SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): September 21, 2005
DRAGON GOLD RESOURCES, INC.
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(Exact name of Registrant as specified in its charter)
000-50541
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(Commission file number)
Nevada 88-0507007
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(State or other jurisdiction of incorporation) (I.R.S. Employer
Identification Number)
338 Euston Road, London NW1 3BT, UK
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(Address of principal executive offices) (Zip code)
+44 (0) 207 416 4920
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions. (see General Instruction A.2. below).
* Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
* Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
* Pre-commencement communications pursuant to Rule 14d-2(b) uner the Exchange
Act (17 CFR 240.14d-2(b)).
Item 1.01 Entry into a Material Definitive Agreement
On September 21, 2005, the Company entered into a cooperative agreement on
exploration and development of the Xijishui Gold Property and its surrounding
area, Jingyuan County, Gansu Province, China.
Under the agreement, the Company and Yinchuan Gaoxin District Shijin Mining Ltd
(Yinchuan Mining), Ningxia, China agreed to form a Sino-Foreign cooperative
joint venture company to explore and develop the Xijishui Gold Property and its
surrounding area. This Agreement contains only the principal terms of the final
joint venture contract expected to be signed within three months of signing this
Agreement.
According to the terms of this Agreement, the Company will be required to
contribute $150,000 to Yinchuan Mining over a period of 1 year after the mineral
exploration rights have been transferred into the the JV Company. In addition,
during the exploration stage, which is expected to last 2 years, the Company
will have the right to earn an interest of 80% in the JV Company by spending
$1,200,000 in exploration activities. The Company could earn up to 95% interest
in the JV Company by further investment in exploration and development
activities, and by paying upto $300,000 to Yinchuan Mining. The term of the
cooperation agreement is 30 years.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 COOPERATIVE AGREEMENT ON EXPLORATION AND DEVELOPMENT OF THEXIJISHUI GOLD
PROPERTY AND ITS SURROUNDING AREA, JINGYUAN COUNTY, GANSU PROVINCE, CHINA
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.
DRAGON GOLD RESOURCES, INC.
September 26, 2005 /s/ Johannes Petersen
President and Chief Executive Officer
Exhibit 10.01 COOPERATIVE AGREEMENT ON EXPLORATION AND DEVELOPMENT OF THE
XIJISHUI GOLD PROPERTY AND ITS SURROUNDING AREA, JINGYUAN
COUNTY, GANSU PROVINCE, CHINA
COOPERATIVE AGREEMENT ON EXPLORATION AND DEVELOPMENT OF THE XIJISHUI GOLD
PROPERTY AND ITS SURROUNDING AREA, JINGYUAN COUNTY, GANSU PROVINCE, CHINA
Party A: Yinchuan Gaoxin District Shijin Mining Ltd., Ningxia, China
Party B: Dragon Gold Resources Inc., United Kingdom
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Through friendly negotiation both parties agree on the following principal terms
regarding exploration and development of the Xijishui Gold Property and Its
Surrounding Area, and its associated minerals, in Jingyuan County, Gansu
Province (herein referred as "the Cooperative Area", see attached "Appendix A"
which shows the mineral right block owned by Party A or to be applied for ):
1. Parties A and B will form a Sino-Foreign cooperative joint venture
company ("the JV Company"), which will carry out exploration and
development within the Cooperative Area in Jingyuan County of Gansu
Province. Upon the JV Company discovering and approving commercially
viable deposit(s), the JV Company will proceed to develop the
deposits.
2. The investment of the JV Company will be carried out in two Stages.
The First Stage will be the Exploration Stage. Subject to the
exploration results of the First Stage, the Second Stage will be the
Entering Development Stage.
3. The registered capital for the JV Company in the First Stage shall be
One and Half Million US Dollars (US$1,500,000).
4. The Parties' cooperative condition and interests are as follows:
(1) During the First Stage of the JV Company, Party A will use its
mineral exploration right and exploration findings (valued at
US$30,000) as its contribution to the joint-venture; Party B will
contribute in cash to the joint-venture;
(2) Once Party B has contributed US$1,200,000 during the Exploration
Stage, the interest ratio of the Parties in the JV Company will be
20% for Party A; and 80% for Party B. The two Parties shall share
risks and profits of the JV Company based on their interest ratios,
respectively. The First Phase of the Exploration Stage will be two
years. The investment in further exploration activities before
entering the Second Phase of the Exploration Stage or before entering
the Development Stage will be subject to the results of the First
Phase.
(3) From the One Million and Three Hundred Fifty Thousand US Dollars
(US$1,350,000) to be invested by Party B in the First Phase of the
Exploration Stage, One Hundred and Fifty Thousand US Dollars
(US$150,000) will be paid in cash to Party A as a compensation, in
accordance with the payment schedule defined below:
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Cash Payment Schedule Amount of Payment (US$)
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Within 10 days after signing of this agreement 40,000
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Within 1 month after the mineral exploration right transferred 40,000
into the JV Company
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Within 1 year after the mineral exploration right transferred 70,000
into the JV Company
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Total (US$) 150,000
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(4) After completion of the First Phase of Exploration Stage, if exploration
and development requires additional investment, then Parties shall make
cash contribution based on 20% (Party A) and 80% (Party B) interest ratio.
If one party fails to or is not willing to invest, then it may elect to
have its interest in the JV Company treated in one of the following ways:
(A) to be diluted by other party's additional capital contribution;
however, Party A's interest shall not be diluted to less than 5% and Party
B shall pay Party A cash US$100,000 as compensation for each 5% reduction
of Party A's interest in the JV Company; (B) to sell or transfer or dispose
all or any portion of its interest in the JV Company; or (C) if one party
elects to sell or transfer a portion of its interest and after that party
has complete such sale or transfer, if that party fails to or is not
willing to make contribution based on its then interest in the JV Company,
then its interest in the JV Company will be diluted by the other parties'
contributions and that party shall lose its right to maintain a minimum
interest in the JV Company.
