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) February 24, 2005
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
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(Exact name of registrant as specified in its charter)
Nevada 000-50399 86-1066675
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
ONE EAST LIBERTY STREET, SIXTH FLOOR, SUITE 9, RENO, NEVADA 89504
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (775) 686-6081
N/A
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(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K 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 February 24, 2005, the Registrant and Nevada Gold Exploration Solutions,
LLC ("NGXS") amended the operating agreement regarding Pediment Gold LLC (the
"Amended Operating Agreement"). Pediment Gold LLC ("Pediment") is a joint
venture between the Registrant and NGXS to explore the Nevada great basin
physiographic area using a proprietary water chemistry database developed by
NGXS. Capitalized terms used in this report on Form 8-K have the same meaning
given to them in the Operating Agreement, and the exhibits thereto, unless
otherwise defined herein. Except for changes made in the Amended Operating
Agreement, Members continue on and the Operating Agreement remains effective for
all other terms and conditions. NGXS acknowledged that the Registrant, by
agreeing to the terms of the Amended Operating Agreement will have cured a
default under the Operating Agreement that was set forth in a notice of default
dated February 11, 2005 (the "Notice of Default"). By returning $704,205.71 to
the Pediment Account (defined below) and disbursing those funds as discussed
below, the Registrant will have cured a breach that was set forth in a letter
dated February 17, 2005 (the "Notice of Breach"). The Registrant intends to
affect such cure of breach as soon as possible. The Registrant disclosed the
facts and circumstances concerning the Notice of Default and the Notice of
Breach in a Form 8-K filed with the Commission on February 18, 2005.
Pursuant to the Amended Operating Agreement, the Hot Pots and Fletcher
Junction project areas will become the sole site specific project obligations
between the Registrant and NGXS under Pediment. Under the Amended Operating
Agreement, the Registrant is required, on an individual property basis, to spend
$500,000 on the technical evaluation of each property (assuming the project
moves through the Discovery Drilling Stage (as defined in Exhibit I, as amended,
to the Operating Agreement)) within twelve months of commencement of the first
drilling program to earn a 70% interest in the project and become the Operator,
with NGXS being carried for a 30% interest, subject to permitting and drill rig
availability. The $500,000 to be spent on each property reflects deduction for
expenditures made to the date of the Amended Operating Agreement for the Field
Examination Stage. Costs spent on each property during the Land Acquisition
Stage, all expenditures of the $500,000 on each property, discussed above, and
third-party farm out budgets will count towards the Registrant's earn-in of an
interest in each property. Upon expenditure of costs to acquire each property,
the Registrant will own an accelerated vested 50% interest in each property
acquired. The Registrant will have an option to spend an additional $750,000
(the "Additional Contribution") on a per property basis within twenty-four
months of commencement of the first drilling program on that property to earn up
to an 80% interest in the property, which funds are in addition to the
Registrant's initial contribution of $3,250,000 as required under the Operating
Agreement. The Amended Operating Agreement includes approved budgets for each
property as well as proposed funding for reconnaissance sampling.
The Amended Operating Agreement includes an Authority for Expenditure
Procedure pursuant to which the Registrant will open a separate savings account
to hold initial funds of $704,205.71 plus future cash calls as required by the
Amended Initial Contribution Schedule, which was filed as Exhibit 10.3 to the
Registrant's Form 8-K filed with the Commission on November 11, 2004. A failure
to deposit funds or a transfer of funds for any purpose other than funding
Pediment's activities will constitute a default and the Registrant's willful and
immediate termination of its intent to continue funding Pediment's activities.
Any funds transferred out require the prior notification of all members of the
Registrant's board of directors (the "Board") and NGXS and the signature
approval of three members of the Board. NGXS is responsible for submitting
exploration plans and budgets to the Registrant for Board approval. As the
Board approves funds for expenditure, the entire amount of such approved funds
will be transferred into the current joint Pediment working checking account
(the "Pediment Account") and work will begin under the direction of NGXS as
scheduled. Dispersal of funds from the Pediment Account will require the
signatures of a person authorized by the Registrant and a person authorized by
NGXS. Upon entry into the Amended Operating Agreement, $595,000 of the
$704,205.71 was deposited into the Pediment Account. The balance of the
remaining funds will be deposited into the Registrant's savings account.
So long as water sampling activities are being funded, the Registrant may
acquire (within the context of the Operating Agreement) any of the areas for
land acquisition that were identified in a Field Examination Stage Summary
Report (the "Report") that was submitted by Pediment on January 11, 2005 (the
"Submittal Date"). The Registrant has ten days to act (within the context of
the Operating Agreement) upon recommendations for specific property advancements
in future summary reports submitted in the Field Examination Stage. After nine
months from the Submittal Date of the Report or the submittal date of future
summary reports, NGXS has the right (including the right to negotiate and enter
into agreements with third parties outside of the Operating Agreement) to
acquire any of the identified areas in the Summary Report or future summary
reports, as the case may be, that have not been acted upon by the Registrant.
Any area acquired or so acted upon by NGXS will become the sole property of NGXS
with no interest of any kind being retained by the Registrant or Pediment.
In addition, the remuneration paid to James E. McKay, the Registrant's
Chief Executive Officer, and the Registrant's infrastructure costs in Reno,
Nevada will be charged to Pediment, but will not count toward the Registrant's
earn-in of any interest in the properties. NGXS will forgo a 3% fee for
management of Pediment. All of Pediment's activities that are conducted by
Kenneth N. Tullar or Wade A. Hodges will be billed directly to the Pediment
Account at a flat rate of $8,000 per month per person plus actual expenses.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
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10.1(1) Operating Agreement of Pediment Gold LLC
10.2* Amendment to Operating Agreement of Pediment Gold LLC
(1) Filed as Part II, of Exhibit 10.1 to the Registrant's Form 8-K filed with
the Commission on November 11, 2004, and incorporated herein by reference.
* Filed herein.
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.
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
By: /s/James E. McKay
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James E. McKay
Chief Executive Officer
Dated: February 28, 2005