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 May 31, 2004 Commission file Number 1-7602
EXCALIBUR INDUSTRIES
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
State or other jurisdiction
of incorporation or organization: UTAH
IRS Employer Identification Number: 87-0292122
Address of principal executive offices: Post Office Box 3551
Duluth, Minnesota 55803
Registrant's telephone number: (218) 724-4711
E-Mail Address: mhubert1@msn.com
Securities registered pursuant to Section 12 (b) of the Act:
Title of Each Class Name of each exchange on which registered
- ------------------------ -----------------------------------------
Common stock (Par value
$.01 per share) None
Securities registered pursuant
to Section 12 (g) of the Act: None
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
requirement for the past 90 days. YES [X] NO [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing. As of
May 31, 2004, no bid or asked prices are available.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of May 31, 2004, the
registrant had total outstanding shares of 5,987,261, $0.01 par value common
stock.
Page 1
Securities and Exchange Commission - Form 10K
Excalibur Industries - May 31, 2004
ITEM 1 - BUSINESS
- -----------------
Excalibur Industries is a Utah corporation formed by the consolidation of Tower
Enterprises (formerly Moab Uranium Company) and The Thrifty Helper on June 1,
1971. In January 1972, Excalibur purchased all of the issued and outstanding
shares of capital stock of Mountain West Mines, Inc., a Nevada corporation,
which is now a wholly owned subsidiary of Excalibur.
Excalibur Industries is a natural resources business enterprise, primarily
involved in uranium mining. The domestic uranium fuels-sector of the nuclear
power industry has been crippled since the Three-Mile Island incident which
resulted in the public's loss of faith. Throughout these years Excalibur has
maintained ownership of several ISL uranium deposits in the Powder River Uranium
District, in the firm belief that the nuclear power component of the world's
electrical needs would expand.
Excalibur's uranium position in Powder River Basin is maintained through
contracts and sole ownership. Uranium production has been and is occurring on
properties covered by contract and royalty payments due have not been paid.
Litigation to establish Excalibur's contractual rights has been filed in the
United States District Court for the District of Wyoming on April 20, 2004.
URANIUM REPORT
POWDER RIVER BASIN-WYOMING - HISTORY
- ------------------------------------
A. Mountain West Mines, Inc.
Beginning in 1965, Mountain West Mines Inc., a private corporation
founded by Claude E. Nugent, Robert H. Ruggeri and Joseph P. Hubert,
operated the underground Betty Mine and the open pit Glade Mine in the
Elk Ridge, Utah uranium district, each operation ending upon the
completion of their respective AEC contracts.
During the dormant years of the domestic uranium industry, MWM
continued full-time uranium exploration. In 1966, Mountain West Mines
began its successful geologic exploration of the Powder River, Wyoming
Uranium District. A large scale mineral property program was begun,
along with the beginning of the district reconnaissance drill hole
fence project.
In 1967, the Nuclear Power Industry revived interest in uranium fuels
and the Powder River Basin began to attract major corporate attention.
MWM in order to maintain viability was forced to seek outside financial
assistance.
B. The Cleveland-Cliffs Iron Company
Excalibur (Mountain West Mines Inc.) entered into an Option and
Agreement dated May 17, 1967, an Addendum dated August 29, 1967, an
Addendum dated August 31, 1968, and a Deed and Agreement dated October
20, 1976 with the Cleveland-Cliffs Iron Company.
Excalibur (MWM) retains a 4% yellow cake royalty on all production
resulting from the operations of the Cleveland-Cliffs Iron Company, its
assigns and/or its Successor in Interest within an Area of Interest
(AMI) defined as Townships 33 through 50 North of Ranges 69 through 79
West, 6th principal meridian.
The Collins Draw ISL pilot program produced a minor royalty credit to
Excalibur.
Page 2
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
POWDER RIVER BASIN - WYOMING (Continued)
- ----------------------------------------
In 1986, failing the contractual obligation of furnishing Excalibur
with prior written notification, the Cleveland-Cliffs Iron Company
assigned its operating rights to the Ruby ranch project subject to the
terms and conditions of MWM/Cliffs agreements to Magnox Electric plc
(UK) subsidiary Central Electricity Generating Board Exploration
(America) (CEGB). Cliffs retained reimbursement responsibility for Area
of Interest royalty obligation to Excalibur payable by its Successor in
Interest within the Area of Interest, less subject lands. In the event
of project abandonment by CEGB (et al), properties must be reassigned
to Cliffs.
