1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ___________
Commission file number 000-21623
________________________________________
SHOSHONE SILVER MINING COMPANY, INC.
__________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Idaho 82-0304993
_______________________________ _____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4903 Industrial Ave. West
Coeur d'Alene, Idaho 83814
_______________________________________ _____________________
(Address of principal executive offices) (Zip Code)
503-632-0032
_________________________________________________________________
(Registrant's telephone number, including area code)
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 period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days. Yes . No XX .
____ ____
As of March 31, 2002, 9,035,660 shares of the issuer's common stock were
outstanding.
2
Shoshone Silver Mining Company, Inc.
Form 10-Q
For the Quarter Ended March 31, 2002
Table of Contents
Page
PART I. - FINANCIAL INFORMATION
Item l - Financial Statements
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of
Security Holders
Item 6 - Exhibits and Reports on Form 8-K
SIGNATURES
3
Part I - FINANCIAL INFORMATION
Shoshone Silver Mining Company, Inc.
Balance Sheets (Unaudited)
March 31, 2002 December 31, 2001
-------------- -----------------
Current Assets
Cash and Cash Equivalents $ 48,726 $ 132,821
Inventory 6,000 6,000
------------ ------------
Total Current Assets 54,726 138,821
------------ ------------
Property, Plant and Equipment, at cost
Property, Plant and Equipment 1,654,861 1,654,861
Accumulated Depreciation (914,519) (904,983)
------------ ------------
Total Property, Plant and Equipment 740,342 749,878
------------ ------------
Other Assets
Depletable Assets and Mine Investments 785,700 785,700
Other Long-term Investments 563,500 563,500
------------ ------------
Total Other Assets 1,349,200 1,349,200
------------ ------------
Total Assets $ 2,144,267 $ 2,237,898
============ ============
Current Liabilities
Accounts Payable $ - - $ - -
Accounts Payable - LOC - - - -
Minority Positions 1,630 1,630
------------ ------------
Total Current Liabilities 1,630 1,630
------------ ------------
Long-term Liabilities
Long-Term Debt - - - -
------------ ------------
Total Liabilities 1,630 1,630
------------ ------------
Stockholders' Equity
Common Stock, Par Value $0.10 per share 903,566 903,566
Authorized - 20,000,000 shares
Issued and outstanding - 9,035,660 shares
Paid in Capital in excess of par 1,597,925 1,597,925
Treasury Stock (65,733) (65,733)
Retained Earnings (Deficit) (293,121) (199,490)
------------ ------------
Total Stockholders' Equity 2,142,637 2,236,268
------------ ------------
Total Liabilities and Stockholders' Equity $ 2,144,267 $ 2,237,898
============ ============
The accompanying notes are an integral part of the financial statements.
4
Shoshone Silver Mining Company, Inc.
Statements of Operations (Unaudited)
For the three months ended March 31, 2002 and 2001
Three Months Ended Three Months Ended
March 31, 2002 March 31, 2001
------------------ ------------------
Sales $ - - $ 46,095
----------- -----------
Cost of Sales:
Direct Mining Expenses - - 60,398
Freight - - 73
Contract Labor 3,100 1,050
----------- -----------
Total Costs of Sales 3,100 61,521
----------- -----------
Gross Loss (3,100) (15,426)
----------- -----------
Other Operating Expenses:
General and Administrative Expenses 8,122 11,650
Depreciation 9,536 8,646
----------- -----------
Total Other Operating Expenses 17,658 20,296
----------- -----------
Net Loss from Operations (20,758) (35,722)
----------- -----------
Other Income (Expenses):
Net Gain (Loss) on Sale of Investments (157,351) - -
Unrealized Gain (loss) on securities 81,642 (96,369)
Option Proceeds - - 11,174
Transfer Fees and Misc. Income - - 1,250
Lease Income 4,200 - -
Dividend Income 336 356
Interest Income - - 8
Margin Fees and Wire Costs (1,670) (421)
----------- -----------
Total Other Income (72,843) (84,002)
----------- -----------
Net Loss Before Income Taxes (93,601) (119,724)
Income Taxes 30 1,801
----------- -----------
Net Loss Applicable to Common Shareholders $ (93,631) $ (121,525)
=========== ===========
Basic and Diluted Loss per Common Share $ (0.0104) $ (0.0134)
=========== ===========
Weighted Average Number of Common
Shares Outstanding 9,035,660 9,035,660
=========== ===========
The accompanying notes are an integral part of the financial statements.
