Colorado | 1041 | 20-4722999 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
2201 Kipling Street, Suite 100 Lakewood, Colorado 80215-1545 (303) 238-1438 | Ann S. Carpenter, President U. S. Gold Corporation 2201 Kipling Street, Suite 100 Lakewood, Colorado 80215-1545 (303) 238-1438 | |
(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices) | (Name, address, including zip code, and telephone number, including area code, of agent for service) |
Alberta | 42-1701924 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2201 Kipling Street, Suite 100 Lakewood, Colorado 80215-1545 (303) 238-1438 | Fraser Milner Casgrain LLP 2900 Manulife Place, 10180-101 Street Edmonton, Alberta, Canada T5J 3V5. (780) 423-7100 | |
(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices) | (Name, address, including zip code, and telephone number, including area code, of agent for service) |
Richard R. Plumridge, Esq.
Jennifer A. D’Alessandro, Esq.
Holme Roberts & Owen LLP
1700 Lincoln Street, Suite 4100
Denver, CO 80203
Phone: 303-861-7000
Title of Each Class of | Amount to be | Proposed Maximum | Proposed Maximum | Amount of | |||||||||||||||||||||||
Securities to be Registered(1) | Registered(2) | Offering Price Per Unit | Aggregate Offering Price(3) | Registration Fee | |||||||||||||||||||||||
US Gold Holdings Corporation Common Stock, par value $0.0001 per share | 22,387,740 | N/A | $ | 52,611,189 | $5,629 | ||||||||||||||||||||||
US Gold Canadian Acquisition Corporation exchangeable shares, without par value | 22,387,740 | N/A | $ | 52,611,189 | (4) | ||||||||||||||||||||||
(1) | This Registration Statement relates to securities of US Gold Holdings Corporation, which is intended to be the successor registrant to U.S. Gold Corporation, a Colorado corporation, and up to an identical number of exchangeable shares of US Gold Canadian Acquisition Corporation, to be issued (a) in exchange for all of the issued and outstanding common shares of White Knight Resources Ltd., a corporation existing under the Business Corporations Act (British Columbia) (“White Knight”), pursuant to the offer to purchase all of the issued and outstanding common shares of White Knight, (b) in connection with a proposed subsequent acquisition transaction to acquire any White Knight common shares not acquired in the offer to purchase and (c) upon exercise of options and warrants to purchase White Knight common shares, to the extent assumed and converted into options and warrants to purchase US Gold Holdings Corporation or US Gold Canadian Acquisition Corporation stock in connection with a subsequent acquisition transaction. This Registration Statement also relates to up to an identical number of shares of common stock of US Gold Holding Corporation issuable, upon the terms described herein, in exchange for exchangeable shares issued by US Gold Canadian Acquisition Corporation. | |
(2) | This amount is based upon the maximum number of shares of common stock of US Gold Holdings Corporation issuable in connection with the offer to purchase and a subsequent acquisition transaction, based on the outstanding number of White Knight common shares and warrants and options to purchase White Knight common shares as reported by White Knight as of February 27, 2006. | |
(3) | Covers all of the securities set forth in footnote 1. Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(f)(1) and Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and low prices for White Knight’s common shares as reported by the TSX Venture Exchange on April 24, 2006. | |
(4) | The registration fee for the exchangeable shares is reflected in the fee payable for the US Gold Holdings Corporation common stock. |
The information contained herein may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. The registrants may not complete the offer to purchase and issue these securities until the registration statement is effective. This offer to purchase is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction in which such offer is not permitted. |
This document is important and requires your immediate attention. If you have any questions as to how to deal with it, you are encouraged to consult your investment dealer, lawyer or other professional advisor. No securities regulatory authority has expressed an opinion about the securities that are subject to this offer to purchase and it is an offence to claim otherwise. This offer to purchase has not been approved by any securities regulatory authority nor has any securities regulatory authority passed upon the fairness or merits of this offer to purchase or upon the adequacy of the information contained in this document. Any representation to the contrary is an offence. |
![(US GOLD CORP LOGO)](https://capedge.com/proxy/S-4/0000909567-06-000660/o31149o3096300.gif)
TSX-V | OTCBB | |||||||||||||||
March 3, | April 28, | March 3, | April 28, | |||||||||||||
Issuer | 2006 | 2006 | 2006 | 2006 | ||||||||||||
White Knight | Cdn$1.79 | Cdn$2.78 | — | — | ||||||||||||
U.S. Gold | — | — | US$5.65 | US$8.95 |
In Canada: | In the United States: | |
GMP SECURITIES LTD. | GRIFFITHS McBURNEY CORP. |
• | U.S. Gold’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the SEC on April 7, 2006 (a copy of which is attached hereto as Appendix A); |
• | U.S. Gold’s Current Reports on Form 8-K filed on February 27, March 6, March 31, and May 1, 2006; and |
• | the description of U.S. Gold common stock contained in U.S. Gold’s Registration Statement on Form SB-2 (File No. 333-133228), filed on April 12, 2006, and any amendments or reports filed for the purpose of updating that description. |
(ii)
(iii)
(iv)
Three Months | ||||||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||||||
March 31, | Year Ended December 31, | |||||||||||||||||||||||||||
2006 | 2005 | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||||
(Canadian dollars) | ||||||||||||||||||||||||||||
Rate at end of period | 1.17 | 1.21 | 1.16 | 1.21 | 1.33 | 1.56 | 1.59 | |||||||||||||||||||||
Average rate for period | 1.15 | 1.23 | 1.21 | 1.30 | 1.40 | 1.57 | 1.54 |
(v)
Page | ||||
DEFINITIONS | 1 | |||
SUMMARY TERM SHEET | 4 | |||
SUMMARY | 9 | |||
RISK FACTORS | 23 | |||
OFFER TO PURCHASE | 26 | |||
1. The Offer | 26 | |||
2. Time for Acceptance | 27 | |||
3. Manner of Acceptance | 27 | |||
4. Conditions of the Offer | 29 | |||
5. Extension of the Expiry Time or Variation or Change of the Offer | 31 | |||
6. Right to Withdraw | 32 | |||
7. Take Up of, and Payment for, Deposited Common Shares | 33 | |||
8. Return of Common Shares | 34 | |||
9. Mail Service Interruption | 34 | |||
10. Dividends and Distributions | 34 | |||
11. Notices and Delivery | 35 | |||
12. Market Purchases | 35 | |||
13. Other Terms | 35 | |||
CIRCULAR | 37 | |||
1. The Offerors | 37 | |||
2. White Knight | 39 | |||
3. Exchangeable Shares | 42 | |||
4. Background to the Offer | 50 | |||
5. Investment Considerations | 51 | |||
6. Intentions of the Offerors | 52 | |||
7. Acquisition of Common Shares Not Deposited | 54 | |||
8. Relationships Between the Offerors and White Knight | 56 | |||
9. Valuation Requirements for Insider Bids | 57 | |||
10. Prior Valuations | 58 | |||
11. Expenses of the Offer | 58 | |||
12. Regulatory Matters | 58 | |||
13. Accounting Treatment | 59 | |||
14. Dissenters’ Rights | 59 | |||
15. Material Canadian Federal Income Tax Considerations | 59 | |||
16. Material U.S. Federal Income Tax Considerations | 69 | |||
17. Comparison of Shareholder Rights | 76 | |||
18. Depositary | 90 | |||
19. Dealer Manager and Soliciting Dealer Group; Information Agent | 90 | |||
20. Experts | 91 | |||
21. Legal Matters | 91 | |||
22. Offerees’ Statutory Rights | 91 | |||
23. Directors’ Approval | 92 |
(vi)
Page | ||||
CONSENT OF FRASER MILNER CASGRAIN LLP | 93 | |||
CONSENT OF DUFFORD & BROWN, P.C. | 94 | |||
CONSENT OF HOLME ROBERTS & OWEN LLP | 95 | |||
AUDITORS’ CONSENT | 96 | |||
APPROVAL AND CERTIFICATE OF U.S. GOLD CORPORATION | 97 | |||
APPROVAL AND CERTIFICATE OF US GOLD HOLDINGS CORPORATION | 98 | |||
APPROVAL AND CERTIFICATE OF US GOLD CANADIAN ACQUISITION CORPORATION | 99 | |||
APPENDIX A — INFORMATION CONCERNING U.S. GOLD CORPORATION | A-1 | |||
APPENDIX B — CERTAIN INFORMATION REGARDING TONKIN SPRINGS GOLD PROPERTY OF U.S. GOLD CORPORATION | B-1 | |||
APPENDIX C — CERTAIN FINANCIAL STATEMENTS OF U.S. GOLD CORPORATION | C-1 | |||
APPENDIX D — UNAUDITED FINANCIAL STATEMENTS OF US GOLD HOLDINGS CORPORATION | D-1 | |||
APPENDIX E — UNAUDITED FINANCIAL STATEMENTS OF US GOLD CANADIAN ACQUISITION CORPORATION | E-1 | |||
APPENDIX F — UNAUDITEDPRO FORMACONSOLIDATED FINANCIAL STATEMENTS OF U.S. GOLD CORPORATION | F-1 | |||
APPENDIX G — UNAUDITEDPRO FORMACONSOLIDATED SUPPLEMENTARY FINANCIAL STATEMENTS OF U.S. GOLD CORPORATION | G-1 | |||
APPENDIX H — RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO THE EXCHANGEABLE SHARES OF US GOLD CANADIAN ACQUISITION CORPORATION | H-1 |
(vii)
1
2
3
• | 0.35 shares of common stock of New US Gold;OR | |
• | 0.35 Exchangeable Shares, which will, under the circumstances described in this Offer, be exchangeable for shares of common stock of New US Gold on a one-for-one basis, |
4
• | a larger land position within the Cortez Trend and a larger exploration program; | |
• | a stronger cash position and reduced costs; | |
• | enhanced trading liquidity and better market focus; and | |
• | greater technical expertise. |
• | properly complete and duly execute the accompanying letter of acceptance and transmittal (the “Letter of Acceptance and Transmittal”) (printed onBLUEpaper) or a facsimile thereof and deposit it, together with certificates representing their Common Shares, in accordance with the instructions in the Letter of Acceptance and Transmittal;OR | |
• | follow the procedures for guaranteed delivery set forth in the section entitled “Manner of Acceptance — Procedure for Guaranteed Delivery” on page 27 of this Offer, using the accompanying notice of guaranteed delivery (printed onGREEN paper) or a facsimile thereof;OR | |
• | contact their broker, investment dealer, bank, trust company or other nominee for assistance in depositing their Common Shares under the Offer if their Common Shares are registered in the name of a nominee. |
5
6
(a) | there shall have been properly deposited under the Offer and not withdrawn at the Expiry Time that number of Common Shares that constitutes at least 662/3% of the Common Shares outstanding calculated on a fully-diluted basis at the time Common Shares are taken up under the Offer; | |
(b) | White Knight shall not have entered into or effectuated any other agreement or transaction with any person or entity having the effect of impairing the Offerors’ ability to acquire White Knight or otherwise diminishing the expected economic value to the Offerors of the acquisition of White Knight including, but not limited to, any material issuance of new securities of White Knight, the declaration of any extraordinary dividend, the adoption of a shareholder rights plan or any other transaction not in the ordinary course of White Knight’s business; | |
(c) | the shares of common stock of New US Gold shall have been approved for listing on the TSX and the AMEX and the Exchangeable Shares shall have been approved for listing on the TSX; | |
(d) | the registration statements for the shares of common stock of New US Gold and the Exchangeable Shares to be issued pursuant to the Offer and the shares of common stock of New US Gold that may be issued upon the exchange of any such Exchangeable Shares shall have become effective under the U.S. Securities Act, and no stop order suspending the effectiveness of the registration statements or a proceeding seeking a stop order shall have been issued nor shall there have been proceedings for that purpose initiated or threatened by the SEC and New US Gold shall have received all necessary state securities law or blue sky authorizations; | |
(e) | a receipt for a final prospectus qualifying the distribution of securities underlying the U.S. Gold Subscription Receipts and qualifying New US Gold as a reporting issuer shall have been issued in all jurisdictions of Canada; | |
(f) | all necessary orders shall have been obtained from relevant Canadian securities regulatory authorities in respect of the Exchangeable Shares to be issued pursuant to the Offer, the shares of common stock of New US Gold that may be issued upon the exchange of any such Exchangeable Shares and the resale of any such Exchangeable Shares or shares of common stock of New US Gold; | |
(g) | the holders of shares of common stock of U.S. Gold, voting at a meeting of such holders, shall have approved the following prior to the Expiry Time: |
• | the agreement and plan of merger and the Reorganization, as described in the section entitled “The Offerors — New US Gold and the Reorganization” on page 38 of this Offer, which will require the affirmative vote of the holders of a majority of the outstanding shares of common stock of U.S. Gold and the Reorganization shall have been implemented; and | |
• | the issuance of shares of common stock of New US Gold (i) in the Strategic Offers, (ii) in any Subsequent Acquisition Transaction relating to the Strategic Offers, (iii) upon the exchange of Exchangeable Shares, as described herein, and (iv) upon the exercise of warrants and options of White Knight, Coral Gold, Nevada Pacific or Tone Resources, which will require the affirmative vote of the holders of a majority of the shares of common stock of U.S. Gold entitled to vote at such meeting; and |
(h) | the Offerors shall have obtained or received all approvals, consents, clearances or waivers required to be obtained or received from any governmental regulatory agency, authority or commission in connection with the Offer and the Subsequent Acquisition Transaction. |
7
8
• | 0.35 shares of common stock of New US Gold;OR | |
• | 0.35 Exchangeable Shares, which will, under the circumstances described herein, be exchangeable for shares of common stock of New US Gold on a one-for-one basis, |
9
• | deliver to the Depositary at the office specified in the Letter of Acceptance and Transmittal, so as to arrive there not later than the Expiry Time: the certificate(s) representing Common Shares in respect of which the Offer is being accepted; a Letter of Acceptance and Transmittal (printed onBLUEpaper) in the form accompanying the Offer or a facsimile thereof, properly completed and duly executed as required by the instructions set out in the Letter of Acceptance and Transmittal; and any other document required by the instructions set forth in the Letter of Acceptance and Transmittal;OR | |
• | follow the procedures for guaranteed delivery set forth in the section entitled “Manner of Acceptance — Procedure for Guaranteed Delivery” on page 27 of this Offer, using the accompanying Notice of Guaranteed Delivery (printed onGREEN paper) or a facsimile thereof;OR | |
• | contact their broker, investment dealer, bank, trust company or other nominee for assistance in depositing their Common Shares under the Offer if their Common Shares are registered in the name of a nominee. |
10
11
• | a larger land position within the Cortez Trend and a larger exploration program; | |
• | a stronger cash position and reduced costs; | |
• | enhanced trading liquidity and better market focus; and | |
• | greater technical expertise. |
12
13
14
15
U.S. Gold Historical Financial Data | ||||||||||||
Year Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
($ in thousands except per share data) | ||||||||||||
Operating data | ||||||||||||
Other revenue | $ | 1,052 | $ | 39 | $ | 636 | ||||||
Net loss from operations before cumulative-effect gain on accounting change | $ | (2,991 | ) | $ | (794 | ) | $ | (1,027 | ) | |||
Net loss from operations | $ | (2,991 | ) | $ | (794 | ) | $ | (623 | ) | |||
Basic and diluted loss per share | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.04 | ) | |||
Weighted average shares | 25,931,172 | 20,028,173 | 17,696,098 | |||||||||
Balance sheet data | ||||||||||||
Cash, cash equivalents and short term investments | $ | 678 | $ | 75 | $ | 198 | ||||||
Inventories | 0 | 0 | 0 | |||||||||
Property, plant and equipment | 53 | 104 | 8 | |||||||||
Other assets | 4,810 | 1,256 | 1,595 | |||||||||
Total assets | $ | 5,541 | $ | 1,435 | $ | 1,801 | ||||||
Current liabilities | $ | 1,791 | $ | 35 | $ | 80 | ||||||
Long-term debt | 16 | 570 | 545 | |||||||||
Other long-term liabilities and deferred gain | 1,201 | 0 | 0 | |||||||||
Shareholders’ equity | $ | 2,533 | $ | 830 | $ | 1,176 | ||||||
Total liabilities and shareholders’ equity | $ | 5,541 | $ | 1,435 | $ | 1,801 |
16
White Knight Historical Financial Data | ||||||||||||||||||||
Six Months Ended, | ||||||||||||||||||||
Year Ended June 30, | ||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
Canadian GAAP | 2005 | 2004 | 2005 | 2004 | 2003 | |||||||||||||||
(Cdn$ in thousands except per share data) | ||||||||||||||||||||
Operating data | ||||||||||||||||||||
Other revenue | $ | 196 | $ | 142 | $ | 262 | $ | 98 | $ | 8 | ||||||||||
Net loss | $ | (481 | ) | $ | (549 | ) | $ | (1,063 | ) | $ | (1,664 | ) | $ | (358 | ) | |||||
Basic and diluted loss per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.01 | ) | |||||
Balance sheet data | ||||||||||||||||||||
Cash, cash equivalents and short term investments | $ | 15,098 | $ | 11,934 | $ | 11,178 | $ | 9,846 | $ | 133 | ||||||||||
Inventories | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Property, plant and equipment | 302 | 144 | 139 | 86 | 7 | |||||||||||||||
Mineral properties and deferred exploration costs | 6,017 | 3,643 | 3,965 | 2,487 | 1,611 | |||||||||||||||
Other assets | 397 | 254 | 415 | 301 | 161 | |||||||||||||||
Total assets | $ | 21,814 | $ | 15,975 | $ | 15,697 | $ | 12,720 | $ | 1,912 | ||||||||||
Current liabilities | $ | 444 | $ | 128 | $ | 180 | $ | 130 | $ | 234 | ||||||||||
Long-term debt | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Other long-term liabilities | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Shareholders’ equity | $ | 21,370 | $ | 15,847 | $ | 15,517 | $ | 12,590 | $ | 1,678 | ||||||||||
Total liabilities and shareholders’ equity | $ | 21,814 | $ | 15,975 | $ | 15,697 | $ | 12,720 | $ | 1,912 |
17
Unaudited | ||||||||||||||||
Pro Forma | ||||||||||||||||
Consolidated | U.S. Gold Historical Financial Data | |||||||||||||||
Year Ended | Year Ended December 31, | |||||||||||||||
December 31, | ||||||||||||||||
US GAAP | 2005 | 2005 | 2004 | 2003 | ||||||||||||
($ in thousands except per share data) | ||||||||||||||||
Operating data | �� | |||||||||||||||
Other revenue | $ | 1,349 | $ | 1,052 | $ | 39 | $ | 636 | ||||||||
Net loss from operations before cumulative-effect gain on accounting change | $ | (6,125 | ) | $ | (2,991 | ) | $ | (794 | ) | $ | (1,027 | ) | ||||
Net loss | $ | (6,125 | ) | $ | (2,991 | ) | $ | (794 | ) | $ | (623 | ) | ||||
Basic and diluted loss per share | $ | (0.09 | ) | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Weighted average shares | 65,018,912 | 25,931,172 | 20,028,173 | 17,696,098 | ||||||||||||
Balance sheet data | ||||||||||||||||
Cash, cash equivalents and short term investments | $ | 42,219 | $ | 678 | $ | 75 | $ | 198 | ||||||||
Inventories | 0 | 0 | 0 | 0 | ||||||||||||
Property, plant and equipment | 313 | 53 | 104 | 8 | ||||||||||||
Mineral properties and deferred exploration costs | 153,601 | 0 | 0 | 0 | ||||||||||||
Other assets | 42,726 | 4,810 | 1,256 | 1,595 | ||||||||||||
Total assets | $ | 238,859 | $ | 5,541 | $ | 1,435 | $ | 1,801 | ||||||||
Current liabilities | $ | 2,173 | $ | 1,791 | $ | 35 | $ | 80 | ||||||||
Long-term debt | 16 | 16 | 570 | 545 | ||||||||||||
Other long-term liabilities and deferred gain | 33,851 | 1,201 | 0 | 0 | ||||||||||||
Shareholders’ equity | $ | 202,819 | $ | 2,533 | $ | 830 | $ | 1,176 | ||||||||
Total liabilities and shareholders’ equity | $ | 238,859 | $ | 5,541 | $ | 1,435 | $ | 1,801 |
18
Unaudited | ||||||||||||||||
Pro Forma | ||||||||||||||||
Consolidated | ||||||||||||||||
Supplementary | U.S. Gold Historical Financial Data | |||||||||||||||
Year Ended | Year Ended December 31, | |||||||||||||||
December 31, | ||||||||||||||||
US GAAP | 2005 | 2005 | 2004 | 2003 | ||||||||||||
($ in thousands except per share data) | ||||||||||||||||
Operating data | ||||||||||||||||
Mining revenue | $ | 8,881 | ||||||||||||||
Other revenue | $ | 1,459 | $ | 1,052 | $ | 39 | $ | 636 | ||||||||
Net loss from operations before cumulative-effect gain on accounting change | $ | (12,886 | ) | $ | (2,991 | ) | $ | (794 | ) | $ | (1,027 | ) | ||||
Net loss | $ | (12,886 | ) | $ | (2,991 | ) | $ | (794 | ) | $ | (623 | ) | ||||
Basic and diluted loss per share | $ | (0.14 | ) | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Weighted average shares | 94,806,954 | 25,931,172 | 20,028,173 | 17,696,098 | ||||||||||||
Balance sheet data | ||||||||||||||||
Cash, cash equivalents and short term investments | $ | 43,914 | $ | 678 | $ | 75 | $ | 198 | ||||||||
Inventories | 2,033 | 0 | 0 | 0 | ||||||||||||
Property, plant and equipment | 13,621 | 53 | 104 | 8 | ||||||||||||
Mineral properties and deferred exploration costs | 332,306 | 0 | 0 | 0 | ||||||||||||
Other assets | 44,016 | 4,810 | 1,256 | 1,595 | ||||||||||||
Total assets | $ | 435,890 | $ | 5,541 | $ | 1,435 | $ | 1,801 | ||||||||
Current liabilities | $ | 3,449 | $ | 1,791 | $ | 35 | $ | 80 | ||||||||
Long-term debt | 16 | 16 | 570 | 545 | ||||||||||||
Other long-term liabilities and deferred gain | 72,184 | 1,201 | 0 | 0 | ||||||||||||
Shareholders’ equity | $ | 360,241 | $ | 2,533 | $ | 830 | $ | 1,176 | ||||||||
Total liabilities and shareholders’ equity | $ | 435,890 | $ | 5,541 | $ | 1,435 | $ | 1,801 |
19
Year Ended | |||||
December 31, 2005 | |||||
U.S. Gold — Historical | |||||
Historical per common share: | |||||
Income per basic share | $ | (0.12 | ) | ||
Income per diluted share | $ | (0.12 | ) | ||
Dividends declared | $ | 0 | |||
Book value per share | $ | 0.08 |
Year Ended | |||||
June 30, 2005 | |||||
White Knight — Historical (Canadian GAAP and Cdn $) | |||||
Historical per common share: | |||||
Income per basic share | $ | (0.02 | ) | ||
Income per diluted share | $ | (0.02 | ) | ||
Dividends declared | $ | 0 | |||
Book value per share | $ | 0.29 |
20
Year Ended | |||||
December 31, 2005 | |||||
UnauditedPro FormaCondensed Combined — U.S. Gold and White Knight (US GAAP) | |||||
Unauditedpro formacondensed combined per common share of New US Gold: | |||||
Income per basic share | $ | (0.09 | ) | ||
Income per diluted share | $ | (0.09 | ) | ||
Dividends declared | $ | 0 | |||
Book value per share | $ | 2.80 | |||
UnauditedPro FormaCondensed Combined — U.S. Gold and White Knight, Coral Gold, Tone Resources and White Knight (US GAAP) | |||||
Unauditedpro formacondensed combined per common share of New US Gold: | |||||
Income per basic share | $ | (0.14 | ) | ||
Income per diluted share | $ | (0.14 | ) | ||
Dividends declared | $ | 0 | |||
Book value per share | $ | 3.53 |
TSX-V | OTCBB | |||||||||||||||
March 3, | April 28, | March 3, | April 28, | |||||||||||||
Issuer | 2006 | 2006 | 2006 | 2006 | ||||||||||||
White Knight | Cdn$ | 1.79 | Cdn$ | 2.78 | — | — | ||||||||||
U.S. Gold | — | — | $ | 5.65 | $ | 8.95 |
21
U.S. Gold OTCBB | White Knight TSX-V | ||||||||||||||||||||||||
Avg. Daily | Avg. Daily | ||||||||||||||||||||||||
High | Low | Volume | High | Low | Volume | ||||||||||||||||||||
($) | (Cdn$) | ||||||||||||||||||||||||
2004 | |||||||||||||||||||||||||
March 31 | 1.85 | 0.81 | 71,116 | 0.92 | 0.55 | 84,905 | |||||||||||||||||||
June 30 | 1.03 | 0.60 | 39,022 | 1.61 | 0.50 | 235,841 | |||||||||||||||||||
September 30 | 0.72 | 0.38 | 40,000 | 1.49 | 0.87 | 178,946 | |||||||||||||||||||
December 31 | 0.54 | 0.40 | 22,006 | 1.20 | 0.70 | 111,059 | |||||||||||||||||||
2005 | |||||||||||||||||||||||||
March 31 | 0.42 | 0.34 | 39,099 | 0.93 | 0.60 | 71,839 | |||||||||||||||||||
June 30 | 0.53 | 0.30 | 23,781 | 0.92 | 0.55 | 27,852 | |||||||||||||||||||
September 30 | 2.81 | 0.35 | 297,451 | 1.80 | 0.85 | 311,711 | |||||||||||||||||||
December 31 | 3.95 | 1.94 | 231,105 | 2.10 | 1.31 | 154,997 | |||||||||||||||||||
2006 | |||||||||||||||||||||||||
March 31 | 9.25 | 3.48 | 252,088 | 2.75 | 1.40 | 256,490 | |||||||||||||||||||
April 1 to April 30 | 10.15 | 7.60 | 429,887 | 2.80 | 2.07 | 17,625 |
22
23
24
25
1. | The Offer |
• | 0.35 shares of common stock of New US Gold;OR | |
• | 0.35 Exchangeable Shares, which will, under the circumstances described herein, be exchangeable for shares of common stock of New US Gold on a one-for-one basis, |
26
2. | Time for Acceptance |
3. | Manner of Acceptance |
• | the certificate(s) representing Common Shares in respect of which the Offer is being accepted;AND | |
• | a Letter of Acceptance and Transmittal (printed onBLUEpaper) in the form accompanying the Offer or a facsimile thereof, properly completed and duly executed as required by the instructions set out in the Letter of Acceptance and Transmittal;AND | |
• | any other document required by the instructions set forth in the Letter of Acceptance and Transmittal. |
• | the deposit is made by or through an Eligible Institution;AND | |
• | a Notice of Guaranteed Delivery (printed onGREENpaper) in the form accompanying the Offer or a facsimile thereof, properly completed and duly executed, including a guarantee by an Eligible Institution in the form specified in the Notice of Guaranteed Delivery, is received by the Depositary at the office set out in the Notice of Guaranteed Delivery, at or prior to the Expiry Time;AND | |
• | the certificate(s) representing the deposited Common Shares in proper form for transfer together with a Letter of Acceptance and Transmittal in the form accompanying the Offer or a facsimile thereof, properly completed and duly executed, with any required signature guarantees and all other documents required by the Letter of Acceptance and Transmittal, are received by the Depositary at the office set out in the Notice of Guaranteed |
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Delivery at or prior to 5:00 p.m. (Vancouver time) on the third trading day on the TSX-V after the Expiry Time. |
