Wednesday, December 22, 2010 2:09:43 AM
Dutch Gold Resources, Inc (DGRI) - Quick overview of basic details and company filings
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Office Address:
3500 Lenox Road
Suite 1500
Atlanta, GA
United States, 30326
404-419-2440
This is a virtual office
http://www.youroffice.com/
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Company Website(s)
Old Website http://www.dutchgoldresources.com/
Which now redirects to the new website http://dutchgold.com/
Old website was registered on 11/29/06
? dutchgoldresources.com
N4892 Nassau
Bahamas
New website was registered on 1/13/10
Daniel Hollins
3500 Lenox Rd Suite 1500
Atlanta, GA 30326
(404) 414-8800
(800) 782-6061 (fax)
dwh104@mac.com
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Company Officers:
Daniel Hollis CEO (Since 2002 when it was Small Town Radio Inc)
Lance Rosmarin Dir. (Was a director on and off since 1990)
Rauno Perttu COO (Since 2009 when the company purchased his company Aultra Gold Inc with 9,614,667 shares)
Steve Keaveney CFO
Prior to becoming CEO Daniel Hollis was a beneficial owner of 8,166,666 shares in 2002
Transfer Agent:
Corporate Stock Transfer, Inc
Auditor/Accountant:
Gruber & Company, LLC
Legal Counsel:
Tarter, Krinsky & Drogin, LLP
Most Recent Share Structure:
A/S 500,000,000 (Sept. 30, 2009)
O/S 192,948,792 (Sept. 30, 2010)
Float 95,603,987 (Nov 9, 2010)
Incorporated in Nevada: (pink sheets says Colorado from back when the shell was Worldwide Petromoly, Inc)
http://nvsos.gov/sosentitysearc/CorpDetails.aspx?lx8nvq=B1jTBt5epqCjUrq0EjtZOw%253d%253d&nt7=0
Last Amendment/Action was designation of Series A Preferred stock on 11/30/10
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Dutch Gold is a Fully Reporting OTCBB company:
In 2007 Daniel Hollis went back and filed 10Qs for 2003, 2004, 2005, and 2006 to fill in a 4 year gap of no filings
Semi-Recent History of the company:
On May 18, 2003, Small Town Radio, Inc and its wholly owned subsidiary, Small Town Radio of Georgia, Inc, filed voluntary petitions under Chapter 11 of title 11, United States Code (the "Bankruptcy Code") in the US Bankruptcy Court for the Northern District of Georgia (the "Bankruptcy Court")(Case Nos. 03-67044 and 03-67043). The company subsequently refocused to become a natural resources company, changing its name to Tombstone Western Resources, Inc. on May 1, 2006. On December 7, 2006 the company changed its name to Dutch Gold Resources, Inc in anticipation of its acquisition of Dutch Mining, LLC which occurred January 16, 2007.
January 4, 2007 Dutch Gold Resources, Inc did a merger/acquisition with Dutch Mining LLC (Oregon Business Entity)
Dutch Mining, LLC
700 Merlin Rd
Grants Pass, OR 97526
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=4899439
http://egov.sos.state.or.us/br/pkg_web_name_srch_inq.show_detl?p_be_rsn=383299&p_srce=BR_INQ&p_print=FALSE
Embassy International, LLC owned 84.4% of Dutch Mining, LLC at the time (19,177,628 shares)
Embassy International, LLC is Ewald Dienhart and Dawn Caruso-Dienhart
http://sunbiz.org/scripts/cordet.exe?action=DETFIL&inq_doc_number=L05000000650&inq_came_from=NAMFWD&cor_web_names_seq_number=0000&names_name_ind=N&names_cor_number=&names_name_seq=&names_name_ind=&names_comp_name=EMBASSYINTERNATIONAL&names_filing_type=
Other Equity Holders of Dutch Mining, LLC were Bruce Burrow (2,865,622 shares) and HPUs LLC (681,750 shares)
This merger/acquisition brought the Benton Mine lease and the adjacent Gold Bug Mine
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A Review of the SEC filings paints a grim financial picture:
RISK FACTORS From the 10K filing for 2009
Our independent auditors have expressed doubt about our ability to continue as a going concern.
Our independent public accountants have expressed doubt about our ability to continue as a going concern in their report on our December 31, 2009 and December 31, 2008 financial statements. Our independent public accountants have advised us that our continuance as a going concern is dependent upon our ability to raise capital. There is no assurance that we will be able to raise sufficient capital or generate sufficient cash from operations to continue as a going concern.
Because of our limited operations and the fact that we are currently generating limited revenue, we may be unable to service our debt obligations.
We currently have approximately $2,514,926 in debt pursuant to promissory notes issued by us. We are presently unable to meet our interest obligations in the amount of $420,415 under these notes. We are also trying to secure additional debt and equity financing. Our ability to satisfy our current debt service obligations, and any additional obligations we might incur will depend upon our future financial and operating performance, which, in turn, are subject to prevailing economic conditions and financial, business, competitive, legislative and regulatory factors, many of which are beyond our control. If our cash flow and capital resources continue to be insufficient to fund our debt service obligations, we may be forced to reduce or delay planned acquisitions, expansion and capital expenditures, sell assets, obtain additional equity capital or restructure our debt. We cannot assure you that our operating results, cash flow and capital resources will be sufficient for payment of our debt service and other obligations in the future.
GOING CONCERN from the 10K filing for 2009
In connection with their audit report on our consolidated financial statements as of December 31, 2009, Gruber & Company, our independent certified public accountants, expressed substantial doubt about our ability to continue as a going concern because such continuance is dependent upon our ability to raise capital.
We have explored, and continue to explore, all avenues possible to raise the funds required. We have limited revenue-producing activity. We also need capital to fund overhead and administrative costs as well as transaction expenses. At December 31, 2009, accounts payable to vendors totaled $1,312,177. At December 31, 2009, our cash requirement was approximately $50,000 per month. We have met our operating costs to date through the sale of gold, equity and debt financing from our shareholders and other investors; however, there can be no assurance that our shareholders and other investors will be able or willing to make additional investments in the future to fund continued operations.
The Company requires further funding to continue to develop its mines and fund corporate overheads. Although we believe that there is a reasonable basis to believe that we will successfully raise the needed funds, we cannot assure you that we will be able to raise sufficient capital to sustain operations or that we will be able to achieve, or maintain, a level of profitability sufficient to meet the operating expenses of the operations and corporate overheads.
RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009 AND THE YEAR ENDED DECEMBER 31, 2009
The operating loss for the twelve months ended December 31, 2009 was $9,219,374, an increase of $5,078,647 over the year ended December 31, 2008. A substantial portion ($7.8 million) of the operating expenses incurred during the twelve months ending 31 December 2009 represent non-cash charges relating to the issuance of shares for professional services. Revenue for the twelve months ended December 31, 2009 was $0 as compared to $628,669 for the year ended December 31, 2008. Interest expense and financing costs for the twelve months ended December 31, 2009 were $1,252,175 as compared to $616,740 for the twelve months ended December 31, 2008. The total loss for the twelve months ended December 31, 2009 was $10,415,229 as compared to $4,602,863 for the twelve months ended December 31, 2008.
