UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 9, 2004
COMMISSION FILE NO.: 000-50399
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 86-1066675
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION)
ONE EAST LIBERTY STREET, SIXTH FLOOR, SUITE 9, RENO, NEVADA 89504
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(775) 686-6081
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(ISSUER TELEPHONE NUMBER)
N/A
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(FORMER NAME AND ADDRESS)
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) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act(17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On September 9, 2004, Battle Mountain Gold Exploration Corp., formerly
Hudson Ventures, Inc., a Nevada corporation Inc. (the "Registrant"), entered
into an Exchange Agreement (the "Agreement") with Battle Mountain Gold
Exploration, Inc. ("Battle Mountain" or the "Company"), and the former Battle
Mountain shareholders. Pursuant to the Agreement, the Registrant acquired
11,640,000 shares of common stock (or 100%) of Battle Mountain in exchange for
an aggregate of 11,640,000 newly issued treasury shares of the Registrant's
common stock. The transaction is referred to as the "Exchange" or the
"Acquisition." Immediately after the issuance of shares to the former Battle
Mountain shareholders, there will be 38,510,000 shares of the Registrant's
common stock issued and outstanding.
ITEM 2.01 COMPLETION OF ACQUISITION OF DISPOSITION OF ASSETS.
On September 9, 2004, the Registrant acquired 100% of the issued and
outstanding shares of Battle Mountain pursuant to the Agreement. All of the
shareholders of Battle Mountain approved the transaction. Each Battle Mountain
shareholder received one (1) share of Registrant's common stock for each share
of Battle Mountain common stock for an aggregate of 11,640,000 shares of the
Registrant's common stock. As a result of the Agreement, Battle Mountain became
a wholly owned subsidiary of the Registrant. Along with the execution of the
Agreement, James E. McKay, Ken Tullar and Wade A. Hodges executed stock purchase
agreements to purchase 3,700,000, 1,900,000 and 1,900,000 shares, respectively,
or an aggregate of 7,500,000 shares, of the Registrant's common stock from
Nikoloas Brekropoulos, a former Director of the Registrant. Additionally Bug
River Trading Corp. ("Bug River"), Mark Kucher and Paul Taufen executed stock
purchase agreements to purchase 2,000,000, 1,000,000 and 500,000 shares,
respectively, or an aggregate of 3,500,000, shares of the Registrant's common
stock from Dana Neill Upton, the Registrant's former President, Secretary,
Treasurer and Director.
BUSINESS DEVELOPMENT
Battle Mountain was incorporated in the State of Nevada on January 7, 2004.
Battle Mountain is a mineral exploration company. Battle Mountain's exploration
efforts are primarily focused on gold in the State of Nevada. Nevada is the
third largest gold producing in the world, behind just South Africa and
Australia.
On June 8, 2004, Battle Mountain entered into a joint venture that includes
a Members Agreement and an Operating Agreement (the "Joint Venture") with Nevada
Gold Exploration Solutions, L.L.C., a Nevada limited liability company ("NGXS")
to explore the Nevada great basin physiographic area using a proprietary water
chemistry database developed by NGXS. The Joint Venture calls for Battle
Mountain's participation with NGXS in the exploration, evaluation and, if
justified, the development and mining of mineral resources. Pursuant to the
Joint Venture, Battle Mountain agreed to fund an aggregate of $3,250,000 (the
"Initial Contribution") for an exploration program (the "Program") in connection
with an opportunity to earn up to a 70% interest in Pediment Gold LLC, a newly
created Nevada limited liability company ("Pediment") engaged in the gold
exploration in the Nevada great basin physiographical area using a proprietary
water chemistry database developed by NGXS (the "Database"). Battle Mountain
will earn a 50% interest in Pediment after paying an aggregate of $1,165,000
toward the Initial Contribution, of which Battle Mountain has made a
non-refundable payment of $325,000. The remainder of the Initial Contribution,
as amended on August 15, 2004, is payable as follows: 1) $840,000 due on January
3, 2005; 2) $385,000 due on July 1, 2005; 3) $385,000 due on November 1, 2005;
and 4) $1,315,000 due on April 1, 2006. Battle Mountain's ability to complete
the Initial Contribution is contingent on Battle Mountain raising approximately
$3 million dollars. NGXS will be the operator until Battle Mountain completes
the Initial Contribution, at which time Battle Mountain will become the
operator. If Battle Mountain completes the Initial Contribution, Battle Mountain
will own 70%, and NGXS will own 30%, of Pediment which will own the properties
generated by the Program, except those that may be quitclaimed to Battle
Mountain. NGXS' participation will be on a carried basis. NGXS will not be
required to fund the ongoing costs of additional exploration. Once Battle
Mountain has completed the Initial Contribution, Battle Mountain will have the
option to earn an additional 10% interest in each property owned by Pediment by
funding $750,000 of additional work per property. NGXS will retain the option,
but not the obligation, to conduct such additional work. If Battle Mountain does
not complete the Initial Contribution, any interest in Pediment that Battle
Mountain may earn will be diluted based on the formula set forth in section 1.3
of Exhibit I of the Operating Agreement, included in Exhibit 10.1 (as amended by
Exhibit 10.2) filed herein. If Battle Mountain's interest is diluted to 25% or
less, Battle Mountain's interest will be converted to a 1.25% net smelter
royalty from the production of minerals from the properties owned by Pediment.
