-----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, E7CMNOPwdNMznqzokIQWph4kn0g/abCMUYt58QYRvOoMVeVYRRmSX1cwstt8wHaR TJ0+L/V3VR/LKApWoRDBSg== 0001144204-04-011048.txt : 20040804 0001144204-04-011048.hdr.sgml : 20040804 20040804133914 ACCESSION NUMBER: 0001144204-04-011048 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040803 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WITS BASIN PRECIOUS MINERALS INC CENTRAL INDEX KEY: 0000912875 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 841236619 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12401 FILM NUMBER: 04950935 BUSINESS ADDRESS: STREET 1: 800 NICOLLET MALL STREET 2: SUITE 2690 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 BUSINESS PHONE: (612)664-0570 MAIL ADDRESS: STREET 1: 800 NICOLLET MALL STREET 2: SUITE 2690 CITY: MINNEAPOLIS STATE: MN ZIP: 55402 FORMER COMPANY: FORMER CONFORMED NAME: ACTIVE IQ TECHNOLOGIES INC DATE OF NAME CHANGE: 20010702 FORMER COMPANY: FORMER CONFORMED NAME: METEOR INDUSTRIES INC DATE OF NAME CHANGE: 19960313 8-K 1 v05304_8k.htm Form 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934



Date of Report (Date of earliest event reported): August 3, 2004


WITS BASIN PRECIOUS MINERALS INC.
(Exact Name of Registrant as Specified in Charter)



Minnesota
(State or Other Jurisdiction
of Incorporation)
1-12401
(Commission
File Number)
84-1236619
(IRS Employer
Identification No.)


520 Marquette Avenue, Suite 900
Minneapolis, Minnesota
(Address of Principal Executive Offices)
 
55402
(Zip Code)


612.349.5277
(Registrant’s telephone number, including area code)



(Former Name or Former Address, if Changed Since Last Report)
 
 
     
 
 
Item 2.  Acquisition or Disposition of Assets.

Pursuant to an Agreement dated July 19, 2004 (the “Termination Agreement”), by and between Wits Basin Precious Minerals Inc., (the “Registrant”) and Argyle Securities Limited, a corporation formed under the laws of Saint Vincent (the “Purchaser”), the Registrant sold its wholly owned subsidiary of Brazmin Ltda., (“Brazmin”) a limited liability company formed under the laws of Brazil, to the Purchaser (its prior owner), completing the transaction on August 3, 2004. The Registrant acquired Brazmin pursuant to a Quota Purchase Agreement dated February 6, 2004 (the “Quota Agreement”), by and between the Registrant the Purchaser.

During the time that Registrant owned Brazmin, Brazmin’s only assets were the mineral exploration rights of four distinct regions (the “Four Properties”) located within the South American country of Brazil. Brazmin has never had any revenues, as its activities have been solely to search out and acquire exploration rights on properties that possess specific criteria relating to base minerals and precious minerals.

Pursuant to the Termination Agreement, the Registrant received (a) a cash payment of $25,000, (b) a further promise to receive an additional $25,000 on or before December 31, 2004, (c) a cash payment of $100,000 in the event that Brazmin commences on a pre-feasibility study on one of the Four Properties, (d) a cash payment of $100,000 in the event that Brazmin commences on a bankable feasibility study on one of the Four Properties, (e) a 10% carried interest in Brazmin or its assigns or successors interest of the Four Properties up until completion of a bankable feasibility process, (f) a 10% payment of any proceeds obtained by Brazmin for the sale or partial sale of any of the Four Properties, and (g) the Purchaser returned 400,000 shares of the 700,000 shares of the Registrant’s Common Stock that it had received as partial consideration pursuant to the Quota Agreement. The Pu rchaser retained the 5-year warrant to purchase 150,000 shares of the Registrant’s Common Stock, with an exercise price of $1.50. Furthermore, the Purchaser assumed all further liabilities required to maintain the Four Properties effective July 19, 2004. The Registrant also terminated its consulting agreements with two of the principles of Brazmin, effective June 30, 2004. According to the terms of the Quota Agreement, the Registrant was required to obtain an effective registration of the 700,000 shares of its common stock by July 5, 2004. Under the terms of the Termination Agreement, the Registrant is required to register the 300,000 shares as soon as practical.

