Each one in plain English, with the numbers worked through for a shareholder.
6 Mar 2012material agreement● NeutralMajor
The filing says that on January 13, 2012 the company filed a counterclaim in Minnesota state court seeking $650,000,000 against an unnamed counterparty (Case No. 27-CV-11-24590). The court set a schedule for the year on February 2, and on March 1 set an April 5 hearing on a request for sanctions and a protective order. The filing does not say who the counterparty is, what the original dispute is, or give any outcome. Although filed under 'material agreement', it describes a lawsuit, not an agreement. This is a new thread in the company's history.
On December 14, 2009 the company borrowed $4,000,000 from Kenglo One, Ltd. by issuing a $5,000,000 note with no interest (a $1,000,000 discount), due February 14, 2011. Kenglo also received a five-year warrant for 16,000,000 company shares at $0.10 and an option to buy 1,299,000 shares of Standard Gold (formerly Princeton Acquisitions) at $1.00. The loan is secured on the company's assets, with pledges of about 85% of Standard Gold (18,584,544 shares), its 35% of Kwagga Gold (Barbados) and its 50% of CGMR BVI (subject to London Mining's consent), plus Hunter Bates' 100% of Gregory Gold. On December 17, 2009 the China Gold debt was also consolidated into a $6,153,321.86 Third Amended Note at 12.25%, still due on demand on or after February 15, 2010, with smaller February and July notes ($227,391.25 and $110,000) extended to February 15, 2010. As payment for these changes, China Gold got a new 1,600,000-share warrant at $0.01 and the exercise price on its 38,200,000 and 882,000 share warrants was cut from $0.075 to $0.01, and affiliate Pioneer Holdings got warrants for 7,000,000 shares at $0.01. This adds new secured debt and substantial dilution, and it continues the China Gold thre
8 Oct 2009asset acquisition disposition● NeutralMajor
On September 29, 2009 the Hunter Bates share exchange with Princeton Acquisitions closed. Hunter Bates (holder of the Bates-Hunter Mine) became a wholly owned subsidiary of Princeton, and the company, which held about 95% of Hunter Bates (18,500,000 of 19,500,000 shares), bought 1,383,543 Princeton shares (about 81% of Princeton before the exchange) for $262,500, not the $250,000 first announced. After this the company holds 19,883,543 Princeton shares, about 94% (the earlier plan said about 98%). This completes the pending September 11 deal, with the company's indirect stake shown as 94%; the filing says Hunter Bates' business plan became Princeton's.
On September 11, 2009 the company and its subsidiary Hunter Bates Mining (which holds the Bates-Hunter Mine) agreed to a share exchange with Princeton Acquisitions, Inc., a Colorado corporation, making Hunter Bates a wholly owned subsidiary of Princeton. The company would buy 1,383,543 Princeton shares for $250,000 and would hold about 98% of Princeton after the deal. The deal depends on due diligence and third-party consents, so it is not yet done. The filing does not state the purpose of the restructuring.
Effective July 3, 2009 the company agreed to issue 3,218,878 unregistered shares to Hawk Uranium to cover $200,000 of management fees owed. Hawk is a company whose officer and director is H. Vance White, the company's chairman, so this is a related-party deal. It also extended Hawk's $60,000 note to August 31, 2009, with faster payments if the company raises more financing, and gave Hawk a five-year warrant for 150,000 shares at $0.15. The share issue dilutes existing holders.
On April 28, 2009 the company issued a 12% convertible debenture for $511,589.59 to Cabo Drilling (America), due April 27, 2012 and convertible at $0.20 per share, to settle money owed for services on the Hunter Bates property. Hunter Bates guarantees it and gave a deed of trust over the property, and Cabo must drop its legal action and lien notice from January 14, 2009. Separately, the board extended the expiry of its Class C Redeemable Warrants, exercisable at $0.50, from April 28 to August 31, 2009. The filing resolves the lien dispute over the Bates-Hunter Mine but adds secured debt against it.