Ground Water Chemistry
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Battle Mountain's primary gold exploration efforts will be driven by the
application of a hydro-geochemical testing program to evaluate ground water
chemistry that can identify the presence of gold and associated minerals and
elements in gravel-covered pediment locations, most of which have not been
tested. Testing in this manner can measure the presence of gold and its
associated minerals down to the parts per trillion. This testing will be
conducted as part of the Program initially targeting Nevada's gravel-covered
pediments.
As ground water interacts with rock, it picks up a "scent" of the rocks the
water passes through. If the ground water encounters gold ore or geochemically
altered rocks associated with gold, distinctive water chemical signatures
result. These "signatures" form plumes considerably larger than the gold
deposits themselves, and present a down-slope deposit "footprint" that indicates
mineralization is nearby. Once recognized, this water chemistry "scent" can be
used to back track to the source gold deposit, especially when the deposit is
hidden by gravels and not exposed at the surface. Ground Water Chemistry can
provide a direct indication of the presence of a gravel-covered, gold-bearing
system. The Company believes that Ground Water Chemistry will provide a
powerful, simple and direct exploration methodology within Nevada's basin and
range.
It is imperative that the Company obtain approximately $3.1 million of
additional financing to complete the Initial Contribution and conduct its
business operations. The Company is taking steps to raise equity capital or to
borrow additional funds. There can be no assurance that any new capital will be
available to the Company or that adequate funds will be sufficient for Company
operations, whether from the Company's financial markets, or other arrangements
will be available when needed or on terms satisfactory to the Company. The
Company does not have any commitments from its officers, directors or affiliates
to provide funding. The failure of the Company to obtain adequate financing may
result in the Company having to delay, curtail or scale back its operations.
DESCRIPTION OF PRINCIPAL PRODUCTS AND SERVICES
The Company currently does not offer any products or services. In the event
that the Company discovers economic deposits of gold or other minerals, it
intends to either sell the deposits or, depending on the specific
characteristics of each discovery, conduct its own mining operations to extract
the gold or other minerals for future sale.
COMPETITIVE BUSINESS CONDITIONS
The mineral exploration industry is intensely competitive in all its
phases. Worldwide, the competitive business environment for minerals exploration
is variable and dependent upon geographic location, political and regulatory
environments, technology applications, and the specific mineral commodity being
sought.
COPYRIGHTS, PATENTS, TRADEMARKS & LICENSES
NGXS granted the Company a limited, exclusive license to use the Database,
NGXS' proprietary data reduction and orientation processes for its GIS database
for the state of Nevada, and NGXS' proprietary water sampling protocol. The
Company does not otherwise own, or hold any licenses to, any copyrights,
patents, trademarks or other types of intellectual property.
