-----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, Bzga+95hz0DLFDZKlRiBaV0YjK3XcJE8YLClKXvBFolAtogu9egX1abU/3ZqLolg CKnj9lm2aqQIf2AsNfRXFw== 0001021890-96-000011.txt : 19961021 0001021890-96-000011.hdr.sgml : 19961021 ACCESSION NUMBER: 0001021890-96-000011 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19961018 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISCHER WATT GOLD CO INC CENTRAL INDEX KEY: 0000844788 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880227654 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17386 FILM NUMBER: 96644997 BUSINESS ADDRESS: STREET 1: 1410 CHERRYWOOD DRIVE CITY: COEUR DALENE STATE: ID ZIP: 83814 BUSINESS PHONE: 2086646757 MAIL ADDRESS: STREET 2: 1410 CHERRYWOOD DRIVE CITY: COEUR DALENE STATE: ID ZIP: 83814 10QSB 1 QUARTERLY REPORT ON FORM 10-QSB U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended APRIL 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- -------- Commission File Number 0-17386 FISCHER-WATT GOLD COMPANY, INC. -------------------------------------- (Exact name of small business issuer as specified in its charter) NEVADA 88-0227654 --------------------------- ------------------- (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 1621 North 3rd Street, Suite 1000, Coeur d'Alene, ID 83814 ---------------------------------------------------------- (Address of principal executive offices) (208) 664-6757 ------------------------- (Issuer's telephone number) 1410 Cherrywood Drive, Coeur d'Alene, ID 83814 ---------------------------------------------- (Former address of principal executive office) Check whether the issuer (l) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ } No [X] The number of shares of Common Stock, $0.001 par value, outstanding as of September 30, 1996 was 31,196,760. Transition Small Business Disclosure Format (check one): Yes [ ] No [X] Part 1 - Financial Information Item 1. Financial Statements FISCHER-WATT GOLD COMPANY, INC. BALANCE SHEETS
April 30, 1996 ASSETS (Unaudited) CURRENT ASSETS: Cash ...................................................... $4,12l,O00 Accounts receivable ....................................... 1,041,000 Due from related parties .................................. 28,000 Inventories ............................................... 196,000 Prepaid Expenses .......................................... 25,000 ------------ Total current assets ......................................... 5,411,000 MINERAL INTERESTS, net ....................................... 2,990,0OO PLANT, PROPERTY, AND EQUIPMENT ............................... 1,639,OOO LESS ACCUMULATED DEPRECIATION ................................ (110,000) ------------ 1,529,000 OTHER ASSETS ................................................. 40,000 ------------ Total assets ................................................. $ 9,970,000 ------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable .......................................... $1,796,OOO and accrued expenses Notes payable ............................................. 454,000 Income taxes payable ...................................... 91,000 ------------ Total liabilities ......................................... $2,341,000 COMMITMENTS AND CONTINGENCIES, Notes 1,3, 6 SHAREHOLDERS' EQUITY: Preferred Stock, non-voting, convertible, $2.00 par value, 250,000 shares authorized; 0 shares outstanding ...................................... -0- Common stock, $0.001 par value, 50,000,000 shares authorized; 31,187,160 shares outstanding at April 1996 ............................................. 31,000 Additional paid-in capital .................................. 12,720,000 Foreign Currency translation adjustments .............................................. 461,000 Deficit .................................................... (5,583,000) ------------ Total shareholders' (deficit) equity ......................... 7,629,000 ------------ Total liabilities and shareholders' equity ...................................... $ 9,970,OO0 ------------
The accompanying notes are an integral part of these balance sheets. 2 FISCHER-WATT GOLD COMPANY, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended April 30, 1996 1995 ----- ----- SALES OF PRECIOUS METALS ......................................... $ 1,057,000 $ -0- COSTS APPLICABLE TO SALES ........................................ (1,533,000) -0- ------------ ---------- LOSS FROM MINING ................................................. (476,000) -0- COSTS AND EXPENSES: Abandoned and impaired mineral interests ............................................. 3,000 22,000 Selling, general and administrative ........................... 269,000 69,000 Exploration ................................................... 66,000 3,000 ------------ ---------- 338,000 94,000 ------------ ---------- OTHER INCOME (EXPENSE): Interest income (expense) ................................. 26,000 (22,000) Unrealized gain on trading securities ..................... -0- 50,000 Other (expense) income .................................... (5,000) (11,000) Currency Exchange Losses, net ............................. (110,000) -0- ------------ ---------- (89,000) (17,000) ------------ ---------- Net loss before income taxes ..................................... (903,000) (76,000) TAX PROVISION .................................................... -0- (1,000) ------------ ---------- NET LOSS ......................................................... $ (903,000) $(77,000) ------------ ---------- (LOSS) INCOME PER SHARE AND COMMON EQUIVALENT ............................................. $ (.04) $ (.01) ------------ ---------- WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING ............................ 25,420,000 12,344,000 ------------ ----------
The accompanying notes are an lntegral part Of these statements. 3 FISCHER-WATT GOLD COMPANY, INC. STATEMENTS OF CASH PLOWS (UNAUDITED)
Three Months Ended April 30, ---------------------------------------- 1996 1995 ------------ ------------ Net cash provided by (used in) operating activities .................................................... (944,000) 26,000 ----------- ----------- Net cash (used in) provided by investing activities .................................................... 4,830,000 (28,000) ----------- ----------- Net cash provided by (used in) financing activities .................................................... (31,000) 6,000 ----------- ----------- NET INCREASE IN CASH ....................................................... 3,855,000 4,000 CASH, at beginning of period ............................................... 266,000 6,000 CASH, at end of period ..................................................... $ 4,121,000 $ 10,000 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest ............................... $ -0- $ 2,000 Cash paid during the period for taxes .................................. 18,000 -0- SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NONCASH ACTIVITIES: Application of bonus on unproven property to offset accrued interest expense ...................................................... $ -- $ 25,000 Cost basis of trading securities sold in connection with loss on trading securities .................................................... $ -- 130,000 Securities issued in exchange for professional services rendered ........................................ $ 18,000 -0-
