-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P1KUlJjqKnyGJBe4XUzeFDtKPA01LOscLrOVj6nyOLeTBNX22oaduRzlXfjrMyRx H9URQCF8Fqj0B27dk3XKHA== 0001096906-01-500047.txt : 20010516 0001096906-01-500047.hdr.sgml : 20010516 ACCESSION NUMBER: 0001096906-01-500047 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANSBURY HOLDINGS CORP CENTRAL INDEX KEY: 0000093566 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 870281239 STATE OF INCORPORATION: UT FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06034 FILM NUMBER: 1634466 BUSINESS ADDRESS: STREET 1: 8801 E HAMPDEN AVE STREET 2: STE 200 CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 7207481407 MAIL ADDRESS: STREET 1: PO BOX 370010 CITY: DENVER STATE: CO ZIP: 80237 FORMER COMPANY: FORMER CONFORMED NAME: STANSBURY MINING CORP DATE OF NAME CHANGE: 19901003 10-Q 1 stansbury10q_march2001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Quarterly Period ended March 31, 2001 Commission File Number: 0-6034 STANSBURY HOLDINGS CORPORATION -------------------------------------------------- (Exact Name of Issuer as Specified in its Charter) UTAH 87-0281239 - - ------------------------------- --------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification Number) Incorporation or Organization) 8801 East Hampden Avenue, Suite 200, Denver, CO 80231 ----------------------------------------------------- (Address of Principal Executive Offices) (720) 748-1407 ---------------------------------------------------- (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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ X ] NO [ ] Indicate the number of shares outstanding of the issuer's classes of common stock as of the latest practicable date. At September 30, 2000, there were 94,748,901 common shares issued and outstanding, $.001 par value. ITEM 1 - Financial Statements STANSBURY HOLDINGS CORPORATION AND SUBISIDARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2001 March 2001 June 2000 ------------ ------------ Assets Current Assets: Cash $ 52,493 $ -- Accounts Receivable $ 28,494 $ -- Inventory $ 130,400 $ 18,960 Prepaid expenses $ 17,500 $ 11,640 Other $ 9,916 $ 9,916 ------------ ------------ Total Current Assets $ 238,803 $ 40,516 Land $ 120,000 $ -- Property and Equipment, at cost: Undeveloped mineral claims and projects, using full-cost method $ 23,532,593 $ 19,349,198 Los Banos exfoliation plant $ 569,102 $ 569,102 Buildings $ 850,000 $ 100,000 Other property and equipment $ 7,670 $ 6,219 ------------ ------------ $ 24,959,365 $ 20,024,519 Less: accumulated depreciation $ (35,233) $ (35,233) ------------ ------------ Net Property and Equipment $ 24,924,132 $ 19,989,286 Other Assets: Reclamation bonds $ 45,100 $ 45,100 Investment in Resource Vermiculite LLC $ 126,088 $ 126,088 Deposits $ -- $ -- ------------ ------------ Total Other Assets $ 171,188 $ 171,188 Total Assets $ 25,454,123 $ 20,200,990 ============ ============ Liabilities and Stockholders' Equity Current Liabilities: Bank Overdrafts $ -- $ 52,227 Elk Creek acquisition obligations $ 972,500 $ 1,072,500 Los Banos acquisition obligation $ 350,000 $ 350,000 Sweetwater acquisition obligation $ 163,000 $ -- Current installments of long-term debt $ 817,217 $ 820,718 Convertible notes payable to officers and shareholders $ 743,846 $ 195,750 Convertible note payable to related party $ 130,000 $ 130,000 Accrued interest $ 195,337 $ 694,717 Trade accounts payable $ 1,267,804 $ 587,916 ------------ ------------ Total Current Liabilities $ 4,639,704 $ 3,903,828 Long-Term Debt $ 1,510,000 $ -- ------------ ------------ Total Liabilities $ 6,149,704 $ 3,903,828 ------------ ------------ Stockholders' Equity: Common stock, par value $0.001, authorized 100,000,000, issued and outstanding 99,772,149 and 74,508,534 at March 31, 2001 and June 30. 2000, respectively $ 99,772 $ 74,509 Paid-in capital $ 33,323,939 $ 26,716,353 Deferred interest $ (88,691) $ (88,691) Accumulated deficit $(14,030,601) $(10,405,009) ------------ ------------ Total Stockholders' Equity $ 19,304,419 $ 16,297,162 ------------ ------------ Total Liabilities and Stockholders' Equity $ 25,454,123 $ 20,200,990 ============ ============ See Accompanying Notes to Consolidated Financial Statements
