
|
)
|
|||
Total
Stockholders' Equity
|
11,122,129
|
4,782,760
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
11,611,949
|
$
|
5,085,442
|
|||
(0
|
)
|
|
|
|
|
November
8,
|
|
|||||
|
|
|
|
|
|
1993
|
|
|||
|
|
|
|
|
|
(Inception)
|
|
|||
|
|
Years
Ended
|
|
to
|
|
|||||
|
|
October
31,
|
|
October
31,
|
|
October
31,
|
|
|||
|
|
2006
|
|
2005
|
|
2006
|
||||
REVENUES
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
GENERAL
AND ADMINISTRATIVE EXPENSES
|
||||||||||
Salaries
and payroll expenses
|
5,558,746
|
797,104
|
8,796,363
|
|||||||
Office
and administrative expenses
|
415,281
|
309,483
|
1,404,227
|
|||||||
Taxes
and fees
|
307,919
|
95,353
|
797,360
|
|||||||
Professional
services
|
1,017,180
|
328,954
|
5,384,852
|
|||||||
Directors
fees
|
1,836,165
|
1,836,165
|
||||||||
Property
expenses
|
113,962
|
186,057
|
2,058,065
|
|||||||
Depreciation
|
89,355
|
83,557
|
431,245
|
|||||||
Exploration
and research
|
2,078,777
|
1,666,884
|
7,412,863
|
|||||||
TOTAL
GENERAL AND ADMINISTRATIVE EXPENSES
|
11,417,385
|
3,467,392
|
28,121,139
|
|||||||
LOSS
FROM OPERATIONS
|
(11,417,385
|
)
|
(3,467,392
|
)
|
(28,121,139
|
)
|
||||
OTHER
INCOME (EXPENSES)
|
||||||||||
Miscellaneous
ore sales, net of expenses
|
(30,896
|
)
|
7,964
|
134,242
|
||||||
VAT
tax refunds
|
13,045
|
119,615
|
132,660
|
|||||||
Rental
income
|
85,500
|
8,500
|
94,000
|
|||||||
Miscellaneous
income (expense)
|
(14,484
|
)
|
-
|
(14,484
|
)
|
|||||
Interest
and investment income
|
174,698
|
29,758
|
250,171
|
|||||||
Interest
and financing expense
|
(3,515
|
)
|
(606
|
)
|
(290,286
|
)
|
||||
TOTAL
OTHER INCOME
|
224,348
|
165,231
|
306,302
|
|||||||
LOSS
BEFORE INCOME TAXES
|
(11,193,037
|
)
|
(3,302,161
|
)
|
(27,814,836
|
)
|
||||
INCOME
TAXES
|
-
|
-
|
-
|
|||||||
NET
LOSS
|
$
|
(11,193,037
|
)
|
$
|
(3,302,161
|
)
|
$
|
(27,814,836
|
)
|
|
BASIC
AND DILUTED NET LOSS PER
|
||||||||||
COMMON
SHARE
|
$
|
(0.36
|
)
|
$
|
(0.16
|
)
|
||||
BASIC
AND DILUTED
|
||||||||||
WEIGHTED
AVERAGE NUMBER
|
||||||||||
OF
COMMON SHARES OUTSTANDING
|
30,748,662
|
20,014,313
|
Common
Stock
|
|
|||||||||||||||||||||
Number
of Shares
|
Amount
|
Additional
Paid-in Capital
|
|
Stock
Subscriptions Receivable
|
Stock
Options
and
Warrants
|
Accumulated
Deficit
During
Exploration
Stage
|
Total
|
|||||||||||||||
Common
stock issuance
|
||||||||||||||||||||||
prior
to inception (no value)
|
960,800
|
$
|
9,608
|
$
|
(9,608
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
1:5
reverse common stock split
|
(768,640
|
)
|
(7,686
|
)
|
7,686
|
-
|
-
|
-
|
-
|
|||||||||||||
Net
loss for the year ended October 31, 1994
|
-
|
-
|
-
|
-
|
-
|
(8,831
|
)
|
(8,831
|
)
|
|||||||||||||
Balances,
October 31, 1994
|
192,160
|
1,922
|
(1,922
|
)
|
-
|