Legal Proceedings - Pending SEC Investigation
From time to time, we are involved in claims and suits that arise in the ordinary course of our business. Although management currently believes that resolving any such claims against us will not have a material adverse impact on our business, financial position or results of operations, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. In addition to any such claims and suits, we are involved in the following legal proceedings.
On April 8, 2010, the Company was advised that the Securities and Exchange Commission is conducting an investigation in the Company in the matter identified as Dutch Gold Resources, Inc, Case No. A-03222. In accordance with the investigation, the Company and its Chief Executive Officer, Daniel W. Hollis, received subpoenas to produce documents and testify before the Commission. Neither the Company nor Mr. Hollis have been notified of the nature of the investigation.
We may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances. We are not aware of any pending or threatened litigation against us or our officers and directors in their capacity as such that could have a material impact on our operations or finances.
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MINING LEASE AND OPTION TO PURCHASE
On May 1, 2006, the Company entered into a mining lease and option to purchase mining property known as Mineral Lot no. 351 final certificate No. 83 consisting of the Gold Bug, Silver State, Silver Dollar, Oregonian, Bimetallist and US Lode Claims in Joseph County, Oregon together with related easements with Benton Mines, Inc. The agreement is a fifth amendment to a mining lease and option to purchase dated June 1, 1976.
The agreement provides for a monthly minimum advance royalty payment of $5,000. The production royalty provides that the lessor pay 4% of the value of ores, minerals, metals, bullion and mineral products derived from the property to the lessee. In addition, lessee will pay 1% of the value of ores, minerals, metals, bullion and mineral products derived within one mile of the leased property. The royalties are payable on a monthly basis.
The Company has an option to purchase the property subject to the lease for $10,000,000. As of the date of this report, the Company is default under the terms of the Agreement. The Company must complete a reclamation plan for the Benton Mine by the end of June 2010, and may apply for a commercial mining permit when completed and the disagreements between Benton Mine, Inc and Dutch Mining, LLC are resolved. The disagreements between the parties are long standing, causing the Agreement to be in default. Dutch Mining LLC disputes the amount of royalties due to the lessor. Dutch Mining LLC does not and will not operate under the aforementioned lease until a reclamation plan is completed and a full commercial permit is obtained. At such time, the Benton Mine, Inc. and the Company will have to agree on new terms of the lease, resolving any and all disputed amounts.
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DESCRIPTION OF PROPERTY
We currently lease approximately 160 square feet of space in Atlanta, Georgia for our corporate office and operations on a month-to-month basis. Our monthly rental charge for these offices is approximately $1,350 per month. We believe that these offices generally are adequate for our current needs and our needs in the immediate future.
The company’s operating headquarters are based in Grants Pass, Oregon where the Company maintains administrative offices, its milling operations and equipment garage for equipment used in the production of gold.
The Company leases the Benton Mine, near Grants Pass, OR and has operational facilities at that location. The Company owns the adjacent Gold Bug Mine, which was last operated in 1941.
Benton Mine
From the 10Q filing ending June 30, 2010 - The Company has had a lease, which is under dispute for the Benton Mine. The mine is currently in Care and Maintenance mode. There are disagreements with the owners of Benton Mine and Dutch Mining LLC as to the amount of royalties due to the lessor. Dutch Mining LLC does not and will not operate under the aforementioned lease until a reclamation plan is completed and a full commercial permit is obtained. The Company produced and sold gold ore in 2007 and 2008, selling gold concentrates to a domestic buyer and to an international buyer. The Company has not produced or sold any gold from the Benton Mine since 2008.
Also from the 10Q for the period ending June 30, 2010 - As of the date of this report, the Company is default under the terms of the Agreement. The Company has completed the reclamation plan for the Benton Mine and is evaluating the economic feasibility of the project, weighing projected capital costs and anticipated return on investment against other projects in the company portfolio. If it is determined that the Benton Mine is viable for future investment the existing lease will have to be re-negotiated and brought up to date.
Gold Bug Mine
The Company owns the Gold Bug mine at Silver State, Silver Dollar, Oregonian, Bimetallist and US Lode Claims in Joseph County, Oregon. Gold Bug had gold production until 1942, when mining ceased as a result of World War II. Historic production and current geochemical studies indicate the presence of minerals associated with gold formations. The Company intends to permit the Gold Bug Mine after completing a thorough and diligent study to assess the economic potential of the properties.
Acquisition of Aultra Gold, Inc.’s Assets
On January 6, 2010, the Company entered into an Asset Purchase Agreement with Aultra Gold, Inc. effective as of December 31, 2009. Pursuant to the Agreement, the Company acquired all of Aultra Gold’s assets. As consideration for these assets, the Company issued 9,614,667 shares of its common stock, par value $0.001 per share, to Aultra Gold. (not sure what these assets are)
In accordance with the transaction, the Company acquired substantially all of the assets related to Aultra Gold’s gold and mineral business, including inventory, accounts receivable, certain supply and distribution and other vendor contracts, good will and other various assets and intangibles. The parties made customary representations, warranties and indemnities that are typical and consistent for a transaction of this size and scope.
In January 2010, the Company announced that an independent consulting geologist conducted an NI 43-101 compliant report, indicating the mineral resource at the Basin Gulch property was sizeable. That report is available as a Form 8K at www.sec.gov and on the Company website, www.dutchgold.com
I am a little confused about who the Basin Gulch property belongs to. I see no where that it is printed that Dutch Gold Resources, Inc definitively owns or leases the Basin Gulch property.
In the 8K for the acquisition of Aultra Gold, Inc it makes one obscure mention of the name "Basin Gulch" and "Jungo" in the excluded assets section of the agreement:
1.11. “Excluded Assets" means all assets of the Seller not explicitly included in the Acquired Assets, including the
following:
(i) all refunds (or credits) of any Tax for any Tax year or portion thereof ending on or before the Closing Date (or for any Tax year beginning before and ending after the Closing Date to the extent allocable to the portion of such period beginning before and ending on the Closing Date);
(ii) all leases, office equipment, fixtures, furniture, supplies, software and software licenses of Seller;
(iii) all of Seller's rights, claims or causes of action against Third Parties relating to the Acquired Assets with respect to the period prior to the Closing; and
(iv) the names “Basin Gulch”, “Jungo”, or any related or similar trade names, trademarks, service marks or logos to the extent the same incorporate the name “Basin Gulch”, “Jungo”.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=6983398
http://nvsos.gov/sosentitysearch/CorpDetails.aspx?lx8nvq=JpyXDexaKXHFvIZPy9UudA%253d%253d&nt7=0
I also find it odd that just 9 days after the acquisition of Aultra Gold, Inc., Dutch Gold Resources, Inc. had already commissioned an NI43-101 on the Basin Gulch property (dated 1/15/10). Reading through the NI43-101 it looks like all the date was taken from old surveys and other various reports on the property from the 1980s and 1990s plus data collected through 4 visits to the property (2 in 2006 and 2 in 2009) by David E. Brown the licensed geologist that signed the NI43-101 so commissioning the report must have just required paying for the existing data to be organized in the proper format and signed and dated by David E. Brown.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7015848
Basin Gulch, Montana
The Basin Gulch Mine is a large, open-ended, gold and silver system in Montana located in central Montana west of Helena near the Idaho border.