The accompanying notes are an integral part of these statements. 4 FISCHER-WATT GOLD COMPANY, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Financial Condition and Liquidity The accompanying financial statements are unaudited; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation have been made. These financial statements and notes thereto should be read in conjunction with financial statements and related notes included in Fischer-Watt Gold Company, Inc.'s ("Fischer-Watt" or the "Company") Annual Report on Form 10-KSB for the year ended January 31, 1996. Future Financing and Realization While Fischer-Watt reported net income in fiscal 1996 principally as a result of realizing gains on the sale or exchange of non-producing mineral properties, it has an accumulated deficit of $4,900,000 and continues to experience negative cash flow from operations and incur losses from mining. Management believes that as the recently acquired producing gold mine property is further developed and production levels increase, sufficient cash flows will exist to fund the Company's continuing mining operations and exploration and development efforts in other areas. Management anticipates achieving levels of production sufficient to fund the Company's operating needs by the end of fiscal 1998 and until then will fund operations with the cash raised in its March 1996 offering (see Note 6). The ability of the Company to achieve its operating goals and thus positive cash flows from operations is dependent upon the future market price of gold, and the ability to achieve future operating efficiencies anticipated with increased production levels. Management's plans may require additional financing or disposition of some of the Company's non-producing assets. While the Company has been successful in raising cash from these sources in the past, there can be no assurance that its future cash raising efforts and anticipated operating improvements will be successful. 2. Unaudited Pro Forma Information The following unaudited pro forma information has been prepared on the basis that the acquisitions of Greenstone Resources of Columbia Ltd. ("GRC") and Great Basin Management Co. Inc., ("GBM") had both occurred at the beginning of fiscal 1995. The unaudited pro forma information includes adjustments to depreciation and depletion expense based on the allocation of the purchase price to the property, plant, equipment and mineral interests acquired. 5 Quarter ended April 30, 1995: Sales of precious metals ............................. $ 585,000 Net income (loss) .................................... $ (777,000) Net earnings (loss) per common share ................................... $ (.05) 3. Accounts Receivable Accounts receivable at April 30, 1996 consist of: Taxes Receivable ..................................... $ 784,000 Trade ................................................ 250,000 Other ................................................ 7,000 ---------- Total accounts receivable ............................ $ 1,042,000 4. Inventories Inventories at April 30, 1996 consist of: Finished products and products in process ............................... $ 130,000 Supplies, materials and spare parts ................................... 66,000 ---------- Total inventories ................................... $ 196,000 5. Mineral Interests Capitalized costs for mineral interests at April 30, 1996 consist of: Operating mining property: E1 Limon Mine, Oronorte District .................. $ 611,000 Less accumulated depletion ....................... 278,000 ---------- 333,000 Non-operating properties, net of reserves: E1 Carmen, Colombia ............................... 772,000 La Aurora, Colombia ............................... 219,000 Juan Vara, Colombia ............................... 5,000 Afghan-Kobeh, Nevada .............................. 647,000 Coal Canyon, Nevada ............................... 548,000 Red Canyon, Nevada ................................ 334,000 Tempo, Nevada ..................................... 50,000 Oatman, Arizona ................................... 10,000 Modoc, California ................................. 72,00O ---------- Total mineral interests ............................. $ 2,990,000 6 6. Equity and Common Stock In November 1995, the Company completed a private placement of 6,067,500 common shares and 3,033,750 warrants to purchase common shares, The net proceeds from this private placement of $816,000 are to be used to finance the expansion and operation of the Company's E1 Limon gold mine in Colombia. Each warrant can be exercised to purchase a common share for $0.30 through August 1997. Costs of issuing these common shares and stock warrants totaled $94,000 and were subtracted from the gross proceeds in determining the amount of additional paid in capital. The Company issued 4,125,660 common shares on January 29, 1996 in exchange for all of the issued and outstanding common shares of GBM. The shares had an estimated fair market value of $1,234,000 and the costs of the issuance of $21,000 were subtracted from the proceeds in determining the amount of additional paid in capital. On March 12, 1996, the Company sold 9,960,000 common shares and 4,980,000 warrants to purchase common shares to investors located outside of the United States pursuant to a Regulation S offering, The net proceeds from this offering of $4,930,000 are to finance the Company's capital equipment and working capital needs related to the further development and expansion of the Colombian gold mining operation and the Company's exploration and development activities in Colombia and Nevada. Each of these warrants issued entitles the holder to purchase one additional share of Fischer-Watt common stock at an exercise price of $.75 through February 28, 1998. These securities were not registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Costs of issuing these common shares and warrants totaled $348,000 and will be subtracted from the gross proceeds in determining the amount of additional paid in capital. Item 2. Management's Discussion and Analysis or Plan of Operation The following is a discussion of Fischer-Watt Gold Company, Inc.'s (the "Company") current financial condition as well as its operations for the three months ended April 30, 1996 (fiscal 1997) and April 30, 1995 (fiscal 1996). This discussion should be read in conjunction with the Financial Statements in Item 1 of this report as well as the Financial Statements in Form 10-KSB for the fiscal year ended January 31, 1996 on file with the Securities and Exchange Commission, as the discussion set forth below is qualified in its entirety by reference thereto. 7 Liquidity and Capital Resources Short-Term Liquidity As of August 31, 1996, the Company had $2,061,000 in cash and accounts payable of $333,000. While Fischer-Watt reported net income in fiscal 1996 principally as a result of realizing gains on the sale or exchange of non-producing mineral properties, it has an accumulated deficit of $5,583,000 and continues to experience negative cash flow from operations and incur losses from mining. Management believes that as the recently acquired producing gold mine property is further developed and production levels increase, sufficient cash flows will exist to fund the Company's continuing mining operations and exploration and development efforts in other areas. Management anticipates achieving levels of production sufficient to fund the Company's operating needs by the end of fiscal 1998 and until then will fund operations with the cash raised in its March 1996 offering (see Note 6). The ability of the Company to achieve its operating goals and thus positive cash flows from operations is dependent upon the future market price of gold, and the ability to achieve future operating efficiencies anticipated with increased production levels. Management's plans may require additional financing or disposition of some of the Company's non-producing assets. While the Company has been successful in raising cash from these sources in the past, there can be no assurance that its future cash raising efforts and anticipated operating improvements will be successful. On April 30, 1996, the Company's current ratio was 2.3:1 based on current assets of $5,411,000 and current liabilities of $2,341,000. On April 30, 1995, Fischer-Watt's current ratio was .43:1 based on current assets of $305,000 and current liabilities of $715,000. The improvement in the current ratio at April 30, 1996 is primarily related to the receipt of funds from the November and March stock offerings, cancellation of a $500,000 note payable to Kennecott Exploration Company related to the sale of the Company's 20% interest in the Minas de Oro gold project in Honduras in May 1995, and the addition of accounts receivable and inventory balances associated with the operating mine, all of which are partially offset by the sale of trading securities, the addition of accounts payable associated with the operating mine, and the addition of notes payable incurred with the acquisitions of GRC and GBM (see discussions below). 