In 1987, failing the contractual obligation of furnishing Excalibur
with prior written notification, the Cleveland-Cliffs Iron Company
assigned its operating rights to the Greasewood Creek and North Butte
projects subject to the terms and conditions of the MWM and Cliffs
agreements to Uranerz USA, Inc. (Germany). Cliffs retained
reimbursement responsibility for Area of Interest royalty obligations
to Excalibur payable by its Successor in Interest within the Area of
Interest less subject lands. In the event of project abandonment by
Uranerz, properties must be reassigned to Cliffs. Failing the
contractual obligation of furnishing Excalibur with prior written
notification, Cliffs sold Excalibur's advance royalty credit of some
$1,319,287 to Uranerz.
C. Cameco Corporation, (Canada), (Power Resources Inc., a member of the
Cameco Group of Companies) Cameco Corporation contends it is the
world's largest producer of uranium and the largest supplier of
combined uranium and conversion services. Through a series of
transactions, Cameco with its subsidiary Power Resources Inc., purports
to have acquired the Powder River Basin operating assets of CEGB and
Uranerz/Cogema. Excalibur has not received proper documentation of
either acquisition.
In July 2002, Cameco Corporation (PRI) purchased the operating Smith
Ranch ISL property which is producing yearly one million pounds plus.
The Smith Ranch is subject to the MWM/Cliffs agreements. No royalty
payments have been received to date.
The following projects subject to Area of Interest royalty obligations
are listed in the Cameco Corporation 2003 Annual Information Form:
Reserves Resources
-------- ---------
Proven Probable Measured Indicated Inferred
------ -------- -------- --------- --------
Ruby Ranch 2,896,000 1,424,000 862,000 581,000 --
Smith Ranch 5,842,000 13,601,000 1,264,000 133,000 4,295,000
North Butte/Brown -- 7,452,000 -- 6,829,000 1,367,000
Ruth -- 1,249,000 -- --
Reynolds Ranch -- -- 2,654,000 7,791,000 7,442,000
Northwest Unit -- -- 2,361,000 1,093,000
Highland 2,831,000 5,143,000 2,212,000 3,148,000 1,977,000
Total All Categories: 84,447,000 #U308
Page 3
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
POWDER RIVER BASIN - WYOMING (Continued)
- ----------------------------------------
D. Qivira Mining Company (Rio Algom Ltd. - Canada)
Rio Algom Ltd. was purchased by BHP Billiton (England) in 2001 and
reduced its uranium participation. In 2001 Quivira Mining Company
quitclaim re-assignment and conveyances by and among Quivira Mining and
Everest Exploration their sum total of 5,000 acres of unpatented mining
claims to Excalibur. Excalibur retained 100% claim ownership to six (6)
known potential ISL reserves. These reserves are independently owned by
Excalibur and not subject to the Cliffs/MWM agreements.
E. Excalibur's 7,000,000-foot (+) drill hole library covering over 500
square miles of the Powder River Basin could prove invaluable in a
profitable uranium market.
SILVER REPORT
The Trust for Public Land exercised its option to purchase 18 patented mining
claims (158 acres) in Ouray County, Colorado for $100,000.00, on June 16, 2003.
Excalibur has no further interest in the silver business.
BUSINESS
Excalibur is natural resource oriented. In the past its activities have
consisted of acquisition, mining and sale of mineral properties. Currently total
interest is centered on its holdings within the Powder River Uranium District of
Wyoming. Optimism is found in the current recent price of uranium $17.00/LB.(+)
and the advent of the litigation.
ITEM 2 - PROPERTIES
- -------------------
Mountain West Mines, Inc. (Mountain West) a wholly owned subsidiary of
Excalibur, owns a royalty interest in approximately 85 patented lode mining
claims, and numerous unpatented lode mining claims in the Powder River Basin in
Converse, Johnson and Campbell Counties, Wyoming. These properties had
capitalized costs of $347,032, and are directly related to the advance royalties
received from Cliffs as described in Item 1 of this Form 10-K. The extent of any
ore bodies and related possible collection of production royalties is not
determinable at this time. The Board of Directors had determined, however, that
a more realistic value should be placed on the books for financial reporting and
elected to reduce the reported value for financial statement purposes to
$100,000.
In May 1986, Cliffs conveyed, subject to the MWM/Cliffs agreements, to Magnox
Electric plc subsidiary, Central Electricity Generating Board Exploration Inc.
63.688 acres of patented claims and 12 unpatented mining claims (Ruby Ranch
project). In 1989, Magnox Electric through its subsidiaries CEGB and Power
Resources Inc. acquired 75% interest in the Highland Uranium Project (HUP) from
Everest Exploration (et al). HUP is subject to the terms and conditions of the
May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. According to
newspapers and other published accounts, HUP uranium production by Magnox
Electric subsidiaries indicates a multi-million dollar royalty payment is due
Excalibur.