NEED FOR GOVERNMENTAL APPROVAL AND THE EFFECTS OF REGULATIONS
In some jurisdictions, government regulations require permits and, in some
cases, reclamation bonding. The details of such permits and the size of the
bonds are related to the location of the property and size of the anticipated
exploration-related surface disturbance. The effect of these regulations on the
Company will include the cost of obtaining permits, posting reclamation bonds
(if required), and completing environmental restoration work if a property is to
be abandoned.
RESEARCH AND DEVELOPMENT SINCE JANUARY 7, 2004 (INCEPTION)
Since January 7, 2004 ("Inception"), Battle Mountain has conducted mineral
exploration activities using a newly developed high-technology hydro-geochemical
exploration program in Nevada.
COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS
The costs and effects of compliance with environmental laws vary in
different jurisdictions and countries. In general, Battle Mountain will have to
obtain permits prior to construction of vehicle access trails and drill sites.
In addition, Battle Mountain will be required to perform environmental
reclamation of these disturbances if the property is to be abandoned.
EMPLOYEES
The Company has two (2) full-time employees, both of whom are employed on a
full-time basis.
DESCRIPTION OF PROPERTY
Battle Mountain currently has a one-year lease for approximately 165 square
feet of office space in Reno, Nevada that expires April 30, 2005. Battle
Mountain pays $960 per month for the office space consisting of monthly base
rent of $850 and a monthly charge for telephones and DSL Internet service of
$110.
Battle Mountain is an exploration stage company in search of mineral
deposits primarily in Nevada and has no proven or probable reserves. Battle
Mountain does not own, lease or control any properties. Pursuant to the Joint
Venture, Battle Mountain has an opportunity to earn up to a 70% interest in
Pediment (a joint venture limited liability company formed between Battle
Mountain and NGXS). Pediment has a lease on one (1) property and a right to
explore and develop an adjoining property in north-central Nevada and is
presently negotiating for two additional properties, both of which are adjacent
to the two already held. Because the properties are in a very competitive
mineral exploration area and Pediment is currently negotiating for (but does not
yet hold) the two additional properties, a more detailed location of the
properties owned would create a competitive disadvantage to Pediment, Battle
Mountain and NGXS. As such, the Registrant undertakes to provide the location of
the properties in an amended Form 8-K or other filing at such time as Pediment
has completed or abandoned its current negotiations for the adjacent property.
The properties are accessible by dirt roads. The first of the two properties
held by Pediment is under a mineral exploration lease between Pediment and a
private ranch owner. Retention of the lease is predicated on an initial payment
of $25,000 (which Pediment paid in September 2004), and subsequent annual
payments of $15,000 per year for three years, and $20,000 per year thereafter.
The second property is held under a three-year exploration and development
agreement covering unpatented mining claims owned by a mining company. Retention
of the exploration and development agreement is predicated on an initial payment
of $3,000 (which Pediment paid in October 2004), and an obligation to incur work
expenditures of $1 million in the evaluation of the property over three years.
Pediment will earn a 70% interest in the mining claims after incurring the full
amount of the work expenditures and be obligated to enter into a joint venture
agreement with the mining company. Pediment's interest is subject to the mining
company's right to earn an additional 40% interest upon the payment of
$3,000,000 to Pediment or to convert its 30% interest into an interest in 5% of
net returns.
There have not been any previous mining operations on the properties and
there is no history of development or production from these properties. Both
properties are exploration stage properties without reserves and the proposed
work is exploratory in nature. Work to date has included surface field
examination and surface and subsurface (from water wells) water sampling. The
Program includes soil sampling and geophysical surveys. There has not been, and
there are no plant, equipment or surface disturbances on either property. The
surface area of the majority of both properties is soil-covered without exposure
of rock formations. The exploration planning and current exploration efforts are
based on the earlier identification of anomalous mineral concentrations in the
subsurface ground water. There are no reports concerning the two properties.
LEGAL PROCEEDINGS
The Company is not a party to, and its property is not the subject of, any
pending legal proceedings.
RELATED PARTY TRANSACTIONS
James E. McKay has entered into a consulting agreement with the Registrant
as discussed below under "Item 5.02(c)."
RISK FACTORS
Risks Relating to Our Business
WE NEED TO RAISE APPROXIMATELY $3.1 MILLION OF ADDITIONAL CAPITAL.
