-----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, BlNlEa6rTf7ni2bZIrK7b38BVJ84eVDThkJ9DMvwDhTIPUbQ4I0BWLYNjT9Uoeiw /rPyNMT0kl9vCuszl0TCjg== 0000914233-97-000171.txt : 19971211 0000914233-97-000171.hdr.sgml : 19971211 ACCESSION NUMBER: 0000914233-97-000171 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971125 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971210 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LA TEKO RESOURCES LTD CENTRAL INDEX KEY: 0000357281 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 870483319 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-10104 FILM NUMBER: 97735852 BUSINESS ADDRESS: STREET 1: 625 HOWE ST STREET 2: STE 500 CITY: VANCOUVER, B.C. STATE: A1 ZIP: 84101 BUSINESS PHONE: 6046880833 MAIL ADDRESS: STREET 1: 180 EAST 2100 SOUTH STREET 2: STE 204 CITY: SALT LAKE CITY STATE: UT ZIP: 84115 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT UNDER TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): November 25, 1997 Commission File Number: 0-10104 LA TEKO RESOURCES LTD. ------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) BRITISH COLUMBIA 87-0483319 ----------------------------- ------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 625 HOWE STREET, SUITE 500 VANCOUVER, B.C. V6C 2T6 ------------------------------- ------------------ (Address of Principal Executive (Zip Code) Offices) Registrant's Telephone Number, including Area Code: (604) 688-0833 NOT APPLICABLE ---------------------------------------------------------------------- (Former name, former address, and formal fiscal year, if changed since last report) - ------------------------------------------------------------------------------- ITEM 5: OTHER EVENTS - ------------------------------------------------------------------------------- La Teko Resources Ltd. (the "Company") announced on November 25, 1997, that it has signed a letter agreement with Kennecott Exploration Company and Kennecott Canada Exploration, Inc. (collectively, "Kennecott") for the acquisition of two drill stage gold exploration projects, Scheelite Dome in the Yukon and Mt. Distin in Alaska. Both projects occur in geological environments which are similar to the Company's True North joint venture with Newmont in the Fairbanks Mining District and both have excellent potential for the discovery of major gold deposits. These projects complement La Teko's key assets, the True North project, which is continuing to make rapid progress toward the definition of a minable ore body. SCHEELITE DOME, YUKON The Scheelite Dome project, consisting of 575 claims covering approximately 14,375 hectares, is accessible by 25 kilometers of road from Mayo, central Yukon Territory. This is a new discovery made by Kennecott in 1994 at the headwaters of two active placer mining creeks, Highet Creek and Sabbath Creek. Gold mineralization occurs disseminated in schist and quartzite of the Proterozoic Hyland Group adjacent to 90 million-year old granitic intrusions of the Tombstone plutonic suite. Both of the metamorphic host rocks and the intrusions are of similar age and character as those occurring with gold mineralization at Fairbanks, particularly at True North. Kennecott has defined a strong gold in soil geochemical anomaly which extends for over three kilometers along strike and averages one kilometer wide. Within this anomaly, soils average several hundred ppb (parts per billion) gold, with values as high as 1,640 pbb. Trenching within this zone yielded values as high as 84.3 g/ton (gpt) gold and over 4 m and 20.6 gpt gold over 4.5 m. One ridge line trench averaged .33 gpt gold along its total length of 744 m. During the summer of 1997, Kennecott completed a small reverse circulation drill program, including 13 holes for a total of 1052 m, within two restricted parts of the anomaly. All the holes were mineralized and individual holes ranged from .02 gpt over 25 m to .48 gpt over 29 m and .24 gpt over 107. The highest value encountered was 4.88 gpt over 1.5 m. La Teko has the right to earn a 100% interest in the property by completing Cdn$800,000 in exploration over the next four years and by making payments to an underlying claim holder of Cdn$135,000 over the next two years. The underlying vendor also retains a 2% NSR on part of the claim block, which can be purchased for Cdn$2 million. Kennecott retains a one time right, at feasibility, to back in for a 49% interest in the project by paying La Teko 150% of La Teko's expenditures on the project to that date or otherwise receive a 2% NSR. This gold soil geochemical anomaly is extremely large and strong, representing a tremendously large, low grade gold mineralized system as evidenced by initial trenching and drilling. The Company believes that there is an excellent opportunity for the discovery of large sized, enriched zones of