In January 1997, Cameco Corporation (Canada) purchased the assets of Power
Resources from Magnox Electric plc (UK) along with the obligations and
conditions set forth in the May 17, 1967 Option and Agreement and Addenda
between MWM/Cliffs. The HUP production royalties have not been paid by Cameco's
operator, its wholly owned subsidiary Power Resources Inc.
Page 4
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 2 - PROPERTIES (Continued)
- -------------------------------
The right of reassignment of all uranium mineral properties within the Area of
Interest is retained by Excalibur as set forth by the May 17, 1967 Option and
Agreement.
In April 1987, Excalibur had not received the contractual obligation of prior
written notice when Uranerz USA (Germany) purchased unpatented claims and the
below cited patented claims along with the remaining portion of MWM advance
royalty from Cliffs. The transaction subjected Uranerz to the obligations as
conditions set forth in the May 17, 1967 Option and Agreement and Addenda
between MWM/Cliffs.
North Butte Deposit Area
------------------------
Pfister Patent - 49-77-0019 222.420 acres
Brown Patent - 49-77-0022 730.016 acres
-------
952.436 acres
Surface acres included with mineral acres 309.000 acres
Greasewood Creek Deposit Area
Greasewood Creek Patent - 49-75-0068 646.596 acres
Surface acres 0.000 acres
In May 1991, failing the contractual obligation of furnishing Excalibur with
prior written notification, Pathfinder Mines, Inc., subsidiary of Cogema-France,
purchased Uranerz' Powder River Uranium holdings along with the remaining
portion of MWM advance royalty. This transaction subjected Pathfinder to the
terms and conditions as outlined in the May 17, 1967 Option and Agreement and
Addenda between MWM/Cliffs. Subsequently, Pathfinder assumed the Christianson
Ranch ISL operation and failed to make Area of Interest royalty payments to
Excalibur. Pathfinder purchased from Everest Exploration its 25% interest in the
Highland Uranium Project.
Between the delinquent royalty payments from the HUP and the Christianson Ranch
operations, the advance royalty payment obligation of $1,319,287.00 has been
satisfied.
In 1973, Excalibur sold mining claims in Campbell and Johnson Counties, Wyoming
to American Nuclear Corporation. The project became a part of a joint venture
between American Nuclear and the Tennessee Valley Authority. At public auction
in 1991, they sold this project along with their entire holdings to General
Atomic. In 1992, General Atomic sold this same project to Pathfinder. Excalibur
retains a 2 1/2 % yellow cake royalty from the ANC contract and an additional 4%
yellow cake royalty from the MWM/Cliffs Area of Interest royalty provision.
In 2001, failing the contractual obligation of furnishing Excalibur with prior
written notification, Pathfinder Mines Inc. (Cogema) executed Special Warranty
Deeds with Cameco Corporation (Canada) through its wholly owned subsidiary Power
Resources Inc., transferring Pathfinder's Powder River uranium holdings.
Camecos' acquisition of that portion of Pathfinder's mineral properties acquired
from the Uranerz/Cliffs contract, commits Cameco and its wholly owned subsidiary
Power Resources Inc. to a second acknowledgment to the terms and conditions in
the May 17, 1967 Option and Agreement and Addenda between MWM/Cliffs. These
mineral lands are within the Area of Interest and are subject to a 4% yellow
cake gross royalty in addition to the royalty obligations inherent in their
title. The Special Warranty Deed grants Pathfinder a royalty interest in these
deposits contrary to the MWM/Cliffs agreement provisions.
Page 5
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 2 - PROPERTIES (Continued)
- -------------------------------
In July 1983, Cliffs quitclaimed 436 unpatented lode mining claims and 1,042 net
acres of fee mineral leases to Texas Eastern Nuclear, Inc., of Houston, Texas.
In August 1986, Texas Eastern Nuclear, Inc., reassigned said properties to
Mountain West, who, in turn, conveyed and assigned its interest in said property
to Everest Minerals, subject to a variable overriding royalty reservation which
ranges 2% to 6%. Everest Minerals determined to abandon a portion of the
property and offered to re-convey it to Excalibur. Excalibur has since abandoned
said property.
On June 28, 1990, Everest Minerals sold the remaining 270 claims to Quivira
Mining Company, 6305 Waterford Boulevard, Suite 325, Oklahoma City, Oklahoma
73118, a subsidiary of Rio Algom Ltd., a Canadian based world producer of
uranium and other metals. Excalibur retained the right of reassignment.