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The Company needs to raise approximately $3 million to complete our Initial
Contribution to the Joint Venture and to conduct its business operations. In
August 2004, Battle Mountain renegotiated the dates that the payments are due
toward the Initial Contribution as a payment of $840,000 was coming due in
August 2004, prior to the renegotiation. The Company intends to raise the
additional capital in one or more private placements and/or public offerings.
The Company does not have any commitments or identified sources of additional
capital from third parties or from its officers, directors or majority
shareholders. There is no assurance that additional financing will be available
on favorable terms, if at all. If the Company is unable to obtain additional
capital on terms satisfactory to the Company's management, or at all, it may
cause the Company to delay, curtail or scale back its operations.
BATTLE MOUNTAIN IS AN EXPLORATION STAGE COMPANY THAT LACKS OPERATING HISTORY AND
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HASNOT GENERATED ANY REVENUE SINCE INCEPTION.
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Battle Mountain is an exploration stage company that lacks operating
history, has not generated any revenue since Inception, and has been dependent
on equity capital from its founders (discussed above) to sustain its operations.
There is no historical financial information at this time that investors can use
to evaluate our business. We are initiating a three-year minerals exploration
program for which we need to raise additional capital (discussed above), and
have not realized (and do not expect to realize) revenue in the near future. We
do not have any commitments or identified sources of capital from third parties
or from our officers, directors, majority shareholders or founders. There can be
no assurances that we can raise adequate cash to fund the exploration program.
It is likely that our auditors will express an opinion in their forthcoming
report on our financial statements that there is substantial doubt about our
ability to continue as a going concern. In the event that we cannot continue as
a going concern, you will lose your entire investment.
OUR EXPLORATION PROGRAM IS DEPENDENT ON FAVORABLE WEATHER CONDITIONS.
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The timely completion of our exploration program within the estimated
budget is dependent upon our forecast of favorable weather conditions in Nevada.
Rain and snow storms can hinder part of the preliminary exploration program. We
forecast that the weather could be unfavorable during 30% of the calendar year.
If the aggregate duration of unfavorable weather conditions within the period of
time intended for our exploration program is not within our forecast, it would
have a materially adverse effect upon our ability to complete the exploration
program on a timely basis within the estimated budget, which would have a
material adverse effect on our business, results of operation and financial
condition.
WE ARE ENGAGED IN A BUSINESS THAT IS INHERENTLY SPECULATIVE AND RISKY.
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Mineral exploration and mining is subject to risks related to a substantial
or extended decline in prices of mineral commodities, property acquisition
complexities, and restrictive and/or changing political, social and/or
environmental laws and regulations. Even if we can implement our business plan
and initiate exploration and development activities, there can be no assurance
that we will find economic concentrations of precious metals or other economic
mineral deposits, or if we are able to find precious metals or other economic
minerals, that we can remove such precious metals or other economic minerals in
a manner that will result in a profit for us. Because of the inherently
speculative and risky nature of the business in which we are engaged, our
Company could fail to find economic concentrations of precious metals or other
economic mineral deposits, or perform poorly and as a result you could lose your
entire investment.
OUR INDUSTRY IS COMPETITIVE IN NATURE.
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The minerals exploration, development and production industry is variable
and dependent upon geographic location, political and regulatory environments,
technology applications, and the specific mineral commodity being sought. Many
of our competitors have substantially greater financial, managerial and other
resources than those presently available to us. Numerous well-established
companies are focusing significant resources within our industry that may
adversely affect our ability to be successful. No assurance can be given that
the Company will be able to effectively compete with these other companies or
that competitive pressures, including possible downward pressure on the price of
minerals that we discover, if any, will not arise. In the event that we cannot
effectively compete on a continuing basis or competitive pressures arise, such
inability to compete or competitive pressures will have a material adverse
effect on our business, results of operations and financial condition.
WE HEAVILY DEPEND ON JAMES E. MCKAY AND MARK KUCHER.
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The success of the Company depends upon the personal efforts and abilities
of James E. McKay and Mark Kucher. Mr. McKay serves as a director of the
Registrant and the Registrant's President pursuant to a three-year consulting
agreement, discussed in more detail below under "Item 5.02(c)." Mr. McKay also
serves as the Registrant's Chief Executive Officer, Secretary and Treasurer. Mr.