5
Shoshone Silver Mining Company, Inc.
Statement of Changes in Stockholders' Equity (Unaudited)
For the year ended December 31, 2001 and the three months ended March 31, 2002
Common Additional Retained Treasury
Stock Paid-in-Capital Earnings Stock Total
------------- --------------- ----------- ---------- ------------
Balances as of December 31, 2000 $ 903,566 $ 1,597,925 $ 18,633 $ (65,733) $ 2,454,391
Net Income (Loss) (218,123) (218,123)
Sales of Additional Shares - -
Purchase of Treasury Stock - -
Unrealized Gains (Loss)
on Marketable Securities - -
--------- ----------- --------- --------- -----------
Balances as of December 31, 2001 $ 903,566 $ 1,597,925 $(199,490) $ (65,733) $ 2,236,268
Net Income (Loss) (93,631) (93,631)
Sales of Additional Shares - -
Purchase of Treasury Stock - -
Unrealized Gains (Loss)
on Marketable Securities - -
--------- ----------- --------- --------- -----------
Balances as of March 31, 2002 $ 903,566 $ 1,597,925 $(293,121) $ (65,733) $ 2,142,637
========= =========== ========= ========= ===========
The accompanying notes are an integral part of the financial statements.
6
Shoshone Silver Mining Company, Inc.
Statement of Cash Flows (Unaudited)
Three Months Ended Three Months Ended
March 31, 2002 March 31, 2001
------------------ ------------------
Operating Activities:
Net Income (Loss) $ (93,631) $ (121,525)
Noncash elements included in net loss:
Depreciation Expense 9,536 8,646
Change in assets and liabilities:
Inventory - - - -
Accounts Payable - - - -
------------ -----------
Net Cash Provided (Used) by
Operating Activities (84,095) (112,879)
------------ -----------
Investing Activities:
Unrealized Gain (Loss) on investments - - - -
Investment in depletable assets - - (14,700)
------------ -----------
Net Cash Provided (Used) by
Investing Activities - - (14,700)
------------ -----------
Financing Activities:
Common Stock issued - - - -
------------ -----------
Net Cash Provided (Used) by
Financing Activities - - - -
------------ -----------
Net increase (decrease) in cash and
cash equivalents (84,095) (127,579)
Cash and Cash Equivalents
- Beginning of Period 132,821 324,852
------------ -----------
Cash and Cash Equivalents
- End of Period $ 48,726 $ 197,273
============ ===========
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies:
This summary of significant accounting policies is presented to assist in
understanding the financial statements. The financial statements and notes are
representations of the Company's management, which is responsible for their
integrity and objectivity. These accounting policies conform to accounting
principles generally accepted in the U.S. and have been consistently applied in
the preparation of the financial statements.
Accounting Methods
------------------
The Company's financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.
Accounting Pronouncements
-------------------------
In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" (SFAS No. 144). SFAS 144 replaces SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." This new standard establishes a single accounting model for
long-lived assets to be disposed of by sale, including discontinued operations.
Statement 144 requires that these long-lived assets be measured at the lower of
carrying amount or fair value less cost to sell, whether reported in continuing
operations or discontinued operations. This statement is effective beginning
for fiscal years after December 15, 2001, with earlier application encouraged.
The Company adopted SFAS 144 and does not believe that the adoption will have a
material impact on the financial statements of the Company at March 31, 2002 or
December 31, 2001.