In 2001, Quivira Mining company reassigned the 270 claims to Excalibur. 100%
ownership of six (6) potential ISL reserves is held by Excalibur. The following
uranium resource estimates are Texas Eastern Nuclear Inc., calculations:
Deposit Area Average Depth Indicated Resource Potential Resource
------------ ------------- ------------------ ------------------
Verna Ann 580' 701,000# 1,500,000#
Niles Ranch 450' 270,000# 600,000#
Hank 420' 600,000# 2,000,000#
Willow Creek 600' 850,000# 2,000,000#
Doughstick 540' -0- 6,000,000#
Nichols Ranch 590' 3,500,000# 4,500,000#
Excalibur owns patented mining claims in Ouray County, Colorado with capitalized
costs of $8,106. These properties were purchased as silver prospects and are not
active. The Trust for Public Land purchased 18 patented claims on June 16, 2003.
ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
On April 20, 2004, the firm of Lindquist & Vennum P.L.L.P. filed in the United
States District Court for the District of Wyoming, a Complaint for Damages and
Declaratory Judgment on behalf of Excalibur wholly owned subsidiary Mountain
West Mines, Inc., Plaintiff versus The Cleveland-Cliffs Iron Company, Powers
Resources, Inc. and Pathfinder Mines Corporation, Defendants.
Litigation is directed to establishing contractual rights defined in the
MWM/Cliffs May 17, 1967 Option and Agreement with addendum and deeds.
Among the covenants claimed to be breached are failure to provide production
data and royalty due on the Highland Uranium Project, the Christianson Ranch
Mine and the Smith Ranch ISL project; and, the failure to offer for reassignment
on AMI mineral properties prior to abandonment.
Linquist & Vennum P.L.L.P. is a 117-member national law firm that has for the
past two years researched and examined our position and agreed to represent
Mountain West Mines, Inc. on a contingency basis. The legal team is headed by
Mr. Harold G. Morris, Jr., Esq.
Page 6
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
(a-d) No matters were submitted to a vote of security holders during the
quarter ended May 31, 2004 through solicitation of proxies or
otherwise. The last annual shareholder's meeting of the Company was
held November 8, 2003.
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
- --------------------------------------------------------------------------------
(a) Principal Market: The stock of the Corporation was formerly traded on
the Intermountain Stock Exchange in Salt Lake City, Utah. At the
present time the stock is not traded on a listed stock exchange and the
Company knows of no market maker.
(b) Approximate number of shareholders of record as of May 31, 2004 is
1,090.
(c-1) No dividends have been paid or declared in the past 5 fiscal years.
(c-2) Management anticipates no payment of dividends in the near future.
Page 7
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 6 - SELECTED FINANCIAL DATA FOR THE YEARS ENDED MAY 31:
- ------------------------------------------------------------
2004 2003 2002 2001 200
----------- ----------- ----------- ----------- -----------
Total Revenues $ 0 $ 0 $ 0 $ 0 $ 0
Total Operating Expense 38,141 13,861 17,372 12,813 17,176
----------- ----------- ----------- ----------- -----------
Loss From Operations (38,141) (13,861) (17,372) (12,813) (17,176)
Other Income (Expense) 0 (9,352) 0 0 7,188
----------- ----------- ----------- ----------- -----------
Income (Loss) -
Before Income Taxes (38,141) (23,213) (17,372) (12,813) (9,988)
Provision For Income Taxes 100 100 100 100 100
----------- ----------- ----------- ----------- -----------
Net Income (Loss) Before
Extraordinary Gain (38,241) (23,313) (17,472) (12,913) (10,088)
Extraordinary Gain 89,478 0 0 0
----------- ----------- ----------- ----------- -----------
Net Income (Loss) 51,237 (23,313) (17,472) (12,913) (10,088)
Retained Earnings (Deficit)
Beginning of Year (85,134) (61,821) (44,349) (31,436) (21,348)
----------- ----------- ----------- ----------- -----------
Retained Earnings (Deficit)
End of Year $ (33,897) $ (85,134) $ (61,821) $ (44,349) $ (31,436)
=========== =========== =========== =========== ===========
Average Shares of Common
Stock Outstanding 5,987,261 5,987,261 5,987,311 5,987,361 5,987,361
=========== =========== =========== =========== ===========
Net Income (Loss) Per Share
of Common Stock $ 0.0085 $ (0.0039) $ (0.0029) $ (0.0022) $ (0.0017)
=========== =========== =========== =========== ===========
Total Assets -
End of Year $ 111,145 $ 108,597 $ 110,958 $ 108,435 $ 122,348
=========== =========== =========== =========== ===========
Long-Term Obligations $ 0 $ 49,852 $ 29,000 $ 9,000 $ 0
=========== =========== =========== =========== ===========
Cash Dividends Declared
Per Share of
Common Stock $ 0 $ 0 $ 0 $ 0 $ 0
=========== =========== =========== =========== ===========
Page 8
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
- --------------------------------------------------------------------------------
The sale of the Colorado Silver patented claims brought temporary solvency to
Excalibur. All of Mr. Hubert's loans with interest were paid and a $25,000.00
expense fund was paid to Lindquist & Vennum P.L.L.P.