The foregoing is qualified in its entirety by reference to the Termination Agreement, which is being filed as Exhibit 10.1 to this Current Report on Form 8-K; and such exhibit is incorporated herein by reference. In addition, the Registrant is attaching as Exhibit 99.1 a Press Release dated August 3, 2004, with respect to the Termination Agreement, which is incorporated herein by reference.


Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

(a) Not required

(b) Not required

(c) Exhibits

Exhibit
Description of Document
10.1
Agreement by and among Wits Basin Precious Minerals Inc. and Argyle Securities Limited, dated July 19, 2004.
99.1
Press Release dated August 3, 2004.
 
 
     
 
 
SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
  Wits Basin Precious Minerals Inc.
 
 		  
 		  
 
Date: August 4, 2004 By:   /s/ Mark D. Dacko
 
  Mark D. Dacko
  Chief Financial Officer 
 
 
EXHIBIT INDEX

Exhibit
Description of Document
10.1
Agreement by and among Wits Basin Precious Minerals Inc. and Argyle Securities Limited, dated July 19, 2004.
99.1
Press Release dated August 3, 2004.
 
 
     
 
 
 EX-10.1 2 v05304_ex10-1.txt EXHIBIT 10.1 AGREEMENT THIS AGREEMENT made as of the 19th day of July, BETWEEN: ARGYLE SECURITIES LIMITED of Trust House 112, Bonadie Street, Kingstown, Saint Vincent OF THE FIRST PART. - and - WITS BASIN PRECIOUS MINERALS INC. of 520 Marquette Avenue, Suite 900, Minneapolis, MN 55402, USA OF THE SECOND PART. THIS AGREEMENT is made and entered into this 19th day of July 2004, ("Effective Date") by and between ARGYLE SECURITIES LIMITED, A CORPORATION ORGANIZED UNDER THE LAWS OF SAINT VINCENT ("ARGYLE"), and WITS BASIN PRECIOUS MINERALS INC, A MINNESOTA CORPORATION ("WITS"); WHEREAS, ARGYLE and WITS entered into a Quota Purchase Agreement on the 6th Day of February 2004, a copy of which attached hereto and marked Schedule "A" (the "QP Agreement"); and WHEREAS, WITS and ARGYLE intend to terminate the QP Agreement and replace same with those terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and in order to consummate a transaction desirous of both parties, it is hereby agreed as follows: 1. BRAZMIN LTDA. QUOTAS: Subject to the terms and conditions hereinafter set forth, at the closing of the transaction contemplated hereby, WITS shall sell, convey, transfer, and deliver to ARGYLE, certificates representing 9,999 (nine thousand, nine hundred and ninety-nine) Quotas in the issued Quotas of the capital of BRAZMIN LTDA, (the "Company"), a limited liability company incorporated in the City of Rio de Janeiro, Brazil, which Company has issued Quotas of 10,000 Quotas of R1.00 (1 real) per Quota; and AGYLE shall purchase from WITS such Quotas in consideration of the purchase price of US$1.00, payment of which is hereby acknowledged. The certificates representing the Company's Quotas, should certificates exist, shall be duly endorsed for transfer or accompanied by appropriate Quotas transfer powers duly executed in blank, and shall have all the necessary documentary transfer tax stamps affixed thereto, if any. In the absence of such certificates being in existence the parties agree that this clause will give legal effect to such sale, conveyance, transfer, and delivery. The closing of the transactions contemplated by this Agreement ("Closing"), shall be held at 25 Sheppard Avenue West, Suite 710, Toronto, Ontario, on or as close to the Effective Date as is possible or such other place, date and time as the parties hereto may otherwise agree. 2. WITS SHARES: Subject to the terms and conditions hereinafter set forth, at the closing of the transaction contemplated hereby, ARGYLE shall sell, convey, transfer, and deliver to WITS, certificates representing 400,000 restricted common shares of WITS ("WITM Shares") in consideration of the transfer of Quotas set forth in Paragraph 1 above. The certificates representing the WITM Shares shall be duly endorsed for transfer or accompanied by appropriate share transfer powers duly executed in blank, and shall have all the necessary documentary transfer tax stamps affixed thereto, if any. The closing of the transactions contemplated by this Agreement ("Closing"), shall be held at 25 Sheppard Avenue West, Suite 710, Toronto, Ontario, on or as close to the Effective Date as is possible or such other place, date and time as the parties hereto may otherwise agree. 