On March 17, 2009 the iron ore deal closed: London Mining paid $38.75M for 50% of CGMR BVI (the company holds the other 50%), and CGMR HK completed buying Sudan (160M RMB, about $23.3M) and Xiaonanshan (130M RMB, about $18.9M) from Lu Benzhao and Lu Tinglan. London Mining lent the company $5.75M (prime plus 2%, capped at 8%, due January 2014), which funded a $5.6M prepayment on the China Gold note, and London Mining's $1M note was amended to a $0.10 conversion price (from $0.20) and a fixed August 22, 2009 maturity. The terms give London Mining 99% of distributions until $44.5M is returned, a management fee of $5.5M in year one and $4.5M a year after, and an indemnity from the company that would be paid in CGMR BVI shares. The consulting agreement with Mr. Lu totals about $54M, about $15M paid and $38.6M deferred. Also, William Green received a $1M bonus plus a $890,000 payable, and his company Green Earth will operate the properties for $1.5M a year. This resolves the long-pending China acquisition and the London Mining letter of intent, but on terms that heavily favor London Mining until its capital is returned. The Zhaoyuan (Matang) acquisition remains pending.
On January 12, 2009 the company and London Mining replaced their November 17 subscription agreement. London Mining would now pay $39.25M for 50% of CGMR BVI and lend the company $5.75M at closing, with its preferential right to get back $45M unchanged. The first escrow agreement, for about US$18.9M with about US$7.3M funded so far, was signed for the Xiaonanshan purchase, and London Mining agreed to lend CGMR BVI US$24.8M to fund the escrows, a loan that converts into its subscription at closing. Closing still depends on London Mining's due diligence, business licenses, mining permits and Chinese approvals, and the Sudan escrow agreement is still to come. This moves the November 17 deal toward closing but does not complete it.
On December 22, 2008 the company combined its $9.8M China Gold note and a $441,000 secured note into one note of $10,421,107.18 at 12.25%, pushing the due date from December 31, 2008 to February 15, 2010. About $5.6M must be prepaid when the London Mining deal closes, and China Gold released its security over CGMR HK and agreed to release it over the rights to buy the Chinese properties once that prepayment is made, taking instead a pledge of the company's stake in the joint venture and a security interest in a $4.8M note from the venture. As payment, the exercise price of China Gold's two warrants for 40,082,000 shares was cut to $0.075 from $0.15 and $0.11, which is more dilutive for shareholders. This resolves the repeatedly extended China Gold maturity, and the filing says the changes were made to facilitate the London Mining subscription.
On November 17, 2008 the company signed a subscription agreement under which London Mining would pay $45 million for a 50% stake in a joint venture company holding CGMR HK, which holds the rights to buy the Sudan and Xiaonanshan iron ore companies. London Mining would get preferential return of capital and distributions until $45 million comes back to it, and the venture would lend the company money, partly to pay down the China Gold loan. This turns the August 18 non-binding letter of intent into signed terms, but closing is still conditional on London Mining's due diligence, Chinese approvals, mining permits and debt restructuring. The press release says the closing date of October 31, 2008 has slipped to no earlier than mid-December 2008 because changes in PRC policy made the original WFOE buying structure unusable. The Zhaoyuan (Matang) purchase right, which the October 29 changes had set aside, must be transferred into CGMR HK as a condition of London Mining's subscription.
4 Nov 2008material agreement termination● NeutralMajor
On October 29, 2008 the company changed the China iron ore deals. For Sudan (160M RMB), only 40M RMB goes into escrow before closing and the remaining 120M RMB is payable within 90 days of closing based on the buyer's available cash, and rights for Sudan and Xiaonanshan (130M RMB) were assigned to CGMR HK. Xiaonanshan's closing now also depends on the sellers receiving an expanded mining permit. Zhaoyuan is no longer part of the immediate deal: its terms are to be negotiated after the other two close. This loosens the earlier staged-payment and all-three-close-together structure. Separately, the company received about $1.85M from Shaanxi Hua Ze on October 20, 2008, the refund owed under the July 31 termination of the nickel deal, from $2M originally paid with a $150,000 loss recorded.
