What happened to this JV deal earlier in the year?... Another deal to nowhere?...
Effective February 1, 2010, the Company entered into a joint venture agreement (the “JV Agreement”) with Castle Peak Mining, Ltd. (“Castle Peak”), a British Columbia corporation. Castle Peak has certain mining concessions in Ghana, West Africa. Pursuant to the JV Agreement, the Company is to acquire a 70% participating interest in the Nkwata Mining Concession as its primary target and is to exercise its option on selecting a 50% participating interest in one of two bordering concessions known as Ayiem and Asuogya.
The JV Agreement provides for the Company to pay Castle Peak $75,000 upon approval of the joint venture by the Ghana Government Minerals Commission (“Mincom”) and for the Company to provide financing for Phase 1 exploration (expected from December 1, 2009 to March 31, 2010) costs ($100,000) and Phase 2 exploration (expected from February 1, 2010 to January 31, 2011) costs ($1,500,000) by February 1, 2010. If Phase 2 exploration is not commenced by March 1, 2010, the JV Agreement provides for the Company to pay a cash penalty of $100,000 to Castle Peak. If Phase 2 exploration is not commenced by April 1, 2010, the JV Agreement provides that Castle Peak may elect to terminate the JV Agreement.
The JV Agreement also provides for the Company to pay Castle Peak $250,000 in 4 installments due from February 1, 2010 to March 15, 2010 and for the Company to issue Castle Peak approximately 322,000 restricted shares of Company common stock (and pay Castle Peak an amount, if any, equal to $150,000 less Castle Peak’s proceeds from its ultimate sales of such shares).
The JV Agreement also provides for the Company to provide financing by February 1, 2011 for Phase 3 exploration (expected from February 1, 2011 to January 31, 2012) costs ($1,500,000) and for the Company to provide financing by February 1, 2012 for Phase 4 exploration (expected from February 1, 2012 to January 31, 2013) costs ($2,500,000).
The JV Agreement also provides for the Company to pay Castle Peak $150,000 on February 1, 2011 and $150,000 on February 1, 2012.
As of March 12, 2010, approval of the JV Agreement by Mincom has not occurred and the Company has not paid (or issued shares) to Castle Peak or the joint venture any of its obligations due under the JV Agreement. Although Castle Peak has not sent a notice of default to the Company, it is uncertain that the Company will be able to raise sufficient capital to meet such obligations and avoid termination of the JV Agreement.
My posting contains many opinions. So please do your own research and validation.
Go Giants!
AI
