On April 10, 2007 the company agreed to sell China Gold, LLC up to $25,000,000 of secured 8.25% five-year convertible notes, and China Gold bought an initial $3,000,000 note (about $3M proceeds less a $60,000 fee). It committed to buy at least $9,000,000 more within 12 months, with more possible by mutual agreement. The notes convert at $1.00 per share after 120 days and automatically on completion of the Easyknit merger, and are secured by a pledge of the company's shares in subsidiary Wits-China Acquisition Corp. Separately, on April 13 it signed a six-month, $100,000 consulting agreement with Boston Financial Partners, controlled by Thomas Brazil, a holder of over 5%. This is major new secured debt that could dilute shareholders; additional notes depend on having enough authorized shares.
On March 9, 2007 the board adopted a 2007 Stock Incentive Plan reserving 5,000,000 shares, and granted CEO Stephen King a ten-year option on 3,000,000 shares at $1.02, vesting in six annual installments. Vesting of the last installment accelerates on completion of a merger with Easyknit Enterprises Holdings Limited or on each material mining acquisition the board deems material. This is the first mention of an Easyknit merger in the record; it adds potential dilution from new awards.
On February 19, 2007 the company hired William Green, a sibling of significant shareholder Andrew Green, as President of Asia Operations on a three-year deal at $10,000 a month, with a ten-year option on 2,500,000 shares at $0.43. On February 23 it borrowed $700,000 from Andrew Green on a 6% note due March 31, 2007; if unpaid, either side can convert the balance into Green paying the exercise price on his 3,550,000 warrants and his 3,000,000-share right. As extra consideration, the warrant price was cut from $0.12 to $0.09125 and the $0.20 right was extended to December 31, 2007. This continues the Green financing thread and could add shares if converted.
On December 18, 2006 the company signed a joint venture agreement with Journey Resources and Minerales Jazz under the June 28 Vianey option, confirming it has paid for and earned a 25% interest in the Vianey silver-lead-zinc mine concessions in Guerrero, Mexico. It keeps the right to earn another 25% through September 30, 2007, and the press release says it intends to do so on an accelerated basis (management's stated intention). This continues the Vianey thread: the first stage is done, the second is still to be earned.
On September 20, 2006 the company signed the formal asset purchase agreement for the Bates-Hunter Mine and Golden Gilpin Mill, superseding the July 21 agreement. At closing, due on or before November 30, 2006, it must deliver Cdn$250,000, a Cdn$6,500,000 note and 3,620,000 restricted shares. This turns the July terms into a binding contract, though closing has not yet happened.
On August 18, 2006 the company signed a standby financing agreement with Andrew Green, who holds more than 10% of its stock, covering possible future joint venture or financing arrangements for exploration projects. In return, Green's right to buy up to 3,000,000 shares at $0.20, from an April 1, 2006 note amendment, was extended from August 31, 2006 to March 31, 2007. No specific financing was committed, and the extension could add shares if exercised.
On July 21, 2006 the company signed an agreement with Hunter Gold Mining to buy the Bates-Hunter mine and Golden Gilpin Mill. The press release says the price is mainly a Cdn$6.5 million seller-held mortgage at 5% with principal due only if the mine goes into production, plus Cdn$250,000 in escrow and 3.62 million unregistered shares that stay outstanding only if there is production. Final closing is subject to due diligence and other conditions. This revises the earlier Cdn$4.6 million price and moves the Bates-Hunter thread toward purchase; the CEO's description of the structure as favorable is management's view.
Effective June 1, 2006, the company hired Boston Financial Partners as a non-exclusive consultant, paying $100,000 cash and issuing 625,000 shares, plus a two-year warrant for 1,000,000 shares at $0.62. Boston is already a major holder, described as owning about 10.7% based on a December 2005 filing. This continues the dealings with an existing large shareholder and adds to the share count.
On June 28, 2006 the company closed an option with Journey Resources to earn up to 50% of the Vianey silver mine concession in Guerrero, Mexico, by issuing 500,000 shares and funding $500,000 of exploration by December 31, 2006, then another 500,000 shares and $500,000 for the final 25%. Missing any requirement forfeits all rights. Separately, it took a 50% interest in Hawk's northern Ontario MacNugget claims for 40,000 shares, then sold part to MacDonald Mines for 50,000 MacDonald shares, leaving it with a 24.5% interest that may require further funding to maintain. This is a new Mexico project and a new related-party dealing with Hawk, approved by a committee of directors with no interest in Hawk.
Effective June 5, 2006, the company agreed to have Hawk Precious Minerals provide management and administrative services through December 31, 2006 for a single US$50,000 payment. CEO H. Vance White is also an officer and director of Hawk. The board also approved a $75,000 cash bonus to President Stephen King for securing capital funding. Both are related-party payments, continuing the existing Hawk and King dealings.