On October 27, 2008 the company received a final $200,000 advance on the London Mining note, so the full $1,000,000 is now outstanding. Terms are unchanged ($0.20 conversion price). The filing does not mention the joint venture or the status of London Mining's US$45M proposal.
On September 19, 2008 the company received a further $300,000 advance on the London Mining convertible note, bringing the outstanding balance to $800,000. Terms are unchanged ($0.20 conversion, 8% interest, unsecured).
On August 22, 2008 the company issued London Mining Plc an unsecured $1,000,000 convertible note (8% interest, convertible at $0.20 per share), with $500,000 advanced on August 27 and up to $500,000 more available later. The note is repayable at the earlier of closing of the China iron ore acquisitions or August 22, 2009. It funds due diligence under an August 18 letter of intent in which London Mining would put in US$45M for a 50% stake in the China iron ore project, subject to due diligence and final documents. This is the financing partner the August 22 filing said was needed, but it is not yet a binding deal. The note adds potential dilution.
22 Aug 2008material agreement termination● NeutralMajor
On August 11, 2008 the company's China subsidiary Maanshan Global signed definitive agreements to buy three Chinese iron ore companies (Sudan, Xiaonanshan, Zhaoyuan) from Lu Benzhao and Lu Tinglan for 160M, 130M and 80M RMB (370M RMB in total). Total consideration is higher once a roughly US$10M consulting fee to Mr. Lu (up to US$44M more in incentives) and reimbursement of seller capital spending are added. This turns the earlier 620M RMB price letter into signed deals. A US$5M deposit has been paid, closings are conditional on each other and on government approvals by Dec 20, 2008, and the filing says significant financing must still be raised, expected through a joint venture with a third party. Separately, the company ended the nickel joint venture and supply contract with Shaanxi Hua Ze on July 31, 2008, with a $1.85M partial refund due within 20 business days. This ends the Xing Wang nickel interest listed in earlier filings.
On July 24, 2008 the company again extended the maturity of its $9.8M China Gold notes, from July 14 to September 12, 2008. The filing restates the interest rate (8.25% to 12.25%) and the cut in China Gold's purchase-right price from $0.25 to $0.18 as consideration for the May 20 extension, and does not describe any new price or rate change for this one. This continues the cycle of short extensions; the filing does not say how the notes will be repaid.
18 June 2008asset acquisition disposition▲ GoodMajor
On June 12, 2008 the company closed the Bates-Hunter Mine purchase in Colorado, held through its wholly owned subsidiary Hunter Bates Mining Corp. It paid with a Cdn$6,750,000 limited-recourse note to George E. Otten plus 3,620,000 unregistered company shares. This resolves the purchase agreement signed in September 2006 and delayed through repeated deadline extensions (most recently to June 30, 2008). The note is interest-free until Jan 1, 2010, then 6%. It requires $250,000 by Dec 1, 2008, with later payments tied to mine profits (75% of quarterly profit once profit exceeds US$100,000) and any balance due by Dec 31, 2015. The note is secured by a deed of trust on the property. On default, the company is jointly liable only up to Cdn$2,000,000 less payments and share-sale proceeds. The 3,620,000 shares add to the share count.
On May 20, 2008 the company extended the maturity of China Gold notes totaling $9.8M from May 31 to July 14, 2008. In return it raised the interest rate from 8.25% to 12.25% and cut the price of China Gold's rights to buy up to 9.8 million shares from $0.25 to $0.18. This continues the China Gold financing, with its terms getting costlier for the company and more dilutive for shareholders each time the notes were extended; the filing does not say how the notes will be repaid.