Dutch Gold Resources, Inc., was granted an assignment of the Basin Gulch Mine lease between Aultra Gold, Inc. and Strategic Minerals, Inc. as a result of the acquisition of this asset and the majority of the stock in Aultra Gold, Inc. On May 31, 2006, the Company entered into a Mining Lease Agreement with Strategic, whereby Strategic granted the Company the exclusive right to explore, evaluate, develop, and mine the Basin Gulch Property, Montana. The advanced exploration and test mining project consists of eleven patented mineral claims, surrounded by the Deer Lodge National Forest, totaling about 217.9 acres. The claims are all located at the head of Basin Gulch, on the northern slopes of the West Fork Buttes, within the Sapphire Range of the Western Montana Rocky Mountains.
The three-stage Mining Lease Agreement for Basin Gulch is structured as follows:
Stage 1 initial payment:
The Company paid its initial cash payment of $10,000 and prior to July 30, 2006 satisfied its reporting obligations to Strategic regarding all the exploration and studies conducted on the premises of Basin Gulch Property.
Stage 2 advance production royalties:
To further evaluate and develop the minerals, the Company fulfilled the following obligations:
i) By June 10, 2006, it paid a cash payment of $15,000 directly to the underlying property owner;
ii) by September 10, 2006 made a cash payment of $25,000 directly to the underlying property owner, and at the end of each flowing six month period to date.. Since 2008, Dutch Gold Resources, Inc. made such payments under an agreement with AGI, which granted a security interest in all the claims, in the event that AGI could not repay such advances;
iii) a cash payment of $25,000 will be made on September 10, 2010, and thereafter on every six months until production has commenced.
Stage 3 production royalties:
Upon commencement of production, the Company must pay the greater of:
i) A twice annual cash payment of $50,000 due on March 10 and September 10 of each year; or
ii) 3% of the gross sales receipts of the gold and silver sold, due semi-annually on March 10 and September 10 of each year;
Should production be suspended for a period of 6 months or longer, the twice annual advance production royalty of $50,000 listed above resume. Upon the completion of payments totaling $8,000,000, the Company will have purchased the mineral rights to this property.
Jungo
Jungo is located in northern Nevada near the Oregon border. The Jungo property lies between the historic Sleeper and Hycroft mines in Humboldt County, Nevada. Rauno Perttu, Dutch Gold’s COO and renowned Geologist discovered the Jungo exploration property in 2006.
On June 1, 2007, the Company entered into a formal binding Agreement of Purchase and Sale (the "Agreement") with W.R. Hansen, an individual (the “Seller”), pursuant to which the Company acquired from the Seller certain mining claims together with all improvements and all equipment owned by the Seller located thereon, located in Humboldt County, State of Nevada (the “Property”). In consideration of the purchase of the Property, the Company agreed to: (i) reimburse the Seller for all staking and filing costs related to the Property, (ii) issue to the Seller 50,000 restricted shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), valued at $0.50 per share, (iii) upon its sole determination of sufficient mineralization to place the Property in production, to further issue to the Seller additional 50,000 restricted shares of the Company’s Common Stock, such that the Company shall make such a determination not later than 30 days following the acquisition of the data contemplated by paragraph 3.3 of the Agreement, (iv) not later than 10 days following the date the Property is placed into development for production of metals, to issue to the Seller an additional 100,000 restricted shares of the Company’s Common Stock, and (v) as further consideration after the Property is placed in production, to direct to the Seller a monthly Net Smelter Royalty of 2% upon all gold, silver, copper, or other metals (the “Metals”) produced and sold from the Property (each royalty payment shall be paid not later than 30 days following the last day of the month in which the metals were produced and sold). Closing of the sale and purchase of the Property occurred on the same date, as under the Agreement both the Company and the Seller have performed their mutual obligations under paragraph 2.2 and Section 4 thereof.
MINERAL PROPERTIES AND DEVELOPMENT COSTS
With the acquisition of the Basin Gulch Project and the Jungo Project, we also acquired certain mining claims and permits in the transaction. Since that time, we have not commenced any mining operations therefore, we have not recorded any amortization expense and we have determined that no impairment has occurred for the period ended March 31, 2010. Components of our mineral properties and development costs are as follows:
Basin Gulch claims - $1,252,053
Jungo - $94,000
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On March 29, 2010, the Company’s subsidiary, Aultra Gold, Inc. entered into an Agreement and Plan of Share Exchange (the “Agreement”) with Shamika Gold Inc., a Canadian Corporation (“Shamika”), and certain shareholders of Shamika (the “Shamika Holders”). Pursuant to the Agreement, the Company acquired all of the outstanding shares (the “Shamika Shares”) from the Shamika Holders in exchange for an aggregate of 25,500,000 shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock”) (the “Exchange”). As a result of the Exchange, Shamika became a wholly-owned subsidiary of the Company. The Company shares were issued to the Shamika Holders on a pro rata basis, on the basis of the shares held by such Shamika Holders at the time of the Exchange.
The former holders of the Shamika Shares now beneficially own approximately 51% of the outstanding shares of our Common Stock. Accordingly, the Exchange represents a change in control. Dutch Gold Resources, Inc. retained 4,950,000 shares of Shamika Gold, Inc. For financial accounting purposes, the acquisition was a reverse acquisition of the Company by Shamika, under the purchase method of accounting, and was treated as a recapitalization with Shamika as the acquirer. Upon consummation of the Exchange, the Company adopted the business plan of Shamika and the Company owns 9.9% of the Shamika business.
If Dutch Gold Resources, Inc gained any mining properties from this acquisition of Samika Gold, Inc. (as hinted at in the press release) the mining properties did not show up on the either of the next 10Q reports. So that's kind of odd.
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Three Months ended March 31, 2010 and 2009
During the three-month period ended March 31, 2010 the Company incurred operating expenses of $1,532,608 and interest expenses of $87,342 as compared to operating expenses of $877,310 and interest expenses of $64,879 for the period ended March 31, 2009. The Company's net loss during the three-month period ended March 31, 2010 was $1,619,950 as compared to a net loss of $942,189 during the three-month period ended March 31, 2009.
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On June 23, 2010 Embassy International, LLC (Edward Dienhart and Dawn Caruso-Dienhart ) who already owned 17,800,000 shares on 12/31/09 was issued 15,800,000 more shares to satisfy $50,000.00 towards a $1,214,962.00 debt owned to Embassy International, LLC by Dutch Gold
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7340722
Those 15,800,000 shares were then in turn sold to Socius CG II, Ltd., a Bermuda company for an undisclosed amount. The Bermuda connection is interesting because it came up earlier in the registration of the domain name dutchgoldresources.com
The shares were obtained pursuant to a Stock Purchase Agreement, dated as of June 23, 2010, between Socius CG II, Ltd. and Embassy International, LLC.
For purposes of calculating the percent of class, the reporting persons have assumed that there were a total of 159,495,439 shares of common stock outstanding immediately subsequent to the issuance of the shares to Socius CG II, Ltd. such that 15,800,000 shares of common stock represent approximately 9.9% of the class subsequent to such issuance.
