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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transaction period from to
Commission file number 1-316
INDEPENDENCE LEAD MINES COMPANY
-----------------------------
(Exact name of registrant as specified on its charter)
ARIZONA 82-0131980
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
P O BOX 717
WALLACE, IDAHO 83873
(Address of principal executive offices)
Registrant's telephone number,
including area code: (208) 753-2525
Securities registered pursuant to Section 12 (b) of the Act:
Common Non-Assessable Stock,
Par Value $1.00 per Share None
- ---------------------- -------------
Title of each class Name of each exchange
on which registered
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of December 31, 2001, the aggregate market value of the
voting stock held by non-affiliates of the registrant was
$255,738.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of December 31, 2001, there were 4,175,357 shares outstanding
of the registrant's $1.00 par value common stock; authorized
common shares of 5,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference in the
indicated parts of this Form 10-K: NONE
INDEPENDENCE LEAD MINES COMPANY
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2001
----------------
TABLE OF CONTENTS
PART I
Page
Item 1. Business . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . 2
Item 3. Legal Proceedings . . . . . . . . . . . . . 2
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . 3
PART II
Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters . . . . . . . 3
Item 6. Selected Financial Data . . . . . . . . . . . 4
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . 4
Item 8. Financial Statements and Supplementary Data . 4
Item 9. Disagreements on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . 4
PART III
Item 10. Directors and Executive Officers of the
Registrant . . . . . . . . . . . . . . . . . . 5
Item 11. Executive Compensation . . . . . . . . . . . . 5
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . 6
Item 13. Certain Relationships and Related
Transaction . . . . . . . . . . . . . . . . . 6
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K . . . . . . . . . . . 6
Exhibit Index . . . . . . . . . . . . . . . . . . . . . 7
Schedule of Property, Plant and Equipment . . . . . . . 8
Index to Financial Statements . . . . . . . . . . . . . 9
Signature Page . . . . . . . . . . . . . . . . . . F/S-6
[The balance of this page has been intentionally left blank]
(i)
INDEPENDENCE LEAD MINES COMPANY
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2001
PART I
-------
Item 1. Business.
- -------------------
Independence Lead Mines Company (the "Company") is a corporation
organized under the laws of the State of Arizona on September 16,
1929. The Company is the owner of fifteen patented and seventeen
unpatented mining claims. This claim group (the "property") is
situated Northwest of Hecla Mining Company's Lucky Friday Mine in the
Coeur d'Alene Mining District, Shoshone County Idaho. Adjacent is the
community of Mullan and U.S. Interstate Highway 90.
Pursuant to the terms of an agreement dated February 8, 1968, among
Hecla Mining Company ("Hecla"), Day Mines, Inc. ("Day"), Abot Mining
Company ("Abot") and the Company (the "Unitization Agreement"), the
Eastern portion of the Company's Property (approximately five-eighths
of the total area of the Property) was unitized with certain adjoining
and near-by properties owned by the Day and Abot into a unitized area,
consisting of 55 claims, (known as the "DIA Area"). Under the terms of
the Unitization Agreement, ores and minerals in place are owned by the
parties thereto in the following percentages:
Day (now Hecla by merger) 47.70%
Independence 46.30%
Abot (now Hecla by purchase) 6.00%
By a second agreement also dated February 8, 1968, (the "Lease
Agreement"), Hecla leased the DIA Area for a period of fifty (50)
years, subject to a 30-year extension, for the purpose of conducting
mineral exploration and development of the DIA Area and mining such
commercial ore as may be discovered in the DIA Area by Hecla. Since
inception of the Lease Agreement, Hecla has performed exploration and
development work on the DIA Project at a cost of $31,241,930 at
yearend December 31, 2001. Ore production for 2001 was 185,781 tons
and averaged 15.33 ounces silver, 8.48 % lead and 1.60% zinc. Total
Proven and Probable Ore Reserves as of January 1, 2001 were 953,820
tons assaying 18 ounces silver per ton, 9.7% lead and 1.3% zinc.
