-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J20qNTnPUeU0dOR+DoD9qZOJbnWJUp7VNGDmOSbTBQG6qhx/H++DpTpKFypOpq/C XL/UBMk6wmL5BfHrAeuNBg== 0000950129-97-001816.txt : 19970505 0000950129-97-001816.hdr.sgml : 19970505 ACCESSION NUMBER: 0000950129-97-001816 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970502 SROS: NYSE GROUP MEMBERS: NABORS ALASKA SERVICES CORP. GROUP MEMBERS: NABORS INDUSTRIES INC GROUP MEMBERS: PEAK OILFIELD SERVICES COMPANY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: USMX INC CENTRAL INDEX KEY: 0000315523 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 841076625 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-32149 FILM NUMBER: 97594772 BUSINESS ADDRESS: STREET 1: 141 UNION BLVD STE 100 CITY: LAKEWOOD STATE: CO ZIP: 80228 BUSINESS PHONE: 3039854665 MAIL ADDRESS: STREET 1: 141 UNION BLVD SUITE 100 CITY: LAKEWOOD STATE: CO ZIP: 80228 FORMER COMPANY: FORMER CONFORMED NAME: U S MINERALS EXPLORATION CO DATE OF NAME CHANGE: 19880222 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NABORS INDUSTRIES INC CENTRAL INDEX KEY: 0000798943 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 930711613 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 515 W GREEN RD STE 1200 CITY: HOUSTON STATE: TX ZIP: 77067 BUSINESS PHONE: 7138740035 FORMER COMPANY: FORMER CONFORMED NAME: ANGLO ENERGY INC DATE OF NAME CHANGE: 19890316 SC 13D 1 NABORS INDUSTRIES, INC. FOR USMX, INC. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. _____)* USMX, Inc. (Name of Issuer) Common Stock, $.001 par value per share (Title of Class of Securities) 903 366 102 (CUSIP Number) Anthony G. Petrello Nabors Industries, Inc. 515 W. Greens Road, Suite 1200 Houston, Texas 77067 281-874-0035 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 22, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box . Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 Page 2 of 14 SCHEDULE 13D
CUSIP No. 903 366 102 -------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Peak Oilfield Services Company 92-0123001 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Partnership organized under the laws of Alaska NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,000,000 EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON WITH 10 SHARED DISPOSITIVE POWER 1,000,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.8% 14 TYPE OF REPORTING PERSON* PN
*SEE INSTRUCTIONS BEFORE FILLING OUT! 3 Page 3 of 14 SCHEDULE 13D
CUSIP No. 903 366 102 -------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Nabors Alaska Services Corp. 92-0126638 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Alaska corporation NUMBER OF 7 SOLE VOTING POWER -0- S H A R E S 8 SHARED VOTING POWER BENEFICIALLY 1,000,000 OWNED BY EACH 9 SOLE DISPOSITIVE POWER -0- REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 1,000,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.8% 14 TYPE OF REPORTING PERSON* CO
*SEE INSTRUCTIONS BEFORE FILLING OUT! 4 Page 4 of 14 SCHEDULE 13D
CUSIP No. 903 366 102 -------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Nabors Industries, Inc. 93-0711613 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware corporation NUMBER OF 7 SOLE VOTING POWER -0- S H A R E S 8 SHARED VOTING POWER BENEFICIALLY 1,000,000 OWNED BY EACH 9 SOLE DISPOSITIVE POWER -0- REPORTING 10 SHARED DISPOSITIVE POWER PERSON WITH 1,000,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,000,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.8% 14 TYPE OF REPORTING PERSON* CO
*SEE INSTRUCTIONS BEFORE FILLING OUT! 5 Page 5 of 14 ITEM 1. SECURITY AND ISSUER This statement relates to shares of common stock, $.001 par value per share ("Common Stock"), of USMX, Inc. (the "Issuer" or "USMX"), 141 Union Boulevard, Suite 100, Lakewood, Colorado 80228. ITEM 2. IDENTITY AND BACKGROUND This statement is filed by (i) Peak Oilfield Services Company ("Peak"), an Alaska partnership; (ii) Nabors Alaska Services Corp. ("Nabors Services"), an Alaska corporation and one of two general partners of Peak; and (iii) Nabors Industries, Inc. ("Nabors"), a Delaware corporation and the parent corporation of Nabors Services. Peak, Nabors Services and Nabors are collectively referred to herein as the "Reporting Persons". Peak conducts oil and gas field-related maintenance, service and support and construction activities. The principal business address of Peak is 2525 "C" Street, Anchorage, Alaska 99503. Its general partners are Nabors Services and Peak Alaska Ventures, Inc. ("Ventures"), an Alaska corporation wholly owned by Cook Inlet Region, Inc. ("CIRI"), also an Alaska corporation. CIRI and Ventures are unaffiliated with Nabors and Nabors Services, and have filed a separate Schedule 13D with Peak with respect to their interest in the Issuer. Nabors Services