Socius Capital Group, LLC, Mr. Peizer and Ms. Peizer directly own no shares of the issuer. Mr. Peizer is the sole Managing Director of Socius Capital Group, LLC and Socius CG II, Ltd..
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7341994
Socius CG II, Ltd. Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
Socius Capital Group, LLC, Mr. Peizer and Ms. Peizer is: 11150 Santa Monica Boulevard, Suite 1500, Los Angeles, CA 90025.
Socius CG II, Ltd. is a Bermuda exempted company
Socius Capital Group, LLC is a Delaware limited liability company.
Mr. Peizer and Ms. Peizer are United States citizens.
The address 11150 Santa Monica Boulevard, Suite 1500, Los Angeles, CA 90025 is a virtual office shared by another publicly trading company, Hythiam, Inc (HYTM) whose CEO is Terren Peizer
http://investorshub.advfn.com/boards/board.aspx?board_id=11407
http://www.hythiam.com/
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Additional information from 10Q for period ending June 30, 2010:
DUTCH GOLD RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Revenue has a lien on the company’s subsidiary Dutch Mining, LLC’s personal and real property in the amount of $118,663. Dutch Gold Resources, Inc. is not liable for the taxes associated with these liens, except to the extent that it makes additional capital available to Dutch Mining, LLC.
The Company assumed a note issued by Dutch Mining LLC in the amount of $950,000 to Josef Bauer for working capital. The note is guaranteed by Ewald Dienhart and carries an interest rate of 8.0%. The related parties have agreed not to demand the loans through December 31, 2012 therefore the loans are recorded as long-term liabilities.
The Company leases space from Rendata Industrial Park, LLC. Rendata Industrial Park ownership: The Ebert Family Trust owns 52% and the remaining 48% is owned by the Caruso Dienhart (TBE) Family LLC. For the period ended December 31, 2009 the Company accrued rent and related expenses in the amount of $142,380 and had a payable balance accrued of $311, 775 at June 30, 2010.
The Company had an agreement with HPUs, LLC, whose Managing Member Patrick Engel, is related to the Company’s former Chairman, effective November 30, 2007 to provide management services. The contract was for one year, automatically renewable unless terminated for a monthly amount of $9,500.
The company owed $69,683 is owed to Caruso Dienhart (TBE) Family LLC for short term advances at December 31, 2009.
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On July 15, 2010, the Company consummated an Exchange Agreement (the “Agreement”) with Embassy International, LLC, a Florida limited liability company (the “Holder”). Pursuant to the Agreement, the Company issued 15,800,000 shares (the “Shares”) of its common stock, par value $0.001 per share (the “Common Stock”), in exchange for partial satisfaction in the amount equal to $50,000.00 of a certain promissory note owed by the Company to the Holder in the principal amount of $1,214,962.00. The Shares are subject to adjustment and potential return to the Company for retirement based upon the loan amount converted and 75% of the volume weighted average price of the Common Stock for the twenty trading days following the delivery of the Shares. The promissory note was issued by Dutch Mining, LLC, a wholly-owned subsidiary of the Company (“Dutch Mining”), to the Holder on December 31, 2006 and was assumed by the Company pursuant to an Agreement and Plan of Share Exchange, dated January 4, 2007, between the Company and Dutch Mining. Also on that date, the Holders sold the Shares to Socius CG, II, Ltd., an unaffiliated Bermuda company.
Three Months ended June 30, 2010 and 2009
During the three-month period ended June 30, 2010 the Company incurred operating expenses of $430,624 and interest expenses of $110,000 as compared to operating expenses of $2,216,917 and interest expenses of $612,550 for the period ended June 30, 2009. The Company's net loss during the three-month period ended June 30, 2010 was $540,624 as compared to a net loss of $2,829,467 during the three-month period ended June 30, 2009.
Three Months ended September 30, 2010 and 2009
During the three-month period ended September 30, 2010 the Company incurred operating expenses of $965,419 and interest expenses of $23,319 as compared to operating expenses of $2,197,093 and interest expenses of $345,798 for the period ended September 30, 2009. The Company's net loss during the three-month period ended September 30, 2010 was $988,738 as compared to a net loss of $2,542,891 during the three-month period ended September 30, 2009.
Unregistered Sales of Equity Securities and Use of Proceeds
During the quarter ending September 30, 2010, the Company issued an aggregate of 12,050,433 shares of Common Stock in consideration for services to non-related parties. Also during the period ending September 30, 2010, the Company sold an aggregate of 31,153,704 shares of common stock in consideration for an aggregate purchase $133,500.
Employee relations
As of September 30, 2010, we had 5 employees.
On December 8, 2010 the company was so broke they had to pay their officers with shares:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7599145
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SUMMARY SO FAR:
Just going through the filings I see a company in Dutch Gold Resources Inc. that is in an incredible amount of debt. DGRI has worked out several merger/acquisition agreements with other companies with some rights to some mine leases in exchange for large amounts of shares and huge debt Notes over the past couple of years. The mine leases they have obtained from these merger/acquisitions all come with debts and/or payments due.
None of the mines sound like they are currently operating and bringing in any revenues based on the information in the filings. According to the 10Q filing ending June 30, 2010 there are some disputes in ownership of the Benton mine property. The Benton mine property was left off the 10Q filing ending September 30, 2010 leaving me to wonder if Dutch Gold Resources lost that property. From the filings it does not sound like any of the other properties are currently ready to start producing. The operational costs to get a mine producing can be very very high.
Besides the issues with accumulating debts and lack of cash to even pay its officers, Dutch Gold is still the subject of an ongoing and yet unresolved investigation by the SEC. Dutch Gold Resources, Inc. describes itself as a junior mining company seeking to find and development significant gold properties. So far they have only been able to find the properties, but not development any of them. Based on my research so far I don't see that changing for Dutch Resources, Inc any time soon.
One other area that may require more investigation is the Bermuda connection.
Going back through the sequence of event:
11/29/06 - The domain name dutchgoldresources.com was registered from out of Bermuda
12/07/06 - Tombstone Western Resources, Inc changed its name to Dutch Gold Resources, Inc in anticipation of its acquisition of Dutch Mining, LLC
1/16/07 - Dutch Gold Resources, Inc. purchased Dutch Mining, LLC which was owned by Embassy International, LLC (Ewald Dienhart and Dawn Caruso-Dienhart)
Because of this purchase Embassy International, LLC became the largest beneficial shareholder of Dutch Gold Resources, Inc. and Dutch Gold Resources, Inc. became indebted to Embassy International, LLC to the tune of $1,214,962.00.
Because of interest due on this $1,214,962.00 debt, Dutch Gold Resources, Inc. has been making periodic payments of large amounts of shares to Embassy International, LLC which in turn has been immediately "selling" those shares to a Bermuda based company, Socius CG, II, Ltd for an undisclosed amount.
There definitely seems to be some odd activities going on here, especially since the Benton mine which Dutch Gold Resources, Inc appeared to be gaining the leasing rights for by acquiring Dutch Mining LLC seems to now be lost.
Biggest Question is why is the CEO of Hythiam, Inc., Terren Peizer, buying up huge blocks of shares of Dutch Gold Resources Inc using his Bermuda based company?
