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| TMGG.OB > SEC Filings for TMGG.OB > Form 10-Q on 3-Nov-2009 | All Recent SEC Filings |
3-Nov-2009
Quarterly Report
Tintic Gold Mining Company ("Tintic Gold," "Company," "we" or "us") is a start-up, exploration stage mining company that has not yet generated or realized any revenues from its business operations. As a precious metals mineral exploration company, our goal is to obtain a partner or joint venturer with the funding and expertise necessary to explore our patented mining claims known as the Emerald, Diamond and Ruby Claims located in the Tintic Mining District of Juab County, Utah, approximately one quarter of a mile from the town of Mammoth, Utah (hereinafter "mineral claims") for their gold and zinc potential. These mineral claims contain one fairly extensive mine or mining shaft called the Emerald Mine and two other mines, shafts, holes or "prospecting pits," the depths of which are currently unknown. For safety purposes, that is, to prevent trespassers from injuring themselves, the Emerald Mine has been fenced off and covered over with a wire or metal mesh by the Utah Abandoned Mine Reclamation Program. As a result, it is currently inaccessible. At the same time, the shaft collar is also partially blocked with debris and mine timbers.
We have an OTC Bulletin Board symbol which is TMGG.OB.
Having completed the first phase of our business plan and plan of operation that involved getting a comprehensive geology report on our claims completed, we have been in the position for sometime now of pursuing the second phase of our business plan. This is the phase in which we are attempting to obtain a joint venture mining exploration partner to finance and engage in the exploration of our patented mining claims.
For further information concerning the progress we have made towards fulfilling our overall business plan and plan of operation, reference is made to our Plan of Operation below. Reference is also made to our last Annual Report on Form 10-K filed in March 2009.
As we disclosed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2008 and previous reports filed on Edgar, we have had serious difficulty attracting interest in our mining claims over the last 4 years. Since this is NOT due to the enhanced prices of precious metals since the early 2000's, we have come to believe that this lack of interest is primarily due to the fact that the land ownership in the Tintic Mining District is very fragmented, meaning that ownership is held in the names of numerous corporations and individuals, many possibly having conflicting ownership rights and interests. At the same time, we believe that a serious mining company or joint venture mining partner would want to be able to tie up an extensive or large area or block of land. Fragmented land ownership therefore means that a mining company or joint venture partner would have to spend a lot of time and energy on land and title work and, when all is said and done, may not be able to lock up or amass a large block of land or contiguous claims. Accordingly, extensive land and title work in the overall area of our mineral claims is a significant expense, cost and drawback that a prospective joint venture mining partner may NOT be willing to assume.
We also believe that the significant EPA presence in the nearby Eureka, Utah, area, while it completes its Superfund clean up operations, may also have a negative effect or impact on a potential mining company or a joint venture mining partner, simply because they may fear that the EPA might require them to do remediation of other operators' contamination that they wouldn't otherwise be required to do if the EPA were not highly present and active in the area. These are the two basic reasons, we believe, why we have not yet attracted a joint venture mining exploration partner. There may be others.
Finally, the current state of the overall economy does not bode well, we believe, for the likelihood of our attracting a joint venture mining partner any time soon. For example, while a large international mining company known as Anglo-American commenced exploratory work in September 2008 at the north end of the Tintic Mining District, in a joint venture with Chief Consolidated Mining, a former operator in the District, this fact in and of itself does not mean that this same mining company would necessarily have any interest whatsoever in our 44 acres of mineral claims. See sequence of events No. 6 below in the discussion titled "Management's Plan of Operation" which discloses this acquisition transaction in more detail. In fact, during the previous quarter we learned that Anglo-American's exploration work was not successful, or not as successful as they wanted or expected, and that therefore, they have moved on or are considering moving on.
If we are unable to fulfill our business plan and plan of operation, we may be forced to look at other business opportunities, the form of which we cannot realistically predict at this time. This may include, however, but not be limited, to a change of control transaction whereby our four (4) insiders and affiliates sell their stock to persons with another direction for the Company, an amount of stock which currently represents slightly less than 80% of the Company's total issued and outstanding shares. If this occurs and if new people taking control of the Company did NOT want our mining claims or were concerned about potential liability to the Company for continuing to hold and own our mining claims, particularly with the EPA's current presence in the District, we do not know what we would then do with our mining claims. It is possible that the claims could be assigned out in exchange for limited indemnifications or in exchange for the excusing of Company debt, or for finder's fees on any such transaction, etc.