economic gold mineralization within this system, which will only be identified by drilling. The Company plans an early summer 1998 mapping, trenching, and geophysical program on the property to refine drill targets, to be followed by a larger diameter reverse circulation drilling program. MT. DISTIN, ALASKA This 30 square kilometer project is accessible by road 32 kilometers north of the famous placer gold mining center of Nome, Alaska, which has produced over 6 million ounces of gold. Kennecott acquired the project from the Bering Straits Native Corporation ("Bering Straits") in 1995 as part of an ongoing regional gold exploration program, which resulted in the identification of the Mt. Distin block as a key center for potential lode gold mineralization. Mt. Distin is underlain by the Paleozoic Nome Group schist and quartzite, overlain by marble which forms the top of Mt. Distin. Gold occurs disseminated with quartz, arsenopyrite and stibnite in faults and shear zones within the schists immediately beneath the marble contact. Geochemical sampling by Kennecott has defined two areas of strongly anomalous gold, arsenic, and antimony in soils. The Steep Creek zone is 4,000 m long by 750 m wide. Kennecott drilled only one hole in this anomaly and encountered 15.2 m of disseminated gold mineralization grading 2.06 gpt gold. The structure believed to be controlling the mineralization has been mapped for one kilometer along strike and is open in both directions. Other potential gold bearing structures have been identified. The second zone, Fred Creek, measures 1,500 m by 600 m and has not been drilled. A single trench across the zone averaged 274 ppb gold over 64 m. Through an assignment of an agreement with Bering Straits from Kennecott, La Teko will have the right to earn a 100% interest in the project by making annual payments to Bering Straits of US$15,000 in year one and US$20,000 for the next four years and completing US$875,000 in exploration over the same five year time frame. Annual cash payments on adjoining claims included in the project are US$10,000 for the first two years and US$25,000 thereafter, with a 2% NSR. After five years, the agreement with Bering Straits will convert to a mining lease. Advance royalty payments are US$50,000 on January 31st of the first year (2003), US$100,000 in the second year, and US$150,000 annually thereafter. Work obligations during the lease period are US$500,000 annually. Bering Straits retains a 2.5% NSR and an 8% Net Profits Royalty, plus the right to purchase a 10% property interest. In return for the assignment, La Teko will issue 30,000 shares to Kennecott upon closing of this transaction and receipt of regulatory approval, 40,000 shares on the first anniversary, 50,000 on the second anniversary, and 80,000 on the third anniversary. In addition, La Teko will issue 500,000 shares to Kennecott upon a production decision for a gold mining operation on the property. This agreement is subject to La Teko advancing Cdn$30,000 to Kennecott on or before January 9, 1998, to signing a definitive agreement on or before February 13, 1998, and to necessary regulatory approval. [Map attached indicating location of new acreage.] - ------------------------------------------------------------------------------- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS - ------------------------------------------------------------------------------- The following is filed as an exhibit to this report: SEC Item No. Reference No. Title of Document - --------- -------------- ---------------------------------------------------- 10 10.01 Letter Agreement dated of 24 November, 1997, between Kennecott Canada Exploration, Inc., and La Teko Resources Ltd., relating to Mt. Distin and Scheelite Dome Projects - ------------------------------------------------------------------------------- SIGNATURES - ------------------------------------------------------------------------------- Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LA TEKO RESOURCES LTD. Dated: December 10, 1997 By /s/ Gerald G. Carlson, President EX-10 2 [LETTERHEAD OF KENNECOTT CANADA EXPLORATION, INC.] 24 November, 1997 Mr. Gerald Carlson President La Teko Resources Ltd. 625 Howe Street Vancouver, British Columbia V6C 2T6 Canada Re: Mt. Distin Project, Cape Nome Recording District Alaska Scheelite Dome Project, Mayo Mining District, Yukon Territory Dear Mr. Carlson: Further to the previous discussions between Kennecott Exploration Company and Kennecott Canada Exploration, Inc. (collectively, "Kennecott") and La Teko Resources, Ltd. ("La Teko"), this letter confirms the intent of Kennecott to negotiate an agreement granting to La Teko a transfer of one hundred percent (100%) of Kennecott's interests in the above referenced projects (collectively, the 'Projects"). The projects are more particularly described in Exhibit "A" hereto. An agreement between Kennecott and La Teko should include, but not be limited to, the following terms: 1. Kennecott shall assign to La Teko one hundred percent (100%) of Kennecott's right, title, and interest (the "Assignment") in the Mt. Distin Project ("MD Project"), subject to the conditions set forth in that certain Exploration Agreement and Option to Lease dated 15 May, 1995 by and between Bering Straits Native Corporation, Golden Glacier, Inc., and Kennecott; and that certain Mineral Lease Agreement dated 5 August, 1996, by and between David L. Lajack, Daniel J. Lajack, William C. Lajack, and Kennecott (collectively, the "MD Agreements"). 