GOLDEN RIVER RESOURCES CORP. company history: the story so far

History

Golden River, a Gutnick-linked explorer, funded a 2009-2010 push to control Acadian Mining through related-party share sales, then began selling that stake down in 2012.

2006-2008: Exploration plans and a restatement

Golden River Resources set out to explore for gold in northern Canada, on properties it held rights to from Tahera Diamond Corp in the Slave Craton and on its own Committee Bay tenements. In May 2006 it agreed to issue 10 million shares and options over 20 million shares to Fast Night Nominees, a company associated with President J. I. Gutnick. This repaid A$2 million of loans from Wilzed Pty Ltd, another Gutnick-associated company, and it also said it would seek to lift authorized shares to 100 million.

In June 2006 it raised US$1,542,000 from RAB Special Situations Fund by selling 10,000,000 special warrants and warrants over 20,000,000 shares, with the money meant for gold exploration and general costs. In September 2007, holders of 57.3% of the shares, companies tied to the Gutnick family, consented to doubling authorized shares to 200 million. The company then had 26,711,630 shares and 55,750,000 options outstanding.

In October 2008 it said its June 30, 2007 accounts could no longer be relied on. After an SEC staff review, it revalued 4,650,000 options, raising the fiscal 2007 loss by A$313,000. Cash flows were unaffected.

2008-2010: Buying control of Acadian

In December 2008 the company sold 100,000,000 new shares at US$0.005 (US$500,000) to Fast Knight Nominees, another Gutnick-associated company, a large addition to the share count.

In March 2009 it agreed to subscribe for up to 338,111,334 new shares of Acadian Mining Corporation for up to C$10 million, which would give it 68.45%. The first tranche closed in April 2009 for C$447,457.34 and a 9.99% interest, smaller than announced, for reasons the filing did not give. A second tranche in June took it to 19.89%, and Acadian shareholders approved the full placement.

In July 2009 the company bought back and cancelled the 2006 RAB warrants for US$500,000, removing that potential dilution.

The Acadian purchase was paid for with shares sold to Northern Capital Resources Corp, another Gutnick-associated company. In September 2009 it agreed to sell 85,000,000 shares at US$0.10 (US$8,500,000) in tranches. The first, of 41,276,710 shares, closed with the Acadian holding at 52%. The third tranche, in March 2010, raised US$4,903,680 and repaid Northern Capital loans that had funded the final Acadian subscription and advances to Acadian, leaving the holding at 68.7%.

2010-2011: Tahera properties and Acadian's mine sale

In May 2010 the company completed its purchase of the Tahera Slave Craton properties, which it had only held exploration rights over since 2002. It paid CDN$86,000 and issued 3,000,000 shares, while Tahera kept the diamond rights. It said it was planning a gold exploration program.

A 1-for-10 reverse split took effect on November 1, 2010; the records give about 24,359,344 shares afterwards. In July 2010 it sold 14,275,800 shares at US$0.10 to Northern Capital and used the money to buy 49,233,866 more Acadian shares, lifting its holding to 71.5%. In February 2011, Joseph Gutnick and Stera Miriam Gutnick each bought 32,448,000 shares at $0.05.

In May 2011 Acadian sold its ScoZinc subsidiary, which held the Scotia lead-zinc mine on care and maintenance since early 2009, to Selwyn Resources for CDN$10 million. After about CDN$2.8 million for reclamation bonding, net proceeds were about CDN$7.2 million.

2012: Selling down Acadian

In 2012 Golden River began selling its Acadian shares. In February it sold 10,783,145 shares to Igneous Capital for CDN$1,617,471.15 (CDN$0.15 a share), cutting its stake to 52% while keeping control. In October it sold another 10,783,145 to Nelson Fernandez for CDN$1,401,808.85 (CDN$0.13 a share), leaving 32.16% and no majority. In December it sold 5,400,000 shares to Chin-Yong Wong for CDN$594,000 (CDN$0.11 a share), leaving 22.197%.

As of January 2, 2013, Golden River still held its largest-noted minority stake in Acadian and its northern Canada gold exploration properties. The Slave Craton gold program had no stated timing or funding, the use of the sale proceeds was not stated, and the Gutnick family remained the principal holders.