Selected Financial Data
Because we had no exploration or other operational mining-related activities during the quarter that resulted in revenues, selected financial data would not be particularly meaningful. Reference is thus made to our quarterly financial statements included in Item 1 above. All of our activities during the quarter were devoted towards locating a joint venture mining partner.
After paying bills that we had received during the quarter, the cash in our checking account on September 30, 2009, was $2,881. As of our quarter end, we owed $350 to our "in-house" accountant. We have also accrued $2,500 to our legal counsel for legal services rendered during our last quarter. These outstanding bills as of September 30, 2009, will show on our balance sheet as payables for the quarter so ended. We have since paid our "in-house" accountant. Other than the outstanding obligation to our legal counsel of $34,000 as of the quarter end, an amount we have accrued, we have no other outstanding bills or payables that we are aware of as of the date of this report.
In order to continue to fund the Company's working capital after September 30,
three (3) officers and a stockholder advanced us a total of $8,000 in July.
After paying our auditors and "in-house" accountant for the bills we received
as of the end of the quarter, we currently have $2,531 in our checking account.
This amount of working capital should satisfy our capital needs through the
beginning of next year.
Liquidity and Capital Requirements
Even with the additional $8,000 that was loaned or advanced to us from four (4) affiliates at the beginning of this third quarter, we still lack the necessary capital to implement a full-fledged mineral exploration program. Since our incorporation in Nevada in March 2004 and since the acquisition of our mineral claims from our then-parent corporation, our working capital has been funded by investments and advances from our officers and directors and one shareholder.
Given that we now have $2,531 in our checking account, we will hopefully be able to satisfy our cash requirements through the beginning of the 2010 year. We believe that within the next 12 months, we will either complete our business plan or, we will know by then what it will take to complete it. The ability to locate and "sign up" a joint venture partner or mining company partner of some kind has so far been unsuccessful, and will depend upon a variety of factors such as the anticipated price of gold and zinc over the next year or two, the cost of mining exploration at that time, the ability of a joint venture partner to tie up a lot of ground in the Tintic Mining District, the absence of future EPA clean up plans in the District, the ability of a joint venture mining partner to feel comfortable with what the EPA will require of them, and most importantly, the overall state of the economy, factors and circumstances that are beyond our control and which cannot be predicted with any certainty. We currently have no specific sources of financing, including bank, private lending sources, or equity capital sources. We also cannot assure anyone that we will be able to develop any joint venture partner sources in the future. So far we have been unsuccessful. Further, we are unable to guarantee that at the expiration of 12 months from now, that individual members of management will continue to advance us sufficient money to allow us to continue in our reporting obligations. We do not mean to imply, however, that individual members of management will NOT continue to advance us funds beyond the 12 months, particularly if there is likelihood that we will be able to complete our business plan if we continue beyond the next 12 months. As it is, we have become concerned that the prospects of fulfilling or carrying out our business plan look bleak. If that is indeed the case, we may have to explore other possibilities for the Company, the form of which we cannot now predict. If nothing else, we may have to significantly modify our business plan or take the Company in a completely different direction.
On the other hand, it is also conceivable that we can locate a joint venture partner within the next 12 months or, we might learn that we cannot locate a joint venture partner within that time frame. If management does not desire to loan or advance sufficient funds to continue beyond the next 12 months for the simple reason that the prospects of our business plan look bleak, we may be required to look at other business opportunities, the form of which we cannot predict at this time as to do so would be highly speculative on our part.
To implement our business plan and engage in an exploratory drilling program on our Emerald, Diamond and Ruby Claims, we will need substantial additional funding and expertise from a strategic mining partner or joint venturer. So far, we have exercised limited methods or plans of contacting and seeking out such possible joint venture and partnership candidates. As of the date of this Quarterly Report we have only contacted perhaps half a dozen large mining companies that we have learned might be interested in so participating. See discussion under "Management's Plan of Operation" below. At the same time, no assurance can be given that we can or will be able to enter into a joint venture and or other partnership relationship necessary to fund the exploration of our mineral claims as contemplated in our Plan of Operation below, namely, our proposed drilling exploration plan or program. At the
We have few assets and limited capital, with no operations and no current sources of income.
