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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number:
June 30, 1998 2-99518-D
Colorado 74-2446999
(State of incorporation) (I.R.S. employer identification
number)
GOLD HILL CORPORATION
2233 West Lindsey
Suite 117
Norman, Oklahoma 73069
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code:
(405) 329-0930
Securities registered pursuant to Section 12 (B) of the Act:
Title of each class: None Name of each exchange
on which registered:
None
Securities registered pursuant to Section 12 (G) of the Act:
Common Stock, $0.002 Par Value (Title of each class)
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 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.
___XXX_____ ____________
Yes No
The number of shares of the common stock of the registrant outstanding as of June
30, 1998:
4,682,322 shares
PART I
ITEM 1. BUSINESS
Results of Operations.
Earnings and Cash Flows from Operating Activities. For the fiscal year ended
June 30, 1998, Gold Hill Corporation ("the Company") realized a net loss which is detailed
in the financial section of this report. The decrease in earnings and cash flows reported
for the period was due, in part, to drilling and carrying costs of the Nevada gold
project.
Summary of Business: 1997-98.
Nevada Gold. The company is continuing its search for Carlin type gold deposits
in the Carlin-Elko area of northern Nevada. This general area of Nevada contains prolific
and extensive gold deposits which are among the most important in the world. The
deposits appear to occur in trends such as the Battle Mountain and Carlin Gold Trends,
although there are several important gold mines off the trend. Barrick Gold is one of the
main producers on the Carlin Trend with its Goldstrike open pit mine and its Meikle deep
underground mine. Newmont Gold is also present on the trend with its Gold Quarry,
Genesis, and other mines. Barrick produced over 2,000,000 oz. of gold during 1997 from
its operations in the area. The potential for new discoveries is considered high in
northern
Nevada. The Carlin Trend alone has proven reserves exceeding 80 million ounces.
Because of this potential, Gold Hill Corporation has developed an exploration
program with the goal of discovering a Carlin-type deposit or trend. To date, Gold Hill
has
assembled around 10,000 acres of mining claims and ranch lands located about 20 miles
easterly of Barrick's Goldstrike Mine and 20 miles northerly of Elko, Nevada. During the
summer of 1996, Gold Hill completed Phase One of its drilling program on the Giant
claims to test the thickness of the barren volcanics that cover and conceal the underlying
sedimentary host rocks. Drilling revealed a "window" or structure considered favorable
for the occurrence of gold. A deep hole was drilled in the Fall of 1996 in the "window" to
a depth of about 1700 ft. No gold was encountered but the type of rock was considered
favorable for gold. Sedimentary rocks were encountered at a depth of approximately 800
feet.
During 1997, four relatively deep holes (one to 1,800 feet) were drilled on the
Coyote claims. However, the thick volcanics were not penetrated. During the spring and
summer of 1998, three holes were drilled on the Giant claims in the "window" area. Two
of the three holes penetrated the volcanics and into the underlying limestones which are
considered favorable host rocks for gold deposition. One of the holes (Hole G9)
encountered anomalous gold at the top of the limestone sequence on an old erosional
surface suggesting that an eroded deposit could be nearby. Warm geothermal waters
were also encountered in the hole, another favorable indication that an ore deposit could
be nearby. This hole was stopped at a depth of 1,330 ft because the drill rig had reached
its depth limit. The drill hole was located over a strong radiometric anomaly. Another
hole
is planned to be drilled during late fall of 1998, depending upon the availability of a rig
capable of reaching a depth of 2,000 feet if necessary. The hole will be over the same
strong radiometric anomaly, but hopefully where mineralization could be much shallower.
So far Gold Hill has been able to retain full working interest in the property without
partners and would thereby be in a good position to advance company growth in the event
of a discovery.
Oil and Gas Prospects
Clearview Field, Oklahoma. The first gas sales were made in January, 1995, from
two small wells. Further attempts to expand the field have been mostly unsuccessful.