Excalibur Industries experienced substantial fluctuations in its consolidated
net income over the past several years. The Company maintained its mineral
properties and interest throughout that period of fluctuation despite a large
drain on its financial resources. Management is now working to retain as much of
its mineral rights and interests as possible, considering its limited resources.
The Board of Directors has adopted a policy designed to husband its resources
and retain as much of its mineral interests as possible, taking into account the
depressed market for minerals and the Company's limited resources.
The consolidated financial statements contained herein under ITEM 8 should be
read in conjunction with this ITEM 7, with particular emphasis on the Notes to
Consolidated Financial Statements. Additional information pertaining to the
fluctuation of the Company's income and expenses is detailed.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATE
- ----------------------------------------------------
Page 9
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ACCOUNTANTS' COMPILATION REPORT
-------------------------------
To the Board of Directors and Stockholders
Excalibur Industries
We have compiled the accompanying consolidated balance sheets of Excalibur
Industries (Corporation) and its wholly owned subsidiary, Mountain West Mines,
Inc. as of May 31, 2004, 2003, and 2002, and the related consolidated statements
of operations and changes in retained earnings (deficit), and cash flows for the
years then ended, in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
/s/ Maxfield and Co., P.C.
- ----------------------------
Maxfield and Co., P.C.
Certified Public Accountants
Grand Junction, Colorado
June 27, 2004
Page 10
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
Consolidated Balance Sheets
May 31, 2004, 2003 and 2002
(Unaudited)
2004 2003 2002
--------- --------- ---------
ASSETS
Current Assets
Cash $ 11,045 $ 391 $ 2,752
--------- --------- ---------
Property and Equipment
Mining properties and interests 100,000 108,106 108,106
Furniture and fixtures 2,354 2,354 2,354
Mining equipment 1,347 1,347 1,347
--------- --------- ---------
103,701 111,807 111,807
Accumulated depreciation (3,661) (3,661) (3,661)
--------- --------- ---------
Total Property and Equipment 100,040 108,146 108,146
--------- --------- ---------
Other Assets
Deposits 60 60 60
--------- --------- ---------
Total Assets $ 111,145 $ 108,597 $ 110,958
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Income tax payable $ 1,363 $ 100 $ 100
--------- --------- ---------
Other Liabilities
Loans from stockholder -- 40,500 29,000
Accrued interest - loans from stockholder -- 9,352 --
Option to sell mining claims -- 100 --
--------- --------- ---------
Total Other Liabilities -- 49,952 29,000
--------- --------- ---------
Total Liabilities 1,363 50,052 29,100
--------- --------- ---------
Stockholders' Equity
Common stock - $.01 par value,
authorized 10,000,000 shares,
issued 5,997,361 shares including shares in treasury 59,974 59,974 59,974
Capital received in excess of par value 83,810 83,810 83,810
Retained earnings (deficit) (33,897) (85,134) (61,821)
Treasury Stock, 10,100 shares at cost (105) (105) (105)
--------- --------- ---------
Total Stockholders' Equity 109,782 58,545 81,858
--------- --------- ---------
Total Liabilities and Stockholders' Equity $ 111,145 $ 108,597 $ 110,958
========= ========= =========
See accompanying notes and accountants' compilation report.