Reserves in all categories were 6,178,450 tons averaging 9.6 ounces
silver, 5.4% lead and 2.3% zinc. Gold Hunter veins in all categories
contain 59,515,413 ounces silver, 33,508,728 units lead and 14,312,746
units zinc.
The Lease Agreement provides that all costs and expenses incurred in
the exploration, development and operation of the DIA Area are to be
paid by Hecla subject to the right of Hecla to be reimbursed for such
costs and expenses, together with all advance royalties paid, out of
any future net profits realized from the operation of the DIA Area.
After recovery of Hecla's costs and expenses and amounts paid as
advance royalties, and the establishment of a three-month working
capital reserve, net profit royalties are to be paid to the Company
and the other property owners as follows:
Day (now Hecla by Merger) 19.08%
Independence 18.52%
Abot now Hecla by purchase) 2.40%
Hecla, as the lessee, will retain the remaining sixty percent (60%) of
any net profits realized. Under the terms of the Unitization
Agreement, one-half of the first net profit/royalties received by the
Company are to be paid over to Day (now Hecla) until Day recovers the
sum of $450,000. The relationship of the parties to the Agreement may,
under certain circumstances, be converted to a joint venture at the
option of the property owners, where after the property owners would
become participating, non-operating working interest owners who would
share profits and expenses in connection with the DIA Area in the same
ratio as exists pursuant to lease arrangement with Hecla described
above.
Page 1
Until Hecla commences to pay net profit royalties and during such
period as the Lease Agreement is in effect, Hecla is obligated to pay
an advance royalty to the Company of $750 per month subject to
increase to $1,500 when production for the DIA Area exceeds 2,000 tons
per month.
Pursuant to the terms of the February 8, 1968, agreements, Hecla will
be obligated to pay a royalty of 18.52 percent of defined net profits
after Hecla has recouped its costs to explore and develop this
property from the new discovery to Independence Lead Mines Company.
The Company has no patents, licenses, franchises or concessions, which
are considered by the Company to be of importance. The business is not
of a seasonal nature. Since the potential products are traded in the
open market, the Company has no control over the competitive
conditions in the industry. There is no backlog of orders.
There are numerous Federal and State laws and regulation related to
environmental protection, which have direct application to mining and
milling activities. The more significant of these laws deal with mined
land reclamation and wastewater discharge from mines and milling
operations. The Company does not believe that these laws and
regulations as presently enacted will have a direct material adverse
effect on its operations.
The current officers and directors of the Company serve without
compensation and are not considered by the Company to be employees.
The western portion of the Company's property is not under the DIA
Area agreement. West Independence, as it is called, consists of 10
patented mining claims of which four (4) claims are partly included in
the DIA Area agreement. Patented acres owned are listed below.
West Independence Acres 81.362
East Independence Acres 91.808
------
Total Acres 173.170
Since June 30, 1999 the Company has experienced substantial
differences with the Lessee. To establish a greater understanding of
the DIA Project, Independence commissioned Mine Systems Design, Inc.
to conduct an overview of the Project. Under Hecla's management, as of
December 31, 2001 more than 944 tons have been mined and milled while
incurring more than $15,000,000 of additional DIA Project debt. We
believe the record indicates the DIA Project was not viable to
undertake with the mining method chosen and the existing economic
conditions, and did not justify the startup of a large mining
operation on the Lessor's property. Because we believe this action by
Hecla's management resulted in the waste of the resource, the Company
gave written notice to Hecla Mining Company on March 1, 2002 of
termination of the February 8, 1968 Lease Agreement and called for
arbitration under the terms of the Agreement.
In 1999 the Company acquired 38,436 shares on the open market at an
average price of $0.49 per share, and in 2000 the Company acquired
94,800 shares at an average price of $0.38 per share. These shares are
carried as treasury stock by the Company.