8 Pursuant to agreements among Greenstone Resources Ltd. ("Greenstone"), Dual Resources Ltd. ("Dual"), and the Company, Greenstone made a payment of $300,000 to Dual to acquire 2,800,000 shares of Oronorte common stock for the benefit of the Company. The Company's obligation to repay Greenstone this $300,000 is evidenced by a note payable which bears interest at the rate of 10% per annum. This note became payable, in full, on June 20, 1996 at which time the Company withheld payment while negotiating the settlement of amounts owed to the Company by Greenstone. Prior to its acquisition by the Company, GBEM, borrowed funds from Serem Gatro Canada Inc. This loan was evidenced by a note. The note payable is for monies lent and advanced to GBEM by SGC during the period April 1, 1995, to May 31, 1995, as provided under the share purchase agreement among Serem Gatro, GBEM and GBM made as of May 31, 1995. The note was to be repaid not later than September 30, 1995. and bears interest at 8%. Repayment of this note payable and related interest is currently being negotiated with SGC, Management believes that the Company has adequately reserved its reclamation commitments. Long-Term Liquidity Cash flows from operations during fiscal 1998 are expected to be sufficient to fund operating and administrative expenses and exploration expenses. The Company may require additional funding from equity or borrowings if a major expansion at its Oronorte property is necessary and cost justified or an acquisition opportunity arises. At April 30, 1996 the Company had no long term debt compared to $96,000 at April 30, 1995. The $96,000 consisted solely of a nonrecourse note payable to Greenstone Resources Canada issued for the loan of funds to purchase shares in Compania Minerales de Copan S, A. de C. V. Repayment was due in 1999 and the Copan shares were the sole security for the loan. This debt was settled in conjunction with the sale of the Copan shares. Results of Operations The Company had net loss of $903,000 ($.04 per share) compared to net loss of $77,000 ($.01 per share) in the quarter ended April 30, 1996 and 1995, respectively. The most significant reason for this change is related to the acquisition of the Oronorte project, which reported a loss from mining of $476,000, general and administrative expenses associated with mining operations of $135,000, and a loss from currency exchange of $110,000 in the quarter ended April 30, 1996. There were no mining operations in fiscal 1995. Additionally, the acquisition of GBM resulted in an increase in exploration expenses of $63,000 in the quarter ended April 30, 1996, as compared to the quarter ended April 30, 1995. 9 Revenues The Company had sales of precious metals of $1,057,000 representing 2,603 ounces of gold and 2,464 ounces of silver in the quarter ended April 30, 1996. Production costs totaled $1,533,000 for the initial period. There were no comparable sales or costs in fiscal 1995. The Company does not presently employ forward sales contracts or engage in any hedging activities. Costs and Expenses The cost of abandoned mineral interests decreased from $22,000 to $3,000 in quarters ended April 30, 1995 and 1996, respectively, During the current fiscal year, La Victoria with a cost basis of $3,000 was abandoned, and the Company abandoned the Rio Tinto property in the first quarter of the prior fiscal year 1996 after a limited explorations program conducted at the end of fiscal 1995 and the beginning of fiscal 1996 could not confirm earlier mineral values. Abandonments are a natural result of the Company's ongoing program of acquisition, exploration and evaluation of mineral properties. When the Company determines that a property lacks continuing economic value, it is abandoned. It cannot be determined at this time when or if any of the Company's current property interests will be abandoned. Selling, general and administrative costs increased from $69,000 to $269,000 in quarters ended April 30, 1995 and l996, respectively. The increase of $200,000 primarily relates to an increase in general and administrative expenses associated with mining operations of $135,000, coupled with an increase in legal and corporate relations expenses. Exploration expense increased to $66,000 in the first quarter of fiscal 1997 from $3,000 in the first quarter of fiscal 1996. This increase is due to the acquisition of GBM. Net interest income (expense) increased from $(22,000) in fiscal 1996 to $26,000 in fiscal 1997. This increase is due to the elimination of interest accrued on the $500,000 note to Kennecott offset by interest earned in the proceeds from the November and March stock offerings. The Company accounts for foreign currency translation in accordance with the provisions of Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS No. 52"). The assets and liabilities of the Colombian unit are translated at the rate of exchange in effect at the balance sheet date. Income and expenses are translated using the weighted average rates of exchange prevailing during the period. The related translation adjustments are reflected in the accumulated translation adjustment section of shareholders' equity. The Company recognized a currency exchange loss of $110,000 in the quarter ended April 30, 1996. There was no comparable gain or loss in the quarter ended April 30, 1995. 10 The Company is subject to inflationary pressures of the Colombian economy. During the past year the rate of inflation in Colombia was approximately 20%, wherein the currency exchange rate of the U.S. dollar to the Colombian peso increased by only 8%. The Company is striving to implement cost-cutting measures in an effort to reduce per unit production costs and increase production efficiencies. However, there can be no assurance that the Company will be able to achieve such cost cutting measures and production efficiencies. In addition, the Company cannot anticipate what the future inflation and exchange rates will be and therefore cannot accurately predict the aggregate effect of these factors. Commitments and Contingencies Upon the purchase of GRC, the Company assumed GRC's liabilities related to transactions governed by Colombian law concerning the movement of foreign currency into and out of Colombia. The Colombian government has the right to request an audit of foreign currency movement within a two year time frame. No request or notice of an audit has been received from the Colombian government to date. Therefore, the likelihood of a loss resulting from the actions of GRC prior to the Company's purchase cannot presently be determined. Oronorte is currently the defendant in several claims relating to labor contracts and employee terminations which occurred during a labor strike. This strike and the resulting terminations took place during the former ownership of Oronorte. The estimated amount of the claims against Oronorte totals approximately $200,000. In the event of an unfavorable outcome from Oronorte's perspective, there is a likelihood that the Company would have the right to claim indemnity from Greenstone Resources Canada Ltd. pursuant to the terms of the agreements related to the acquisition of Oronorte. In connection with the purchase of GRC, Greenstone agreed to reimburse the Company for certain liabilities existing at the date of purchase in excess of $1,000,000. At the present time, the Company has paid or identified as current payables approximately $309,000 in excess of the $1,000,000. Management is seeking to recover these excess liabilities from Greenstone and is unable to determine Greenstone's ability or willingness to fund its share of these excess liabilities in accordance with the terms of the purchase agreement and accordingly has not recorded a receivable from Greenstone as of April 30, 1996. 