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Mineral Liberation Analyzer/Geometallurgy
http://www.actlabs.com/files/Mineral_Liberation_Analyzer-Geometallurgy.pdf
Detailed Exploration
Once a claim has been staked, the exploration program will move forward to determine if there is a mineral occurrence worth further investigation. Based on the results of its initial prospecting work, the company will decide whether to continue with more detailed exploration.
Many mineral deposits are not exposed at the surface of the earth, but are buried beneath soil, glacial tills or other rock formations. To test if minerals are present, it is often necessary to look beneath the surface materials to see what is there. This is done using advanced techniques such as geophysical and geochemical surveys, and diamond drilling programs. To prepare for this advanced work, various surveys must be planned. For the surveys to be exact, a map grid is created on the land marked by narrow cut-lines in forest or by a long line of pickets on open land. Once this grid has been done, geophysical instruments can be carried along the grid and more precise work can be done, including trenching (cutting a long ditch in the ground). At this stage, the community may notice not only increased work on the ground, but also a helicopter or an airplane carrying special antennas or instruments pulled though the air.
Sampling and Drilling
Initial prospecting takes small samples, whereas trenching, in soil or rock, can provide a larger and more representative sampling of a mineral occurrence. If earlier work indicates that there is the possibility of a mineral deposit underground, the exploration company must now be able to sample that rock to estimate the extent and shape of that mineral deposit. A diamond drill is used to cut through rock, going down hundreds of metres and bringing up lengths of cored rock (drill core). Typically, an average drill program would cost several times the total amount spent so far. The cost is per metre and varies depending on the location of activity (north is more expensive) and the availability of drilling contractors. The samples are then sent to laboratories for "assay" and the company will analyze the results.
Facts & Figures
During detailed exploration, the community may notice not only increased work on the ground, but also a helicopter or an airplane carrying special antennas or instruments pulled through the air.
http://www.nrcan-rncan.gc.ca/mms-smm/abor-auto/htm/kit-toc/kit-exp-eng.htm#exp1-1
Plenty of "GOLD" properties on Newfoundland
http://www.nr.gov.nl.ca/mines&en/geosurvey/matty_mitchell/pdf/Prop%20for%20opt%20Map,%20Island%20Mar.%202010.pdf
A little blurp on KATX. May have been posted already. It has a link to KATX web site.
http://www.nr.gov.nl.ca/mines&en/statistics/ExpOv/Exploration%20Highlights%20for%20June%20%2710.pdf
KAT EXPL INC ( KATX ) weekly prices from 10/23/2009 through 07/16/2010
Date Volume High Low Open Close
10/23/09 48.99 M 0.0093 0.0042 0.0075 0.0062
10/30/09 13.77 M 0.008 0.0045 0.0065 0.0045
11/06/09 33.02 M 0.0045 0.0014 0.0045 0.0029
11/13/09 42.59 M 0.0067 0.0028 0.0029 0.0044
11/20/09 118.00 M 0.032 0.0037 0.0044 0.031
11/27/09 71.02 M 0.042 0.0162 0.037 0.019
12/04/09 42.15 M 0.027 0.015 0.0204 0.018
12/11/09 29.57 M 0.0249 0.0149 0.019 0.022
12/18/09 30.86 M 0.0285 0.017 0.024 0.027
12/24/09 12.89 M 0.0285 0.0195 0.0285 0.022
12/31/09 10.54 M 0.0285 0.0165 0.0285 0.018
01/08/10 17.76 M 0.022 0.0165 0.018 0.0194
01/15/10 68.48 M 0.063 0.019 0.022 0.055
01/22/10 55.63 M 0.09 0.043 0.059 0.086
01/29/10 37.15 M 0.093 0.0495 0.0925 0.068
02/05/10 16.17 M 0.0835 0.06 0.067 0.066
02/12/10 17.56 M 0.069 0.0465 0.069 0.051
02/19/10 15.25 M 0.065 0.049 0.052 0.0525
02/26/10 11.40 M 0.063 0.052 0.0525 0.056
03/05/10 16.57 M 0.068 0.0545 0.0565 0.059
03/12/10 11.58 M 0.059 0.049 0.059 0.052
03/19/10 8.77 M 0.06 0.051 0.0521 0.052
03/26/10 12.43 M 0.059 0.0525 0.0525 0.056
04/01/10 32.57 M 0.092 0.055 0.056 0.078
04/09/10 18.39 M 0.08 0.06 0.08 0.061
04/16/10 9.12 M 0.065 0.056 0.061 0.06
04/23/10 10.29 M 0.065 0.055 0.06 0.057
04/30/10 9.81 M 0.063 0.058 0.0598 0.061
05/07/10 17.78 M 0.085 0.062 0.064 0.078
05/14/10 30.38 M 0.1298 0.076 0.084 0.128
05/21/10 47.65 M 0.24 0.1101 0.114 0.229
05/28/10 24.57 M 0.252 0.19 0.201 0.239
06/04/10 18.90 M 0.245 0.161 0.245 0.185
06/11/10 17.92 M 0.232 0.15 0.21 0.19
06/18/10 45.73 M 0.185 0.111 0.185 0.168
06/25/10 13.63 M 0.198 0.151 0.171 0.192
07/02/10 13.69 M 0.20 0.145 0.19 0.16
07/09/10 14.33 M 0.198 0.152 0.165 0.188
07/16/10 9.09 M 0.195 0.161 0.189 0.175
KAT EXPL INC ( KATX ) daily prices from 04/14/2010 through 07/13/2010
Date Volume High Low Open Close
04/14/10 1.36 M 0.065 0.0579 0.06 0.062
04/15/10 1.14 M 0.064 0.058 0.063 0.059
04/16/10 1.31 M 0.063 0.058 0.06 0.06
04/19/10 1.83 M 0.06 0.055 0.06 0.055
04/20/10 2.19 M 0.0645 0.055 0.06 0.062
04/21/10 962,091 0.065 0.059 0.061 0.061
04/22/10 1.07 M 0.061 0.06 0.061 0.06
04/23/10 4.22 M 0.063 0.0562 0.063 0.057
04/26/10 2.09 M 0.062 0.059 0.0598 0.06
04/27/10 648,454 0.062 0.058 0.058 0.061
04/28/10 913,626 0.063 0.0588 0.063 0.059
04/29/10 2.19 M 0.061 0.058 0.061 0.06
04/30/10 3.95 M 0.062 0.06 0.06 0.061
05/03/10 5.86 M 0.082 0.062 0.064 0.074
05/04/10 4.48 M 0.085 0.076 0.079 0.083
05/05/10 3.89 M 0.085 0.065 0.0834 0.082
05/06/10 1.95 M 0.082 0.072 0.08 0.079