-
|
(8,831
|
)
|
(8,831
|
)
|
||||||||||||
3:1
common stock split
|
384,320
|
3,843
|
(3,843
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Net
loss for the year ended October 31, 1995
|
-
|
-
|
-
|
-
|
-
|
(7,761
|
)
|
(7,761
|
)
|
|||||||||||||
Balances,
October 31, 1995
|
576,480
|
5,765
|
(5,765
|
)
|
-
|
-
|
(16,592
|
)
|
(16,592
|
)
|
||||||||||||
Issuances
of common stock as follows:
|
||||||||||||||||||||||
-
for par value at transfer of ownership
|
2,000
|
20
|
-
|
-
|
-
|
-
|
20
|
|||||||||||||||
-
for cash at an average of $0.11 per share
|
1,320,859
|
13,209
|
133,150
|
-
|
-
|
-
|
146,359
|
|||||||||||||||
-
for services at an average of $0.08 per share
|
185,000
|
1,850
|
12,600
|
-
|
-
|
-
|
14,450
|
|||||||||||||||
-
for computer equipment at $0.01 per share
|
150,000
|
1,500
|
13,500
|
-
|
-
|
-
|
15,000
|
|||||||||||||||
-
for mineral property at $0.01 per share
|
900,000
|
9,000
|
-
|
-
|
-
|
-
|
9,000
|
|||||||||||||||
Net
loss for the year ended October 31, 1996
|
-
|
-
|
-
|
-
|
-
|
(40,670
|
)
|
(40,670
|
)
|
|||||||||||||
Balances,
October 31, 1996
|
3,134,339
|
31,344
|
153,485
|
-
|
-
|
(57,262
|
)
|
127,567
|
||||||||||||||
Issuances
of common stock as follows:
|
||||||||||||||||||||||
-
for cash at an average of $0.61 per share
|
926,600
|
9,266
|
594,794
|
-
|
-
|
-
|
604,060
|
|||||||||||||||
-
for services at an average of $0.74 per share
|
291,300
|
2,913
|
159,545
|
-
|
-
|
-
|
162,458
|
|||||||||||||||
-
for payment of a loan at $0.32 per share
|
100,200
|
1,002
|
30,528
|
-
|
-
|
-
|
31,530
|
|||||||||||||||
Options
issued as follows:
|
||||||||||||||||||||||
-
300,000 options for cash
|
-
|
-
|
3,000
|
-
|
-
|
-
|
3,000
|
|||||||||||||||
Net
loss for the year ended October 31, 1997
|
-
|
-
|
-
|
-
|
-
|
(582,919
|
)
|
(582,919
|
)
|
|||||||||||||
Balances,
October 31, 1997
|
4,452,439
|
44,525
|
941,352
|
-
|
-
|
(640,181
|
)
|
345,696
|
||||||||||||||
Issuances
of common stock as follows:
|
||||||||||||||||||||||
-
for cash at an average of $1.00 per share
|
843,500
|
8,435
|
832,010
|
-
|
-
|
-
|
840,445
|
|||||||||||||||
-
for cash and receivables at $1.00 per share
|
555,000
|
5,550
|
519,450
|
(300,000
|
)
|
-
|
-
|
225,000
|
||||||||||||||
-
for services at an average of $0.53 per share
|
41,800
|
418
|
21,882
|
-
|
-
|
-
|
22,300
|
|||||||||||||||
-
for mine data base at $1.63 per share
|
200,000
|
2,000
|
323,000
|
-
|
-
|
-
|
325,000
|
|||||||||||||||
Options
issued or granted as follows:
|
||||||||||||||||||||||
-
1,200,000 options for cash
|
-
|
-
|
120,000
|
-
|
-
|
-
|
120,000
|
|||||||||||||||
-
for financing fees
|
-
|
-
|
-
|
-
|
60,000
|
-
|
60,000
|
|||||||||||||||
-
for consulting fees
|
-
|
-
|
-
|
-
|
117,000
|
-
|
117,000
|