11 Statements which are not historical facts contained herein are forward looking statements that involve risks and uncertainties that could cause actual results to differ from projected results. Such forward-lookinq statements include statements regarding expected commencement dates of mining or mineral production operations, projected quantities of future mining or mineral production, and anticipated production rates, costs and expenditures, as well as projected demand or supply for the products that FWG and/or FWG Subsidiaries produce, which will affect both sales levels and prices realized by such parties. Factors that could cause actual results to differ materially include, among others, risks and uncertainties relating to general domestic and international economic and political risks associated with foreign operations, unanticipated ground and water conditions, unanticipated grade and geological problems, metallurgical and other processing problems, availability of materials and equipment, the timing of receipt of necessary governmental permits, the occurrence of unusual weather or operating conditions, force majeure events, lower than expected ore grades and higher than expected stripping ratios, the failure of equipment or processes to operate in accordance with specifications and expectations, labor relations, accidents, delays in anticipated start-up dates, environmental costs and risks, the results of financing efforts and financial market conditions, and other factors described herein and in FWG's annual report on Form 10-KSB. Many of such factors are beyond the Company's ability to control or predict. Actual results may differ materially from those projected. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws. Part II - Other Information Item 5. Other Information As of September 30, 1996, the Company purchased certain unpatented mining claims located in Esmeralda County, Nevada (the "Property"), from Kennecott Exploration Company. At closing, the Company delivered to Kennecott Exploration Company a promissory note in the amount of $700,000, due September 30, 1998, as the purchase price for the Property, which is payable under certain conditions, at the option of the Company, by the issuance of 1,000,000 (one million) shares of the Company's common stock. 12 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - Exhibit Item 601 No. Category Exhibit - --- -------- ------- 1 2 Letter of Intent dated August 28, 1995 whereby Fischer-Watt Gold Company, Inc., and Great Basin Management Company, Inc., agree to form a business combination and filed as Exhibit 1.2 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 2 2 August 28, 1995 agreement between Fischer-Watt Gold Company, Inc., and Greenstone Resources Ltd., whereby Fischer-Watt agrees to purchase 100% of Greenstone Resources Ltd.'s wholly-owned Colombian branch, Greenstone of Colombia ("GOC") and filed as Exhibit 2.2 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 3 2 Closing Agreement dated October 20, 1995 among Fischer-Watt Gold Company, Inc., and Greenstone Resources Canada Ltd., and Greenstone Resources Ltd., and filed as Exhibit 1.2 to Form 8-K filed November 3, 1995 and incorporated herein by reference. 4 2 Articles of Merger Merging GBM Acquisition Corp., into Great Basin Management Co., Inc., dated January 25, 1996 and filed as as Exhibit 1.2 to Form 8-K filed as Exhibit 1.2 to Form 8-K filed February 5, 1996 and incorporated herein by reference. 5 2 Plan of Reorganization and Agreement among Fischer-Watt Gold Company, Inc., GBM Acquisition Corp., and Great Basin Management Co., Inc., dated January 3, 1996 and filed as as Exhibit 2.2 to Form 8-K filed as Exhibit 1.2 to Form 8-K filed February 5, 1996 and incorporated herein by reference. 13 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 6 2 Mining Property Purchase Agreement dated September 30, 1996, between Fischer-Watt Gold Company, Inc. and Kennecott Exploration Company ("KEC") whereby FWG purchased mining claims owned by KEC in Esmeralda County, Nevada, and, upon closing, delivered to KEC a Promissory Note in the amount of $700,000. 7 3 Articles of Incorporation. Filed as Exhibit 3.1 to Form 8 filed May 4, 1989 and incorporated herein by reference. 8 3 By-Laws of the Corporation as amended. Filed as Exhibit 6.3 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 9 10 Letter Agreement between BMR Gold Corporation and Fischer-Watt Gold Company, Inc., regarding the America Mine Property effective September 20, 1989, and filed as Exhibit 19.1 to Form 10-Q filed November 20, 1989 and incorporated herein by reference. 10 10 Fischer-Watt Gold Company, Inc., non-qualified stock option plan of May 1987 and filed as Exhibit 36.10 to Form 10-K filed April 23, 1991 and incorporated herein by reference. 11 10 First Amendment to Exploration Agreement and Mining Venture Agreement dated March 25, 1992 between Kennecott Exploration Company and Fischer-Watt Gold Company, Inc., and filed as Exhibit 45.10 to Form 10-K filed April 22, 1993 and incorporated herein by reference. 12 10 Employment Agreement effective September 1, 1993 between Fischer-Watt Gold Company, Inc., and George Beattie whereby Fischer-Watt agrees to employ Mr. Beattie for a two-year period as Chief Executive Officer and filed as Exhibit 20.10 to Form 10-K filed May 11, 1994 and incorporated herein by reference. 13 10 Option Agreement between Greenstone Resources Ltd., and Fischer-Watt Gold Company, Inc., dated March 24, 1994, whereby Greenstone has the right to purchase all of Fischer-Watt's interest in the San Andres property in Honduras and filed as Exhibit 23.10 to Form 10-K filed May 11, 1994 and incorporated herein by reference. 14 10 Agreement to Assign Leases dated July 7, 1994 between Fischer-Watt Gold Company, Inc., and Kennecott Exploration Company whereby Fischer-Watt agrees to assign its interests in the Modoc property located in Imperial County, California to Kennecott, reserving a Net Smelter Return royalty. This agreement was filed as Exhibit 22.10 to Form 10-Q filed September 13, 1994 and incorporated herein by reference. 14 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 15 10 Letter agreement between Fischer-Watt Gold Company, Inc., and La Cuesta International (LCI) dated August 11, 1994 whereby LCI agrees to lease the Oatman property located in Mohave County, Arizona. This agreement was filed as Exhibit 23.10 to Form 10-Q filed September 13, 1994 and incorporated herein by reference. 16 10 Option Agreement - Lock-up Agreement between Fischer-Watt Gold Company, Inc., and Greenstone Resources Ltd., dated October 17, 1994 whereby the San Andres option agreement was amended to provide for an early advance of $50,000 as partial payment of the option in exchange for restrictions on the disposition of Greenstone shares. This agreement was filed as Exhibit 22.10 to Form 10-Q filed December 14, 1994 and incorporated herein by reference. 