Written from the 17 story beats below (2006 to 2 Jan 2013), 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)

201356.8m shares · US$1.1m market cap

2 Jan
On December 7, 2012, Golden River agreed to sell 5,400,000 Acadian shares (a 9.9% interest) to Chin-Yong Wong for CDN$594,000 (CDN$0.11 per share); it closed December 10, 2012. Its Acadian holding falls to 22.197%. This continues the sell-down at a further lower price per share, after CDN$0.15 in February and CDN$0.13 in October 2012. The filing text refers to the buyer as 'Fernandez' in one place, which appears to be a drafting slip (inference).
asset acquisition disposition
56.8m shUS$1.1m
2 Jan
On October 2, 2012, Golden River agreed to sell another 10,783,145 Acadian shares (19.9%) to Nelson Fernandez for CDN$1,401,808.85 (CDN$0.13 per share); it closed October 25, 2012. Golden River's Acadian stake drops to 32.16%, meaning it no longer holds a majority. This continues the sell-down begun with Igneous in February 2012, at a lower price per share (CDN$0.13 versus CDN$0.15).
asset acquisition disposition
56.8m shUS$1.1m

201256.8m shares · US$5.1m market cap

10 Feb
On February 6, 2012, Golden River agreed to sell 10,783,145 Acadian shares (a 19.9% interest) to Igneous Capital Limited for CDN$1,617,471.15 (agreement text says $1,617,471.75, at $0.15 per share); it closed February 7, 2012. Golden River's Acadian stake falls from 71.5% to 52%, and it keeps control. Golden River will use reasonable efforts to get an Igneous nominee onto Acadian's board, with one Golden River nominee resigning, and Northern Capital Resources and Joseph Gutnick guaranteed Golden River's representations and warranties. This is the first sell-down of the Acadian holding built up through the 2009-2010 subscriptions.
asset acquisition disposition
56.8m shUS$5.1m

201156.8m shares · US$14.2m market cap

7 June
On May 25, 2011, Acadian Mining (the 71.5%-owned subsidiary) agreed to sell its wholly-owned ScoZinc, which held the Scotia lead-zinc mine (on care and maintenance since early 2009), to Selwyn Resources for CDN$10 million. About CDN$2.8 million is deducted for increased reclamation bonding, leaving net proceeds of about CDN$7.2 million; the sale closed May 31, 2011. This disposes of Acadian's Nova Scotia lead-zinc asset; the filing does not say how the proceeds will be used.
asset acquisition disposition
56.8m shUS$14.2m

2010

22 July
The company sold 14,275,800 new shares at US$0.10 (US$1,427,580) to Northern Capital Resources Corp on July 14, 2010, and used the proceeds to subscribe on July 16 for 49,233,866 more Acadian shares at CDN$0.03 (CDN$1,477,015.98). Its Acadian holding is now 387,345,200 shares, or 71.5%. This is a new placement under a fresh subscription agreement, separate from the earlier US$8.5 million one, and again adds shares to a Gutnick-associated buyer.
capital raising announcement
18 May
The company closed its purchase of the Tahera Diamond Corp mineral properties in the Slave Craton, which it had until now only held rights to explore under separate access agreements since 2002. It paid CDN$86,000 and issued 3,000,000 shares to Tahera, which keeps the rights to any diamonds. The company says it now has unrestricted access and is planning a gold exploration program. This turns the earlier exploration arrangement with Tahera into outright ownership. The attached agreement is dated December 3, 2009 and also mentions a CDN$74,703.55 lease payment and legal costs of up to CDN$20,000; the CDN$86,000 figure is the company's own wording and the filing does not reconcile the two.
capital raising announcement
12 Apr
The third tranche of the Northern Capital Resources Corp placement closed March 31, 2010: 49,036,800 shares at US$0.10 for US$4,903,680. Unlike earlier tranches, the proceeds repaid loans from Northern Capital that had funded the final Acadian subscription in October 2009 and advances to Acadian. The company's Acadian holding is stated as 68.7%, slightly above the 68.45% originally targeted. The filing does not say how much was lent or when the loans were made.
capital raising announcement