Further investigation pending
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Office Address:
3500 Lenox Road
Suite 1500
Atlanta, GA
United States, 30326
404-419-2440
This is a virtual office
http://www.youroffice.com/
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Company Website(s)
Old Website http://www.dutchgoldresources.com/
Which now redirects to the new website http://dutchgold.com/
Old website was registered on 11/29/06
? dutchgoldresources.com
N4892 Nassau
Bahamas
New website was registered on 1/13/10
Daniel Hollins
3500 Lenox Rd Suite 1500
Atlanta, GA 30326
(404) 414-8800
(800) 782-6061 (fax)
dwh104@mac.com
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Company Officers:
Daniel Hollis CEO (Since 2002 when it was Small Town Radio Inc)
Lance Rosmarin Dir. (Was a director on and off since 1990)
Rauno Perttu COO (Since 2009 when the company purchased his company Aultra Gold Inc with 9,614,667 shares)
Steve Keaveney CFO
Prior to becoming CEO Daniel Hollis was a beneficial owner of 8,166,666 shares in 2002
Transfer Agent:
Corporate Stock Transfer, Inc
Auditor/Accountant:
Gruber & Company, LLC
Legal Counsel:
Tarter, Krinsky & Drogin, LLP
Most Recent Share Structure:
A/S 500,000,000 (Sept. 30, 2009)
O/S 192,948,792 (Sept. 30, 2010)
Float 95,603,987 (Nov 9, 2010)
Incorporated in Nevada: (pink sheets says Colorado from back when the shell was Worldwide Petromoly, Inc)
http://nvsos.gov/sosentitysearc/CorpDetails.aspx?lx8nvq=B1jTBt5epqCjUrq0EjtZOw%253d%253d&nt7=0
Last Amendment/Action was designation of Series A Preferred stock on 11/30/10
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Dutch Gold is a Fully Reporting OTCBB company:
In 2007 Daniel Hollis went back and filed 10Qs for 2003, 2004, 2005, and 2006 to fill in a 4 year gap of no filings
Semi-Recent History of the company:
On May 18, 2003, Small Town Radio, Inc and its wholly owned subsidiary, Small Town Radio of Georgia, Inc, filed voluntary petitions under Chapter 11 of title 11, United States Code (the "Bankruptcy Code") in the US Bankruptcy Court for the Northern District of Georgia (the "Bankruptcy Court")(Case Nos. 03-67044 and 03-67043). The company subsequently refocused to become a natural resources company, changing its name to Tombstone Western Resources, Inc. on May 1, 2006. On December 7, 2006 the company changed its name to Dutch Gold Resources, Inc in anticipation of its acquisition of Dutch Mining, LLC which occurred January 16, 2007.
January 4, 2007 Dutch Gold Resources, Inc did a merger/acquisition with Dutch Mining LLC (Oregon Business Entity)
Dutch Mining, LLC
700 Merlin Rd
Grants Pass, OR 97526
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=4899439
http://egov.sos.state.or.us/br/pkg_web_name_srch_inq.show_detl?p_be_rsn=383299&p_srce=BR_INQ&p_print=FALSE
Embassy International, LLC owned 84.4% of Dutch Mining, LLC at the time (19,177,628 shares)
Embassy International, LLC is Ewald Dienhart and Dawn Caruso-Dienhart
http://sunbiz.org/scripts/cordet.exe?action=DETFIL&inq_doc_number=L05000000650&inq_came_from=NAMFWD&cor_web_names_seq_number=0000&names_name_ind=N&names_cor_number=&names_name_seq=&names_name_ind=&names_comp_name=EMBASSYINTERNATIONAL&names_filing_type=
Other Equity Holders of Dutch Mining, LLC were Bruce Burrow (2,865,622 shares) and HPUs LLC (681,750 shares)
This merger/acquisition brought the Benton Mine lease and the adjacent Gold Bug Mine
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A Review of the SEC filings paints a grim financial picture:
RISK FACTORS From the 10K filing for 2009
Our independent auditors have expressed doubt about our ability to continue as a going concern.
Our independent public accountants have expressed doubt about our ability to continue as a going concern in their report on our December 31, 2009 and December 31, 2008 financial statements. Our independent public accountants have advised us that our continuance as a going concern is dependent upon our ability to raise capital. There is no assurance that we will be able to raise sufficient capital or generate sufficient cash from operations to continue as a going concern.
Because of our limited operations and the fact that we are currently generating limited revenue, we may be unable to service our debt obligations.
We currently have approximately $2,514,926 in debt pursuant to promissory notes issued by us. We are presently unable to meet our interest obligations in the amount of $420,415 under these notes. We are also trying to secure additional debt and equity financing. Our ability to satisfy our current debt service obligations, and any additional obligations we might incur will depend upon our future financial and operating performance, which, in turn, are subject to prevailing economic conditions and financial, business, competitive, legislative and regulatory factors, many of which are beyond our control. If our cash flow and capital resources continue to be insufficient to fund our debt service obligations, we may be forced to reduce or delay planned acquisitions, expansion and capital expenditures, sell assets, obtain additional equity capital or restructure our debt. We cannot assure you that our operating results, cash flow and capital resources will be sufficient for payment of our debt service and other obligations in the future.
GOING CONCERN from the 10K filing for 2009
In connection with their audit report on our consolidated financial statements as of December 31, 2009, Gruber & Company, our independent certified public accountants, expressed substantial doubt about our ability to continue as a going concern because such continuance is dependent upon our ability to raise capital.
We have explored, and continue to explore, all avenues possible to raise the funds required. We have limited revenue-producing activity. We also need capital to fund overhead and administrative costs as well as transaction expenses. At December 31, 2009, accounts payable to vendors totaled $1,312,177. At December 31, 2009, our cash requirement was approximately $50,000 per month. We have met our operating costs to date through the sale of gold, equity and debt financing from our shareholders and other investors; however, there can be no assurance that our shareholders and other investors will be able or willing to make additional investments in the future to fund continued operations.
The Company requires further funding to continue to develop its mines and fund corporate overheads. Although we believe that there is a reasonable basis to believe that we will successfully raise the needed funds, we cannot assure you that we will be able to raise sufficient capital to sustain operations or that we will be able to achieve, or maintain, a level of profitability sufficient to meet the operating expenses of the operations and corporate overheads.
RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009 AND THE YEAR ENDED DECEMBER 31, 2009
The operating loss for the twelve months ended December 31, 2009 was $9,219,374, an increase of $5,078,647 over the year ended December 31, 2008. A substantial portion ($7.8 million) of the operating expenses incurred during the twelve months ending 31 December 2009 represent non-cash charges relating to the issuance of shares for professional services. Revenue for the twelve months ended December 31, 2009 was $0 as compared to $628,669 for the year ended December 31, 2008. Interest expense and financing costs for the twelve months ended December 31, 2009 were $1,252,175 as compared to $616,740 for the twelve months ended December 31, 2008. The total loss for the twelve months ended December 31, 2009 was $10,415,229 as compared to $4,602,863 for the twelve months ended December 31, 2008.
Legal Proceedings - Pending SEC Investigation
From time to time, we are involved in claims and suits that arise in the ordinary course of our business. Although management currently believes that resolving any such claims against us will not have a material adverse impact on our business, financial position or results of operations, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. In addition to any such claims and suits, we are involved in the following legal proceedings.