17 10 English translation of an Exploration Agreement between Fischer-Watt's Mexican subsidiary, Minera Montoro, S.A. de C.V. and Minera Cuicuilco, S.A. de C.V. dated October 18, 1994 whereby Minera Cuicuilco is granted the rights to explore the Cerrito property in Baja California, Mexico and was filed as Exhibit 23.10 to Form 10-Q filed December 14, 1994 and incorporated herein by reference. 18 10 Acquisition agreement dated November 10, 1994 among Greenstone Resources Canada Ltd., Greenstone Resources Ltd., and Fischer-Watt Gold Company, Inc., whereby the parties finalize the Option Agreement of March 24, 1994 to purchase the San Andres property in Honduras and modify the Lock-Up Agreement dated October 17, 1994. This agreement was filed as Exhibit 29.10 to Form 10-K filed May 15, 1995 and incorporated herein by reference. 19 10 Letter agreement dated February 28, 1995 between Tombstone Explorations Co. Ltd., and Fischer-Watt Gold Company, Inc., whereby Tombstone agrees to purchase all of Fischer-Watt's rights to the Minas de Oro property in Honduras. This agreement was filed as Exhibit 30.10 to Form 10-K filed May 15, 1995 and incorporated herein by reference. 15 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 20 10 Letter agreement dated April 13, 1995 between Begeyge Minera Limitada and Fischer-Watt Gold Company, Inc., whereby Fischer-Watt will acquire rights to the La Victoria, Honduras property. This agreement was filed as Exhibit 31.10 to Form 10-K filed May 15, 1995 and incorporated herein by reference. 21 10 Option whereby Fischer-Watt Gold Company, Inc., grants Gerald D. Helgeson an option to purchase 100,000 shares of Fischer-Watt restricted common stock. This option was filed as Exhibit 32.10 to Form 10-K filed May 15, 1995 and incorporated herein by reference. 22 10 Option whereby Fischer-Watt Gold Company, Inc., grants Larry J. Buchanan an option to purchase 100,000 shares of Fischer-Watt restricted common stock. This option was filed as Exhibit 33.10 to Form 10-K filed May 15, 1995 and incorporated herein by reference. 23 10 Amendment dated April 20, 1995 to Agreement to Assign Leases dated July 7, 1994 between Fischer-Watt Gold Company, Inc., and Kennecott Exploration Company whereby Fischer-Watt agrees to assign its interests in the Modoc property located in Imperial County, California to Kennecott. This Amendment was filed as Exhibit 28.10 to Form 10-QSB filed June 14, 1995 and incorporated herein by reference. 24 10 Asset Purchase Agreement dated May 16, 1995 between Fischer-Watt Gold Company, Inc., and Cerenex Financial A.V.V., whereby the February 28, 1995 sale of Minas de Oro is closed. This Asset Purchase Agreement was filed as Exhibit 29.10 to Form 10-QSB filed June 13, 1995 and incorporated herein by reference. 25 10 Option effective June 1, 1995, whereby Fischer-Watt Gold Company, Inc., grants Gerald D. Helgeson an option to purchase 200,000 shares of Fischer-Watt restricted common stock. This Option was filed as Exhibit 31.10 to Form 10-QSB filed September 15, 1995 and incorporated herein by reference. 26 10 Option effective June 1 1995, whereby Fischer-Watt Gold Company, Inc., grants Larry J. Buchanan an option to purchase 100,000 shares of Fischer-Watt restricted common stock. This Option was filed as Exhibit 32.10 to Form 10-QSB filed September 15, 1995 and incorporated herein by reference. 27 10 Option effective June 1, 1995 whereby Fischer-Watt Gold Company, Inc., grants Anthony P. Taylor an option to purchase 100,000 shares of Fischer-Watt restricted common stock. This Option was filed as Exhibit 33.10 to Form 10-QSB filed September 15, 1995 and incorporated herein by reference. 16 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 28 10 Loan Agreement dated August 28, 1995, between Fischer-Watt Gold Company, Inc., and Great Basin Management Company, Inc., whereby Fischer-Watt agrees to loan Great Basin Management Company, Inc. up to $108,000. This Loan Agreement was filed as Exhibit 36.10 to Form 10-QSB filed September 15, 1995 and incorporated herein by reference. 29 10 Amendment dated October 31, 1995 to Loan agreement dated August 28, 1995, between Fischer-Watt Gold Company, Inc. and Great Basin Management Company, Inc., whereby Fischer-Watt changes the dates of the loan to Great Basin Management Company, Inc. This Amendment was filed as Exhibit 33.10 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 30 10 Extension of time for payment of Secured Promissory Note dated October 31, 1995 to the Loan agreement dated August 28, 1995, between Fischer-Watt Gold Company, Inc. and Great Basin Management Company, Inc. whereby Fischer-Watt agrees to extend the time for payment of the Secured Promissory Note. This Extension of Time for Payment was filed as Exhibit 34.10 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 31 10 Second Amendment dated November 30, 1995 to Loan agreement dated August 28, 1995 between Fischer-Watt Gold Company, Inc. and Great Basin Management Company, Inc. whereby Fischer-Watt changes the dates of the loan to Great Basin Management Company, Inc. This Second Amendment was filed as Exhibit 35.10 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 32 10 Second Extension of Time for Payment of Secured Promissory Note dated October 31, 1995, to the loan agreement dated August 28, 1995, between Fischer-Watt Gold Company, Inc., and Great Basin Management Company, Inc. whereby Fischer-Watt agrees to extend the time for payment of the Secured Promissory Note. This Second Extension was filed as Exhibit 36.10 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 17 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 33 10 Promissory Note dated October 20, 1995 whereby Greenstone Resources of Colombia Ltd., a wholly owned Bermuda subsidiary of Fischer-Watt Gold Company, Inc., promises to pay $300,000 to Greenstone Resources, Ltd. This Promissory Note was filed as Exhibit 37.10 to Form 10-QSB filed December 20, 1995 and incorporated herein by reference. 34 10 Option effective June 1, 1996, whereby Fischer-Watt Gold Company, Inc., grants Gerald D. Helgeson an option to purchase 100,000 shares of Fischer-Watt restricted common stock. Filed as Exhibit 31.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 35 10 Option effective June 1, 1996 whereby Fischer-Watt Gold Company, Inc., grants Anthony P. Taylor an option to purchase 100,000 shares of Fischer-Watt restricted common stock. Filed as Exhibit 32.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 36 10 Option effective June 1, 1996 whereby Fischer-Watt Gold Company, Inc., grants Peter Bojtos an option to purchase 100,000 shares of Fischer-Watt restricted common stock. Filed as Exhibit 33.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 37 10 Purchase - Sale agreement between Compania Minera Oronorte, S.A. and Nissho Iwai Corporation in which Nissho Iwai Corporation agrees to buy gold and silver concentrate produced at El Limon Mine in Colombia. Filed as Exhibit 34.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 38 10 Letter of Agreement dated November 13, 1995, between Digger Resources, Inc. of Calgary, Alberta, Canada and Great Basin Exploration and Mining, Inc. regarding exploration and mining joint venture of Tempo property, Lander County, Nevada. Filed as Exhibit 35.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 18 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 39 10 Joint Venture agreement dated July 25, 1996, and Exhibit A to agreement, between Great Basin Exploration and Mining, Inc. and Digger Resources, Inc. regarding Tempo mineral property, Lander County, Nevada. Filed as Exhibit 36.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 40 10 Mining Venture agreement between Great Basin Exploration and Mining Company, Inc. and Hemlo Gold Mines (USA), Inc. for exploration, development and mining of property held by Great Basin in Eureka County Nevada. Said property described in Exhibit A to agreement. common stock. Filed as Exhibit 37.