UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Amendment No. 3
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 15, 2004
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
--------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 000-50399 86-1066675
- ---------------------------- --------------- --------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
ONE EAST LIBERTY STREET, SIXTH FLOOR, SUITE 9, RENO, NEVADA 89504
-----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (775) 686-6081
N/A
---
(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))
This report of Form 8-K/A is being filed to update the disclosure regarding
the sale of the Registrant's common stock as previously disclosed in Item. 1.01
and Item 3.02. The Registrant agreed to accept $100,000 less of an investment
from one of the investors, in addition to the previously disclosed re-pricing of
the shares from $1.00 per share to $0.50 per share. The Registrant has also
made a correction to the name of the former principal independent accountant
in Item 4.01.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On October 20, Pediment Gold LLC ("Pediment"), the Registrant's joint
venture with Nevada Gold Exploration Solutions, L.L.C. ("NGXS") to explore for
gold in the Nevada great basin physiographical area using a proprietary water
chemistry database developed by NGXS, entered into a binding letter agreement
(the "Letter Agreement") for exploration and development on unpatented mining
claims located in north-central Nevada (the "Property") during the three-year
period beginning on October 21, 2004 (the "Earn-In Period"). Pursuant to the
Letter Agreement, Pediment has the right to earn a 70% interest in the Property
and to enter into a joint venture agreement covering the Property. Retention of
the Letter Agreement is predicated on an initial payment of $3,000 (which
Pediment paid in October 2004), and an obligation to incur an aggregate of
$1 million of work expenditures on the Property during the Earn-In Period as
follows: 1) $50,000 during the period from October 21, 2004 through October 21,
2005; 2) $250,000 during the period from October 21, 2005 through October 21,
2006; and 3) $700,000 during the period from October 21, 2006 through October
21, 2007. Pediment may acquire an undivided 70% interest in the Property after
incurring the full amount of the work expenditures. If Pediment acquires such
interest, Pediment is obligated to enter into a joint venture agreement with the
mining company that currently owns the Property. Pediment's interest in the
Property is subject to the mining company's right to earn an additional 40%
interest upon the payment of $3 million to Pediment or to convert its 30%
interest into an interest in 5% of net returns. In order to retain the Letter
Agreement, Pediment must pay all federal claim maintenance fees (or perform
sufficient assessment work) required to maintain the unpatented mining claims
(the "Claims"), and timely make all filings and recordings required in
connection therewith (collectively "Annual Maintenance"). During the Earn-In
Period, Pediment is also responsible for timely payment of all taxes levied or
assessed upon or against the Property and any facilities or improvements located
thereon. Pediment may, at any time in its sole discretion, terminate the Letter
Agreement in its entirety or with respect to any portion of the Claims. If
Pediment terminates the Letter Agreement, it will have no further obligations
other than those related to indemnifying the mining company against losses
related to misrepresentation of Pediment or any exploration, development or
related work conducted by Pediment on the Property, reclaiming the surface of
the Property, and performing remediation work as to the subsurface of the
Property. If such termination occurs prior to June 1, 2005, or after June 1 of
any other year, Pediment will also be obligated to perform Annual Maintenance
for the assessment year beginning on September 1 of the year of termination.
In November 2004, the Company sold an aggregate of 450,000 shares of common
stock to four (4) individual investors for an aggregate of $450,000 (or $1.00
per share). In February 2005, the Company changed the terms of the sale to
provide for 900,000 shares for an aggregate of $450,004 (or approximately $0.50
per share). In April 2005, the Company agreed to accept $100,000 less of an
investment from one of the investors. As a result of these changes in the
original terms of the sale, the Company received $350,004 for an aggregate of
700,000 shares. The spouse of Mark Kucher, the Company's Chief Financial
Officer and a Director of the Company, purchased 40,000 of these shares.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSAL OF ASSETS.
Battle Mountain Gold Exploration, Inc., the Registrant's wholly-owned
subsidiary (the "Subsidiary"), has made payments that will enable it to earn a
50% interest in Pediment Gold, LLC ("Pediment"); however, the Subsidiary will
not earn the 50% interest until Pediment makes certain expenditures as discussed
below. The Subsidiary entered into a joint venture agreement with Nevada Gold
Exploration Solutions, LLC, a Nevada limited liability company ("NGXS"), to form
Pediment to explore the Nevada great basin physiographic area using a
proprietary water chemistry database developed by NGXS. Pursuant to the joint
venture agreement, the Subsidiary 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. The Subsidiary
paid $325,000 in October 2004 and $840,000 in January 2005 (or an aggregate of
$1,165,000) toward the Initial Contribution. The joint venture agreement
provides in pertinent part that the Subsidiary will earn a 50% interest in
Pediment after Pediment's expenditure of the $840,000 payment for the land
acquisition stage. In determining whether the Subsidiary has funded the Program
and earned an interest in Pediment, the following costs will be included:
property acquisition costs, rentals royalties and other payments necessary to
acquire and maintain title to property; salaries, wages, employee benefits and
taxes thereon; materials, equipment and supplies; reasonable transportation;
contract services and utilities; insurance premiums; damages or losses in excess
of insurance proceeds; legal and regulatory costs and expenses; the cost of
annual audits; taxes; overhead; costs of reasonably anticipated environmental
compliance; and any other reasonable direct expenditures for the necessary and
proper conduct of operations (collectively, the "Expenditures"). The
administrative charge paid by Pediment to NGXS as Manager to reimburse NGXS for
its home office overhead and general and administrative expenses (the
"Administrative Charge") will not be counted in determining whether the
Subsidiary has funded the Program and earned an interest in Pediment. The
Company expects that Pediment will have expended the $840,000 payment in March
2005, at which time the Subsidiary will be considered to have earned its 50%
interest in Pediment.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
In November 2004, the Company sold an aggregate of 450,000 shares of common
stock to four (4) individual investors for an aggregate of $450,000 (or $1.00
per share). In February 2005, the Company changed the terms of the sale to
provide for 900,000 shares for an aggregate of $450,004 (or approximately $0.50
per share). In April 2005, the Company agreed to accept $100,000 less of an
investment from one of the investors. As a result of these changes in the
original terms of the sale, the Company received $350,004 for an aggregate of
700,000 shares. The spouse of Mark Kucher, the Company's Chief Financial
Officer and a Director of the Company, purchased 40,000 of these shares. The
Company claims an exemption from registration afforded by Section 4(2) of the
Act since the foregoing issuances did not involve a public offering, the
recipients had access to information that would be included in a registration
statement, took the shares for investment and not resale and the Company took
appropriate measures to restrict transfer. The Company also claims an exemption
from registration afforded by Regulation S under the Act. No underwriters or
agents were involved in the foregoing issuance and no underwriting discounts or
commissions were paid by the Company.