• | register, record, transfer and enter the transfer of the Purchased Common Shares and any Other Securities on the books of White Knight; | |
• | vote, execute and deliver any instruments of proxy, authorizations and consents in form and on terms satisfactory to New US Gold in respect of any Purchased Common Shares and any or all Other Securities, revoke any such instrument, authorization or consent given prior to or after the Effective Date, designate in |
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any such instruments of proxy any person(s) as the proxy or the proxy nominee(s) of the Shareholder in respect of those Purchased Common Shares and those Other Securities for all purposes; and | ||
• | execute, endorse and negotiate any cheques or other instruments representing any distribution payable to the holder; and exercise any and all other rights of a holder of Purchased Common Shares and any Other Securities. |
• | not to vote any of the Purchased Common Shares or Other Securities at any meeting of holders of those securities; | |
• | not to exercise any other rights or privileges attached to any of those securities; and | |
• | to deliver to New US Gold any and all instruments of proxy, authorizations or consents received in respect of all those securities. |
• | such Shareholder has full power and authority to deposit, sell, assign and transfer the Common Shares (and any Other Securities) being deposited and has not sold, assigned or transferred or agreed to sell, assign or transfer any of such Common Shares (and Other Securities) to any other person; | |
• | the Shareholder owns the Common Shares (and any Other Securities) being deposited within the meaning of applicable securities laws; | |
• | the deposit of those Common Shares (and any Other Securities) complies with applicable securities laws; and | |
• | when those Common Shares (and any Other Securities) are taken up and paid for under the Offer, New US Gold or Canadian Exchange Co., as the case may be, will acquire good title thereto free and clear of all liens, restrictions, charges, encumbrances and claims. |
4. | Conditions of the Offer |
(a) | there shall have been properly deposited under the Offer and not withdrawn at the Expiry Time that number of Common Shares that constitutes at least 662/3% of the Common Shares outstanding calculated on a fully-diluted basis at the time Common Shares are taken up under the Offer; | |
(b) | White Knight shall not have entered into or effectuated any other agreement or transaction with any person or entity having the effect of impairing the Offerors’ ability to acquire White Knight or otherwise diminishing the expected economic value to the Offerors of the acquisition of White Knight including, but not limited to, any material issuance of new securities of White Knight, the declaration of any extraordinary dividend, the adoption of a shareholder rights plan or any other transaction not in the ordinary course of White Knight’s business; |
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(c) | the shares of common stock of New US Gold shall have been approved for listing on the TSX and the AMEX and the Exchangeable Shares shall have been approved for listing on the TSX; | |
(d) | the registration statements for the shares of common stock of New US Gold and the Exchangeable Shares to be issued pursuant to the Offer and the shares of common stock of New US Gold that may be issued upon the exchange of any such Exchangeable Shares shall have become effective under the U.S. Securities Act, as amended, and no stop order suspending the effectiveness of the registration statements or a proceeding seeking a stop order shall have been issued nor shall there have been proceedings for that purpose initiated or threatened by the SEC and New US Gold shall have received all necessary state securities law or blue sky authorizations; | |
(e) | a receipt for a final prospectus qualifying the distribution of securities underlying the U.S. Gold Subscription Receipts and qualifying New US Gold as a reporting issuer shall have been issued in all jurisdictions of Canada; | |
(f) | all necessary orders shall have been obtained from relevant Canadian securities regulatory authorities in respect of the Exchangeable Shares to be issued pursuant to the Offer, the shares of common stock of New US Gold that may be issued upon the exchange of any such Exchangeable Shares and the resale of any such Exchangeable Shares or shares of common stock of New US Gold; | |
(g) | the Offerors shall have received waivers relating to any change of control provisions in any note, bond, mortgage, indenture, license, lease, contract, agreement or other instrument or obligation to which White Knight or any of its subsidiaries is a party or by which any of them or any of their properties or assets may be bound, except such waivers the absence of which would not in the aggregate materially adversely affect White Knight and its subsidiaries; | |
(h) | the holders of shares of common stock of U.S. Gold, voting at a meeting of such holders, shall have approved the following prior to the Expiry Time: |
• | the agreement and plan of merger and the Reorganization, as described in the section entitled “The Offerors — New US Gold and the Reorganization” on page 38 of this Offer, which will require the affirmative vote of the holders of a majority of the outstanding shares of common stock of U.S. Gold and the Reorganization shall have been implemented; and | |
• | the issuance of shares of common stock of New US Gold (i) in the Strategic Offers, (ii) in any Subsequent Acquisition Transaction relating to the Strategic Offers, (iii) upon the exchange of Exchangeable Shares, as described herein, and (iv) upon the exercise of warrants and options of White Knight, Coral Gold, Nevada Pacific or Tone Resources, which will require the affirmative vote of the holders of a majority of the shares of common stock of U.S. Gold entitled to vote at such meeting; |
(i) | there shall not be in effect or threatened as of the Expiry Time, as it may be extended, any temporary restraining order, preliminary or permanent injunction or other order or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition challenging the Offer or preventing the completion of the Offer or any of the other transactions described in this Offer, and there shall be no statute, rule, regulation, order, injunction or decree enacted, entered, promulgated or enforced by any court, administrative agency or commission or other governmental authority or instrumentality which requires consent or approval or challenges, prohibits, restricts or makes illegal the completion of the Offer or the Subsequent Acquisition Transaction; | |
(j) | there shall not be pending or threatened any suit, action or proceeding by any governmental entity: (i) challenging the Offer, seeking to restrain or prohibit the completion of the Offer or seeking to obtain from New US Gold or White Knight or their respective subsidiaries any damages that are material in relation to White Knight and its subsidiaries, on a consolidated basis, or New US Gold and its subsidiaries, on a consolidated basis; (ii) seeking to prohibit or limit the ownership or operation by New US Gold or White Knight or any of New US Gold’s subsidiaries of any material portion of the business or assets of White Knight or New US Gold or any of New US Gold’s subsidiaries or to compel White Knight or New US Gold or any of New US Gold’s subsidiaries to dispose of or hold separate any material portion of the business or assets of New US Gold or White Knight or any of New US Gold’s subsidiaries as a result of the |
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Offer; (iii) seeking to prohibit New US Gold from effectively controlling in any material respect the business or operations of White Knight; or (iv) which otherwise is reasonably likely to have a material adverse effect on New US Gold and its subsidiaries, on a consolidated basis, or White Knight and its subsidiaries, on a consolidated basis; | ||
(k) | there shall be no change or threatened change in the business, properties, assets, liabilities, capitalization, shareholders’ equity, condition (financial or otherwise), operations, licenses or franchises, results of operations or prospects of White Knight or any of its subsidiaries, on a consolidated basis, that, in the reasonable judgment of the Offerors, has or may have a material adverse effect on White Knight and its subsidiaries, on a consolidated basis, and the Offerors shall not have become aware of any fact that, in the reasonable judgment of the Offerors, has or may have a material adverse effect on White Knight and its subsidiaries or their business or prospects or the value to New US Gold of the common shares of White Knight; | |
(l) | the Offerors shall have obtained or received all approvals, consents, clearances or waivers required to be obtained or received from any governmental regulatory agency, authority or commission in connection with the Offer and the Subsequent Acquisition Transaction; and | |
(m) | there shall not have occurred or been threatened: (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States or Canada; (ii) any extraordinary or material adverse change in the financial markets or major stock exchange indices in the United States or Canada or in the market price of the Common Shares; (iii) any change in the general political, market, economic or financial conditions in the U.S. or Canada that could, in the reasonable judgment of U.S. Gold, have a material adverse effect upon the business, properties, assets, liabilities, capitalization, shareholders equity, condition (financial or otherwise), operations, licenses or franchises, results of operations or prospects of White Knight or any of its subsidiaries; (iv) any material change in U.S. or Canadian currency exchange rates or a suspension of, or limitation on, the markets therefor; (v) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or Canada; (vi) any limitation (whether or not mandatory) by any government, domestic, foreign or supranational, or governmental entity on, or other event that, in the reasonable judgment of U.S. Gold, might affect the extension of credit by banks or other lending institutions; (vii) a commencement of war or armed hostilities or other national or international calamity involving the U.S. or Canada; or (viii) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof. |
5. | Extension of the Expiry Time or Variation or Change of the Offer |
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6. | Right to Withdraw |
(a) | at any time before the Common Shares have been taken up by the Offerors under the Offer; | |
(b) | if the Common Shares have not been paid for by the Offerors within three business days after having been taken up; or | |
(c) | at any time before the expiration of 10 days from the date upon which either: |
(i) | a notice of change relating to a change in the information contained in the Offer, as amended from time to time, that would reasonably be expected to affect the decision of a Shareholder to accept or reject the Offer (other than a change that is not within the control of the Offerors or an affiliate of the Offerors, unless it is a change in a material fact relating to the shares of common stock of New US Gold or the Exchangeable Shares), in the event that such change occurs at or before the Expiry Time or after the Expiry Time but before the expiry of all rights of withdrawal in respect of the Offer; or |
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(ii) | a notice of variation concerning a variation in the terms of the Offer (other than a variation consisting solely of an increase in the consideration offered for the Common Shares where the Expiry Time is not extended for more than 10 days); |
is mailed, delivered, or otherwise properly communicated, but subject to abridgement of that period pursuant to such order or orders as may be granted by applicable courts or securities regulatory authorities and only if such Deposited Shares have not been taken up by the Offerors at the date of the notice. |
7. | Take Up of, and Payment for, Deposited Common Shares |
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8. | Return of Common Shares |
9. | Mail Service Interruption |
10. | Dividends and Distributions |
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11. | Notices and Delivery |
12. | Market Purchases |
13. | Other Terms |
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U.S. GOLD CORPORATION | US GOLD HOLDINGS CORPORATION | |
(signed)Robert R. McEwen Chairman of the Board and Chief Executive Officer | (signed)Ann S. Carpenter President |
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1. | The Offerors |
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2. | White Knight |
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Period | High | Low | Volume | |||||||||
(Cdn$) | (Cdn$) | |||||||||||
2005 | ||||||||||||
January | 0.83 | 0.65 | 1,491,938 | |||||||||
February | 0.78 | 0.60 | 1,521,150 | |||||||||
March | 0.93 | 0.67 | 1,386,683 | |||||||||
April | 0.73 | 0.57 | 693,994 | |||||||||
May | 0.68 | 0.55 | 128,506 | |||||||||
June | 0.92 | 0.60 | 960,001 | |||||||||
July | 1.14 | 0.85 | 9,421,613 | |||||||||
August | 1.80 | 1.26 | 7,285,067 | |||||||||
September | 1.80 | 1.33 | 2,931,114 | |||||||||
October | 1.62 | 1.31 | 3,594,704 | |||||||||
November | 2.10 | 1.45 | 3,989,138 | |||||||||
December | 1.95 | 1.58 | 2,025,977 | |||||||||
2006 | ||||||||||||
January | 2.13 | 1.70 | 3,461,395 | |||||||||
February | 1.79 | 1.40 | 3,654,899 | |||||||||
March | 2.39 | 1.65 | 9,299,027 | |||||||||
April | 2.80 | 2.07 | 6,362,824 |
TSX-V | ||||||||||||
March 3, | March 6, | April 28, | ||||||||||
Issuer | 2006 | 2006 | 2006 | |||||||||
White Knight | Cdn$ | 1.79 | Cdn$ | 2.13 | Cdn$ | 2.78 |
Number of | ||||||||||||||||
Securities | Purchase or | Aggregate | ||||||||||||||
Purchased | Sale Price | Gross | ||||||||||||||
Date | Description of Purchase or Sale | or Sold | per Security | Proceeds | ||||||||||||
(Cdn$) | (Cdn$) | |||||||||||||||
January 2006 | Mineral property interests | 40,000 | Unknown | Unknown |
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Number of | Distribution | |||||||||||||||
Common | Price per | Aggregate | ||||||||||||||
Shares | Common | Gross | ||||||||||||||
Date | Description of Distribution | Distributed | Share | Proceeds | ||||||||||||
(Cdn$) | (Cdn$) | |||||||||||||||
April 9, 2002 | Common Shares issued pursuant to a Mining Lease Agreement on the Hunter mineral property | 20,000 | 0.20 | 4,000 | ||||||||||||
May 23, 2002 | Exercise of stock option | 300,000 | 0.10 | 30,000 | ||||||||||||
June 27, 2002 | Private placement of units(1) | 1,764,706 | (6) | 0.17 | 300,000 | |||||||||||
June 27, 2002 | Payment in units(1)of finder’s fee regarding private placement of units | 176,470 | (6) | 0.00 | 0 | |||||||||||
January 1, 2003 | Exercise of stock option | 25,000 | 0.10 | 2,500 | ||||||||||||
January 8, 2003 | Exercise of stock option | 312,500 | 0.10 | 31,250 | ||||||||||||
January 29, 2003 | Issued for Mineral Property | 20,000 | 0.20 | 4,000 | ||||||||||||
January 29, 2003 | Issued for Mineral Property | 20,000 | 0.20 | 4,000 | ||||||||||||
September 26, 2003 | Exercise of stock option | 1,652,500 | 0.10 | 165,250 | ||||||||||||
September 26, 2003 | Exercise of stock option | 422,000 | 0.23 | 97,060 | ||||||||||||
October 9, 2003 | Exercise of warrant | 13,158 | 0.44 | 5,790 | ||||||||||||
October 10, 2003 | Exercise of warrant | 10,793 | 0.44 | 4,749 | ||||||||||||
October 21, 2003 | Exercise of warrant | 164,180 | 0.44 | 72,239 | ||||||||||||
October 27, 2003 | Exercise of warrant | 127,685 | 0.44 | 56,181 | ||||||||||||
October 28, 2003 | Private placement of units(2) | 2,500,000 | (6) | 0.40 | 1,000,000 | |||||||||||
October 28, 2003 | Payment in units(2)of finder’s fee regarding private placement of units | 125,000 | (6) | 0.00 | 0 | |||||||||||
October 29, 2003 | Exercise of warrant | 421,053 | 0.44 | 185,263 | ||||||||||||
October 30, 2003 | Exercise of warrant | 315,210 | 0.44 | 138,692 | ||||||||||||
November 4, 2003 | Exercise of warrant | 228,132 | 0.44 | 100,378 | ||||||||||||
November 5, 2003 | Exercise of warrant | 26,315 | 0.44 | 11,579 | ||||||||||||
November 5, 2003 | Exercise of warrant | 100,000 | 0.25 | 25,000 | ||||||||||||
November 6, 2003 | Exercise of warrant | 100,000 | 0.44 | 44,000 | ||||||||||||
November 7, 2003 | Exercise of warrant | 159,605 | 0.44 | 70,226 | ||||||||||||
November 10, 2003 | Exercise of warrant | 200,000 | 0.44 | 88,000 | ||||||||||||
November 13, 2003 | Exercise of warrant | 657,895 | 0.44 | 289,474 | ||||||||||||
November 17, 2003 | Exercise of warrant | 200,000 | 0.44 | 88,000 | ||||||||||||
November 18, 2003 | Exercise of warrant | 1,084,106 | 0.44 | 477,007 | ||||||||||||
January 8, 2004 | Exercise of warrant | 1,429,411 | 0.25 | 357,353 | ||||||||||||
January 15, 2004 | Issued for mineral properties | 40,000 | 0.20 | 8,000 | ||||||||||||
January 29, 2004 | Private placement of units(3) | 7,764,704 | (6) | 0.85 | 6,600,000 | |||||||||||
February 29, 2004 | Exercise of stock option | 50,000 | 0.10 | 5,000 | ||||||||||||
June 2004 | Private placement of units(4) | 2,222,222 | (6) | 0.90 | 2,000,000 | |||||||||||
During fiscal year ended June 30, 2004 | Exercise of stock options | 10,000 | Unknown | Unknown | ||||||||||||
During fiscal year ended June 30, 2004 | Exercise of warrants | 846,765 | Unknown | Unknown | ||||||||||||
December 20, 2004 | Private placement of units(5) | 1,500,000 | (6) | 1.58 | 2,370,000 | |||||||||||
June 30, 2004 to | ||||||||||||||||
August 3, 2004 | Exercise of warrants | 2,090,000 | 0.60 | 1,254,000 | ||||||||||||
June 30, 2004 to December 31, 2004 | Exercise of warrants | 200,000 | 0.60 | 120,000 |
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Number of | Distribution | |||||||||||||||
Common | Price per | Aggregate | ||||||||||||||
Shares | Common | Gross | ||||||||||||||
Date | Description of Distribution | Distributed | Share | Proceeds | ||||||||||||
(Cdn$) | (Cdn$) | |||||||||||||||
January 1, 2005 to March 31, 2005 | Mineral property interests | 40,000 | 0.71 | 28,400 | ||||||||||||
June 30, 2004 to June 30, 2005 | Exercise of stock options | 230,000 | 0.30 | (7) | 120,125 | |||||||||||
June 30, 2005 to September 30, 2005 | Exercise of warrants | 4,940,586 | 1.25 | 6,175,732 | ||||||||||||
June 30, 2005 to December 31, 2005 | Exercise of stock options | 165,000 | 0.59 | (7) | 169,584 | |||||||||||
January 2006 | Mineral property interests | 40,000 | Unknown | Unknown |
(1) | Each unit consists of one Common Share and one warrant entitling the holder to purchase one Common Share at a price of Cdn$0.25 on or before June 27, 2002. |
(2) | Each unit consists of one Common Share and one warrant entitling the holder to purchase one Common Share at a price of Cdn$0.60 on or before October 24, 2005. |
(3) | Each unit consists of one Common Share and one warrant entitling the holder to purchase one Common Share at a price of Cdn$1.25 for 18 months. |
(4) | Each unit consists of one Common Share and one warrant entitling the holder to purchase one Common Share at a price of Cdn$1.25 for one year. |
(5) | Each unit consists of one Common Share and one warrant entitling the holder to purchase one Common Share at a price of Cdn$2.50 for one year. |
(6) | Does not include the Common Shares issuable upon exercise of the warrants. |
(7) | Weighted average. |
3. | Exchangeable Shares |
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43
44
45
• | pay any dividends on the common shares or any other shares of Canadian Exchange Co. ranking junior to the Exchangeable Shares, other than stock dividends payable in common shares or any such other shares of Canadian Exchange Co. ranking junior to the Exchangeable Shares, as the case may be; | |
• | redeem or purchase or make any capital distribution in respect of common shares or any other shares of Canadian Exchange Co. ranking junior to the Exchangeable Shares; | |
• | redeem or purchase any other shares of Canadian Exchange Co. ranking equally with the Exchangeable Shares with respect to the payment of dividends or the distribution of assets in the event of the liquidation, dissolution or winding up of Canadian Exchange Co., whether voluntary or involuntary, or any other distribution of the assets of Canadian Exchange Co. among its shareholders for the purpose of winding up its affairs; or |
46
• | issue any shares other than Exchangeable Shares and common shares in the capital of Canadian Exchange Co. and any other shares not ranking superior to the Exchangeable Shares, |
47
48
49
4. | Background to the Offer |
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5. | Investment Considerations |
• | a larger land position within the Cortez Trend and a larger exploration program; | |
• | a stronger cash position and reduced costs; | |
• | enhanced trading liquidity and better market focus; and | |
• | greater technical expertise. |
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6. | Intentions of the Offerors |
• | Coral Gold. Coral Gold is a natural resource company primarily engaged in the exploration and development of natural resource properties. Coral Gold’s principal business activities are the exploration of certain mineral properties located in Nevada and California. Since Coral Gold’s 2002 fiscal year, Coral Gold has made aggregate principal expenditures of Cdn$2,498,084 on the Robertson Mining Claims in Nevada. The Offerors intend to offer to purchase all of the outstanding shares of Coral Gold on the basis of 0.63 shares of common stock of New US Gold or 0.63 Exchangeable Shares per 1.0 common share of Coral Gold. Coral Gold’s common shares are listed on theTSX-V under the symbol“CGR-V” and on the OTCBB under the symbol “CGREF.” | |
• | Nevada Pacific. Nevada Pacific is a mining company based in Vancouver, British Columbia. Nevada Pacific owns, among other things, an exploratory property portfolio covering approximately 75 square miles of mineral rights including portions of two significant gold producing belts in the State of Nevada. The Offerors intend to offer to purchase all of the outstanding shares of Nevada Pacific on the basis of 0.23 shares of common stock of New US Gold or 0.23 Exchangeable Shares per 1.0 common share of Nevada Pacific. Nevada Pacific’s common shares are listed on theTSX-V under the symbol“NPG-V.” | |
• | Tone Resources. Tone Resources is an exploration stage company engaged in the acquisition and exploration of mineral properties primarily located on the major gold trends in the north-central region of Nevada. Tone Resources holds 410 mining claims in Nevada. The Offerors intend to offer to purchase all of the outstanding shares of Tone Resources on the basis of 0.26 shares of common stock of New US Gold or 0.26 Exchangeable |
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Shares per 1.0 common share of Tone Resources. Tone Resources’ common shares are listed on theTSX-V under the symbol“TNS-V” and quoted on the Pink Sheets in the United States under the symbol “TONRF.” |
• | A larger land position within the Cortez Trend and a larger exploration program. U.S. Gold holds a 100% interest in the Tonkin Springs exploration gold property in Eureka County, Nevada, subject to paramount title in the United States. This property consists of approximately 36 square miles of unpatented lode mining claims and millsite claims located on the Battle Mountain-Eureka Trend, approximately 45 miles northwest of the town of Eureka, in north- central Nevada. Upon successful completion of the Strategic Offers, U.S. Gold’s land position would increase by approximately 344% to approximately 160 square miles. Over the next two years, U.S. Gold has planned 400,000 feet of exploration drilling on its Tonkin Springs exploration gold property at a cost of $30 million. If the Strategic Offers are successfully completed, U.S. Gold intends to aggressively explore the properties of White Knight, Coral Gold, Nevada Pacific and Tone Resources over the next two years to coincide with its explorations program at its Tonkin Springs exploration gold property. | |
• | A stronger cash position and reduced costs. On February 22, 2006, U.S. Gold completed a private placement of 16,700,000 subscription receipts for aggregate gross proceeds of $75.15 million. Of the companies currently exploring for gold in Nevada, U.S. Gold has one of the strongest cash positions. Successful completion of one or more of the Strategic Offers will also give U.S. Gold access to the additional cash resources of the companies acquired. Due to the strategic locations in Nevada of the assets of each of White Knight, Coral Gold, Nevada Pacific and Tone Resources and the elimination of redundant fees and costs, the Offerors expect that New US Gold will realize lower total costs than if each company was to remain a separate entity. | |
• | Enhanced trading liquidity and better market focus. The Offerors expect that the successful completion of the Strategic Offers will result in increased market capitalization and trading liquidity of the combined company, resulting in better market focus. Because of the increased market capitalization and liquidity of the combined company, the Offerors expect that the combined company will have greater access to equity and debt capital markets than U.S. Gold currently does, and greater appeal to institutional investors. The Offerors expect that this access will provide management of the combined company greater flexibility to execute its business plan under various financial market conditions. | |
• | Greater technical expertise. The Offerors believe that each of White Knight, Coral Gold, Nevada Pacific and Tone Resources has quality employees with good technical expertise. The Offerors hope to retain these key employees following the successful completion of the Strategic Offers to help drive New US Gold’s business and operations going forward. |
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7. | Acquisition of Common Shares Not Deposited |
