CHINA SHEN ZHOU MINING & RESOURCES, INC.

CHINA SHEN ZHOU MINING & RESOURCES, INC.'s exchange filed to remove a class of its securities from listing.

listing compliance notice

On May 17, 2013 NYSE MKT's staff said it would deny the company's request to extend its compliance deadline to October 24, 2013, reject its May 1 late-filer plan, and move to delist the stock, finding the company had not made progress consistent with its plan (accepted Jan 11, 2013). The company does not intend to appeal, and the filing warns there is no assurance a trading market will resume after delisting. This resolves the open question of the October 2012 notice and the April 2013 late-filing notice: the plans failed.

listing compliance notice

On April 17, 2013 NYSE MKT told the company it was out of compliance with listing rules because the 2012 annual report (Form 10-K) was not filed on time, and it must submit a plan by May 1, 2013 to regain compliance by July 16, 2013 or face delisting procedures. The company says the delay is due to ongoing talks with the SEC about how certain mine development costs were accounted for; a possible restatement would reverse about $2,287 thousand of capitalized costs in 2011, turning reported 2011 net income from operations of $2,249 thousand into a net loss from operations of $38 thousand. Preliminary 2012 net loss is estimated at $14,484-17,492 thousand, and the company cannot say when the 10-K will be filed. This adds to the October 2012 NYSE MKT notice.

listing compliance notice

On October 24, 2012 NYSE MKT told the company it is below a continued listing standard, based on its June 30, 2012 quarterly report, which covers substantial losses or financial impairment that makes continuing operations questionable. The company must submit a compliance plan by November 30, 2012 to regain compliance by April 24, 2013, or face delisting procedures. The company says it believes it can provide a satisfactory plan. This is a more serious notice than the December 2011 record-date notice.

listing compliance notice

On March 21, 2012 the company agreed to sell up to $10 million of Series A convertible preferred stock with warrants to institutional investors, in two $5M tranches, first closing around March 26, 2012; estimated net proceeds are about $9.35M. The preferred converts at $2.04 and pays 5% dividends, and the warrants cover about 1,960,785 shares at $2.04 for 42 months, so conversion and warrant exercise would dilute existing holders. The press release says the money is meant partly to develop the three Guizhou mining companies bought earlier in 2012; investors waived the restriction from the January 2011 offering.

material agreement

This amended filing restates the Wuchuan deal and adds two more Guizhou purchases made on February 7, 2012: 60% of Guizhou Qianshi Resources Development for RMB 6M (337,457 shares) and 60% of Yanhe Meilan Mining for RMB 9M (506,186 shares), both paid in company stock. With Wuchuan, total new shares to issue are 3,262,091, so shareholders are diluted further. The acquired-company financials are still promised later.

asset acquisition disposition

On January 16, 2012 the company, through its Inner Mongolia subsidiary Xiangzhen, bought 60% of Wuchuan Dongsheng Mining (Guizhou) from Gang Liu and Qiang Liu for RMB 93 million (about US$14.65M): RMB 43M in company stock (2,418,448 new shares) and RMB 50M in cash put into Wuchuan as new capital. Wuchuan has fluorite and barite mines and two processing plants; this adds a new Guizhou region alongside the Inner Mongolia, Anhui and Xinjiang interests. The $15M revenue and $4.5M profit for 2012 in the press release are management forecasts, and the required acquired-company financial statements are still to be filed by amendment.

asset acquisition disposition

The company agreed to sell 2,836,883 shares at $7.05 each, with warrants for 851,066 more shares at $8.46, in a registered direct offering to institutional investors, for about $20 million gross (about $19 million net). Afterwards about 30.8 million shares will be outstanding before warrants. The company says $5 million is for the Xinyi acquisition and renovation, and none for repaying debt. It also agrees to a 90-day limit on new securities issues and a 12-month bar on variable-rate deals, so existing shareholders are diluted.

material agreement

On January 13, 2011 the company, through Xingzhen Mining, acquired 55% of Xinyi Fluorite Company in Jingde County, Anhui Province for RMB 65 million (about US$9.85 million), paid as RMB 50 million in company stock and RMB 15 million in cash. Two other investors take 15%, and Xingzhen and those investors will pay a further RMB 28 million into Xinyi, including RMB 20 million for renovating its mining facilities. Management's press release hopes for about 35,000 tons of fluorite powder in 2011 (those are management hopes, not results). This extends the fluorite business beyond the Inner Mongolia base.

asset acquisition disposition

The company agreed to sell its Kyrgyz subsidiary Tun Lin (owner of Kichi-Chaarat and the Kuru-Tegerek copper-gold mine, bought in Nov 2007 for US$10 million) to Fortune Pegasus International for US$8.2 million, plus assignment of a US$1,761,784.78 loan, closing scheduled Oct 31, 2009. It also agreed to repurchase the entire $28 million notes from Mountview Path Limited for US$8 million cash plus 5 million shares, closing scheduled Nov 30, 2009; Mountview waives the defaults, gives up accrued interest, and the pledge on Yu and Xu's shares is to be released. The company states the sale proceeds will fund the repurchase. This resolves the default and acceleration thread, subject to closing; it adds new share dilution of 5 million shares.