McKay and the Company may voluntarily terminate the consulting agreement at any
time. Mark Kucher serves as a director of the Registrant and as Chief Executive
Officer of Battle Mountain. The loss of Mr. McKay or Mr. Kucher could have a
material adverse effect on our business, results of operations or financial
condition. In addition, the absence of Mr. McKay or Mr. Kucher will force us to
seek a replacement who may have less experience or who may not understand our
business as well, or we may not be able to find a suitable replacement.
JAMES E. MCKAY, MARK KUCHER, WADE A HODGES AND KENNETH TULLAR CAN VOTE AN
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AGGREGATE OF 45.2% OFTHE REGISTRANT'S COMMON STOCK AND CAN EXERCISECONTROL OVER
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CORPORATE DECISIONS.
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James E. McKay, Mark Kucher, Wade A. Hodges and Kenneth Tullar beneficially
own an aggregate of approximately 42.5% of the issued and outstanding shares of
the Registrant's common stock. Accordingly, they will exercise control in
determining the outcome of all corporate transactions or other matters,
including the election of directors, mergers, consolidations, the sale of all or
substantially all of the Registrant's assets, and also the power to prevent or
cause a change in control. The interests of Messrs. McKay, Kucher, Hodges and
Tullar may differ from the interests of the other stockholders and thus result
in corporate decisions that are adverse to other shareholders.
Risks Related to Our Common Stock
THE MARKET PRICE OF OUR COMMON STOCK HISTORICALLY HAS BEEN VOLATILE.
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The market price of our common stock historically has fluctuated
significantly based on, but not limited to, such factors as: general stock
market trends, announcements of developments related to our business, actual or
anticipated variations in our operating results, our inability to generate
revenues, and conditions and trends in the gold exploration, development and
production industry.
Our common stock is traded on the over-the-counter Bulletin Board (the
"OTCBB"). In recent years the stock market in general has experienced extreme
price fluctuations that have oftentimes have been unrelated to the operating
performance of the affected companies. Similarly, the market price of our common
stock may fluctuate significantly based upon factors unrelated or
disproportionate to our operating performance. These market fluctuations, as
well as general economic, political and market conditions, such as recessions,
interest rates or international currency fluctuations may adversely affect the
market price of our common stock.
WE HAVE NOT CREATED A MARKET TO SUSTAIN THE SIGNIFICANT AMOUNT OF SHARES IN OUR
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PUBLIC FLOAT.
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We have approximately 15,870,000 shares of common stock in our public
float; however, we have not created a market for our common stock. We may not
have adequate time to create such a market prior to the time our shareholders
resell their shares. If our shareholders resell their shares before we can
create a market, it may exert downward pressure on the price of our common
stock.
OUR COMMON STOCK IS SUBJECT TO THE"PENNY STOCK" RULES OF THE COMMISSION WHICH
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LIMITS THE TRADING MARKET IN OUR COMMON STOCK, MAKES TRANSACTIONS IN OUR COMMON
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STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR COMMON STOCK.
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Our common stock is considered a "penny stock" as defined in Rule 3a51-1
promulgated by the Commission under the Exchange Act of 1934 (the "Exchange
Act"). In general, a security which is not quoted on NASDAQ or has a market
price of less than $5 per share where the issuer does not have in excess of
$2,000,000 in net tangible assets (none of which conditions the Company meets)
is considered a penny stock. The Commission's Rule 15g-9 regarding penny stocks
impose additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally persons with net worth in excess of $1,000,000 or an annual income
exceeding $200,000 or $300,000 jointly with their spouse). For transactions
covered by the rules, the broker-dealer must make a special suitability
determination for the purchaser and receive the purchaser's written agreement to
the transaction prior to the sale. Thus, the rules affect the ability of
broker-dealers to sell our common stock should they wish to do so because of the
adverse effect that the rules have upon liquidity of penny stocks. Unless the
transaction is exempt under the rules, under the Securities Enforcement Remedies
and Penny Stock Reform Act of 1990, broker-dealers effecting customer
transactions in penny stocks are required to provide their customers with (i) a
risk disclosure document; (ii) disclosure of current bid and ask quotations if
any; (iii) disclosure of the compensation of the broker-dealer and its sales
personnel in the transaction; and (iv) monthly account statements showing the
market value of each penny stock held in the customer's account. As a result of
the penny stock rules the market liquidity for our common stock may be adversely
affected by limiting the ability of broker-dealers to sell our common stock and
the ability of purchasers to resell our common stock.