These two discovery wells have since been plugged. A third gas well was completed in
early 1997, but its production has declined. Gold Hill has disposed of its interest in the
field.
Other Prospects. Other areas are being explored for oil prospects, including east
central Oklahoma and central Texas. Several prospects have been identified and leased
in Oklahoma. A test hole is currently being considered. The prospects appear to be quite
significant.
General Operations. Gold Hill will continue its conservative policy of avoiding debt
and maintaining very low overhead costs. No salaries will be paid or allowed to accrue
at this time, nor will Gold Hill be charged for the use of office space currently provided
by
its principals.
Private Placement. Gold Hill is continuing to make a private placement of its
common stock in order to finance a portion of the costs of the projects described above.
Competition and Risks. The U.S. oil and gas industry has suffered an economic
decline that has resulted in reduced activity and widespread business failures. The
business environment is very competitive, and there are a number of significant risks
associated with oil and gas exploration and production, including operational as well as
exploration.
Gold Hill Corporation intends to seek high-risk, high-potential prospects as well as
lower-risk, lower-potential development ones. However, the major effort will be towards
wildcat prospects with potential of 1,000,000 bbls or greater.
Regulation. The domestic exploration for mineral, including oil and gas, reserves
is subject to various state and federal environmental laws, rules, and regulations.
Operators in the industry are subject to the Clean Water Act and damages which
could arise out of environmental pollution.
Corporate History. Gold Hill Corporation is an exploration company focused on
large wildcat major oil, gas, and gold prospects, which if successful will significantly
impact
upon the value of the Company's stock. In addition to the Nevada Gold prospect, Gold
Hill is active in oil and gas exploration.
Although Gold Hill is a public company, it is considered to be a startup company
and its stock does not presently trade. Management's policy is to withhold stock trading
until an important discovery is made.
Gold Hill's management is comprised of experienced and successful explorationists
who are qualified to carry forth the goals and aspirations of the company. The primary
goal of the company is to discover a major deposit while avoiding debt. At the same time,
the company is focusing on retaining a large interest in each prospect so that a discovery
will have a dramatic impact on stock value to the benefit of the shareholders.
Gold Hill's executive and operations offices are located in Oklahoma at 2233 West
Lindsey, Suite 117, Norman, Oklahoma 73069 (telephone 405-329-0930). Unless the
context otherwise requires, the term "Gold Hill" as used herein refers to Gold Hill
Corporation.
ITEM 2. PROPERTIES
Oil and Gas Properties. Geological investigations are continuing on several
prospects,
and oil and gas lease acquisition has been initiated.
Mining Properties. Gold Hill is continuing to evaluate gold prospects in Nevada
and has
acquired mining leases in Elko County, near the Carlin Trend, one of the richest gold
mining regions of the world.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings, to which Gold Hill is a party or of which any
of its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual shareholders meeting for the fiscal year ending June 30, 1998
will be
held in the month of December, 1998. At that time, the 1998 directors' meeting
will be held, and officer elections will take place. Until then, the officers
elected
during the 1997 meeting will continue to serve. The following was discussed and
agreed upon at the 1998 directors' meeting held at Norman, Oklahoma:
1) Earl W. Smith was nominated and elected Chairman of the Board of Directors for
the
year ending June 30, 1998.
2) The following executive officers were elected for the year ending June 30,
1998:
Earl W. Smith (1) 71 President and
Director
T. J. Simek (2) 56 Vice-President
and Director
Paul W. Smith (3) 38 Director
Susan Nash, Ph.D. (4) 40 Secretary-
Treasurer
(1) Earl W. Smith, President and Director: Mr. Smith has been actively involved in
geological exploration and development since 1954, after receiving B.S. and M.S. degrees
in Geology from the University of Oklahoma. He served as regional exploration geologist
for Samedan Oil Corporation from 1954-1961. In addition to exploration geology in both
mining and the oil industries, Mr. Smith possesses corporate management experience,
serving as the president of Siskon Corporation, a public company engaged in mining
exploration, from 1970-1981. Since 1981, he has been a successful independent
geologist.