In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" (SFAS No. 143). SFAS No. 143 establishes guidelines related to the
retirement of tangible long-lived assets of the Company and the associated
retirement costs. This statement requires that the fair value of a liability
for an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived assets. This statement is effective for financial statements issued
for the fiscal years beginning after June 15, 2002 and with earlier application
encouraged. The Company adopted SFAS No. 143 and does not believe that the
adoption will have a material impact on the financial statements of the Company
at March 31, 2002 or December 31, 2001.
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In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 provides for
the elimination of the pooling-of-interests method of accounting for business
combinations with an acquisition date of July 1, 2001 or later. SFAS No. 142
prohibits the amortization of goodwill and other intangible assets with
indefinite lives and requires periodic reassessment of the underlying value of
such assets for impairment. SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001. An early adoption provision exists for
companies with fiscal years beginning after March 15, 2001. The Company does
not have assets with indeterminate lives.
In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." This
statement provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishment of liabilities and also
provides consistent standards for distinguishing transfers of financial assets
that are sales from transfers that are secured borrowings. SFAS No. 140 is
effective for recognition and reclassification of collateral and for disclosures
relating to securitization transactions and collateral for fiscal years ending
after December 15, 2000, and is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. The Company believes that the adoption of this standard will not have a
material effect on the Company's results of operations or financial position.
Cash and Cash Equivalents
-------------------------
For purposes of the statements of cash flows, the Company considers all highly
liquid investments with original maturities of three months or less to be cash
equivalents.
Comprehensive Income
--------------------
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income" (SFAS 130), which was issued in June 1997. SFAS 130
establishes rules for the reporting and display of comprehensive income and its
components, but had no effect on the Company's net income (loss) or total
stockholders' equity. SFAS 130 requires unrealized gains and losses on the
Company's available-for-sale securities, which prior to adoption were reported
separately in stockholders' equity, to be included in comprehensive income. The
Company does not hold any securities qualifying under the Other Comprehensive
Income requirements.
Cost of sales
-------------
Cost of sales consists of the production costs of products sold, inbound and
outbound shipping charges, packaging supplies and costs associated with service
revenues and marketplace business.
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Derivative Instruments
----------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133 ("SFAS No. 130"), "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective Date
of FASB No. 133", and SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities", which is effective for the Company
as of January 1, 2001. This standard establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value.
If certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged asset or liability that are attributable to the hedged risk
or (ii) the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.
Historically, the Company has not entered into derivatives contracts to hedge
existing risks or for speculative purposes.
At March 31, 2002 and December 31, 2001, the Company has not engaged in any
transactions that would be considered derivative instruments or hedging
activities.
Earnings Per Share
------------------
On January 1, 1998, the Company adopted SFAS No. 128, which provides for
calculation of "Basic" and "Diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing net income available to
common shareholders by the weighted average common shares outstanding for the
period. Diluted earnings per share reflect the potential dilution of securities
that could share in the earnings of an entity similar to fully diluted earnings
per share. Although there were common stock equivalents outstanding at March
31, 2002 and December 31, 2001, they were not included in the calculation of
earnings per share because they would have been considered anti-dilutive.
Exploration Costs
-----------------
In accordance with accounting principles generally accepted in the United States
of America, the Company expenses exploration costs as incurred.
10
Fair Value of Financial Instruments
-----------------------------------
The Company's financial instruments as defined by SFAS No. 107, "Disclosures
about Fair Value of Financial Instruments," include cash, advances to affiliate,
trade accounts receivable, investment in securities available-for-sale,
restricted cash, accounts payable and accrued expenses and short-term
borrowings. All instruments other than the investment in securities available-
for-sale are accounted for on a historical cost basis, which, due to the short
maturity of these financial instruments, approximates fair value at December 31,
2001. Investment in securities available-for-sale is recorded at fair value at
March 31, 2002 and December 31, 2001.