material agreement

On May 8, 2009 Best Tone sent a notice of acceleration, stating the EBITDA defaults were not cured within 14 days, so the $28 million notes plus any accrued interest are declared immediately due. The company says it is in discussions with Best Tone about remedying the default. This continues the April default notice and moves it from a threat to an actual demand.

debt financing

On April 16, 2009, Best Tone Holdings Limited, now the holder of the $28 million 6.75% Senior Convertible Notes originally issued to Citadel, sent a notice of default saying the company missed minimum EBITDA targets for the quarters ended March 31, June 30 and September 30, 2008. If not cured within 14 days, the notes' $28 million could be declared immediately due. This is the covenant risk flagged in the earlier Citadel note amendments, now being enforced.

debt financing

the American Stock Exchange certified CHINA SHEN ZHOU MINING & RESOURCES, INC.'s securities for listing, clearing them to begin trading.

listing compliance notice

On December 10, 2007 Xiangzhen Mining and majority stockholder Xiaojing Yu agreed to sell 100% of Tianzhen Mining (the Xinjiang copper and lead-zinc exploration business, held 99% and 1% respectively) to Dechang Wang for HK$22 million (about US$2.76 million). A further HK$10 million (about US$1.25 million) is payable only if a geological report shows at least 200,000 tons of copper, lead or zinc reserves under the Jiangejier permit. The sale reverses the earlier build-up of the Xinjiang assets, and the chairman is a party to it as the 1% holder.

material agreement

On November 26, 2007 the company, through Xiangzhen Mining, completed buying 100% of Tun Lin, a Kyrgyz company, for USD 10 million, giving it indirect ownership of Kichi-Chaarat. Kichi-Chaarat holds an exploration license over 39,500 hectares in the Kurutegerek area and a mining license over the Kuru Tegerek deposit (900 hectares). This resolves the open question of whether the planned Kyrgyzstan purchase, about $10 million, went ahead.

asset acquisition disposition

On September 28, 2007 the company agreed changes to the Citadel convertible notes with the trustee, The Bank of New York. The conversion price falls from $3.20 to $2.25 per share (444 shares per $1,000 note instead of 312), which could mean more new shares and dilution for existing holders if converted. The deadline for a US public listing moves from November 15 to December 31, 2007, with no interest payable October 1 to December 30, 2007 and 3.75% interest from December 31, 2007 if no listing is obtained (1.75% if a listing is later obtained and maintained). A net worth covenant is replaced by quarterly minimum EBITDA targets for 2008 and 2009, and other ratio covenants are deferred to the first quarter of 2010. A side agreement with Citadel bars the company from issuing securities or raising debt without Citadel's consent, and Citadel agrees to reasonably extend the listing deadline only for force majeure or changes in NASDAQ/AMEX/NYSE listing standards.

asset acquisition disposition

The $28 million Citadel convertible note financing closed on December 27, 2006: 6.75% notes due December 27, 2012, convertible at $3.20 per share, secured by the same pledge of about 79% of the shares by Ms. Yu and Mr. Xu. Citadel also gets the right to designate a director (and in some circumstances a second independent director) under a voting agreement. Proceeds are to repay the bridge notes from December 1 and December 21, 2006 and fund mine capital spending in China and Kyrgyzstan and working capital. This resolves the term sheet and bridge loan threads.

capital raising announcement

On December 1, 2006, Citadel bought $8.5 million of 10% senior notes due January 12, 2007, as a bridge to the larger $28 million convertible note financing. The notes are secured by about 79% of the company's shares (14,917,000 pledged by Ms. Yu Xiao Jing and 1,870,000 by Mr. Xu Xue Ming); the full financing is still subject to due diligence and definitive agreements.

material agreement

Now named China Shen Zhou Mining & Resources, the company announced a term sheet for a US$28.0 million financing from Citadel Equity Fund, via senior secured convertible notes due 2012 with a 6.75% cash coupon, convertible at $3.20 per share, subject to due diligence by December 10, 2006. Proceeds are intended for buying a Kyrgyzstan copper and gold mine from Kichi Chaarat (expected cost about $10 million), capital spending in China, and working capital. Conversion into shares could dilute existing holders. (The filing's text also gives a maturity date of December 10, 2006, which appears inconsistent with 2012 notes.)

material agreement

The deal with American Federal Mining Group closed on September 15, 2006: the company issued 20,000,000 shares for 100% of AFMG, which holds Chinese mining subsidiaries (Qianzhen, Xiangzhen, Tianzhen). This resolves the July agreement; AFMG holders now own about 94% and the original shareholders (1,297,700 shares) about 6%, and the former officers and directors resigned. The company is now a holding company for fluorite, copper, zinc and lead operations in Inner Mongolia and Xinjiang, with mining rights for the Beiaobaotu fluorite mine not being extended past November 2006.

business combination

Earth Products & Technologies signed an agreement on July 14, 2006 to issue 20,000,000 shares (about 93.9% of its diluted shares) for all of American Federal Mining Group, an Illinois holding company with Chinese mining subsidiaries (fluorite, zinc, lead, copper). If completed, existing shareholders would hold about 6% and management would be replaced; completion was expected by July 31, 2006 but subject to conditions, and the filing says there is no assurance it will close.

material agreement