Each one in plain English, with the numbers worked through for a shareholder.
26 July 2006material agreement● NeutralMajor
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.
Perkins Capital Management, Inc reported a WITS BASIN PRECIOUS MINERALS INC shareholding of 1,452,000 shares (4.30% of votes) in a periodic institutional filing.
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.