(2) T.J. Simek, Vice President and Director: Mr. Simek has been engaged in the oil and
gas industry since 1959, gaining expertise in virtually every aspect of drilling and
completion operations. In addition to field operations management, Mr. Simek is actively
involved in land acquisition and leasing. Since 1978, Mr. Simek has served as the
president of Simek Oil Properties, Inc., a private company engaged in oil drilling,
completing, and producing.
(3) Paul W. Smith, Director: Mr. Smith has developed and supervised geological and
geophysical field investigations for oil and gas, as well as gold exploration and
development. Further, he has developed computer modelling programs that result in more
accurate processing of gravity and magnetic data. While his degrees are in Geology (B.S.
Oklahoma, 1982, M.S. Oklahoma, 1992), he has obtained additional training geophysics,
as well as valuable field experience, especially in the Nevada Basin and Range Province.
In addition, he has managed oil and gas exploration and development programs, including
the acquisition of existing production.
(4) Susan Nash, Ph.D. Secretary-Treasurer: Ms. Nash's academic credentials include
a B.S. in Geology, an M.A. in English, and extensive graduate work in economics. She
holds a Ph.D. in English from the University of Oklahoma. In addition to ten years
experience in exploration geology, Nash possesses well-rounded expertise in international
research, marketing, and sales. Her areas of expertise include high-technology training
programs via Internet, oil and gas industry technical sales, and industrial products,
including machinery and raw materials. She has led trade missions to South America,
and has organized commercial, cultural, and educational events many international groups
from countries such as Uzbekistan, Kazakhstan, Turkmenistan, Venezuela, Guatemala,
Mexico, and Paraguay with the goal of developing new markets in the United States.
Nash is currently Director of Engineering and Geosciences for the University of Oklahoma
College of Continuing Education.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Markets for Common Stock. The market for Gold Hill's Common Stock is inactive at
the present time, but the Company will be seeking an Over-the-Counter or lesser
market depending upon its asset growth.
Private Placement. The company is seeking to place 450,000 shares of its restricted
common stock at $1.00 per share. These units may only be offered and sold to those
who meet the suitability standards for investment as expressed in an offering circular
that accompanies the private placement memorandum. During the past fiscal year, the
company made no sales of stock.
Dividends. Gold Hill paid no cash dividends during the fiscal year ended June 30,
1998. No dividends will be paid in the immediate future. All profits and proceeds are
to be reinvested in the company. There is no open market for Gold Hill stock at this
time, and none will be developed until conditions change to the satisfaction of
management.
At June 30, 1988, 4,682,322 shares of common stock were outstanding.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Gold Hill can be considered a start-up company, and management plans to obtain
operating capital through joint ventures, geological consulting services, and private
placements of restricted stock. The proceeds of private placements will be used to
fund the acquisition of favorable oil and gas prospects and testing of its Nevada gold
prospects.
Private Placement. Further efforts will continue to make a private placement of
restricted stock at $1.00 per share. The shares are restricted, and the price is $1.00
per share.
The company plans to maintain a minimum price for the private placement restricted
stock at $1.00 per share for an additional six months, and that the effort would be
extended for that time. In the event of drilling successes, Gold Hill may continue to
market restricted stock in a private placement at a higher price per share, depending
upon market conditions. In line with its conservative policies, the management of Gold
Hill will not market more stock than its immediate capital needs in order to keep the
number of shares outstanding at a minimum.
Oil and Gas Leases. Gold Hill is looking at additional oil and gas prospects to
lease
in the forthcoming year.
Salaries and Operations Overhead. It was agreed that Gold Hill will continue its
policy of paying no salaries to its officers and directors, and that it will continue to
use
the offices of its directors rent-free.