On April 8, 2010, the Company was advised that the Securities and Exchange Commission is conducting an investigation in the Company in the matter identified as Dutch Gold Resources, Inc, Case No. A-03222. In accordance with the investigation, the Company and its Chief Executive Officer, Daniel W. Hollis, received subpoenas to produce documents and testify before the Commission. Neither the Company nor Mr. Hollis have been notified of the nature of the investigation.
We may be involved from time to time in ordinary litigation, negotiation and settlement matters that will not have a material effect on our operations or finances. We are not aware of any pending or threatened litigation against us or our officers and directors in their capacity as such that could have a material impact on our operations or finances.
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MINING LEASE AND OPTION TO PURCHASE
On May 1, 2006, the Company entered into a mining lease and option to purchase mining property known as Mineral Lot no. 351 final certificate No. 83 consisting of the Gold Bug, Silver State, Silver Dollar, Oregonian, Bimetallist and US Lode Claims in Joseph County, Oregon together with related easements with Benton Mines, Inc. The agreement is a fifth amendment to a mining lease and option to purchase dated June 1, 1976.
The agreement provides for a monthly minimum advance royalty payment of $5,000. The production royalty provides that the lessor pay 4% of the value of ores, minerals, metals, bullion and mineral products derived from the property to the lessee. In addition, lessee will pay 1% of the value of ores, minerals, metals, bullion and mineral products derived within one mile of the leased property. The royalties are payable on a monthly basis.
The Company has an option to purchase the property subject to the lease for $10,000,000. As of the date of this report, the Company is default under the terms of the Agreement. The Company must complete a reclamation plan for the Benton Mine by the end of June 2010, and may apply for a commercial mining permit when completed and the disagreements between Benton Mine, Inc and Dutch Mining, LLC are resolved. The disagreements between the parties are long standing, causing the Agreement to be in default. Dutch Mining LLC disputes the amount of royalties due to the lessor. Dutch Mining LLC does not and will not operate under the aforementioned lease until a reclamation plan is completed and a full commercial permit is obtained. At such time, the Benton Mine, Inc. and the Company will have to agree on new terms of the lease, resolving any and all disputed amounts.
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DESCRIPTION OF PROPERTY
We currently lease approximately 160 square feet of space in Atlanta, Georgia for our corporate office and operations on a month-to-month basis. Our monthly rental charge for these offices is approximately $1,350 per month. We believe that these offices generally are adequate for our current needs and our needs in the immediate future.
The company’s operating headquarters are based in Grants Pass, Oregon where the Company maintains administrative offices, its milling operations and equipment garage for equipment used in the production of gold.
The Company leases the Benton Mine, near Grants Pass, OR and has operational facilities at that location. The Company owns the adjacent Gold Bug Mine, which was last operated in 1941.
Benton Mine
From the 10Q filing ending June 30, 2010 - The Company has had a lease, which is under dispute for the Benton Mine. The mine is currently in Care and Maintenance mode. There are disagreements with the owners of Benton Mine and Dutch Mining LLC as to the amount of royalties due to the lessor. Dutch Mining LLC does not and will not operate under the aforementioned lease until a reclamation plan is completed and a full commercial permit is obtained. The Company produced and sold gold ore in 2007 and 2008, selling gold concentrates to a domestic buyer and to an international buyer. The Company has not produced or sold any gold from the Benton Mine since 2008.
Also from the 10Q for the period ending June 30, 2010 - As of the date of this report, the Company is default under the terms of the Agreement. The Company has completed the reclamation plan for the Benton Mine and is evaluating the economic feasibility of the project, weighing projected capital costs and anticipated return on investment against other projects in the company portfolio. If it is determined that the Benton Mine is viable for future investment the existing lease will have to be re-negotiated and brought up to date.
Gold Bug Mine
The Company owns the Gold Bug mine at Silver State, Silver Dollar, Oregonian, Bimetallist and US Lode Claims in Joseph County, Oregon. Gold Bug had gold production until 1942, when mining ceased as a result of World War II. Historic production and current geochemical studies indicate the presence of minerals associated with gold formations. The Company intends to permit the Gold Bug Mine after completing a thorough and diligent study to assess the economic potential of the properties.
Acquisition of Aultra Gold, Inc.’s Assets
On January 6, 2010, the Company entered into an Asset Purchase Agreement with Aultra Gold, Inc. effective as of December 31, 2009. Pursuant to the Agreement, the Company acquired all of Aultra Gold’s assets. As consideration for these assets, the Company issued 9,614,667 shares of its common stock, par value $0.001 per share, to Aultra Gold. (not sure what these assets are)
In accordance with the transaction, the Company acquired substantially all of the assets related to Aultra Gold’s gold and mineral business, including inventory, accounts receivable, certain supply and distribution and other vendor contracts, good will and other various assets and intangibles. The parties made customary representations, warranties and indemnities that are typical and consistent for a transaction of this size and scope.
In January 2010, the Company announced that an independent consulting geologist conducted an NI 43-101 compliant report, indicating the mineral resource at the Basin Gulch property was sizeable. That report is available as a Form 8K at www.sec.gov and on the Company website, www.dutchgold.com
I am a little confused about who the Basin Gulch property belongs to. I see no where that it is printed that Dutch Gold Resources, Inc definitively owns or leases the Basin Gulch property.
In the 8K for the acquisition of Aultra Gold, Inc it makes one obscure mention of the name "Basin Gulch" and "Jungo" in the excluded assets section of the agreement:
1.11. “Excluded Assets" means all assets of the Seller not explicitly included in the Acquired Assets, including the
following:
(i) all refunds (or credits) of any Tax for any Tax year or portion thereof ending on or before the Closing Date (or for any Tax year beginning before and ending after the Closing Date to the extent allocable to the portion of such period beginning before and ending on the Closing Date);
(ii) all leases, office equipment, fixtures, furniture, supplies, software and software licenses of Seller;
(iii) all of Seller's rights, claims or causes of action against Third Parties relating to the Acquired Assets with respect to the period prior to the Closing; and
(iv) the names “Basin Gulch”, “Jungo”, or any related or similar trade names, trademarks, service marks or logos to the extent the same incorporate the name “Basin Gulch”, “Jungo”.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=6983398
http://nvsos.gov/sosentitysearch/CorpDetails.aspx?lx8nvq=JpyXDexaKXHFvIZPy9UudA%253d%253d&nt7=0
I also find it odd that just 9 days after the acquisition of Aultra Gold, Inc., Dutch Gold Resources, Inc. had already commissioned an NI43-101 on the Basin Gulch property (dated 1/15/10). Reading through the NI43-101 it looks like all the date was taken from old surveys and other various reports on the property from the 1980s and 1990s plus data collected through 4 visits to the property (2 in 2006 and 2 in 2009) by David E. Brown the licensed geologist that signed the NI43-101 so commissioning the report must have just required paying for the existing data to be organized in the proper format and signed and dated by David E. Brown.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7015848
Basin Gulch, Montana
The Basin Gulch Mine is a large, open-ended, gold and silver system in Montana located in central Montana west of Helena near the Idaho border.
