Each one in plain English, with the numbers worked through for a shareholder.
2 Oct 2008asset acquisition disposition▲ GoodMajor
The Tara Gold deal closed October 1, 2008: the company issued 7,350,000 shares for Tara Gold's remaining 30% of the joint venture, cancelled its invoices to Tara Gold for San Miguel costs, paid 100,000 pesos for the concessions, and issued 300,000 shares to a consultant. Documents and shares are held in escrow pending registration with Mexico's Bureau of Mines; if that is not done by February 28, 2009 (or a later agreed date), the shares are returned and cancelled and the deal unwinds.
The company agreed with Tara Gold Resources to buy Tara Gold's remaining equity in their February 7, 2007 joint venture, plus certain mining concessions. It would issue 7,350,000 legended shares, cancel invoices it had sent Tara Gold for its share of San Miguel property costs, and pay 100,000 Mexican pesos for the concessions. Closing needs AMEX and Toronto Stock Exchange approval of the share issue and registration with Mexico's Bureau of Mines.
DTC resumed services for the company on April 30, 2008, so the company says it now complies with the AMEX settlement and depository rules, and the exchange issued a notice resuming trading. This resolves the listing problem flagged on April 22, 2008.
The American Stock Exchange told the company it fails listing rules on book-entry settlement and depository eligibility, because the DTC (the clearing service) suspended services on March 17, 2008 and had not resumed them. Trading on the exchange stays suspended until DTC resumes. The company submitted a plan to comply by May 19, 2008 and could face delisting if the plan fails.
The company closed a private placement of 10,398,496 units at $2.10 each, for $21,836,841. Each unit has one share plus a half warrant (exercisable at $2.90 for 24 months). Agents were paid $1,310,210.46 in commissions and fees and received 623,909 broker warrants. Shares outstanding rose to 46,422,478 and proceeds are to fund exploration of its mining properties and working capital. This adds new shares (dilution) but brings in cash.
What it means for a shareholder
10.4m new shares at $2.10 to raise about $21.8m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