Item 2. Properties
- -------------------
By an agreement dated February 8, 1968 among the Company and the
owners of other adjacent or neighboring mining properties, the Company
and the owners of the other properties entered into certain
agreements, the general effect of which was to establish certain
vertical boundaries between their respective properties and to waive
certain existing or potential claims to extralateral rights to veins
or ores found outside of the vertical boundaries of their respective
properties. The Property of the Company is subject to this agreement.
Pursuant to existing law, the Company is required to pay $100 per
claim as a rental fee in order to maintain possessory title to such
properties. This requirement has been performed by Hecla Mining
Company under the terms of the February 8, 1968 agreements described
in Item 1 of this report.
Page 2
Further information regarding the Properties of the Company is set
forth in this report under "Item 1. Business" and is incorporated
herein by reference.
Item 3. Legal Proceedings
- -------------------------
There are no legal proceedings pending. The Company has retained the
Boise, Idaho law firm of Marcus, Merrick, Montgomery, Christian and
Hardee in connection with the notice of termination of the 1968 Lease
Agreement issued to Hecla Mining Company on March 1, 2002. It is
anticipated that arbitration proceedings will begin in the first or
second quarter of 2002.
Item 4. Submission of matter to a Vote of Security Holders
- -------------------------------
There was no shareholder meeting held in 2001.
PART II
-------
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
- -------------------------------
(a)The market price ranges of the Company's common stock during each
quarter of the years 2001 and 2000, respectively, were as follows:
2001 2000
---- ----
High Low High Low
---- --- ---- ---
1st Quarter 0.10 0.10 0.45 0.45
2nd Quarter 0.10 0.10 0.50 0.40
3rd Quarter 0.11 0.10 0.40 0.10
4th Quarter 0.11 0.07 0.10 0.10
(b)Approximate Number of Equity Security Holders.
- --------------------------------
Title of Class (1) Number of Record Holders December 31, 2001
- ----------------- ---------------------------------
Common non-assessable Approximately 2,300 (1)
Capital stock, par value
$1.00 per share
- -------------------------
(1)Included in the number of shareholders of record are shares held in
"nominee" or "street" name.
(c) No dividends were paid by the Registrant in 2001 or 2000, and the
Company has no plans to pay a dividend in the foreseeable future.
[The balance of this page has been intentionally left blank.]
Page 3
Item 6. Selected Financial Data
- --------------------------
Selected Income Statements Data:
Year ended December 31,
------------
2001 2000 1999 1998
---- ---- ---- ----
Net Revenues -0- -0- 84,688 3,592
Net Income (Loss) (33,225) 305,473 (121,391) (29,023)
Net Income (Loss)
Per share (0.01) 0.07 (0.03) (0.01)
Selected Balance Sheets Data:
Year ended December 31,
------------
2001 2000 1999 1998
---- ---- ---- ----
Current Assets 170,180 199,232 60,086 8,883
Current Liabilities 11,462 26,039 105,065 105,185
Working Capital 158,718 173,193 (44,979) (96,302)
Total Assets 3,303,507 3,332,559 3,296,413 3,244,105
Deferred Income 356,000 337,250 301,250 283,250
Long-Term Debt -0- -0- -0- -0-
Stockholders' Equity 2,936,045 2,969,270 2,890,098 2,855,670
Item 7. Management's Discussion and Analysis of Financial Condition
and Result of Operations.
- --------------------------------
LIQUIDITY. The liquidity of the Company decreased over the past year,
primarily due to normal expenses of operation with no offsetting
revenue. Current assets of the Company consist primarily of cash,
which decreased by $29,0523 from 2000.
CAPITAL RESOURCES. The Property of the Company is leased to Hecla
Mining Company. Capital improvements are to be paid for by Hecla
pursuant to the terms of the leases. The Company has no long-term
debt.
RESULTS OF OPERATIONS. The Company is in the exploratory and
development stage and has no operations. General and administrative
costs in 2001 decreased by $6,909 over 2000 due to reduced activity
following the 2000 legal settlement with H.F. Magnuson & Co. The
Company realized no revenue from operations and received $7,167 in
interest income. The Company reported a net loss of $33,225 after
provision for income taxes.