ITEM 4.01. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Effective January 4, 2005, the client auditor relationship between the
Registrant and Morgan & Company, Chartered Accountants ("Morgan") ceased as the
former principal independent accountant was dismissed. On that date, the
Registrant's Board of Directors approved a change of accountants and the
Registrant's management engaged Chisholm, Bierwolf & Nilson, LLC, Certified
Public Accountants ("Chisholm") as its principal independent public accountant
for the fiscal year ended July 31, 2005.
Chisholm is succeeding Morgan. Morgan audited the balance sheet of the
Registrant as of July 31, 2003 and July 31, 2004 and the related statements of
operations, cash flows, and stockholders' deficiency for the years ended July
31, 2003 and July 31, 2004, and for the cumulative period from November 30, 2001
(date of inception) to July 31, 2004. Morgan's report on the financial
statements of the Registrant for the fiscal years ended July 31, 2003 and July
31, 2004, and any later interim period, including the interim period up to and
including the date the relationship with Morgan ceased did not contain any
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles except for concerns about the
Registrant's ability to continue as a going concern.
In connection with the audit of the Registrant's fiscal years ended July
31, 2003 and July 31, 2004, and any later interim period, including the interim
period up to and including the date the relationship with Morgan ceased, there
have been no disagreements with Morgan on any matters of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreement(s), if not resolved to the satisfaction of Morgan would have
caused Morgan to make reference to the subject matter of the disagreement(s) in
connection with its report on the Registrant's financial statements. There have
been no reportable events as defined in Item 304(a)(1)(iv)(B) of Regulation S-B
during the Registrant's fiscal years ended July 31, 2003 and July 31, 2004, and
any later interim period, including the interim period up to and including the
date the relationship with Morgan ceased.
The Registrant authorized Morgan to respond fully to any inquiries of any
new auditors hired by the Registrant relating to their engagement as the
Registrant's principal independent accountant. The Registrant requested that
Morgan review the disclosure and Morgan was given an opportunity to furnish the
Registrant with a letter addressed to the Commission containing any new
information, clarification of the Registrant's expression of its views, or the
respect in which it did not agree with the statements made by the Registrant.
Such letter was filed as an exhibit to the report on Form 8-K/A filed with the
Commission on January 11, 2005.
The Registrant has not previously consulted with Chisholm regarding either
(i) the application of accounting principles to a specified transaction, either
completed or proposed; or (ii) the type of audit opinion that might be rendered
on the Registrant's financial statements; or (iii) any matter that was either
the subject matter of a disagreement (as defined in Item 304(a)(1)(iv)(A) of
Regulation S-B) between the Registrant and Morgan, the Registrant's previous
principal independent accountant, as there were no such disagreements, or an
other reportable event (as defined in Item 304(a)(1)(iv)(B) of Regulation S-B)
during the Registrant's fiscal years ended July 31, 2003 and July 31, 2004, and
any later interim period, including the interim period up to and including the
date the relationship with Morgan ceased. Neither has the Registrant received
any written or oral advice concluding there was an important factor to be
considered by the Registrant in reaching a decision as to an accounting,
auditing, or financial reporting issue.
Chisholm reviewed the disclosure before it was filed with the Commission
and was provided an opportunity to furnish the Registrant with a letter
addressed to the Commission containing any new information, clarification of the
Registrant's expression of its views, or the respects in which it did not agree
with the statements made by the Registrant in response to Item 304 of Regulation
S-B. Chisholm did not furnish a letter to the Commission.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
(d) On November 24, 2004, the Registrant's Board of Directors appointed
Brian Labadie and Anthony Crews as Directors. Messrs. Labadie and Crews 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. Labadie and
Crews may be named have not been determined, as of the filing of this report.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
- ----------- -----------
10.1(1) Short Form of Exploration and Development Agreement of Pediment
Gold, LLC
16.1(2) Letter from Morgan & Company, Chartered Accountant
(1) Filed as Exhibit 10.1 to the report on Form 8-K filed with the Commission
on January 7, 2005.
(2) Filed as Exhibit 16.1 to the report on Form 8-K/A filed with the Commission
on January 11, 2005.
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
-----------------
James E. McKay
Chief Executive Office
Dated: April 22, 2005