-----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, D2oiCrYqS5118XbYv0JjZ5tO0rj1ZGrekpPLiDxXpBwFB1wTKX+ZhhmQrSxA5HE/ bKhyT14VFYpo3W9hvNtAwQ== 0001144204-04-014610.txt : 20040916 0001144204-04-014610.hdr.sgml : 20040916 20040916153633 ACCESSION NUMBER: 0001144204-04-014610 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040910 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20040916 DATE AS OF CHANGE: 20040916 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: 041033753 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 v06806_8k.txt 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): September 10, 2004 WITS BASIN PRECIOUS MINERALS INC. (Exact Name of Registrant as Specified in Charter) Minnesota 1-12401 84-1236619 (State or Other (Commission (IRS Employer Jurisdiction File Number) Identification No.) of Incorporation) 520 Marquette Avenue, Suite 900 Minneapolis, Minnesota 55402 (Address of Principal Executive Offices) (Zip Code) 612.349.5277 (Registrant's telephone number, including area code) (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01. Entry into a Material Definitive Agreement. The Registrant entered into an agreement dated September 10, 2004 (the "Proposal"), by and among the Registrant, Hunter Gold Mining Corporation (a corporation incorporated under the laws of British Columbia, Canada) and its wholly owned subsidiary Hunter Gold Mining, Inc. (a corporation incorporated under the laws of Colorado) (collectively "Hunter Corporation") and Ken Swaisland ("Swaisland") a resident of British Columbia, Canada, that provides the Registrant with an assignment of an option to purchase the Hunter Corporation, held by Swaisland. The Hunter Corporation owns a 100% interest in the Bates-Hunter Gold Mine and the Golden Gilpin Mill located in Central City, Colorado. For a description of this Proposal, reference is hereby made to the Registrant's press release dated September 15, 2004, and the Bates-Hunter proposal, both of which are attached as exhibits. The foregoing is qualified in its entirety by reference to the Proposal, which is being filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. In addition, the Registrant is attaching a Press Release dated September 15, 2004, as Exhibit 99.1, with respect to the Bates-Hunter Proposal, which is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (a) Not required (b) Not required (c) Exhibits Exhibit Description of Document ------- ----------------------- 10.1 Proposal by and among Wits Basin Precious Minerals Inc., Hunter Gold Mining Corporation, Hunter Gold Mining, Inc., and Ken Swaisland, dated September 10, 2004. 99.1 Press Release dated September 15, 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: September 16, 2004 By: /s/ Mark D. Dacko --------------------------- Mark D. Dacko Chief Financial Officer 1 EXHIBIT INDEX Exhibit Description of Document ------- ----------------------- 10.1 Proposal by and among Wits Basin Precious Minerals Inc., Hunter Gold Mining Corporation, Hunter Gold Mining, Inc., and Ken Swaisland, dated September 10, 2004. 99.1 Press Release dated September 15, 2004. 2 EX-10.1 2 v06806_ex10-1.txt EXHIBIT 10.1 [LOGO] Wits Basin Precious Minerals Inc. Hunter Gold Mining Corporation, September 10, 2004 Hunter Gold Mining Inc., PO Box 2460 Station R, Kelowna B.C.. V1X 6A5 Attention; Mr. George Otten RE: BATES HUNTER PROPOSAL Dear Sir Further to our site visit in Colorado August 30-31, to our email memo and subsequent follow up telephone conversations please find below the terms of offer to provide certain work on the Bates Hunter Property (including the Bates Hunter Mine, Water Treatment Facility and Golden Gilpin Mill) in Central City Colorado. It is our understanding that an option on said property was held by Mr Ken Swaisland which option expired on August 31, 2004 but which you may re-extend to September 30, 2004 and on this basis we would propose the following: 1. Wits Basin Precious Minerals Inc. (WITM) will acquire Gregory Gold Producers (GG) from Mr. George Otten (Otten) including all books, EIN #'s etc. for US$10,000 with US$5,000 payable September 17, 2004 and $5,000 payable October 15, 2004. It is understood that all required work permits are in place and current to carry out the program of work. GG will become a wholly owned subsidiary of WITM. 2. Hunter Gold Mining Corp. (Hunter Gold) agrees to extend the deadline for initial funding under the option agreement with Ken Swaisland (Swaisland) dated December 2, 2003 (subsequently amended January 13, 2004, March 30, 2004, and August 4, 2004) to Sept 30, 2004. 3. Swaisland agrees to assign the option to GG with payments of cash, shares and warrants to be made by WITM as per the original unexecuted assignment agreement between WITM and Swaisland dated August 17, 2004. 