2 WITS hereby acknowledges that ARGYLE will retain ownership of 300,000 restricted common shares of WITS. WITS agrees to use its best efforts to have the 300,000 abovementioned WITM Shares registered for resale under the United States Securities Act of 1933, as amended (the "Securities Act") as soon as is practical. WITS acknowledges that, following the registration of the 300,000 WITM Shares, ARGYLE will be free to transfer the WITM Shares as contemplated by such registration. To give effect to the above, on signature, ARGYLE shall return WITM Share Certificate Number 2136 in the amount of 700,000 shares to WITS and WITS will immediately issue and forward to ARGYLE a new WITS share certificate in the amount of 300,000 shares. WITS hereby agrees that ARGYLE will retain ownership of the 5-year warrant to purchase 150,000 common shares in WITS granted to ARGYLE pursuant to the QP Agreement. 3. CASH PAYMENTS AND CARRIED INTEREST As total consideration for the purchase and sale of the Quotas, pursuant to this Agreement, ARGYLE shall pay or grant to WITS, the following: (i) US$25,000.00 cash within 10 days of Effective Date; and (ii) US$25,000.00 cash by no later than December 31, 2004; and (iii) US$100,000.00 cash, only in the event that the Company commences a pre-feasibility study on any of the Rio Maria; Campo Grande; Sao Juliao; and/or Serrita projects (such projects being the only projects owned by the Company at Effective Date, hereinafter being referred to as the "Projects" and itemised in the "List of Claims" attached hereto and marked Schedule "B"); and (iv) US$100,000.00 cash only in the event that the Company commences a bankable feasibility study on any of the Projects; and (v) 10% carried interest of the Company's interest in any of the Projects up until completion of a bankable feasibility should same occur; and (vi) 10% of any proceeds obtained by the Company for the sale or part sale of any of the Projects. 4. OPTION PAYMENTS ARGYLE agrees to take over WITS obligations in terms of option payments payable on the Projects after the Effective Date, hereby releasing WITS of any obligations regarding the payment of such option payments after Effective Date. WITS hereby confirm it will pay any options payments on the Projects or any other obligations outstanding as at Effective Date. 5. CONSULTING AGREEMENTS WITS agrees to terminate any consulting agreements in existence, if any between WITS and Alan Friedman (Tau Capital Corp); and WITS and Luis Azevedo (the "Consultants") and releases the Consultants from any duty, liability, damage, or responsibility arising now or at any time in the future. 3 Notwithstanding such termination, WITS agrees to the payment of any outstanding consulting fees and disbursements due for the month of June 2004. WITS further agrees that the ownership of the Options issued by WITS to the Consultants pursuant to the WITS 2001 Employee Stock Option Plan will be retained by the Consultants and that full ownership has been vested. 6. REPRESENTATIONS AND WARRANTIES WITS hereby warrants and represents: (i) Company is a company duly organized, validly existing and in good standing under the laws of Brazil and has the corporate power and authority to carry on its business as it is now being conducted. (ii) WITS is not a party to any agreement, written or oral, creating rights in respect to the Company's Quotas in any third person or relating to the voting of the Company's Quotas, other than what has been disclosed. (iii) WITS is the lawful owner of the Quotas, free and clear of all security interests, liens, encumbrances, equities and other charges, other than what has been disclosed. (iv) Neither the Company nor WITS has any existing warrants, options, Quotas purchase agreements, redemption agreements, restrictions of any nature, calls or rights to subscribe of any character relating to the Quotas, nor are there any securities convertible into such Quotas, other than what has been disclosed. (v) WITS warrants that the 300,000 WITS shares as described in Paragraph 2 above will be freely trading by no later than February 10, 2005. (vi) The Company is the lawful owner of the Projects, free and clear of all security interests, liens, encumbrances, equities and other charges, other than what has been disclosed. (vii) WITS have received the prerequisite number of board members signatures to consummate this transaction. ARGYLE hereby warrants and represents: (i) ARGYLE is not a party to any agreement, written or oral, creating rights in respect to the 400,000 WITM Shares described in Paragraph 2 above, in any third person or relating to the voting of the WITM Shares. 4 (ii) ARGYLE has the authority to transfer 400,000 WITM Shares described in Paragraph 2 above, free and clear of all security interests, liens, encumbrances, equities and other charges. 