STANSBURY HOLDINGS CORPORATION AND SUBISIDARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDING MARCH 31, 2001 AND 2000 THREE MONTHS NINE MONTHS ENDED MARCH 31 ENDED MARCH 31 2001 2000 2001 2000 ------------- ------------ ------------- ------------- Sales $ 122,687 $ 268 $ 168,325 $ 358 Cost of sales ---------------------------- ----------------------------- Gross profit $ 122,687 $ 268 $ 168,325 $ 358 Expenses: Operating $ 380,362 $ 770,558 General and administrative $ 203,938 $ 686,275 $ 1,598,117 $ 1,500,911 Interest, conversion premiums, and equity inducements $ 301,165 $ 1,082,041 $ 1,425,243 $ 1,966,827 ---------------------------- ----------------------------- Total Expenses $ 885,465 $ 1,768,316 $ 3,793,918 $ 3,467,738 Loss from operations $ (762,778) $ (1,768,048) $ (3,625,593) $ (3,467,380) Other income $ -- Net Loss $ (762,778) $ (1,768,048) $ (3,625,593) $ (3,467,380) Basic and diluted earnings per share: Loss from continuing operations $ (0.01) $ (0.03) $ (0.04) $ (0.06) Extraordinary gain $ -- $ -- $ -- $ -- Net Loss $ (0.01) $ (0.03) $ (0.04) $ (0.06) Basic and diluted weighted average shares outstanding 99,772,149 59,903,559 98,132,733 53,742,287
STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended March 31 2001 2000 ------------ ------------- OPERATING ACTIVITIES Net Income (Loss) $(3,625,592) $ (3,467,380) Adjustments to reconcile Net Income (loss) to net cash provided by operations: Accounts Receivable $ (28,495) Depreciation $ 670 Stock issued for debt,interest and compensation $5,473,284 Prepaid Expenses $ (5,860) $ 8,841 Inventory $ (111,440) Accounts Payable $ 677,616 $ (87,099) Other Assets Accrued Interest Payable $ (499,381) $ (251,878) Other Current Liabilities $ 611,197 $ (21,558) Net cash provided by (used in) Operating Activities $(2,981,955) $1,654,880 INVESTING ACTIVITIES Mineral property $(2,211,263) Land $ (120,000) Prepaid Royalty $ (209,500) Building $ (750,000) Other Property and Equipment $(1,887,263) $ (2,307) Development Costs $ (20,557) $ (352,992) Deposits $ (4,100) $ (25,100) Net cash provided by (used in) Investing Activities $(5,202,683) $ (380,399) FINANCING ACTIVITIES Bank Overdraft $ 5,431 Notes Payable $ 1,506,500 $ (1,275,321) Common Stock $ 25,264 Common Stock to Issue $ 2,171 Capitalization Excess $ 6,607,586 Net cash provided by (used in) Financing Activities $ 8,141,521 $ (1,269,890) Net cash increase for period $ (43,117) $ 4,591 Cash at beginning of period $ 52,228 $ - Cash at end of period $ 52,493 $ 4,591 STANSBURY HOLDINGS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Stansbury Holdings Corporation ("Stansbury") was incorporated in 1969 under the name Stansbury Mining Corporation. In 1985, Stansbury changed its name to Stansbury Holdings Corporation. Stansbury, and its wholly owned subsidiaries, to wit: Elk Creek Vermiculite, Inc., Dillon Vermiculite Limited LLC, International Vermiculite (Montana), Inc., International Vermiculite (California), Inc., and Sweetwater Garnet, Inc., are referred to collectively herein as the "Company." The Company's business is the acquisition, exploration, development and operations of industrial mineral properties, particularly vermiculite and garnet mineral projects. NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. These statements do not include any adjustments that might result from the outcome of this uncertainty. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, such interim statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented. The results of operations for these interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes for the year ended June 30, 2000, filed with the Company's Form 10-KSB. Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. Cash and Cash Equivalents - The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Inventory - Inventory is stated at the lower of cost or market. Undeveloped Mineral Claims and Projects - The Company follows the full-cost method of accounting for its mineral claims and projects. Accordingly, all costs associated with the acquisition, exploration, and development of mineral properties, including directly related overhead costs, are capitalized. Once these properties are developed, the capitalized costs will be amortized on the unit-of-production method using estimates of proved reserves. In addition, the capitalized costs are separated into cost centers on a state-by-state basis. The capitalized costs for each cost center are subject to a "ceiling test", which limits such costs to the aggregate of the estimated present value of future net revenues from proved reserves, plus the lower of cost or fair market value of undeveloped and unproved properties. Other Plant, Property, and Equipment - Other