On February 13, 2008 the company sold Platinum Long Term Growth V a 10% senior secured convertible note for $1,020,000, due February 11, 2009 and convertible at $0.18 per share. It also issued a five-year warrant for 2,500,000 shares at $0.35 and made a previously issued 3,000,000-share warrant immediately exercisable. The note has price-reset and prepayment features that apply if the stock trades below $0.30 after August 11, 2008, and it is secured by nearly all company assets except the China-related entities pledged to China Gold, including Gregory Gold Producers and Kwagga. To get China Gold's consent, the company also pledged its China Global BVI and HK shares to China Gold and agreed to subsidiary guaranties. This is new secured debt that could dilute shareholders, and the conversion price of $0.18 is far below the $1.00 earlier notes were issued at.
On January 25, 2008 the company and its China Global subsidiary set the purchase price for the Maanshan Zhaoyuan and Xiao Nan Shan iron ore mines at 620 million renminbi (about US$86M), payable in stages of 25%, 50% and 25% after mining permits are verified. The deal still needs final agreements, government approvals, due diligence and reserve requirements, and the filing does not say how it will be funded. Separately, the Bates-Hunter purchase agreement was amended again: closing moved from March 31 to June 30, 2008, about $2.5M of due diligence costs were acknowledged, and a Cdn$250,000 cash payment can be deferred into a note payable by the earlier of production or January 2010. Bates-Hunter has still not closed, so this continues that thread.
On December 12, 2007 the company signed a deal that lets it acquire the remaining 65% of Kwagga Gold (Barbados), the FSC Project holder in which it owns 35%, from AfriOre. It needs South Africa's mineral minister's consent by June 14, 2008, at least US$1.4M of exploration spending, and a US$1.162M payment to AfriOre by Dec 31, 2008 or within three months of finishing that spending, and AfriOre gets a 2% gross royalty (1% can be bought back for US$2M). This changes the FSC Project from a passive investment to a managed one, since the company becomes manager under an operating agreement. On December 18, 2007 the company and Easyknit settled, dismissing all claims with prejudice and releasing each other, which ends the termination-fee dispute (the filing gives no payment terms). On December 12 it also settled the China Global dispute with SSC: it gives up the option on 60% of SSC-Sino Gold and is deemed to own 100% of China Global BVI and HK plus two Chinese operating subsidiaries (Maanshan and Hubei WFOEs). It owes SSC about US$237K and US$256K by Feb 10, 2008 and $2.25M by the later of March 12, 2008 or completion of due diligence, while SSC owes it $1.75M on a similar date, with of
5 Nov 2007material agreement termination▼ BadMajor
On November 1, 2007 the company gave notice terminating the Easyknit merger agreement, citing material adverse effects at Easyknit, dissatisfaction with its due diligence, and Easyknit's breaches of covenant. On November 5 Easyknit replied that the termination was wrongful and demanded a $30M termination fee plus $500,000 expenses; the company calls this without merit and will keep fighting in the Minnesota case. This resolves the merger thread that began in April 2007, but the fee dispute remains open. Separately, on October 31, 2007 the company agreed with China Gold to move the maturity of all its notes (now four, including a $4M Note 3 and an $800K Note 4) to February 29, 2008, and cut the conversion price and the China Gold purchase-right price from $1.00 to $0.50 per share. The company can extend to May 31, 2008 by cutting both prices to $0.25. This continues the China Gold financing on terms that could dilute shareholders more.
22 Oct 2007material agreement termination▼ BadMajor
On October 15, 2007 SSC Mandarin sent notice terminating the July 27 agreements under which the company bought China Global BVI and China Global HK, alleging amended terms that the company breached. The company denies any amendment, says it paid and the deals are complete and not terminable, and says it has not received title documents; it holds about $8.9M of China Global notes maturing December 31, 2007. Separately, Easyknit counterclaimed in the Minnesota case, seeking a declaration that it may terminate and is owed a $30M termination fee, plus unspecified damages that could exceed $2M in expenses and $300M in lost profits; the company says the claims lack merit and will defend. Both threads are now disputed, and ownership of China Global, which the China Gold notes' security is tied to, is contested.
