Form 8-K for DE BEIRA GOLDFIELDS INC.
17-Jul-2006
Entry into a Material Definitive Agreement, Regulation FD Disclosure, Fi
Item 1.01. Entry into a Material Definitive Agreement.
Pursuant to the terms and conditions of a share sale agreement, De Beira Goldfields Inc. has agreed to acquire an 80% interest in Minanca Minera Nanguipa, Compañía Anónima (the "Subsidiary"), subject to certain closing conditions discussed below. The Subsidiary owns certain mineral exploration property, including plant and equipment, in Ecuador (the "Property").
De Beira will acquire the 80% interest in the Subsidiary from Emco Corporation Inc., S.A. ("Emco") for an aggregate purchase price comprising of 10 million restricted common shares in the capital of De Beira at a deemed price of $3.00 per common share and a cash payment of US$400,000. The increase in the number of shares issued as consideration for the acquisition of the 80% interest in the Subsidiary is a direct result of the decrease in the deemed price per share of $10.00 to $3.00 per share, which was the price per share that was provided in the terms of the letter agreement that was initially disclosed in the Company's Form 8-K filed on June 29, 2006.
On June 16, 2006, De Beira paid a deposit of $500,000 to Emco (the "Deposit") on the acceptance of the letter agreement by Emco.
On July 7, 2006, De Beira completed its due diligence on the Property.
On July 10, 2006, the share sale agreement was signed by the parties. The closing conditions for the acquisition of the 80% interest in the Subsidiary are as follow:
a. Emco will deliver to De Beira the following;
i. proof that a meeting of the directors of the Subsidiary has been held approving the transfer of the shares in the Subsidiary ("Shares") to De Beira;
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i. instruments of transfer for the Shares in favour of De Beira, which have been duly executed by Emco;
ii. all available copies of the constitution of the Subsidiary;
iii. the minute books and other records of meetings or resolutions of members and directors of the Subsidiary;
iv. all mining information on the Property, including all,
1. surveys, maps, plans and diagrams of the Property,
2. drill samples and cores and drilling location maps related to drilling conducted on the Property,
3. geological and geochemical samples and geophysical logs and reports with respect to mineral seams located within the Property and all other technical data and information,
4. mining, beneficiation, marketing and feasibility studies relating to the operations, or proposed operations, on the Property, and
5. other documents or information relating specifically to the Property, to work carried out or proposed to be carried out in the Property, or to the conduct of operations on the Property;
v. all registers of the Subsidiary (including the register of shareholders, register of options, register of directors, register of charges) in proper order and condition and fully entered up to closing;
vi. all cheque books, financial and accounting books and records, copies of tax returns and assessments, mortgages, leases, agreements, insurance policies, title documents, licenses, indicia of title, contracts, certificates and all other records, papers, books and documents of the Subsidiary; and
vii. all current authorizations and other documents issued to the Subsidiary under any legislation or ordinance relating to its business activities.
b. De Beira will deliver to Emco the following:
i. the share certificates representing the 10 million restricted common shares in the capital of De Beira (the "Restricted Shares");
ii. confirmation of the cost base of the Restricted Shares; and
iii. a certified copy of the director's resolution of De Beira approving the Share Sale Agreement.
Further, the share sale agreement provides, among other terms and conditions, the following:
1. $100,000 of the Deposit will be utilized as and deemed to be a loan from De Beira to the Subsidiary for expenditure on the Property.
2. Following the settlement of the closing conditions listed above, De Beira will make available to the Subsidiary an aggregate $7,000,000 as a loan for the following purposes and at the following timetable:
i. US$1,500,000 within 15 days of closing to be used for upgrade expenditures on the Property;
ii. US$400,000 to be used for upgrades to the Property by July 31, 2006;
iii. US$1,375,000 by October 2, 2006 to be paid to the Bank of Guayaquil for existing debt owed by the Subsidiary to the Bank of Guayaquil; and
iv. the balance of US$3,725,000 to be used for exploration expenditures on the Property and to be paid equally over a period of five months beginning September 1, 2006 with the final payment due on January1, 2007.
3. The loan will be repayable on demand by De Beira but only from cash surpluses from the sale of mineral products from the Property. Repayment of the loan will rank in priority ahead of loan repayments to other persons, with the exception of the repayment to the Bank of Guayaquil, and ahead of dividends, capital returns, loans or distributions of any nature to shareholders of the Subsidiary.
4. As security for the loan, the Subsidiary will grant a registrable mortgage over its assets to De Beira in a form approved by De Beira at the cost of the Subsidiary immediately after the Subsidiary's liability to the Bank of Guayaquil is paid in full and the security interest granted by the Subsidiary to the Bank of Guayaquil has been released.
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1. As soon as practicable after the settlement of the closing conditions listed above, Emco and the Subsidiary will take all necessary steps to ensure that the appointment of directors nominated by De Beira results in those constituting the majority of the board of the Subsidiary.
2. The Subsidiary has appointed De Beira as the Joint Operator of the Property with the existing operator, Overton S.A. For this purpose, the particular terms of operation shall consist of Overton, S. A. being in charge of the day-by-day onsite operation, and De Beira being in charge of providing onsite assistance regarding technical oversight for both mining and milling. In any case, procedures and final authorization will be determined by De Beira.
3. De Beira will be responsible for keeping the Property and all permits in good standing during the term of the share sale agreement.
See Exhibit 10.4 - Share Sale Agreement for more details.
Item 7.01. Regulation FD Disclosure.
Limitation on Incorporation by Reference: In accordance with general instruction B.2 of Form 8-K, the information in this report, including Exhibit 10.4, is furnished under Item 9 and pursuant to Regulation FD, and will not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as will be expressly set forth by specific reference in such filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.