Dutch Gold Resources, Inc., was granted an assignment of the Basin Gulch Mine lease between Aultra Gold, Inc. and Strategic Minerals, Inc. as a result of the acquisition of this asset and the majority of the stock in Aultra Gold, Inc. On May 31, 2006, the Company entered into a Mining Lease Agreement with Strategic, whereby Strategic granted the Company the exclusive right to explore, evaluate, develop, and mine the Basin Gulch Property, Montana. The advanced exploration and test mining project consists of eleven patented mineral claims, surrounded by the Deer Lodge National Forest, totaling about 217.9 acres. The claims are all located at the head of Basin Gulch, on the northern slopes of the West Fork Buttes, within the Sapphire Range of the Western Montana Rocky Mountains.
The three-stage Mining Lease Agreement for Basin Gulch is structured as follows:
Stage 1 initial payment:
The Company paid its initial cash payment of $10,000 and prior to July 30, 2006 satisfied its reporting obligations to Strategic regarding all the exploration and studies conducted on the premises of Basin Gulch Property.
Stage 2 advance production royalties:
To further evaluate and develop the minerals, the Company fulfilled the following obligations:
i) By June 10, 2006, it paid a cash payment of $15,000 directly to the underlying property owner;
ii) by September 10, 2006 made a cash payment of $25,000 directly to the underlying property owner, and at the end of each flowing six month period to date.. Since 2008, Dutch Gold Resources, Inc. made such payments under an agreement with AGI, which granted a security interest in all the claims, in the event that AGI could not repay such advances;
iii) a cash payment of $25,000 will be made on September 10, 2010, and thereafter on every six months until production has commenced.
Stage 3 production royalties:
Upon commencement of production, the Company must pay the greater of:
i) A twice annual cash payment of $50,000 due on March 10 and September 10 of each year; or
ii) 3% of the gross sales receipts of the gold and silver sold, due semi-annually on March 10 and September 10 of each year;
Should production be suspended for a period of 6 months or longer, the twice annual advance production royalty of $50,000 listed above resume. Upon the completion of payments totaling $8,000,000, the Company will have purchased the mineral rights to this property.
Jungo
Jungo is located in northern Nevada near the Oregon border. The Jungo property lies between the historic Sleeper and Hycroft mines in Humboldt County, Nevada. Rauno Perttu, Dutch Gold’s COO and renowned Geologist discovered the Jungo exploration property in 2006.
On June 1, 2007, the Company entered into a formal binding Agreement of Purchase and Sale (the "Agreement") with W.R. Hansen, an individual (the “Seller”), pursuant to which the Company acquired from the Seller certain mining claims together with all improvements and all equipment owned by the Seller located thereon, located in Humboldt County, State of Nevada (the “Property”). In consideration of the purchase of the Property, the Company agreed to: (i) reimburse the Seller for all staking and filing costs related to the Property, (ii) issue to the Seller 50,000 restricted shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), valued at $0.50 per share, (iii) upon its sole determination of sufficient mineralization to place the Property in production, to further issue to the Seller additional 50,000 restricted shares of the Company’s Common Stock, such that the Company shall make such a determination not later than 30 days following the acquisition of the data contemplated by paragraph 3.3 of the Agreement, (iv) not later than 10 days following the date the Property is placed into development for production of metals, to issue to the Seller an additional 100,000 restricted shares of the Company’s Common Stock, and (v) as further consideration after the Property is placed in production, to direct to the Seller a monthly Net Smelter Royalty of 2% upon all gold, silver, copper, or other metals (the “Metals”) produced and sold from the Property (each royalty payment shall be paid not later than 30 days following the last day of the month in which the metals were produced and sold). Closing of the sale and purchase of the Property occurred on the same date, as under the Agreement both the Company and the Seller have performed their mutual obligations under paragraph 2.2 and Section 4 thereof.
MINERAL PROPERTIES AND DEVELOPMENT COSTS
With the acquisition of the Basin Gulch Project and the Jungo Project, we also acquired certain mining claims and permits in the transaction. Since that time, we have not commenced any mining operations therefore, we have not recorded any amortization expense and we have determined that no impairment has occurred for the period ended March 31, 2010. Components of our mineral properties and development costs are as follows:
Basin Gulch claims - $1,252,053
Jungo - $94,000
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On March 29, 2010, the Company’s subsidiary, Aultra Gold, Inc. entered into an Agreement and Plan of Share Exchange (the “Agreement”) with Shamika Gold Inc., a Canadian Corporation (“Shamika”), and certain shareholders of Shamika (the “Shamika Holders”). Pursuant to the Agreement, the Company acquired all of the outstanding shares (the “Shamika Shares”) from the Shamika Holders in exchange for an aggregate of 25,500,000 shares of the Company’s common stock, par value $0.00001 per share (the “Common Stock”) (the “Exchange”). As a result of the Exchange, Shamika became a wholly-owned subsidiary of the Company. The Company shares were issued to the Shamika Holders on a pro rata basis, on the basis of the shares held by such Shamika Holders at the time of the Exchange.
The former holders of the Shamika Shares now beneficially own approximately 51% of the outstanding shares of our Common Stock. Accordingly, the Exchange represents a change in control. Dutch Gold Resources, Inc. retained 4,950,000 shares of Shamika Gold, Inc. For financial accounting purposes, the acquisition was a reverse acquisition of the Company by Shamika, under the purchase method of accounting, and was treated as a recapitalization with Shamika as the acquirer. Upon consummation of the Exchange, the Company adopted the business plan of Shamika and the Company owns 9.9% of the Shamika business.
If Dutch Gold Resources, Inc gained any mining properties from this acquisition of Samika Gold, Inc. (as hinted at in the press release) the mining properties did not show up on the either of the next 10Q reports. So that's kind of odd.
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Three Months ended March 31, 2010 and 2009
During the three-month period ended March 31, 2010 the Company incurred operating expenses of $1,532,608 and interest expenses of $87,342 as compared to operating expenses of $877,310 and interest expenses of $64,879 for the period ended March 31, 2009. The Company's net loss during the three-month period ended March 31, 2010 was $1,619,950 as compared to a net loss of $942,189 during the three-month period ended March 31, 2009.
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On June 23, 2010 Embassy International, LLC (Edward Dienhart and Dawn Caruso-Dienhart ) who already owned 17,800,000 shares on 12/31/09 was issued 15,800,000 more shares to satisfy $50,000.00 towards a $1,214,962.00 debt owned to Embassy International, LLC by Dutch Gold
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7340722
Those 15,800,000 shares were then in turn sold to Socius CG II, Ltd., a Bermuda company for an undisclosed amount. The Bermuda connection is interesting because it came up earlier in the registration of the domain name dutchgoldresources.com
The shares were obtained pursuant to a Stock Purchase Agreement, dated as of June 23, 2010, between Socius CG II, Ltd. and Embassy International, LLC.
For purposes of calculating the percent of class, the reporting persons have assumed that there were a total of 159,495,439 shares of common stock outstanding immediately subsequent to the issuance of the shares to Socius CG II, Ltd. such that 15,800,000 shares of common stock represent approximately 9.9% of the class subsequent to such issuance.