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 41 10 Mineral Lease Agreement and amendment thereto between Great Basin Exploration and Mining Company, Inc., and H. Walter Schull dated February 19, 1991 regarding the Coal Canyon property in Eureka County, Nevada. Filed as Exhibit 38.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 42 10 Mineral Lease Agreement between Great Basin Exploration and Mining Company, Inc., and The Lyle F. Campbell Trust dated October 14, 1994 regarding the Tempo Mineral Prospect in Lander County, Nevada. Filed as Exhibit 39.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 43 10 Mineral Lease Agreement with amendment thereto between Great Basin Exploration and Mining Company, Inc., and The Lyle F. Campbell Trust dated November 8,1993 regarding the Afgan Mineral Prospect in Eureka County, Nevada. Filed as Exhibit 40.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 44 10 Participation Agreement between Great Basin Exploration and Mining Company, Inc., and Serem Gatro Canada Inc., dated May 31, 1995 regarding the right of Serem Gatro Canada Inc., to elect to acquire a Participation Interest in properties in which Great Basin Exploration and Mining Company, Inc., has an interest. Filed as Exhibit 41.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 45 10 Mineral Lease Agreement between Great Basin Exploration and Mining Company, Inc., and Edward L. Devenyns and David R. Ernst dated November 8, 1992 regarding the Red Canyon Mineral Prospect in Eureka County, Nevada. Filed as Exhibit 42.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 19 Exhibit Item 601 No. Category Exhibit - --- -------- ------- 46 10 Joint Venture operating agreement dated January 1, 1996, between Cominco American, Inc. and Great Basin Exploration and Mining Company, Inc. known as the "Afgan-Kobeh Joint Venture". Property described in Exhibit A. Filed as Exhibit 43.10 to Form 10-KSB filed September 26, 1996 and incorporated herein by reference. 47 10 Amendment to Mineral Lease between Walter Schull and Mireille Schull and Great Basin Exploration and Mining Company dated July 31, 1996. Regarding the Coal Canyon property. 48 10 Promissory note dated September 30, 1996, whereby Fischer-Watt Gold Company, Inc. promises to pay $700,000 to Kennecott Exploration Company, Inc. 49 27 Financial Data Schedule for the three month period ended April 30 ,1996. 50 99 Minutes of Special Meeting of Board of Directors of Fischer-Watt Gold Company, Inc., dated October 19, 1994, whereby George Beattie's employment contract dated September 1, 1993 is extended to September 1, 1997. These minutes were filed as Exhibit 28.99 to Form 10-K filed May 15, 1995 and incorporated herein by reference. 20 (b) Reports on Form 8-K During the quarter ended April 30, 1996, 1. The Registrant filed a Current Report on Form 8-K on March 13, 1996, reporting that on March 12, 1996 the Company gave notice that it has made an offering of securities not registered under the Securities Act of 1933 in the form of a news release dated March 12, 1996. 2. The Registrant filed a Current Report on Form 8-K on April 3, 1996 reporting that on March 29, 1996 the company signed an engagement letter with BDO Seidman, LLP. SIGNATURES In accordance to the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FISCHER-WATT GOLD COMPANY, INC. October 17, 1996 By /s/ George Beattie (Signature) George Beattie, President, Chief Executive Officer (Principal Executive Officer), Chairman of the Board and Director October 17, 1996 By /s/ Michele D. Wood (Signature) Michele D. Wood, Chief Financial Officer (Principal Financial and Accounting Officer) 21 EX-1 2 EXHIBIT 6-2--MINING PROPERTY PURCHASE AGREEMENT MINING PROPERTY PURCHASE AGREEMENT THIS MINING PURCHASE AGREEMENT (this "Agreement ) is entered into as of this 30th day of September, 1996 by and between Kennecott Exploration Company, a Delaware Company ("KEC") and Fischer-Watt Gold Company, Inc., a Nevada corporation ("FWG"). RECITALS KEC owns certain unpatented mining claims in Esmeralda County, Nevada, more particularly described on Exhibit A attached hereto and made a part of hereof (the "Property"), which FWG desires to purchase from KEC, on the terms and conditions herein. NOW, THEREFORE, in consideration of the foregoing recital and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to as follows: 1. Documents to be Delivered at Closing. At closing, FWG shall deliver to KEC a Promissory Note in the amount of US$700,000 substantially in the form of Exhibit C, as the purchase price for the Property, which Promissory Note is payable under certain conditions by the issuance of 1,000,000 (one million) shares of FWG common stock (the "Shares"). Simultaneously, KEC shall deliver to FWG a Quit-claim Deed, substantially in the form attached hereto as Exhibit B, conveying all of KEC's rights, titles, and interests in the Property to FWG, 2. Date of Closing. The closing shall occur before October 1, 1996 at 10:00 a.m. at the offices of Parsons Behle & Latimer in Salt Lake city, Utah, unless the parties otherwise agree. 3. Representations and Warranties of the Parties a. FWG represents and warrants to KEC that the transactions contemplated herein do not violate the Articles of Incorporation or Bylaws of FWG , or Nevada State Law, and that it has taken all corporate action necessary to consummate the transaction contemplated by this Agreement and to perform its obligations hereunder. b. Each party represents and warrants to the other party that it is a duly organized, validly existing corporation in good standing under the laws of its state of incorporation, that it has the full corporate power and authority to enter into and perform this Agreement, and that the undersigned are authorized to enter into and perform this Agreement, and that the undersigned are authorized to execute this Agreement on behalf of the corporation. c. Each party represents and warrants to the other party that this Agreement does not violate or breach the terms of any agreement, instrument, or arrangement to which it is a party. d. KEC represents and warrants that the federal claim maintenance fees for the 1996-1997 assessment year were timely paid for the unpatented mining claims that comprise the Property, but makes no other representations or warranties on the Property, e. Each of the representations and warranties set forth above shall be true and correct as of the date of the closing with the same force and effect as though made at that time, and shall survive for a period of one year from the date of closing. f. KEC representing and confirms with FWG that it: (1) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares; (2) if the Promissory Note is paid in the form of the Shares, will receive the Shares in reliance on the exemption from registration contained in Section 4(2) of the Securities Act of 1933 (the "Securities Act"), for investment and without any view to the distribution thereof in any manner that is in violation of the Securities Act; (3) is aware of limits on resale imposed by virtue of the nature of the transaction pursuant to which the Shares, if issued, will be received; (4) acknowledges that FWG has made available to it and it has received and carefully reviewed all materials and information concerning FWG that it deems material to making an informed investment decision and to evaluate the merits and risks of an investment in securities of FWG; and (5) acknowledges that the certificates representing the Shares when and if delivered, may have appropriate orders restricting transfer placed against them on the records of the transfer agent for such securities, and may have placed upon them the following legend: THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933. THEY MAY NOT BE TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE TRANSFER, IN THE MANNER PROPOSED, DOES NOT VIOLATE THE REGISTRATION REQUIREMENTS OF SAID ACT. 4. Consents and Approvals. No consent, approval, or authorization of or declaration, filing or registration with any governmental or regulatory authority, or any other person or entity is required to be made or obtained by FWG prior to closing in connection with the execution, delivery and performance of this Agreement and the consummation of the transaction contemplated by this Agreement. 