On August 15, 2007 the company sued Easyknit and Race Merger in Minnesota state court, asking for a declaration that it may terminate the merger agreement because its due diligence led it to conclude the merger is not in shareholders' best interests, or alternatively because of a material adverse change in Easyknit's finances. It has not terminated the agreement, says it will keep complying until it is ended, and says its mining interests in South Africa, Mexico, the US and China go on regardless. This reverses the earlier course of the merger: the company is now trying to exit the deal it signed in April.
On July 27, 2007 the company bought 100% of China Global Mining Resources (BVI) for HK$10,000 (about US$1,300) and a Hong Kong shell of the same name; it had already lent China Global about US$8 million. China Global holds rights, subject to government approvals, due diligence and financing, to nickel, iron ore and gold-related mine deals in China, including a nickel joint venture needing about US$52M and an iron ore stake priced at $57M. The company also paid US$400,000 for 40% of SSC Mandarin Africa and US$100,000 for a three-year option on 60% of SSC-Sino Gold (US$5M exercise price), and guaranteed up to $2M of loans from William and Andrew Green; director Norman Lowenthal was chairman of the seller SSC Mandarin Financial until June 2007. This continues the China expansion funded by China Gold, with related-party links; the filing says funding for these deals is still being sought, so the large payment obligations are unfunded.
On July 17-18, 2007 Easyknit filed an announcement in Hong Kong and its shares resumed trading there on July 18. A press release says Hong Kong's Securities and Futures Commission confirmed Wits Basin holders will not have to make a mandatory offer for Easyknit shares, which it calls satisfying a key condition for the merger. This continues the pending merger; nothing is completed, and the Form F-4 registration is still not available.
25 June 2007capital raising announcement● NeutralMajor
On June 19, 2007 the company sold China Gold a third convertible note of $4,000,000 (8.25%, convertible at $1.00 per share, due September 17, 2007, extendable in 30-day steps to no later than December 31, 2007 while the Easyknit merger is alive) for about $3,920,000 after an $80,000 fee. The filing says $9,000,000 of notes have now been issued; $7,000,000 of proceeds was lent to China Global Mining Resources (BVI) for Chinese nickel and iron ore mine deals, and the company has agreed to acquire China Global, awaiting Easyknit's consent. The China Gold purchase obligation now ends at the earlier of April 10, 2008 or the merger becoming effective, and the notes are newly secured by the China Global loan receivables. This continues the China Gold financing and adds a new China mining thread; more convertible debt could dilute shareholders.
On May 21, 2007 the parties amended the Easyknit merger agreement to clarify the exchange ratio terms, fix the breakup fee at US$30 million instead of 3% of the merger consideration, and name an additional Easyknit board member. This continues the pending merger; it is not yet completed and still needs shareholder approval and an effective registration.
On April 20, 2007 the company signed a merger agreement with Hong Kong-listed Easyknit Enterprises Holdings Limited: a subsidiary of Easyknit merges into Wits Basin, which survives as a wholly owned Easyknit subsidiary. Wits Basin shares would be cancelled and converted into Easyknit shares, with Wits Basin holders getting about 46% of Easyknit on a fully diluted basis; the press release says a minimum of 21 Easyknit shares per Wits Basin share. Closing needs due diligence, approval of both companies' shareholders and an effective SEC registration, and the filing also provides for a 3% breakup fee (the press release cites US$30M), Stephen King and Norman Lowenthal joining Easyknit's board, and US-traded ADSs. This is the major turn in the story, though nothing is completed and the effect on holders is not yet final.