is a holding company with investments in oilfield services entities. Its principal business address is 4300 "B" Street, Suite 600, Anchorage, Alaska 99503. Nabors is a land drilling contractor providing contract drilling and other oilfield services on a worldwide basis. Nabors actively markets over 370 land drilling and 75 land well service rigs. Offshore, Nabors operates 25 platform rigs (including two under construction), six jack-up and five barge rigs. Nabors is a participant in most of the significant oil, gas and geothermal drilling markets in the world. Complementing its drilling and workover services, Nabors provides comprehensive oilfield engineering, civil construction, logistics and management services. Nabors' principal business address is 515 W. Greens Road, Suite 1200, Houston, Texas 77067. Attached hereto as Schedule A, Schedule B and Schedule C and incorporated by reference herein are tables setting forth the name, business address, principal occupation or employment and citizenship of each partner or director, as applicable, and each executive officer of Peak, Nabors Services and Nabors, respectively. During the last five years, none of Peak, Nabors Services, Nabors nor, to the best knowledge of Peak, Nabors Services and Nabors, or any director or executive officer of Peak, Nabors Services or Nabors has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding has been or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION A dispute has arisen with respect to certain obligations to Peak arising from a construction contract related to the Illinois Creek Project. One million shares of Common Stock are to be issued to Peak in connection with the settlement of certain contractual obligations by the Issuer arising from a construction contract related to the Illinois Creek Project. This transaction is described in further detail in response to Item 4. 6 Page 6 of 14 ITEM 4. PURPOSE OF TRANSACTION USMX and Peak entered into an Illinois Creek Erection and Installation Contract, C-96-0302 dated June 11, 1996 (the "Contract") related to the installation and construction of certain improvements on land and mining claims in Alaska. A dispute has arisen between Peak and USMX with respect to payment of, and the amount owed to, Peak pursuant to the Contract. In order to resolve these disputes, Peak, USMX and Dakota Mining Corporation ("Dakota") entered into a binding Letter Agreement dated April 22, 1997. Dakota is a party to the Letter Agreement because it has entered into an agreement pursuant to which a subsidiary of Dakota will merge with USMX. The Letter Agreement provides for the payment of certain cash amounts by USMX and the issuance of 1,000,000 shares of Common Stock of USMX to Peak immediately prior to the consummation of the merger of USMX and a subsidiary of Dakota and after approval thereof by the shareholders of each of USMX and Dakota. If the merger is not consummated prior to June 15, 1997, then USMX will have the right for a 60-day period to settle the disputed claims by paying Peak a cash amount, and no shares of USMX would be issued. If the payment is not made, Peak may obtain a judgment against USMX for $2,782,396 or may rescind the Letter Agreement, in which event Peak could reassert its original claims, and USMX could reassert its objections to such claims. A definitive settlement agreement is being negotiated between the parties. As a result of its entering into the Letter Agreement, Peak is deemed to beneficially own approximately 5.8% of the Issuer's issued and outstanding Common Stock. The text of the Letter Agreement is being filed herewith as Exhibit 1 and is hereby incorporated in full by reference. While Peak, Nabors Services and Nabors have no present plans to purchase additional shares of Common Stock in the open market or otherwise, they could determine to do so depending upon price, market conditions, availability of funds, evaluation of alternative investments and other factors. While none of the Reporting Persons have any present plans to sell any of shares held by them, USMX and Dakota have announced plans for a subsidiary of Dakota to merge with USMX, and the Reporting Persons could determine, based on the same set of factors listed above with respect to purchases, to sell some or all of the shares held by them. The shares of Common Stock to be acquired by Peak will not be held on the record date set for the vote with respect to such merger, and therefore will not be eligible to vote on the merger. The Letter Agreement among Peak, Dakota and USMX provides for certain registration rights as described in Item 6. Other than as discussed above, the persons filing this Schedule have no plans or proposals that relate to or would result in the acquisition by any person of additional securities