plant, property and equipment, consisting of the Los Banos exfoliation plant, two buildings, and office equipment, are recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are 20 years for the plant and buildings, and 5 years for the office equipment. Revenue Recognition - Revenue is recognized when products are shipped to customers. Income Taxes - The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. This method also requires the recognition of future tax benefits such as net operating loss carryforwards, to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Earnings (Loss) Per Share - Basic earnings (loss) per share are based on the weighted average shares outstanding. Outstanding stock options and convertible debt obligations are generally treated as common stock equivalents for purposes of computing diluted earnings per share. However, since the Company reported net losses for the years ended June 30, 2000 and 1999, these common stock equivalents are excluded from the computation of diluted earnings per share because their effect on net loss per share would be anti-dilutive. Use of Estimates - The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - GOING CONCERN STATEMENT The Company emerged from Chapter 11 bankruptcy proceedings during 1985, and has been non-operating since that time until June, 2000. At March 31, 2001, its negative working capital was approximately $4,400,901, and accumulated deficit was approximately $14,030,601. During calendar 1999, the Company hired Aldine J. Coffman, Jr., as a new president who also now serves as chairman of the Board of Directors and chief executive officer. Eldon W. Brickle, Chief Operating Officer and Executive Vice-President, was elected to the Board on August 18, 2000. Daniel Yeungling and Dennis Staal were elected to the Board in early, 2000. Messrs. Coffman, Brickle, Yeungling and Staal constitute the entire Board of the Company. Messrs. Coffman, Brickle and Staal are members of the board or management committees of all wholly owned subsidiaries. There can be no assurances that the Company will be successful in obtaining the financing necessary to develop its mineral reserves. Nor can there be any assurances that other sources of funds can be obtained to cover general and administrative costs. The Company's independent public accountants have included a "going concern" emphasis paragraph in their audit report accompanying the June 30, 2000, consolidated financial statements reported in the Company's 10K-SB for that reporting period. The paragraph states that the Company's recurring losses and negative working capital raise substantial doubt about the Company's ability to continue as a going concern and cautions that the financial statements do not include adjustments that might result from the outcome of this uncertainty. Management believes that, despite the financial and funding difficulties going forward, it now has a business plan that, if successfully funded and executed, will result in the development of its mining claims thereby improving operating results. Operations of both the vermiculite and garnet projects continued during the reporting quarter, although vermiculite mining and concentration operations were temporarily suspended on March 8, 2001, pending certain plant rehabilitations. NOTE 3 - TRADE PAYABLES Trade Payables in the amount of $1,267,803.82 are broken down as follows: International Vermiculite (Montana), Inc. $192,478.56 International Vermiculite (California), Inc. $52,169.72 Sweetwater Garnet, Inc. $117,960.33 Stansbury Holdings Corporation $756,564.69 Pay-roll taxes and related $76,130.52 Common stock to issue (subsequently issued) $72,500 Common Stock to Issue represents monies received for common stock subscriptions for which stock was issued subsequently to the reporting period or remains obligated to be issued. NOTE 4- COMMITMENTS AND CONTINGENCIES Effective December 1, 2000, the Company entered into a 60-month lease agreement for office space in Denver, Colorado. Rent is payable quarterly in three-month increments at $14,000, with future annual escalations. The Company is obligated to the federal government for approximately $24,100 per year to maintain the ownership of its mineral claims. These funds are due and payable by noon, on September 1, each year, and have been paid through August 31, 2001. Various legal proceedings and claims are pending against the Company. Some of the plaintiffs in these matters are certain of the