05/07/10 1.58 M 0.079 0.072 0.075 0.078
05/10/10 2.12 M 0.084 0.076 0.084 0.08
05/11/10 11.03 M 0.11 0.08 0.08 0.108
05/12/10 6.32 M 0.108 0.092 0.107 0.093
05/13/10 2.55 M 0.10 0.092 0.10 0.097
05/14/10 8.34 M 0.1298 0.102 0.105 0.128
05/17/10 7.92 M 0.145 0.1101 0.114 0.139
05/18/10 9.40 M 0.178 0.142 0.145 0.177
05/19/10 15.17 M 0.24 0.185 0.20 0.196
05/20/10 9.09 M 0.21 0.159 0.195 0.192
05/21/10 6.06 M 0.235 0.175 0.178 0.229
05/24/10 7.33 M 0.25 0.19 0.201 0.214
05/25/10 4.64 M 0.24 0.19 0.23 0.215
05/26/10 6.26 M 0.252 0.22 0.22 0.238
05/27/10 3.36 M 0.248 0.23 0.24 0.242
05/28/10 2.96 M 0.249 0.2231 0.244 0.239
06/01/10 8.05 M 0.245 0.18 0.245 0.21
06/02/10 6.66 M 0.215 0.161 0.21 0.172
06/03/10 3.03 M 0.189 0.161 0.161 0.184
06/04/10 1.14 M 0.185 0.175 0.185 0.185
06/07/10 4.11 M 0.2259 0.20 0.21 0.226
06/08/10 2.99 M 0.232 0.202 0.231 0.22
06/09/10 2.56 M 0.2275 0.15 0.22 0.21
06/10/10 1.39 M 0.21 0.19 0.21 0.20
06/11/10 6.85 M 0.20 0.165 0.20 0.19
06/14/10 19.98 M 0.185 0.119 0.185 0.136
06/15/10 9.10 M 0.135 0.119 0.13 0.12
06/16/10 7.38 M 0.145 0.12 0.123 0.128
06/17/10 2.89 M 0.13 0.111 0.13 0.125
06/18/10 6.36 M 0.18 0.121 0.121 0.168
06/21/10 3.41 M 0.19 0.171 0.171 0.189
06/22/10 4.80 M 0.198 0.151 0.165 0.18
06/23/10 1.60 M 0.185 0.167 0.18 0.178
06/24/10 1.61 M 0.184 0.17 0.18 0.173
06/25/10 2.19 M 0.195 0.1725 0.175 0.192
06/28/10 2.80 M 0.20 0.171 0.19 0.181
06/29/10 2.28 M 0.184 0.172 0.18 0.184
06/30/10 2.18 M 0.185 0.165 0.18 0.172
07/01/10 4.08 M 0.175 0.15 0.17 0.155
07/02/10 2.32 M 0.16 0.145 0.155 0.16
07/06/10 7.74 M 0.195 0.152 0.165 0.195
07/07/10 3.61 M 0.198 0.18 0.195 0.181
07/08/10 1.08 M 0.19 0.181 0.181 0.188
07/09/10 1.88 M 0.19 0.183 0.19 0.188
07/12/10 2.31 M 0.195 0.18 0.189 0.185
07/13/10 2.00 M 0.1889 0.175 0.1889 0.176
Core Shack
http://www.katexploration.com/PressReleases/Press%20Release%20HC%20Drilling.pdf
A core shack has been secured for logging and splitting of the drill core. The drill crews will work around the clock with double 12 hour shift in order to complete all drill holes in a timely manner.
hoopsville,
http://www.katexploration.com/PressReleases/Press%20Release%20HC%20Drilling.pdf
A core shack has been secured for logging and splitting of the drill core. The drill crews will work around the clock with double 12 hour shift in order to complete all drill holes in a timely manner.
74stingray,
I believe the market will determine the price of BVIG. Ken has no say so. GUMP tried to put a share price of what he thought the price was when Handcamp moved from KATX to BVIG. I believe he used the price Ken paid for the shell, which was wrong. What should be used to put a price on BVIG shares is what the accounting firm value it at when it moved into BVIG. That price should come out in the next BVIG filing.
KAT EXPL INC ( KATX )weekly prices from 01/08/2010 through 07/02/2010
Date Volume High Low Open Close
01/08/10 17.76 M 0.022 0.0165 0.018 0.0194
01/15/10 68.48 M 0.063 0.019 0.022 0.055
01/22/10 55.63 M 0.09 0.043 0.059 0.086
01/29/10 37.15 M 0.093 0.0495 0.0925 0.068
02/05/10 16.17 M 0.0835 0.06 0.067 0.066
02/12/10 17.56 M 0.069 0.0465 0.069 0.051
02/19/10 15.25 M 0.065 0.049 0.052 0.0525
02/26/10 11.40 M 0.063 0.052 0.0525 0.056
03/05/10 16.57 M 0.068 0.0545 0.0565 0.059
03/12/10 11.58 M 0.059 0.049 0.059 0.052
03/19/10 8.77 M 0.06 0.051 0.0521 0.052
03/26/10 12.43 M 0.059 0.0525 0.0525 0.056
04/01/10 32.57 M 0.092 0.055 0.056 0.078
04/09/10 18.39 M 0.08 0.06 0.08 0.061
04/16/10 9.12 M 0.065 0.056 0.061 0.06
04/23/10 10.29 M 0.065 0.055 0.06 0.057
04/30/10 9.81 M 0.063 0.058 0.0598 0.061
05/07/10 17.78 M 0.085 0.062 0.064 0.078
05/14/10 30.38 M 0.1298 0.076 0.084 0.128
05/21/10 47.65 M 0.24 0.1101 0.114 0.229
05/28/10 24.57 M 0.252 0.19 0.201 0.239
06/04/10 18.90 M 0.245 0.161 0.245 0.185
06/11/10 17.92 M 0.232 0.15 0.21 0.19
06/18/10 45.73 M 0.185 0.111 0.185 0.168
06/25/10 13.63 M 0.198 0.151 0.171 0.192
07/02/10 13.69 M 0.20 0.145 0.19 0.16
White Cobra,
Good post.
I believe Ken only owns 2,264,000 and they are probably really owned by KATX. Ken and KATX both don't get 65,000,000 shares.
When KATX (Ken Stead) purchased BVIG, KATX received 2,264,000 shares of Common Stock, constituting approximately 85.6% of such shares and Non-Affiliated Shareholders held 380,500 shares of Common Stock constituting approximately 14.4% of such shares.
We found out and knew was coming, a share increase of BVIG AS to 500,000,000 of which 96,000,000 will be issued.
Reason for the Increase
The proposed Increase is necessary in order for the Company to have a sufficient number of Shares authorized and issuable to the Seller issued in the Acquisition described below. The Increase will raise the number of the Company’s authorized Shares from 70,000,000 to 500,000,000. The Amendment will not affect any of the Company’s authorized 5,000,000 “blank check” preference shares, par value $0.001 per share (the “ Preferred Shares ”).
On June 4, 2010 (the “ Closing Date ”), pursuant to a Purchase Agreement dated as of May 28, 2010 (the “ Agreement ”) by and the Company and Kat Exploration Inc, a company organized under the laws of Nevada (the “ Seller ”), the Company acquired (the “ Acquisition ”) 100% of “Handcamp,” a gold property (the “ Property ”) from the Seller, solely in exchange for 161,000,000 Shares (the “ Purchase Shares ”).