Page 11
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
Consolidated Statements of Operations and Changes in Retained Earnings (Deficit)
Years Ended May 31, 2004, 2003 and 2002
(Unaudited)
2004 2003 2002
----------- ----------- -----------
Revenues
Royalties $ -- $ -- $ --
----------- ----------- -----------
Operating Expenses
Mining and related expenses -- -- --
General and administrative 38,141 13,861 17,372
----------- ----------- -----------
Total Operating Expenses 38,141 13,861 17,372
----------- ----------- -----------
(Loss) From Operations (38,141) (13,861) (17,372)
Other Income (Expense)
Interest -- (9,352) --
----------- ----------- -----------
(Loss) Before Income Taxes (38,141) (23,213) (17,372)
Provision For Income Taxes 100 100 100
----------- ----------- -----------
(Loss) Before Extraordinary Gain (38,241) (23,313) (17,472)
Extraordinary Gain
Gain from sale of mining claims, net of income tax 89,478 -- --
----------- ----------- -----------
Net Income (Loss) 51,237 (23,313) (17,472)
Retained Earnings (Deficit) - Beginning of Year (85,134) (61,821) (44,349)
----------- ----------- -----------
Retained Earnings (Deficit) - End of Year $ (33,897) $ (85,134) $ (61,821)
=========== =========== ===========
Net (Loss) Per Share of Common Stock $ 0.0085 $ (0.0039) $ (0.0029)
=========== =========== ===========
Outstanding Number of Common Shares 5,987,261 5,987,261 5,987,311
=========== =========== ===========
See accompanying notes and accountants' compilation report.
Page 12
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
Consolidated Statements of Cash Flows
Years Ended May 31, 2004, 2003 and 2002
(Unaudited)
2004 2003 2002
-------- -------- --------
Cash Flows From Operating Activities
Net income (loss) $ 51,237 $(23,313) $(17,472)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Extraordinary gain (expense) before income tax (90,741) -- --
Increase (Decrease) in:
Income tax payable 1,263 -- --
Accrued interest - loans to shareholder (9,352) 9,352 --
-------- -------- --------
Net Cash Used By Operating
Activities (47,593) (13,961) (17,472)
-------- -------- --------
Cash Flows From Investing Activities
Sale of mining claims 98,847 -- --
Option to sell mining claims -- 100 --
-------- -------- --------
Net Cash Provided By Investing
Activities 98,847 100 --
-------- -------- --------
Cash Flows From Financing Activities
Loans from shareholders
Additions -- 11,500 20,000
Reductions (40,500) -- --
Capital Stock transactions:
Share repurchases -- -- (5)
-------- -------- --------
Net Cash Provided (Used) By
Financing Activities (40,500) 11,500 19,995
-------- -------- --------
Net Increase (Decrease) In Cash 10,754 (2,361) 2,523
Cash - Beginning of Year 391 2,752 229
-------- -------- --------
Cash - End of Year $ 11,145 $ 391 $ 2,752
======== ======== ========
Supplemental Disclosures
Income taxes paid $ 100 $ 100 $ 100
Interest Paid 9,352 -- --
See accompanying notes and accountants' compilation report.
Page 13
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Summary of Significant Accounting Policies
- ---------------------------------------------------
Consolidation
-------------
The consolidated financial statements presented herein include the
accounts of Excalibur Industries (Excalibur) and its wholly owned
subsidiary, Mountain West Mines, Inc., (Mountain West), a Nevada
corporation, qualified to do business in the states of Utah and Wyoming.
All significant intercompany transactions have been eliminated from
these statements.
Mining Properties and Interests
-------------------------------
Mining claims, leases, and royalty interests are stated at cost, unless
in the judgement of the Directors a lesser amount is felt to be more
appropriate due to a permanent decline in value. No depletion has been
charged against income for financial statement purposes, but is deducted
for Federal income tax purposes when allowable. The full carrying value
is charged against income at the time of sale of disposition of an
asset. If a perpetual overriding royalty is retained the recorded costs
of the asset are treated the same for financial statement purposes as
for income tax purposes and are not reduced in value until production
royalties are received.
Depreciable Property and Equipment
----------------------------------
Depreciable property and equipment are stated at cost. Depreciation for
income tax purposes is consistent with that used for financial statement
purposes and has been computed using the straight-line method.
Deferred Income Taxes
---------------------
Deferred income taxes are provided as a result of timing differences in
reporting income for financial statement and tax purposes. Currently no
deferred income taxes payable (or receivable) are recognized.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Earnings Per Share
------------------
Earnings per share of common stock are computed using the weighted
average number of common shares outstanding during the period. Primary
and full diluted earnings per share are shown as the same figure if the
dilative effect of any common stock equivalents or convertible
securities are less than three percent. The Company currently has no
dilative equivalents.
Page 14
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
Notes to Consolidated Financial Statements
(Unaudited)
Note 2 - Mining Properties and Interests
- ----------------------------------------
Uranium
-------
The Company owns various royalty and other interests in patented and
unpatented mining claims and mineral leased acreage, located in the
Powder River Basin, Johnson and Campbell Counties, Wyoming. Future
earned royalties are subject to offset by the amount of certain advance
minimum royalty revenues. These properties were assigned a value of
$347,032 following the acquisition of Mountain West by Excalibur.