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8. | Relationships Between the Offerors and White Knight |
56
9. | Valuation Requirements for Insider Bids |
57
10. | Prior Valuations |
11. | Expenses of the Offer |
12. | Regulatory Matters |
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13. | Accounting Treatment |
14. | Dissenters’ Rights |
15. | Material Canadian Federal Income Tax Considerations |
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• | less than the fair market value of the Ancillary Rights received on a disposition of Common Shares pursuant to the Offer; | |
• | less than the lesser of: (a) the adjusted cost base to the Shareholder of the Shareholder’s Common Shares disposed of pursuant the Offer, and (b) the fair market value of the Common Shares; and | |
• | greater than the fair market value of the Common Shares so disposed of, |
• | the Shareholder will be deemed to have been disposed of Common Shares for proceeds of disposition equal to the Elected Amount; | |
• | if the proceeds of disposition of the Common Shares are equal to the aggregate of the adjusted cost base of the Shareholder’s Common Shares, determined immediately before the time of the disposition, and any reasonable costs of disposition, no capital gain or capital loss will be realized by the Shareholder; | |
• | to the extent that the proceeds of disposition of the Common Shares exceed (or are less than) the aggregate of the adjusted cost base to the Shareholder of his or her Common Shares, determined immediately before the time of the disposition, and any reasonable costs of disposition, a capital gain (or capital loss) will be realized by the Shareholder; and | |
• | the cost to a Shareholder of the Exchangeable Shares received in exchange for the Common Shares will be equal to the amount by which the Elected Amount exceeds the fair market value of the Ancillary Rights received on the disposition of the Common Shares pursuant to the Offer. |
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64
65
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16. | Material U.S. Federal Income Tax Considerations |
69
• | a financial institution, thrift, insurance company or mutual fund; | |
• | a tax-exempt organization; | |
• | an S corporation, an entity taxable as a partnership for U.S. federal income tax purposes or other pass-through entity or an owner thereof; | |
• | a dealer in stocks and securities or foreign currencies or a trader or an investor in Common Shares who elects the mark-to-market method of accounting for such stock; | |
• | a shareholder who received Common Shares from the exercise of employee stock options, stock purchase plans or otherwise as compensation, or from a tax-qualified retirement plan, individual retirement account or other qualified savings account; | |
• | a U.S. holder (defined below) that has a functional currency other than the U.S. dollar; | |
• | an expatriate or former long-term resident of the United States; | |
• | a shareholder that owns (or is deemed to own) shares representing 10% or more of the voting power of White Knight; or | |
• | a shareholder who holds Common Shares as part of a hedge against currency risk, straddle or a constructive sale or conversion transaction, or other risk reduction or integrated investment transaction. |
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• | the income or gain is effectively connected with the conduct by the non-U.S. holder of a trade or business, or, if a tax treaty applies, attributable to a permanent establishment maintained by the non-U.S. holder, in the United States; or | |
• | the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met, unless an applicable income tax treaty provides otherwise. |
• | the gain is effectively connected with the conduct by the non-U.S. holder of a trade or business, or, if a tax treaty applies, attributable to a permanent establishment maintained by the non-U.S. holder, in the United States; | |
• | in the case of sale or exchange of shares of common stock of New US Gold, such non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met, unless an applicable income tax treaty provides otherwise; or |
74
• | in the case of sale or exchange of Exchangeable Shares (assuming that such shares are not treated as shares of common stock of New US Gold), such non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met, unless an applicable income tax treaty provides otherwise. |
• | In the case of a non-U.S. holder who owns only shares of common stock of New US Gold (actually and constructively), the shares of common stock of New US Gold are treated as “regularly traded on an established securities market” and the non-U.S. holder holds more than 5% of the total fair market value of the shares of common stock of New US Gold outstanding (on a non-diluted basis) at the relevant determination time; | |
• | In the case of a non-U.S. holder who owns only Exchangeable Shares (actually and constructively, other than shares of common stock of New US Gold constructively owned by reason of ownership of Exchangeable Shares), either: |
• | The Exchangeable Shares are treated as “regularly traded on an established securities market” and such non-U.S. holder holds more than 5% of the total fair market value of the Exchangeable Shares outstanding at the relevant determination time, or | |
• | The Exchangeable Shares are not treated as “regularly traded on an established securities market,” but the shares of common stock of New US Gold are “regularly traded on an established securities market,” and such non-U.S. holder holds Exchangeable Shares with a fair market value on the relevant date of determination greater than 5% of the total fair market value of the shares of common stock of New US Gold outstanding (on a non-diluted basis) on such date; |
• | In the case of a non-US holder who actually or constructively owns shares of common stock of New US Gold or Exchangeable Shares, such shares and Exchangeable Shares are not treated as “regularly traded on an established securities market.” |
75
17. | Comparison of Shareholder Rights |
76
• | surplus; or | |
• | in case there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year, except, dividends may not be paid out of net profits when the capital is diminished to an amount less than the aggregate amount of capital represented by issued and outstanding stock having a preference on the distribution of assets. |
77
78
79
80
81
82
• | alter its articles to alter the restrictions on the powers of the corporation or on the business it its permitted to carry on; | |
• | approve certain amalgamations; | |
• | approve an arrangement, where the terms of the arrangement permit dissent; | |
• | sell, lease or otherwise dispose of all or substantially all of its undertaking; or | |
• | continue the corporation into another jurisdiction. |
• | shares of stock of the surviving corporation; | |
• | shares of stock of another corporation that are either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 stockholders; | |
• | cash in lieu of fractional shares of the stock described in the two preceding bullets; or | |
• | any combination of the above. |
83
• | the affairs of the corporation are or have been conducted, or the powers of the directors are being or have been exercised, in a manner oppressive to one or more of the shareholders, including the applicant; or | |
• | some act of the corporation has been done or is threatened, or that some resolution of the shareholders or of the shareholders holding shares of a class or series of shares has been passed or is proposed, that is unfairly prejudicial to one or more of the shareholders, including the applicant. |
• | prosecute a legal proceeding to enforce a right, duty or obligation owed to White Knight that could be enforced by White Knight itself, or to obtain damages for any breach of such a right, duty or obligation; or | |
• | defend a legal proceeding brought against White Knight. |
• | the complainant has made reasonable efforts to cause the directors of the corporation to prosecute or defend the legal proceeding; | |
• | notice of the application for leave has been given to the corporation and to any other person the court may order; | |
• | the complainant is acting in good faith; and | |
• | it appears to the court that it is in the best interests of the corporation for the legal proceeding to be prosecuted or defended. |
84
• | the name, age, principal occupation or employment, business address and residence address of the stockholder and the person or persons to be nominated; | |
• | the class and number of shares of stock held of record, owned beneficially and represented by proxy by the stockholder and by the person or persons to be nominated as of the date of the notice; |
85
• | a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming the person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; | |
• | any other information regarding each nominee proposed by the stockholder required pursuant to the U.S. Securities Exchange Act; and | |
• | the consent of each nominee to serve as a director of the corporation if so elected. |
• | a description of the proposed item of business and the reasons for conducting such business at the annual meeting; | |
• | the name and record address of the stockholder who proposes to bring the item of business; | |
• | the class and number of shares of stock held of record, owned beneficially and represented by proxy by the stockholder as of the date of such notice; | |
• | any material interest of the stockholder in such proposed business; and | |
• | all other information that is required to be provided by the stockholder pursuant to regulations promulgated under the U.S. Securities Exchange Act. |
• | is or was a director or officer of the corporation; | |
• | is or was a director or officer of another corporation, (i) at the time when the corporation is or was an affiliate of the corporation, or, (ii) at the request of the corporation; or | |
• | at the corporation’s request, is or was, acting in a similar capacity of another entity, against a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of any legal proceeding or investigative action, whether current, threatened, pending or completed, in which such eligible party is involved because of that association with the corporation or other entity. |
• | such eligible party did not act honestly and in good faith with a view to the best interests of such corporation (or the other entity, as the case may be); and | |
• | in the case of a proceeding other than a civil proceeding, such eligible party did not have reasonable grounds for believing that such person’s conduct was lawful. |
86
• | order a corporation to indemnify an eligible party in respect of an eligible proceeding; | |
• | order a corporation to pay some or all of the expenses incurred by an eligible party in an eligible proceeding; | |
• | order enforcement of or any payment under an indemnification agreement; | |
• | order the corporation to pay some or all of the expenses actually and reasonably incurred by a person in obtaining the order of the court; and/or | |
• | make any other order the court considers appropriate. |
87
• | carry on its business or exercise any power that it is restricted by its articles from carrying on or exercising; | |
• | pay a commission or allow a discount contrary to the provisions of the BCBCA; | |
• | pay a dividend or acquire or redeem any of its shares where there are reasonable grounds for believing that the corporation is insolvent or the payment of the dividend or the acquisition or redemption would render the corporation insolvent; or | |
• | indemnify a person in contravention of the BCBCA. |
• | financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the auditor of the corporation to fairly reflect the financial position of the corporation; | |
• | a written report of a lawyer, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by that person; | |
• | a statement of fact represented to the director by an officer of the corporation to be correct; or | |
• | any record, information or representation that the court considers provides reasonable grounds for the actions of the director, whether or not that record was forged, fraudulently made or inaccurate. |
88
• | for any breach of the director’s duty of loyalty to New US Gold or its stockholders; | |
• | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; | |
• | for unlawful dividends under the Delaware Law; or | |
• | for any transaction from which the director derived an improper personal benefit. |
89
18. | Depositary |
19. | Dealer Manager and Soliciting Dealer Group; Information Agent |
90
20. | Experts |
21. | Legal Matters |
22. | Offerees’ Statutory Rights |
91
23. | Directors’ Approval |
92
TO: | The Directors of U.S. Gold Corporation |
The Directors of US Gold Holdings Corporation | |
The Directors of US Gold Canadian Acquisition Corporation |
93
TO: | The Directors of U.S. Gold Corporation |
The Directors of US Gold Holdings Corporation | |
The Directors of US Gold Canadian Acquisition Corporation |
94
TO: | The Directors of U.S. Gold Corporation |
The Directors of US Gold Holdings Corporation | |
The Directors of US Gold Canadian Acquisition Corporation |
95
TO: | The Directors of U.S. Gold Corporation |
The Directors of US Gold Holdings Corporation | |
The Directors of US Gold Canadian Acquisition Corporation |
(Signed) STARK WINTER SCHENKEIN & CO, LLP | ||
Denver, Colorado | ||
May 1, 2006 |
96
(signed)Robert R. McEwen Chairman of the Board and Chief Executive Officer | (signed)William F. Pass Vice President and Chief Financial Officer |
(signed)Declan J. Costelloe Director | (signed)Peter Bojtos Director |
97
(signed)Ann S. Carpenter President | (signed)William F. Pass Vice President, Secretary and Treasurer |
(signed)Ann S. Carpenter Director | (signed)William F. Pass Director |
98
(signed)Robert R. McEwen Chairman of the Board and Chief Executive Officer | (signed)William F. Pass Vice President, Secretary and Treasurer |
(signed)Ann S. Carpenter Director | (signed)William F. Pass Director |
99
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Colorado | 84-0796160 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
2201 Kipling Street, Suite 100, Lakewood, CO | 80215 | |
(Address of principal executive offices) | (Zip Code) |
(Issuer’s telephone number, including area code)
None | N/A | |
Title of each class | Name of each exchange on which registered |
(Title of class)
þ Yeso No
o Yesþ No
PART I | A-3 | |||
ITEM 1: | DESCRIPTION OF BUSINESS | A-3 | ||
ITEM 2: | DESCRIPTION OF PROPERTIES | A-5 | ||
ITEM 3: | LEGAL PROCEEDINGS | A-10 | ||
ITEM 4: | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | A-10 | ||
PART II | A-11 | |||
ITEM 5: | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS | A-11 | ||
ITEM 6: | MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS | A-12 | ||
ITEM 7: | FINANCIAL STATEMENTS | A-24 | ||
ITEM 8: | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | A-39 | ||
ITEM 8A: | CONTROL AND PROCEDURES | A-39 | ||
PART III | A-39 | |||
ITEM 9: | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT | A-39 | ||
ITEM 10: | EXECUTIVE AND DIRECTOR COMPENSATION | A-42 | ||
ITEM 11: | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | A-45 | ||
ITEM 12: | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | A-46 | ||
PART IV | ||||
ITEM 13: | EXHIBITS | A-47 | ||
ITEM 14: | PRINCIPAL ACCOUNTANT FEES AND SERVICES | A-49 | ||
SIGNATURES | A-50 |
A-2
A-3
A-4
A-5
A-6
No. of | No. of | No. of | Drilling | |||||||||||||||||||||
Period | Company | Holes | Total Length | Intervals | Assays | Type | ||||||||||||||||||
(metres) | (feet) | |||||||||||||||||||||||
1966-67 | Homestake Mining Company | 10 | 655 | 2,147 | 850 | 419 | Rotary | |||||||||||||||||
1970-71 | American Selco (Amselco) | 4 | 316 | 1,035 | 410 | 204 | Rotary | |||||||||||||||||
1974-75 | Chevron Resources | 20 | 1,480 | 4,854 | 1,922 | 951 | Rotary | |||||||||||||||||
1976 | Placer Amex | 19 | 1,601 | 5,250 | 1,519 | 769 | Rotary | |||||||||||||||||
1978-79 | Earth Resources | 15 | 1,087 | 3,565 | 699 | 339 | Rotary | |||||||||||||||||
1980 | Freeport Exploration | 34 | 2,971 | 9,745 | 3,864 | 1,910 | Rotary | |||||||||||||||||
1981-84 | Precambrian Exploration | 421 | 32,227 | 105,705 | 41,861 | 21,104 | Rotary | |||||||||||||||||
1985-89 | U.S. Gold | 1,976 | 97,805 | 320,802 | 125,389 | 61,823 | Rotary & Core | |||||||||||||||||
1991-92 | Homestake Mining Company (Denay) | 86 | 7,723 | 25,332 | 83,088 | 17,644 | Rotary & Core | |||||||||||||||||
1995-98 | Gold Capital Corporation | 76 | 1,339 | 4,392 | 14,405 | 2,344 | Rotary & Core | |||||||||||||||||
1999-2001 | Agnico-Eagle/Sudbury Contact | 107 | 19,381 | 63,570 | 15,018 | 7,308 | Rotary & Core | |||||||||||||||||
2003-04 | BacTech | 29 | 2,386 | 7,825 | 1,565 | 189 | Rotary & Core | |||||||||||||||||
Total | 2,797 | 168,970 | 554,222 | 290,590 | 115,004 |
A-7
A-8
A-9
• | a mill and associated tailings storage impoundment, which will ultimately require closure and reclamation; | |
• | exposed sulfide bearing rocks located in the upper benches of TSP-1, which are generating a small amount of acidic waters that are high in metals; | |
• | water captured in TSP-5 pit, which is neutral and high in metals; | |
• | existing waste rock dumps that require re-grading and reclamation; | |
• | the existing gold heap leach pad, which must be closed and reclaimed; and | |
• | roads related to the past mining operations and exploration, which must be reclaimed. |
A-10
Increase of authorized shares to 250,000,000- Votes For: 29,552,819 | Votes Against: 1,075,887 | Abstain: 42,750 | ||
Elimination of par value of shares- Votes For: 29,711,170 | Votes Against: 872,121 | Abstain: 88,165 | ||
Elimination of the super majority voting requirements- Votes For: 23,875,025 | Votes Against: 744,719 | Abstain: 114,592 | ||
Increase in number of shares reserved under Plan: Votes For: 23,605,603 | Votes Against: 1,003,144 | Abstain: 125,589 | ||
Appointment of Auditors (Stark Winter Schenkein & Co., LLP) Votes For: 30,210,047 | Votes Against: 95,023 | Abstain: 336,386 |
Year Ended | High | Low | ||||||
December 31, 2006 | ||||||||
First Quarter (to March 31, 2006) | $ | 9.25 | $ | 3.48 | ||||
December 31, 2005 | ||||||||
First Quarter | $ | 0.42 | $ | 0.34 | ||||
Second Quarter | 0.53 | 0.30 | ||||||
Third Quarter | 2.81 | 0.35 | ||||||
Fourth Quarter | 3.95 | 1.94 | ||||||
December 31, 2004 | ||||||||
First Quarter | $ | 1.85 | $ | 0.81 | ||||
Second Quarter | 1.03 | 0.60 | ||||||
Third Quarter | 0.72 | 0.38 | ||||||
Fourth Quarter | 0.54 | 0.40 |
A-11
A-12
A-13
A-14
A-15
A-16
A-17
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||
$271 | $ | 310 | $ | 364 | $ | 406 | $ | 445 |
A-18
A-19
A-20
• | economically insufficient mineralized material; | |
• | fluctuations in production costs that may make mining uneconomical; | |
• | labor disputes; | |
• | unanticipated variations in grade and other geologic problems; | |
• | environmental hazards; | |
• | water conditions; | |
• | difficult surface or underground conditions; | |
• | industrial accidents; | |
• | metallurgical and other processing problems; | |
• | mechanical and equipment performance problems; | |
• | failure of pit walls or dams; | |
• | unusual or unexpected formations; | |
• | personal injury, fire, flooding, cave-ins and landslides; and | |
• | decrease in reserves due to a lower gold price. |
A-21
• | changes in the worldwide price for gold; | |
• | disappointing results from our exploration or development efforts; | |
• | failure to meet our revenue or profit goals or operating budget; | |
• | decline in demand for our common stock; | |
• | downward revisions in securities analysts’ estimates or changes in general market conditions; | |
• | technological innovations by competitors or in competing technologies; | |
• | investor perception of our industry or our prospects; and | |
• | general economic trends |
A-22
• | decisions of foreign countries and banks within those countries; | |
• | technological changes in the mining industry; | |
• | our costs; | |
• | changes in our business strategy; | |
• | interpretation of drill hole results and the geology, grade and continuity of mineralization; | |
• | the uncertainty of reserve estimates and timing of development expenditures; and | |
• | commodity price fluctuations |
A-23
Index to Financial Statements: | 22 | |||
Report of Independent Registered Public Accounting Firm | 23 | |||
Consolidated Statements of Operations for the years ended December 31, 2005 and 2004 | 24 | |||
Consolidated Balance Sheet at December 31, 2005 | 25 | |||
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2005 and 2004 | 26 | |||
Consolidated Statements of Cash Flows for the years ended December 31, 2005 and 2004 | 27 | |||
Notes to Consolidated Financial Statements | 28 |
A-24
U.S. Gold Corporation
Lakewood, Colorado
/s/ Stark Winter Schenkein & Co., LLP | ||
Denver, Colorado |
A-25
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31,
2005 | 2004 | |||||||
OTHER REVENUE: | ||||||||
Earnest money forfeited | $ | 200,000 | $ | — | ||||
Interest income | 32,032 | 38,750 | ||||||
Management fee | 330,000 | — | ||||||
Realized gain from disposition of shares | 520,428 | — | ||||||
(Loss) on sale of other assets | (29,982 | ) | — | |||||
Total other revenue | 1,052,478 | 38,750 | ||||||
COSTS AND EXPENSES: | ||||||||
General and administrative | 1,027,194 | 782,968 | ||||||
Write-off of purchase price receivable | 182,748 | — | ||||||
Property holding costs | 761,081 | — | ||||||
Employment termination payments | 1,423,824 | — | ||||||
Stock compensation expense | 294,400 | 43,229 | ||||||
Equity share of subsidiary loss | 58,888 | — | ||||||
Realization reserve-stock | 168,960 | — | ||||||
Interest | 3,011 | 1,476 | ||||||
Accretion of asset retirement obligation | 110,243 | — | ||||||
Depreciation | 12,850 | 4,878 | ||||||
Total costs and expenses | 4,043,199 | 832,551 | ||||||
(Loss) before income | (2,990,721 | ) | (793,801 | ) | ||||
Provision for income taxes | — | — | ||||||
Net (loss) | $ | (2,990,721 | ) | $ | (793,801 | ) | ||
Basic and diluted per share data: | ||||||||
Net (loss) | ||||||||
Basic | $ | (0.12 | ) | $ | (0.04 | ) | ||
Diluted | $ | (0.12 | ) | $ | (0.04 | ) | ||
A-26
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2005
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 677,518 | ||
Interest receivable | 25,667 | |||
Other current assets-prepaid expense | 85,483 | |||
Total current assets | 788,668 | |||
Property and equipment, net | 53,305 | |||
Restrictive time deposits for reclamation bonding | 2,937,746 | |||
Other assets: | ||||
Inactive milling equipment | 777,819 | |||
Long-lived asset-asset retirement | 942,924 | |||
Prepaid insurance | 29,970 | |||
Other assets | 10,118 | |||
Total other assets | 1,760,831 | |||
TOTAL ASSETS | $ | 5,540,550 | ||
LIABILITIES & SHAREHOLDERS’ EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ | 96,794 | ||
Installment purchase contracts | 97,303 | |||
Reclamation plan cost (reclamation obligation) | 1,597,032 | |||
Total current liabilities | 1,791,129 | |||
Installment purchase contracts, long-term | 16,083 | |||
Retirement obligation | 1,127,689 | |||
Other permit obligations | 72,510 | |||
Total liabilities | 3,007,411 | |||
Commitments and contingencies | — | |||
Shareholders’ equity: | ||||
Common stock, no par value, 250,000,000 shares authorized; 33,296,755 shares issued and outstanding | 40,465,813 | |||
Accumulated (deficit) | (37,932,674 | ) | ||
Total shareholders’ equity | 2,533,139 | |||
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ | 5,540,550 | ||
A-27
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 (restated)
Common | Accumulated | |||||||||||||||
Shares | Stock | (Deficit) | Total | |||||||||||||
Balance, December 31, 2003 | 19,188,954 | $ | 35,324,260 | $ | (34,148,152 | ) | $ | 1,176,108 | ||||||||
Exercise of stock warrants at $.30/share | 428,572 | 128,571 | — | 128,571 | ||||||||||||
Sale of shares for cash at $.50/share | 200,000 | 100,000 | — | 100,000 | ||||||||||||
Sale of shares for cash at $.724/share | 100,000 | 72,350 | — | 72,350 | ||||||||||||
Sale of shares for cash at $.475/share | 200,000 | 95,000 | — | 95,000 | ||||||||||||
Value assigned to warrants | — | 21,800 | — | 21,800 | ||||||||||||
Exercise of stock options at $.16/share | 340,000 | 30,400 | — | 30,400 | ||||||||||||
Treasury shares cancelled | (516 | ) | (470 | ) | — | (470 | ) | |||||||||
Net (loss) | — | — | (793,801 | ) | (793,801 | ) | ||||||||||
Balance, December 31, 2004 | 20,457,010 | 35,771,911 | (34,941,953 | ) | 829,958 | |||||||||||
Shares issued for cancellation of warrants at $.47/share | 120,000 | 56,400 | — | 56,400 | ||||||||||||
Shares issued for cancellation of warrants at $.40/share | 145,000 | 58,000 | — | 58,000 | ||||||||||||
Share grants to directors at $.40/share | 450,000 | 180,000 | — | 180,000 | ||||||||||||
Share grants to executive officers at $.39/share | 1,025,000 | 399,750 | — | 399,750 | ||||||||||||
Sale of shares for cash at $.36/share | 11,100,000 | 4,000,000 | — | 4,000,000 | ||||||||||||
Treasury shares cancelled | (255 | ) | (248 | ) | — | (248 | ) | |||||||||
Net (loss) | — | — | (2,990,721 | ) | (2,990,721 | ) | ||||||||||
Balance, December 31, 2005 | 33,296,755 | $ | 40,465,813 | $ | (37,932,674 | ) | $ | 2,533,139 | ||||||||
A-28
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
2005 | 2004 | |||||||
Cash flows from operating activities: | ||||||||
Cash paid to suppliers and employees | $ | (2,630,620 | ) | $ | (853,033 | ) | ||
Earnest money payment | 200,000 | — | ||||||
Interest received | 6,365 | 56,108 | ||||||
Interest paid | (3,011 | ) | (1,476 | ) | ||||
Income taxes paid | — | — | ||||||
Cash (used in) operating activities | (2,427,266 | ) | (798,401 | ) | ||||
Cash flows from investing activities: | ||||||||
BacTech purchase price payments | 185,776 | 318,892 | ||||||
Increase to restricted investments securing reclamation | (1,118,733 | ) | — | |||||
Capital expenditures | (55,067 | ) | (101,507 | ) | ||||
Sale of assets | 10,000 | — | ||||||
Cash (used in) provided by investing activities | (978,024 | ) | 217,385 | |||||