Socius Capital Group, LLC, Mr. Peizer and Ms. Peizer directly own no shares of the issuer. Mr. Peizer is the sole Managing Director of Socius Capital Group, LLC and Socius CG II, Ltd..
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7341994
Socius CG II, Ltd. Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
Socius Capital Group, LLC, Mr. Peizer and Ms. Peizer is: 11150 Santa Monica Boulevard, Suite 1500, Los Angeles, CA 90025.
Socius CG II, Ltd. is a Bermuda exempted company
Socius Capital Group, LLC is a Delaware limited liability company.
Mr. Peizer and Ms. Peizer are United States citizens.
The address 11150 Santa Monica Boulevard, Suite 1500, Los Angeles, CA 90025 is a virtual office shared by another publicly trading company, Hythiam, Inc (HYTM) whose CEO is Terren Peizer
http://investorshub.advfn.com/boards/board.aspx?board_id=11407
http://www.hythiam.com/
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Additional information from 10Q for period ending June 30, 2010:
DUTCH GOLD RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Revenue has a lien on the company’s subsidiary Dutch Mining, LLC’s personal and real property in the amount of $118,663. Dutch Gold Resources, Inc. is not liable for the taxes associated with these liens, except to the extent that it makes additional capital available to Dutch Mining, LLC.
The Company assumed a note issued by Dutch Mining LLC in the amount of $950,000 to Josef Bauer for working capital. The note is guaranteed by Ewald Dienhart and carries an interest rate of 8.0%. The related parties have agreed not to demand the loans through December 31, 2012 therefore the loans are recorded as long-term liabilities.
The Company leases space from Rendata Industrial Park, LLC. Rendata Industrial Park ownership: The Ebert Family Trust owns 52% and the remaining 48% is owned by the Caruso Dienhart (TBE) Family LLC. For the period ended December 31, 2009 the Company accrued rent and related expenses in the amount of $142,380 and had a payable balance accrued of $311, 775 at June 30, 2010.
The Company had an agreement with HPUs, LLC, whose Managing Member Patrick Engel, is related to the Company’s former Chairman, effective November 30, 2007 to provide management services. The contract was for one year, automatically renewable unless terminated for a monthly amount of $9,500.
The company owed $69,683 is owed to Caruso Dienhart (TBE) Family LLC for short term advances at December 31, 2009.
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On July 15, 2010, the Company consummated an Exchange Agreement (the “Agreement”) with Embassy International, LLC, a Florida limited liability company (the “Holder”). Pursuant to the Agreement, the Company issued 15,800,000 shares (the “Shares”) of its common stock, par value $0.001 per share (the “Common Stock”), in exchange for partial satisfaction in the amount equal to $50,000.00 of a certain promissory note owed by the Company to the Holder in the principal amount of $1,214,962.00. The Shares are subject to adjustment and potential return to the Company for retirement based upon the loan amount converted and 75% of the volume weighted average price of the Common Stock for the twenty trading days following the delivery of the Shares. The promissory note was issued by Dutch Mining, LLC, a wholly-owned subsidiary of the Company (“Dutch Mining”), to the Holder on December 31, 2006 and was assumed by the Company pursuant to an Agreement and Plan of Share Exchange, dated January 4, 2007, between the Company and Dutch Mining. Also on that date, the Holders sold the Shares to Socius CG, II, Ltd., an unaffiliated Bermuda company.
Three Months ended June 30, 2010 and 2009
During the three-month period ended June 30, 2010 the Company incurred operating expenses of $430,624 and interest expenses of $110,000 as compared to operating expenses of $2,216,917 and interest expenses of $612,550 for the period ended June 30, 2009. The Company's net loss during the three-month period ended June 30, 2010 was $540,624 as compared to a net loss of $2,829,467 during the three-month period ended June 30, 2009.
Three Months ended September 30, 2010 and 2009
During the three-month period ended September 30, 2010 the Company incurred operating expenses of $965,419 and interest expenses of $23,319 as compared to operating expenses of $2,197,093 and interest expenses of $345,798 for the period ended September 30, 2009. The Company's net loss during the three-month period ended September 30, 2010 was $988,738 as compared to a net loss of $2,542,891 during the three-month period ended September 30, 2009.
Unregistered Sales of Equity Securities and Use of Proceeds
During the quarter ending September 30, 2010, the Company issued an aggregate of 12,050,433 shares of Common Stock in consideration for services to non-related parties. Also during the period ending September 30, 2010, the Company sold an aggregate of 31,153,704 shares of common stock in consideration for an aggregate purchase $133,500.
Employee relations
As of September 30, 2010, we had 5 employees.
On December 8, 2010 the company was so broke they had to pay their officers with shares:
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7599145
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SUMMARY SO FAR:
Just going through the filings I see a company in Dutch Gold Resources Inc. that is in an incredible amount of debt. DGRI has worked out several merger/acquisition agreements with other companies with some rights to some mine leases in exchange for large amounts of shares and huge debt Notes over the past couple of years. The mine leases they have obtained from these merger/acquisitions all come with debts and/or payments due.
None of the mines sound like they are currently operating and bringing in any revenues based on the information in the filings. According to the 10Q filing ending June 30, 2010 there are some disputes in ownership of the Benton mine property. The Benton mine property was left off the 10Q filing ending September 30, 2010 leaving me to wonder if Dutch Gold Resources lost that property. From the filings it does not sound like any of the other properties are currently ready to start producing. The operational costs to get a mine producing can be very very high.
Besides the issues with accumulating debts and lack of cash to even pay its officers, Dutch Gold is still the subject of an ongoing and yet unresolved investigation by the SEC. Dutch Gold Resources, Inc. describes itself as a junior mining company seeking to find and development significant gold properties. So far they have only been able to find the properties, but not development any of them. Based on my research so far I don't see that changing for Dutch Resources, Inc any time soon.
One other area that may require more investigation is the Bermuda connection.
Going back through the sequence of event:
11/29/06 - The domain name dutchgoldresources.com was registered from out of Bermuda
12/07/06 - Tombstone Western Resources, Inc changed its name to Dutch Gold Resources, Inc in anticipation of its acquisition of Dutch Mining, LLC
1/16/07 - Dutch Gold Resources, Inc. purchased Dutch Mining, LLC which was owned by Embassy International, LLC (Ewald Dienhart and Dawn Caruso-Dienhart)
Because of this purchase Embassy International, LLC became the largest beneficial shareholder of Dutch Gold Resources, Inc. and Dutch Gold Resources, Inc. became indebted to Embassy International, LLC to the tune of $1,214,962.00.
Because of interest due on this $1,214,962.00 debt, Dutch Gold Resources, Inc. has been making periodic payments of large amounts of shares to Embassy International, LLC which in turn has been immediately "selling" those shares to a Bermuda based company, Socius CG, II, Ltd for an undisclosed amount.
There definitely seems to be some odd activities going on here, especially since the Benton mine which Dutch Gold Resources, Inc appeared to be gaining the leasing rights for by acquiring Dutch Mining LLC seems to now be lost.
Biggest Question is why is the CEO of Hythiam, Inc., Terren Peizer, buying up huge blocks of shares of Dutch Gold Resources Inc using his Bermuda based company?
Further investigation pending
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