SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 3, 1997
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USMX, INC.
(Exact name of registrant as specified in its charter)
______________
Delaware 0-9370 84-1076625
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
141 Union Boulevard, Suite 100
Lakewood, Colorado 80228
(Address of principal executive offices) (Zip Code)
(303) 985-4665
(Registrant's telephone number, including area code)
USMX, INC.
Item 5. Other Events
USMX, INC.
Item 5. Other Events
On January 3, 1997, USMX, Inc. (the "Company") or ("USMX")
entered into a letter agreement in principle with Dakota to merge
(the "Merger") with Dakota Mining Corporation ("Dakota"). Dakota
is a Canadian federal corporation headquartered in Denver,
Colorado, with interests in gold mines in the United States.
Dakota is a publicly-held company; its shares are traded on the
American Stock Exchange, The Toronto Stock Exchange and the
Berlin Stock Exchange. It is intended that each holder of 1.10
outstanding shares of USMX common stock will receive one common
share of Dakota in a tax-free reorganization to be effected as a
reverse triangular merger whereby an indirect wholly-owned
subsidiary of Dakota organized under Delaware law will merge with
and into USMX. USMX would thus become an indirect wholly-owned
subsidiary of Dakota at the effective time of the Merger. The
Merger is subject to satisfactory completion of financing by
Dakota as set forth below, approval by The Toronto Stock
Exchange, stockholder and creditor approval, review by regulatory
authorities, a definitive merger agreement and other conditions.
The full text of the letter agreement is included as Exhibit 2 to
this Report.
Dakota has engaged three Canadian securities firms to
conduct a "special warrants" financing of Cdn. $40 million on a
"best effort" basis. The special warrants will be exerciseable
into unsecured convertible debentures. A portion of the proceeds
of the offering will be loaned by Dakota to USMX pending
completion of the Merger, with the balance of the proceeds of the
offering to be held in escrow pending consummation of the Merger.
A substantial portion of the proceeds to be realized from the
offering are expected to be used in connection with development
of the Company's Illinois Creek Project in Alaska.
The Company has prepared a revised development and operating
plan (the "Plan") for the Illinois Creek Project. Based on the
revised Plan, the Company anticipates that it will require
additional funding of approximately $12.1 million to achieve
production at the Illinois Creek Mine. The Company also
presently estimates that several million dollars of additional
funding will be required to comply with the financial covenants
of the Project loan from N M Rothschild & Sons Limited
("Rothschild") and for general corporate purposes until the
Illinois Creek Mine is generating cash flow, which the Company
presently forecasts will occur in the fourth quarter of 1997.
The current capital estimate, including pre-construction and
acquisition costs, for the completion and start-up of the
Illinois Creek Mine is $47.8 million. The increase is due to the
delay in projected start-up from November 1996 to May 1997,
increased capital costs and higher working capital requirements.
The Company is not in compliance with several financial covenants
in its credit agreements with Rothschild and is in discussions
with Rothschild to extend a waiver of compliance until the merger
with Dakota is consummated. The consent of Rothschild is a
condition to consummation of the Merger.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
2. Letter agreement in principle regarding proposed
business combination of USMX, Inc. and Dakota Mining Corporation,
dated January 3, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
USMX, INC.
(Registrant)
Date: January 13, 1997 By: /s/ Donald P. Bellum
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Donald P. Bellum, President