It is anticipated that we will require only limited capital to maintain our corporate viability and the funds necessary for this limited purpose will be provided by officers and directors for at least the next 12 months or longer. However, unless we are able to enter into a partnership or joint venture relationship with an experienced mining entity willing to finance our intended exploration, it is unlikely that we will be able to achieve our operational goals. In such event, management will be forced to look at other business opportunities, the form of which we cannot now predict.
In 2002, the EPA declared the Eureka, Utah, area, approximately 3 miles from us, as a "Super-Fund" site for lead contamination. The EPA is reputedly spending as much as $40 million or more in clean-up costs. These clean-up efforts, so we are told, should be completed within the next 2 years. Because our mineral claims are not in Eureka and because we never had a mill or significant mining dump of any kind on them, we believe that there is little likelihood that, among other reasons, the EPA would ever assess us for any historical pollution or contamination of any kind.
Management's Plan of Operation.
As per our agreement with Tintic-Utah, our former parent corporation, in consideration for the distribution of our shares to shareholders of Tintic-Utah on the record date of March 5, 2004, we have been conveyed the subsurface mineral rights on approximately 44 acres of land located in the heart of the Tintic Mining District of Juab County, Utah, near the town of Mammoth, Utah (subject to a 3% net smelter royalty in favor of an individual named Chase Hoffman). During the next twelve months, we will continue to attempt to identify and contract with a mineral exploration company that will agree to search for minerals that may underlie our Claims. During the time our search continues in progress, the small amounts of cash required to maintain our operations, as well as the costs associated with the identification of and contracting with a mineral exploration company partner, will be provided by what cash we now have on hand and if that money is exhausted, by our officers and directors. Our officers and directors have agreed to advance or loan us the money that is necessary for us to complete our work sequences identified below. At the same time, our officers and directors are NOT under any contractual obligation with the Company to finance us; they are doing so because they want to. We do NOT have any written agreement with them in this regard nor do we intend to enter into one. Future funding by our officers and directors may come from the exercise of options to purchase our common stock and/or through future agreements between us and our officers and directors negotiated on terms equivalent or better than those terms negotiated on an arms-length basis. As a result, we do not believe there will be the need to raise additional funds between now and the next 12 months, other than through our officers and directors, if and when required.
Management is NOT interested at this time in going to the expense or trouble of directly raising, on a secondary offering or private placement basis, either $517,000 or $2.141 million to engage in drilling exploration programs of our own and without the participation of a joint venture mineral exploration partner. This is because we lack the expertise and experience ourselves to implement and oversee such a large project. See the paragraph below titled "The Phased Nature of Our Planned or Proposed Exploration Program." We also believe and are informed that such a money raising effort would be very expensive in terms of the cost thereof and we would rather spend what limited resources we have on locating a mineral exploration joint venture partner. We also have no idea what securities brokerage firm, if any, would possibly be interested in underwriting such an effort, particularly in light of the recent "financial crisis" and current uncertain state of the overall economy. Since the increased price of precious metals starting in early 2004 would appear to have made the overall exploration environment more financing-friendly and based on the history of the Tintic Mining District, we believe that it makes far more sense to do what is necessary to attract an experienced and well financed mineral exploration partner or joint venturer. This is our basic plan of operation at the present time.
In order to attract mineral exploration company partners and pursue an exploration program of our mineral claims, we need a specific and realistic business plan for this purpose. We therefore hired Mr. Bruce Yeomans, our expert and consulting geologist, to prepare an extensive geology report. This task was finally completed in 2005. Because Mr. Yeomans' report provides a comprehensive evaluation of our properties, including exploration targets, we have included or summarized portions of such report below. Our plan to explore our mineral claims now focuses on, based on such report, not only evaluating certain specific exploration targets identified below but also on completing eight (8) separate work sequences identified below, the cost of which shall be borne by us with what capital we have. If not, current officers and directors have communicated their commitment to fund the cost of these work sequences, including the cost of paying future Edgarization, accounting and legal fees and expenses, all by making additional advances to us.