Under the terms of the Agreement, the Company issued 65,000,000 Purchase Shares to the Seller on the Closing Date, and the remaining 96,000,000 Purchase Shares shall be issued as soon as reasonably practical after the Company shall have effectuated the Increase in its number of authorized shares of Common Stock to enable it to issue such 96,000,000 Purchase Shares to the Seller.
littlerichie,
Lets deal with facts.
This board was chaotic over no drilling and why. IR's/Ken's voicemail/email were being overrun. PR released, board calm. Voicemail/email back to normal.
That is a fact and if you don't believe ask Jack.
Tradersrule,
Yesterdays was not a pacifier for longs.
It was an press release to inform investor the status of what was going on at Handcamp. As you seen, until it was released there was a lot of discussion on the board about what was going on and who said what. The PR cleaned it all up.
Bio,
Handcamp will proven and we will be rewarded just like you.
The organizer for putting all the DD under one message and keeping it updated
It takes time to prove a site here is an example of a mine complex in Mongolia and what they went through:
Oyu Tolgoi copper-gold mining complex.
http://www.ivanhoemines.com/s/Home.asp
History
A minor amount of copper was recovered at South Oyu during the Bronze Age from malachite and chrysocolla, as indicated by small circular pits and minor copper smelting slag.
During the 1980s the district was investigated by joint Mongolian, Russian regional geochemical surveys which reported the Central Oyu area as a molybdenum anomaly. In 1996 Mr Garamjav (now senior geologist at Ivanhoe), who first visited Oyu Tolgoi in 1983 and noted evidence of alteration and copper mineralization, guided Magma Copper to Oyu Tolgoi. Following the visit exploration tenements were secured.
BHP Billiton (which acquired Magma Copper) began exploration at Oyu Tolgoi as part of a regional reconnaissance program of the South Gobi desert during the 1997 field season. After geological mapping, stream and soil sediment surveys, magnetic and induced polarization surveys, BHP Billiton (BHP) completed six diamond core holes totalling 1,100 metres in September and October of 1997. With encouraging results a second phase of drilling began. Commencing in April 1998, BHP completed an additional 13 core holes totalling 2,000 metres with positive results obtained in four of the holes. A third phase of drilling was then conducted in August and September, 1998, completing four holes totalling 800 metres. These holes failed to return significant mineralization and the project was suspended pending a review.
In 1999, additional drilling and exploration was recommended, however, further exploration at Oyu Tolgoi by BHP was discontinued due to cut-backs in BHP's exploration budgets. At this time BHP's tenements were offered for joint venture. Ivanhoe Mines signed an option to earn 100% interest in the Oyu Tolgoi Concession in May 2000. A reverse circulation (RC) drill program was initiated in June, 2000, completing 109 holes totalling 8,828 metres by September. The program targeted the supergene-enriched, chalcocite blanket discovered in BHP's hole OT-3. Results were encouraging, including the discovery of additional high-grade supergene copper resources.
In 2001, Ivanhoe continued RC drilling, mostly in the South Oyu area to delineate possible oxide resources followed by three diamond drill holes in South Oyu, Southwest Oyu and Central Oyu, respectively. These three holes were targeted to test the deep hypogene copper-gold potential. These three holes were sufficiently encouraging for Ivanhoe to mount a major follow-up drill program that continues to the present time. In late 2002, Ivanhoe drilled a hole in the far northern portion of the property, now known as the Hugo Dummett deposit, to test a broad induced polarization high. This test hole intersected 638m of bornite, chalcopyrite-rich mineralization lying 222m down hole under younger (?) sedimentary rocks.
By the 2nd quarter of 2003 drilling in the Hugo Zone was accelerated to delineate the extent of the Hugo deposit. Several of the new drill holes contained intercepts of greater than 200 metres in thickness that average well in excess of 3% copper. In September, 2003, the company fulfilled its earlier undertaking to rename the Far North portion of the project to give special recognition to the work of Hugo Dummett, Ivanhoe's former Executive Vice-President, Project Development. Mr. Dummett, who died in a highway accident in South Africa in 2002, was one of the best-known geologists in international mining and a leading authority on large-scale porphyry copper deposits. As Ivanhoe advances the Turquoise Hill project toward production, the underground development of the Hugo Dummett Deposit will be known as the Hugo Mine. He was previously Vice-President, Minerals Discovery, for BHP Minerals and was a leading figure in the discoveries that led to the creation of Canada's diamond industry. He also was President of the Society of Economic
Geologists.
Overview
Oyu Tolgoi is the world's largest undeveloped copper-gold project and is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border.
Based on Ivanhoe Mines' discoveries at Oyu Tolgoi during the past nine years, independently verified estimates indicate that Oyu Tolgoi contains approximately 81 billion pounds of copper and 46 million ounces of gold in measured, indicated and inferred resources.
The Bottom Line is that there is Gold/Copper or whatever minerals we have on our properties. KATX’s MISSION STATEMENT is to discover, extract and supply precious metals and minerals to an ever growing world. Give them time. They have discovered metals/minerals and now they have to determine how much there is so they can decide on the best course of action to EXTRACT it.
We Are Good
We Are Very Good
We hope to be VERY, VERY, VERY GOOD when we determine just how much is in the GROUND. In time
TO ALL MY PEPS
I would like to thank all the people who contributed to keeping this board active, informative, controversial, and most of all golden.
The gate-keeper for keeping the discussion flowing and the facts straight
The marketer for his never-ending research, due-diligence (DD) and uncovering of information that is second-to-none
The organizer for putting all the DD under one message and keeping it updated
The technical analysts for provide timely, accurate and “spot-on” informational reports as to the movement of the stock price.
The officer and gentleman who always convey a calm and fact based analysis on the fundamentals of the company
The pit-bulls who protects our KAT from outside forces
The adversary for challenging the board to keep him on his P&Qs by providing even more DD
The emergency chap for keeping the current and developing information flowing
The lone star for being quick on the draw and full of humor
In closing I would like to add that no one knows all and everyone has a right to their own opinion, belief, interpretation, understanding and outlook. If someone doesn’t see things your way, that is their choice.
Here are a few quotes to ponder on:
Pythagoras quotes
“Wisdom thoroughly learned will never be forgotten”
“Choose always the way that seems the best, however rough it may be; custom will soon render it easy and agreeable”
“Rest satisfied with doing well, and leave others to talk of you as they will”
“Silence is better than unmeaning words.”
“Concern should drive us into action and not into a depression. No man is free who cannot control himself.”
“Friends are as companions on a journey, who ought to aid each other to persevere in the road to a happier life.”
“Do not say a little in many words but a great deal in a few.”
Og Mandino quotes
“Laugh at yourself and at life. Not in the spirit of derision or whining self-pity, but as a remedy, a miracle drug, that will ease your pain, cure your depression, and help you to put in perspective that seemingly terrible defeat and worry with laughter at your predicaments, thus freeing your mind to think clearly toward the solution that is certain to come. Never take yourself too seriously.”