of the Issuer or the disposition of securities of the Issuer; an extraordinary corporate transaction involving the Issuer or any of its subsidiaries; a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; a change in the present Board of Directors or management of the Issuer; any other material change in the Issuer's business or corporate structure; changes in the Issuer's charter or bylaws or other actions that might impede the acquisition of control of the Issuer by any other person; causing securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an interdealer quotation system of a registered national securities association; causing securities of the Issuer to be eligible for termination of registration pursuant to the Act; or any other similar action. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Peak has the right to acquire ownership of 1,000,000 shares of Common Stock, representing 5.8% of the outstanding shares of Common Stock of the Issuer. Nabors Services, a wholly owned subsidiary of Nabors, is a general partner of Peak and thus Nabors Services and Nabors may be considered to have beneficial ownership of the shares owned by Peak. 7 Page 7 of 14 (b) Nabors and Nabors Services share voting power with CIRI and Ventures, with respect to the 1,000,000 shares that may be acquired by Peak. (c) On April 22, 1997, Peak, USMX and Dakota entered into a Letter Agreement pursuant to which Peak will acquire 1,000,000 shares of Common Stock of USMX upon the satisfaction of certain conditions. The transaction is described above in Item 4. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER USMX, Dakota and Peak are parties to a Letter Agreement as described above in Item 4. Pursuant to the Letter Agreement, Dakota has agreed, under certain conditions and subject to certain limitations, to use its reasonable efforts to effect the registration under the Securities Act of 1933, as amended of the shares of common stock of Dakota that will be held by Peak upon the conversion in the merger of the shares of USMX Common Stock issuable to Peak pursuant to the Letter Agreement. Dakota has agreed to use its best efforts to keep this registration statement effective until Peak may sell such shares without restriction. Dakota has agreed to pay all expenses of the registration, and Peak has agreed to reimburse Dakota for no more than $25,000 of expenses. A definitive settlement agreement, that will contain additional details with respect to the registration rights, is being negotiated between the parties. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS 1. Letter Agreement dated April 22, 1997 among Dakota Mining Corporation, USMX, Inc. and Peak Mining Corporation. 8 Page 8 of 14 Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. PEAK OILFIELD SERVICES COMPANY By: /s/ MIKE R. O'CONNOR Date: May 2, 1997 ---------------------------------------- Mike R. O'Connor President NABORS ALASKA SERVICES CORP. By: /s/ MARK LINDSEY Date: May 2, 1997 ---------------------------------------- Mark Lindsey Vice President NABORS INDUSTRIES, INC. By: /s/ Anthony G. Petrello Date: May 2, 1997 ---------------------------------------- Anthony G. Petrello President 9 Page 9 of 14 SCHEDULE A Set forth below are the name, business address, principal occupation or employment and citizenship of each partner and executive officer of Peak. The name of each entity who is a partner of Peak is marked with an asterisk. All of the individuals listed below are U.S. citizens. Unless otherwise indicated, the business address of each person listed below is 2525 "C" Street, Anchorage, Alaska 99503.
Name and Business Address Principal Occupation or Employment - ------------------------- ---------------------------------- Nabors Alaska Services Corp.* 4300 "B" Street Suite 600 Anchorage, Alaska 99503 Cook Inlet Region, Inc.* Mike R. O'Connor President of Peak Vernon R. McKenzie Senior Vice President of Peak Steven C. Roberts Vice President of Peak
10 Page 10 of 14 SCHEDULE B Set forth below are the name, principal occupation or employment and citizenship of each director and executive officer of Nabors Services. The name of each person who is a director of Nabors Services is marked with an asterisk. All individuals listed below are citizens of the U.S. Unless otherwise indicated, the business address of each person listed below is 4300 "B" Street, Suite 600, Anchorage, Alaska 99503.
Name and Business Address Principal Occupation or Employment - ------------------------- ---------------------------------- Richard A. Stratton* Vice Chairman of the Board of Nabors; 515 W. Greens Road, Suite 1200 President of Nabors Services Houston, TX 77067 Mark Lindsey* Vice President, Secretary and Treasurer of Nabors Services; Vice President - Finance, Nabors Alaska Drilling, Inc.