4. Hunter Gold agrees to the assignment from Swaisland to GG (with WITM guarantee if requested by Hunter Gold). 5. GG will enter into a Services Agreement as drafted and amended with Otten and/or his company to cover the Dewatering and Rehabilitation of the Bates-Hunter to be carried out by Otten under the supervision of Glen O'Gorman. 6. In order to carry out the work program as recommended in the Phase 1 of the Glenn O'Gorman report dated March 1, 2004, GG/WITM (subject to a current financing having been completed) will advance funds as per schedule below: September 30, 2004 $70,000 Start up $90,000 Projected burn rate for October 2004 October 31, 2004 $90,000 Projected burn rate November 2004 November 30, 2004 $90,000 Projected burn rate December 2004 December 31, 2004 $90,000 Projected burn rate January 2005 ------- $430,000 520 Marquette Avenue, Suite 900, Minneapolis, MN 55402 Tel: 612.349.5277 o Fax: 612.371.2077 o www.witsbasin.com 7. Subject to financing having been arranged WITM will advance a $70,000 Contingency Fund by October 31, 2004 the purpose of which will be to cover any unforeseen capital requirements. 8. Subject to financing having been arranged as above WITM will deposit $30,000 on or before October 31, 2004 in a bank account to be controlled Otten to be used as a credit against the last payment required to complete Phase 1 of the O'Gorman Report. Should GG/WITM not complete the financing necessary to complete Phase 1 then the $30,000 will be retained as a penalty by the contractor Otten on his own behalf or that of his company and/or Hunter Gold. Otten will execute a trust agreement to reflect this provision. 9. The advances contemplated under paragraphs 6 and 7 will be to a bank account controlled by Otten to cover the costs of Dewatering and Rehabilitation of the Bates-Hunter. 10. Should any of the funds contemplated to be advanced by GG/WITM to Otten, his nominee company or Hunter Gold, not be advanced by the dates specified herein (unless otherwise extended) then this agreement shall be considered null and void and any funds previously advanced shall be retained by the payees as penalty Should you be in agreement with the above kindly indicate same in the provided for below. Yours truly, /s/ H. Vance White - ------------------ H. Vance White President and CEO Accepted and agreed to by : Hunter Gold Mining Corporation per /s/ George Otten dated 9-10-04 - ------------------------------ ------- George Otten - President Accepted and agreed to by : Hunter Gold Mining Inc. per /s/ George Otten dated 9-10-04 - ------------------------------ ------- George Otten - President Accepted and agreed to by : Hunter Gold Mining Corporation per /s/ George Otten dated 9-10-04 - ------------------------------ ------- George Otten - President Accepted and agreed to by : /s/ Ken Swaisland dated Sept 10/04 - ------------------------------ ---------- Ken Swaisland 520 Marquette Avenue, Suite 900, Minneapolis, MN 55402 Tel: 612.349.5277 o Fax: 612.371.2077 o www.witsbasin.com EX-99.1 3 v06806_ex99-1.txt EXHIBIT 99.1 [LOGO] Wits Basin Precious Minerals Inc. Wits Basin Acquires Option to Purchase Bates-Hunter Gold Mine in Central City, Colorado The Central City area was known historically as the "Richest Square Mile on Earth" Minneapolis MN (September 15, 2004): Wits Basin Precious Minerals Inc. "Wits Basin" (OTCBB-WITM) is pleased to announced that it has executed an assignment of an option (the "Assignment") held by Ken Swaisland to purchase the Hunter Gold Mining Corp, a Canadian corporation, and its wholly owned US subsidiary, Hunter Gold Mining Inc., which owns a 100% interest in the Bates-Hunter Gold Mine and the Golden Gilpin Mill located in Central City, Colorado. Wits Basin management has reviewed an Exploration and Development Plan on the Bates-Hunter property prepared by Glenn O'Gorman, P. Eng., a practicing mining engineer and miner since 1974. Mr. O'Gorman's report, dated March 1, 2004, included a geological report (March 1997) prepared by Stephen Tedesco, Geologist, which detailed and mapped the nine principle gold bearing veins underlying the Bates-Hunter property. In his report Mr. O'Gorman states that: "Lode gold was first discovered in Colorado in 1859 by John H. Gregory. The first veins discovered were the Gregory and the Bates. This discovery started a gold rush into the area with thousands of people trying to stake their claims. The Central City mining district is the most important mining district in the Front Range mineral belt. Since 1859, more than 4,000,000 ounces of gold have been mined from this district. Over 25% of this production has come from the area immediately surrounding the Bates-Hunter Gold Project. Although the Bates vein was one of the richest and most productive in the early history of the area, it was never consolidated and mined to any great depth". After review of historical reports and assessments, Wits