Cash flows from financing activities: | ||||||||
Sale of common stock for cash | 4,000,000 | 374,492 | ||||||
Purchase of treasury stock | (248 | ) | (470 | ) | ||||
Proceeds from (payments on) installment purchase contracts | 8,068 | 83,990 | ||||||
Cash provided by financing activities | 4,007,820 | 458,012 | ||||||
Increase (decrease) in cash and cash equivalents | 602,530 | (123,004 | ) | |||||
Cash and cash equivalents, beginning of year | 74,988 | 197,992 | ||||||
Cash and cash equivalents, end of year | $ | 677,518 | $ | 74,988 | ||||
Reconciliation of net (loss) to cash (used in) operating activities: | ||||||||
Net (loss) | $ | (2,990,721 | ) | $ | (793,801 | ) | ||
Items not providing/requiring cash: | ||||||||
Management fee paid with GRC shares | (320,000 | ) | — | |||||
Realized gain from GRC shares | (520,428 | ) | — | |||||
Equity share of GRC loss | 58,888 | — | ||||||
Non-cash portion of employment termination expense | 433,400 | — | ||||||
Write-off of BacTech purchase price receivable | 182,748 | — | ||||||
Loss on sale of asset | 29,982 | — | ||||||
Interest income | (25,667 | ) | — | |||||
Stock compensation expense | 294,400 | 43,229 | ||||||
Realization reserve-GRC stock | 168,960 | — | ||||||
Accretion of asset retirement obligation-SFAS 143 | 110,243 | — | ||||||
Depreciation | 12,850 | 4,878 | ||||||
(Increase) decrease in other assets related to operations | 22,341 | (623 | ) | |||||
Increase (decrease) in liabilities related to operations | 115,738 | (52,084 | ) | |||||
Cash (used in) operating activities | $ | (2,427,266 | ) | $ | (798,401 | ) | ||
Non-cash financing and investing activities: | ||||||||
Net assets received from BacTech withdrawal from TSLLC | $ | 757,035 | $ | — | ||||
Payments pursuant to Employment Termination Agreements with GRC common stock | $ | 612,580 | $ | — | ||||
Exercise of stock options utilizing cashless exercise | $ | — | $ | 24,000 | ||||
A-29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005
A-30
A-31
A-32
Asset retirement and reclamation liability-January 1, 2005 | $ | 1,596,570 | ||
Adjustment at December 31, 2005 reflecting updated cost estimate, cost of capital and timing projections | 942,924 | |||
Accretion of liability while BacTech was manager | 74,984 | |||
Accretion of liability at assumed 17.3% annual rate | 110,243 | |||
Asset retirement and reclamation liability-December 31, 2005 | $ | 2,724,721 | ||
Decrease in the cost of capital assumption from 17.3% to 8.72% | $ | 575,200 | ||
Increase to estimated reclamation cost | 277,300 | |||
Reduction of time frame to complete reclamation from 8.25 years to 6 years from December 31, 2005 | 90,424 | |||
Total | $ | 942,924 | ||
A-33
A-34
Office furniture and equipment | $ | 45,922 | ||
Trucks and autos | 38,950 | |||
Other equipment | 19,263 | |||
Subtotal | 104,135 | |||
Less: accumulated depreciation | (50,830 | ) | ||
Total | $ | 53,305 | ||
Deferred tax assets: | ||||
Alternative minimum tax credit carryfoward | $ | 11,200 | ||
Reclamation obligation | 345,900 | |||
Net operating (loss) carryforward | 2,738,200 | |||
Capital (loss) carryforward | 268,400 | |||
Total gross deferred tax assets | 3,363,700 | |||
Less valuation allowance | (3,249,100 | ) | ||
Net deferred tax assets | 114,600 | |||
Deferred tax liabilities: | ||||
Basis in TSVLP | (114,600 | ) | ||
Total net deferred tax asset | $ | — | ||
2005 | 2004 | |||||||
Statutory rate tax provision on book loss | $ | (658,000 | ) | $ | (174,600 | ) | ||
Book to tax adjustments: | ||||||||
Valuation allowance | 658,000 | 174,600 | ||||||
Tax provision | $ | — | $ | — | ||||
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Analysis of Stock Options | ||||||||||||||||
2005 | 2004 | |||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Exercise | Exercise | |||||||||||||||
Shares | Prices | Shares | Prices | |||||||||||||
Outstanding, beginning of year | 675,000 | $ | .50-.86 | 1,367,695 | $ | .16-.86 | ||||||||||
Granted | 1,072,000 | $ | 2.09-2.12 | — | — | |||||||||||
Exercised | — | 340,000 | $ | .16 | ||||||||||||
Canceled including through cashless exercise | 675,000 | $ | .50-.86 | 34,286 | $ | .16 | ||||||||||
Expired | — | — | 318,407 | $ | .16 | |||||||||||
Outstanding and exercisable, end of year | 1,072,000 | $ | 2.09-2.12 | 675,000 | $ | .50-.86 | ||||||||||
Weighted average fair value of Option granted during year | $ | 2,076,180 | $ | — | ||||||||||||
Options Outstanding | Weighted Average | |||||||||||||||||||
Remaining | Average | |||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Exercise | |||||||||||||||
Prices | Outstanding | Life | Price | Exercisable | Price | |||||||||||||||
$2.09 | 200,000 | 9.8 yrs. | $ | 2.09 | 200,000 | $ | 2.09 | |||||||||||||
$2.12 | 872,000 | 9.9 yrs. | $ | 2.12 | 100,000 | $ | 2.12 |
2005 Net (loss) | ||||||||
As reported | Pro forma | |||||||
Net (loss) | $ | (2,990,721 | ) | $ | (5,066,901 | ) |
Basic and diluted Net (loss) per share | ||||||||
As reported | Pro forma | |||||||
Net (loss) | ||||||||
Basic | $ | (0.12 | ) | $ | (0.20 | ) | ||
Diluted | $ | (0.12 | ) | $ | (0.20 | ) |
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2006 | $ | 97,303 | ||
2007 | $ | 7,837 | ||
2008 | $ | 8,246 |
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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT |
Board | ||||||||||
Name and | Position | |||||||||
Municipality of Residence | Age | Positions With the Company | Held Since | |||||||
Robert R. McEwen | 55 | Chief Executive Officer and Chairman | ||||||||
Toronto, Ontario | of the Board of Directors | 2005 | ||||||||
Ann S. Carpenter | 48 | President and Chief Operating Officer | N/A | |||||||
Reno, Nevada |
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Board | ||||||||||
Name and | Position | |||||||||
Municipality of Residence | Age | Positions With the Company | Held Since | |||||||
William F. Pass | 59 | Vice President, Chief Financial Officer, | ||||||||
Golden, Colorado | Secretary and Treasurer | N/A | ||||||||
Michele L. Ashby(2),(3) | 50 | Director | 2005 | |||||||
Denver, Colorado | ||||||||||
Dr. Leanne M. Baker(1) | 53 | Director | 2005 | |||||||
Tiburon, California | ||||||||||
Peter Bojtos(1) | 55 | Director | 2003 | |||||||
Lakewood, Colorado | ||||||||||
Declan J. Costelloe(1),(2),(3) | 40 | Director | 2005 | |||||||
Lakewood, Colorado |
(1) | Member of the Audit Committee. | |
(2) | Member of the Compensation Committee. | |
(3) | Member of the Nominating Committee. |
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Long Term | ||||||||||||||||||||
Compensation Awards | ||||||||||||||||||||
Securities | ||||||||||||||||||||
Name and | Underlying | All Other | ||||||||||||||||||
Principal Position | Year | Salary | Other | Options | Compensation | |||||||||||||||
Robert R. McEwen, Chief Executive Officer(1) | 2005 | $ | — | $ | — | — | $ | — | ||||||||||||
Ann S. Carpenter, President and Chief Operating Officer(2) | 2005 | $ | 31,875 | $ | — | 300,000 | $ | — | ||||||||||||
William F. Pass, Vice President, | 2005 | $ | 101,528 | (3) | $ | — | 200,000 | $ | 452,026 | (4) | ||||||||||
Chief Financial | 2004 | 117,480 | (3) | $ | — | — | — | |||||||||||||
Officer and Secretary | 2003 | 114,372 | (3) | $ | 44,764 | (5) | 75,000 | (6) | 185,920 | (7) | ||||||||||
William W. Reid,(8) Former President and | 2005 | $ | 135,908 | (3) | $ | — | — | $ | 966,447 | (4) | ||||||||||
Chief Executive | 2004 | 230,590 | (3) | $ | 34,311 | (5) | — | 129,000 | (7) | |||||||||||
Officer | 2003 | 230,590 | (3) | $ | 99,475 | (5) | 75,000 | (6) | 220,000 | (7) |
(1) | Robert R. McEwen was appointed as Chief Executive Officer on August 18, 2005. Mr. McEwen did not receive any salary, other compensation or options during the year ended December 31, 2005. | |
(2) | Ann S. Carpenter was appointed as President and Chief Operating Officer effective October 24, 2005. | |
(3) | Includes imputed income for use of vehicle. |
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(4) | Represents payments under a termination agreement dated July 28, 2005 where the employment agreement with the individual was terminated. Also includes payment of deferred salary, including $144,925 and $282,533 for William Pass and William Reid, respectively. | |
(5) | Represents prior year accrued salary of $44,764 paid to William Pass during 2003, and $34,311 and $99,475 paid to William Reid during 2004 and 2003, respectively. | |
(6) | Options were voluntarily terminated in connection with a termination agreement. | |
(7) | During 2003 and 2004, the executive officers exercised certain of their respective stock options at an exercise price of $0.16 per share which resulted in compensation for federal tax purposes based upon the market price of our common stock on the day of each exercise. William Reid exercised options to purchase 300,000 shares of our common stock in 2003 and 150,000 shares of our common stock in 2004, and William Pass exercised options to purchase an aggregate of 232,326 shares of our common stock in 2003. | |
(8) | William W. Reid resigned as president, chief executive officer and chairman of the Board of Directors effective August 18, 2005 and terminated his employment with us on September 30, 2005. |
(Individual Grants)
Percent of | ||||||||||||||||||||
Number of | Total Options | Market | ||||||||||||||||||
Securities | Granted to | Exercise | Value of | |||||||||||||||||
Underlying | Employees | or Base | Underlying | |||||||||||||||||
Options/SARs | in Fiscal | Price | Securities at | Expiration | ||||||||||||||||
Name | Granted (#) | Year | ($/Share) | Date of Grant | Date | |||||||||||||||
Ann S. Carpenter | 100,000 | 20 | % | $ | 2.09 | $ | 2.09 | 10/24/2015 | ||||||||||||
Ann S. Carpenter | 200,000 | 40 | % | 2.12 | 2.12 | 11/14/2015 | ||||||||||||||
William F. Pass | 200,000 | 40 | % | 2.12 | 2.12 | 11/14/2015 |
Year Ended December 31, 2005 Option/SAR Values
Number of Securities | ||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||
Shares | Options/SARS | In-the-Money Options at | ||||||||||||||
Acquired on | Value | At 12/31/05(#) | 12/31/05($ )(1)(2) | |||||||||||||
Name | Exercise (#) | Realized($) | Exercisable/Unexercisable | Exercisable/Unexercisable | ||||||||||||
Ann S. Carpenter | 0 | $ | 0 | 300,000/0 | $ | 362,000/$0 | ||||||||||
William F. Pass | 0 | 0 | 0/200,000 | $ | 0(3)/$266,000 |
(1) | Based upon the closing price of our common stock as reported by the OTC Bulletin Board as of December 31, 2005 ($3.45 per share). | |
(2) | Represents the difference between the exercise price of the options and the fair market value of the stock on December 31, 2005. | |
(3) | These options are exercisable 33.3% on or after November 14, 2006, 33.3% on or after November 14, 2007 and the remainder on or after November 14, 2008. |
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Number of | ||||||||||||
securities remaining | ||||||||||||
Number of | Weighted- | available for future | ||||||||||
securities to be | average exercise | issuance under | ||||||||||
issued upon | price of | equity compensation | ||||||||||
exercise of outstanding | outstanding | plans (excluding | ||||||||||
options, warrants | options, | securities reflected | ||||||||||
and rights | warrants and | in column (a)) | ||||||||||
Plan Category | (a) | rights (b) | (c) | |||||||||
Equity compensation plans approved by | $ | 2.11 | ||||||||||
security holders | 1,072,000 | per share | 740,637 | |||||||||
Equity compensation plans not approved by security holders | 0 | — | 0 | |||||||||
TOTAL | 1,072,000 | 740,637 |
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ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Name and Address of | Shares Beneficially Owned | |||||||
Beneficial Owner | Number | Percentage (%) | ||||||
Robert R. McEwen(1) | 11,602,500 | (2) | 27.5 | % | ||||
Peter Bojtos(1) | 125,000 | (3) | * | |||||
Declan Costelloe(1) | 5,000 | (3) | * |
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Name and Address of | Shares Beneficially Owned | |||||||
Beneficial Owner | Number | Percentage (%) | ||||||
Michele L. Ashby(1) | 0 | (3) | * | |||||
Leanne M. Baker(1) | 0 | (3) | * | |||||
Ann S. Carpenter(1) | 300,000 | (4) | * | |||||
William F. Pass(1) | 347,075 | (3) | * | |||||
NovaGold Resources, Inc. P.O. Box 24, Suite 2300 200 Granville Street Vancouver, British Columbia V6C 1S4, Canada | 5,374,544 | 12.9 | % | |||||
All officers and directors as a group (seven individuals) | 12,379,575 | 29.19 | % |
* | Less than one percent. | |
(1) | Officer or director. | |
(2) | Includes 335,000 shares of common stock issuable upon automatic conversion of subscription receipts owned by the individual and 167,500 shares of common stock issuable upon exercise of warrants which will be issued upon conversion of the subscription receipts. Excludes an additional 335,000 shares of common stock and an additional 167,500 shares of common stock underlying warrants which may be issuable upon conversion of the subscription receipts. | |
(3) | Excludes stock options which are not exercisable within 60 days of the date of this prospectus. | |
(4) | Includes 300,000 shares underlying options that are exercisable within 60 days of the date of this prospectus. |
• | We agreed to issue an aggregate of 450,000 shares of our common stock to the four then-existing non-executive members of the Board of Directors. These shares were issued under our Plan. Each of these directors also agreed to cancel any outstanding stock options. |
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• | We agreed to use our commercially reasonable efforts to cause the shares purchased by Mr. McEwen to be registered for resale with the SEC as promptly as practical after the closing of the transaction and to pay the costs associated with such registration. In addition, Mr. McEwen was granted “piggyback” registration rights on all registrations filed by the Company other than registrations on Form S-4 and S-8. | |
• | We and Mr. McEwen agreed to indemnify each other and their respective representatives and agents from breach of any representation or warranty contained in the underlying agreements. |
Share | GRC Share | |||||||||||
Name of Officer | Cash Payment | Issuance | Distribution | |||||||||
William W. Reid | $ | 469,936 | 534,968 | 2,439,606 | ||||||||
David C. Reid | 301,567 | 275,784 | 1,565,539 | |||||||||
William F. Pass | 228,497 | 214,248 | 1,186,207 |
• | All of our previous obligations to the officers were cancelled. | |
• | We distributed three automobiles and the associated installment purchase obligations to the officers. | |
• | Each officer agreed to cancel any outstanding stock options that we previously granted to them. |
3.1.1 | Articles of Incorporation of the Company filed with the Secretary of State of Colorado on June 24, 1979 (incorporated by reference from the Report on Form 10-KSB dated March 27, 1996, Exhibit 3.1 File No. 000-09137) | |
3.1.2 | Articles of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Colorado on June 22, 1988 (incorporated by reference from Report on Form 10-K dated March 30, 1988, Exhibit 3.1 File No. 000-9137) | |
3.1.3 | Articles of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Colorado on July 5, 1988 (incorporated by reference from Report on Form 10-K dated March 30, 1988, Exhibit 3.2 File No. 000-9137) | |
3.1.4 | Articles of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Colorado on December 20, 1991 (incorporated by reference from Report on Form 10-K dated March 29, 1991, Exhibit 3.3 File No. 000-9137) | |
3.1.5 | Articles of Amendment to the Articles of Incorporation of the Company filed with the Secretary of State of Colorado on November 15, 2005. | |
3.2. | Bylaws of the Company, as Amended June 22, 1988 (incorporated by reference from the Report on Form 10-KSB dated March 27, 1996 Exhibit 3.1 File No. 000-9137) | |
3.2.1 | Amendment to the Bylaws of the Company effective as of October 3, 2005. |
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10.1 | Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986. | |
10.2 | First Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 10, 1986. | |
10.3 | Sixth Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated June 29, 1989. | |
10.4 | Seventh Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, executed April 18, 1990. | |
10.5 | Eighth Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated April 20, 1992. | |
10.6 | Ninth Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated January 22, 1992. | |
10.7 | Tenth Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated April 30, 1993. | |
10.8 | Eleventh Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated June 28, 1993. | |
10.9 | Twelfth Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated November 27, 1995. | |
10.10 | Thirteenth Amendment to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, dated February 1, 2003. | |
10.11 | Agreement To Pay Distributions dated February 21, 1992, by and between Tonkin Springs Gold Mining Company and French American Banking Corporation (incorporated by reference from the Report on Form 8-K dated February 21, 1992, Exhibit 4, File No. 000-09137). | |
10.12 | Purchase Agreement between BacTech Nevada Corporation and U.S. Gold Corporation dated effective July 31, 2003 related to the purchase by BacTech of 55% interest in Tonkin Springs LLC from Tonkin Springs Venture L.P., a subsidiary of the Company (incorporated by reference from the Report on Form 8-K dated August 6, 2003, Exhibit 10.1, File No. 000-09137). | |
10.13 | Amended and Restated Members’ Agreement of the Tonkin Springs LLC between Tonkin Springs Venture L.P. and BacTech Nevada Corporation dated effective July 31, 2003 (incorporated by reference from the Report on Form 8-K dated August 6, 2003, Exhibit 10.2, File No. 000-09137). | |
10.14 | Amended and Restated Operating Agreement of the Tonkin Springs LLC between Tonkin Springs Venture L.P. and BacTech Nevada Corporation dated effective July 31, 2003 (incorporated by reference from the Report on Form 8-K dated august 6, 2003, Exhibit 10.3, File No. 000-09137). | |
10.15 | Amended and Restated Non-Qualified Stock Option and Stock Grant Plan, as amended effective September 19, 2003 (incorporated by reference from the Report on Form 10-KSB for the year ended December 31, 2003, Exhibit 10.2, File No. 000-09137). | |
10.16 | Termination Agreement between the Company and William W. Reid dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 10.1, File No. 000-09137). | |
10.17 | Termination Agreement between the Company and David C. Reid dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 10.2, File No. 000-09137). | |
10.18 | Termination Agreement between the Company and William F. Pass dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 10.3, File No. 000-09137). | |
10.19 | Letter Agreement of Private Placement between the Company and Robert R. McEwen dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 2.1, File No. 000-09137). |
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10.20 | Stock Subscription Agreement between the Company and Robert R. McEwen dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 2.2, File No. 000-09137). | |
10.21 | Employment Agreement between the Company and Ann Carpenter dated October 24, 2005 (incorporated by reference from Form 8-K dated October 24, 2005, Exhibit 10.1, File No. 000-09137). | |
10.22 | Form of Indemnification Agreement (incorporated by reference from Form 8-K dated December 7, 2005, Exhibit 10.1, File No. 000-09137). | |
10.23 | Agency Agreement between the Company, GMP Securities L.P. and Griffiths McBurney Corp. dated February 22, 2006 (incorporated by reference from Form 8-K dated February 27, 2006, Exhibit 10.1, File No. 000-09137). | |
10.24 | Subscription Receipt Indenture between the Company, GMP Securities L.P. and Equity Transfer Services Inc. dated February 22, 2006 (incorporated by reference from Form 8-K dated February 27, 2006, Exhibit 10.2, File No. 000-09137). | |
10.25 | Warrant Indenture between the Company and Equity Transfer Services Inc. dated February 22, 2006 (incorporated by reference from Form 8-K dated February 27, 2006, Exhibit 10.3, File No. 000-09137). | |
10.26 | Compensation Option issued by the Company in favor of GMP Securities L.P. dated February 22, 2006 (incorporated by reference from Form 8-K dated February 27, 2006, Exhibit 10.4, File No. 000-09137). | |
10.27 | Form of Subscription Agreement between the Company and Subscribers (incorporated by reference from Form 8-K dated February 27, 2006, Exhibit 10.5, File No. 000-09137). | |
10.28 | Registration Rights Agreement between the Company and GMP Securities L.P. dated February 22, 2006. | |
10.29 | Employment Agreement between the Company and William F. Pass dated March 30, 2006. | |
21 | Subsidiaries of the Company. | |
31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Robert R. McEwen. | |
31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for William F. Pass. | |
32 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Robert R. McEwen and William F. Pass. |
2005 | 2004 | |||||||
Audit Fees | $ | 12,100 | $ | 14,500 | ||||
Audit Related Fees | $ | 10,799 | $ | 10,974 | ||||
Tax Fees | 0 | 0 | ||||||
All Other Fees | 0 | 0 | ||||||
Total Fees | $ | 22,899 | $ | 25,474 |
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/s/ Robert R. McEwen | Chief Executive officer, | April 3, 2006 | ||||
Robert R. McEwen | Chairman of the Board | |||||
/s/ William F. Pass | Principal Accounting | April 3, 2006 | ||||
William F. Pass | Officer, Vice President, | |||||
Chief Financial Officer | ||||||
and Secretary |
/s/ Robert R. McEwen | Chairman of the Board & | April 3, 2006 | ||||
Robert R. McEwen | Chief Executive Officer | |||||
/s/ Michele L. Ashby | Director | April 3, 2006 | ||||
Michele L. Ashby | ||||||
/s/ Leanne M. Baker | Director | April 3, 2006 | ||||
Leanne M. Baker | ||||||
/s/ Peter Bojtos | Director | April 3, 2006 | ||||
Peter Bojtos | ||||||
/s/ Declan J. Costelloe | Director | April 3, 2006 | ||||
Declan J. Costelloe |
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![(FLOW CHART)](https://capedge.com/proxy/S-4/0000909567-06-000660/o31149o3100601.gif)
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Pro formaat December | ||||||||||||
Pro formaat December | 31, 2005 giving effect to | |||||||||||
31, 2005, giving effect to | conversion of the | |||||||||||
the sale of Subscription | Subscription Receipts | |||||||||||
Outstanding at | Receipts completed | and exercise of warrants | ||||||||||
December 31, 2005 | February 22, 2006 | and broker warrants | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Long Term Debt | $ | — | $ | — | $ | — | ||||||
Shareholders’ Equity: | ||||||||||||
Common Stock | $ | 40,465,813 | $ | 40,465,813 | $ | 202,784,813 | (4) | |||||
(authorized 250,000,000 shares) | (33,296,755 shares | ) | (33,295,755 shares | ) | (59,849,755 shares | ) | ||||||
Subscription Receipts | — | $ | 69,300,000 | (2) | ||||||||
(16,700,000 subscription receipts | ) | |||||||||||
$ | 40,465,813 | $ | 109,765,813 | $ | 202,784,813 | |||||||
Accumulated (Deficit) | (37,932,674 | ) | (37,932,674 | ) | (37,932,674 | ) | ||||||
Total Shareholders’ Equity | $ | 2,533,139 | (1) | $ | 71,833,139 | (1),(2),(3) | $ | 164,852,139 | (1) | |||
(1) | Excludes outstanding options to acquire 1,072,000 shares at a weighted average exercise price of $2.11 per share. | |
(2) | Represents gross proceeds of $75,150,000 (16,700,000 Subscription Receipts at $4.50 each) less agents’ commission of $5,260,500 and estimated offering expenses of $589,500, for net proceeds of $69,300,000. Assumes that all of the Subscription Receipts are converted, of which there is no assurance. | |
(3) | Excludes 8,350,000 warrants and 1,002,000 compensation options convertible into up to 1,002,000 broker warrants. | |
(4) | Excludes the effect of any penalty in the event that certain release conditions are not satisfied on or before August 22, 2006. |
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Price | Underwriting | |||||||||||||||||||||||
Number of | Per Share | Total | Fee | |||||||||||||||||||||
Date | Purchaser | Units | ($) | ($) | ($) | |||||||||||||||||||
1. | 6/08/05 | Excalibur Limited Partnership | 120,000 | (6) | .47 | 56,400 | 0 | |||||||||||||||||
2. | 7/26/05 | Individual and two entities | 145,000 | (6) | .40 | 58,000 | 0 | |||||||||||||||||
3. | 7/28/05 | Directors | 375,000 | (7) | .40 | 150,000 | 0 | |||||||||||||||||
4. | 7/28/05 | Officer and former officers | 1,025,000 | (8) | .39 | 399,750 | 0 | |||||||||||||||||
5. | 7/29/05 | Robert McEwen | 11,100,000 | .36 | 4,000,000 | 0 |
(1) | Shares issued in exchange for the cancellation of warrants. | |
(2) | Shares issued to directors for compensation. | |
(3) | Shares issued to officers and former officers in settlement of accrued salary and other obligations. |
(i) | was the subject of a cease trade or similar order or an order that denied the company access to any exemption under securities legislation for a period of more than 30 consecutive days; | ||
(ii) | was subject to an event that resulted, after that person ceased to be a director or officer in the company being the subject of a cease trade or similar order that denied that company access to any exemption under securities legislation for a period of more than 30 consecutive days; or | ||
(iii) | within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, |
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• | 0.35 shares of our common stock for each outstanding share of White Knight; |
• | 0.23 shares of our common stock for each outstanding share of Nevada Pacific Gold; |
• | 0.63 shares of our common stock for each outstanding share of Coral Gold; and |
• | 0.26 shares of our common stock for each outstanding share of Tone Resources. |
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December 31, 2004 from $441,727 in 2003 reflecting lower levels of common stock sales in 2004 with $374,492 in net proceeds raised from the sale of common stock in 2004 compared to $450,000 in 2003, and proceeds from installment purchase contracts of $83,990 in 2004 compared to payments of $8,273 in 2003.