In addition, various state securities laws impose restrictions on
transferring "penny stocks" and as a result, investors in our common stock may
have their ability to sell their shares of the common stock impaired.
THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS.
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The Company has paid no cash dividends on its common stock to date and it
is not anticipated that any cash dividends will be paid to holders of the
Company's common stock in the foreseeable future. While the Company's dividend
policy will be based on the operating results and capital needs of the business,
it is anticipated that any earnings will be retained to finance the future
expansion of the Company.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
The Registrant will issue an aggregate of 11,640,000 shares of common stock
in a transaction that will not be registered under the Securities Act of 1933
(the "Act") to the former Battle Mountain shareholders pursuant to the Exchange
whereby Battle Mountain became a wholly-owned subsidiary of the Registrant. The
Registrant will claim the exemption from registration afforded by Rule 506 of
Regulation D under the Act.
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.
On September 9, 2004, the Battle Mountain shareholders entered into the
Agreement with the Registrant, whereby each Battle Mountain shareholder received
one (1) share of Registrant's common stock for each share of Battle Mountain
common stock for an aggregate of 11,640,000 shares of the Registrant's common
stock. Along with the execution of the Agreement, James E. McKay, Ken Tullar and
Wade A. Hodges executed stock purchase agreements to purchase 3,700,000,
1,900,000 and 1,900,000 shares, respectively, or an aggregate of 7,500,000
shares, of the Registrant's common stock from Nikoloas Bekropoulos a former
Director of the Registrant. Additionally Bug River, Mark Kucher and Paul Taufen
executed stock purchase agreements to purchase 2,000,000, 1,000,000 and 500,000
shares, respectively, or an aggregate of 3,500,000, shares of the Registrant's
common stock from Dana Neill Upton, the Registrant's former President,
Secretary, Treasurer and Director. Following the execution of the Agreement and
the stock purchase agreements, the Battle Mountain shareholders owned 22,640,000
shares of the Registrant's common stock. As a result of these transactions, the
following individuals will exercise control over the Registrant:
Shares of Common Stock Beneficially Owned (1)
Name No. of Shares Percentage
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James E. McKay 4,700,000 12.0%
Mark Kucher 8,510,000 (2) 22.1%
Wade A. Hodges 2,100,000 5.5%
Kenneth Tullar 2,100,000 5.5%
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<FN>
(1) The number of shares of common stock owned are those "beneficially owned" as
determined under the rules of the Securities and Exchange Commission, including
any shares of common stock as to which a person has sole or shared voting or
investment power and any shares of common stock which the person has the right
to acquire within sixty (60) days through the exercise of any option, warrant or
right. As of November 9, 2004, there were 38,510,000 shares of common stock
outstanding, 11,640,000 of which relate to the Exchange and have not been issued
as of the filing of this report.
(2) Includes 3,160,000, 1,000,000, and 1,000,000 shares of common stock owned by
Bug River, British Swiss Investment Corp. ("British Swiss"), and Warrior
Resources Corp. ("Warrior"), respectively. Mark Kucher is a director and
shareholder of Bug River, British Swiss, and Warrior.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
(b) On September 9, 2004, Nikoloas Bekropoulos and Philip Stanley Taneda
resigned as Directors of the Registrant. On that same date, Mark Kucher resigned
as the Chief Executive Officer and President of the Registrant.
(c) On September 9, 2004, the Registrant's Board of Directors, via
unanimous written consent, appointed James E. McKay as the Registrant's Chief
Executive Officer and President. Mr. Kucher will continue to serve as Principal
Financial Officer. Mr. Kucher has served in this capacity since his appointment
as an officer of the Registrant in April 2004.
