UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 11/17/2008
Aurelio Resource Corporation
(Exact name of registrant as specified in its charter)
Commission File Number: 000-50931
Nevada | | 33-1086828 |
(State or other jurisdiction of | | (IRS Employer |
incorporation) | | Identification No.) |
12345 W. Alameda Parkway, Suite 202
Lakewood, CO 80228
(Address of principal executive offices, including zip code)
303-795-3030
(Registrant’s telephone number, including area code)
5554 S. Prince Street
Suite 200
Littleton, CO 80120
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Stock Purchase AgreementOn November 17, 2008, Aurelio Resource Corporation ("Aurelio") entered into an Amended Stock Purchase Agreement (the "Amended Agreement") with Telifonda (Cayman) Ltd. ("Telifonda") pursuant to which Aurelio has agreed to sell to Telifonda its Bolsa Resources, Inc. subsidiary, which owns Aurelio's Hill Copper-Zinc Project, and, a 3% Net Smelter Returns royalty in the Company's Gavilanes gold project.
The total value of the proposed transaction remains unchanged at $4 million.
The amendments have been agreed to in order to better-reflect the current market values of the assets being acquired by the Investment Company, and to facilitate closure of this transaction in the current difficult equity markets, among other factors.
Pursuant to the Amended Agreement, Aurelio would sell all of the outstanding stock in Bolsa Resources, Inc. to Telifonda in exchange for $2,500,000 cash and Aurelio would retain a 3% Net Smelter Return Royalty ("NSR") on all future precious and base metal pr oduction from the Project (the "Bolsa NSR"). The Bolsa NSR is further described in the Bolsa NSR Agreement, which would be executed at the closing of the transactions contemplated by the Amended Agreement.
A form of the Bolsa NSR Agreement was filed as Exhibit 10.20 in a Current Report on Form 8-K dated October 2, 2008. The proposed Amended Bolsa NSR Agreement, incorporating the changes contemplated by the Amended Agreements, is included as Exhibit 10.26 to this Current Report on Form 8-K and is incorporated by reference herein.
Pursuant to Section 2(e) of the original Stock Purchase Agreement, adjustments will be made at Closing to reimburse the Company for all payments made by Aurelio to maintain Bolsa Resources' assets from and after August 15, 2008 (as set forth in Exhibit C to the Stock Purchase Agreement).
The proposed transaction requires Telifonda to complete a Bankable Feasibility Study within the next four years; should Telifonda fail to complete the Bankable Feasibility Study or otherwise maintain the 5,000+ acre land position, Aurelio would have the exclusive right to re-acquire the Hill Copper-Zinc Project by reimbursing Telifonda for its $2,500,000 investment and any out-of-pocket expenditures.
Upon completion of the Bankable Feasibility Study, Telifonda would have a right to purchase the Bolsa NSR at fair market value on the terms set forth in the Amended Bolsa NSR Agreement.
The proposed transaction also requires that the Investment Company fund Bolsa Resources shortly after Closing in the initial amount of $8 million to facilitate further development of Bolsa's Hill Copper-Zinc Project.
In addition, upon the closing of the transactions contemplated by the Amended Agreement, Telifonda would also purchase a 3% NSR interest in the Gavilanes gold project for $50,000 cash (the "Minera NSR"). Aurelio would retain the right to repurchase the Gavilanes NSR at fair market value on the terms set forth in the Gavilanes NSR Agreement. The Minera NSR Agreement would be executed at the closing of the transactions contemplated by the Amended Agreement.
A form of the Gavilanes NSR Agreement was previously filed as Exhibit 10.21 in a Current Report on Form 8-K dated October 2, 2008. The proposed Amended Minera (Gavilanes) NSR Agreement, incorporating the changes contemplated by the Amended Agreements, is included as Exhibit 10.27 to this Current Report on Form 8-K and is incorporated by reference herein.
The foregoing summary of the Amended Agreement, the Amended Bolsa NSR and the Minera (Gavilanes) NSR does not purport to be complete and is qualified in its entirety by reference to the both the initial Agreement, the Bolsa NSR and the Minera (Gavilanes) NSR which were previously filed as Exhibits 10.19, 10.20 and 10.21 to the Current Report on Form 8-K dated October 2, 2008 and are incorporated by reference herein, as well as the Amended Agreement, Amended Bolsa NSR and the Minera (Gavilanes) NSR which are filed as Exhibits 10.25, 10.26 and 10.27, respectively, to this Current Report on Form 8 - -K and are incorporated by reference herein.
Based on information filed in a Form 13D by Telifonda Holdings Co. Limited ("Holdings") and DFG Master Hedge Fund Ltd. ("DFG"), Anthony Warnaars is responsible for the overall management and control of DFG. Holdings is a wholly-owned subsidiary of DFG, and Aurelio has been informed by Telifonda that Holdings is the sole stockholder of Telifonda. Mr. Anthony Warnaars is the son of Dr. Frederik Warnaars, a member of the board of directors of Aurelio.
In addition, two members of the board of directors of Aurelio, Mr. Frank Vermeulen and Mr. Stephan Roes, are appointees of Telifonda.
Bridge Loan Agreement
As part of the transaction contemplated by the Amended Agreement, on October 1, 2008 Telifonda advanced $2,000,000 to Aurelio (the "Bridge Loan") that will be repaid upon the closing of the transactions contemplated by the Amended Agreement by offsetting the principal and interest outstanding under the Bridge Loan against the cash consideration due under the Amended Agreement. If the closing transaction contemplated by the Amended Agreement does not occur, the Bridge Loan is payable in cash, with the date such payment is due dependent upon the reason the transaction fails to close. The Bridge Loan was made pursuant to a Bridge Loan Agreement between Aurelio and Telifonda, and is evidenced by a Bridge Loan Note from Aurelio to Telifonda. The Bridge Loan is secured by all assets of Aurelio, including all shares of stock held by Aurelio in its two subsidiaries, as set forth in the related General Security Agreement between Telifonda and Aurelio.