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oC | degrees Celsius | |
oF | degrees Fahrenheit | |
allochthonous | formed or produced elsewhere than in its present place | |
autochthonous | formed or produced in the place now found | |
CIL | carbon-in-leach | |
forbs | any nongrass-like plant having little or no woody material | |
halogeton | type of plant common in dry dessert areas | |
O-15/ TSP-1/ TSP-5/ Rooster: | names of pits/prospects on the property, from south to north | |
oz | troy ounce(s) | |
oz/ T | troy ounces per short ton | |
redox | reduction/oxidation | |
SAG | semi-autogenous grinding | |
T | short ton(s) |
B-1
B-2
B-3
B-4
Total length | ||||||||||||||||||||||||||||
Period | Company | No. of holes | (metres) | (feet) | No. of intervals | No. of assays | Drilling type | |||||||||||||||||||||
1966-67 | Homestake Mining Co. | 10 | 655 | 2,147 | 850 | 419 | Rotary | |||||||||||||||||||||
1970-71 | American Selco (Amselco) | 4 | 316 | 1,035 | 410 | 204 | Rotary | |||||||||||||||||||||
1974-75 | Chevron Resources | 20 | 1,480 | 4,854 | 1,922 | 951 | Rotary | |||||||||||||||||||||
1976 | Placer Amex | 19 | 1,601 | 5,250 | 1,519 | 769 | Rotary | |||||||||||||||||||||
1978-79 | Earth Resources | 15 | 1,087 | 3,565 | 699 | 339 | Rotary | |||||||||||||||||||||
1980 | Freeport Exploration | 34 | 2,971 | 9,745 | 3,864 | 1,910 | Rotary | |||||||||||||||||||||
1981-84 | Precambrian Exploration | 421 | 32,227 | 105,705 | 41,861 | 21,104 | Rotary | |||||||||||||||||||||
1985-89 | U.S. Gold Corporation | 1,976 | 97,805 | 320,802 | 125,389 | 61,823 | Rotary & Core | |||||||||||||||||||||
1991-92 | Homestake Mining Co. | 86 | 7,723 | 25,332 | 83,088 | 17,644 | Rotary & Core | |||||||||||||||||||||
1995-98 | Gold Capital Corp. | 76 | 1,339 | 4,392 | 14,405 | 2,344 | Rotary & Core | |||||||||||||||||||||
1999-2001 | Agnico-Eagle/ Sudbury Contact | 107 | 19,381 | 63,570 | 15,018 | 7,308 | Rotary & Core | |||||||||||||||||||||
2003-04 | BacTech | 29 | 2,386 | 7,825 | 1,565 | 189 | Rotary & Core | |||||||||||||||||||||
Total | 2,797 | 168,970 | 554,222 | 290,590 | 115,004 | |||||||||||||||||||||||
B-5
Cut-Off | Category | Ore type | Tons | Gold grade | Gold | |||||||||||||
(oz/T) | (Thousands) | (oz/T) | (Thousand oz) | |||||||||||||||
0.018 | Measured | Sulphide | 2,654 | 0.066 | 175.8 | |||||||||||||
0.018 | Indicated | Sulphide | 20,659 | 0.044 | 903.6 | |||||||||||||
0.012 | Indicated | Oxide | 6,359 | 0.029 | 186.3 | |||||||||||||
Total measured and indicated sulphide and oxide | 29,672 | 0.043 | 1,265.6 | |||||||||||||||
0.018 | Inferred | Sulphide | 3,466 | 0.044 | 152.5 |
B-6
• | data compilation; | |
• | detailed property-wide geologic mapping ; | |
• | structural analysis and interpretation using regional aeromagnetics, remote sensing, and district-scale gravity ; | |
• | detailed geophysical surveys including gravity, and possibly induced polarization and magneto-telluric surveys to map specific ore-controlling structures and define the presence of Lower Plate/ favourable rock units; | |
• | rock, soil, and drill hole geochemistry to prioritize structural targets; and | |
• | drilling (mainly core drilling, with some reverse circulation) to test targets and concepts defined through this integrated process. |
B-7
Reports of Stark Winter Schenkein & Co., LLP | C-2 | |||
Consolidated Statements of Operations for the years ended December 31, 2005, 2004 and 2003 (restated) | C-4 | |||
Consolidated Balance Sheet as at December 31, 2005 and 2004 | C-5 | |||
Consolidated Statement of Changes in Shareholders’ Equity for the years ended December 31, 2005, 2004 (Restated) and 2003 (Restated) | C-6 | |||
Notes to Consolidated Financial Statements | C-8 |
C-1
C-2
C-3
2003 | ||||||||||||||
2005 | 2004 | (Restated) | ||||||||||||
OTHER REVENUE: | ||||||||||||||
Earnest money forfeited | $ | 200,000 | $ | — | $ | — | ||||||||
Gain on sale of TSLLC interest | — | — | 601,924 | |||||||||||
Interest income | 32,032 | 38,750 | 30,219 | |||||||||||
Management fee | 330,000 | — | — | |||||||||||
Realized gain from disposition of shares | 520,428 | — | — | |||||||||||
Gain (loss) on sale of other assets | (29,982 | ) | — | 4,000 | ||||||||||
Total other revenue | 1,052,478 | 38,750 | 636,143 | |||||||||||
COSTS AND EXPENSES: | ||||||||||||||
General and administrative | 1,027,194 | 782,968 | 492,876 | |||||||||||
Write-off of purchase price receivable | 182,748 | — | — | |||||||||||
Property holding costs | 761,081 | — | 443,218 | |||||||||||
Employment termination payments | 1,423,824 | — | — | |||||||||||
Stock compensation expense | 294,400 | 43,229 | 290,000 | |||||||||||
Equity share of subsidiary loss | 58,888 | — | — | |||||||||||
Realization reserve-stock | 168,960 | — | 363,165 | |||||||||||
Interest | 3,011 | 1,476 | 1,635 | |||||||||||
Accretion of asset retirement obligation | 110,243 | — | 56,583 | |||||||||||
Depreciation | 12,850 | 4,878 | 15,404 | |||||||||||
Total costs and expenses | 4,043,199 | 832,551 | 1,662,881 | |||||||||||
(Loss) before income taxes and cumulative effect of accounting change | (2,990,721 | ) | (793,801 | ) | (1,026,738 | ) | ||||||||
Provision for income taxes | — | — | — | �� | ||||||||||
(Loss) before cumulative effect of accounting change | (2,990,721 | ) | (793,801 | ) | (1,026,738 | ) | ||||||||
Accounting change: cumulative-effect gain on implementation of SFAS 143 | — | — | 404,000 | |||||||||||
Net (loss) | $ | (2,990,721 | ) | $ | (793,801 | ) | $ | (622,738 | ) | |||||
Basic and diluted per share data: | ||||||||||||||
(Loss) before accounting change | ||||||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.06 | ) | |||||
Accounting change | ||||||||||||||
Basic and diluted | $ | — | $ | — | $ | 0.02 | ||||||||
Net (loss) | ||||||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.04 | ) | $ | (0.04 | ) | |||||
C-4
2005 | 2004 | |||||||||
(Restated) | ||||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 677,518 | $ | 74,988 | ||||||
Interest receivable | 25,667 | — | ||||||||
Purchase contract receivable | — | 368,524 | ||||||||
Other current assets-prepaid expense | 85,483 | 5,877 | ||||||||
Total current assets | 788,668 | 449,389 | ||||||||
Property and equipment, net | 53,305 | 103,914 | ||||||||
Investment in Tonkin Springs LLC | — | 880,840 | ||||||||
Restrictive time deposits for reclamation bonding | 2,937,746 | — | ||||||||
Other assets: | ||||||||||
Inactive milling equipment | 777,819 | — | ||||||||
Long-lived asset-asset retirement | 942,924 | — | ||||||||
Prepaid insurance | 29,970 | — | ||||||||
Other assets | 10,118 | 700 | ||||||||
Total other assets | 1,760,831 | 700 | ||||||||
TOTAL ASSETS | $ | 5,540,550 | $ | 1,434,843 | ||||||
LIABILITIES & SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 96,794 | $ | 10,446 | ||||||
Installment purchase contracts | 97,303 | 24,136 | ||||||||
Reclamation plan cost (reclamation obligation) | 1,597,032 | — | ||||||||
Total current liabilities | 1,791,129 | 34,582 | ||||||||
Installment purchase contracts, long-term | 16,083 | 59,854 | ||||||||
Related party payables, long-term | — | 510,449 | ||||||||
Retirement obligation | 1,127,689 | — | ||||||||
Other permit obligations | 72,510 | — | ||||||||
Total liabilities | 3,007,411 | 604,885 | ||||||||
Commitments and contingencies | — | — | ||||||||
Shareholders’ equity: | ||||||||||
Common stock, no par value, 250,000,000 shares authorized; 33,296,755 and 20,457,010 shares issued and outstanding at December 31, 2005 and 2004 | 40,465,813 | 35,771,911 | ||||||||
Accumulated (deficit) | (37,932,674 | ) | (34,941,953 | ) | ||||||
Total shareholders’ equity | 2,533,139 | 829,958 | ||||||||
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ | 5,540,550 | $ | 1,434,843 | ||||||
C-5
Common | Accumulated | |||||||||||||||
Shares | Stock | (Deficit) | Total | |||||||||||||
Balance, December 31, 2002 | 16,453,533 | $ | 34,194,096 | $ | (33,525,414 | ) | $ | 668,682 | ||||||||
Sale of shares for cash at $.45/share, plus adjustment of $.29/share | 1,000,000 | 740,000 | — | 740,000 | ||||||||||||
Penalty forgiven with warrant re-pricing | — | 25,500 | — | 25,500 | ||||||||||||
Issuance of shares in exchange for GRC shares at $.54/share | 672,528 | 363,165 | — | 363,165 | ||||||||||||
Exercise of stock options at $.16/share | 1,063,128 | 1,600 | — | 1,600 | ||||||||||||
Treasury shares cancelled | (235 | ) | (101 | ) | — | (101 | ) | |||||||||
Net (loss) | — | — | (622,738 | ) | (622,738 | ) | ||||||||||
Balance, December 31, 2003 | 19,188,954 | 35,324,260 | (34,148,152 | ) | 1,176,108 | |||||||||||
Exercise of stock warrants at $.30/share | 428,572 | 128,571 | — | 128,571 | ||||||||||||
Sale of shares for cash at $.50/share | 200,000 | 100,000 | — | 100,000 | ||||||||||||
Sale of shares for cash at $.724/share | 100,000 | 72,350 | — | 72,350 | ||||||||||||
Sale of shares for cash at $.475/share | 200,000 | 95,000 | — | 95,000 | ||||||||||||
Value assigned to warrants | — | 21,800 | — | 21,800 | ||||||||||||
Exercise of stock options at $.16/share | 340,000 | 30,400 | — | 30,400 | ||||||||||||
Treasury shares cancelled | (516 | ) | (470 | ) | — | (470 | ) | |||||||||
Net (loss) | — | — | (793,801 | ) | (793,801 | ) | ||||||||||
Balance, December 31, 2004 | 20,457,010 | 35,771,911 | (34,941,953 | ) | 829,958 | |||||||||||
Shares issued for cancellation of warrants at $.47/share | 120,000 | 56,400 | — | 56,400 | ||||||||||||
Shares issued for cancellation of warrants at $.40/share | 145,000 | 58,000 | — | 58,000 | ||||||||||||
Share grants to directors at $.40/share | 450,000 | 180,000 | — | 180,000 | ||||||||||||
Share grants to executive officers at $.39/share | 1,025,000 | 399,750 | — | 399,750 | ||||||||||||
Sale of shares for cash at $.36/share | 11,100,000 | 4,000,000 | — | 4,000,000 | ||||||||||||
Treasury shares cancelled | (255 | ) | (248 | ) | — | (248 | ) | |||||||||
Net (loss) | — | — | (2,990,721 | ) | (2,990,721 | ) | ||||||||||
Balance, December 31, 2005 | 33,296,755 | $ | 40,465,813 | $ | (37,932,674 | ) | $ | 2,533,139 | ||||||||
C-6
2005 | 2004 | 2003 | ||||||||||||
(Restated) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Cash paid to suppliers and employees | $ | (2,630,620 | ) | $ | (853,033 | ) | $ | (1,253,584 | ) | |||||
Ernest money payment | 200,000 | — | — | |||||||||||
Interest received | 6,365 | 56,108 | 3,047 | |||||||||||
Interest paid | (3,011 | ) | (1,476 | ) | (1,635 | ) | ||||||||
Income taxes paid | — | — | — | |||||||||||
Cash (used in) operating activities | (2,427,266 | ) | (798,401 | ) | (1,252,172 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||
BacTech purchase price payments | 185,776 | 318,892 | 1,000,000 | |||||||||||
Increase to restricted time deposits | (1,118,733 | ) | — | — | ||||||||||
Capital expenditures | (55,067 | ) | (101,507 | ) | — | |||||||||
Sale of assets | 10,000 | — | 4,000 | |||||||||||
Cash (used in) provided by investing activities | (978,024 | ) | 217,385 | 1,004,000 | ||||||||||
Cash flows from financing activities: | ||||||||||||||
Sale of common stock for cash | 4,000,000 | 374,492 | 450,000 | |||||||||||
Purchase of treasury stock | (248 | ) | (470 | ) | — | |||||||||
Advances to GRC | — | — | (30,000 | ) | ||||||||||
Repayment of advances from GRC | — | — | 30,000 | |||||||||||
Proceeds from (payments) on installment purchase contracts | 8,068 | 83,990 | (8,273 | ) | ||||||||||
Cash provided by financing activities | 4,007,820 | 458,012 | 441,727 | |||||||||||
Increase (decrease) in cash and cash equivalents | 602,530 | (123,004 | ) | 193,555 | ||||||||||
Cash and cash equivalents, beginning of year | 74,988 | 197,992 | 4,437 | |||||||||||
Cash and cash equivalents, end of year | $ | 677,518 | $ | 74,988 | $ | 197,992 | ||||||||
Reconciliation of net (loss) to cash (used in) operating activities: | ||||||||||||||
Net (loss) | $ | (2,990,721 | ) | $ | (793,801 | ) | $ | (622,738 | ) | |||||
Items not providing/ requiring cash: | ||||||||||||||
Management fee paid with GRC shares | (320,000 | ) | — | — | ||||||||||
Realized gain from GRC shares | (520,428 | ) | — | — | ||||||||||
Gain on sale of interest in TSLLC to BacTech | — | — | (601,924 | ) | ||||||||||
Equity share of GRC loss | 58,888 | — | — | |||||||||||
Non-cash portion of employment termination expense | 433,400 | — | — | |||||||||||
Write-off of BacTech purchase price receivable | 182,748 | — | — | |||||||||||
Loss on sale of asset | 29,982 | — | — | |||||||||||
Interest income | (25,667 | ) | — | (17,358 | ) | |||||||||
Stock compensation expense | 294,400 | 43,229 | 290,000 | |||||||||||
Realization reserve-GRC stock | 168,960 | — | 363,165 | |||||||||||
Cumulative-gain-implementation of SFAS 143 | — | — | (404,000 | ) | ||||||||||
Accretion of asset retirement obligation-SFAS 143 | 110,243 | — | 56,583 | |||||||||||
Depreciation | 12,850 | 4,878 | 22,297 | |||||||||||
(Increase) decrease in other assets related to operations | 22,341 | (623 | ) | 7,225 | ||||||||||
Increase (decrease) in liabilities related to operations | 115,738 | (52,084 | ) | (345,422 | ) | |||||||||
Cash (used in) operating activities | $ | (2,427,266 | ) | $ | (798,401 | ) | $ | (1,252,172 | ) | |||||
Non-cash financing and investing activities: | ||||||||||||||
Net assets received from BacTech withdrawal from TSLLC | $ | 757,035 | $ | — | $ | — | ||||||||
Payments pursuant to employment termination agreements with GRC common stock | $ | 612,580 | $ | — | $ | — | ||||||||
Stock issued to RMB in exchange for GRC shares | $ | — | $ | — | $ | 363,165 | ||||||||
Net assets transferred to BacTech in purchase | $ | — | $ | — | $ | 1,076,582 | ||||||||
Purchase contract receivable | $ | — | $ | — | $ | 87,416 | ||||||||
TSLLC investment | $ | — | $ | — | $ | 880,840 | ||||||||
Exercise of stock options utilizing cashless exercise | $ | — | $ | 24,000 | $ | 106,313 | ||||||||
C-7
C-8
C-9
Asset retirement and reclamation liability — January 1, 2004 | $ | 1,193,508 | ||
Increase reflecting 2004 updated cost projections | 281,620 | |||
Accretion of liability at assumed 8.5% annual rate | 121,442 | |||
Asset retirement and reclamation liability — January 1, 2005 | 1,596,570 | |||
Adjustment at December 31, 2005 reflecting updated cost estimate, cost of capital and timing projections | 942,924 | |||
Accretion of liability while BacTech was manager | 74,984 | |||
Accretion of liability at assumed 17.3% annual rate | 110,243 | |||
Asset retirement and reclamation liability-December 31, 2005 | $ | 2,724,721 | ||
Decrease in the cost of capital assumption from 17.3% to 8.72% | $ | 575,200 | |||
Increase to estimated reclamation cost | 277,300 | ||||
Reduction of time frame to complete reclamation from 8.25 years to 6 years from December 31, 2005 | 90,424 | ||||
Total | $ | 942,924 | |||
C-10
C-11
2005 | 2004 | |||||||
Office furniture and equipment | $ | 45,922 | $ | 35,726 | ||||
Trucks and autos | 38,950 | 150,182 | ||||||
Other equipment | 19,263 | 6,906 | ||||||
Subtotal | 104,135 | 192,814 | ||||||
Less: accumulated depreciation | (50,830 | ) | (88,900 | ) | ||||
Total | $ | 53,305 | $ | 103,914 | ||||
2005 | 2004 | |||||||||
Deferred tax assets: | ||||||||||
Alternative minimum tax credit carryforward | $ | 11,200 | $ | 11,200 | ||||||
Reclamation obligation | 345,900 | 114,200 | ||||||||
Net operating (loss) carryforward | 2,738,200 | 1,739,100 | ||||||||
Capital (loss) carryforward | 268,400 | 268,400 | ||||||||
Total gross deferred tax assets | 3,363,700 | 2,132,900 | ||||||||
Less valuation allowance | (3,249,100 | ) | (2,018,300 | ) | ||||||
Net deferred tax assets | 114,600 | 114,600 | ||||||||
Deferred tax liabilities: | ||||||||||
Basis in TSVLP | (114,600 | ) | (114,600 | ) | ||||||
Total net deferred tax asset | $ | — | $ | — | ||||||
C-12
2005 | 2004 | 2003 | ||||||||||
Statutory rate tax provision on book loss | $ | (658,000 | ) | $ | (174,600 | ) | $ | (137,000 | ) | |||
Book to tax adjustments: | ||||||||||||
Valuation allowance | 658,000 | 174,600 | 137,000 | |||||||||
Tax provision | $ | — | $ | — | $ | — | ||||||
C-13
Analysis of Stock Options | ||||||||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||||||||||||||
Weighted Average | Weighted Average | Weighted Average | ||||||||||||||||||||||
Shares | Exercise Prices | Shares | Exercise Prices | Shares | Exercise Prices | |||||||||||||||||||
Outstanding, beginning of year | 675,000 | $ | .50-.86 | 1,367,695 | $ | .16-.86 | 2,048,295 | $ | .16 | |||||||||||||||
Granted | 1,072,000 | $ | 2.09-2.12 | — | — | 675,000 | $ | .50-.86 | ||||||||||||||||
Exercised | — | 340,000 | $ | .16 | 1,063,128 | $ | .16 | |||||||||||||||||
Canceled including through cashless exercise | 675,000 | $ | .50-.86 | 34,286 | $ | .16 | 292,474 | $ | .16 | |||||||||||||||
Expired | — | — | 318,407 | $ | .16 | — | — | |||||||||||||||||
Outstanding and exercisable, end of year | 1,072,000 | $ | 2.09-2.12 | 675,000 | $ | .50-.86 | 1,367,695 | $ | .16-.86 | |||||||||||||||
Weighted average fair value of Option granted during year | $ | 2,076,180 | $ | — | $ | .71 | ||||||||||||||||||
December 31, 2005 | ||||||||||||||||||||
Weighted Average | ||||||||||||||||||||
Options Outstanding | ||||||||||||||||||||
Remaining | Average | |||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Exercise | |||||||||||||||
Prices | Outstanding | Life | Price | Exercisable | Price | |||||||||||||||
$ | 2.09 | 200,000 | 9.8 yrs. | $ | 2.09 | 200,000 | $ | 2.09 | ||||||||||||
$ | 2.12 | 872,000 | 9.9 yrs. | $ | 2.12 | 100,000 | $ | 2.12 |
December 31, 2004 | ||||||||||||||||||||
Weighted Average | ||||||||||||||||||||
Options Outstanding | ||||||||||||||||||||
Remaining | Average | |||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Exercise | |||||||||||||||
Prices | Outstanding | Life | Price | Exercisable | Price | |||||||||||||||
$ | .50 | 100,000 | 3.2 yrs. | $ | .50 | 100,000 | $ | .50 | ||||||||||||
$ | .56 | 200,000 | 3.8 yrs. | $ | .56 | 200,000 | $ | .56 | ||||||||||||
$ | .85 | 275,000 | 3.9 yrs. | $ | .85 | 275,000 | $ | .85 | ||||||||||||
$ | .86 | 100,000 | 3.2 yrs. | $ | .86 | 100,000 | $ | .86 |
Net (loss) | ||||||||||||||||
2005 | 2003 | |||||||||||||||
As reported | Pro forma | As reported | Pro forma | |||||||||||||
(Loss) before cumulative effect of accounting change | $ | (2,990,721 | ) | $ | (3,328,197 | ) | $ | (1,026,738 | ) | $ | (1,389,738 | ) | ||||
Accounting change: cumulative-effect gain on Implementation of SFAS 143 | — | — | 404,000 | 404,000 | ||||||||||||
Net (loss) | $ | (2,990,721 | ) | $ | (3,328,197 | ) | $ | (622,738 | ) | $ | (985,738 | ) | ||||
C-14
Basic and diluted net (loss) per share | |||||||||||||||||
2005 | 2003 | ||||||||||||||||
As reported | Pro forma | As reported | Pro forma | ||||||||||||||
Basic and diluted per share data: | |||||||||||||||||
(Loss) before accounting change | |||||||||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.13 | ) | $ | (0.06 | ) | $ | (0.08 | ) | |||||
Accounting change | |||||||||||||||||
Basic and diluted | $ | — | $ | — | $ | 0.02 | $ | 0.02 | |||||||||
Net (loss) | |||||||||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.13 | ) | $ | (0.04 | ) | $ | (0.06 | ) |
2006 | $ | 97,303 | ||
2007 | $ | 7,837 | ||
2008 | $ | 8,246 |
C-15
C-16
Unaudited Balance Sheet as of April 30, 2006 | D-2 | |||
Notes to Unaudited Balance Sheet | D-3 |
D-1
As of April 30, 2006 | ||||||
Assets | ||||||
Current Assets: | ||||||
Cash | $ | 10.00 | ||||
Total current assets | $ | 10.00 | ||||
Liabilities and Shareholder’s Equity | ||||||
Liabilities | $ | — | ||||
Shareholder’s equity | ||||||
Common shares, authorized — unlimited, issued and outstanding — 1,000 shares | $ | 10.00 | ||||
Total shareholder’s equity | $ | 10.00 | ||||
D-2
D-3
Balance Sheet as of April 30, 2006 | E-2 | |||
Notes to Balance Sheet | E-3 |
E-1
As of April 30, 2006 | ||||||
Assets | ||||||
Current Assets: | ||||||
Cash | $ | 1.00 | ||||
Total current assets | $ | 1.00 | ||||
Liabilities and Shareholder’s Equity | ||||||
Liabilities | $ | — | ||||
Shareholder’s equity Common shares, authorized — unlimited, issued and outstanding — 1 share | $ | 1.00 | ||||
Total shareholder’s equity | $ | 1.00 | ||||
E-2
E-3
Compilation Report | F-2 | ||||
UnauditedPro FormaConsolidated Balance Sheet | F-4 | ||||
UnauditedPro FormaConsolidated Statement of Operations | F-5 | ||||
Notes to the UnauditedPro FormaConsolidated Financial Statements | F-6 |
F-1
1. | Compared the figures in the columns captioned “U.S. Gold Corporation” on the unauditedpro forma consolidated balance sheet to the audited consolidated balance sheet of the Company as at December 31, 2005 and found them to be in agreement. Compared the figures in the columns captioned “U.S. Gold Corporation” on the unauditedpro forma consolidated statement of operations for the year ended December 31, 2005 to the audited consolidated statement of operations of the Company for the year ended December 31, 2005 and found them to be in agreement. | |
2. | Compared the figures in the column captioned “White Knight Resources Ltd.” on the unauditedpro forma consolidated balance sheet to the unaudited consolidated balance sheet of White Knight Resources Ltd (“White Knight”) as at December 31, 2005 and found them to be in agreement. Compared the figures in the column captioned “White Knight Resources Ltd.” on the unauditedpro forma consolidated statement of operations for the twelve months ended December 31, 2005 to the results of White Knight by adding together (a) the results for the six months ended June 30, 2005 (derived from White Knight’s audited consolidated financial statements for the year ended June 30, 2005 and the unaudited interim results for the six months ended December 31, 2004) and (b) the unaudited interim results for the six months ended December 31, 2005, and found them to be in agreement. | |
3. | Made enquiries of certain officials (“the officials”) of the Company who have responsibility for financial and accounting matters about: |
(a) | the basis for determination of thepro forma adjustments; and | |
(b) | whether the unauditedpro forma consolidated financial statements comply as to form in all material respects with the regulatory requirements of the various securities commissions and similar regulatory authorities in Canada. |
The officials: |
(a) | described to us the basis for determination of thepro forma adjustments; and | |
(b) | stated that the unauditedpro forma consolidated financial statements comply as to form in all material respects with the regulatory requirements of the various securities commissions and similar regulatory authorities in Canada. |
4. | Read the notes to the unauditedpro forma consolidated financial statements, and found them to be consistent with the basis described to us for determination of thepro forma adjustments. | |
5. | Recalculated the application of thepro forma adjustments to the aggregate of the amounts in the columns captioned “Pro Forma Adjustments” and “Pro Forma Adjustments US GAAP” and found the amounts in those columns to be arithmetically correct. |
F-2
F-3
December 31, 2005 | ||||||||||||||||||||||||||||||||||
Pro forma | Pro forma | |||||||||||||||||||||||||||||||||
As reported | consolidated | consolidated | ||||||||||||||||||||||||||||||||
U.S. Gold | Pro forma | U.S. Gold | ||||||||||||||||||||||||||||||||
U.S. Gold | White Knight | Pro forma | Corporation | adjustments | Corporation | |||||||||||||||||||||||||||||
Corporation | Resources Ltd. | adjustments | Notes | (Cdn GAAP) | US GAAP | Notes | (US GAAP) | |||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 677,518 | $ | 88,540 | $ | 34,944,750 | 4(a) | $ | 29,322,513 | $ | 29,322,513 | |||||||||||||||||||||||
(6,388,295 | ) | 4(c) | ||||||||||||||||||||||||||||||||
Temporary investments | — | 12,896,077 | 12,896,077 | 7(ii) | 12,896,077 | |||||||||||||||||||||||||||||
Accounts receivable | 25,667 | 103,212 | 128,879 | 128,879 | ||||||||||||||||||||||||||||||
Other current assets — prepaid expenses | 85,483 | 2,708 | 88,191 | 88,191 | ||||||||||||||||||||||||||||||
Total current assets | 788,668 | 13,090,537 | 28,556,455 | 42,435,660 | 42,435,660 | |||||||||||||||||||||||||||||
Restricted cash | — | — | 37,575,000 | 4(a) | 37,575,000 | 37,575,000 | ||||||||||||||||||||||||||||
Property and equipment, net | 53,305 | 259,410 | 312,715 | 312,715 | ||||||||||||||||||||||||||||||
Mineral property interests | — | 2,348,693 | 2,348,693 | $ | (2,348,693 | ) | 7(i) | — | ||||||||||||||||||||||||||
Acquired mineral property interests | — | — | 148,426,958 | 3 | 148,426,958 | 5,174,408 | 7(i)&7(iv) | 153,601,366 | ||||||||||||||||||||||||||
Deferred exploration costs | — | 2,825,715 | 2,825,715 | (2,825,715 | ) | 7(i) | — | |||||||||||||||||||||||||||
Restrictive time deposits for reclamation bonding | 2,937,746 | 201,259 | 3,139,005 | 3,139,005 | ||||||||||||||||||||||||||||||
Long-lived asset — asset retirement | 942,924 | — | 942,924 | 942,924 | ||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||
Inactive milling equipment | 777,819 | — | 777,819 | 777,819 | ||||||||||||||||||||||||||||||
Prepaid insurance | 29,970 | — | 29,970 | 29,970 | ||||||||||||||||||||||||||||||
Other assets | 10,118 | 34,400 | 44,518 | 44,518 | ||||||||||||||||||||||||||||||
Total other assets | 817,907 | 34,400 | — | 852,307 | — | 852,307 | ||||||||||||||||||||||||||||
Total assets | $ | 5,540,550 | $ | 18,760,014 | $ | 214,558,413 | $ | 238,858,977 | $ | — | $ | 238,858,977 | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 96,794 | $ | 326,618 | $ | 423,412 | $ | 423,412 | ||||||||||||||||||||||||||
Installment purchase contracts | 97,303 | — | 97,303 | 97,303 | ||||||||||||||||||||||||||||||
Due to related parties | — | 55,107 | 55,107 | 55,107 | ||||||||||||||||||||||||||||||
Reclamation plan cost (reclamation obligation) | 1,597,032 | — | 1,597,032 | 1,597,032 | ||||||||||||||||||||||||||||||
Total current liabilities | 1,791,129 | 381,725 | — | 2,172,854 | — | 2,172,854 | ||||||||||||||||||||||||||||
Installment purchase contracts, long-term | 16,083 | — | 16,083 | 16,083 | ||||||||||||||||||||||||||||||
Retirement obligation | 1,127,689 | — | 1,127,689 | 1,127,689 | ||||||||||||||||||||||||||||||
Future income tax liability | — | — | $ | 32,651,043 | 4(e) | 32,651,043 | 32,651,043 | |||||||||||||||||||||||||||
Other permit obligations | 72,510 | — | 72,510 | 72,510 | ||||||||||||||||||||||||||||||
Total liabilities | 3,007,411 | 381,725 | 32,651,043 | 36,040,179 | — | 36,040,179 | ||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||
Capital stock | 40,465,813 | 26,804,465 | (26,804,465 | ) | 4(b) | 240,751,472 | 240,751,472 | |||||||||||||||||||||||||||
127,765,909 | 3 | — | — | |||||||||||||||||||||||||||||||
72,519,750 | 4(a) | — | — | |||||||||||||||||||||||||||||||
Other equity accounts | — | 1,916,492 | (1,916,492 | ) | 4(b) | — | — | |||||||||||||||||||||||||||
Deficit | (37,932,674 | ) | (10,342,668 | ) | 10,342,668 | 4(b) | (37,932,674 | ) | (37,932,674 | ) | ||||||||||||||||||||||||
Total shareholders’ equity | 2,533,139 | 18,378,289 | 181,907,370 | 202,818,798 | — | 202,818,798 | ||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 5,540,550 | $ | 18,760,014 | $ | 214,558,413 | $ | 238,858,977 | $ | — | $ | 238,858,977 | ||||||||||||||||||||||
F-4
For the period ended December 31, 2005 | ||||||||||||||||||||||||||||||||||
Pro forma | ||||||||||||||||||||||||||||||||||
consolidated | Pro forma | |||||||||||||||||||||||||||||||||
As reported | U.S. Gold | consolidated | ||||||||||||||||||||||||||||||||
Corporation | Pro forma | U.S. Gold | ||||||||||||||||||||||||||||||||
U.S. Gold | White Knight | Pro forma | (Cdn | adjustments | Corporation | |||||||||||||||||||||||||||||
Corporation | Resources Ltd. | adjustments | Notes | GAAP) | US GAAP | Notes | (US GAAP) | |||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
Earnings (loss) from mining operations | ||||||||||||||||||||||||||||||||||
Other revenue | ||||||||||||||||||||||||||||||||||