Company's shareholders and former officers, and others are trade creditors. Actions brought by shareholders and former officers generally pertain to default in the repayment terms of amounts loaned to the Company. The Company is accruing interest on these amounts pursuant to the terms of the underlying obligations. At March 31, 2001, the principal amount of these obligations is included in short-term debt under the caption "officers, directors and shareholders." Actions brought by certain trade creditors and others have resulted in the Company issuing promissory notes payable to those creditors. The Company is accruing interest on these amounts pursuant to the terms of the promissory notes. At March 31, 2001, the principal amount of these promissory notes is included in long-term debt under the caption "other". Actions have also been brought by the Company with respect to the debt obligations that resulted from the Elk Creek acquisition and Los Banos acquisition, as well as for certain equipment acquisitions. Management believes that these matters will be settled for an amount not greater than the recorded amount of those obligations at March 31, 2001. ITEM 2 - PLAN OF OPERATIONS: GENERAL: Stansbury continued its transition from a development stage company to an operating company in the quarter ending March 31, 2001, although the road of such transition proved to not to be smooth. Because of repeated equipment failures at the Dillon Vermiculite Mill, the decision was made to suspend vermiculite mining and milling operations on March 9, 2001, until reliable replacement equipment could be acquired and installed. The equipment failures had developed a crescendo of shut-downs, leading to more severe operating cash-flow negatives than the company could sustain. Funding for replacement equipment, through the in-place partially funded private placement program, is anticipated to supply the capital needed to install the required equipment, and provide the working capital to renew mining and milling of vermiculite. Although the vermiculite mining and milling operations in Montana were temporarily suspended, adequate inventory of concentrate had been shipped to the company's exfoliation facility in Los Banos, California, to continue the operations of that facility. Revenues from the sale of exfoliated product, the only company revenues for the quarter, totaled $63,441.00. Sales of vermiculite concentrate to customers were suspended until the replacement equipment at the mill could assure product quality for industrial, as opposed to horticultural, uses. During the quarter, the company continued to process its inventory of stockpiled garnet concentrate owned by its Sweetwater Garnet subsidiary in Dillon, Montana. The company also acquired the principal components for its new concentrating equipment to be installed at its Sweetwater Garnet mine in Madison County, Montana, and expects to open that fully permitted mine in late May, 2001, for year-around mining and concentration of garnet ore. During the quarter, the company received funding from two private placements, as follows: (1) from the October 2000 offering of $2.5 million in secured mortgage participations, $150,000, and (2) from a February, 2001, secured working capital line, $200,000. The remaining unsubscribed funding from the October 2000 offering as of the end of the quarter was $810,000.00, of which $175,000 has been subsequently subscribed (see subsequent event note to the financial statement). The company expects the remaining subscription to be filled in the current quarter. Adverse Stock Market conditions prevailing from October to the present are seen by the private placement agent as the primary reason for the delay in the funding schedule. DESCRIPTION OF PROPERTIES AND OPERATIONS: A. VERMICUILTE PROPERTIES AND OPERATIONS: (1) THE DILLON VERMICULITE PROJECT MINE AND MILL: (a) UNPATENTED LODE MINING CLAIMS: The mining property consists of 95 unpatented lode-mining claims of approximately 20 acres each, or a total of 1900 acres (slightly over three square miles). Prior owner's exploration indicated that drilling had confirmed sufficient ore at a 25% grade to support the mill at 30,000 tons of concentrate output a year for a period of twenty years. (b) MINE AND CONCENTRATION MILL: The concentration mill consists of a building of approximately 60 by 40 feet, with a thirty-foot ceiling, to which a large shed roof extension was added during the quarter. Outside the building, the