The information contained in Exhibit 10.4 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
17-Jul-2006
Entry into a Material Definitive Agreement, Regulation FD Disclosure, Fi
Item 1.01. Entry into a Material Definitive Agreement.
Pursuant to the terms and conditions of a share sale agreement, De Beira Goldfields Inc. has agreed to acquire an 80% interest in Minanca Minera Nanguipa, Compañía Anónima (the "Subsidiary"), subject to certain closing conditions discussed below. The Subsidiary owns certain mineral exploration property, including plant and equipment, in Ecuador (the "Property").
De Beira will acquire the 80% interest in the Subsidiary from Emco Corporation Inc., S.A. ("Emco") for an aggregate purchase price comprising of 10 million restricted common shares in the capital of De Beira at a deemed price of $3.00 per common share and a cash payment of US$400,000. The increase in the number of shares issued as consideration for the acquisition of the 80% interest in the Subsidiary is a direct result of the decrease in the deemed price per share of $10.00 to $3.00 per share, which was the price per share that was provided in the terms of the letter agreement that was initially disclosed in the Company's Form 8-K filed on June 29, 2006.
On June 16, 2006, De Beira paid a deposit of $500,000 to Emco (the "Deposit") on the acceptance of the letter agreement by Emco.
On July 7, 2006, De Beira completed its due diligence on the Property.
On July 10, 2006, the share sale agreement was signed by the parties. The closing conditions for the acquisition of the 80% interest in the Subsidiary are as follow:
a. Emco will deliver to De Beira the following;
i. proof that a meeting of the directors of the Subsidiary has been held approving the transfer of the shares in the Subsidiary ("Shares") to De Beira;
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i. instruments of transfer for the Shares in favour of De Beira, which have been duly executed by Emco;
ii. all available copies of the constitution of the Subsidiary;
iii. the minute books and other records of meetings or resolutions of members and directors of the Subsidiary;
iv. all mining information on the Property, including all,
1. surveys, maps, plans and diagrams of the Property,
2. drill samples and cores and drilling location maps related to drilling conducted on the Property,
3. geological and geochemical samples and geophysical logs and reports with respect to mineral seams located within the Property and all other technical data and information,
4. mining, beneficiation, marketing and feasibility studies relating to the operations, or proposed operations, on the Property, and
5. other documents or information relating specifically to the Property, to work carried out or proposed to be carried out in the Property, or to the conduct of operations on the Property;
v. all registers of the Subsidiary (including the register of shareholders, register of options, register of directors, register of charges) in proper order and condition and fully entered up to closing;
vi. all cheque books, financial and accounting books and records, copies of tax returns and assessments, mortgages, leases, agreements, insurance policies, title documents, licenses, indicia of title, contracts, certificates and all other records, papers, books and documents of the Subsidiary; and
vii. all current authorizations and other documents issued to the Subsidiary under any legislation or ordinance relating to its business activities.
b. De Beira will deliver to Emco the following:
i. the share certificates representing the 10 million restricted common shares in the capital of De Beira (the "Restricted Shares");
ii. confirmation of the cost base of the Restricted Shares; and
iii. a certified copy of the director's resolution of De Beira approving the Share Sale Agreement.
Further, the share sale agreement provides, among other terms and conditions, the following:
1. $100,000 of the Deposit will be utilized as and deemed to be a loan from De Beira to the Subsidiary for expenditure on the Property.
2. Following the settlement of the closing conditions listed above, De Beira will make available to the Subsidiary an aggregate $7,000,000 as a loan for the following purposes and at the following timetable:
i. US$1,500,000 within 15 days of closing to be used for upgrade expenditures on the Property;
ii. US$400,000 to be used for upgrades to the Property by July 31, 2006;
iii. US$1,375,000 by October 2, 2006 to be paid to the Bank of Guayaquil for existing debt owed by the Subsidiary to the Bank of Guayaquil; and
iv. the balance of US$3,725,000 to be used for exploration expenditures on the Property and to be paid equally over a period of five months beginning September 1, 2006 with the final payment due on January1, 2007.
3. The loan will be repayable on demand by De Beira but only from cash surpluses from the sale of mineral products from the Property. Repayment of the loan will rank in priority ahead of loan repayments to other persons, with the exception of the repayment to the Bank of Guayaquil, and ahead of dividends, capital returns, loans or distributions of any nature to shareholders of the Subsidiary.
4. As security for the loan, the Subsidiary will grant a registrable mortgage over its assets to De Beira in a form approved by De Beira at the cost of the Subsidiary immediately after the Subsidiary's liability to the Bank of Guayaquil is paid in full and the security interest granted by the Subsidiary to the Bank of Guayaquil has been released.
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1. As soon as practicable after the settlement of the closing conditions listed above, Emco and the Subsidiary will take all necessary steps to ensure that the appointment of directors nominated by De Beira results in those constituting the majority of the board of the Subsidiary.
2. The Subsidiary has appointed De Beira as the Joint Operator of the Property with the existing operator, Overton S.A. For this purpose, the particular terms of operation shall consist of Overton, S. A. being in charge of the day-by-day onsite operation, and De Beira being in charge of providing onsite assistance regarding technical oversight for both mining and milling. In any case, procedures and final authorization will be determined by De Beira.
3. De Beira will be responsible for keeping the Property and all permits in good standing during the term of the share sale agreement.
See Exhibit 10.4 - Share Sale Agreement for more details.
Item 7.01. Regulation FD Disclosure.
Limitation on Incorporation by Reference: In accordance with general instruction B.2 of Form 8-K, the information in this report, including Exhibit 10.4, is furnished under Item 9 and pursuant to Regulation FD, and will not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as will be expressly set forth by specific reference in such filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.
The information contained in Exhibit 10.4 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