Item 8. Financial Statements and Supplementary Data.
- --------------------------------
The Company's financial statements appear elsewhere in this report,
beginning at page F/S-1, following page 9.
Item 9. Disagreements on Accounting and Financial Disclosure.
- --------------------------------
Not applicable.
Page 4
PART III
--------
Item 10. Directors and Executive Officers of the Registrant.
- ------------------------------
Name of Executive
Officers and Directors Brief profile of
and Position Held Age Officers and Directors
- ---------------------- --- ----------------------
Bernard C Lannen 65 Semi Retired Director of Lucky
President and Director Friday Extension Mining Company
Wayne L Schoonmaker 64 Certified Public Accountant,
Secretary / Treasurer Secretary/Treasurer of Hanover
Gold Company Inc, Sterling Mining
Company, and Metalline Mining Co
Forrest G Godde 85 President of Corporate Ranches
Director in California and Nevada, Director
of Mineral Mountain Mining
Robert Bunde 63 Semi-retired farmer with investments
Director in the mining field
Gordon Berkhaug 67 Management of real estate investments
with experience in the mining field
The by-laws of the Company provide that the Directors serve until the
next annual meeting of shareholders or until their respective
successors have been duly elected and qualified. Officers serve at the
discretion of the Board of Directors.
Item 11. Executive Compensation
- ------------------------
The directors and officers of this company are not considered
employees. There was no remuneration paid to any of the directors and
officers of this company during the fiscal year ended December 31,
2001, other than the payment of $765 to the Treasurer for accounting
services.
No retirement benefit, bonus or other remuneration plans are in effect
with respect to the Company's officers and directors.
The Company has no standard or other arrangements for compensating
directors.
Page 5
Item 12. Security Ownership of Certain Beneficial Owners and
Management
- -----------------------------
To the knowledge of the Company, no person beneficially owned more
than five percent (5%) of any class of the Registrant's voting
securities as of December 31, 2001.
The following tabulation shows the beneficial ownership's of the
Company's officers and directors in the securities of the Company as
of March 1, 2002:
Shares of Approximate
Common Stock Percentage of
Name Beneficially Owned Class
---- ------------------ ------------
Bernard C. Lannen 201,182 4.82
Wayne L. Schoonmaker 4,000 0.10
Forrest G. Godde 95,000 (F1) 2.28
Robert Bunde 159,500 3.82
Gordon Berkhaug 62,275 1.49
All directors and executive officers of the Company as a group (5
persons in a group) own 521,957 shares or approximately 12.50 percent
of the Company are outstanding voting securities.
(FN1) Includes 45, 000 shares that represent Mr. Godde's 50% interest
in the Godde 1980 Trust.
Item 13. Certain Relationships and Related Transaction
- --------------------------------
NONE.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
- ---------------------------------
(a)1. Financial Statements
See index to Financial Statements at page 9 of this report
2. Financial Statement Schedules
V - Statement of Property, Plant and Equipment, Page 8.
Other financial statement schedules are omitted because of
conditions under which they are required, or because the
required information is given in the financial statements or
notes thereto.
(b) The company filed its report on Form 8-K during the last quarter
of 1992.
(c) Exhibits
No additional exhibits are filed as a part of this report.
The Exhibit Index appears at Page 7 of this report.
Page 6
EXHIBIT INDEX
Exhibits
3.1 Articles of Incorporation of Independence Lead Mines, Inc.,
as amended, previously filed as Exhibit 3.1 to form 10-K for
1983 and incorporated by reference herein.
3.2 Bylaws of Independence Lead Mines Company, as amended,
previously filed as Exhibit 3.2 to form 10-K for 1983 and
incorporated by reference herein.
10.1 Unitization Agreement dated February 8, 1968 among Day
Mines, Inc., Independence Lead Mines company and Abot Mining
Company, previously filed as Exhibit 10.1 to Form 10-K for 1983
and incorporated by reference herein.