Earnest money forfeited | $ | 200,000 | $ | 200,000 | $ | 200,000 | ||||||||||||||||||||||||||||
Interest and other income | 32,032 | $ | 294,563 | 326,595 | 326,595 | |||||||||||||||||||||||||||||
Management fee | 330,000 | — | 330,000 | 330,000 | ||||||||||||||||||||||||||||||
Realized gain from disposition of shares | 520,428 | — | 520,428 | 520,428 | ||||||||||||||||||||||||||||||
Gain (loss) on sale of assets | (29,982 | ) | — | (29,982 | ) | (29,982 | ) | |||||||||||||||||||||||||||
Gain (loss) on foreign exchange | — | 1,634 | 1,634 | 1,634 | ||||||||||||||||||||||||||||||
Total other revenue | 1,052,478 | 296,197 | 1,348,675 | 1,348,675 | ||||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||
General and administrative | 1,027,194 | 808,305 | 1,835,499 | 1,835,499 | ||||||||||||||||||||||||||||||
Write-off of purchase | ||||||||||||||||||||||||||||||||||
price receivable | 182,748 | — | 182,748 | 182,748 | ||||||||||||||||||||||||||||||
Property holding costs | 761,081 | — | 761,081 | 761,081 | ||||||||||||||||||||||||||||||
Employment termination | ||||||||||||||||||||||||||||||||||
payments | 1,423,824 | — | 1,423,824 | 1,423,824 | ||||||||||||||||||||||||||||||
Stock compensation expense | 294,400 | 174,760 | $ | 337,476 | 4(d) | 806,636 | 806,636 | |||||||||||||||||||||||||||
Equity share of subsidiary loss | 58,888 | — | 58,888 | 58,888 | ||||||||||||||||||||||||||||||
Realization reserve — stock | 168,960 | — | 168,960 | 168,960 | ||||||||||||||||||||||||||||||
Interest | 3,011 | 5,016 | 8,027 | 8,027 | ||||||||||||||||||||||||||||||
Accretion of asset retirement | ||||||||||||||||||||||||||||||||||
obligation | 110,243 | — | 110,243 | 110,243 | ||||||||||||||||||||||||||||||
Write-off of deferred | ||||||||||||||||||||||||||||||||||
exploration costs | — | 107,296 | 107,296 | $ | 1,692,739 | 7(i) | 1,800,034 | |||||||||||||||||||||||||||
Write-off of mineral | ||||||||||||||||||||||||||||||||||
property costs | — | — | — | 277,428 | 7(i) | 277,428 | ||||||||||||||||||||||||||||
Depreciation | 12,850 | 27,329 | 40,179 | 40,179 | ||||||||||||||||||||||||||||||
Total costs and expenses | 4,043,199 | 1,122,704 | 337,476 | 5,503,379 | 1,970,167 | 7,473,546 | ||||||||||||||||||||||||||||
Loss before income taxes | (2,990,721 | ) | (826,507 | ) | (337,476 | ) | (4,154,704 | ) | (1,970,167 | ) | (6,124,871 | ) | ||||||||||||||||||||||
Provision for income taxes | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Net loss | $ | (2,990,721 | ) | $ | (826,507 | ) | $ | (337,476 | ) | $ | (4,154,704 | ) | $ | (1,970,167 | ) | $ | (6,124,871 | ) | ||||||||||||||||
Basic and diluted net loss per share | $ | (0.12 | ) | 6 | $ | (0.06 | ) | 7(v) | $ | (0.09 | ) | |||||||||||||||||||||||
F-5
(i) | White Knight acquisition (the “Acquisition”) and | |
(ii) | Private placement dated February 22, 2006 for gross proceeds of $75,150,000 of which $37,575,000 is being held in an escrow account pending satisfaction of certain release Conditions. |
(a) | A unauditedpro forma consolidated balance sheet combining the audited balance sheet of U.S. Gold as at December 31, 2005 with the unaudited balance sheet of White Knight Resources Ltd. as at December 31, 2005 giving effect to the transactions as if they occurred on December 31, 2005. | |
(b) | A unauditedpro forma consolidated statement of operations combining the audited statement of operations of the Company for the year ended December 31, 2005, giving effect to the transactions as if they occurred on January 1, 2005, with the unaudited constructed statement of operations of White Knight for the twelve months ended December 31, 2005. White Knight’s statement of operations for the twelve months ended December 31, 2005 has been constructed by adding together (a) the results for the six months ended June 30, 2005 (derived from White Knight’s audited financial statements for the year ended June 30, 2005 and the unaudited interim results for the six months ended December 31, 2004) and (b) the unaudited interim results for the six months ended December 31, 2005. |
As at December 31, 2005 | $ | 0.86 | ||
Average for the twelve months ended December 31, 2005 | $ | 0.83 |
F-6
White Knight Acquisition |
Purchase price: | |||||
Shares issued on acquisition | $ | 127,765,909 | |||
Acquisition costs (estimated at 5% of purchase price) | 6,388,295 | ||||
$ | 134,154,204 | ||||
Net assets acquired: | |||||
Cash and cash equivalents | $ | 88,540 | |||
Temporary investments | 12,896,077 | ||||
Accounts receivable | 103,212 | ||||
Other current assets — prepaid expenses | 2,708 | ||||
Property and equipment, net | 259,410 | ||||
Mineral property interests | 2,348,693 | ||||
Deferred exploration costs | 2,825,715 | ||||
Restrictive time deposits for reclamation bonding | 201,259 | ||||
Other assets | 34,400 | ||||
Accounts payable and accrued liabilities | (326,618 | ) | |||
Due to related parties | (55,107 | ) | |||
Future income tax liability | (32,651,043 | ) | |||
Acquired mineral property interests | 148,426,958 | ||||
$ | 134,154,204 | ||||
F-7
(a) | Cash proceeds of $75,150,000 from the February 22, 2006 private placement, of which $34,944,750 (net of commission but before deduction of expenses of the offering) is included under cash and cash equivalents and $37,575,000 is included under restricted cash pending release from escrow. An amount of $72,519,750 has been added to share capital. | |
(b) | Elimination of acquired business capital stock, equity accounts and accumulated deficit. | |
(c) | Transaction costs have been assumed to be $6,388,295 representing 5 per cent of the total fair value of shares issued in connection with the Acquisition. | |
(d) | Stock compensation expense in the amount of $337,476 has been recognized in U.S. Gold’s unauditedpro forma statement of operations to reflect Canadian GAAP requirements. | |
(e) | Future income taxes have been taken into consideration in connection with the purchase price allocation where assumed fair values are not the same as the carry forward book values. |
Number of | ||||||||
shares | Amount | |||||||
Issued common shares of U.S. Gold | 33,296,755 | $ | 40,465,812 | |||||
Issue of subscription receipts | 16,700,000 | 72,519,750 | ||||||
Shares issued for White Knight | 20,732,240 | 122,320,217 | ||||||
Impact of outstanding options and warrants in White Knight as if they were exercised | 1,655,500 | 5,445,693 | ||||||
Pro formabalance | 72,384,495 | $ | 240,751,472 | |||||
(Shares or | ||||
US dollars) | ||||
Actual weighted average number of U.S. Gold common shares outstanding | 25,931,172 | |||
Assumed number of U.S. Gold common shares issued to White Knight shareholders | 20,732,240 | |||
Issue of subscription receipts | 16,700,000 | |||
Impact of outstanding warrants and options in White Knight as if they were exercised | 1,655,500 | |||
Pro formaweighted average number of U.S. Gold common shares outstanding | 65,018,912 | |||
Pro formanet loss | $ | (4,154,704 | ) | |
Pro formaadjusted basic loss per share | $ | (0.06 | ) |
F-8
(iii) | Stock Option Plans |
(iv) | Acquired mineral property interests |
Acquired mineral property interests under Canadian GAAP | $ | 148,426,958 | ||
Add: Acquired mineral exploration costs written off | 5,174,408 | |||
Acquired mineral property interests under US GAAP | $ | 153,601,366 | ||
(v) | Thepro forma net loss per share under US GAAP is as follows: |
Pro formaweighted average number of U.S. Gold common shares outstanding | 65,018,912 | |||
Pro formanet loss | $ | (6,124,871 | ) | |
Pro formaadjusted basic loss per share | $ | (0.09 | ) |
F-9
UnauditedPro FormaConsolidated Supplementary Balance Sheet | G-2 | |||
UnauditedPro FormaConsolidated Supplementary Statement of Operations | G-3 | |||
Notes to the UnauditedPro FormaConsolidated Supplementary Financial Statements | G-4 |
G-1
December 31, 2005 | ||||||||||||||||||||||||||||||||||||||||||
As reported | Pro forma | Pro forma | ||||||||||||||||||||||||||||||||||||||||
Pro forma | consolidated | consolidated | ||||||||||||||||||||||||||||||||||||||||
consolidated — | Tone | U.S. Gold | Pro forma | U.S. Gold | ||||||||||||||||||||||||||||||||||||||
White Knight | Nevada Pacific | Coral Gold | Resources | Pro forma | Corporation | adjustments | Corporation | |||||||||||||||||||||||||||||||||||
Resources Ltd. | Gold Ltd. | Resources Ltd. | Limited | adjustments | Notes | (Cdn GAAP) | US GAAP | Notes | (US GAAP) | |||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 29,322,513 | $ | 2,338,765 | $ | 547,186 | $ | 23,408 | $ | (7,871,098 | ) | 4(a | ) | $ | 30,969,457 | $ | 30,969,457 | |||||||||||||||||||||||||
6,608,683 | 4(b | ) | ||||||||||||||||||||||||||||||||||||||||
Temporary investments | 12,896,077 | — | 48,755 | — | 12,944,832 | 12,944,832 | ||||||||||||||||||||||||||||||||||||
Accounts receivable | 128,879 | 120,968 | 74,547 | 6,008 | 330,402 | 330,402 | ||||||||||||||||||||||||||||||||||||
Product inventory and stockpiled ore | — | 1,695,877 | — | — | 1,695,877 | 1,695,877 | ||||||||||||||||||||||||||||||||||||
Supplies inventory | — | 337,390 | — | — | 337,390 | 337,390 | ||||||||||||||||||||||||||||||||||||
Other current assets — prepaid expenses | 88,191 | 116,134 | 13,359 | 2,150 | 219,834 | 219,834 | ||||||||||||||||||||||||||||||||||||
Total current assets | 42,435,660 | 4,609,134 | 683,847 | 31,566 | (1,262,415 | ) | 46,497,792 | — | 46,497,792 | |||||||||||||||||||||||||||||||||
Restricted cash | 37,575,000 | — | — | — | 37,575,000 | 37,575,000 | ||||||||||||||||||||||||||||||||||||
Property and equipment, net | 312,715 | 13,304,716 | 3,311 | — | 13,620,742 | 13,620,742 | ||||||||||||||||||||||||||||||||||||
Mineral property interests | 2,348,693 | 3,760,444 | 7,663,301 | 978,319 | 14,750,757 | (14,750,757 | ) | 4(f | ) | — | ||||||||||||||||||||||||||||||||
Acquired mineral property interests | 148,426,958 | — | — | — | 166,302,698 | 4(c | ) | 314,729,656 | 17,576,472 | 4(f | ) | 332,306,128 | ||||||||||||||||||||||||||||||
Deferred exploration costs | 2,825,715 | — | — | — | 2,825,715 | (2,825,715 | ) | 4(f | ) | — | ||||||||||||||||||||||||||||||||
Restrictive time deposits for reclamation bonding | 3,139,005 | 93,228 | 233,720 | 29,564 | 3,495,517 | 3,495,517 | ||||||||||||||||||||||||||||||||||||
Investment in subsidiary | — | — | 467,317 | — | 467,317 | 467,317 | ||||||||||||||||||||||||||||||||||||
Long-lived asset — asset retirement | 942,924 | — | — | — | 942,924 | 942,924 | ||||||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||||||||||
Inactive milling equipment | 777,819 | — | — | — | 777,819 | 777,819 | ||||||||||||||||||||||||||||||||||||
Prepaid insurance | 29,970 | — | — | — | 29,970 | 29,970 | ||||||||||||||||||||||||||||||||||||
Other assets | 44,518 | — | 132,239 | — | 176,757 | 176,757 | ||||||||||||||||||||||||||||||||||||
Total other assets | 852,307 | — | 132,239 | — | — | 984,546 | — | 984,546 | ||||||||||||||||||||||||||||||||||
Total assets | $ | 238,858,977 | $ | 21,767,522 | $ | 9,183,735 | $ | 1,039,449 | $ | 165,040,283 | $ | 435,889,966 | $ | — | $ | 435,889,966 | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 423,412 | $ | 1,031,586 | $ | 35,102 | $ | 135,325 | $ | 1,625,425 | $ | 1,625,425 | ||||||||||||||||||||||||||||||
Installment purchase contracts | 97,303 | — | — | — | 97,303 | 97,303 | ||||||||||||||||||||||||||||||||||||
Due to related parties | 55,107 | — | — | — | 55,107 | 55,107 | ||||||||||||||||||||||||||||||||||||
Advances payable | — | — | 74,131 | — | 74,131 | 74,131 | ||||||||||||||||||||||||||||||||||||
Reclamation plan cost (reclamation obligation) | 1,597,032 | — | — | — | 1,597,032 | 1,597,032 | ||||||||||||||||||||||||||||||||||||
Total current liabilities | 2,172,854 | 1,031,586 | 109,233 | 135,325 | — | 3,448,998 | — | 3,448,998 | ||||||||||||||||||||||||||||||||||
Installment purchase contracts, long-term | 16,083 | — | — | — | 16,083 | 16,083 | ||||||||||||||||||||||||||||||||||||
Retirement obligation | 1,127,689 | 1,626,039 | — | — | 2,753,728 | 2,753,728 | ||||||||||||||||||||||||||||||||||||
Future income tax liability | 32,651,043 | — | — | — | $ | 36,583,359 | 4(c | ) | 69,234,402 | 69,234,402 | ||||||||||||||||||||||||||||||||
Other permit obligations | 72,510 | — | — | — | 72,510 | 72,510 | ||||||||||||||||||||||||||||||||||||
Other liabilities | — | 123,495 | — | — | 123,495 | 123,495 | ||||||||||||||||||||||||||||||||||||
Total liabilities | 36,040,179 | 2,781,120 | 109,233 | 135,325 | 36,583,359 | 75,649,216 | — | 75,649,216 | ||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Capital stock | 240,751,472 | 28,376,033 | 25,670,398 | 2,481,340 | $ | (56,527,771 | ) | 4(d | ) | 398,173,424 | 398,173,424 | |||||||||||||||||||||||||||||||
157,421,952 | 3 | — | ||||||||||||||||||||||||||||||||||||||||
Other equity accounts | — | 1,119,231 | 631,821 | 641,805 | (2,392,857 | ) | 4(d | ) | — | — | ||||||||||||||||||||||||||||||||
Deficit | 37,932,674 | (10,508,862 | ) | (17,227,717 | ) | (2,219,021 | ) | 29,955,600 | 4(d | ) | 37,932,674 | 37,932,674 | ||||||||||||||||||||||||||||||
Total shareholders’ equity | 202,818,798 | 18,986,402 | 9,074,502 | 904,124 | 128,456,924 | 360,240,750 | — | 360,240,750 | ||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 238,858,977 | $ | 21,767,522 | $ | 9,183,735 | $ | 1,039,449 | $ | 165,040,283 | $ | 435,889,966 | $ | — | $ | 435,889,966 | ||||||||||||||||||||||||||
G-2
For the period ended December 31, 2005 | ||||||||||||||||||||||||||||||||||||||
As reported | Pro forma | Pro forma | ||||||||||||||||||||||||||||||||||||
Pro forma | consolidated | consolidated | ||||||||||||||||||||||||||||||||||||
consolidated — | Tone | U.S. Gold | Pro forma | U.S. Gold | ||||||||||||||||||||||||||||||||||
White Knight | Nevada Pacific | Coral Gold | Resources | Corporation | adjustments | Corporation | ||||||||||||||||||||||||||||||||
Resources Ltd. | Gold Ltd. | Resources Ltd. | Limited | Notes | (Cdn GAAP) | US GAAP | Notes | (US GAAP) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
Sales | $ | 8,881,168 | $ | 8,881,168 | $ | 8,881,168 | ||||||||||||||||||||||||||||||||
Cost of sales | 8,024,132 | 8,024,132 | 8,024,132 | |||||||||||||||||||||||||||||||||||
Depreciation and depletion | 1,203,093 | 1,203,093 | 1,203,093 | |||||||||||||||||||||||||||||||||||
Royalties | 472,743 | 472,743 | 472,743 | |||||||||||||||||||||||||||||||||||
9,699,968 | 9,699,968 | 9,699,968 | ||||||||||||||||||||||||||||||||||||
Earnings (loss) from mining operations | (818,800 | ) | (818,800 | ) | (818,800 | ) | ||||||||||||||||||||||||||||||||
Other revenue | ||||||||||||||||||||||||||||||||||||||
Earnest money forfeited | $ | 200,000 | — | 200,000 | 200,000 | |||||||||||||||||||||||||||||||||
Interest and other income | 326,595 | 27,205 | $ | 15,270 | $ | 439 | 369,509 | 369,509 | ||||||||||||||||||||||||||||||
Management fee | 330,000 | — | — | — | 330,000 | 330,000 | ||||||||||||||||||||||||||||||||
Realized gain from disposition of shares | 520,428 | — | — | — | 520,428 | 520,428 | ||||||||||||||||||||||||||||||||
Gain (loss) on sale of assets | (29,982 | ) | 155,199 | (3,296 | ) | — | 121,921 | 121,921 | ||||||||||||||||||||||||||||||
Gain (loss) on foreign exchange | 1,634 | (67,043 | ) | (15,576 | ) | (1,723 | ) | (82,708 | ) | (82,708 | ) | |||||||||||||||||||||||||||
Total other revenue | 1,348,675 | 115,361 | (3,602 | ) | (1,284 | ) | 1,459,150 | — | 1,459,150 | |||||||||||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||||||||||||
General and administrative | 1,835,499 | 1,800,234 | 480,660 | 374,645 | 4,491,038 | 4,491,038 | ||||||||||||||||||||||||||||||||
Write-off of purchase price receivable | 182,748 | — | — | 182,748 | 182,748 | |||||||||||||||||||||||||||||||||
Property holding costs | 761,081 | — | — | 761,081 | 761,081 | |||||||||||||||||||||||||||||||||
Employment termination payments | 1,423,824 | — | — | — | 1,423,824 | 1,423,824 | ||||||||||||||||||||||||||||||||
Stock compensation expense | 806,636 | 472,707 | 311,545 | 233,415 | 1,824,303 | 1,824,303 | ||||||||||||||||||||||||||||||||
Equity share of subsidiary loss | 58,888 | — | — | — | 58,888 | 58,888 | ||||||||||||||||||||||||||||||||
Realization reserve — stock | 168,960 | — | — | — | 168,960 | 168,960 | ||||||||||||||||||||||||||||||||
Interest | 8,027 | 246 | — | — | 8,273 | 8,273 | ||||||||||||||||||||||||||||||||
Accretion of asset retirement obligation | 110,243 | — | — | — | 110,243 | 110,243 | ||||||||||||||||||||||||||||||||
Write-off of deferred exploration costs | 107,296 | — | — | — | 107,296 | $ | 1,692,739 | 4(f | ) | 1,800,034 | ||||||||||||||||||||||||||||
Write-off of mineral property costs | — | — | — | 67,871 | 67,871 | 2,456,525 | 4(f | ) | 2,524,396 | |||||||||||||||||||||||||||||
Write-down of mineral properties | — | 131,710 | — | — | 131,710 | 131,710 | ||||||||||||||||||||||||||||||||
Depreciation | 40,179 | — | 764 | — | 40,943 | 40,943 | ||||||||||||||||||||||||||||||||
Total costs and expenses | 5,503,379 | 2,404,897 | 792,970 | 675,930 | 9,377,176 | 4,149,264 | 13,526,440 | |||||||||||||||||||||||||||||||
Loss before income taxes | (4,154,704 | ) | (3,108,336 | ) | (796,572 | ) | (677,214 | ) | (8,736,826 | ) | (4,149,264 | ) | (12,886,090 | ) | ||||||||||||||||||||||||
Provision for income taxes | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | $ | (4,154,704 | ) | $ | (3,108,336 | ) | $ | (796,572 | ) | $ | (677,214 | ) | $ | (8,736,826 | ) | $ | (4,149,264 | ) | $ | (12,886,090 | ) | |||||||||||||||||
Basic and diluted net loss per share | $ | (0.06 | ) | 6 | $ | (0.09 | ) | 7 | $ | (0.14 | ) | |||||||||||||||||||||||||||
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(a) | A unauditedpro forma consolidated supplementary balance sheet combining the audited balance sheet of U.S. Gold as at December 31, 2005 with the unaudited consolidated balance sheet of White Knight as at December 31, 2005, the unaudited consolidated balance sheet of Nevada Pacific as at December 31, 2005, the unaudited consolidated balance sheet of Tone Resources as at November 30, 2005 and the unaudited consolidated balance sheet of Coral Gold as at October 31, 2005, giving effect to the transactions as if they occurred on December 31, 2005. | |
(b) | A unauditedpro forma consolidated supplementary statement of operations combining the audited statement of operations of the Company for the year ended December 31, 2005 with unaudited constructed statement of operations of White Knight for the twelve months ended December 31, 2005, the unaudited constructed statement of operations of Nevada Pacific for the twelve months ended December 31, 2005, the unaudited constructed statement of operations of Tone Resources for the twelve months ended November 30, 2005 and the unaudited constructed statement of operations of Coral Gold for the twelve months ended October 31, 2005, giving effect to the transactions as if they occurred on January 1, 2005. |
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(a) | Transaction costs have been assumed to be 5 per cent of the total fair value of shares issued in connection with the acquisition of the Targets. | |
(b) | Cash and cash equivalents have been adjusted to include proceeds from share issuances up to March 5, 2006, the date of the press release announcing the proposed transaction to the extent determinable from publicly available records. | |
(c) | After reflecting thepro forma purchase adjustments, the excess of the purchase consideration over the adjusted book values of the Targets’ assets and liabilities has been allocated in full to Acquired Mineral Property Interests, together with the related future income tax liability. | |
(d) | Elimination of acquired business capital stock, other equity accounts and accumulated deficit. | |
(e) | Stock compensation expense in the amount of $337,476 has been recognized in U.S. Gold’spro forma statement of operations and shareholders’ equity to reflect Canadian GAAP requirements. |
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(f) | Under US GAAP, exploration and development expenditures incurred on properties where mineralization has not been classified as a proven and probable reserve under SEC rules are expensed as incurred. |
Number of | ||||||||
shares | Amount | |||||||
Issued common shares of U.S. Gold | 33,296,755 | $ | 40,465,812 | |||||
Issue of subscription receipts | 16,700,000 | 72,519,750 | ||||||
Shares issued for acquisition of Targets | 45,202,018 | 266,691,904 | ||||||
Impact of outstanding options and warrants in Targets as if they were exercised | 6,973,764 | 18,495,958 | ||||||
Pro formabalance | 102,172,537 | $ | 398,173,424 | |||||
(Shares or | ||||
US dollars) | ||||
Actual weighted average number of U.S. Gold common shares outstanding | 25,931,172 | |||
Issue of subscription receipts | 16,700,000 | |||
Shares issued for acquisition of Targets | 45,202,018 | |||
Impact of outstanding warrants and options in Targets as if they were exercised | 6,973,764 | |||
Pro formaweighted average number of U.S. Gold common shares outstanding | 94,806,954 | |||
Pro formanet loss | $ | (8,736,826 | ) | |
Pro formaadjusted basic loss per share | $ | (0.09 | ) |
(Shares or | ||||
US dollars) | ||||
Pro formaweighted average number of U.S. Gold common shares outstanding | 94,806,954 | |||
Pro formanet loss | $ | (12,886,090 | ) | |
Pro formaadjusted basic loss per share | $ | (0.14 | ) |
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1.1 | Definitions |
(a) | the Foreign Currency Amount; by | |
(b) | the noon spot exchange rate on such date for such foreign currency expressed in Canadian dollars as reported by the Bank of Canada or, in the event such spot exchange rate is not available, such spot exchange rate on such date for such foreign currency expressed in Canadian dollars as may be deemed by the Board of Directors to be appropriate for such purpose. |
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1.2 | Sections and Headings |
1.3 | Number Gender and Persons |
1.4 | Payments |
1.5 | Currency |
2.1 | Ranking |
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3.1 | Dividends |
(a) | in the case of a cash dividend or distribution declared on the shares of US Gold Common Stock, in an amount in cash for each Exchangeable Share equal to the Canadian Dollar Equivalent of the cash dividend or distribution declared on each share of US Gold Common Stock on the US Gold Dividend Declaration Date; | |
(b) | in the case of a stock dividend or distribution declared on the shares of US Gold Common Stock to be paid in shares of US Gold Common Stock, by the issue or transfer by the Corporation of such number of Exchangeable Shares for each Exchangeable Share as is equal to the number of shares of US Gold Common Stock to be paid on each share of US Gold Common Stock; or | |
(c) | in the case of a dividend or distribution declared on the shares of US Gold Common Stock in property other than cash or shares of US Gold Common Stock, in such type and amount of property for each Exchangeable Share as is the same as or economically equivalent to (to be determined by the Board of Directors as contemplated by Section 3.5 hereof) the type and amount of property declared as a dividend or distribution on each share of US Gold Common Stock. |
3.2 | Payment of Dividends |
3.3 | Record and Payment Dates |
3.4 | Partial Payment |
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3.5 | Economic Equivalence |
(a) | in the case of any stock dividend or other distribution payable in shares of US Gold Common Stock, the number of such shares issued in proportion to the number of shares of US Gold Common Stock previously outstanding; | |
(b) | in the case of the issuance or distribution of any rights, options or warrants to subscribe for or purchase shares of US Gold Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire shares of US Gold Common Stock), the relationship between the exercise price of each such right, option or warrant and the Current Market Price of a share of US Gold Common Stock; | |
(c) | in the case of the issuance or distribution of any other form of property (including, without limitation, any shares or securities of US Gold of any class other than US Gold Common Stock, any rights, options or warrants other than those referred to in Section 3.5(b), any evidences of indebtedness of US Gold or any assets of US Gold), the relationship between the fair market value (as determined by the Board of Directors in the manner above contemplated) of such property to be issued or distributed with respect to each outstanding share of US Gold Common Stock and the Current Market Price of a share of US Gold Common Stock; | |
(d) | in the case of any subdivision, redivision or change of the then outstanding shares of US Gold Common Stock into a greater number of shares of US Gold Common Stock or the reduction, combination, consolidation or change of the then outstanding shares of US Gold Common Stock into a lesser number of shares of US Gold Common Stock or any amalgamation, merger, reorganization or other transaction affecting the US Gold Common Stock, the effect thereof upon the then outstanding shares of US Gold Common Stock; and | |
(e) | in all such cases, the general taxation consequences of the relevant event to holders of Exchangeable Shares to the extent that such consequences may differ from the taxation consequences to holders of shares of US Gold Common Stock as a result of differences between taxation laws of Canada and the United States (except for any differing consequences arising as a result of differing marginal taxation rates and without regard to the individual circumstances of holders of Exchangeable Shares). |
4.1 | Certain Restrictions |
(1) | Except as provided in Section 4.1(2), so long as any of the Exchangeable Shares are outstanding, the Corporation shall not at any time without, but may at any time with, the approval of the holders of the Exchangeable Shares given as specified in Section 9.2 hereof: |
(a) | pay any dividends on the Common Shares or any other shares ranking junior to the Exchangeable Shares with respect to the payment of dividends, other than stock dividends payable in Common Shares or in any such other shares ranking junior to the Exchangeable Shares, as the case may be; | |
(b) | redeem or purchase or make any capital distribution in respect of Common Shares or any other shares ranking junior to the Exchangeable Shares with respect to the distribution of the assets in the event of the liquidation, dissolution or winding up of the Corporation; | |
(c) | redeem or purchase any other shares of the Corporation ranking equally with the Exchangeable Shares with respect to the payment of dividends or the distribution of assets in the event of the liquidation, dissolution orwinding-up of the Corporation, whether voluntary or involuntary, or any other distribution of the assets of the Corporation among its shareholders for the purpose of winding up its affairs; or |
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(d) | issue any shares other than (i) Exchangeable Shares, (ii) Common Shares, and (iii) any other shares not ranking superior to the Exchangeable Shares. |
(2) | The restrictions in Sections 4.1(1)(a), 4.1(1)(b) and 4.1(1)(c) hereof shall not apply if all dividends and distributions on the outstanding Exchangeable Shares corresponding to dividends and distributions declared and paid to date on the shares of US Gold Common Stock shall have been declared and paid in full on the Exchangeable Shares. |
5.1 | Participation Upon Liquidation, Dissolution or Winding Up of the Corporation |