4 May 2006capital raising announcement● NeutralMajor
By April 30, 2006, 59 warrant holders exercised into 15,879,901 new shares, bringing the company net proceeds of about $3,819,000, which it intends to use for debt retirement, capital expenditures and working capital. Holders also get new three-year $0.50 warrants covering 7,939,950 shares. The board cut the Class B warrant price from $5.50 to $0.25; 807,167 were exercised and the other 3,482,922 expired. This resolves the repriced and extended warrant thread: it brings in cash but significantly dilutes existing shareholders, and further dilution is possible from the new warrants.
The board cut the exercise price on Friedland Capital's 200,000 warrants from $0.30 to $0.12 and allowed cashless exercise. It also extended 4,299,850 October 2003 placement warrants from March 31 to April 28, 2006, and cut the price on 4,241,500 of them from $0.75 to $0.25. Holders who exercise get a new three-year $0.50 warrant for every two shares bought. This continues the pattern of extending these warrants, now with a large price cut that could add many shares if exercised.
The board raised the shares reserved under the 2001 employee stock option plan from 1,450,000 to 2,500,000. The company also signed a January 16, 2006 letter agreement with Hunter Gold Mining Corporation extending its Bates-Hunter option: phase one now due June 30, 2006, phase two October 31, 2006, and closing by November 30, 2006. The price is now stated as Cdn$4,600,000, replacing the earlier US$3,000,000. This continues the Bates-Hunter thread, with more time but a different, currency-denominated price.
On November 29, 2005 the board extended the 690,000 redeemable public warrants ($7.15 exercise price) by two years, to November 30, 2007. It also extended 4,299,850 private warrants from the October 2003 placement (exercise prices $0.25 to $0.75) to March 31, 2006. This repeats the pattern of extending warrants rather than letting them expire.
On October 20, 2005 the board granted 200,000 immediately vested options at $0.15 (market close $0.13), expiring in ten years, to each of executives H. Vance White and Mark Dacko and directors Norman Lowenthal and Stephen King, 800,000 in total. Insiders receive the options, which would add to the share count if exercised.
On October 13, 2005 the board gave director Stephen King a two-year warrant for 1,000,000 shares at $0.15 for consulting on the Colorado opportunities and a personal guaranty of corporate financing. It also cut the exercise price on Relevant Marketing's 300,000 warrants from $0.50 to $0.15 (its CEO is King's spouse), and extended 4,241,500 October 2003 placement warrants ($0.75) to November 30, 2005. These are related-party grants and a repricing, which dilute existing holders if exercised.
What it means for a shareholder
1.0m new shares at $0.150 to raise about $150,000. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
On January 21, 2005 the company completed the Bates-Hunter assignment started in September 2004, paying Ken Swaisland $61,500 and 250,000 unregistered shares for his rights to buy Hunter Corporation's assets (Bates-Hunter Mine, Golden Gilpin Mill, water treatment plant). It has advanced $315,000 for a roughly $500,000 Phase 1 and must show $535,000 of funding by March 30, 2005 for Phase 2 (about $650,000 total); it may buy the assets for $3,000,000 by November 30, 2005 plus warrants and royalties, or the agreement lapses. The press release's roughly 1.1 million ounce figure is described as a rough target, not a qualified resource estimate.
Auditor Virchow, Krause & Company resigned on December 28, 2004; the filing says its 2003 and 2002 reports had no adverse opinion and there were no disagreements. Carver Moquist & O'Connor was engaged on January 3, 2005 to audit 2004. The company also moved its Minneapolis office to 80 South 8th Street, IDS Center, effective January 3, 2005. This replaces the auditor engaged in December 2001.
16 Dec 2004capital raising announcement● NeutralMajor
On December 3 and 10, 2004 the company sold 8,450,000 units for $845,000 gross with no commissions, each unit being one share plus a warrant for half a share at $0.25 expiring December 31, 2006. Shares outstanding were 33,901,612 as of December 3, 2004. It must register the shares for resale within 60 days of the final closing or cut the warrant price to $0.10 and issue extra penalty warrants, a risk of further dilution.
On November 29, 2004 the board extended the expiry of the 690,000 redeemable public warrants (WITMW, $7.15 exercise price) by one year, from November 30, 2004 to November 30, 2005. Terms are otherwise unchanged, including redemption at $0.10 if the stock reaches $8.25 for 10 straight trading days.
On October 13, 2004 the company borrowed $15,000 from Hawk Precious Minerals (an affiliate) on a four-month unsecured 10% note, with the right to borrow another $15,000, and gave Hawk a two-year warrant for 30,000 shares at $1.00. The board also extended the expiry of 4,704,000 October 2003 placement warrants (each for half a share at $0.75) by one year, to October 14 and 24, 2005. This continues the company's use of related-party Hawk funding, and the extension keeps those warrants alive rather than letting them lapse.
On September 10, 2004 the company signed a proposal under which Ken Swaisland assigns to it his option to buy Hunter Gold Mining Corporation and its US subsidiary, which own the Bates-Hunter Gold Mine and Golden Gilpin Mill in Central City, Colorado. This is a new project beyond the South African and Ontario interests; per the press release it would need a $50,000 cash payment and 250,000 unregistered shares to close the assignment, financing is still being explored, and the full purchase would cost $3,000,000 plus royalties and 1,000,000 warrants if exploration proves viable by November 30, 2005.