2009

8 Sept
The company signed a subscription agreement with Northern Capital Resources Corp, a company associated with CEO Joseph Gutnick, to sell 85,000,000 new shares at US$0.10 each for US$8,500,000, to be closed in tranches before March 31, 2010. The money is for buying more Acadian shares and for working capital. The first tranche of 41,276,710 shares (US$4,127,671) closed September 3, 2009, and the filing puts the company's Acadian holding at 52%. This answers the open question of how the Acadian purchase would be funded, and it dilutes existing shareholders, with the buyer being a Gutnick-associated company.
capital raising announcement
7 July
Effective June 30, 2009 (settled July 1) the company agreed to buy back from RAB Special Situations (Master) Fund Limited the warrants issued to it in 2006 for US$500,000 in total: the 10,000,000 special warrants and the warrants over 20,000,000 shares (exercise price US$0.1542, adjusted to US$0.0364541, expiring April 30, 2011). The company then cancelled them. This removes the potential dilution from those 2006 RAB securities and closes that open item.
asset acquisition disposition
10 June
The second tranche closed: Acadian issued 21,058,129 shares to the company for C$552,542, taking its interest to 19.89%. Acadian shareholders approved the full 338,111,334-share placement on June 9, 2009. The company says it will file Acadian's financial statements within 75 days. The remaining tranches toward the 68.45% stake are still open.
asset acquisition disposition
7 Apr
The first tranche of the Acadian investment closed: Acadian issued 17,053,205 shares to the company for C$447,457.34, giving it a 9.99% interest. This is smaller than the C$1.0 million (38,111,334 shares) first tranche described in the March announcement; the filing does not explain the difference.
asset acquisition disposition
20 Mar
Effective March 17, 2009 the company agreed to subscribe for up to 338,111,334 new shares of Acadian Mining Corporation (TSX: ADA) for up to C$10 million, which would give it 68.45% of Acadian if all tranches close. The first C$1.0 million tranche (38,111,334 shares) needs regulatory approval including the Toronto Stock Exchange and was expected around April 10, 2009; the remaining C$9 million needs Acadian shareholder approval and due diligence, and lapses if conditions are not met by July 1, 2009. The company says it intends to seek extra financing, possibly a private placement of its own shares, to fund this. This is a new direction beyond its Tahera and Committee Bay exploration.
material agreement

2008

9 Dec
On December 9, 2008 the company sold 100,000,000 new shares at US$0.005 each (US$500,000 total) to Fast Knight Nominees Pty Ltd, a company associated with President and CEO Joseph Gutnick. The money is for exploration and general corporate and administrative costs. This is the capital raising the company had been investigating since 2007; the new shares are a large addition to the 26,711,630 shares reported in 2007 and dilute other holders (inference), and the buyer is a Gutnick-linked party.
capital raising announcement
6 Oct
On October 3, 2008 the company said its June 30, 2007 financial statements should no longer be relied on, after SEC staff review led it to revalue 4,650,000 options granted in October 2006 using a US$0.30 share price instead of US$0.166. The restatement raises the fiscal 2007 net loss by A$313,000 and the cumulative loss since July 1, 2002 to A$9,560,000 from A$8,116,000. The filing says cash flows are unaffected and management believes the business and shareholders are not materially impacted.
financial restatement

2007

18 Sept
A preliminary information statement says holders of 57.3% of the shares (companies tied to the Gutnick family, including Fast Night Nominees) consented on August 31, 2007 to raising authorized common stock from 100 million to 200 million shares. The company has 26,711,630 shares and 55,750,000 options outstanding, and says it is looking at capital raising for exploration and working capital. This follows the 100 million increase proposed in 2006; more shares could be issued without existing holders having preemptive rights, which could dilute them.
business combination

2006

15 June
On June 9, 2006 the company sold RAB Special Situations Fund (Master) Limited 10,000,000 special warrants (each convertible to one share for no extra payment) plus warrants over 20,000,000 shares at US$0.1542 (to April 30, 2011) for US$1,542,000. Proceeds are intended for gold exploration on Tahera's Slave Craton properties and its Committee Bay tenements in northern Canada, and for general corporate costs. This is new outside money, but the shares and warrants it creates will dilute existing holders (inference).
capital raising announcement
9 May
Effective May 8, 2006, the company agreed to issue 10 million shares and options over 20 million shares (A$0.20 exercise price, expiring April 2011) to Fast Night Nominees, a company associated with President J. I. Gutnick, to repay A$2 million of loans from Wilzed Pty Ltd, another Gutnick-associated company. It also said it intends to seek approval to raise authorized shares to 100 million. For shareholders this removes the A$2 million debt but adds shares and options, which dilutes existing holders (inference).
capital raising announcement