mill "front-end" consists of certain gross screening processes to remove large waste rock, a dryer to remove moisture, and a pre-feed storage bin. Inside the mill are four double-screened shaker screens feeding up to twelve winnowing boxes. Concentrated product from the winnowers is stored in three silos adjacent to the mill. Fuel tanks and a power plant are located outside the mill building. As designed, the mill is expected to be able to take up to 35 tons an hour of ore feed, and yield 4 to 5 tons per hour of concentrate. Tailings are returned to the open pit from whence the ore is mined, and reclaimed in place by contouring and seeding the surface. A dust control baghouse was erected adjacent to the mill during the quarter. (2) THE HAMILTON VERMICULITE PROJECT: (a) FEE LAND AND IMPROVEMENTS: The Company owns a small office building and surrounding land (1.25 acres) at Victor Siding, Montana (southwestern Montana), which can be used for a field office (the "Field Office Property"), and which building is adequate to use presently to expand exploration activities. (b) UNPATENTED LODE MINING CLAIMS AND MILL SITE CLAIMS: The Company is the holder of 96 unpatented lode-mining claims in Ravalli County, Montana, which were formerly managed and developed under the name of "Western Vermiculite". These claims and the development of a mining and milling project to exploit the Skalkaho Mountain vermiculite deposit covered by these claims is referred to as the "Hamilton Vermiculite Project". A "mineral deposit" or "mineralized material" is a mineralized body which has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade of metal(s). Such a deposit does not qualify as a reserve, until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility. Under the original Western Vermiculite Project, the Company proposed to build an open pit vermiculite mine, haul road, ore beneficiation plant, host rock waste stockpile, water storage tanks, sedimentation ponds and administrative and maintenance buildings. At this time, the Company is deferring further work on the Hamilton Project until it has sustained commercial operations of its Dillon mine and mill. The Company's 96 unpatented mining and mill site claims, comprising approximately 1,750 acres, are located about 11 air miles East and slightly North of Hamilton, Montana. Access to the property is by an improved, private road. The nearest rail siding, located on the Montana Rail Link Railroad, is an additional 9 miles North of Hamilton, Montana, at Victor Crossing, Montana. (3) THE LOS BANOS EXFOLIATION PLANT: The Los Banos Exfoliation Plant, located in the San Joaquin valley of central California, was acquired by the Company in May, 2000. The facility consists of two rotary furnaces for the exfoliation of vermiculite, and certain ancillary equipment. The Plant is capable of processing 5000 tons of product per year. All exfoliate product processed by the plant is currently being sold to customers in the San Joaquin Valley. The Company is reviewing the California air emission standards that are to take effect on July 1, 2001, and evaluating the capital cost of compliance versus the capital cost of relocating the exfoliation facility to either Montana or Nevada. If relocation is elected, the time to physically remove and re-install the plant is expected to take less than 30 days. Such a relocated facility would include not only the two currently operating furnaces, but also the two additional furnaces acquired by the Company in December 2000. The four furnaces would be capable of 10,000 tons of product per year. (4) CURRENT VERMICULITE MARKET AND COMPETITION: All of the vermiculite that is now being mined in the United States comes from mines in Virginia and South Carolina. W.R. Grace & Company has a large vermiculite operation near Enoree, South Carolina, which is capable of producing approximately 100,000 short tons of vermiculite concentrate per year. Virginia Vermiculite Ltd. produces vermiculite from a mine near Woodruff, South Carolina, and from a mine near Louisa, Virginia. The Company believes that the combined output of Virginia Vermiculite Ltd., is approximately 90,000 tons per year. Both Grace and Virginia Vermiculite consider their reserve and production data to be confidential so the Company's estimates of their production are approximations. There is one other small mining operation in South Carolina. This operation was for many years known as Patterson Vermiculite and was recently