On August 27, 2004 (amended August 30) the company signed a Shareholders Agreement with AfriOre and Kwagga Gold (Barbados) replacing the June 2003 Heads of Agreement for the FSC Project in South Africa. Kwagga must issue the company about 33.6% of its equity for the $2.025 million advanced, rising to 35% after the final $75,000 of the $2.1 million commitment. The company can require a buyback of its shares for the unspent balance if Phase I is discontinued, gets 3 of 6 Kwagga board seats once fully funded, and holds veto rights over significant Kwagga actions. It may also advance $1.4 million for a further 15% stake.
4 Aug 2004asset acquisition disposition● NeutralMajor
The company sold Brazmin back to Argyle Securities (completed August 3, 2004), reversing the February 2004 acquisition after about six months. It received $25,000 cash, a further $25,000 due by December 31, 2004, $100,000 each if pre-feasibility and bankable feasibility studies begin, a 10% carried interest and 10% of any sale proceeds, and Argyle returned 400,000 of the 700,000 shares; Argyle kept the 150,000-share warrant at $1.50. The company must still register the remaining 300,000 shares. The press release also reports the first FSC drill hole (2,984 meters) did not hit Witwatersrand rocks, and names Stephen D. King as a new director.
On June 10, 2004 the company took over from Hawk Precious Minerals Inc. an option to earn a 70% interest (subject to royalties) in 5 mining claims of about 3,200 acres in the McFaulds Lake area of northern Ontario. It must pay Cdn$60,000 (half already paid), issue 200,000 unregistered shares by November 1, 2004, and spend Cdn$200,000 on exploration. CEO H. Vance White and director Walter Brooks are also officers and directors of Hawk, whose subsidiary Hawk Precious Minerals USA is a significant shareholder of the company, so the disinterested directors approved it.
On May 28, 2004 the company raised $650,000 gross (about $525,000 net) through an 18-month secured convertible note to Pandora Select Partners LP, secured by substantially all its assets. It may repay in shares priced between $0.35 and $0.65, and it issued Pandora a warrant for 928,571 shares at $0.40, plus other warrants to Pandora affiliates (200,000 shares) and to Wayne Mills or his affiliate (475,000 shares at $0.40) for his personal guarantee. The press release says proceeds were used to pay $360,000 to former CEO Jack Johnson to settle litigation; it also says the company has advanced $1.95 million toward the $2.1 million needed for a 35% stake in Kwagga (FSC Project), with a deadline extended to June 30, 2004. This is the first secured debt after the company reported no debt in 2003.
12 Feb 2004asset acquisition disposition● NeutralMajor
On February 6, 2004 the company bought all of Brazmin Ltda., a Brazilian company holding exploration rights to four regions in Brazil, from Argyle Securities Limited for $50,000 cash, 700,000 company shares (valued at $686,000), a 5-year warrant for 150,000 shares at $1.50, and expenses under $20,000. This is the first concrete step into mineral exploration after the October 2003 placement, alongside an existing South African gold project (FSC) in which the company is a passive investor. Separately, because the resale registration from the October 2003 placement was not effective within 120 days, the company says it will issue 2,038,000 extra shares to those investors as a penalty, further diluting holders. If the 700,000 shares are not registered for resale by July 5, 2004, Argyle can cancel the deal.
31 Oct 2003capital raising announcement● NeutralMajor
Now named Wits Basin Precious Minerals Inc., the company completed a private placement on October 24, 2003 of 10,190,000 units for about $2,547,500 gross. Each unit is one share plus a one-year warrant for half a share at $0.75, which works out to $0.25 per unit. Placement agents received $250,500 in cash commissions and 4-year warrants for 1,002,000 shares at $0.50. This is the first filing under the new name and raises new cash after the company sold its operating businesses; the issue adds shares and warrants that dilute existing holders.
What it means for a shareholder
1.0m new shares at $0.500 to raise about $250,500. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
This amendment adds the promised pro forma figures for the March 14, 2003 sale of the hosted solutions business to Stellent for $650,000 cash plus $150,000 expense reimbursement. Pro forma, it produces a $445,000 loss on the sale and cuts total equity from $589,133 to $144,133 at December 31, 2002. It repeats that after the April 30, 2003 accounting software sale the company has no operating assets, no debt and about $450,000 of net assets, and is reviewing acquisitions. Historical 2002 net loss was $9,658,755.
12 May 2003asset acquisition disposition● NeutralMajor
On April 30, 2003, after shareholder approval on April 29, the company completed the sale of its accounting software business (the Red Wing and Champion units bought in 2001) to Red Wing Software, Inc., which is principally owned by two employees, James Long and Kenneth Hilton. The buyer paid by settling about $1.45 million of the company's debt from the 2001 acquisitions: $752,427 cash to 17 holders who took 75 cents on the dollar, and $448,479 in new buyer notes to 7 others. The company says it now has no operating business assets, no debt and about $450,000 of net assets, and its address has moved to Minneapolis.