Impaired Asset Policy
---------------------
In March 1995, the Financial Accounting Standards Board issued statement SFAS
No. 121 titled "Accounting for Impairment of Long-lived Assets." In complying
with this standard, the Company reviews its long-lived assets quarterly to
determine if any events or changes in circumstances have transpired which
indicate that the carrying value of its assets may not be recoverable. The
Company determines impairment by comparing the undiscounted future cash flows
estimated to be generated by its assets to their respective carrying amounts.
The Company does not believe any adjustments are needed to the carrying value of
its assets at March 31, 2002 or December 31, 2001.
Inventories
-----------
Inventories are stated at the lower of cost or market on a first-in, first-out
basis.
Investments
-----------
The Company's investments consist of nonmarketable equity securities. These
investments, for which the Company does not have the ability to exercise
significant influence in the underlying company, are accounted for under the
cost method of accounting. Dividends and other distributions of earnings, if
any, are included in income when declared. The Company periodically evaluates
the carrying value of its investments, and as of March 31, 2002 and December 31,
2001, these investments were recorded at the lower of cost or estimated net
realizable value.
The Company uses the equity method of accounting for all investments greater
than 20%, and for these investments in which the Company has a significant
influence over the investee.
11
Investment in Securities
------------------------
Pursuant to Statement of Financial Accounting Standards (SFAS) No. 115, the
Company's investments in securities are classified as either trading, held to
maturity, or available-for-sale. During the years ended December 31, 2000 and
2001, the Company did not own any securities classified as either trading or
held to maturity or available-for-sale. However, at December 31, 2000 and 2001,
the Company did own securities classified as trading.
Securities classified as trading are classified as cash equivalents. Unrealized
holding gains and losses on trading securities are reported as other income on
the statement of operations.
Gains and losses on the sale of trading securities are determined using the
specific identification method and are included in earnings.
Mineral Exploration and Development Costs
-----------------------------------------
All exploration expenditures are expensed as incurred. Significant property
acquisition payments for active exploration properties are capitalized. If no
minable ore body is discovered, previously capitalized costs are expensed in the
period the property is abandoned. Expenditures to develop new mines, to define
further mineralization in existing ore bodies, and to expand the capacity of
operating mines, are capitalized and amortized on a units of production basis
over proven and probable reserves.
Should a property be abandoned, its capitalized costs are charged to operations.
The Company charges to operations the allocable portion of capitalized costs
attributable to properties sold. Capitalized costs are allocated to properties
sold based on the proportion of claims sold to the claims remaining within the
project area.
Mining Properties
-----------------
Costs of acquiring mineral properties are capitalized by project area upon
purchase of the associated claims (see Note 4). Costs to maintain the mineral
rights and leases are expensed as incurred. When a property reaches the
production stage, the related capitalized costs will be amortized, using the
units of production method on the basis of periodic estimates of ore reserves.
12
Mineral properties are periodically assessed for impairment of value and any
diminution in value is charged to operations at the time of impairment. Should
a property be abandoned, its unamoritized capitalized costs are charged to
operations. The Company charges to operations the allocable portion of
capitalized costs attributable to properties sold. Capitalized costs are
allocated to properties abandoned or sold based on the proportion of claims
abandoned or sold to the claims remaining within the project area.
Property and Equipment
----------------------
Property and equipment are stated at cost. Depreciation of property and
equipment is calculated using the straight-line method over the estimated useful
lives of the assets, which range from three to ten years. See Note 2.
Provision for Taxes
-------------------
Income taxes are provided based upon the liability method of accounting pursuant
to SFAS No. 109 "Accounting for Income Taxes." Under this approach, deferred
income taxes are recorded to reflect the tax consequences on future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year-end. A valuation allowance is recorded against
deferred tax assets if management does not believe the Company has met the "more
likely than not" standard imposed by SFAS No. 109 to allow recognition of such
an asset.
At March 31, 2002 and December 31, 2001, the Company had no net deferred tax
assets. As management of the Company cannot determine that it is more likely
than not that the Company will realize the benefit of any net deferred tax
asset.