5. Responsible for Own Actions. Each party shall be responsible only for its own acts and omissions with respect to the Property and shall not be responsible for the acts or omissions of the other party. 6. Registration Rights. With respect to any Shares issued as payment of the Promissory Note, KEC shall have the right to have such Shares included in any public registration statement filed by FWG with the United States Securities and Exchange Commission in which such Shares could be included, for a period of one year after the date of the delivery of the Shares. 7. Default-Notice and Cure. In the event that either party is in default of any terms of this Agreement, the non-defaulting party shall give the defaulting party written notice of the default specifying the details of the default. The defaulting party shall have 15 days from receipt of such notice to remedy the default or give written notice to the non-defaulting party setting forth reasons why it believes it is not in default. 8. Counterpart Signatures. This Agreement may be executed in one or more counterparts that when taken together shall constitute one document. For purposes of this Agreement, the delivery of a counterpart signature by facsimile transmission shall constitute delivery of an original counterpart signature. 9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah, excluding any conflict of law provisions that would require the application of the law of any other jurisdiction. 10. Arbitration. All claims and conflicts arising under this Agreement shall be subject to and finally resolved by binding arbitration in accordance with the rules of the American Arbitration Association then pertaining. The arbitration shall take place in Salt Lake City by one qualified arbitrator appointed by the Association. 11. Limitation of Actions and Damages. No action arising under this Agreement shall be valid unless a claim is made within one year after the date of this Agreement, or, in the case of the registration rights under Section 6, within one year after the termination of such rights. Neither party shall have liability for consequential, incidental, or punitive damages, howsoever characterized, with respect to any cause of action arising under this Agreement. 12. Severability. The provisions of this Agreement are severable, and should any provision hereof be void, voidable, unenforceable, or invalid, such provision shall not affect the other provisions of this Agreement. 13. Amendment. This Agreement may not be modified except by an instrument in writing signed by both parties. 14. No Brokers. The parties represent and warrant to each other that no broker or finder acted for it or is entitled to any fee or is entitled to any fee or commission with the transactions contemplated herein. 15. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter contained herein, and all prior negotiations, agreements or understandings relating to its subject matter are hereby superseded and are no longer of any force or effect. This Agreement has been executed to be effective as of the date first above written, Kennecott Exploration Company, Inc. Fischer-Watt Gold Company, Inc. By Kenneth Hecker By George Beattie --------------------------- ---------------------------- Its Commercial Director Its President --------------------------- ---------------------------- EX-2 3 EXHIBIT 47-10--AMENDMENT TO MINERAL LEASE FOURTH AMENDMENT TO MINERAL LEASE WITH OPTION TO PURCHASE THIS FOURTH AMENDMENT to that Mineral Lease Agreement with Option to Purchase dated February 19, 1991 is executed this 31st day of July, 1996 between H, Walter Schull, Manager, and Mireille Schull, Owner, (hereinafter referred to as "Lessor"), and Great Basin Exploration & Mining Co., Inc., a Nevada corporation (hereinafter referred to as "Lessee"). RECITALS A. Lessor and Lessee are parties to the following: "MINERAL LEASE AGREEMENT WITH OPTION TO PURCHASE Coal Canyon Property" dated February 19, 1991 (hereinafter referred to as the "Mineral Lease Agreement"). "AMENDMENT OF LEASE" dated January 13, 1991 (hereinafter referred to as the "First Amendment"). "SECOND AMENDMENT TO MINERAL LEASE AGREEMENT WITH OPTION TO PURCHASE Coal Canyon Property" dated May 17, 1994 (hereinafter referred to as the "Second Amendment"), "THIRD AMENDMENT TO MINERAL LEASE WITH OPTION TO PURCHASE Coal Canyon Property, Eureka County, Nevada" entered the 15th day of February, 1996 (hereinafter referred to as the "Third Amendment"). (the foregoing Mineral Lease Agreement, First Amendment, Second Amendment and Third Amendment hereinafter collectively referred to as the "Mineral Lease Agreement as Amended"). B. Lessor and Lessee desire to further amend the Mineral Lease Agreement as Amended. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of the mutual benefits to be derived, Lessor and Lessee agree as follows: 1. The last sentence of the first paragraph of Section 3 of the Mineral Lease Agreement is hereby revised to read as follows: "Any and all payments made by LESSEE to LESSOR pursuant to Section 5 hereof, and all costs, if any, incurred by LESSEE for which LESSOR is liable pursuant to paragraph b of Section 7 hereof shall be credited against the purchase price." 2. The last sentence of paragraph b of Section 5 of the Mineral Lease Agreement is hereby amended to read: "The term 'Gross Returns" in any calendar quarter shall mean the amount of earned revenues payable to LESSEE by any smelter, refinery, or other arm's length purchaser of any and all Mineral Substances from the Premises, less any smelting and sampling charges charged to LESSEE by said purchaser." 3. Paragraph d of Section 5 of the Mineral Lease Agreement is hereby amended to read: "d. Adjustment for Inflation - The purchase price as set forth in Section 3 shall be subject to escalation based upon the Consumer Price Index published by the Bureau of Labor Statistics of the United States Department of Labor. The applicable amount due LESSOR shall be multiplied by a percentage equal to 100, plus the percentage increase in the Consumer Index from the effective date of the Agreement, to the date of the close of the calendar quarter during which the applicable payment is due." 4. Section 1 of the First Amendment and Section 1 of the Third Amendment are hereby deleted and paragraph a of Section 5 of the Mineral Lease Agreement is hereby amended to read as follows: "A. Rental - Subject to LESSEE's right to terminate this Agreement, LESSEE shall pay to LESSOR rental in the following amounts: $15,000.00 on or before March 18, 1991, $15,000.00 on or before October 1, 1991, $30,000.00 between January 1 and January 15, 1992, $20,000.00 between January 1 and January 15, 1993, $20,000.00 between January 1 and January 15, 1994, $20,000.00 between January 1 and January 15, 1995, and of each year thereafter while the Mineral Lease Agreement as Amended is in effect. LESSEE's obligation to make the rental payments shall terminate upon the earlier of the commencement of payment of production royalties or upon its exercise of the option to purchase the Premises, and all rental payments to LESSOR shall be credited against the purchase price as calculated in Section 3." 