10.2 Agreement dated February 8, 1968 among Hecla Mining
Company, Day Mines, Inc., Independence Lead Mines Company and
Abot Mining Company, previously filed Exhibit 10.2 to Form 10-K
for 1983 and incorporated by reference herein.
10.3 Agreement dated February 8, 1968 among Independence Lead
Mines Company, Day Mines, Inc., Abot Mining Company, Wall Street
Mining Company, Hunter Creek Mining Company, Lucky Friday
Extension Mining Company, Hecla Mining Company and the Bunker
Hill Mining Company relating to extralateral and intralimital
rights to mining claims, previously filed as Exhibit 10.7 to
Form 10-K for 1983 and incorporated by reference herein.
[The balance of this page has been intentionally left blank.]
Page 7
INDEPENDENCE LEAD MINES COMPANY
(AN EXPLORATION STAGE COMPANY)
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
---------------------------------------
Balance, Balance
Beginning Other End of
of Year Addition Retirements Changes Year
------- -------- ----------- ------- -------
December 31, 2001
Equipment - - - -
----- ----- ---- -----
Mining Property 3,945,407 - - 2,945,407
Less deferred credits 337,250 18,750 - 356,000
------- ------ ---- -------
Net Total 2,608,157 (18,750) - NONE 2,589,407
======== ====== ==== ==== ========
December 31, 2000
Equipment - - - -
----- ----- ---- -----
Mining Property 2,945,407 - - 2,945,407
Less deferred credits 319,250 18,000 - 337,250
------- ------ ---- -------
Net Total 2,626,157 (18,000) - NONE 2,608,157
======== ====== ==== ==== ========
December 31, 1999
Equipment - - - -
----- ----- ---- -----
Mining Property 3,048,407 - - 3,048,407
Less deferred credits 301,250 18,000 - 319,250
------- ------ ---- -------
Net Total 2,747,157 (18,000) - NONE 2,729,157
======== ====== ==== ==== ========
Page 8
INDEX TO FINANCIAL STATEMENTS
Filed as part of the Annual Report Form 10-K
December 31, 2001
FINANCIAL STATEMENTS: Page
Balance Sheets, December 31, 2001 and 2000 . . . . . . F/S-1
Statement of Operations and Deficit Accumulated
During The Exploratory Stage for the Years Ended
December 31, 2001, 2000 and 1999 . . . . . . . . . . . F/S-2
Statement of Cash flows, for the years ended
December 31, 2001, 2000 and 1999 . . . . . . . . . . . F/S-3
Notes to Financial Statements . . . . . . . . . . . . . F/S-4
The Company's financial statements are unaudited in reliance
upon Section 210.3-11 of Regulations S-X adopted by the
Securities and Exchange Commission.
[The balance of this page has been intentionally left blank.]
Page 9
INDEPENDENT LEAD MINES COMPANY
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET - UNAUDITED
DECEMBER 31, 2001 AND 2000
--------------------
ASSETS
2001 2000
---- ----
CURRENT ASSETS
Cash 167,674 196,726
Royalties Receivable 1,500 1,500
Investments 2,908 2,908
------ ------
Total Current Assets 170,180 199,232
------- -------
PROPERTY AND EQUIPMENT, at cost
Equipment - -
Less accumulated depreciation - -
----- -----
Mining property 2,945,407 2,945,407
------- -------
2,945,407 2,945,407
--------- ---------
OTHER ASSETS
Unrecovered exploration costs 187,920 187,920
------ ------
Total Assets 3,303,507 3,332,559
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
2001 2000
---- ----
CURRENT LIABILITIES
Accounts payable 10,926 12,389
Accrued Expenses 536 13,650
----- -----
Total current liabilities 11,462 26,039
------ ------
DEFERRED INCOME 356,000 337,250
------- -------
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value;
authorized 5,000,000 shares;
issued 4,308,793 shares at
12/31/00 and at 12/31/01 4,308,793 4,308,793
Treasury Stock (55,290) (55,290)
Additional Paid in Capital (deficit) (108,293) (108,293)
-------- --------
4,231,004 4,250,120
Less deficit accumulated during
the Exploration stage (1,209,165) (1,175,940)
-------- --------
Total Stockholders' Equity 2,936,045 2,969,270
======== ========
Total Liabilities
& Stockholders' Equity 3,303,507 3,332,559
======== ========
The accompanying notes are an integral part of these financial
Statements.
