History
Nilam Resources tried to buy Peruvian mining assets in 2008, saw both deals collapse for lack of funding, then spent years correcting its accounts before stopping SEC reporting in 2019.
2008: Peru deals and a collapse
Nilam Resources, a Nevada company, set out in January 2008 to buy a mine in Peru. It signed a non-binding letter of intent (an outline agreement, not a firm contract) with MRC 1 Explorations to buy the Pativilca Gold Mine, described as an operating mine refining about 50 tons of ore a day. The price was $1.5 million cash in three instalments, plus two million restricted shares and a 3% royalty on net production. A January private placement of 323,727 units at $0.50, raising about $270,000, was meant to support the purchase.
In June the plans fell apart. A June 5 letter of intent to buy Cobre y Oro de Columbia S.A. for $3,000,000 cash expired because financing was not secured. The Pativilca seller revoked its letter and declared it void after an equity financing commitment from an institutional investor failed to close. Nilam said it was exploring other funding options; the record does not show the outcome.
In September, after SEC comments, the board said its accounts for the year to April 30, 2008 and the quarter to January 31, 2008 should not be relied on. A share transfer between senior managers had been wrongly accounted for, adding $3,000,000 to the loss, while $100,000 of Llipa mineral rights would be recorded as an asset instead of an expense. The net effect was a loss $2,900,000 higher, or $0.05 per share.
2009-2019: Restatements and withdrawal
The record is quiet between 2008 and 2012. In that time, Nilam issued 20,000,000 shares in February 2009 for the Linderos mining concessions in Peru, and 12,000,000 shares in June 2009 to settle a $60,000 related-party note.
In March 2012 Nilam said its accounts for the years to April 30, 2009, 2010 and 2011 could no longer be relied on. The note settlement, with shares valued at $1,680,000, should have produced a loss rather than a capital transaction. The Linderos shares should have been valued at $0.36 each, or $7,200,000, then written down to $200,000. Nilam promised amended filings. Shares on issue were 56,095,345 at the end of 2012.
The next entry is in March 2019, when Nilam suspended its duty to file periodic reports with the SEC.
Written from the 5 story beats below (2008 to 14 Mar 2019), which come from the company's own announcements and filings.