UNITED STATES
SECURITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2004
AMERICAN GOLDFIELDS INC.
(Exact name of registrant as specified in its charter)
Nevada 000-49996 71-0867612
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200-4170 Still Creek Drive
Burnaby, B.C., Canada V5C 6C6
(Address of principal executive offices)
604-299-6600
(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report.)
Item 5. Other Events and Regulation FD Disclosure.
On May 7, 2004, American Goldfields Inc. (the "Company") executed an agreement
with Minquest, Inc. granting the Company the right to purchase 100% of the
mining interests of a Nevada mineral exploration property currently controlled
by MinQuest, a natural resource exploration company. The property, known as the
Gilman property, consists of 19 contiguous, unpatented mineral claims covering
approximately 390 acres located in Lander County, Nevada. All of the claims are
on Department of Agriculture, Forest Service administered lands, while access to
the property is across Department of Interior, Bureau of Land Management land.
Simultaneous with the execution and delivery of the Property Option Agreement,
we paid MinQuest $10,000. In order to earn a 100% interest in the Gilman
property, we must pay MinQuest, Inc. and incur expenditures relating to mining
operations in accordance with the following schedule: (i) on or before May 15,
2005, $15,000 to MinQuest and incur $50,000 in expenditures incidental to the
mining operations; (ii) on or before May 15, 2006, $15,000 to MinQuest and an
additional $75,000 in expenditures; (iii) on or before May 15, 2007, $15,000 to
MinQuest and an additional $100,000 in expenditures; (iv) on or before May 15,
2008, $15,000 to MinQuest and an additional $100,000 in expenditures; and (v) on
or before May 15, 2009, $15,000 to MinQuest and an additional $125,000 in
expenditures. If we have not incurred the requisite expenditures to maintain our
option in good standing, we have a 60-day period subsequent to May 30 to make
such payment along with such amount which shall be deemed to have been an
expenditure incurred by us during such period. Since our payment obligations are
non-refundable, if we do not make any payments, we will lose any payments made
and all our rights to the properties. If all said payments are made, then we
will acquire all mining interests in the property, subject to MinQuest retaining
a 3% royalty of the aggregate proceeds received by us from any smelter or other
purchaser of any ores, concentrates, metals or other material of commercial
value produced from the property, minus the cost of transportation of the ores,
concentrates or metals, including related insurance, and smelting and refining
charges, including penalties.
Pursuant to the Property Option Agreement, we have a one-time option to purchase
up to two thirds of MinQuest's royalty interest (66.7% of 3%) for $2,000,000 or
$1,000,000 for each 1% purchased. We must exercise our option 90 days following
completion of a bankable feasibility study.
The Company will assume future carrying costs of the property estimated to be
$3,500 per year and will reimburse Minquest for all acquisition costs associated
with claim staking on the property estimated to be a total of $5,500. In
addition, the Company has agreed to use Minquest for on-site project management
at competitive commercial rates.
For all the terms and conditions of the Property Option Agreement, reference is
hereby made to such agreement annexed hereto as Exhibit 1. All statements made
herein concerning the foregoing agreement are qualified by reference to Exhibit
1.
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 hereunto duly authorized.
American Goldfields Inc.
(Registrant)
By: /s/ Donald Neal
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Donald Neal, Chief Executive and Financial
Officer, Treasurer and Secretary
Date: May 12, 2004