Stock Options. It was agreed that no stock options will be offered at this time.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report thereon of Ron
Kirkpatrick, C.P.A., are contained within this report.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-K as prescribed by the
Securities and Exchange Commission. All material adjustments which, in the opinion
of Management, were necessary for a fair presentation of the results for the interim
periods have been reflected.
Gold Hill Corporation
Balance Sheet
June 30, 1998
Current Assets
BANK OF OKLAHOMA $ 51,857.79
BANK OF OKLAHOMA 11,463.06
BANK OF OKLAHOMA 150,000.00
Total Current Assets $
213,320.85
Fixed Assets
FURNITURE AND FIXTURES $ 138.46
TANGIBLE EQUIPMENT 31,952.75
BURK #1 -- PIPE 13,870.71
ACCUMULATED DEPRECIATION (21,095.92)
Total Fixed Assets
24,844.00
Other Assets
Total Assets $
238,186.85
Current Liabilities
Equity
COMMON STOCK $
470,400.00
RETAINED EARNINGS
(383,431.04)
PAID-IN CAPITAL
247,904.00
Current Income (Loss) (
96,686.11)
Total Equity $
238,186.85
Total Liabilities and Equity $
238,186.85
Gold Hill Corporation
Income Statement
For the Period Ended June 30, 1998
3 Months Ended 12 Months ended
June 30, 1998 Pct June 30, 1998
Pct
Revenue
INTEREST INCOME $ 516.72 3.01 $ 4,910.71 13.18
OIL AND GAS REV 16,666.67 96.99 32,353.90 86.82
------------------------
TOTAL REV 17,183.39 100.00 37,264.61
100.00
Cost of Sales
DRILLING $ 17,243.35 $ 17,243.35
NEVADA GOLD PRJ 28,369.40 89,894.93
NEVADA PRJ - LEASE 1,238.68 16,398.68
Total Cost of Sales $ 46,851.43 $123,536.96
- -------------------------------------------------------------------------------------------
- -
Gross Profit $ ( 29,668.04) $ ( 86,272.35)
Operating Expenses
DEPRECIATION $ 6,978.00 $ 6,978.00
DUES & SUBSCRIPTS 475.00 710.00
FILING FEES 11.00
65.00
LEGAL AND ACCTG 150.00 900.00
MISC 9.54
9.54
OFFICE EXPENSE 00.00 211.12
POSTAGE 0.00
192.00
GENERAL EXPL. FEE 0.00 171.60
TRANFER FEES 378.00 1,176.50
TOTAL EXPENSES 8,001.54 10,413.76
Net Income (Loss) $ (37,669.58) $ (96,686.11)
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
There were no salaries or other compensation paid to executives during the fiscal
year ending June 30, 1998. The Company resolved to not pay salaries or
compensation to executives during the upcoming year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Oil Creek Production, a privately-held corporation owned by Simek and Smith has sold
certain oil and gas leases to Gold Hill at cost since Gold Hill has limited capital and
personnel, but Oil Creek retained an overriding royalty interest equal to the difference
between 80 percent net revenue interest and the base lease net revenue interest. Mr.
Smith will retain a small royalty in the Nevada Gold property.
Management stock. Part of Gold Hill's restricted stock is owned directly or
indirectly by present management as follows:
Direct Indirect
T. J. Simek Director 810,235
Paul W. Smith Director 540,157
Earl W. Smith Director 1,080,394
Susan Smith Nash Secretary- 110,000 50,000
Treasurer
______________________________________
Total Direct & Indirect
shares 110,000 2,480,786
Stock owned by management, acquired in the open market:
Susan Smith Nash Secretary- 1,000
Treasurer
Earl W. Smith Director 89,470
Stock Options. The Company does not have a plan to grant any stock options to
any of its officers or directors.
SIGNATURES
Pursuant to the requirements of Sections 13 and 14 (D) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf of
Undersigned, there unto duly authorized.
GOLD HILL CORPORATION
By:______________________________________________
Date:____________________________________________