Reclassification
----------------
Certain amounts from prior periods have been reclassified to conform to the
current period presentation. This reclassification has resulted in no changes
to the Company's accumulated deficit or net losses presented.
Reclamation Costs
-----------------
Management believes reclamation costs at its mining sites will be minimal.
Posting of a reclamation bond has not been required at this time.
Revenue Recognition
-------------------
The Company recognizes revenue from product sales upon shipment to the customer.
13
Segment Information
-------------------
The Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," during 2001. SFAS No. 131 established standards for
reporting information about operating segments in annual financial statements
and requires selected information about operating segments in interim financial
reports issued to stockholders. It also established standards for related
disclosures about products and services and geographic areas. Operating
segments are defined as components of an enterprise about which separate
financial information is available, evaluated regularly by the chief operating
decision makers, or a decision making group, in deciding how to allocate
resources and in assessing performance.
Use of Estimates
----------------
The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.
Note 2 - Property and Equipment:
Property and equipment are stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets. The useful
lives of property, plant and equipment for purposes of computing depreciation
are five to forty years. The following is a summary of property, equipment, and
accumulated depreciation:
March 31, Dec. 31,
2002 2001
------------ -----------
Equipment $ 57,180 $ 57,180
Plant assets 1,597,681 1,597,681
------------ -----------
Total assets $ 1,654,861 $ 1,654,861
Less accumulated
depreciation (914,519) (904,983)
$ 740,342 $ 749,878
============ ===========
Depreciation and amortization expense for the three months ended March 31, 2002
and March 31, 2001 was $9,536 and $8,646, respectively. The Company evaluates
the recoverability of property and equipment when events and circumstances
indicate that such assets might be impaired. The Company determines impairment
by comparing the undiscounted future cash flows
14
estimated to be generated by these assets to their respective carrying amounts.
Maintenance and repairs are expensed as incurred. Replacements and betterments
are capitalized. The cost and related reserves of assets sold or retired are
removed from the accounts, and any resulting gain or loss is reflected in
results of operations.
Note 3 - Investments:
The Company's securities investments are classified as available for sale
securities which are recorded at fair value in investments on the balance sheet,
with the change in fair value during the period excluded from earnings and
recorded net of tax as a component of other comprehensive income. The Company
has no securities which are classified as trading securities.
At March 31, 2002 and December 31, 2001, the market values of investments were
as follows:
March 31, 2002 Dec. 31, 2001
-------------- -------------
Interactive Displays $ 20,000 $ 20,000
---------- ----------
$ 20,000 $ 20,000
========== ==========
Note 4 - Depletable Assets and Mine Investments:
Shoshone Group - The mining company owns five patented and 30 unpatented
contiguos lode mining claims situated in the St. Joe Mining District, Shoshone
County, Idaho. The unpatented claims were acquired by the issuance of 1,500,000
shares of capital stock to Irv Scheller and members of his family. The five
unpatented claims were acquired in 1970 from Violet Hanson for $2,500 in cash
and 100,000 shares of capital stock.
Weber Group - The Company has acquired, for 100,000 shares, six patented and
five unpatented lode mining claims located in the Lakeview Mining District,
Bonner County, Idaho. In addition, $125 cash was paid and 100 shares of capital
stock were issued to acquire a pit fraction within the same location.
Idaho Lakeview and Keep Cool Group - The company acquired the Lakeview and Keep
Cool mining properties through the issuance of 3,126,700 shares of capital stock
during 1985.
Drumheller Group - The Company owns six patented claims consisting of 110.82
acres which are adjoining and lying south of the Idaho Lakeview claims on an
extension of the Hewer vein. The Company issued 109.141 shares of its stock to
the Drumheller Estate to acquire these claims on February 1984.
15
Bullion Group - Seven patented mining claims were acquired in 1998 in full
settlement of a promissory note owed to the Company. The property was recorded
at the unpaid balance of the promissory note at the time of the quit claim.