JAMES E. MCKAY, age 58, has served as the Registrant's President, Chief
Executive Officer, Secretary and Treasurer since June 2004. From July 1992 to
May 2004, Mr. McKay was a manager and Director of Miramar Mining Corporation's,
American Eagle Resources and managed the Golden Eagle Mine in Storey Co. in
Nevada. During the same period, Mr. McKay served as a director of Aurex, a
Canadian-Chilean partnership involved in acquisitions and the ownership and
management of an underground copper-gold mine in Chile. From February 1989 to
July 1993, Mr. McKay was a self-employed Consultant. Mr. McKay has over thirty
(30) years of foreign and North American exploration and operational experience.
His experience has included corporate directorships and exploration, operations
and reclamation management. In 1979, following six years as a field exploration
geologist in Africa, Colombia, Mexico, and North America, he was designated the
on-site manager of Homestake Mining Corporation's McLaughlin exploration
project, from its inception through the announcement of the discovery of the 3
million ounces gold deposit. Mr. McKay holds a Masters in Business
Administration and a Bachelor of Science degree in Geological Engineering both
from the University of Nevada.
Effective June 1, 2004, James E. McKay entered into a consulting agreement
with the Registrant pursuant to which Mr. McKay serves as the Registrant's
President. Mr. McKay began assisting Mark Kucher as the Registrant's President,
Chief Executive Officer, Secretary and Treasurer in June 2004. Mr. McKay began
formally serving in these capacities in September 2004. Pursuant to the
consulting agreement, Mr. McKay receives a base salary of $7,500 per month,
three (3) weeks of paid vacation, and an option, which was approved by our board
of directors, to purchase 500,000 shares of the Company's common stock at an
exercise price of $0.99 per share that vests in its entirety on May 31, 2005.
Mr. McKay and the Registrant may terminate the consulting agreement at will,
provided, however, that if the Registrant's terminates the consulting agreement
for any reason, or if Mr. McKay and the Registrant mutually decide to terminate
the agreement at any time before the third anniversary date of the agreement,
the Registrant will pay Mr. McKay a severance at his then current salary through
the third anniversary date upon such termination. If the Registrant terminates
Mr. McKay's employment prior to May 31, 2005, the option will automatically vest
in its entirety on the date of such termination.
Mark Kucher has not entered into a consulting agreement or an employment
agreement with the Registrant.
(d) On September 9, 2004, the Registrant's Board of Directors appointed
James E. McKay and Wade A. Hodges as Directors.
James E. McKay has entered into a consulting agreement with the Registrant
as discussed above under Item 5.02(c).
Wade A. Hodges, a Director of the Company, owns a forty percent (40%)
membership interest in NGXS. As contemplated by the Joint Venture, Battle
Mountain and NGXS formed Pediment to explore the Nevada great basin
physiographic area using a proprietary water chemistry database developed by
NGXS. Mr. Hodges will provide geological services to the Joint Venture in
consideration for $400 per day plus a per diem of $125 per day. Mr. Hodges
received an aggregate of $42,000 as of the filing of this report for services
that he provided to the Joint Venture.
Messrs. McKay and Hodges have not been named to any committees of the
Registrant's Board of Directors, and any committees of the Registrant's Board of
Directors to which Messrs. McKay and Hodges may be named have not been
determined, as of the filing of this report.
ITEM 8.01 OTHER EVENTS
On September 9, 2004, Mark Kucher also resigned as the Registrant's
Secretary and Treasurer. On that same day, the Registrant's Board of Directors
appointed James E McKay as Secretary and Treasurer.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Battle Mountain Gold Exploration, Inc. to be
provided.
(b) Pro Forma Financial Information To Be provided
(c) Exhibits:
2.1 Exchange Agreement
10.1 Exploration Agreement with Nevada Gold Exploration Solutions, LLC,
including Members Agreement and Operating Agreement regarding Pediment
Gold, LLC
10.2 Consulting Agreement with James E. McKay
10.3 Amended Initial Contribution Schedule
SIGNATURES
Pursuant to the requirement 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.
Battle Mountain Gold Exploration Corp.
November 19, 2004
/s/ James E. McKay
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James E. McKay
Chief Executive Officer