For the quarterly period ended JUNE 30, 2001
Commission file number 0-4846-3
Idaho
82-0288840
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
6975 South Union Park Center, Suite 600
Salt Lake City, Utah 84047
(Address of principal executive offices) (Zip Code)
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding July 31, 2001
Common stock, no par value 9,449,707 shares
Page
Part I. - Financial Information
Item l - Consolidated Balance Sheets - June 30, 2001
and December 31, 2000
3- Consolidated Statements of Operations
Three Months and Six Months Ended June 30, 2001 and 2000
4- Consolidated Statements of Cash Flows Six Months Ended June 30, 2001 and 2000
5- Notes to Consolidated Financial Statements
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. - Other Information
Item 1 - Legal Proceedings 11
Item 6 - Exhibits and Reports on Form 8-K 11
* Items omitted are not applicable.
June 30,
December 31,
2001
2000
Current assets:
Cash and cash equivalents
$ 379
$ 1,419
Other receivables
525
84
Prepaid expenses - -
Income tax refund receivable - -
Total current assets 904 1,503
Total assets $ 904 $ 1,503
Current liabilities:
Accounts payable and accrued expenses
$ 12,297
$ 2,096
Accounts payable - Hecla Mining Company
16,380
-
Accrued interest payable - Hecla Mining Company
316,804
282,725
Note payable - Hecla Mining Company
725,000
725,000
Total current liabilities 1,070,481 1,009,821
Stockholders' deficit:
Preferred stock; $0.25 par value; authorized
10,000,000 shares; issued and outstanding, none
-
-
Common stock; no par value; authorized 100,000,000
shares; issued 9,455,689 shares 2,360,572 2,360,572
Accumulated deficit
(3,426,688)
(3,365,429)
Less: Common stock reacquired at cost; 5,982 shares
(3,461)
( 3,461)
Total stockholders' deficit (1,069,577) (1,008,318)
Total liabilities and stockholders' deficit
$ 904
$ 1,503
Part I - Financial Information (Continued)
Expenses:
General and administrative
19,102 6,455
27,145 12,772
Interest expense on note payable
to Hecla Mining Company
15,975 19,426
34,080 37,313
Foreign exchange (gain) loss (11) (463) 35 (169)
Total Expenses 35,066 25,418 61,260 49,916
Loss before income taxes (35,066) (25,418) (61,260) (49,916)
Income tax provision - - - -
Net loss $ (35,066) $ (25,418) $ (61,260) $ (49,916)
Basic and diluted loss per
common share
$ (0.00) $ (0.00)
$ (0.01) $ (0.01)
Cash dividends per share $ - $ - $ - $ -
Weighted average number of
common shares outstanding
9,449,707
9,449,707 9,449,707
9,449,707
Operating activities:
Net loss $ (61,260) $ (49,916)
Change in:
Accounts and other receivables
(441) 8,320
Accounts payable and accrued liabilities 26,582 (3,308)
Accrued interest payable on note
to Hecla Mining Company
34,079 37,313
Net cash used by operating activities (1,040) (7,591)
Financing activities:
Borrowing on Hecla note payable - 14,000
Net cash provided by financing activities - 14,000
Net increase (decrease) in cash
and cash equivalents
(1,040) 6,409
Cash and cash equivalents at
beginning of period
1,419 11,209
Cash and cash equivalents at
end of period
$ 379 $ 17,618
Note 1.
The notes to the consolidated financial statements as of December 31, 2000, as set forth in ConSil Corp.'s (ConSil) 2000 Annual Report on Form 10-K, substantially apply to these interim consolidated financial statements and are not repeated here. All amounts are in U.S. dollars unless otherwise indicated.
Note 2.
The financial information given in the accompanying unaudited interim financial statements reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods reported. All such adjustments are of a normal recurring nature. All financial statements presented herein are unaudited. However, the balance sheet as of December 31, 2000, was derived from the audited consolidated balance sheet described in Note 1 above.
Note 3.
At June 30, 2001, ConSil had 9,449,707 common shares outstanding of which Hecla Mining Company (Hecla), the majority stockholder of ConSil, owned 7,418,300 shares or 78.503% of the outstanding shares.
The financial statements have been prepared on a going concern basis which assumes realization of assets and liquidation of liabilities in the normal course of business. At June 30, 2001, ConSil had negative working capital of $1,069,577 and a stockholders' deficit of $1,069,577. Included in current liabilities are the $725,000 note payable and the related accrued interest due to Hecla which are due upon demand by authorized representatives of Hecla, but in no event later than March 31, 2002. Also included in current liabilities are accounts payable to Hecla of $16,380. If other sources of funds are unavailable, new management has obtained shareholder commitments to fund the reasonable minimum financial requirements of ConSil through June 30, 2002.
Note 4.
On June 28, 1996, ConSil and Hecla entered into a loan agreement whereby Hecla agreed to make
available to ConSil a loan not to exceed $500,000, due in its entirety on or before December 31,
1996. This loan agreement was subsequently amended on eight separate occasions, increasing the
amount available to borrow to $725,000 and extending the repayment date until March 31, 2002.
At June 30, 2001, there was $725,000 outstanding under the loan agreement with Hecla, having an
interest rate of 8.25% and accrued interest due to Hecla totaling $316,804.