1) Locate the claim corners in the field so that property boundaries are known. (This step was accomplished over four years ago by our consulting geologist when we commissioned his geology report. If we need more specific or exact markers, we will hire a surveyor to do so. We anticipate that the cost would be between $1,000 and $2,000. As of now, and unless requested or required by a mineral exploration partner, we do not believe that this cost or expense will be necessary.)
2) Evaluate the status of adjacent mineral claims, so that investor interest will not be limited to the three claims we hold. Several of the mineral targets trend off of our claims. (The adjacent claims to which we refer are known as the Grand Central Claims. While we have not thoroughly evaluated the status of these adjacent claims, we know the owner and have been in discussions with the owner over the last several years. This individual, who is also a geologist, has indicated to us that he would be willing to work out a suitable arrangement with a mineral exploration partner, if we can bring one to the table. There is no cost associated with this step or sequence of events, as what information needs to be known about the Grand Central Claims and their geology can and would be supplied by the owner. Accordingly, this step or sequence is essentially complete.)
3) Collect additional surface rock samples, as indicated by surface mapping or inspection. If so indicated, sampling will be conducted in accessible portions of the scattered surface mine diggings and in areas of exposed hydrothermal alteration. Samples will be analyzed for gold, silver and "pathfinder" elements, including arsenic and barium. Anomalous areas at the surface may indicate "leakage" of hydrothermal fluids along faults and fault intercepts from potential mineralized zones at depth. These areas will be incorporated into a three-dimensional evaluation of the property for potential drill testing. (Based on what our consulting geologist tells us, we are not aware that rock samples are necessary to be obtained at this point. We believe that if an interested mineral exploration partner is interested in our mineral claims, they would likely want to do sampling themselves, as they would likely want to analyze the results themselves. Having said this, our geologist would charge us by the hour for sampling if necessary and then we would pay for assaying at a recognized assaying laboratory. This, we believe, would cost between $1,000 and $2,000. We are not aware that this step or work sequence is necessary at this time.)
4) Update our April 24, 2005, geology report if necessary as a result of any surface sampling. Contact and distribute the report to target groups familiar with high-grade underground mineral exploration ventures. (This report was authored by our consulting geologist and we know of nothing at this point that would require us to update it. Accordingly, there is no cost that we know of at the present time associated with this sequence of events or step. So far, we have distributed our report to several large mining companies, namely, two large U.S. mining companies and one large Canadian mining company headquartered in Toronto. Our legal counsel has also distributed the report to a Vancouver, Canada, mining company and also, to a London, England-based mining company. We do not believe it is appropriate to identify their names without their written consent.)
5) Keep abreast of ongoing EPA response activities in the District. (There is no cost associated with this step or work sequence and we intend to do it ourselves as an incident to our business. At the same time, our consulting geologist is aware of EPA and Utah Department of Oil, Gas & Mining (DOGM) responses in the district and he has indicated a willingness to communicate any changes to us if they are material to us and our Plan of Operation.)
6) Contact as many mining and mineral exploration companies as possible who we believe might be interested in partnering or joint venturing with us to explore our mineral claims. (This is a task that comprises the principal part of our business plan at this stage and we have been doing it in the ordinary course of our business for the last several years. In late 2006, we had limited discussions with one large U.S. mining company to whom we sent a copy of our geology report. In September of 2006, a project manager of this mining company accompanied us on a physical tour of our property. In mid-September 2008, during the end of the quarter, we learned that a major internationally diversified mining company headquartered in the United Kingdom known as Anglo American PLC, purchased some mining claim interests in the Tintic Mining District from Chief Consolidated Mining Co., a former operator in the District. The news reports are skimpy but it appears that the company sought to explore, and if justified, to then develop a porphyry copper-gold-molybdenum target. Upon learning this news, we have since endeavored to contact Anglo American to see if they would be interested in our claims and, in particular, a copy of our geology report, but, to date, we have heard nothing back.)
