SOUTH AMERICAN GOLD CORP.

SOUTH AMERICAN GOLD CORP. deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

On May 1, 2013 the company signed a non-final memorandum of understanding with BMZ, Ltd. to earn an 80% interest in the Kelly project (16 unpatented claims, about 320 acres, Marysville, Montana), with a definitive agreement to be signed within 180 days. The contemplated terms include a $5,000 payment, work commitments of $5,000 (2013), $25,000 (2014) and $40,000 a year after that (minimum $350,000 over 10 years), a 3-5% royalty (buyable for $500,000) and an option to buy the property for $1,000,000. The filing says there are no established reserves or mineralized material, and that historical information is unverified; this would be a fourth property after Baltimore, Arizona and New Light.

material agreement

On January 16, 2013 the company leased two unpatented claims covering part of the former New Light Mine in Whatcom County, Washington from William I. Guy: 15 years, advance royalties of $500 then $750 a year, and a 2% net smelter royalty. No reserves are established, and the filing notes possible permitting and tailings-contamination concerns. Separately, in January 2013 it issued 26,500,000 restricted shares at $0.003 to settle $79,500 of liabilities, none to officers or directors, which dilutes existing holders. This adds a third property to the Arizona and Montana ones.

capital raising announcement

On September 5, 2012 the company signed the definitive lease-with-option for the Baltimore Silver Mine in Montana, following the August 2012 MOU with Western Continental. Terms: 10-year lease (extendable 15 years for $100,000), $10,000 a year from July 31, 2013 plus $500 a quarter, 3% net smelter royalty, a purchase option of $500,000 (resolving the earlier $250,000/$500,000 inconsistency in favour of $500,000), an extra $30,000 if a report shows over 2 million ounces of silver, and $25,000 between January and July 2013. It also issued 10,000,000 restricted shares to Western, which the filing values at $29,000 ($0.0029 a share), so existing holders are diluted. No reserves are established; the filing sets an initial exploration budget of $5,000 to $50,000.

capital raising announcement

On August 23, 2012 the company decided its unaudited results for the quarters ended December 31, 2011 and March 31, 2012 should no longer be relied on, because a bargain purchase gain had been recorded improperly. The gain came from the November 2011 purchase of the minority interest in Kata Enterprises, which the company says it already managed; the filing says the gain should instead have been booked as an increase in capital. Restated statements were filed on August 23, 2012; the filing does not give restated figures, so the effect on reported losses is not stated here.

financial restatement

On August 6, 2012 the company signed a binding memorandum of understanding with Western Continental, Inc. to lease, with an option to buy, three patented claims (the Baltimore Silver Mine) in Jefferson County, Montana, to be followed by a definitive agreement within 90 days. Terms include a 10-year lease at $10,000 a year (from July 31, 2013), a 3% net smelter royalty, 10,000,000 restricted shares to Western, and a further $25,000 payment in 2013; the filing gives the purchase option price inconsistently as '$250,000' in words and '$500,000' in figures. No reserves are established and the definitive agreement was not yet finalized. Issuing 10,000,000 shares would dilute existing holders.

material agreement

The company abandoned the Colombian Kata deal: on November 18, 2011 the concession agreement was terminated and the $500,000 closing payment went to Kata's Colombian subsidiary, and on November 28 a second amendment (extending the seller's duty to hand over 100% of Kata to any termination of the underlying agreement, for $10,000) was signed. The filing cites uncertain approval of the concession application and possible Colombian mining-sector changes. The company says it will look for mineral properties beyond Colombia. Whether the company itself recovered the $500,000 is not stated clearly; the filing says the payment was transferred to the Colombian subsidiary, and the company still holds its 25% stake in Kata (inference: that stake is now in a company holding the terminated deal).

material agreement termination

On April 25, 2011 the company amended the Kata purchase agreement, paying the seller an extra $50,000 for the 25% stake (on top of the $500,000) and changing the terms of the options on the other 75%. The 50% option now involves $450,000 plus $1,000,000 in cash and 2,000,000 shares, tied to registration of the concessions and no later than March 2, 2012; the 75% and 100% options are each $1,000,000 plus 1,000,000 shares. The Kata deal still had not closed, and the forestry reserve overlap and the fallback of getting back only the $500,000 remain.

asset acquisition disposition

On March 30, 2011 the company sold 5,800,000 units at $0.25 each to eight non-U.S. investors, raising $1,450,000. Each unit is one share plus a warrant to buy another share at $0.50, exercisable from six months after issue until one year after closing, so existing shareholders are diluted by the new shares and potentially by the warrants. The filing calls this the initial closing and does not say what the money is for.

capital raising announcement

On February 25, 2011 the company agreed with Minera Kata S.A. to buy 25% of Kata Enterprises Inc. (Panama), paying $500,000 cash at closing, with options to buy the other 75%. Kata is meant to acquire an 85% interest in mining concessions in Nariño, Colombia, but had not closed that deal; the filing says the concession area overlaps a forestry reserve that would need reclassifying before significant exploration or mining, and the company warns the investment could be worthless if that fails. If the concessions are not registered to Kata by February 25, 2012, the seller must hand over 100% of Kata and the company is entitled to the $500,000 back.

material agreement