7. INDEMNIFICATION: The parties shall indemnify, defend and hold harmless each other and their directors, officers, employees, agents, consultants, representatives, successors, transferees and assigns (individually a "Indemnified Party"; and collectively, the "Indemnified Parties"), promptly upon demand, at any time and from time to time, from, against, and in respect of any and all demands, claims, losses, damages, judgments, liabilities, assessments, suits, actions, proceedings, interest, penalties, and expenses (including, without limitation, legal expenses for investigating or defending any actions or threatened actions or for enforcing such rights of indemnity and defense) incurred or suffered by each of the Indemnified Parties, in connection with, arising out of or as a result of each and all of the following: (i) any breach of any representation or warranty made by the parties in this Agreement or in any other document or instrument delivered by one party to the other or entered into as part of the transactions contemplated by this Agreement; (ii) the material breach of any covenant, agreement or obligation of a party contained in this Agreement or any other document or instrument delivered by one party to another or entered into as part of the transactions contemplated by this Agreement; and (iii) any and all liabilities and obligations arising from ownership of the Quotas or WITM Shares or operation of the Company after the Closing. 8. SURVIVAL. The representations and warranties contained in this Agreement shall survive the Closing for a period of one (1) year. 9. GENERAL PROVISIONS (A) ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. Notwithstanding, this Agreement shall be read in conjunction with the QP Agreement. In so far as the provisions of this Agreement is in conflict with those of the QP Agreement, the provisions of this Agreement will take precedent. 5 (B) SECTIONS AND OTHER HEADINGS. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. (C) SEVERABILITY. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. (D) GOVERNING LAW. This agreement, and all transactions contemplated hereby, shall be governed by, construed and enforced in accordance with the laws of Ontario. The parties herein agree to submit to the jurisdiction and venue of a court of subject matter jurisdiction located in Ontario, Canada. In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party's reasonable attorney's fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. SIGNED AT THIS 3rd DAY OF AUGUST 2004. AS WITNESSES: 1. 2. /s/ Warren Newfield ARGYLE SECURITIES LIMITED being duly authorized thereto SIGNED AT THIS 3rd DAY OF AUGUST 2004. AS WITNESSES: 1. /s/ Walter E. Brooks - ----------------------- 2. /s/ H. Vance White - --------------------- WITS BASIN PRECIOUS MINERALS INC. being duly authorized thereto 6 EX-99.1 3 v05304_ex99-1.txt Exhibit 99.1 Wits Basin Completes Sale of Minerals Exploration Company Located in South America and Announces Appointment of a New Board Member Minneapolis, Minnesota, August 3, 2004. Wits Basin Precious Minerals Inc. ("Wits Basin") (OTCBB: WITM) announced today that it has completed its sale of its wholly owned subsidiary of Brazmin Ltda., ("Brazmin") a limited liability company located in Rio de Janeiro, Brazil. Wits Basin originally acquired Brazmin on February 6, 2004, in a transaction (the "Quota Agreement") with Argyle Securities Limited, a corporation formed under the laws of Saint Vincent ("Argyle"). During the time that Wits Basin owned Brazmin, Brazmin's only assets were the mineral exploration rights of four distinct regions (the "Four Properties"). Brazmin has never had any revenues, as its activities have been solely to search out and acquire exploration rights relating to base and precious minerals. Pursuant to an agreement dated July 19,2004, Wits Basin sold Brazmin to the prior owner, Argyle, for the following consideration: (a) a cash payment of $25,000, (b) a further promise to receive an additional $25,000 on or before December 31, 2004, (c) a cash payment of $100,000 in the event that Brazmin commences on a pre-feasibility study on one of the Four Properties, (d) a cash payment of $100,000 in the event that Brazmin commences on a bankable feasibility study on one of the Four Properties, (e) a 10% carried interest in Brazmin or its assigns or successors interest of the Four Properties up until completion of a bankable feasibility process, (f) a 10% payment of any proceeds obtained by Brazmin for the sale or partial sale of any of the Four Properties, and (g) Argyle returned 400,000 shares of the 700,000 shares of Wits Basin common stock that it had received as partial consideration pursuant to the Quota Agreement. Argyle retained the 5-year warrant to purchase 150,000 shares of Wits Basin common stock, with an exercise price of $1.50. Furthermore, Argyle assumed all further liabilities required to maintain the Four Properties effective July 19, 2004. The consulting agreements with two of the principles of Brazmin were also terminated effective June 30, 2004. Under the terms of the original Quota Agreement, Wits