sold to Palmetto Vermiculite (now Virginia Vermiculite). This operation has historically produced vermiculite at the rate of 15,000 tons per year. The sum total of all three companies is an estimated maximum production capacity of 205,000 short tons per year. The Company believes that vermiculite produced from its Dillon property will be competitive with South Carolina and Virginia sources throughout the western United States and Canada. There is no vermiculite mine currently active in the western United States other than the Company's facilities at Dillon. Currently, substantially all of the vermiculite imported into the United States and Canada comes from either the Peoples Republic of China, the Republic of South Africa, or Zimbabwe. The amount of vermiculite arriving at ports in California and Washington is quite small and relatively high priced. Although the possibility of larger and lower cost shipments of imported vermiculite landing on the Pacific Coast is possible, the Company believes that the information available at this time is insufficient to allow it to reasonably predict its potential impact on the marketability of its vermiculite ores. B. GARNET PROPERTIES AND OPERATIONS: On July 28, 2000, the Company acquired Sweetwater Garnet, Inc. (a Nevada corporation qualified to do business in Montana), from Absolute Resources Corp., an Alberta, Canada, publicly traded company. Sweetwater Garnet, Inc., now a wholly owned subsidiary of the Company, is the owner of the Sweetwater Garnet Mine and Mill Project. The Sweetwater Garnet Mine and Mill Project consists of 1860 acre lease in Madison County, Montana, upon which a garnet concentrating mine and mill are located, and a finishing mill located on four acres of fee land in Beaverhead County, Montana, about six miles south of the town of Dillon, Montana, adjacent to Interstate15 and a rail siding. The acquisition was completed on July 28, 2000. The garnet facilities have a fully permitted capacity of at least 12,000 tons per year of finished garnet, which in the past has been sold to the abrasives and water treatment industries. With modest expenditures, the mine and two mills can be increased to 20,000 tons per year output, which represents 20% of current United States demand. The Plant building can house further capacity increase up to 50,000 tons per year. Industrial grade garnet, used in the abrasives industry, and in water-jet cutting and water treatment facilities, sells generally for an average of $300 per ton, depending on size. The facilities of Sweetwater Garnet, Inc., produce the full suite of sizes used in the industry. The known ore body covers an extensive area from the surface to an average depth of nine feet, with an estimated resource able to supply 16 years of ore to the mills at a production rate of 20,000 tons of finished garnet per year. C. LIQUIDITY AND FINANCE: Prior to 1999, the Company had been inactive and non-operating for years; consequently, it has been questionable as to whether or not it can remain a going concern. The primary activity in the past few years has been to preserve and maintain mineral leases and claims. No actual mining has occurred since the Company acquired such properties in 1984, other than the operations commenced in December, 1999, maintained sporadically through the summer of 2000, and commenced in earnest during the last calendar quarter of 2000. Other than the revenues from recent production, the Company has had no income since 1991, and has utilized proceeds of loans from shareholders and the issuance of capital stock for meeting its operating capital commitments. Funding for Company general and administrative expenses is not expected to be satisfied by this source. It is anticipated the balance of the funds to be realized from the outstanding private placement will sustain the company until its revenues are self sufficient for that purpose. The Company expects that condition to be reached in the July1 to September, 30, 2001, quarter, but certainly no later than December 31, 2001. PART II - OTHER INFORMATION: ITEM 1 - LEGAL PROCEEDINGS: Pending actions against the Company, as of May 10, 2001, include the following: (1) An action against the Company by Ellsworth, Wiles & Chalphin, P.C., filed in the Court of Common Pleas, Bucks County, Pennsylvania, on September 14, 1998. James G. Wiles ("Wiles") acted as former counsel to the Company as partner in Ellsworth, Wiles & Chalphin, P.C. The complaint alleges $69,654.95 