(1) | Subject to applicable law and the due exercise by US Gold or Alberta ULC of a Liquidation Call Right, in the event of the liquidation, dissolution or winding up of the Corporation or any other distribution of the assets of the Corporation among its shareholders for the purpose of winding up its affairs, a holder of Exchangeable Shares shall be entitled to receive from the assets of the Corporation in respect of each Exchangeable Share held by such holder on the effective date of such liquidation, dissolution or winding up or other distribution (the“Liquidation Date”), before any distribution of any part of the assets of the Corporation among the holders of the Common Shares or any other shares ranking junior to the Exchangeable Shares, an amount per share equal to (a) the Current Market Price of a share of US Gold Common Stock on the last Business Day prior to the Liquidation Date, which shall be satisfied in full by the Corporation causing to be delivered to such holder one share of US Gold Common Stock, plus (b) the Dividend Amount, if any (collectively, the“Liquidation Amount”). | |
(2) | In the case of a distribution on Exchangeable Shares under this Section 5.1 and provided the Liquidation Call Right has not been exercised, on or promptly after the Liquidation Date, the Corporation shall cause to be delivered to the holders of the Exchangeable Shares the Liquidation Amount for each such Exchangeable Share upon presentation and surrender of the certificates representing such Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the ABCA and the Articles of the Corporation and such additional documents and instruments as the Transfer Agent and the Corporation may reasonably require, at the registered office of the Corporation or at any office of the Transfer Agent as may be specified by the Corporation by notice to the holders of the Exchangeable Shares. Payment of the aggregate Liquidation Amount for such Exchangeable Shares shall be made by causing to be delivered to each holder, at the address of the holder recorded in the securities register of the Corporation for the Exchangeable Shares or by holding forpick-up by the holder at the registered office of the Corporation or at any office of the Transfer Agent as may be specified by the Corporation by notice to the holders of Exchangeable Shares, certificates representing the aggregate number of shares of US Gold Common Stock deliverable by the Corporation to such holder (which shares shall be duly issued as fully paid and non-assessable and shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim) and a cheque of the Corporation payable at par at any branch of the bankers of the Corporation in payment of the Dividend Amount, if any, payable to such holder, without interest (less any amounts withheld on account of tax required to be deducted and withheld therefrom). On and after the Liquidation Date, the holders of the Exchangeable Shares shall cease to be holders of such Exchangeable Shares and shall not be entitled to exercise any of the rights of holders in respect thereof (including any rights under the Voting and Exchange Trust Agreement), other than the right to receive the Liquidation Amount, unless payment of the total Liquidation Amount for such Exchangeable Shares shall not be made upon presentation and surrender of share certificates in accordance with the foregoing provisions, in which case the rights of the holders shall remain unaffected until the Liquidation Amount has been paid in the manner hereinbefore provided. The Corporation shall have the right at any time after the Liquidation Date to transfer or cause to be issued or transferred, and deposited in a custodial account with any chartered bank or trust company in Canada named in such notice, the Liquidation Amount in respect of the Exchangeable Shares represented by certificates that have not at the Liquidation Date been surrendered by the holders thereof, such Liquidation Amount to be held by such bank or trust company as trustee for and on behalf of, and for the use and benefit of, such holders. Upon such deposit being made, the rights of a holder of Exchangeable Shares after such deposit shall be limited to receiving its proportionate part of the |
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Liquidation Amount for such Exchangeable Shares so deposited, without interest, and when received by such bank or trust company, all dividends and other distributions with respect to the shares of US Gold Common Stock to which such holder is entitled with a record date after the date of such deposit and before the date of transfer of such shares of US Gold Common Stock to such holder (in each case less any amounts withheld on account of tax required to be deducted and withheld therefrom) against presentation and surrender of the certificates for the Exchangeable Shares held by them in accordance with the foregoing provisions. Upon such payment or deposit of the total Liquidation Amount (less any amounts withheld on account of tax required to be deducted and withheld therefrom), the holders of the Exchangeable Shares shall thereafter be considered and deemed for all purposes to be holders of the US Gold Common Stock delivered to them or the custodian on their behalf. | ||
(3) | After the Corporation has satisfied its obligations to pay the holders of the Exchangeable Shares the total Liquidation Amount pursuant to this Section 5.1, such holders shall not be entitled to share in any further distribution of the assets of the Corporation. |
5.2 | Liquidation Call Rights |
(1) | Subject to the limitations set forth in Section 5.2(2), including that Alberta ULC shall only be entitled to exercise its Liquidation Call Right with respect to those holders of Exchangeable Shares, if any, in respect of which US Gold has not exercised its Liquidation Call Right, US Gold and Alberta ULC shall each have the overriding right (a“Liquidation Call Right”), in the event of and notwithstanding the proposed liquidation, dissolution or winding up of the Corporation pursuant to Section 5.1 hereof, to purchase from all but not less than all of the holders of Exchangeable Shares on the Liquidation Date (other than US Gold and its Subsidiaries) all but not less than all of the Exchangeable Shares held by each such holder on payment by whichever of US Gold or Alberta ULC is exercising such right (the“LCR Exercising Party”) of an amount per share equal to (a) the Current Market Price of a share of US Gold Common Stock on the last Business Day prior to the Liquidation Date, which shall be satisfied in full by delivery to such holder of one share of US Gold Common Stock, plus (b) the Dividend Amount, if any (collectively, the“Liquidation Call Purchase Price”). In the event of the exercise of a Liquidation Call Right, each holder of Exchangeable Shares (other than Alberta ULC and its Subsidiaries) shall be obligated to sell all the Exchangeable Shares held by such holder to the LCR Exercising Party on the Liquidation Date on payment by the LCR Exercising Party to the holder of the Liquidation Call Purchase Price for each such share and the Corporation shall have no obligation to pay any Liquidation Amount to the holders of such shares so purchased by the LCR Exercising Party. | |
(2) | Alberta ULC shall only be entitled to exercise its Liquidation Call Right with respect to those holders of Exchangeable Shares, if any, in respect of which US Gold has not exercised its Liquidation Call Right. In order to exercise its Liquidation Call Right, an LCR Exercising Party must notify in writing the Transfer Agent, as agent for the holders of Exchangeable Shares, the Trustee and the Corporation of its intention to exercise such right at least 55 days before the Liquidation Date in the case of a voluntary liquidation, dissolution or winding up of the Corporation and at least five Business Days before the Liquidation Date in the case of an involuntary liquidation, dissolution or winding up of the Corporation. The Transfer Agent will notify the holders of Exchangeable Shares as to whether or not a Liquidation Call Right has been exercised (such notice to specify the LCR Exercising Party) forthwith after the expiry of the date by which the same may be exercised, such form of notice to be provided by US Gold to the Transfer Agent. If an LCR Exercising Party exercises its Liquidation Call Right in accordance with this Section 5.2, all obligations of the Corporation under Section 5.1 shall terminate and on the Liquidation Date such LCR Exercising Party will purchase and the holders of Exchangeable Shares (other than US Gold and its Subsidiaries) will sell all of their Exchangeable Shares then outstanding for a price per share equal to the Liquidation Call Purchase Price. | |
(3) | For the purposes of completing a purchase of the Exchangeable Shares pursuant to the exercise of a Liquidation Call Right, the LCR Exercising Party shall deposit with the Transfer Agent, on or before the Liquidation Date, certificates representing the total number of shares of US Gold Common Stock deliverable by the LCR Exercising Party (which shares shall be duly issued as fully paid and non-assessable and shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim) in payment of the total Liquidation Call Purchase Price and a cheque in the amount of the remaining portion, if any, of the total Liquidation Call Purchase Price and any interest allowed on such deposit shall belong to the LCR |
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Exercising Party. Provided that the total Liquidation Call Purchase Price has been so deposited with the Transfer Agent, on and after the Liquidation Date the rights of each holder of Exchangeable Shares (other than US Gold and its Subsidiaries) will be limited to receiving such holder’s proportionate part of the total Liquidation Call Purchase Price payable by the LCR Exercising Party, without interest, and when received by the Transfer Agent, all dividends and other distributions with respect to the shares of US Gold Common Stock to which such holder is entitled with a record date after the date of such deposit and before the date of transfer of such shares of US Gold Common Stock to such holder (in each case less any amounts withheld on account of tax required to be deducted and withheld therefrom) against presentation and surrender of the certificates for the Exchangeable Shares held by them in accordance with the following provisions. Upon surrender to the Transfer Agent of a certificate representing Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the ABCA and such additional documents and instruments as the Transfer Agent and the Corporation may reasonably require, the holder of such surrendered certificate shall be entitled to receive in exchange therefor, and the Transfer Agent on behalf of the LCR Exercising Party shall deliver to such holder, a certificate representing the shares of US Gold Common Stock to which such holder is entitled and a cheque in payment of the Dividend Amount, if any, without interest (less any amounts withheld on account of tax required to be deducted and withheld therefrom). If neither US Gold nor Alberta ULC exercises its Liquidation Call Right in the manner described above, on the Liquidation Date the holders of Exchangeable Shares shall be entitled to receive in exchange therefor the Liquidation Amount otherwise payable by the Corporation in connection with the liquidation, dissolution or winding up of the Corporation pursuant to Section 5.1 hereof. |
6.1 | Retraction at Option of Holder |
(1) | Subject to applicable law and the due exercise by either US Gold or Alberta ULC of a Retraction Call Right, a holder of Exchangeable Shares shall be entitled at any time to require the Corporation to redeem, on the fifth Business Day after the date on which the Retraction Request is received by the Corporation (the“Retraction Date”), any or all of the Exchangeable Shares registered in the name of such holder for an amount per share equal to (a) the Current Market Price of a share of US Gold Common Stock on the last Business Day prior to the Retraction Date, which shall be satisfied in full by the Corporation causing to be delivered to such holder one share of US Gold Common Stock, plus (b) the Dividend Amount, if any (collectively, the“Retraction Price”). The holder must give notice of a requirement to redeem by presenting and surrendering at the registered office of the Corporation or at any office of the Transfer Agent as may be specified by the Corporation by notice to the holders of Exchangeable Shares the certificate representing the Exchangeable Shares that the holder desires to have the Corporation redeem, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the ABCA and such additional documents and instruments as the Transfer Agent and the Corporation may reasonably require, together with a duly executed statement (the“Retraction Request”) in the form of Schedule A hereto or in such other form as may be acceptable to the Corporation specifying that the holder desires to have all or any number specified therein of the Exchangeable Shares represented by such certificate (the“Retracted Shares”) redeemed by the Corporation. | |
(2) | In the case of a redemption of Exchangeable Shares under this Section 6.1, upon receipt by the Corporation or the Transfer Agent in the manner specified in Section 6.1(1) hereof of a certificate representing the number of Exchangeable Shares which the holder desires to have the Corporation redeem, together with a Retraction Request, and provided that the Retraction Request is not revoked by the holder in the manner specified in Section 6.1(5) and that neither US Gold or Alberta ULC has exercised a Retraction Call Right, the Corporation shall redeem the Retracted Shares effective at the close of business on the Retraction Date. On the Retraction Date, the Corporation shall deliver or cause to be delivered to the relevant holder, at the address of the holder recorded in the securities register of the Corporation for the Exchangeable Shares or at the address specified in the holder’s Retraction Request or by holding forpick-up by the holder at the registered office of the Corporation or at any office of the Transfer Agent, as may be specified by the Corporation by notice to the holders of Exchangeable Shares, a certificate representing the number of shares |
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of US Gold Common Stock to which such holder is entitled (which shares shall be duly issued as fully paid and non-assessable and shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim) registered in the name of the holder or in such other name as the holder may request in payment of the Retraction Price and a cheque of the Corporation payable at par at any branch of the bankers of the Corporation in payment of the remaining portion, if any, of the aggregate Retraction Price to which such holder is entitled (less any amounts withheld on account of tax required to be deducted and withheld therefrom) and such delivery of such certificate and cheque by or on behalf of the Corporation by the Transfer Agent shall be deemed to be payment of and shall satisfy and discharge all liability for the Retraction Price to the extent that the same is represented by such share certificates and cheque, unless such cheque is not paid on due presentation. If only a part of the Exchangeable Shares represented by any certificate is redeemed, a new certificate for the balance of such Exchangeable Shares shall be issued to the holder at the expense of the Corporation. | ||
(3) | On and after the close of business on the Retraction Date, the holder of the Retracted Shares shall cease to be a holder of such Retracted Shares and shall not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive its proportionate part of the total Retraction Price, unless upon presentation and surrender of certificates in accordance with the foregoing provisions, payment of the aggregate Retraction Price payable to such holder shall not be made, in which case the rights of such holder shall remain unaffected until such aggregate Retraction Price has been paid in the manner hereinbefore provided. On and after the close of business on the Retraction Date, provided that presentation and surrender of certificates and payment of such aggregate Retraction Price has been made in accordance with the foregoing provisions, the holder of the Retracted Shares so redeemed by the Corporation shall thereafter be considered and deemed for all purposes to be a holder of the shares of US Gold Common Stock delivered to such holder. | |
(4) | Notwithstanding any other provision of this Section 6.1, the Corporation shall not be obligated to redeem Retracted Shares specified by a holder in a Retraction Request to the extent that such redemption of Retracted Shares would be contrary to solvency requirements or other provisions of applicable law. If the Corporation believes that on any Retraction Date it would not be permitted by any of such provisions to redeem the Retracted Shares tendered for redemption on such date, and neither US Gold nor Alberta ULC shall have exercised its Retraction Call Right with respect to the Retracted Shares, the Corporation shall only be obligated to redeem Retracted Shares specified by a holder in a Retraction Request to the extent of the maximum number that may be so redeemed (rounded down to a whole number of shares) as would not be contrary to such provisions and shall notify the holder at least two Business Days prior to the Retraction Date as to the number of Retracted Shares which will not be redeemed by the Corporation. In any case in which the redemption by the Corporation of Retracted Shares would be contrary to solvency requirements or other provisions of applicable law and more than one holder has delivered a Retraction Request, the Corporation shall redeem Retracted Shares in accordance with Section 6.1(2) on a pro rata basis and shall issue to each such holder of Retracted Shares a new certificate, at the expense of the Corporation, representing the Retracted Shares not redeemed by the Corporation pursuant to Section 6.1(2) hereof. If the Retraction Request is not revoked by the holder in the manner specified in Section 6.1(5) and neither US Gold nor Alberta ULC shall have exercised its Retraction Call Right in respect of any such Retracted Shares, an Insolvency Event (as defined in the Voting and Exchange Trust Agreement) shall, to the extent it has not theretofore occurred, be deemed thereupon to have occurred and the holder of any such Retracted Shares not redeemed by the Corporation pursuant to Section 6.1(2) as a result of solvency requirements or other provisions of applicable law shall be deemed by giving the Retraction Request to have exercised its Exchange Right (as defined in the Voting and Exchange Trust Agreement) so as to require US Gold or, at the option of US Gold, Alberta ULC to purchase the unredeemed Retracted Shares from such holder on the Retraction Date or as soon as practicable thereafter on payment by US Gold or, at the option of US Gold, Alberta ULC to such holder of the Retraction Price, all as more specifically provided in the Voting and Exchange Trust Agreement. | |
(5) | A holder of Retracted Shares may, by notice in writing given by the holder to the Corporation before the close of business on the Business Day immediately preceding the Retraction Date, withdraw its Retraction Request in which event such Retraction Request shall be null and void and, for greater certainty, the |
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revocable offer constituted by the Retraction Request to sell the Retracted Shares to US Gold or Alberta ULC shall be deemed to have been revoked. | ||
(6) | Notwithstanding any other provision of this ARTICLE 6, if: |
(a) | exercise of the rights of the holders of the Exchangeable Shares, or any of them, to require the Corporation to redeem any Exchangeable Shares pursuant to this ARTICLE 6 on any Retraction Date would require listing particulars or any similar document to be issued in order to obtain the approval of AMEX or TSX to the listing and trading (subject to official notice of issuance) of, the shares of US Gold Common Stock that would be required to be delivered to such holders of Exchangeable Shares in connection with the exercise of such rights; and | |
(b) | as a result of (a) above, it would not be practicable (notwithstanding the reasonable endeavours of US Gold) to obtain such approvals in time to enable all or any of such shares of US Gold Common Stock to be admitted to listing and trading by AMEX or TSX (subject to official notice of issuance) when so delivered, that Retraction Date shall, notwithstanding any other date specified or otherwise deemed to be specified in any relevant Retraction Request, be deemed for all purposes to be the earlier of (i) the second business day immediately following the date the approvals referred to in Section 6.1(6)(a) are obtained, and (ii) the date which is 30 Business Days after the date on which the relevant Retraction Request is received by the Corporation, and references in these share provisions to such Retraction Date shall be construed accordingly. |
6.2 | Retraction Call Rights |
(1) | In the event that a holder of Exchangeable Shares delivers a Retraction Request pursuant to Section 6.1 and subject to the limitations set forth in Section 6.2(2), including that Alberta ULC shall only be entitled to exercise its Retraction Call Right with respect to those holders of Exchangeable Shares, if any, in respect of which US Gold has not exercised its Retraction Call Right, US Gold and Alberta ULC shall each have the overriding right (a“Retraction Call Right”), notwithstanding the proposed redemption of the Exchangeable Shares by the Corporation pursuant to Section 6.1 hereof, to purchase from such holder on the Retraction Date all but not less than all of the Retracted Shares held by such holder on payment by whichever of US Gold or Alberta ULC is exercising such right (the“RCR Exercising Party”) of an amount per share equal to (a) the Current Market Price of a share of US Gold Common Stock on the last Business Day prior to the Retraction Date, which shall be satisfied in full by the RCR Exercising Party causing to be delivered to such holder one share of US Gold Common Stock, plus (b) the Dividend Amount, if any (the“Retraction Call Purchase Price”). In the event of the exercise of a Retraction Call Right, a holder of Exchangeable Shares who has delivered a Retraction Request shall be obligated to sell all the Retracted Shares to the RCR Exercising Party on the Retraction Date on payment by the RCR Exercising Party of an amount per share equal to the Retraction Call Purchase Price for each such share. | |
(2) | Upon receipt by the Corporation of a Retraction Request, the Corporation shall promptly notify US Gold and Alberta ULC thereof. Alberta ULC shall only be entitled to exercise its Retraction Call Right with respect to those holders of Exchangeable Shares, if any, in respect of which US Gold has not exercised its Retraction Call Right. In order to exercise its Retraction Call Right, the RCR Exercising Party must notify the Corporation in writing of its determination to do so (a“US Gold Call Notice”) within five Business Days of notification to such RCR Exercising Party by the Corporation of the receipt by the Corporation of the Retraction Request. If either US Gold or Alberta ULC does not so notify the Corporation within such five Business Day period, the Corporation shall notify the holder as soon as possible thereafter that neither will exercise the Retraction Call Right. If either US Gold or Alberta ULC delivers a US Gold Call Notice within such five Business Day period and duly exercises its Retraction Call Right in accordance with this Section 6.2, the obligation of the Corporation to redeem the Retracted Shares shall terminate and, provided that the Retraction Request is not revoked by the holder in the manner specified in Section 6.1(5), the RCR Exercising Party shall purchase from such holder and such holder shall sell to the RCR Exercising Party on the Retraction Date the Retracted Shares for the Retraction Call Purchase Price. Provided that the aggregate Retraction Call Purchase Price has been so deposited with the Transfer Agent as provided in Section 6.2(3), the closing of the purchase and sale of the Retracted Shares pursuant to the Retraction Call Right shall be deemed to have occurred as at the close of business on the Retraction Date and, for greater certainty, no |
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redemption by the Corporation of such Retracted Shares shall take place on the Retraction Date. In the event that neither US Gold nor Alberta ULC delivers a US Gold Call Notice within such five Business Day period, and provided that the Retraction Request is not revoked by the holder in the manner specified in Section 6.1(5), the Corporation shall redeem the Retracted Shares on the Retraction Date and in the manner otherwise contemplated in Section 6.1. | ||
(3) | For the purpose of completing a purchase of Exchangeable Shares pursuant to the exercise of a Retraction Call Right, the RCR Exercising Party shall deliver or cause to be delivered to the relevant holder, at the address of the holder recorded in the securities register of the Corporation for the Exchangeable Shares or at the address specified in the holder’s Retraction Request or by holding forpick-up by the holder at the registered office of the Corporation or at any office of the Transfer Agent as may be specified by the Corporation by notice to the holders of Exchangeable Shares, a certificate representing the number of shares of US Gold Common Stock to which such holder is entitled (which shares shall be duly issued as fully paid and non-assessable and shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim) registered in the name of the holder or in such other name as the holder may request in payment of the Retraction Call Purchase Price and a cheque of the RCR Exercising Party payable at par and in Canadian dollars at any branch of the bankers of US Gold, Alberta ULC or of the Corporation in Canada in payment of the remaining portion, if any, of such aggregate Retraction Call Purchase Price (less any amounts withheld on account of tax required to be deducted and withheld therefrom) and such delivery of such certificate and cheque on behalf of the RCR Exercising Party by the Transfer Agent shall be deemed to be payment of and shall satisfy and discharge all liability for the Retraction Call Purchase Price to the extent that the same is represented by such share certificates and cheque, unless such cheque is not paid on due presentation. | |
(4) | On and after the close of business on the Retraction Date, the holder of the Retracted Shares shall not be entitled to exercise any of the rights of a holder in respect thereof, other than the right to receive its proportionate part of the total Retraction Call Purchase Price unless upon presentation and surrender of certificates in accordance with the foregoing provisions, payment of the aggregate Retraction Call Purchase Price payable to such holder shall not be made, in which case the rights of such holder shall remain unaffected until such aggregate Retraction Call Purchase Price has been paid in the manner hereinbefore provided. On and after the close of business on the Retraction Date, provided that presentation and surrender of certificates and payment of such aggregate Retraction Call Purchase Price has been made in accordance with the foregoing provisions, the holder of the Retracted Shares so purchased by the RCR Exercising Party shall thereafter be considered and deemed for all purposes to be a holder of the shares of US Gold Common Stock delivered to such holder. |
7.1 | Redemption by the Corporation |
(1) | Subject to applicable law and the due exercise by either US Gold or Alberta ULC of a Redemption Call Right, the Corporation shall on the Redemption Date redeem all of the then outstanding Exchangeable Shares for an amount per share equal to (a) the Current Market Price of a share of US Gold Common Stock on the last Business Day prior to such Redemption Date, which shall be satisfied in full by the Corporation causing to be delivered one share of US Gold Common Stock, plus (b) the Dividend Amount, if any (collectively, the“Redemption Price”). | |