“Search for the seed of good in every adversity. Master that principle and you will own a precious shield that will guard you well through all the darkest valleys you must traverse. Stars may be seen from the bottom of a deep well, when they cannot be discerned from the mountaintop. So will you learn things in adversity that you would never have discovered without trouble. There is always a seed of good. Find it and prosper.”
eelfland,
Could please explain the current batch of promises you are referring to.
This one has been essentially crippled since the first of June, and the story is about due to play out once the current batch of promises fails to materialize.
White Cobra,
You are correct except nothing won't be taken from the 161,000,000 as these shares will go to KATX shareholders.
There are a minimum of 380,500 shares in the float.
When KATX (Ken Stead) purchased BVIG, KATX received 2,264,000 shares of Common Stock constituting approximately 85.6% of such shares and Non-Affiliated Shareholders held 380,500 shares of Common Stock constituting approximately 14.4% of such shares.
Today we found out and knew was coming, a share increase of BVIG AS to 500,000,000 of which 96,000,000 will be issued(67,644,500 were already issued).
Reason for the Increase
The proposed Increase is necessary in order for the Company to have a sufficient number of Shares authorized and issuable to the Seller issued in the Acquisition described below. The Increase will raise the number of the Company’s authorized Shares from 70,000,000 to 500,000,000. The Amendment will not affect any of the Company’s authorized 5,000,000 “blank check” preference shares, par value $0.001 per share (the “ Preferred Shares ”).
On June 4, 2010 (the “ Closing Date ”), pursuant to a Purchase Agreement dated as of May 28, 2010 (the “ Agreement ”) by and the Company and Kat Exploration Inc, a company organized under the laws of Nevada (the “ Seller ”), the Company acquired (the “ Acquisition ”) 100% of “Handcamp,” a gold property (the “ Property ”) from the Seller, solely in exchange for 161,000,000 Shares (the “ Purchase Shares ”).
Under the terms of the Agreement, the Company issued 65,000,000 Purchase Shares to the Seller on the Closing Date, and the remaining 96,000,000 Purchase Shares shall be issued as soon as reasonably practical after the Company shall have effectuated the Increase in its number of authorized shares of Common Stock to enable it to issue such 96,000,000 Purchase Shares to the Seller.
(1) Beneficial ownership is calculated based on the 67,644,500 Shares issued and outstanding as of the Record Date hereof, together with securities exercisable or convertible
into Shares within sixty (60) days of the Record Date hereof for each stockholder. The Shares issuable pursuant to those convertible securities, options or warrants are deemed outstanding for computing the percentage ownership of the person holding such convertible securities, options or warrants but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
Whatever the share price is of BVIG (soon to be KATG) will be the same share price of the restricted shares, except the restricted shares can't be traded until the restriction is lifted.
Balihi,
People can only buy what is in the float. It will be up to the market makers to make a market. Supply and Demand will rule. If Handcamp drill results are very, very, very positive watch out above
Does anyone know if the shares in bold below are going to be restricted?
What I'm trying to figure from the filing today is.. there are 67,644,500 Shares issued and outstanding. 65,000,000 restricted for KATX shareholders, 380,500 held by Non-Affiliated Shareholders leaving 2,264,000 shares. Will these 2,264,000 be restricted.
(1) Beneficial ownership is calculated based on the 67,644,500 Shares issued and outstanding as of the Record Date hereof, together with securities exercisable or convertible into Shares within sixty (60) days of the Record Date hereof for each stockholder. The Shares issuable pursuant to those convertible securities, options or warrants are deemed outstanding for computing the percentage ownership of the person holding such convertible securities, options or warrants but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
bahli,
I don't know about you, I am KATX, I am a shareholder, I own part of the company.
If you were to divide the outstanding shares (641,603,644) of KATX by 4, you will get a number of around 161,000,000.
Know what you own.
We are very good.
Hawksfan
When KATX (Ken Stead) purchased BVIG, KATX received 2,264,000 shares of Common Stock, constituting approximately 85.6% of such shares and Non-Affiliated Shareholders held 380,500 shares of Common Stock constituting approximately 14.4% of such shares.
Today we found out and knew was coming, a share increase of BVIG AS to 500,000,000 of which 96,000,000 will be issued.
Reason for the Increase
The proposed Increase is necessary in order for the Company to have a sufficient number of Shares authorized and issuable to the Seller issued in the Acquisition described below. The Increase will raise the number of the Company’s authorized Shares from 70,000,000 to 500,000,000. The Amendment will not affect any of the Company’s authorized 5,000,000 “blank check” preference shares, par value $0.001 per share (the “ Preferred Shares ”).
On June 4, 2010 (the “ Closing Date ”), pursuant to a Purchase Agreement dated as of May 28, 2010 (the “ Agreement ”) by and the Company and Kat Exploration Inc, a company organized under the laws of Nevada (the “ Seller ”), the Company acquired (the “ Acquisition ”) 100% of “Handcamp,” a gold property (the “ Property ”) from the Seller, solely in exchange for 161,000,000 Shares (the “ Purchase Shares ”).
Under the terms of the Agreement, the Company issued 65,000,000 Purchase Shares to the Seller on the Closing Date, and the remaining 96,000,000 Purchase Shares shall be issued as soon as reasonably practical after the Company shall have effectuated the Increase in its number of authorized shares of Common Stock to enable it to issue such 96,000,000 Purchase Shares to the Seller.
Nathaniel,
Part of the 5 million may be filter into BVIG (Handcamp) The question is how do the company get the funds into Handcamp?
I'm confident there is a plan to fund BVIG, it just has not been revealed to us yet. It will be sooner than later.
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) April 28, 2010
BELLA VIAGGIO, INC.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7227300-1095-17557&type=sect&dcn=0000930413-10-002683
RECITALS
WHEREAS, the Sellers own of record and beneficially in the aggregate 2,043,333 shares (the "SHARES") of common stock of the Company, par value $0.001 per share (the "COMMON STOCK"), which shares constitute approximately 76.9% of all the issued and outstanding shares of Common Stock as follows: Mr. Davis, 1,043,333 Shares and Mr. Brigham, 1,000,000 Shares;
WHEREAS, the Sellers desire to sell to the Purchaser all such 2,043,333 Shares and the Purchaser desires to purchase from the Sellers all such 2,043,333 Shares (the "SHARE ACQUISITION"), upon the terms and subject to the conditions set forth herein;
WHEREAS, other than (i) the 220,667 Other Shares (as defined below) being purchased by the Purchaser in the Other Share Acquisition (as defined below),
(ii) the 380,500 shares of Common Stock owned by persons who are non-affiliates of the Company (the "NON-AFFILIATED SHAREHOLDERS"), the Sellers and/or the Purchaser and not being acquired pursuant to this Agreement or the Other Acquisition, and (iii) the 2,043,333 Shares being acquired pursuant to this Agreement, the Company has no other securities issued and outstanding;
WHEREAS, the sale of the Shares pursuant to this Agreement is being made, inter alia, in accordance with and in reliance upon the exemptions from securities registration for offers and sales under Section 4(1) and Section 4(2) of the under the Securities Act of 1933, as amended (the "SECURITIES ACT");
WHEREAS, as a condition to the closing of the Share Acquisition pursuant to this Agreement, the Purchaser pursuant to a stock purchase agreement by and among the Purchaser and eleven (11) other sellers of Common Stock, dated of even date herewith (the "OTHER SHARE ACQUISITION"), the Purchaser shall acquire simultaneously with the closing of the Share Acquisition, 220,667 additional shares of Common Stock (the "OTHER SHARES"); and
WHEREAS, following the closing of the Share Acquisition and the Other Share Acquisition, the Company will have issued and outstanding 2,644,500 shares of Common Stock, of which (i) the Purchaser shall own 2,264,000 shares of Common Stock, constituting approximately 85.6% of such shares, and (ii) there shall be 380,500 shares of Common Stock owned by the Non-Affiliated Shareholders, constituting approximately 14.4% of such shares.