Basin management believes the Bates-Hunter Mine represents a unique mining development opportunity. The strong vertical continuity of the veins and ore shoots in the Central City Mining District suggests that the Bates, German, McAllister and Leavitt veins systems, all of which are part of the Bates-Hunter Mine, should continue to extend significantly downward beyond their current 500 to 800 foot maximum development depth. Other mines in the area have reached depths in excess of 2,200 feet and were still in ore at the time of closure. G.S. R. Goldsearch Resources Inc. drilled two reverse circulation holes in 1990. One of the holes did not reach the Bates vein. The second drill hole intersected the Bates vein 200 feet below the lowest workings and returned values averaging .48 ounces gold per ton and .45% copper over a drill length of 10 feet. Most importantly, the Bates-Hunter Mine and the Golden Gilpin Mill are covered by Mining Permit M-1990-41. Furthermore, a water discharge permit is also active through July 31, 2007. Wits Basin believes that these permits represent a distinct economic and operating advantage. Of additional importance is the inclusion of a state-of-the-art water treatment facility adjacent to the mine site, with a 700 gallon per minute capacity. This facility will be utilized for the treatment of the mine water, estimated to be 300 gallons per minute during the dewatering phase, with excess capacity available for community use at a cost yet to be determined. Wits Basin is now exploring various financing options in order to close on the Assignment and fund the exploration program. In order to consummate the Assignment, Wits Basin would make a $50,000 cash payment to Mr. Swaisland and issue him 250,000 shares of our unregistered common stock. The exploration program would be conducted in two phases. The Phase 1 program would proceed with the recommendations by Mr. O'Gorman to: "Dewater and rehabilitate the shaft and levels and conduct underground sampling and diamond drilling to establish confidence that sufficient reserves can be found to justify the property purchase. Concurrent with these activities, investigations should be undertaken to source a suitable processing plant and mining equipment......The initial dewatering and rehabilitation to the 212 foot level has already been accomplished during the 1980's. Timbered areas which have remained submerged will be in good condition and should not require much rehabilitation. It is estimated that the shaft could be dewatered and rehabilitated in as little as 3 months based on a 300 GPM pumping rate. However, a 3 to 6 month time frame should be allowed due to uncertainties associated with underground dewatering and rehabilitation." The cost of the dewatering, rehabilitation and sampling processes is estimated at approximately $500,000. The Phase 2 program would include a more extensive underground diamond drilling program (approximate cost of $650,000) in order to confirm the vein systems above and below the existing underground workings and is estimated to take approximately 4 months to complete. Wits Basin has until November 30, 2005 to complete its due diligence, including Phase 1 and 2. Should the exploration prove viable, Wits Basin's option to complete the acquisition of Hunter Gold Mining Corp., requires a payment of $3,000,000 (to the shareholders and or creditors of Hunter Gold Mining Corp.) plus pay a one percent net smelter return royalty payable to Goldrush Casino and Mining Corporation (to a maximum of $1,500,000) and issue 1,000,000 share purchase warrants at a price equal to the 10 day closing average sale price to Mr. Swaisland plus pay him a two percent net smelter return royalty. 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 has redefined target selection 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 an extension to the Witwatersrand Basin mineralized gold reefs. About Wits Basin Precious Minerals Inc. Wits Basin is a minerals exploration company currently holding interests in three gold and base metal exploration projects. 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 earned a 33% equity interest in Kwagga Gold (Propriety) Limited ("Kwagga"), a subsidiary of AfriOre International (Barbados) Ltd. ("AfriOre") by investing $2.025M to date. Kwagga holds the exploration and mining rights to the FSC Project. AfriOre is the operator of the FSC Project. Wits Basin will earn an additional 2% interest by investing a further $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 investment 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 Cdn$230,000 to help further explore the McFaulds Lake 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 and any estimates relating to possible reserves are subject to significant risks. 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-----