COLORADO GOLDFIELDS INC. company history: the story so far

History

Colorado Goldfields moved from Ontario claims to Colorado mills and mines, raised about $3.3 million, abandoned a Mexican deal, then took on large share-funded mine leases before deregistering in 2018.

2007: A pivot to Colorado

Colorado Goldfields, formerly Garpa Resources, began 2007 holding two claims in Red Lake, Ontario. In June it changed direction. It agreed to buy the Pride of the West Mill in Howardsville, Colorado from Tusco Incorporated for $900,000, plus replacing a reclamation bond of roughly $300,000. Of the price, $250,000 was due at or before closing and $650,000 would be paid by a 7% promissory note.

Days later it won an option to earn up to 80% of properties in San Juan County, Colorado from San Juan Corp. and Todd Hennis. Earning in required staged spending, cash payments, 10,000,000 shares for the optionors and gold payments tied to the mill. Hennis became CEO and President, and bought Gary Schellenberg's 2,500,000 shares, 44.8% of the company, so control passed to him. In November the spending needed for the second and third slices was cut from $4,500,000 to $3,500,000 each. The company also replaced its auditor, Manning Elliott LLP, with GHP Horwath, P.C.; Manning Elliott's earlier reports had carried a going-concern doubt.

The work was funded by a private placement. After a 2 for 1 forward split, the company closed the sale of 8,758,600 units at US$0.375 on 21 November, raising $3,284,475. Each unit carried a warrant at US$0.50 until 14 November 2009. Part repaid loans, and the rest went to the Silverton properties, working capital and new properties.

2008: A failed Mexican detour and a funding line

In March the company signed a non-binding letter of intent to buy 75% of Besmer, S.A. de C.V., a Mexican mining company, for $3 million, plus a loan of up to $5 million. It paid a $50,000 deposit. By June the deal was off after unsatisfactory due diligence. The filings do not say what became of the deposit or a $100,000 loan to Besmer. The same filing mentioned a Memorandum of Understanding with Hennis and San Juan Corp., whose terms were not disclosed.

In September the company signed a standby equity facility with YA Global Investments, allowing it to sell up to $5,000,000 of shares at 95% of the lowest five-day average price. No draws could start until a registration statement was effective. It issued 1,436,108 shares as a commitment fee.

2009-2018: New leases and deregistration

By September 2009 Lee R. Rice signed as President and CEO, replacing Hennis; the filings do not explain why. The company leased the King Solomon Mine from Larry H. Killian, with an option to buy, for 50,000,000 restricted Class A shares, $50,000 a year of work and a 3.5% royalty. In October it leased the Brooklyn Mine, on similar terms, for 75,000,000 restricted Class A shares, work averaging $200,000 a year and a 5% royalty. Both share issues were large for existing holders. Year-end counts show about 490 million shares in 2012 and 491 million in 2013, but the beats do not explain the path there.

The record is then quiet. On 21 September 2018 the company deregistered its securities, ending its obligation to file reports with the SEC.

Written from the 11 story beats below (2007 to 21 Sept 2018), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

shares on issue market cap (log scale)

2018491m shares · US$0 market cap

21 Sept
COLORADO GOLDFIELDS INC. deregistered its securities, ending its obligation to file reports with the SEC.
listing compliance notice
491m shUS$0

2009

6 Oct
The company signed a mining lease with option to purchase on the Brooklyn Mine in San Juan County, Colorado, with Frank J. Montonati and Don Laeding. Terms: 75,000,000 restricted Class A shares locked up for 3 years, work commitments averaging $200,000 a year, and a 5% net smelter royalty; it renews while ore is being produced or sold. Together with the King Solomon lease, this adds another large share issuance for existing holders.
material agreement
23 Sept
The company signed a lease with option to purchase on the King Solomon Mine in San Juan County, Colorado, with Larry H. Killian. Terms: 50,000,000 restricted Class A shares locked up for 3 years, $50,000 a year of work, and a 3.5% net smelter royalty; it renews while ore is being produced or sold. Lee R. Rice now signs as President and CEO, replacing Todd Hennis in that role since the last filings. The 50,000,000 shares are a large issuance for existing holders.
material agreement

2008

4 Sept
The company signed a standby equity facility letting it sell up to $5,000,000 of shares to YA Global Investments at 95% of the lowest daily average price over five trading days, in advances of up to $250,000. It cannot draw until a registration statement is effective. It issued 1,436,108 shares as a commitment fee and owes other fees. For shareholders, drawing on this would mean issuing more shares.
capital raising announcement
6 June
The Besmer acquisition is off: due diligence results were unsatisfactory as of May 30, 2008, the letter of intent expired, and no definitive agreements will be signed. The filing does not say what happens to the $50,000 deposit or the $100,000 loan to Besmer. It also mentions a June 5, 2008 press release on a Memorandum of Understanding with CEO Todd Hennis and his company San Juan Corp.; the terms are not in this filing.
material agreement
18 Mar
The company signed a non-binding letter of intent to buy 75% of Besmer, S.A. de C.V., a Mexican mining company running the El Barreno, Remedios and La Zacatecana mines and a flotation mill. The price would be $3 million ($750,000 at signing of definitive agreements, $2,250,000 by note at 6%), plus an interest-free loan of up to $5 million. It paid a $50,000 deposit and says it needs to raise money through private share sales to complete it, with no assurance it can. This is a new direction outside Colorado.
material agreement

2007

21 Nov
The company announced it closed the private placement, issuing 8,758,600 post-split units at US$0.375 for gross proceeds of $3,284,475. Warrants are exercisable at US$0.50 until November 14, 2009. Part of the proceeds repaid certain loans and the rest is for its Silverton properties, working capital and acquiring mineral properties. This completes the placement announced in August.
capital raising announcement
15 Nov
The company signed subscriptions for the private placement announced in August: 7,932,600 units to 24 offshore investors (US$2,974,725) and 826,000 units to four US investors (US$309,750). Units are priced at US$0.375 after a forward stock split (US$0.75 before), each with a warrant at US$0.50 for two years. It must file a resale registration within 60 days or pay 2% of the purchase price for delays, up to 15%. This adds shares and warrants for existing holders.
capital raising announcement
13 Nov
The company lowered the spending needed to earn the second and third 20% slices of the San Juan option from $4,500,000 to $3,500,000 each; the share issuances stay at 5,000,000 each, or 10,000,000 after a forward split. Hennis, the company's CEO and a director, is on the other side of the deal. It also replaced its auditor Manning Elliott LLP with GHP Horwath, P.C.; Manning Elliott's earlier reports carried a going-concern doubt paragraph.
auditor change
26 June
The company got an option to earn up to 80% of properties in San Juan County, Colorado from San Juan Corp. and Todd Hennis. This requires staged spending of $6,000,000, then $4,500,000, then $4,500,000, plus cash payments of $50,000, $100,000 and $200,000, 10,000,000 total shares to the optionors, and gold payments tied to the Pride of the West Mill. Hennis becomes CEO and President at $8,000 a month with an option over 300,000 shares. Gary Schellenberg sold his 2,500,000 shares (44.8%) to Hennis for $2,500, so control moves to Hennis.
material agreement
22 June
Now named Colorado Goldfields (formerly Garpa Resources), the company agreed to buy the Pride of the West Mill in Howardsville, Colorado from Tusco Incorporated for $900,000, plus replacing Tusco's roughly $300,000 reclamation bond with the State of Colorado. $250,000 is due at or before closing and $650,000 by promissory note at 7% interest. This is a shift from the Ontario claims to a Colorado milling asset.
material agreement