Note 5.
ConSil prepares its consolidated financial statements in accordance with generally accepted accounting principles (GAAP) as practiced in the United States. ConSil also has regulatory reporting requirements in Canada. There are no differences between U.S. GAAP and Canadian GAAP with respect to stockholders' deficit or net loss at June 30, 2001 or 2000 and the six months then ended.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction
Except for the historical information contained herein, the matters discussed that are forward-looking statements involve risks and uncertainties, including the timely development of future projects, the impact of metals prices, changing market conditions and regulatory environment, and other risks detailed from time to time in ConSil's Form 10-K and Form 10-Qs filed with the United States Securities and Exchange Commission. Actual results may differ materially from those projected or implied. Forward-looking statements included herein represent ConSil's judgment as of the date of this filing. ConSil disclaims, however, any intent or obligation to update these forward-looking statements.
Following the sale of ConSil's Silver Summit mine in 1995, ConSil was actively involved in exploration and acquisition activities, primarily in Mexico. ConSil was unsuccessful in its exploration and acquisition activities, and since the fourth quarter of 1997, ConSil has been inactive.
Results of Operations
First Six Months of 2001 Compared to First Six Months of 2000
ConSil reported a net loss of $61,260, or $0.01 per share, for the first six months of 2001 compared to a net loss of $49,916 or $0.01 per share in the same period in 2000. The increase in the net loss was due primarily to an increase in general and administrative expense of $14,373, partially offset by a $3,233 decrease in interest expense on the note payable to Hecla (see Note 4 of Notes to Consolidated Financial Statements).
Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000
ConSil reported a net loss of $35,066, or nil per share in the second quarter of 2001, compared to a net loss of $25,418, or nil per share in the second quarter of 2000. The increase in the net loss was due primarily to an increase in general and administrative costs of $12,647, partially offset by a $3,451 decrease in interest expense.
Financial Condition and Liquidity
At June 30, 2001, assets totaled $904 and stockholders' deficit totaled $1,069,577. Cash and cash equivalents decreased by $1,040 to $379 at June 30, 2001 from $1,419 at December 31, 2000. The primary use of cash was to pay general and administrative expenditures.
Working capital decreased $61,259 during the first six months of 2001, from a negative $1,008,318
at December 31, 2000 to a negative $1,069,577 at June 30, 2001. The decrease in working capital is
primarily the result of funding general and administrative costs and increased accrued interest and accounts
payable due to Hecla.
ConSil's planned 2001 expenditures include the necessary expenditures to maintain the current inactive status of ConSil. ConSil intends to finance planned expenditures partially through existing cash and cash equivalents. Any further exploration projects, potential acquisitions or even limited operations are subject to ConSil being able to raise funds from external sources. Subsequent to the end of the quarter, Consil experienced a change of controlling shareholders and management. New management intends to seek out a business opportunity to merge with or acquire.
The financial statements have been prepared on a going concern basis which assumes realization of assets and liquidation of liabilities in the normal course of business. At June 30, 2001, ConSil had negative working capital of $1,069,577 and a stockholders' deficit of $1,069,577. Included in current liabilities are the $725,000 note payable and the related accrued interest due to Hecla which are due upon demand by authorized representatives of Hecla, but in no event later than March 31, 2002. Also included in current liabilities are accounts payable to Hecla of $16,380. If other sources of funds are unavailable, new management has received shareholder commitments to fund the reasonable minimum financial requirements of ConSil through June 30, 2002.
Quantitative and Qualitative Disclosures About Market Risk
At June 30, 2001, ConSil's note payable to Hecla (refer to Note 4 of Notes to Consolidated Financial Statements) was subject to changes in market interest rates. However, due to the short-term nature of the debt, ConSil's management does not believe it is at material risk with respect to changes in market interest rates.
Item 1. Legal Proceedings
There are no pending legal proceedings.
Item 5. Other Information
Subsequent to the end of the fiscal quarter for June 2001, Hecla Mining Company sold all
ownership of common stock to Lincoln Properties LTD LC. Additionally, James Anderson was appointed
Director and President of the Company. Lewis E. Walde, Thomas F. Fudge Jr. and Michael B. White
resigned as Directors of the Company and Michael B. White, David F. Wolfe and Nigel Cave resigned as
officers of the Company.
New management intends to actively seek a new business opportunity to acquire or merge with. There can be no assurance that the Company will be successful in consummating such merger or acquisition.
Due to minimal operations of the Company and the expenses and administrative burdens relating to listing on the Vancouver Exchange, the Company intends to be removed from such listing.
In exchange for cancellation of one hundred thousand shares of common stock, the Company has assigned to Hecla any remaining royalties relating to previously owned properties or rights.
Item 6. Exhibits and Reports on Form 8-K
None.
(b) Reports on Form 8-K
None.
Items 2, 3, and 5 of Part II are omitted from this report as inapplicable.
Dated August 13, 2001
CONSIL CORP.
James Anderson
Director
Date: August 13, 2001 By: /S/ James Anderson
President
Date: August 13, 2001 By:/S/ James Anderson
Treasurer (principal accounting and financial officer)
Exhibit No. Description