Sugar Pit #2 - The company paid $14,700 cash during 2001 to acquire this
property, located in
Note 5 - Common Stock:
The Company is authorized to issue 20,000,000 shares of $0.10 par value common
stock. All shares have equal voting rights, are non-assessable and have one
vote per share. Voting rights are not cumulative and, therefore, the holders of
more than 50% of the common stock could, if they choose to do so, elect all of
the directors of the Company.
There were no capital stock transactions during the periods presented in the
financial statements.
16
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Quarterly Report on Form 10-Q contains forward-looking statements.
Management cautions that forward-looking statements are subject to risks and
uncertainties that could cause the Company's actual results to differ materially
from those projected in forward-looking statements.
Shoshone Silver Mining Company continues to pursue operations in its mining
properties for 2002 with expectations of increased metal prices and
opportunities. An earnest money deposit has been received for the Mexico silica
operations project. Therefore, there are no mining revenues and expenses
reported for the first quarter of 2002. However, management is currently
investigating other potential mining properties in the United States and in
Mexico. A potential gold property located in Sacramento, California has been
identified and is currently under consideration.
Sample runs from various small mines in Mexico have been processed through our
mill operation, allowing Shoshone to identify recoveries from potential sites.
Shoshone owns 25% of the mill equipment of two other gold and silver properties
in the area, known as the La Morena and La Vibre.
Shoshone is currently negotiating a new lease for the Lakeview plant and mill.
Negotiations should be completed within the next two months.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2002 AND THREE MONTHS ENDED
MARCH 31, 2001.
Sales for the current three-month period have decreased $46,095, or 100%, over
the previous three-month period sales of $46,095. There were no mining revenues
for the current quarter due to the potential sale of the silica operations.
Cost of sales for the current three-month period have decreased $60,398, or
100%, over the previous three-month cost of sales of $60,398, primarily due to
the potential sale of the Company's interest in the silica operations.
General and administrative expenses for the current three-month period have
decreased $3,528, or 30%, over the previous three-month period expenses of
$11,650. This decrease is principally due to a decrease in professional fees of
$2,317 and other minor decreases.
Other income for the current three-month period have increased $11,159, or 13%,
from the previous three-month period's other income of $(84,002) primarily due
to increased unrealized gains/losses on marketable securities ($178,011),
increased lease income ($4,200), partially offset by decrease in realized gains
on sales of marketable securities ($157,351), and decreased option proceeds
($11,174).
17
LIQUIDITY AND CAPITAL RESOURCES
Historically, Shoshone Silver Mining Company has utilized earnings from
operations and gains from the sales of marketable securities to generate its
working capital and expects that future cash flow from operations will be
sufficient to meet future working capital requirements.
As of March 31, 2002, cash and cash equivalents totaled $48,726, which
represents a decrease of $84,095 from the December 31, 2001 balance of $132,821.
This decrease was primarily attributable to the $84,095 of cash used by
operating activities.
Cash provided by investing activities had no effect on cash and cash equivalents
for the three months ended March 31, 2002.
The Company plans to continue to make investments in marketable securities and
further expansion of its operating facilities to improve operational
efficiencies and customer service. The Company expects to meet these cash
requirements through a combination of operating cash flow and investing
activities.
18
Part II - OTHER INFORMATION
Shoshone Silver Mining Company, Inc.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters required submission to security holders for vote during the
three months ended March 31, 2002.
Item 6. Exhibits and Reports on Form 8-K.
Form 8-K dated March 20, 2002, reporting the change in Shoshone Silver
Mining Company's independent public accountants to Webster & Williams from
Scott Beggs & Company.
19
Shoshone Silver Mining Company, Inc.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SHOSHONE SILVER MINING COMPANY, INC.
______________________________________
(Registrant)
Date: May 14, 2002 By /s/ James I. Scheller
____________________________________
James I. Scheller, President