is due for legal services rendered by Wiles on behalf of the Company. The matter has been settled for $60,000, to be paid on a scheduled pay-out. (2) The Montana Department of Environmental Quality issued two Notices of Noncompliance regarding disturbances at the Dillon Vermiculite Property and the Hamilton Property with Civil penalties totaling $42,950. With respect to Dillon Project, the Company is currently negotiating with the Department of Environmental Quality to pay $20,000 and to complete $20,000 in reclamation work on various abandoned mine sites around the State. With respect to the Hamilton Project, the proposed penalty of $450 has been paid. (3) A Complaint to foreclose a Notice of default on the note with Nevada Vermiculite, L.L.C., that the Company has failed to make a $130,000 payment plus interest due October 28,1999. The foreclosure pertains to the entire Hamilton project. Responsive pleadings, including a counterclaim have been filed in this matter. (4) The Company initiated an action to have a Receiver appointed for one of the creditors of its Dillon Vermiculite operation - Resource Vermiculite LLC, a defunct company. The Company has acquired about an 11% interest in the defunct company and is currently in the process of seeking a restructured settlements with the Receiver. (5) A judgment obtained by Dorsey & Whitney, a general partnership, in December, 1994, for a total amount of which is $85,210 . A settlement in principal has been reached. (6) A judgment obtained by Martineau & Co., in Salt Lake City, Utah, in May, 1991, for approximately $5,000.00. (7) A judgment obtained by Bruce Blessington, in Salt Lake County, Utah, for $14,674.00. These judgments [items (6) and (7)] remain unsatisfied as of March 31, 2001, are more than seven years old and may now be unenforceable. The present whereabouts of the claimants is unknown to the Company at this time. (8) Two former directors have filed an action in Bergen County, New Jersey, claiming the company was indebted to them in the amounts of $335,000 and $12,000 respectively, with interest and costs. The company has engaged counsel to contest the claims. (9) Pacific Vermiculite LLC has filed an action in Merced County, California, for judgment on the balance due on the acquisition of the Los Banos Exfoliating. The matter has been settled in principle. (10) Kailub, Inc., as assignee of Lowell Thomas, has filed an action in Beaverhead County, Montana, to collect the sum of $40,000.00, plus interest and costs, primarily in relation to the sale to Stansbury of certain equipment. The matter has been settled in principle. (11) Behre Dolhbear & Co. has filed an action against the company in the City and County of Denver, Colorado, for the sum of approximately $15,000.00. The matter has been settled in principle and the initial payment on the settlement has been made. (12) Cooperative Holding Corporation has filed and action in Essex County, New Jersey, for $30,000, plus interest and costs. The company expects to discharge this indebtedness prior to June 30, 2001. (13) Charles McLaughlin is one of several defendants in a legal action commenced by the Company in the Federal District Court in Salt Lake City, Utah, in 1995, and the last active party with whom the Company had not settled. Agreement has been reached to dismiss this action. This matter is settled in principle. Accordingly, items (1), (2), (5), (9), (10), (11) and (13) are regarded as resolved, with paperwork to effect the dismissal of these actions to be completed by the end of the fiscal year (June 30, 2001). Items (6) and (7) are being reclassified as no longer debts of the company. Item (12) is expected to be resolved prior to June 30, 2001. Items (3), (4) and (8) are expected to be litigated. ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS: None. ITEM 3 - DEFAULTS UPON SENIOR SECURITIES: None. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None. ITEM 5 - OTHER INFORMATION: None. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K: (a) There were no reports on Form 8-K filed during the three months ended March 31, 2001. SIGNATURES: In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DATED: May 14, 2001 STANSBURY HOLDINGS CORPORATION By:/s/ Aldine J. Coffman, Jr. ALDINE J. COFFMAN, JR., Chief Executive Officer and President By:/s/ Eldon W. Brickle ELDON W. BRICKLE, Chief Operating Officer and Assistant Treasurer, Director and Executive Vice-President -----END PRIVACY-ENHANCED MESSAGE-----