F/S-1
INDEPENDENT LEAD MINES COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE EXPLORATORY STAGE
UNAUDITED
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, 1999
-----------------------------------------------
2001 2000 1999
---- ---- ----
Revenue $ 0 $366,877 $83,500
---- ------ ------
Expenses
Management and Director fees 0 5,000 11,500
Licenses and fees 630 217 324
Office expense 1,419 716 250
Office services 600 600 500
Shareholder Relations 5,592 3,781 1,340
Consulting 11,226 17,772 0
Transportation 1,962 5,766 0
Accounting 853 615 1,590
Legal 15,714 10,438 182,826
------ ------ ------
Total Expenses 37,996 44,905 198,330
------ ------ ------
Loss from Operation (37,996) (44,905) (114,830)
Other Income and (Expense)
Disposition of Assets 0 (1,902) 0
Interest, net 7,167 7,875 (6,561)
Legal settlement 0 358,085 0
Total Other Income 7,167 364,058 (6,561)
Net Income (Loss) before
Income Taxes (30,829) 319,153 (121,391)
Provision for income taxes (2,396) (13,680) 0
----- ----- -----
Net Income (Loss) (33,225) 305,473 (121,391)
DEFICIT, accumulated during the
Exploration stage,
beginning of period (1,175,940) (1,481,413) (1,360,022)
DEFICIT, accumulated during the
Exploration stage,
end of period (1,209,165) (1,175,940) (1,481,413)
-------- -------- --------
GAIN (LOSS) PER SHARE (0.01) 0.07 (0.03)
Weighted average common
Shares outstanding 4,175,357 4,225,757 4,351,675
The accompanying notes are an integral part of these financial
statements.
[The balance of this page has been intentionally left blank.]
F/S-2
INDEPENDENT LEAD MINES COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS - UNAUDITED
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, 1999
------------------------------------
2001 2000 1999
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) (33,225) 305,473 (121,391)
Adjustment to reconcile net Loss to
net cash provided by Operating Activities:
Increase (decrease) in cash due to changes
in assets and liabilities:
Receivable 0 0 0
Accounts payable (1,463) (16,322) 22,378
Deferred income 18,750 18,000 18,000
Accrued Expense (13,114) (6,730) 7,749
Advances Payable 0 (86,100) 0
------ ------ -----
Net cash used by Operating Activities 4,173 214,321 (73,264)
------ ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of land 0 103,000 0
Retirement of director's shares 0 (48,000) 0
Repurchase and retirement of common stock 0 (1,500) 0
Repayment of shareholder loans 0 (42,000) 0
Net borrowing on short-term advances 0 0 42,000
---- ----- -----
0 11,500 42,000
---- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Company's Capital Stock - Treasury 0 (36,295)(19,116)
Purchase of Investments 0 1,902 (2,908)
---- ----- -----
0
(34,393)(15,562)
--- ------ -----
Net increase (decrease) in cash (29,052) 191,428 (50,380)
CASH, beginning of year 196,726 5,298 55,678
CASH, end of year 167,674 196,726 5,298
===== ====== ====
Disclosure of Accounting Policy-
For years ended Dec. 31, 2001, 2000, and
1999, the company had no cash equivalents.
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
2001 2000 1999
---- ---- ----
Interest paid 17 916 0
Taxes paid - State of Idaho 5,310 30 30
Federal 10,191 0 0
The accompanying notes are an integral part of these financial statements.
F/S-3
INDEPENDENT LEAD MINES COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
------------------------------
Note 1 - Company business - The Company was incorporated under
the laws of the State of Arizona on September 16, 1929.
The Company is presently in the exploratory stage.