Basin was required to obtain an effective registration of the 700,000 shares of its common stock by July 5, 2004. Under the terms of the July 19, 2004 agreement, Wits Basin is required to register the 300,000 shares as soon as practical. Appointment of a New Board Member The Company is also pleased to announce the appointment of Mr. Stephen D. King as a member of the Board of Directors. Mr. King presently is the CEO of SDK Investments of Atlanta, Georgia, a financial advisory firm. Mr. King has extensive experience as a financing resource specialist in a variety of business enterprises, including real estate, finance and media. Update to the FSC Project in South Africa On June 8, 2004, the Company announced the completion of the first drill hole, which was drilled in the southern structural block to a depth of 2,984 meters, and although the drill hole was not successful in intersecting Witwatersrand rocks to the depths drilled, it provided valuable information which will refine target selection elsewhere for the next two sites. Drilling will commence in these areas once the required operating permits have been obtained. The aim of the exploration at the FSC Project, which is being conducted by AfriOre Limited (TSX:AFO) and funded in part by Wits Basin, is to discover a major extension of the Witwatersrand basin. The "range-finding" drilling program, which commenced after a comprehensive geophysical survey, aims to identify the optimum position to discover mineralized gold reefs in a Witwatersrand basin extension. About Wits Basin Precious Minerals Inc. Wits Basin is a precious minerals exploration company currently holding interests in three gold and base metal exploration projects. In one of these projects referred to as the "FSC Project," the Company is a passive investor. The FSC Project (140,000 +ha) is located in South Africa adjacent to the major goldfields discovered at the Witwatersrand Basin. To date Wits Basin has advanced $2.025M to Kwagga Gold (Propriety) Limited ("Kwagga"), a wholly owned subsidiary of AfriOre International (Barbados) Ltd. ("AfriOre"). Kwagga holds the exploration and mining rights to the FSC Project. AfriOre is the operator of the FSC Project. Wits Basin has an additional $75,000 payment, which will be due upon the issuance of the required operating permits. Wits Basin retains the right to increase its equity ownership in Kwagga with a future advance of $1.4M. Wits Basin also holds exploration rights to certain lands (304 ha) near Wawa, Ontario, Canada, referred to as the "Holdsworth Project." While there are no current plans to conduct exploration activities on the Holdsworth Project, the Company is actively seeking a partner to further explore and/or develop Holdsworth. Wits Basin also holds an option agreement to earn a 70% interest, subject to a 2% royalty, in 5 mining claims (1,295 ha) in the McFaulds Lake area of northern Ontario currently held under option by an affiliate, Hawk Precious Minerals Inc. The site is a new VMS (volcanogenic massive sulphide) base metals play. The Company has a funding commitment of $200,000 to help further explore the property. Wits Basin common stock trades on the Over-the-Counter Bulletin Board under the symbol "WITM." Wits Basin is headquartered in Minneapolis, MN with an office in Toronto, ON. Forward-Looking Statements and Risk Factors Certain statements contained in this press release that are forward-looking in nature are based on the current beliefs and assumptions of our management. When used in this press release, the words "may," "could," "should," "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," and similar expressions and their variants may be used to identify forward-looking statements. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. The exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves and mineral resources in connection with any of our projects. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, assuming recoverable, may differ from the reserves and mineral resources already discovered and recovered by others in the same region of the planned areas of exploration. The cost of exploration and exploitation can be extensive and there is no assurance that we will have the resources necessary or the financing available to pursue projects we currently hold interests in or to acquire interests in other mineral exploration projects that may become available. The risks are numerous and detailed information regarding these risks may be found in filings made by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and reports on Form 8-K. Contact Information: Wits Basin Precious Minerals Inc. H. Vance White, CEO, 416.214.2250 or 866.214.WITM(9486); Mark D. Dacko, CFO, 612.349.5277 -----END PRIVACY-ENHANCED MESSAGE-----