BVIG has no funds. I expect there may be a share exchange for funding, however these shares will probably be restricted as well.
Something gotta give
We are very good
BELLA VIAGGIO, INC. SCHEDULE 14C
INTRODUCTION
This notice and information statement (the “ Information Statement ”) was mailed on or about July _, 2010 to the stockholders of record, as of July ___, 2010, of Bella Viaggio, Inc., a Nevada corporation (the “ Company ”) pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) to inform the stockholders of the Company (the “ Stockholders ”) that a stockholder (the “ Majority Stockholder ”) owning a majority of the shares of common stock of the Company (the “ Shares ”) executed a written consent dated July __, 2010 approving an amendment (the “ Amendment ”) to the Company’s Articles of Incorporation (the “ Articles ”) pursuant to which such Articles will be amended to reflect: (i) an increase in the Company’s authorized shares of common stock (the “ Shares ”) to 500,000,000 such Shares (the “ Increase ”); and (ii) the change of its name to Kat Gold Holdings Corp. (the “ Name Change ” and with the Increase, the “ Amendments ”). This Information Statement will serve as written Notice to stockholders pursuant to Section 78.315 of the Nevada Revised Statutes (the “ NRS ”).
The Majority Stockholder has voted to approve the Amendment. This Information Statement shall be considered the notice required under the corporate law of the State of Nevada. Accordingly, your approval is not required and is not being sought.
Please read this Information Statement carefully. It describes the essential terms of, and contains certain information concerning, the Amendment. The Amendment to the Articles in substantially the form in which it will be filed is appended hereto as Annex A . Additional information about the Company is contained in its periodic and current reports filed with the United States Securities and Exchange Commission (the “ Commission ”). These reports, their accompanying exhibits and other documents filed with the Commission may be inspected without charge at the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such material may also be obtained from the Commission at prescribed rates. The Commission also maintains a Web site that contains reports, proxy and information statements and other information regarding public companies that file reports with the Commission. Copies of these reports may be obtained from the Commission’s EDGAR archives at http://www.sec.gov/index.htm.
The principal executive office of the Company is located at 2120 58th Avenue, Suite 107, Vero Beach, Florida 32966. The Company’s telephone number is +709-368-9223.
BELLA VIAGGIO, INC.
2120 58TH AVENUE, SUITE 107
VERO BEACH, FLORIDA 32966
THIS INFORMATION STATEMENT IS BEING PROVIDED TO
YOU BY THE BOARD OF DIRECTORS OF THE COMPANY
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
PRELIMINARY INFORMATION STATEMENT
PURSUANT TO SECTION 14 OF THE SECURITIES EXCHANGE ACT OF 1934
AND REGULATION 14C AND SCHEDULE 14C THEREUNDER
To our Stockholders:
NOTICE IS HEREBY GIVEN that the following actions were taken pursuant to a Written Consent of the Majority Stockholder of the Company to be effective upon the filing of the Amendment with the Secretary of State of the State of Nevada. The Amendment in substantially the form in which it will be filed is appended hereto as Annex A .
This Information Statement is being furnished to the holders of the Shares, par value $0.001 per share, of the Company as of July __, 2010, to inform the Stockholders:
1.
THAT an Amendment to the Articles be filed to effectuate an increase in the Company’s authorized Shares to 500,000,000 such shares (the “ Increase ”); and
2.
THAT an Amendment to the Articles be filed to effectuate a change the name of the Company to Kat Gold Holdings Corp. (the “ Name Change, ” and with the Increase, the “ Amendments ”).
The Board of Directors has fixed the close of business on July ___, 2010, as the Record Date for determining the Stockholders entitled to Notice of the foregoing.
The Company has asked brokers and other custodians, nominees and fiduciaries to forward this Information Statement to the beneficial owners of the Common Stock held of record by such persons and will reimburse such persons for out-of-pocket expenses incurred in forwarding such material. This Information Statement will serve as written Notice to stockholders pursuant to Section 78.315 of the pursuant to Section 78.315 of the Nevada Revised Statutes.
The above actions will become effective 20 days following the mailing to the Stockholders of the Definitive Information Statement, or as soon thereafter as is practicable. The cost of this Information Statement will be borne by the Company. This Information Statement is first being sent to stockholders on or about July __, 2010.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY. THIS INFORMATION STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information included in this Information Statement may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”). This information may involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. The Company’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. The Company undertakes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
DISSENTER’S RIGHTS
Under the NRS, holders of Shares are not entitled to dissenters’ rights with respect to any aspect of the Amendments, and the Company will not independently provide Stockholders with any such right.
INTERESTS OF CERTAIN PERSONS IN THE AMENDMENTS
No director, executive officer, associate of any director or executive officer or any other person has any substantial interest, direct or indirect, by security holdings or otherwise, in the proposals to effectuate the Amendments and take all related actions which is not shared by all other holders of the y Shares.
RECORD DATE
The Company’s Board of Directors on July __, 2010 adopted, by unanimous written consent, resolutions (i) recommending the Amendments to effect the changes listed above, and (iii) fixing the close of business on July ___, 2010, as the Record.
The NRS provide, in substance, that unless the Articles otherwise provide, Stockholders may take action without a meeting of stockholders and without prior notice if a consent or consents in writing, setting forth the action so taken, is signed by the Stockholders having not less than the minimum number of votes that would be necessary to take such action at a meeting at which all shares entitled to vote thereon were present. Accordingly, the Company is providing this Information Statement for information purposes only.
VOTING SECURITIES
The voting securities of the Company are its Shares, 67,644,500 of which were issued and outstanding as of the Record Date. All outstanding Shares are entitled to one vote on each matter submitted for voting by the stockholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain information regarding the beneficial ownership of the Shares by: (i) each person who, to the Company’s knowledge, beneficially owns 5% or more of the Shares and (ii) each of the Company’s directors and “named executive officers.” As of the Record Date, there were 67,644,500 Shares issued and outstanding.
2
Name and address of Beneficial Owner
Number of Shares
Percent of Shares (1)
Directors and Named Executive Officers:
Kenneth Stead (2)
67,264,000
99
%
Ronald A. Davis (3)
0
—
Kat Exploration, Inc.