2. As consideration for granting such Assignment, La Teko shall assume all obligations of Kennecott for payments and expenditures required by the MD Agreements as follows: Payments Expenditures ------------------------------- Lajack Bering Straits ------------ ------------------------------- 1998 US$10,000 US$15,000 US$125,000 1999 US$10,000 US$20,000 US$150,000 2000 US$25,000 US$20,000 US$150,000 2001 US$25,000 US$20,000 US$200,000 2002 US$25,000 US$20,000 US$250,000 Total US$95,000 US$95,000 US$875,000 As additional consideration for making such Assignment, La Teko shall issue to Kennecott common shares of La Teko on the following schedule: 30,000.........Closing 40,000.........First Anniversary of Option Agreement 50,000.........Second Anniversary of Option Agreement 80,000.........Third Anniversary of Option Agreement 500,000.........Production Decision Kennecott's right to receive such shares shall be contingent upon La Teko not surrendering the MD Project to Bering Straits Native Corporation. 3. Kennecott shall also grant to La Teko an exclusive option to purchase (the "Option") all of Kennecott's right, title, and interest in the Sheelite Dome Project ("SD Project"), subject to Kennecott's right to reacquire an interest in the SD Project as set forth in Paragraph 6 below. As consideration for Kennecott granting such Option, La Teko shall make payments to the underlying landowner, and Exploration Expenditures for the benefit of the SD property in the following amounts: Year Payments Expenditures ---- --------- ------------ 1998 C$ 70,000 C$150,000 1999 C$ 65,000 C$200,000 2000 C$ 0 C$200,000 2001 C$ 0 C$250,000 --------- --------- Total C$135,000 C$800,000 4. If at any time after exercising its Option, La Teko intends to initiate development of the SD Project, La Teko shall notify Kennecott in writing and concurrently provide Kennecott with a copy of the feasibility study recommending the operation of a mine on the SD property. Kennecott shall have the right to advise La Teko within sixty (60) days whether it wishes to reacquire a forty-nine percent (49%) interest in the SD Project. If Kennecott wishes to exercise its reacquisition right, it will do so by providing written notice of its intent to La Teko, and within thirty days thereafter providing La Teko with payment of an amount equal to one hundred and fifty percent (150%) of forty-nine percent (49%) of the expenditures incurred by La Teko on the SD Project. 5. After Kennecott has exercised its reacquisition right, Kennecott and La Teko shall operate the SD Project as a joint venture, incorporating such terms as well be negotiated before execution of the Option Agreement. Thereafter, each party shall contribute its share of development expenditures in relation to its current participating interest. La Teko shall have the option of managing the joint venture, or appointing Kennecott as manager. 6. In the event Kennecott notifies La Teko that Kennecott will not exercise its right to reacquire an interest in the SD Project, Kennecott's interest in the SD Project shall be converted automatically to the right to receive two percent (2%) of net smelter returns from any mine located thereon. 7. Exploration Expenditures shall be made at La Teko's sole discretion and on such parts of the Projects as La Teko may deem appropriate. For the purposes of satisfying the Option, Exploration Expenditures shall mean cash, expenses, and obligations spent or incurred by La Teko on exploration and development activities on or for the Projects, including but not limited to, all fees and assessment work required to keep the Projects in good standing, all expenditures for geophysical, geological, and geochemical work of direct benefit to the Projects, all surveys, drilling, assaying, metallurgical testing and engineering, administration, and all other expenditures directly benefiting the Projects. If La Teko fails to make the required Exploration Expenditures or Payments in any given year, the Option Agreement will terminate automatically. The parties agree that, except for year one (1), which shall be a firm commitment, the Exploration Expenditures set forth above shall be a requirement to extend the contract from year to year, and not an obligation to make expenditures. La Teko may terminate the Option Agreement at any time for any reason or no reason, upon sixty (60) days written notice to Kennecott. 