(2) | In any case of a redemption of Exchangeable Shares under this Section 7.1, the Corporation shall, at least 60 days before the Redemption Date, send or cause to be sent to each holder of Exchangeable Shares a notice in writing of the redemption by the Corporation or the purchase by US Gold or Alberta ULC under its Redemption Call Right, as the case may be, of the Exchangeable Shares held by such holder (other than US Gold and its Subsidiaries in the case of a purchase by US Gold or Alberta ULC). Such notice shall set out the formula for determining the Redemption Price or the Redemption Call Purchase Price, as the case may be, such Redemption Date and, if applicable, particulars of the Redemption Call Right. |
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(3) | On or after the Redemption Date and subject to the exercise by US Gold or Alberta ULC of a Redemption Call Right, the Corporation shall cause to be delivered to the holders of the Exchangeable Shares to be redeemed the Redemption Price for each such Exchangeable Share upon presentation and surrender at the registered office of the Corporation or at any office of the Transfer Agent as may be specified by the Corporation in such notice of the certificates representing such Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the ABCA and such additional documents and instruments as the Transfer Agent and the Corporation may reasonably require. Payment of the aggregate Redemption Price for Exchangeable Shares held by a holder shall be made by delivery to such holder, at the address of such holder recorded in the securities register of the Corporation or by holding forpick-up by the holder at the registered office of the Corporation or at any office of the Transfer Agent as may be specified by the Corporation in such notice, of a certificate representing the aggregate number of shares of US Gold Common Stock deliverable by the Corporation to such holder (which shares shall be duly issued as fully paid and non- assessable and shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim) and a cheque of the Corporation payable at par at any branch of the bankers of the Corporation in respect of the remaining portion, if any, of such aggregate Redemption Price (less any amounts withheld on account of tax required to be deducted and withheld therefrom). On and after the Redemption Date, the holders of the Exchangeable Shares called for redemption shall not be entitled to exercise any of the rights of holders in respect thereof, other than the right to receive their proportionate part of the total Redemption Price, unless payment of the aggregate Redemption Price deliverable to a holder for Exchangeable Shares shall not be made upon presentation and surrender of share certificates in accordance with the foregoing provisions, in which case the rights of the holder shall remain unaffected until the aggregate Redemption Price deliverable to such holder has been paid in the manner hereinbefore provided. | |
(4) | The Corporation shall have the right at any time after the sending of notice of its intention to redeem the Exchangeable Shares as aforesaid to deposit or cause to be deposited the total Redemption Price of the Exchangeable Shares so called for redemption, or of such of the said Exchangeable Shares represented by certificates that have not at the date of such deposit been surrendered by the holders thereof in connection with such redemption, in a custodial account with any chartered bank or trust company in Canada named in such notice and any interest allowed on such deposit shall belong to the Corporation. Provided that such total Redemption Price has been so deposited prior to the Redemption Date, on and after the Redemption Date, the Exchangeable Shares shall be redeemed and the Rights of the holders thereof after the Redemption Date shall be limited to receiving their proportionate part of the total Redemption Price for such Exchangeable Shares so deposited, against presentation and surrender of the said certificates held by them, respectively, in accordance with the foregoing provisions. Upon such payment or deposit of the total Redemption Price, the holders of the Exchangeable Shares shall thereafter be considered and deemed for all purposes to be holders of the shares of US Gold Common Stock delivered to them. |
7.2 | Redemption Call Rights |
(1) | Subject to the limitations set forth in Section 7.2(2), including that Alberta ULC shall only be entitled to exercise its Redemption Call Right with respect to those holders of Exchangeable Shares, if any, in respect of which US Gold has not exercised its Redemption Call Right, US Gold and Alberta ULC shall each have the overriding right (a“Redemption Call Right”), notwithstanding the proposed redemption of the Exchangeable Shares by the Corporation pursuant to Section 7.1 hereof, to purchase from all but not less than all of the holders of Exchangeable Shares (other than US Gold and its Subsidiaries) on the last Business Day prior to the Redemption Date in respect of which the Redemption Call Right is exercised all but not less than all of the Exchangeable Shares held by each such holder on payment by whichever of US Gold or Alberta ULC is exercising such right (the“Redemption CR Exercising Party”) of an amount per share equal to (a) the Current Market Price of a share of US Gold Common Stock on the last Business Day prior to such Redemption Date, which shall be satisfied in full by causing to be delivered to such holder one share of US Gold Common Stock plus (b) the Dividend Amount, if any (collectively, the“Redemption Call Purchase Price”). In the event of the exercise of a Redemption Call Right, each holder of Exchangeable Shares (other than US Gold and its Subsidiaries) shall be obligated to sell all the Exchangeable Shares held by such holder to the Redemption CR Exercising Party on the last Business Day prior to such |
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Redemption Date on payment by the Redemption CR Exercising Party to such holder of the Redemption Call Purchase Price for each such share. | ||
(2) | Alberta ULC shall only be entitled to exercise its Redemption Call Right with respect to those holders of Exchangeable Shares, if any, in respect of which US Gold has not exercised its Redemption Call Right. In order to exercise its Redemption Call Right, a Redemption CR Exercising Party must notify in writing the Transfer Agent, as agent for the holders of Exchangeable Shares and the Corporation of its intention to exercise such right at least 30 days before the Redemption Date. The Transfer Agent will notify the holders of Exchangeable Shares as to whether or not a Redemption Call Right has been exercised (such notice to specify the Redemption CR Exercising Party) forthwith after the expiry of the date by which the same may be exercised, such form of notice to be provided by US Gold to the Transfer Agent. If a Redemption CR Exercising Party duly exercises its Redemption Call Right in accordance with this Section 7.2, the right of the Corporation to redeem any Exchangeable Shares pursuant to Section 7.1 on the Redemption Date shall terminate at such time and on the last Business Day prior to such Redemption Date such Redemption CR Exercising Party will purchase and the holders of Exchangeable Shares (other than US Gold and its Subsidiaries) will sell all of their Exchangeable Shares then outstanding for a price per share equal to the Redemption Call Purchase Price. | |
(3) | For the purposes of completing a purchase of the Exchangeable Shares pursuant to the exercise of a Redemption Call Right, the Redemption CR Exercising Party shall deposit with the Transfer Agent, on or before the last Business Day prior to the Redemption Date, certificates representing the total number of shares of US Gold Common Stock deliverable by the Redemption CR Exercising Party (which shares shall be duly issued as fully paid and non-assessable and shall be free and clear of any lien, claim, encumbrance, security interest or adverse claim) in payment of the total Redemption Call Purchase Price and a cheque in the amount of the remaining portion, if any, of the total Redemption Call Purchase Price, without interest (less any amounts withheld on account of tax required to be deducted and withheld therefrom) and any interest allowed on such deposit shall belong to the Redemption CR Exercising Party. Provided that the total Redemption Call Purchase Price has been so deposited with the Transfer Agent, on and after the last Business Day prior to the Redemption Date the rights of each holder of Exchangeable Shares (other than US Gold and its Subsidiaries) will be limited to receiving such holder’s proportionate part of the total Redemption Call Purchase Price payable by the Redemption CR Exercising Party upon presentation and surrender by such holder of certificates representing the Exchangeable Shares held by such holder in accordance with the following provisions and such holder shall on and after the last Business Day prior to such Redemption Date be considered and deemed for all purposes to be the holder of the shares of US Gold Common Stock delivered to such holder. Upon surrender to the Transfer Agent of a certificate representing Exchangeable Shares, together with such other documents and instruments as may be required to effect a transfer of Exchangeable Shares under the ABCA and such additional documents and instruments as the Transfer Agent and the Corporation may reasonably require, the holder of such surrendered certificate shall be entitled to receive in exchange therefor, and the Transfer Agent on behalf of the Redemption CR Exercising Party shall deliver to such holder, a certificate representing the shares of US Gold Common Stock to which such holder is entitled and a cheque in payment of the remaining portion, if any, of the holder’s proportionate part of the total Redemption Call Purchase Price, without interest (less any amounts withheld on account of tax required to be deducted and withheld therefrom). If neither US Gold nor Alberta ULC exercises the Redemption Call Right in the manner described above, on the Redemption Date a holder of Exchangeable Shares shall be entitled to receive in exchange therefor the Redemption Price otherwise payable by the Corporation in connection with the redemption of the Exchangeable Shares pursuant to Section 7.1 hereof. |
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8.1 | Voting Rights |
9.1 | Amendment |
9.2 | Approval |
10.1 | Reciprocal Changes |
(1) | Each holder of an Exchangeable Share acknowledges that the Support Agreement provides, in part, that US Gold will not, except as provided in the Support Agreement, without the prior approval of the Corporation and the prior approval of the holders of the Exchangeable Shares given in accordance with Section 9.2 hereof: |
(a) | issue or distribute shares of US Gold Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire US Gold Common Stock) to the holders of all or substantially all of the then outstanding shares of US Gold Common Stock, by way of stock dividend or other distribution, other than an issue of shares of US Gold Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire US Gold Common Stock) to holders of shares of US Gold Common Stock who exercise an option to receive dividends in shares of US Gold Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire US Gold Common Stock) in lieu of receiving cash dividends; | |
(b) | issue or distribute rights, options or warrants to the holders of all or substantially all of the then outstanding shares of US Gold Common Stock entitling them to subscribe for or to purchase shares of |
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US Gold Common Stock (or securities exchangeable for or convertible into or carrying rights to acquire shares of US Gold Common Stock); or | ||
(c) | issue or distribute to the holders of all or substantially all of the then outstanding shares of US Gold Common Stock: |
(i) | shares or securities (including evidence of indebtedness) of US Gold of any class other than US Gold Common Stock (other than shares convertible into or exchangeable for or carrying rights to acquire US Gold Common Stock); | |
(ii) | rights, options or warrants other than those referred to in Section 10.1(1)(b) above; or | |
(iii) | assets of US Gold, |
unless the economic equivalent on a per share basis of such rights, options, securities, shares, evidences of indebtedness or other assets is issued or distributed simultaneously to holders of the Exchangeable Shares. |
(2) | Each holder of an Exchangeable Share acknowledges that the Support Agreement further provides, in part, that US Gold will not, except as provided in the Support Agreement, without the prior approval of the Corporation and the prior approval of the holders of the Exchangeable Shares given in accordance with Section 9.2 hereof: |
(a) | subdivide, redivide or change the then outstanding US Gold Common Stock into a greater number of shares of US Gold Common Stock; | |
(b) | reduce, combine, consolidate or change the then outstanding shares of US Gold Common Stock into a lesser number of shares of US Gold Common Stock; or | |
(c) | reclassify or otherwise change the shares of US Gold Common Stock or effect an amalgamation, merger, reorganization or other transaction affecting the US Gold Common Stock, |
unless the same or an economically equivalent change shall simultaneously be made to, or in, the rights of the holders of the Exchangeable Shares. |
11.1 | Actions by the Corporation |
11.2 | Changes to Support Agreement |
(a) | adding to the covenants of the other parties to such agreement for the protection of the Corporation or the holders of the Exchangeable Shares; | |
(b) | making such provisions or modifications not inconsistent with such agreement as may be necessary or desirable with respect to matters or questions arising thereunder which, in the opinion of the Board of Directors, it may be expedient to make, provided that the Board of Directors shall be of the good faith |
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opinion, after consultation with counsel, that such provisions and modifications will not be prejudicial to the interests of the holders of the Exchangeable Shares; or | ||
(c) | making such changes in or corrections to such agreement which, on the advice of counsel to the Corporation, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error contained therein, provided that the Board of Directors shall be of the good faith opinion, after consultation with counsel, that such provisions and modifications will not be prejudicial to the interests of the holders of the Exchangeable Shares. |
12.1 | Legend |
12.2 | Call Rights |
12.3 | Withholding Rights |
13.1 | Notices |
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13.2 | Certificates |
13.3 | Notices to Shareholders |
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To: | US Gold Corporation, US Gold Alberta ULC and US Gold Canadian Acquisition Corporation, c/of the Trustee |
o | all share(s) represented by this certificate; or | |
o | share(s) only represented by this certificate. |
(Date) | (Signature of Shareholder) | (Guarantee of Signature) |
o | Please check box if the securities and any cheque(s) resulting from the retraction or purchase of the Retracted Shares are to be held forpick-up by the shareholder at the principal transfer office of the Transfer Agent in Toronto, failing which such securities and any cheque will be mailed to the last address of the shareholder as it appears on the register. |
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NOTE: | This panel must be completed and this certificate, together with such additional documents as the Transfer Agent and the Corporation may require, must be deposited with the Transfer Agent at its principal transfer office in Toronto. The securities and any cheque resulting from the retraction or purchase of the Retracted Shares will be issued and registered in, and made payable to respectively, the name of the shareholder as it appears on the register of the Corporation and the securities and cheque resulting from such retraction or purchase will be delivered to such shareholder as indicated above, unless the form appearing immediately below is duly completed, all exigible transfer taxes are paid and the signature of the registered holder is guaranteed by a Canadian chartered bank or trust company, member of a recognized stock exchange in Canada or a member of the Securities Transfer Association Medallion (STAMP) Program. |
Street Address or P.O. Box | Signature of Shareholder |
City, Province and Postal Code | Signature Guaranteed by |
NOTE: | If this Retraction Request is for less than all of the share(s) represented by this certificate, a certificate representing the remaining share of the Corporation will be issued and registered in the name of the shareholder as it appears on the register of the Corporation, unless the Share Transfer Power on the share certificate is duly completed in respect of such share(s). |
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For Delivery by Mail: The Exchange Tower 130 King Street West Suite 2950, P.O. Box 361 Toronto, Ontario M5X 1E2 | For Delivery by Courier or by Hand: The Exchange Tower 130 King Street West Suite 2950 Toronto, Ontario M5X 1C7 |
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Item No. | Description | |
** 2.1 | Form of Agreement and Plan of Merger by and among U.S. Gold Corporation, US Gold Holdings Corporation and USGL Merger Sub, Inc. | |
3.1.1 | Articles of Incorporation of U.S. Gold (f/k/a Silver State Mining Corporation) filed with the Secretary of State of Colorado on June 24, 1979 (incorporated by reference from the Report on Form 10-KSB dated March 27, 1996, Exhibit 3.1, File No. 000-09137). |
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Item No. | Description | |
3.1.2 | Articles of Amendment to the Articles of Incorporation of U.S. Gold filed with the Secretary of State of Colorado on June 22, 1988 (incorporated by reference from Report on Form 10-K for the year ended December 31, 1988, Exhibit 3.1, File No. 000-09137). | |
3.1.3 | Articles of Amendment to the Articles of Incorporation of U.S. Gold filed with the Secretary of State of Colorado on July 5, 1988 (incorporated by reference from Report on Form 10-K for the year ended December 31, 1988, Exhibit 3.2, File No. 000-09137). | |
3.1.4 | Articles of Amendment to the Articles of Incorporation of U.S. Gold filed with the Secretary of State of Colorado on December 20, 1991 (incorporated by reference from Report on Form 10-K for the year ended December 31, 1991, Exhibit 3.3, File No. 000-09137). | |
3.1.5 | Articles of Amendment to the Articles of Incorporation of U.S. Gold filed with the Secretary of State of Colorado on November 15, 2005 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 3.1.5, File No. 000-9137). | |
** 3.2.1 | Certificate of Incorporation of New US Gold filed with the Secretary of State of Delaware on April 17, 2006. | |
** 3.2.2 | Amended and Restated Certificate of Incorporation of New US Gold. | |
3.3.1 | Bylaws of U.S. Gold, as amended June 22, 1988 (incorporated by reference from the Report on Form 10-KSB for the year ended December 31, 1996 Exhibit 3.1, File No. 000-09137). | |
3.3.2 | Amendment to the Bylaws of U.S. Gold effective as of October 3, 2005 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 3.2.1, File No. 000-09137). | |
** 3.4.1 | Bylaws of New US Gold. | |
** 3.4.2 | Amended and Restated Bylaws of New US Gold. | |
** 5.1 | Opinion of Dufford & Brown, P.C. | |
** 5.2 | Opinion of Fraser Milner Casgrain LLP. | |
10.1 | Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986, with amendments (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.1, File No. 000-09137). | |
10.2 | First Amendment dated January 10, 1986 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.2, File No. 000-09137). | |
10.3 | Sixth Amendment to Tonkin Mining Lease dated June 29, 1989 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.3, File No. 000-09137). |
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Item No. | Description | |
10.4 | Seventh Amendment to Tonkin Mining Lease dated April 18, 1990 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.4, File No. 000-09137). | |
10.5 | Eighth Amendment to Campbell/Simpson Tonkin Springs Venture Limited Partnership Tonkin Mineral Lease dated April 20, 1992 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.5, File No. 000-09137). | |
10.6 | Ninth Amendment to Campbell/Simpson Tonkin Springs Venture Limited Partnership Tonkin Mineral Lease dated January 22, 1993 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.6, File No. 000-09137). | |
10.7 | Tenth Amendment to Campbell/Simpson Tonkin Springs Venture Limited Partnership Tonkin Mineral Lease dated April 30, 1993 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.7, File No. 000-09137). | |
10.8 | Eleventh Amendment to Campbell/Simpson Tonkin Springs Venture Limited Partnership Tonkin Mineral Lease dated June 28, 1993 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.8, File No. 000-09137). | |
10.9 | Twelfth Amendment to Tonkin Mining Lease dated November 27, 1995 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.9, File No. 000-09137). | |
10.10 | Thirteenth Amendment to Tonkin Mining Lease dated February 1, 2003 to Mining Lease by and between Lyle F. Campbell, Julian E. Simpson and Jean C. Simpson, and Tonkin Springs Gold Mining Company, effective as of January 1, 1986 (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.10, File No. 000-09137). | |
10.11 | Agreement To Pay Distributions dated February 21, 1992, by and between Tonkin Springs Gold Mining Company and French American Banking Corporation (incorporated by reference from the Report on Form 8-K dated February 21, 1992, Exhibit 4, File No. 000-09137). | |
10.12 | Purchase Agreement between BacTech Nevada Corporation and U.S. Gold Corporation dated effective July 31, 2003 related to the purchase by BacTech of 55% interest in Tonkin Springs LLC from Tonkin Springs Venture L.P., a subsidiary of U.S. Gold (incorporated by reference from the Report on Form 8-K dated August 6, 2003, Exhibit 10.1, File No. 000-09137). | |
10.13 | Amended and Restated Members’ Agreement of the Tonkin Springs LLC between Tonkin Springs Venture L.P. and BacTech Nevada Corporation dated effective July 31, 2003 (incorporated by reference from the Report on Form 8-K dated August 6, 2003, Exhibit 10.2, File No. 000-09137). | |
10.14 | Amended and Restated Operating Agreement of the Tonkin Springs LLC between Tonkin Springs Venture L.P. and BacTech Nevada Corporation dated effective July 31, 2003 (incorporated by reference from the Report on Form 8-K dated august 6, 2003, Exhibit 10.3, File No. 000-09137). |
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Item No. | Description | |
10.15 | Amended and Restated Non-Qualified Stock Option and Stock Grant Plan, as amended effective September 19, 2003 (incorporated by reference from the Report on Form 10-KSB for the year ended December 31, 2003, Exhibit 10.2, File No. 000-09137). | |
10.16 | Termination Agreement between U.S. Gold and William W. Reid dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 10.1, File No. 000-09137). | |
10.17 | Termination Agreement between U.S. Gold and David C. Reid dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 10.2, File No. 000-09137). | |
10.18 | Termination Agreement between U.S. Gold and William F. Pass dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 10.3, File No. 000-09137). | |
10.19 | Letter Agreement of Private Placement between U.S. Gold and Robert R. McEwen dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 2.1, File No. 000-09137). | |
10.20 | Stock Subscription Agreement between U.S. Gold and Robert R. McEwen dated July 29, 2005 (incorporated by reference from the report on Form 8-K dated July 29, 2005, Exhibit 2.2, File No. 000-09137). | |
10.21 | Employment Agreement between U.S. Gold and Ann Carpenter dated October 24, 2005 (incorporated by reference from the report on Form 8-K dated October 24, 2005, Exhibit 10.1, File No. 000-09137). | |
10.22 | Form of Indemnification Agreement (incorporated by reference from the report on Form 8-K dated December 7, 2005, Exhibit 10.1, File No. 000-09137). | |
10.23 | Agency Agreement between U.S. Gold, GMP Securities L.P. and Griffiths McBurney Corp. dated February 22, 2006 (incorporated by reference from the report on Form 8-K dated February 27, 2006, Exhibit 10.1, File No. 000-09137). | |
10.24 | Subscription Receipt Indenture between U.S. Gold, GMP Securities L.P. and Equity Transfer Services Inc. dated February 22, 2006 (incorporated by reference from the report on Form 8-K dated February 27, 2006, Exhibit 10.2, File No. 000-09137). | |
10.25 | Warrant Indenture between U.S. Gold and Equity Transfer Services Inc. dated February 22, 2006 (incorporated by reference from the report on Form 8-K dated February 27, 2006, Exhibit 10.3, File No. 000-09137). | |
10.26 | Compensation Option issued by U.S. Gold in favor of GMP Securities L.P. dated February 22, 2006 (incorporated by reference from the report on Form 8-K dated February 27, 2006, Exhibit 10.4, File No. 000-09137). | |
10.27 | Form of Subscription Agreement between U.S. Gold and Subscribers (incorporated by reference from the report on Form 8-K dated February 27, 2006, Exhibit 10.4, File No. 000-09137). | |
10.28 | Registration Rights Agreement dated February 22, 2006 between U.S. Gold and GMP Securities L.P (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.28, File No. 000-09137). | |
10.29 | Employment Agreement dated February 22, 2006 between U.S. Gold and William F. Pass (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 10.29, File No. 000-09137). | |
** 10.30 | US Gold Equity Incentive Plan. |
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Item No. | Description | |
21.1 | Subsidiaries of U.S. Gold (incorporated by reference filed with U.S. Gold’s Annual Report for the fiscal year ended December 31, 2005, Exhibit 21, File No. 000-09137). | |
* 23.1 | Consent of Stark Winter Schenkein & Co., LLP. | |
* 23.2 | Consent of Dufford & Brown, P.C. (included in the Offer to Purchase which is part of this Registration Statement). | |
*23.3 | Consent of Fraser Milner Casgrain LLP (included in the Offer to Purchase which is part of this Registration Statement). | |
**23.3 | Consent of Fraser Milner Casgrain LLP (to be included in Exhibit 5.2). | |
* 23.4 | Consent of Holme Roberts & Owen LLP (included in the Offer to Purchase which is part of this Registration Statement). | |
* 24.1 | Power of Attorney (included on signature page). |
* | Filed herewith. | |
** | To be filed by amendment. |
II-5
II-6
US GOLD HOLDINGS CORPORATION | ||||
(Registrant) | ||||
By: | /s/ William F. Pass | |||
William F. Pass, Vice President, Secretary and Treasurer | ||||
US GOLD CANADIAN ACQUISITION CORPORATION | ||||
(Registrant) | ||||
By: | /s/ Robert R. McEwen | |||
Robert R. McEwen, Chief Executive Officer |
/s/ Ann S. Carpenter | President and Director (Principal Executive Officer) | April 28, 2006 | ||
/s/ William F. Pass | Vice President, Secretary, Treasurer and Director (Principal Financial and Accounting Officer) | April 28, 2006 |
/s/ Robert R. McEwen | Chief Executive Officer and Director (Principal Executive Officer) | April 28, 2006 | ||
/s/ Ann S. Carpenter | President and Director | April 28, 2006 | ||
/s/ William F. Pass | Vice President, Secretary, Treasurer and Director (Principal Accounting Officer) | April 28, 2006 |