(5) Within one year after signing of this agreement, when Party B has
contributed its first US$200,000, Party B has the right to elect not to
make further contribution in which case Party B shall transfer all its
interest in the JV Company to Party A at no cost. If Party A causes the
termination of this Agreement or Cooperation, all the cash payment that
Party B paid Party A as compensation should be fully returned to Party B.
5. (1) In order for cooperative exploration activities to commence in a timely
manner, within One and Half Month of signing this letter agreement, Party B
shall wire US$50,000 to an account under Party A's name that is jointly
supervised by the two Parties. The fund will be used to perform an initial
geological evaluation program on the Cooperative Area. The usage and
management of this fund should be decided by the Joint Venture Management
Committee with signatures of Representatives from Both parties. This
contribution shall be accounted for as part of the Party B's contribution
to the JV Company.
(2) The Parties will form a Joint Venture Management Committee to manage
the current program and meanwhile will carry out the preparation work for
the establishment of the Sino-Foreign cooperative joint venture company.
Once the JV Company is established, the JV Company's Board of Directors
will replace the Joint Venture Management Committee.
6. Obligations of the Parties:
6.1 For future exploration work carried out in the Cooperative Area,
Party A will have a priority to be contracted for the geological
exploration work, however, Party A must be able to perform the work
competitively and according to the requirements set out by Joint
Venture Management Committee (or the Board of Directors).
6.2 After signing this agreement, Party A shall provide all necessary
geological information to Party B so that Party B can organize
experts to evaluate the projects. Party B shall keep confidential all
received geological information and shall be fully responsible for
the damage caused by leaking of the information.
6.3 After establishment of the JV Company, Party A shall actively assist
the JV Company to apply for the Exploration Right of the area
surrounding the Xijishui Gold Property. The associated reasonable
expenditures incurred for the Mineral Right application shall be
compensated by the JV Company. The range of the Exploration Right to
be applied for is listed in Appendix B and C (104(0)23'00" to
104(0)37'00" E; 36(0)52'00" to 36(0)59'30" N. For details see the
Appendices).
7. Joint Venture Management Committee (Board of Directors)
7.1 The Joint Venture Management Committee will have 5 members, three
appointed by Party B and two appointed by Party A. The Chairman is
appointed by Party B and Vice Chairman by Party A. The Board of
Directors will have 5 Directors, three appointed by Party B and two
appointed by Party A. The Chairman is appointed by Party B and Vice
Chairman by Party A.
7.2 The General Manager nominated by Party B and Deputy-General Manager
nominated by Party A, will be appointed by the Joint Venture
Management Committee (or the Board of Directors) and will be
responsible for the daily operation of the JV Company.
8. Right of First Refusal
Should either Party (a "Vending Party") elect to sell, transfer, or
otherwise dispose of all or any portion of its interest in the JV Company,
it must first offer such interest (the "Offered Interest") to the other
Party ("Other Party"). The Other Party must reply to the Vending Party
within 30 days after receipt of the offer. If the Other Party does not
intend to increase its interest in the JV Company, the Vending Party may
transfer its Offered Interest within 90 days to a third party but the terms
and conditions shall not be more favorable than the offer to the Other
Party. Should the Vending Party be unable to transfer its Offered Interest
in the JV Company within 90 days or alters terms and conditions of
transferring, the Vending Party must again comply with the above provision
and offer it again to the Other Party.
9. The term of the cooperation is 30 years.
10. This agreement becomes into effective when it is signed by both Parties.
When any parties do not comply with the articles in this agreement, the
other Party can think this agreement become ineffective autonomously.
11. Final Contract
The Parties acknowledge that this agreement contains only the principal
terms of the final contract. Other matters and issues shall be determined
in the final contract. The final joint venture contract shall be signed
within three months of signing this agreement. During this period, the
Party A shall not contact and/or deal with any third party on any forms of
cooperation regarding the Cooperative Area. This Agreement has total four
copies and is written in both Chinese and English, and signing parties
shall each keep two copies. Both Chinese and English copies shall be
equally effective.
Party A: Party B
Yinchuan Gaoxin District Shijin Dragon Gold Resources Inc.
Mining Ltd.
Address: Address:
P.O. 061, Yingchuan City, 338 Euston Road, Suite 323,
Ningxia Hui Autonomous Region London, United Kingdom
China
Representative: Representative:
GUO SHUSHENG XIAOJUN CUI
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Date: September 21, 2005 Date: September 21, 2005
Contact Phone: 086-(0)951-2088224 Contact Phone: 001-604-657-9884 (Canada)
Contact Person: SHUSHENG GUO 086-1369579840 (Beijing)
Fax: 086-(0)951-2080679 Contact Person: XIAOJUN CUI
Fax: 001-604-357-1549
APPENDIX A
DESCRIPTION OF COOPERATIVE AREAS
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Details of Cooperative Areas
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1. Name of Cooperative Area: Xijishui Gold Property
Location of Cooperative Area: Jinyuan County, Xijishui region, Gansu
Province
Coordinates: See the attachment B
Exploration License Number: 6200000530263
Renewal Date of License: 06/24/2005 to 06/24/2006
Area of Property: 19.22 km(2)
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2. Name of Cooperative Area: Surrounding Area of the Xijishui Gold Property
(To be applied for)
Location of Cooperative Area: Same as above
Coordinates: See the attachment B
Exploration License Number: To be applied for
Renewal Date of License: 06/2006
Area of Property: 100 km(2)
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APPENDIX B
EXPLORATION LICENSES AND AREA MAPS FOR COOPERATIVE AREAS