Various acreage has been dropped during the past years as such acreage
was determined to be of no value. The capitalized costs of these
properties have been reallocated to the remaining acreage still retained
by the Company. The Board of Directors determined that a more realistic
value should be placed on the books and elected to reduce the reporting
value for financial statement purposes by $247,032.
Silver
------
The Company owns various interests in patented mining claims in Ouray
County, Colorado. These claims were sold during the fiscal year ended
May 31, 2004, for $100,000.
A summary of capitalized costs in the above properties as of May 31,
2004, 2003 and 2002 follows:
2004 2003 2002
-------- -------- --------
Uranium $100,000 $100,000 $100,000
Silver -- 7,957 7,957
Other -- 149 149
-------- -------- --------
Total $100,000 $108,106 $108,106
======== ======== ========
Note 3 - General and Administrative Expense
- -------------------------------------------
General and administrative expenses for the years ended May 31, 2004,
2003 and 2002 follows:
2004 2003 2002
------- ------- -------
Salaries $ -- $ -- $ --
Reports and publications 1,447 1,223 1,764
Professional 27,852 4,773 3,816
Telephone, office
supplies and other 8,842 7,865 11,792
------- ------- -------
Total $38,141 $13,861 $17,372
======= ======= =======
Page 15
Securities and Exchange Commission - form 10-K
Excalibur Industries - May 31, 2004
Notes to Consolidated Financial Statements
(Unaudited)
Note 4 - Income Taxes
- ---------------------
Currently, no deferred income taxes payable (or receivable) are
recognized as a result of timing differences in reporting income for
financial accounting and tax purposes.
Deferred income taxes on unrealized losses in the amount $247, 032 due
to the reduction in value of royalty interests has not been recognized
in the financial statements due to the uncertainty of any future tax
benefit. Likewise, deferred income taxes are not affected as a result of
statutory depletion deductions taken for tax purposes.
As of May 31, 2004, the Company has loss carryforwards of approximately
$217,000 for Federal tax purposes and $158,000 for State tax purposes
that may be offset against future taxable income (expiring on various
dates through 2024).
Note 5 - Gain From Sale of Mining Claims
- ----------------------------------------
During the year ended May 31, 2004, patented mining claims in Ouray,
County, Colorado were sold for $100,000.
Note 6 - Litigation Costs
- -------------------------
In April, 2004 the Company filed a complaint for damages and declaratory
judgment versus Cleveland Cliffs Iron Company for unpaid royalty
payments. Total litigation cost to the Company consists of a $25,000
advance payment to a law firm which has agreed to represent the Company
on a contingency basis. The ultimate outcome of the litigation cannot
presently be determined.
Note 7 - Operating Funds
- ------------------------
Company management has developed a plan to reduce or delay
administrative costs to insure that the Company will continue to meet
its obligations during the coming year, as well as a plan to obtain
additional operating funds, if needed, through the sale of certain of
its mining properties.
In the interim, Joseph P. Hubert, President and major stockholder, has
agreed to advance operating funds as needed, until other funds are
available. During the year ended May 31, 2004, total advances, with
interest, were paid in full from proceeds received from the sale of the
Ouray County, Colorado mining claims.
Page 16
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a, b & e) Name Age Position
--------------------- --- ---------------------------------------
Joseph P. Hubert 72 President, Chief Executive Officer and
Chairman of Board of Directors
Jack D. Powers 78 Vice-President and Director
Dawn Carpenter 74 Vice-President and Director
Marguerite Emanuel 70 Secretary
Joseph P. Hubert is President and Chief Executive Officer. He received his B.S.
Degree in Geology from the University of Minnesota Duluth. He has been a
self-employed registered mining geologist for many years. He served on the Board
of Directors of Mountain West Mines, Inc. from 1966 until 1971, either as
President or Vice-President during that period. Mr. Hubert was elected to the
Presidency and Board of Directors of Excalibur at the 1982 annual meeting and
following Directors' meeting.
Jack D. Powers is Vice-President. He obtained a BA Degree in business and
accounting from the University of Minnesota and a B.S. Degree in mechanical
engineering from Michigan Tech. He has worked as a manager for Longyear Drilling
Co., Boyles Bros. and Joy for many years and presently is a self-employed
drilling consultant.
Dawn L. Carpenter replaced Charles O. Spielman as Vice-President/Treasurer and
Director on July 28, 2003. He received his B.S. Degree from the University of
Wyoming and has over thirty years as a Consulting Landman in the oil, gas, and
mining industries. Mr. Carpenter has had a forty-year association with Excalibur
Industries and its subsidiary, Mountain West Mines, and served in the past for a
number of years as its Vice-President and Director.