Proceeds from the Bridge Loan were used to retire previous Company indebtedness and for working capital purposes.
The foregoing summary of the Bridge Loan Agreement, the Bridge Loan Note and the General Security Agreement does not purport to be complete and is qualified in its entirety by reference to the Bridge Loan Agreement, the Bridge Loan Note and the General Security Agreement which were previously filed as Exhi bits 10.22, 10.23 and 10.24 to Current Report on Form 8-K dated October 2, 2008 and are incorporated by reference herein.
Loan to New Aurelio Subsidiary
As part of the transaction contemplated by the Amended Agreement, the Investment Company has agreed to loan, upon shareholder approval of the overall transaction, $1.45 million to a newly-created Aurelio subsidiary (the NewCo Loan). The NewCo Loan Agreement is an unsecured loan and would be non-recourse to the Company. Interest at LIBOR + 5% would accrue over the term of the loan.
The Company intends to use the proceeds of the NewCo Loan facility to fund further exploration of its assets, as well as for acquisitions and general working capital.
The foregoing summary of the NewCo Loan Agreement and NewCo Loan Note does not purport to be complete and is qualified in its entirety by reference to the NewCo Loan Agreement and NewCo Loan Note which are filed as Exhibit 10.28 to the Current Report on Form 8-K and is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Bridge Loan AgreementAs part of the transaction contemplated by the Amended Agreement, on October 1, 2008 Telifonda advanced $2,000,000 to Aurelio in the form of a Bridge Loan that will be repaid upon the closing of the transactions contemplated by the Agreement by offsetting the principle and interest outstanding under the Bridge Loan against the cash consideration due under the Amended Agreement. The Bridge Loan is evidenced by a Bridge Loan Agreement and a Bridge Loan Note. As set forth in the related General Security Agreement, the Bridge Loan is secured by all assets of Aurelio, including all shares of stock held by Aurelio in its two subsidiaries. If the closing of the Agreement does not occur, the Bridge Loan is payable in cash, with the date of payment dependent upon the reason the Agreement fails to close.
Proceeds from the Bridge Loan were used to retire previous Company indebtedness and for working capital purposes.
The foregoing summary of the Bridge Loan Agreement, the Bridge Loan Note an d the General Security Agreement does not purport to be complete and is qualified in its entirety by reference to the Bridge Loan Agreement, the Bridge Loan Note and the General Security Agreement which were filed as Exhibits 10.22, 10.23 and 10.24 to Current Report on Form 8-K dated October 2, 2008 and are incorporated by reference herein.
Loan to New Aurelio Subsidiary
As part of the transaction contemplated by the Amended Agreement, the Investment Company has agreed to loan, upon shareholder approval of the overall transaction, $1.45 million to a newly-created Aurelio subsidiary (the NewCo Loan). The NewCo Loan Agreement is an unsecured loan and would be non-recourse to the Company. Interest at LIBOR + 5% would accrue over the term of the loan.
The Company intends to use the proceeds of the NewCo Loan facility to fund further exploration of its assets, as well as for acquisitions and general working capital.
The foregoing summary of the NewCo Loan A greement and NewCo Loan Note does not purport to be complete and is qualified in its entirety by reference to the NewCo Loan Agreement and NewCo Loan Note which are filed as Exhibit 10.28 to the Current Report on Form 8-K and is incorporated by reference herein.
Item 7.01. Regulation FD Disclosure
On November 17, 2008, Aurelio issued a news release announcing the execution of the Amended Stock Purchase Agreement related to the sale of Bolsa Resources, Inc. and Aurelio's Hill Copper-Zinc Project. A copy of the press release is attached as Exhibit 99.1.The information contained in this Item 7.01 and Exhibit 99.1 of this report (i) is not "filed" under the Securities Exchange Act of 1934 and (ii) shall not be incorporated by reference into any previous or future filings made by Aurelio with the Securities Exchange Commission.
Item 9.01. Financial Statements and Exhibits
Exhibit 10.25 - Amendment to the Stock Purchase Agreement
Exhibit 10.26 - Amendment to the Bolsa Net Smelter Return Royalty Agreement
Exhibit 10.27 - Minera (Gavilanes) Net Smelter Return Royalty Agreement
Exhibit 10.28 - NewCo Loan Agreement & Loan Note
Exhibit 99.1 - News Release #08-16 - Aurelio Announces Amended Agreement To Sell Hill Copper-Zinc Project & 3% NSR In Gavilanes Gold Project For $4 Million
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | Aurelio Resource Corporation |
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| Date: November 17, 2008 | | | | By: | | /s/ Stephen B. Doppler
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| | | | | | | | | Stephen B. Doppler |
| | | | | | | | | President & CEO |
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Exhibit Index
Exhibit No.
| | Description
|
| EX-10.26 | | Amendment to the Bolsa Net Smelter Return Royalty Agreement |
| EX-10.27 | | Minera (Gavilanes) Net Smelter Return Royalty Agreement |
| EX-10.28 | | NewCo Loan Agreement and Loan Note |
| EX-99.1 | | News Release #08-16 - Aurelio Announces Amended Agreement to Sell Hill Copper-Zinc Project & 3% NSR in Gavilanes Gold Project for $4 Million |
| EX-10.25 | | Amendment to the Stock Purchase Agreement |