1149 Topsail Rd.
Mount Pearl, Newfoundland, A1N 5G2
65,000,000
96
%
5% or Greater Beneficial Owners
Kenneth Stead (4)
67,264,000
99
%
(1) Beneficial ownership is calculated based on the 67,644,500 Shares issued and outstanding as of the Record Date hereof, together with securities exercisable or convertible into Shares within sixty (60) days of the Record Date hereof for each stockholder. The Shares issuable pursuant to those convertible securities, options or warrants are deemed outstanding for computing the percentage ownership of the person holding such convertible securities, options or warrants but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
(2) The address for Mr. Stead is c/o Kat Exploration Inc., 1149 Topsail Rd., Mount Pearl, Newfoundland, A1N 5G2.
(3) The address for Mr. Davis is c/o the Company, 2120 58th Avenue, Suite 107, Vero Beach, Florida 32966.
(4) Mr. Stead is the control person of Kat Exploration, Inc. and may as such be deemed to “beneficially own” the shares of Common Stock owned by Kat Exploration, Inc. Mr. Stead, however, disclaims beneficial ownership of all such Shares.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 75,000,000 shares, consisting of 70,000,000 Shares and 5,000,000 Preferred Shares.
Common Stock
Holders of Shares are entitled to one vote for each Share on all matters submitted to a stockholder vote. Holders of Shares do not have cumulative voting rights. Therefore, holders of a majority of the Shares voting for the election of directors can elect all of the directors. Holders of Shares representing a majority of the voting power of the Company’s capital stock issued and outstanding and entitled to vote are necessary to constitute a quorum at any meeting of the Company’s stockholders. A vote by the holders of a majority of the outstanding Shares is required to effectuate certain fundamental corporate changes, such as liquidation, merger or an amendment to the Articles.
Holders of Shares are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding Share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the Shares. Holders of the Shares have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Shares.
3
AMENDMENT NO. 1
Holders of 99% of the outstanding Shares have voted in favor of the Increase forming a part of the Amendment. Accordingly, the Company is not seeking proxies from the Stockholders and is providing this notice for information purposes only.
Reason for the Increase
The proposed Increase is necessary in order for the Company to have a sufficient number of Shares authorized and issuable to the Seller issued in the Acquisition described below. The Increase will raise the number of the Company’s authorized Shares from 70,000,000 to 500,000,000. The Amendment will not affect any of the Company’s authorized 5,000,000 “blank check” preference shares, par value $0.001 per share (the “ Preferred Shares ”).
On June 4, 2010 (the “ Closing Date ”), pursuant to a Purchase Agreement dated as of May 28, 2010 (the “ Agreement ”) by and the Company and Kat Exploration Inc, a company organized under the laws of Nevada (the “ Seller ”), the Company acquired (the “ Acquisition ”) 100% of “Handcamp,” a gold property (the “ Property ”) from the Seller, solely in exchange for 161,000,000 Shares (the “ Purchase Shares ”).
Under the terms of the Agreement, the Company issued 65,000,000 Purchase Shares to the Seller on the Closing Date, and the remaining 96,000,000 Purchase Shares shall be issued as soon as reasonably practical after the Company shall have effectuated the Increase in its number of authorized shares of Common Stock to enable it to issue such 96,000,000 Purchase Shares to the Seller.
Procedure for Effectuating the Increase
The Company will have the Amendment filed such time as the Board of Directors has determined the appropriate effective date thereof (the “ Effective Date ”). The Amendment in substantially the form in which it will be filed is appended to this Information Statement as Annex A . The Board of Directors may delay effectuation of the Amendment without resoliciting stockholder approval. The Increase will become effective on the Effective Date.
As soon as practicable after the Effective Date, the Company will file a Current Report of Form 8-K with the Commission disclosing that the Increase has been effected.
For further information on the Acquisition and related matters, please refer to the Current Report on Form 8-K filed by the Company with the Commission at www.sec.gov on June 4, 2010.
AMENDMENT NO. 2
Holders of 99% of the outstanding Shares have voted in favor of the Name Change forming a part of the Amendment. Accordingly, the Company is not seeking proxies from the Stockholders and is providing this notice for information purposes only.
Reason for the Name Change
The primary purpose of the name change from Bella Viaggio, Inc. to Kat Gold Holdings Corp. is to better represent the Company’s business subsequent to the Closing Date.
Certificates for the Company’s Shares that recite the name “Bella Viaggio, Inc.” will continue to represent Shares in the Company after the effective date of the Name Change.
The Amendment will be effective upon filing thereof in the State of Nevada, which is expected to occur as soon as reasonably practical after the mailing date of this Information Statement, which is expected to occur twenty (20) calendar days after such date.
4
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY. THIS INFORMATION STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY.
STOCKHOLDER PROPOSALS
The Board has not yet determined the date on which the next annual general meeting of Stockholders will be held. Any proposal by a Stockholder intended to be presented at the Company’s next annual general meeting of Stockholders must be received at the offices of the Company a reasonable amount of time prior to the date on which the information or proxy statement for that meeting are mailed to Stockholders in order to be included in the Company’s information or proxy statement relating to that meeting.
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Exchange, and in accordance therewith files reports, proxy statements and other information including annual and quarterly reports on Form 10-K and 10-Q (the “ 1934 Act Filings ”) with the Commission. Reports and other information filed by the Company can be inspected and copied at the public reference facilities maintained at the Commission at Room 1024, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such material can be obtained upon written request addressed to the Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a web site on the Internet ( http://www.sec.gov ) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission through the Electronic Data Gathering, Analysis and Retrieval System.
EFFECTIVE DATE
Pursuant to Rule 14c-2 under the Exchange Act, the above actions shall not be effective until a date at least twenty (20) days after the date on which the Definitive Information Statement has been mailed to the Stockholders. The Company anticipates that the actions contemplated hereby will be effected on or about the close of business on July __, 2010.
5
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THE ATTACHED MATERIAL IS FOR INFORMATIONAL PURPOSES ONLY.
By Order of the Board of Directors,
/s/ Kenneth Stead
Kenneth Stead, Chief Executive Officer and Director
June 25, 2010
6
Core tent examples
There should be one on-site at Handcamp.
(Link Back)
7. Drilling The drilling method will be selected by a QP(s) and should be appropriate to the material being investigated, the objective of the program and local drilling conditions. The drill hole size selected should provide sufficient representative sample material for analysis and reference. Surface and downhole locational surveys should be
undertaken using techniques appropriate for the hole size, angle and length of holes. A representative fraction of the drill sample material should be retained, however if material is not retained, the QP(s) should report and explain the reason for this
decision.
Drill logs, forms or software specifically suited to the type of drilling, the particular geological situation, and the minerals being sought, should be used for detailed geological logging of core or cuttings. Logs should be appropriately detailed for the
type of drilling being conducted, the geological setting, type of mineralization, and geotechnical conditions. Core or sample recoveries should be noted on the logs.
Cross sections depicting basic geology and hole data, including correlation with surface geology and any nearby holes should be developed and updated as drilling proceeds.
Any downhole geophysical information or other such surveys should also be kept with the drill log. A photographic record of the core is recommended, where appropriate.