5. Sction 2 of the first Amendment is hereby deleted and LESSOR and LESSEE agree that Paragraph d of Section 9 of the Mineral Lease Agreement shall apply only while federal or state law requires annual assessment work to be performed on the Premises. When annual assessment is not required and the payment of holding, rental or filing fees and filing of documents to federal state or county offices or agencies is required, LESSEE will pay such fees and make such filings on or prior to the date such payments and filings are required. If the Mineral Lease Agreement is hereafter terminated by either party, pursuant to Section 10 thereof, no further assessment work or filings or payment of fees will be required by LESSEE. 6. Section 2 of the Third Amendment is hereby revised to read as follows: "The Mineral Lease Agreement As Amended is hereby amended to effect a work commitment by LESSEE of $100,000.00 to be spent between January 1, 1996 and December 31, 1996 and $200,000.00 to be spent between January 1, 1997 and December 31, 1997 and each year thereafter. The yearly work expenditures qualified as fulfilling the work commitment shall be limited to all costs incurred in actual work on the Coal Canyon Mineral prospect in drilling, trenching, excavation, mining, road building, surveying, mapping, and geological, geochemical and geophysical programs conducted on the Coal Canyon Mineral Prospect as well as assaying and metallurgical testing of ores extracted from the Coal Canyon Mineral Prospect which may be conducted at appropriate facilities off the Coal Canyon Mineral Prospect. Expenditures shall include wages and salaries paid to engineers, geologists, laborers and technicians for actual time spent in exploration, development and mining of the Coal Canyon Mineral Prospect. Direct overhead, such as lodging, meals and travel expenses (but expressly excluding any charge for office or administrative expenses) shall be limited to ten percent (10%) of the yearly work requirement. Any work expenditures in excess of the work commitment in any calendar year shall he applied to the work commitment for the following calendar year. The said work commitments shall terminate in the event the Mineral Lease Agreement As Amended is terminated." 7. Except as specifically amended in this Fourth Amendment, the Mineral Lease Agreement As Amended remains in full force and effect. LESSOR and LESSEE certify that the Mineral Lease Agreement As Amended is in good standing and in full force and effect, LESSEE is not in default in any of the terms of the Mineral Lease Agreement As Amended and LESSOR and LESSEE know of no circumstances presently existing that would cause LESSEE to be in default. 8. All denominations of money in the Mineral Lease Agreement As Amended are in United States currency. IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment to the Mineral Lease Agreement as of the date first above written. LESSEE LESSOR GREAT BASIN EXPLORATION & MINING CO., INC. By George Beattie H. Walter Schull ----------------------------- ----------------------------- Title President Manager 13 Aug. 1996 July 31, 1996 STATE OF NEVADA } } ss COUNTY OF WASHOE } The foregoing instrument was acknowledged before me on this ---- day of------ , 1996 by ----------------------------------, ------------------ of Great Basin Exploration & Mining Co., Inc., a Nevada corporation, on behalf of the Corporation. - --------------------------------- My Commission Expires: Notary Public STATE OF NEVADA } } ss COUNTY OF WASHOE } The foregoing instrument was acknowledged before me on this ---- day of -------, 1996 by H. Walter Schull who acknowledged that he executed the within instrument for the purposes contained herein. - ----------------------------------- My Commission Expires: Notary Public EX-3 4 EXHIBIT 48-27--PROMISSORY NOTE Promissory Note US$700,000.00 Salt Lake City, Utah September 30, 1996 Non-Negotiable, Non-Transferrable FOR VALUE RECEIVED, Fischer-Watt Gold Company, Inc., a Nevada corporation with offices at 1410 Cherrywood Drive, Coeur d'Alene, Idaho 83814 ("FWG") hereby promised to pay to Kennecott Exploration Company, Inc. ("KEC"), at its office located at 225 North 2200 West, Salt Late City, Utah 84116, the principal sum of US$700,000.00, with interest thereon at an annual interest rate equal to the prime or base rate as announced from time to time by The Chase Manhattan Bank (National Association) at its principal New York, New York office (the "Prime" rate), or at the highest legal rate, if less. Such payment of principal and interest shall be calculated on the basis of a month of 30 days and a year of 360 days. FWG may repay this Note in whole but not in part upon at least ten (10) days prior notice to KEC. Each of the following shall be a default under this Promissory Note: (i) The failure of FWG to pay principal and interest when due; or (ii) If FWG shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or if any proceeding is instituted by or against FWG seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debt under any law relating to bankruptcy, insolvency or reorganization or relief of debtors (but in case of any involuntary proceeding, the same is not dismissed within 60 days), or seeking the entry of an order for relief or the appointment of a receiver, trustee, or similar official for it or for any substantial part of its property; or if FWG takes corporate action to authorize any of the actions set forth above in this subparagraph; or if any analogous event or proceeding occurs or is instituted in any jurisdiction with respect to FWG. In the event of any default under this Promissory Note then the principal and interest remaining unpaid as of such date shall be immediately and automatically due and payable in full and such sums shall bear default interest from the date of default at an annual rate equal to the Prime rate plus two percent (2%), or at the highest legal rate, if less. Failure of KEC to exercise any right or remedy with respect to any default shall not be deemed to be a waiver of that or any subsequent default. Upon default, the undersigned shall pay all costs of collection and reasonable attorneys' fees paid or incurred in enforcing this Promissory Note. The undersigned hereby waives presentment for payment, protest, notice of non payment and protest, and agrees to any extension of time of payment and partial payment before, at or after maturity, At the option of FWG and upon 10 days' prior notice to KEC, and provided to default has occurred and is then continuing, the payment of principal, but not interest, to be paid under this Promissory Note shall be payable by the delivery of one million shares of fully paid and nonassessable common stock of FWG. Provided, however, that FWG shall not have the right to exercise the foregoing option if the issuance of such shares, plus all outstanding shares of common stock by FWG then held by KEC and its affiliates, would result in the number of shares held by KEC and its affiliates equaling or exceeding 10% of the total outstanding shares of common stock of FWG. KEC shall have such registration rights with respect to such shares as provided in the Mining Property Purchase Agreement between the parties, dated September 30, 1996, THIS PROMISSORY NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF UTAH, EXCLUDING ANY CONFLICT OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. IN WITNESS WHEREOF, the undersigned has executed this Promissory Note this 30 day of September, 1996, Fischer-Watt Gold Company, Inc. By: George Beattie ------------------------------ Title: President EX-27 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED APRIL 30, 1996 CONTAINED IN FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1,000 3-MOS JAN-31-1996 FEB-01-1996 APR-30-1996 4,121 0 1,041 0 196 5,411 1,639 110 9,970 2,341 0 0 0 31 7,598 9,970 1,057 1,057 1,533 1,871 115 0 (26) (903) 0 (903) 0 0 0 (903) (.04) (.04)
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