11 Page 11 of 14 SCHEDULE C Set forth below are the name, business address, principal occupation or employment and citizenship of each director and executive officer of Nabors. The name of each person who is a director of Nabors is marked with an asterisk. All of the individuals listed below are U.S. citizens except Mr. Schmidt who is a citizen of Germany. Unless otherwise indicated, the business address of each person listed below is 515 West Greens Road, Suite 1200, Houston, Texas 77067.
Name and Business Address Principal Occupation or Employment - ------------------------- ---------------------------------- Eugene M. Isenberg* Chairman of the Board and Chief Executive Officer of Nabors Richard A. Stratton* Vice Chairman of the Board of Directors of Nabors Anthony G. Petrello* President and Chief Operating Officer of Nabors Gary T. Hurford* President of Hunt Oil Company Hunt Oil Company Fountain Place 1445 Ross at Field Dallas, TX 75202-2785 Hans W. Schmidt* Retired President of Deutag Drilling, a subsidiary of C. Deilman A.G. Myron M. Sheinfeld* Counsel to the law firm of Sheinfeld, Sheinfeld, Maley & Kay Maley & Kay, a professional corporation 3700 First City Tower located in Houston, Texas Houston, TX 77002 Jack Wexler* International business consultant 205 Oceanway Vero Beach, FL 32963 Martin J. Whitman* Chairman of Danielson Holding 767 Third Avenue Corporation (a financial services New York, NY 10017-2023 holding company); Chairman of Third Avenue Trust (a registered investment company); Chief Executive Officer of M. J. Whitman, Inc. (a broker-dealer) Bruce P. Koch Vice President, Finance and Controller of Nabors Daniel McLachlin Vice President, Administration and Corporate Secretary of Nabors
12 INDEX TO EXHIBITS 1. Letter Agreement dated April 22, 1997 among Dakota Mining Corporation, USMX, Inc. and Peak Mining Corporation. EX-99.1 2 LETTER AGREEMENT DATED 04/22/97 1 Page 12 of 14 EXHIBIT 1 USMX, INC. 141 UNION BLVD., SUITE 100 LAKEWOOD, CO 80228 April 22, 1997 VIA FACSIMILE (907) 263-7070 Mr. Michael O'Connor, President Peak Oilfield Service Company 2525 C Street, Ste. 201 Anchorage, Alaska 99503 Dear Mike: The purpose of this letter is to confirm the various discussions among you and other representatives of Peak Oilfield Service Company ("Peak"), USMX, Inc. and its subsidiary, USMX of Alaska, Inc. (collectively, "USMX"), and Dakota Mining Corporation ("Dakota"), which have culminated in our agreement resolving the dispute regarding services rendered by Peak to USMX on the Illinois Creek Project in Alaska pursuant to that certain Extraction and Installation Contract, C-90-0302 (the "Contract") between Peak and USMX. The objective of our discussions has been the consummation of a definitive settlement agreement which, among other things, would provide for the following material terms: 1. USMX and Dakota agree to pay Peak an aggregate of $5 million in cash and securities in full settlement of Peak's claims pursuant to the Contract; provided, however, that any obligation of Dakota shall accrue only upon the consummation of the Merger (as defined below). The $5 million will be paid as follows: (a) $1,772,000 has been paid by USMX to Peak, receipt of which is acknowledged by Peak; (b) An additional cash payment of $445,598 will be made by USMX no later than one business day after execution of this agreement; (c) An additional cash payment of $1,782,396 will be made by USMX with funds provided by Dakota, plus interest at 9% per annum which shall accrue from April 11, 1997, immediately upon completion of the merger between USMX and Dakota (the "Merger"), but which Merger shall be completed not later than June 15, 1997; and (d) The issuance of 1,000,000 shares of USMX's common stock, par value $.001 ("USMX Stock") to Peak, such shares to be duly authorized, fully paid and non-assessable. The USMX Stock will be issued to Peak immediately prior to the execution of the closing documents in connection with the Merger which is expected to occur on or about May 29, 1997, 2 Page 13 of 14 subsequent to the meetings of shareholders of USMX and Dakota which have been called to approve the Merger. The USMX Stock will be restricted upon issuance, but a sufficient number of shares of Dakota common stock will be registered in the Registration Statement covering the Merger for issuance to Peak in exchange for the USMX Stock. It is our understanding Peak would be able to immediately resell the shares of Dakota common stock it would receive in the Merger on The Toronto Stock Exchange. Dakota shall provide an opinion of nationally recognized counsel acceptable to Peak that such shares may