7) Conduct property tours with interested parties. (The only cost associated with this step is whether we would be accompanied by our consulting geologist. If so, we would pay him by the hour. The only additional cost is transportation. As stated above, during September of 2006, we took an employee, actually a project manager, of a large mining company on a tour of our mineral claims. Mr. Yeomans, our geologist, was kind enough to accompany us.)
8) Negotiate a mineral agreement to explore the mineral claims. (This task has obviously not been accomplished and
We have NOT identified any one potential mineral exploration partner. There are several large mining companies in the United States, Canada, Europe, Australia and elsewhere that we believe may be interested in our mineral claims. Accordingly, there would be no reason to target just one or two companies. As stated above, we have provided our geology report to several mining companies, Canadian, American and British and to date, none has expressed an interest in our claims.
In January of 2008, our president and chief executive officer had a discussion with another large mining company headquartered in Idaho but it turned out that this company was similarly NOT interested in the Tintic Mining District and thus, our properties.
As of the date of this report, we have had NO discussions with any mining or mineral exploration company about entering into a joint venture agreement of any kind or nature. Furthermore, based on our lack of success in this regard over the last 4 years, we are not particularly optimistic that we will in fact be able to locate and eventually enter into an agreement with a joint venture mining partner. As stated above, we are not sure why there is an overall lack of interest in the Tintic Mining District by the mining industry, given the fact that gold is now trading at above $1,000 per ounce, but that is the case. If this lack of interest in our claims continues, we will be forced to look at other opportunities for the Company, the form of which we cannot at this time predict.
Tintic Gold Mining Company Exploration Targets.
The following discusses certain specific and suggested exploration targets on our mineral claims that we currently believe would be suitable for exploration. We believe by identifying such targets, we have done significant work, in advance, on behalf of a potential or prospective mineral exploration partner or joint venturer. Our estimates of exploratory drilling costs, as set forth below, do not currently take into consideration increased costs or inflation since April 2005.
1. Background.
The limited past development and production to date from our claims is in part due to the fact that the stratigraphic (i.e., geology dealing with the earth's strata) and structural controls to ore formation were not well understood when the Emerald Mine was originally dug or excavated. The Emerald Mine exploration and most of the District's exploration and development work was completed (1880's to 1920's) before G. W. Crane ("Crane"), an engineer for U.S. Smelting and Refining, compiled the first district-wide mapping in 1930. U.S. Smelting and Refining owned and operated the Centennial-Eureka Mine, the largest producer of gold and copper in the District. After reaching an agreement with the numerous independent mine owners in the Main Tintic District, Crane was authorized to determine stratigraphic and structural controls to ore deposit formation by mapping each mine. For the first time in the District's history, but unfortunately after the District was into the end of its productive life, ore controls on mineralization that crossed property boundaries were determined. Centurion Mines Corporation, a former lessee of our mineral claims, built on Crane's work in the late 1980's and early 1990's, by having access to all of his underground mapping and sampling. Crane's ore controls were evaluated within the more newly developed understanding of the structural complexities of wrench fault systems, systems that are prevalent in the Tintic Mining District.
Exploration work relating to our Emerald Mine intersected scattered weak mineralization on all levels of the mine but not in large enough quantities to contribute to significant development or production. Favorable gold values were reported on the 600 foot level of the mine and were documented and evaluated by geologist, G.W. Crane during his District-wide ore controls evaluation. Crane felt that this mineralization was evidence of the southerly continuation of the Centennial Ore Channel mined in the Grand Central and Centennial-Eureka Mines. Crane wrote in an internal report to U.S. Smelting and Refining:
"The Emerald Mine happens to be at the extreme southern, or gold/copper end of the Gemini or Centennial Channel, the largest producer of five major ore zones, and for this and other reasons, is due to become a producer of ore consisting of gold. On the same fissure, to which recent developments in the Emerald Mine have been directed, ore bodies on the lower levels of the Grand Central Mine have their principle values in gold and copper, indicating the trend in the direction of the Emerald." (G. Crane, March 28, 1933).
2. Generalized Exploration Targets on the Tintic Gold Claims.
The majority of all Tintic Main District ore is preferentially developed within . . .
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