8. Sample Security The security of samples from sample acquisition to analysis is a vital component of the
sampling process. Procedures should include the use of secure core logging, sampling, storage and preparation facilities, as appropriate, and the prompt, secure and direct shipping of samples to the laboratories. The QP(s) should endeavour to put
in place the best security procedures practical, given the geographic and topographic conditions and the logistics created by the site location.
Question?
Aren't there suppose to be pictures/video of the Drilling linked to website?
Core tent examples
There should be one on-site at Handcamp.
(Link Back)
7. Drilling The drilling method will be selected by a QP(s) and should be appropriate to the material being investigated, the objective of the program and local drilling conditions. The drill hole size selected should provide sufficient representative sample material for analysis and reference. Surface and downhole locational surveys should be
undertaken using techniques appropriate for the hole size, angle and length of holes. A representative fraction of the drill sample material should be retained, however if material is not retained, the QP(s) should report and explain the reason for this
decision.
Drill logs, forms or software specifically suited to the type of drilling, the particular geological situation, and the minerals being sought, should be used for detailed geological logging of core or cuttings. Logs should be appropriately detailed for the
type of drilling being conducted, the geological setting, type of mineralization, and geotechnical conditions. Core or sample recoveries should be noted on the logs.
Cross sections depicting basic geology and hole data, including correlation with surface geology and any nearby holes should be developed and updated as drilling proceeds.
Any downhole geophysical information or other such surveys should also be kept with the drill log. A photographic record of the core is recommended, where appropriate.
8. Sample Security The security of samples from sample acquisition to analysis is a vital component of the
sampling process. Procedures should include the use of secure core logging, sampling, storage and preparation facilities, as appropriate, and the prompt, secure and direct shipping of samples to the laboratories. The QP(s) should endeavour to put
in place the best security procedures practical, given the geographic and topographic conditions and the logistics created by the site location.
Exploration Best Practices Guidelines
http://www.cim.org/definitions/explorationBESTPRACTICE.pdf
Preamble: These guidelines have been prepared to assist the Qualified Person(s) in the planning and supervision of
exploration programs which will be reported under National Instrument 43-101. Such exploration programs must be
under the supervision of the Qualified Person who will be responsible and accountable for the planning, execution
and interpretation of all exploration activity as well as the implementation of quality assurance programs and
reporting. These guidelines are also recommended for use in the planning and execution of exploration programs
which will not be reported under NI 43-101. This set of broad guidelines or “best practices” has been drawn up to
ensure a consistently high quality of work that will maintain public confidence and assist securities regulators. The
guidelines are not intended to inhibit the original thinking or application of new approaches, that are fundamental to
successful mineral exploration.
Results should be summarized and reported in a Technical Report of good professional quality in accordance with
the National Instrument 43-101 and Form 1 contained in that instrument.
All exploration work from which public reporting will ensue must be designed and carried out under the supervision of
a Qualified Person (“QP”). A QP is defined in National Instrument 43-101 as an individual who is an engineer or
geoscientist with at least five (5) years’ experience in mineral exploration, mine development, mine operation or
project assessment, has experience relevant to the subject matter of the project or report and is a member in good
standing of a recognized professional association.
1. Qualified Person The Qualified Person may base the exploration program on such geological premises
and interpretation of existing information as the QP(s) may decide and select such
exploration methods and tools as the QP(s) may judge to be appropriate. In planning,
implementing and supervising any exploration work, the Qualified Person should
ensure that the practices followed are based on criteria that are generally accepted in
the industry or that can reasonably be justified on scientific or technical grounds.
2. Geological Concept The geological premise on which the exploration work is conducted including the
deposit type, geological setting and style of mineralization sought, should be supported
by relevant field data and a reasoned scientific approach.
3. Quality Assurance and Control
Throughout the process of mineral exploration, the QP(s) should ensure that a quality
assurance program is in place and that any required quality control measures are
implemented. Quality assurance programs should be systematic and apply to all types
of data acquisition, across the full range of values measured and not only high or
unusual results.
4. Exploration Methods & Data Collection
Field work is to be planned and implemented under the direct supervision of a QP(s).
Data should be properly recorded and documented at appropriate scales. All data
points should be accurately located with respect to known reference points. The QP(s)
supervising this work should ensure that any work by employees, contractors or
consultants is done by competent personnel and that appropriate quality assurance
programs and security procedures are practised. Whenever several persons carry out
similar duties or when the data has been collected over a period of time, care should be
taken to ensure the quality and consistency of the data being used.
5. Records and Data Verification
The exploration process including planning, mapping, sampling, sample preparation,
sample security and analysis or testing should be accompanied by detailed record
keeping setting out the procedures followed, the results obtained and the abbreviations
used. In addition to paper records, digital storage is encouraged in a standard format
on a reliable medium. A program of data verification should be in place to confirm the
validity of exploration data that are entered into the database. A summary of records
should be included in a periodic technical report produced and signed by the QP(s).
Practices used should be well documented and justified.
6. Sampling The practices and procedures used in each sampling program should be appropriate
for the objectives of the program. All sampling programs should be carried out in a
careful and diligent manner using scientifically established sampling practices designed
and tested to ensure that the results are representative and reliable. Samples should
be collected under the supervision of a QP(s). Quality control programs appropriate to
the type of sample and the mineralization should be planned and implemented. These
programs should include such measures as external blanks, standards and duplicate
samples. Where the volume of individual samples is reduced prior to shipping to a
laboratory for analysis, appropriate reduction procedures to obtain representative
subsamples should be applied and verified.
c
7. Drilling The drilling method will be selected by a QP(s) and should be appropriate to the
material being investigated, the objective of the program and local drilling conditions.
The drill hole size selected should provide sufficient representative sample material for
analysis and reference. Surface and downhole locational surveys should be
undertaken using techniques appropriate for the hole size, angle and length of holes. A
representative fraction of the drill sample material should be retained, however if
material is not retained, the QP(s) should report and explain the reason for this
decision.
Drill logs, forms or software specifically suited to the type of drilling, the particular
geological situation, and the minerals being sought, should be used for detailed
geological logging of core or cuttings. Logs should be appropriately detailed for the
type of drilling being conducted, the geological setting, type of mineralization, and
geotechnical conditions. Core or sample recoveries should be noted on the logs.
Cross sections depicting basic geology and hole data, including correlation with surface
geology and any nearby holes should be developed and updated as drilling proceeds.
Any downhole geophysical information or other such surveys should also be kept with
the drill log. A photographic record of the core is recommended, where appropriate.
8. Sample Security The security of samples from sample acquisition to analysis is a vital component of the
sampling process. Procedures should include the use of secure core logging,
sampling, storage and preparation facilities, as appropriate, and the prompt, secure
and direct shipping of samples to the laboratories. The QP(s) should endeavour to put
in place the best security procedures practical, given the geographic and topographic
conditions and the logistics created by the site location.
9. Sample Preparation The selection of sample preparation procedures should be approved by the QP and
should be appropriate to the material being tested, the elements being analyzed and
should be subject to the security measures as stated above. All samples that are
reduced or split should be processed in a manner such that the fraction analyzed or
tested is as representative of the whole sample as possible. Representative fractions
of the material to be analyzed or tested should be retained for an appropriate period of
time, as decided by the QP. Quality control checks should be undertaken as
determined by the QP.