|||||||||||||||
Warrants
issued for services
|
-
|
-
|
-
|
-
|
488,980
|
(488,980
|
)
|
-
|
||||||||||||||
Net
loss for the year ended October 31, 1998
|
-
|
-
|
-
|
-
|
-
|
(906,036
|
)
|
(906,036
|
)
|
|||||||||||||
Balance,
October 31, 1998
|
6,092,739
|
$
|
60,928
|
$
|
2,757,694
|
$
|
(300,000
|
)
|
$
|
665,980
|
$
|
(2,035,197
|
)
|
$
|
1,149,405
|
|
|
Common
Stock
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Number
of
Shares
|
|
Amount
|
|
Additional
Paid-in
Capital
|
|
Stock
Subscriptions
Receivable
|
|
Stock
Options
and
Warrants
|
|
Accumulated
Deficit
During
Exploration
Stage
|
|
Total
|
||||||||
Balance,
October 31, 1998
|
6,092,739
|
$
|
60,928
|
$
|
2,757,694
|
$
|
(300,000
|
)
|
$
|
665,980
|
$
|
(2,035,197
|
)
|
$
|
1,149,405
|
|||||||
Issuances
of common stock as follows:
|
||||||||||||||||||||||
-
for cash at an average of $1.04 per share
|
818,800
|
8,188
|
842,712
|
-
|
-
|
-
|
850,900
|
|||||||||||||||
-
for drilling fees at $0.90 per share
|
55,556
|
556
|
49,444
|
-
|
-
|
-
|
50,000
|
|||||||||||||||
Stock
option and warrant activity as follows:
|
||||||||||||||||||||||
-
exercise of options at $0.90 per share
|
250,000
|
2,500
|
267,500
|
-
|
(45,000
|
)
|
-
|
225,000
|
||||||||||||||
-
issuance of options for financing fees
|
-
|
-
|
-
|
-
|
216,000
|
-
|
216,000
|
|||||||||||||||
-
expiration of options
|
-
|
-
|
60,000
|
-
|
(60,000
|
)
|
-
|
-
|
||||||||||||||
Stock
subscription received
|
-
|
-
|
-
|
300,000
|
-
|
-
|
300,000
|
|||||||||||||||
Net
loss for the year ended October 31, 1999
|
-
|
-
|
-
|
-
|
-
|
(1,423,045
|
)
|
(1,423,045
|
)
|
|||||||||||||
Balance,
October 31, 1999
|
7,217,095
|
72,172
|
3,977,350
|
-
|
776,980
|
(3,458,242
|
)
|
1,368,260
|
||||||||||||||
Stock
option and warrant activity as follows:
|
||||||||||||||||||||||
Exercise
of options at $0.86 per share
|
950,000
|
9,500
|
1,090,750
|
-
|
(288,000
|
)
|
-
|
812,250
|
||||||||||||||
Warrants
issued for services
|
-
|
-
|
-
|
-
|
55,000
|
-
|
55,000
|
|||||||||||||||
Issuances
of common stock as follows:
|
||||||||||||||||||||||
-
for cash at an average of $2.77 per share
|
1,440,500
|
14,405
|
3,972,220
|
-
|
-
|
-
|
3,986,625
|
|||||||||||||||
-
for services at $1.28 per share
|
120,000
|
1,200
|
152,160
|
-
|
-
|
-
|
153,360
|
|||||||||||||||
-
for equipment at $1.67 per share
|
15,000
|
150
|
24,850
|
-
|
-
|
-
|
25,000
|
|||||||||||||||
Net
loss for the year ended October 31, 2000
|
-
|
-
|
-
|
-
|
-
|
(882,208
|
)
|
(882,208
|
)
|
|||||||||||||
Balances,
October 31, 2000
|
9,742,595
|
97,427
|
9,217,330
|
-
|
543,980
|
(4,340,450
|
)
|
5,518,287
|
||||||||||||||
Stock
option and warrant activity as follows:
|
||||||||||||||||||||||
-
Warrants exercised at $0.75 per share
|
20,000
|