Marguerite H. Emanuel replaced Charles O. Spielman as Secretary on March 1,
2001. She received her BS Degree in Business and accounting from the University
of Minnesota. She was a department manager with the Marriott Corporation and an
administrative assistant with the Village of Lincolnshire, Illinois.
(c) Excalibur has no full time employees.
(d) Mrs. Marguerite Emanuel was elected Corporate Secretary at the November 19,
2001 Annual Meeting. Mrs. Emanuel is the sister of Joseph P. Hubert,
President and CEO. There are no other family relationships between any
Director and Executive Officer and/or any other Director or Executive
officer or nominee for Director.
Page 17
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (Continued)
(f) No Officer, Director or nominee for Director has been involved in any legal
proceedings involving Federal bankruptcy laws, or any State insolvency
laws, or has been convicted or named in a criminal proceeding, or is the
subject of any order, judgement, or decree limiting him in any activity, or
from engaging in any type of business practice, or from engaging in any
activity in connection with the purchase or sale of any security, or in
connection with any violation of Federal or State security laws.
(g) A comprehensive review and examination by the United States Securities and
Exchange Commission was conducted in 2004 and any deficiencies were
corrected.
ITEM 11 - MANAGEMENT REMUNERATION
Excalibur and Mountain West Mines, Inc., has no employees or payroll and pays no
compensation to management. However, it does pay medical insurance for its
President and management for reimbursement of expenses.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners:
*Amount and Percent
Nature of of class
Name and Address Beneficial as of
Title of Class of Beneficial owner Ownership 5/31/03
-------------- ------------------------------------- -------------- -------
Common Joseph P. Hubert 1,179,000 19.69%
1800 Lakeview Drive Direct
Duluth, MN 55803
Common Allen E. Nugent, Trustee of the *868,000 14.50%
Claude E. Nugent Trust Direct
10238 South 2375 East
Sandy, UT 84092
Common Robert H. Ruggeri 336,683 5.62%
3314 Music Lane Direct
Grand Junction, CO 81506
Common Jack D. Payne 302,540 5.05%
Box 2951 Direct
Grand Junction, CO 81501
Common Service Credit Corp.
377 N. Main 300,000 5.01%
Layton, UT 84041 Direct
*Includes 24,000 shares owned by Allen Nugent's wife, and 24,000 shares
owned by Allen E. Nugent, son of Claude E. Nugent.
Page 18
Securities and Exchange Commission - Form 10-K
Excalibur Industries - May 31, 2004
(b) Security Ownership of Management:
*Amount and Percent
Nature of of class
Name and Address Beneficial as of
Title of Class of Beneficial Owner Ownership 5/31/03
-------------- -------------------------------------- -------------- -------
Common Joseph P. Hubert 1,179,000 19.69%
Common Jack D. Powers 25,000 .42%
Common Dawn L. Carpenter 52,500 .86%
Common Marguerite Emanuel 100,000 1.68%
Common Directors and Officers Group 1,356,500 22.65%
*Information as to beneficial ownership is based upon statements furnished by
each Director. Information with such ownership rests peculiarly within their
knowledge and the Registrant disclaims responsibility for the accuracy and
completeness thereof.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,
(Continued)
- --------------------------------------------------------------------------------
*Information as to beneficial ownership is based upon statements furnished
by each Director. Information with such ownership rests peculiarly within
their knowledge and the Registrant disclaims responsibility for the
accuracy and completeness thereof.
(c) Changes in Control:
No arrangements are known to Registrant which may at a subsequent date
result in a change in control of the Registrant.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
(a) Transactions with Management and Others None
(b) Certain Business Relationships None
(c) Indebtedness of Management None
(d) Transactions with Promoters None
Page 19
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K
- ---------------------------------------------------------------------------
(a) 1. Unaudited Consolidated Financial Statements for the fiscal years ended
May 31, 2004, 2003 and 2002, including:
Accountants' Compilation Report
Consolidated Balance Sheets
Consolidated Statements of Operations and Changes in Retained
Earnings (Deficit)
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
2. None
3. None
(b) No reports on Form 8-K have been filed during the quarter ended May 31,
2004.
(c) None
(d) None
Page 20
Securities and Exchange Commission - Form 10-K
Excalibur Page 20
SIGNATURES
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 on the dates indicated.
Date July 13, 2004 By /s/ Joseph P. Hubert
--------------------------- --------------------------------------
Joseph P. Hubert
President, Chief Executive Officer
and Chairman of Board of Directors
Date July 13, 2004 By /s/ Jack D. Powers
--------------------------- --------------------------------------
Jack D. Powers
Vice-President and Director
Page 21