be resold without restriction under United States or Canadian law by Peak on The Toronto Stock Exchange. In addition, Peak would be able to resell such shares on the American Stock Exchange in the U.S., subject only to certain limitations prescribed by SEC rules. Dakota shall provide an opinion of nationally recognized counsel acceptable to Peak that such shares may be resold in the U.S. by Peak subject to the limitations of Rule 145 of the Securities Act of 1933, as amended. In addition, to the extent that Peak determines it necessary to have totally unrestricted trading privileges on the American Stock Exchange, Dakota will, upon request by Peak, use its best efforts to file and have declared effective a Registration Statement covering the resale in the U.S. of the Dakota common stock owned by Peak and deliver an opinion of nationally recognized counsel acceptable to Peak as to the registration of such shares. Dakota's out-of-pocket expenses of registration will be reimbursed by Peak; provided, that, such reimbursement shall be limited to a maximum of $25,000. The settlement agreement shall provide for standard representations and warranties to be made by USMX and Dakota to Peak in connection with the registration of such shares and by USMX and Dakota to Peak and by Peak to USMX and Dakota in connection with the entry into such settlement agreement and for indemnification of Peak in connection with the registration of such shares. The obligation of Dakota to file a Registration Statement and provide unrestricted trading privileges shall remain in effect until Dakota provides an opinion of nationally recognized counsel acceptable to Peak that such shares may be traded without restriction in the absence of any Registration Statement. 2. It will be provided in the settlement agreement that Peak will protect, preserve and maintain its liens until full payment is made as set forth above. USMX and Dakota recognize that this may require Peak to file a lawsuit against USMX prior to May 7, 1997. The parties will seek to stay such lawsuit to provide reasonable opportunity to finalize the settlement agreement. Such action will be without waiver of rights by any party to assert any claims or defenses in the lawsuit. Upon full payment, the liens would be released. In addition, the settlement agreement will provide for mutual releases of all claims between Peak and USMX and Dakota related to the Contract. 3. If the Merger is not consummated by June 15, 1997, USMX would be provided the right for a 60-day period thereafter to pay Peak solely in cash the amount of $2,782,396, plus interest at the rate of 15% per annum from June 15, 1997. If such payment were not timely made, then Peak may choose to either (a) file a confession of judgment against USMX the form of which will be attached as an exhibit to the settlement agreement with respect to the unpaid balance of $2,782,396, plus interest or (b) rescind the settlement agreement and reassert its original claims in which case USMX could reassert its objections to such claims; provided, however, that Peak shall be entitled to retain the $445,598 paid pursuant to this letter agreement and the $1,772,000 previously paid to Peak which amounts would be credited to unpaid amounts under the Contract. 4. This letter is intended to form a binding agreement between the parties who shall in good faith seek to negotiate a definitive settlement agreement by May 4, 1997. 3 Page 14 of 14 Upon the execution by you and return to us of this letter, we shall instruct our respective counsel to cooperate in the preparation of a definitive settlement agreement containing provisions substantially in accord with the foregoing, together with such further appropriate terms and conditions as our counsel may mutually determine. The settlement agreement shall be subject to the approval of all parties. If the foregoing correctly sets forth our agreement in principle, please so signify by signing and returning this letter to USMX and Dakota. It is understood that the respective specific rights and obligations of all parties remain to be defined in the definitive settlement agreement into which this letter and all prior discussions shall merge. Thank you very much for your consideration and cooperation. Very truly yours, USMX, INC. and USMX of Alaska, Inc. By: /s/ ---------------------------------- Authorized Officer AGREED AND ACCEPTED: DAKOTA MINING CORPORATION By: /s/ ---------------------------------- Authorized Officer AGREED AND ACCEPTED: PEAK OILFIELD SERVICE COMPANY By: /s/ ---------------------------------- Authorized Officer -----END PRIVACY-ENHANCED MESSAGE-----