8. Until La Teko exercises its Option, Kennecott shall retain title to the Projects, as appropriate. La Teko shall reimburse Kennecott for the payment of all taxes and fees required to keep the Projects in good standing. Payment of such taxes and fees shall be included in Exploration Expenditures. Upon La Teko exercising its Option, Kennecott shall immediately transfer title of the Projects to La Teko. Such transfer shall be subject to the provisions of Paragraphs 4,5, 6, 9, and 10. 9. La Teko may relinquish title to the Projects, or any part thereof, at any time upon written notice to Kennecott. Kennecott shall have the right to retain, or after the Option is exercised, reacquire such claims at no cost. 10. Kennecott shall have a right of first refusal on any transfer of La Teko's interest in the SD Project. In the event Kennecott exercises its right to reacquire an interest in the SD Project, the preemptive rights contained in the joint venture agreement shall apply to transfers of interests by either party. Such preemptive right restrictions shall not apply to any transfer to an affiliated company. 11. Closing of Option and Assignment Agreements shall be subject to: (a) VSE regulatory approval; and (b) Amendment of the agreement with Bering Straits Native Corporation on terms acceptable to both parties. 12. The paragraphs set forth above are intended by the parties to be the terms of the final Option and Assignment Agreements. The parties intend to be immediately bound by this paragraph 11 and those set forth below. Immediately upon the execution of this Letter Agreement and until such time as a final Option Agreement is executed between the parties, Kennecott shall grant to La Teko the right to: (a) Enter in, under, and upon the Projects as La Teko's sole risk; and (b) Inspect and copy any geological or other data in Kennecott's possession relating to the Projects. 13. Kennecott represents and warrants that as of the effective date of this Letter Agreement that: (a) It has title to the claims comprising the Projects, subject to the paramount title of the United States of America and Canada; (b) To the best of its knowledge, it has paid all taxes, assessments, charges, fees, and other levies imposed upon or required with respect to the Projects, and has filed all returns and reports required therefor; (c) To the best of its knowledge, there are no actual, pending, or threatened lawsuits or administrative actions affecting the Projects; and (d) It has full authority to enter into the transaction contemplated herein. 14. The parties agree to meet at such times and places as are mutually convenient or necessary to negotiate the Option Agreement. Each party shall bear its own costs for the negotiation and registration of such Option Agreement. The parties shall close the option Agreement prior to the close of business on 13 February, 1998. La Teko shall have until 9 January, 1998 to conduct due diligence on the Projects. On or before 9 January, 1998, La Teko shall give Kennecott written notice of its intent to close the Option Agreement. If La Teko intends to close, it shall forward a bank draft for C$30,000 to Kennecott to cover land costs on the SD Project due on 13 January, 1998. In the event that Kennecott does not receive such bank draft in the time specified, this Letter Agreement shall automatically terminate and, subject to VSE approval, La Teko shall issue 15,000 of its common shares to Kennecott as a break-up fee. In the event that VSE approval is not given, La Teko shall reimburse Kennecott for its direct expenses in relation to the proposed transaction in cash. Thereafter, the parties shall have no further liability or obligation to one another. 15. Either party may assign its rights under this Letter Agreement to an affiliated company. 16. The parties agree that any confidential information exchanged shall not be disclosed to any third party without written permission. Neither party shall issue any press release or other public announcement concerning the subject matter of this letter without the written permission of the other party. 17. This Agreement shall be construed under the laws of the Province of British Columbia, Canada, without regard to conflicts of law. If these terms are acceptable to you, please execute this Letter Agreement in the appropriate space below. KENNECOTT EXPLORATION COMPANY /s/ F.D. Hegner Director, Strategic Development KENNECOTT CANADA EXPLORATION, INC. /s/ F. D. Hegner, Vice President ACCEPTED: LA TEKO RESOURCES LTD. /s/ Gerry G. Carlson Date: 24 November, 1997 -----END PRIVACY-ENHANCED MESSAGE-----