Note 2 - The significant accounting principles and practices of
the Company are as follows:
a. The financial statements are prepared on the accrual
basis of accounting.
b. The Company depreciated its equipment on the straight-
line method over their estimated useful life of 7
years. The Company currently has no depreciable
property.
c. Earning per share have been computed using the weighted
average of shares outstanding during the period.
Note 3 - Company property - The Company has 15 patented and 17
unpatented claims situated in the Hunter Mining
District, Shoshone County, Idaho. On February 8, 1968,
the Company entered into an agreement with Day Mines,
Inc., Abot Mining Company and Hecla Mining Company.
Certain properties of the four companies were combined
for purposes of exploration and development. These
properties were referred to as the DIA Area. The DIA
Area consists of 9 patented and 14 unpatented claims of
Independence Lead Mines Company. Hecla Mining Company
is the exploring and developing company. The DIA
agreement allows Hecla Mining Company to recover all of
its exploration and development cost, advance royalties
paid, and to build a three months' reserve for working
capital prior to splitting profits. Independence is to
receive 18.52% of the profits, and under the terms of
the DIA agreement the Company has been receiving an
advance of $1,500 for each month 2,000 tons of ore is
mined. In March 2002 the Company notified Hecla Mining
Company that it considers the DIA lease terminated and
as a result will no longer accept advance royalty
payments.
Note 4 - In addition to cash costs in the amount of $23,302, the
amount reflected in the balance sheet as the cost of
mining claims reflects the par value assigned to
3,024,000 shares of stock issued for $3,034,000. The
underlying cost basis of the mining claims is unknown
and unobtainable. Since it was an accepted accounting
practice at the time of the transaction, all subsequent
financial statements have used the par value of the
shares issued as the cost basis of the mining claims.
The Company has considered revaluation of the mining
properties, but feels that to revalue them at an amount
that has no basis would be misleading. The Company
feels that the claims are of value, as Hecla Mining
Company has continued with its lease since 1968 and is
currently conducting mining operations on the property.
F/S-4
Note 5 -As shown in the financial statements, the Company
incurred net loss of $33,225 during the year ended
December 31, 2001, a net income of $305,473 during the
year ended December 31, 2000, and a net loss of $121,391
during the year ending December 31, 1999. The income for
the year 2000 was a one-time benefit and the Company has
no continuing source of cash. These factors indicate
doubt as to the ability of the Company to continue
business on a going concern basis.
The financial statements do not include any adjustments
relating to the recoverability of recorded asset amounts
or the amounts and classification of liabilities that
might be necessary should the Company be unable to
continue in existence.
Note 6 -Statements of income, cash flows, and shareholders'
equity since the inception of the Company, September 16,
1929, through December 31, 2001 have not been presented
due to the unavailability of past records. Generally
accepted Accounting principles require that such
statements be presented when financial statements
purport to present financial position and results of
operations for an exploration stage company.
[The balance of this page has been intentionally left blank.]
F/S-5
SIGNATURES
Pursuant to the requirement of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be sign on its behalf by the undersigned, thereunto duly
authorized.
INDEPENDENCE LEAD MINES COMPANY
By: /s/ Bernard C. Lannen
-----------------------
Bernard C. Lannen, its President and
Chief Administrative Officer
Dated: March 22, 2002
By: /s/ Wayne L. Schoonmaker
------------------------
Wayne L. Schoonmaker, its Principal
Accounting Officer
Dated: March 22, 2002
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and as
of the date indicated.
By: /s/ Bernard C. Lannen By: /s/ Wayne L. Schoonmaker
--------------------- ------------------------
Bernard C. Lannen Wayne L. Schoonmaker
Director Secretary and Treasurer
Dated: March 25, 2002 Dated: March 25, 2002
By: /s/ Forrest G. Godde By: /s/ Gordon Berkhaug
--------------------- ------------------------
Forrest G. Godde Gordon Berkhaug
Director Director
Dated: March 25, 2002 Dated: March 25, 2002
By: /s/ Robert Bunde
---------------------
Robert Bunde
Director
Dated: March 25, 2002
F/S - 6