10. Analysis and Testing Analysis and testing of samples should be done by a reputable and preferably
accredited laboratory qualified for the particular material to be analyzed or tested. The
selection of a laboratory, testing or mineral processing facility and the analytical
methods used will be the responsibility of the QP. The analytical methods chosen must
be documented and justified. All analytical or test results should be supported by duly
signed certificates or technical reports issued by the laboratory or testing facility and
should be accompanied by a statement of the methods used. The reliability of the
analytical and testing results should be measured using the results of the quality control
samples inserted in the process by the QP. Duplicate analyses at other laboratories
should be undertaken.
11. Interpretation A comprehensive and ongoing interpretation of all the exploration data is an essential
activity at all stages of the project and should be undertaken to assess the results of
the work.
This interpretation should be based on all of the information collected to date, be
systematic and thorough, describe and document the interpretation and discuss any
information that appears at variance with the selected interpretation. The density of the
exploration data should be critically assessed as to its ability to support the qualitative
and quantitative conclusions.
12. Mineral Resource and Reserve Estimation
Estimation of a mineral resource and a mineral reserve are both fundamental steps in
project development. The classification and categorization of these estimates must be
done in accordance with National Instrument 43-101 and be prepared by a QP(s). The
methods and parameters used in making these estimates should be in accordance with
the principles generally accepted in Canada and should be presented and justified with
the estimate.. A mineral resource can be estimated for material where the geological
characteristics and the continuity are known or reasonably assumed and where there is
the potential for production at a profit. Reserves can be estimated when a positive prefeasibility
or feasibility study as defined by NI 43-101 has established the technical,
economic and other relevant factors that indicate that these resources can be produced
at a profit. Reserve estimates should be based on input and information from a
multidisciplinary team under the direction of QP(s).
d
13. Environment, Safety and Community Relations
All field work should be conducted in a safe, professional manner with due regard for
the environment, the concerns of local communities and with regulatory requirements.
An environmental program, including baseline studies, appropriate to the stage of the
project should be carried out.
14. Recommendations The interpretation and assessment of the program results at the end of each phase
should determine if the program objectives have been met and if further work is
justified. Any plan for further work should identify exploration targets, recommend an
exploration program and present a budget and schedule. Any changes in working
hypotheses and objectives should be recorded.
15. Technical Reporting A comprehensive technical report signed by the QP(s) should be prepared on
completion of a particular phase or stage of work following the format presented in
Form 1 of the National Instrument 43-101.
Exploration Best Practices Guidelines
http://www.cim.org/definitions/explorationBESTPRACTICE.pdf
Preamble: These guidelines have been prepared to assist the Qualified Person(s) in the planning and supervision of
exploration programs which will be reported under National Instrument 43-101. Such exploration programs must be
under the supervision of the Qualified Person who will be responsible and accountable for the planning, execution
and interpretation of all exploration activity as well as the implementation of quality assurance programs and
reporting. These guidelines are also recommended for use in the planning and execution of exploration programs
which will not be reported under NI 43-101. This set of broad guidelines or “best practices” has been drawn up to
ensure a consistently high quality of work that will maintain public confidence and assist securities regulators. The
guidelines are not intended to inhibit the original thinking or application of new approaches, that are fundamental to
successful mineral exploration.
Results should be summarized and reported in a Technical Report of good professional quality in accordance with
the National Instrument 43-101 and Form 1 contained in that instrument.
All exploration work from which public reporting will ensue must be designed and carried out under the supervision of
a Qualified Person (“QP”). A QP is defined in National Instrument 43-101 as an individual who is an engineer or
geoscientist with at least five (5) years’ experience in mineral exploration, mine development, mine operation or
project assessment, has experience relevant to the subject matter of the project or report and is a member in good
standing of a recognized professional association.
1. Qualified Person The Qualified Person may base the exploration program on such geological premises
and interpretation of existing information as the QP(s) may decide and select such
exploration methods and tools as the QP(s) may judge to be appropriate. In planning,
implementing and supervising any exploration work, the Qualified Person should
ensure that the practices followed are based on criteria that are generally accepted in
the industry or that can reasonably be justified on scientific or technical grounds.
2. Geological Concept The geological premise on which the exploration work is conducted including the
deposit type, geological setting and style of mineralization sought, should be supported
by relevant field data and a reasoned scientific approach.
3. Quality Assurance and Control
Throughout the process of mineral exploration, the QP(s) should ensure that a quality
assurance program is in place and that any required quality control measures are
implemented. Quality assurance programs should be systematic and apply to all types
of data acquisition, across the full range of values measured and not only high or
unusual results.
4. Exploration Methods & Data Collection
Field work is to be planned and implemented under the direct supervision of a QP(s).
Data should be properly recorded and documented at appropriate scales. All data
points should be accurately located with respect to known reference points. The QP(s)
supervising this work should ensure that any work by employees, contractors or
consultants is done by competent personnel and that appropriate quality assurance
programs and security procedures are practised. Whenever several persons carry out
similar duties or when the data has been collected over a period of time, care should be
taken to ensure the quality and consistency of the data being used.
5. Records and Data Verification
The exploration process including planning, mapping, sampling, sample preparation,
sample security and analysis or testing should be accompanied by detailed record
keeping setting out the procedures followed, the results obtained and the abbreviations
used. In addition to paper records, digital storage is encouraged in a standard format
on a reliable medium. A program of data verification should be in place to confirm the
validity of exploration data that are entered into the database. A summary of records
should be included in a periodic technical report produced and signed by the QP(s).
Practices used should be well documented and justified.
6. Sampling The practices and procedures used in each sampling program should be appropriate
for the objectives of the program. All sampling programs should be carried out in a
careful and diligent manner using scientifically established sampling practices designed
and tested to ensure that the results are representative and reliable. Samples should
be collected under the supervision of a QP(s). Quality control programs appropriate to
the type of sample and the mineralization should be planned and implemented. These
programs should include such measures as external blanks, standards and duplicate
samples. Where the volume of individual samples is reduced prior to shipping to a
laboratory for analysis, appropriate reduction procedures to obtain representative
subsamples should be applied and verified.
c
7. Drilling The drilling method will be selected by a QP(s) and should be appropriate to the
material being investigated, the objective of the program and local drilling conditions.
The drill hole size selected should provide sufficient representative sample material for
analysis and reference. Surface and downhole locational surveys should be
undertaken using techniques appropriate for the hole size, angle and length of holes. A
representative fraction of the drill sample material should be retained, however if
material is not retained, the QP(s) should report and explain the reason for this
decision.
Drill logs, forms or software specifically suited to the type of drilling, the particular
geological situation, and the minerals being sought, should be used for detailed
geological logging of core or cuttings. Logs should be appropriately detailed for the
type of drilling being conducted, the geological setting, type of mineralization, and
geotechnical conditions. Core or sample recoveries should be noted on the logs.
Cross sections depicting basic geology and hole data, including correlation with surface
geology and any nearby holes should be developed and updated as drilling proceeds.
Any downhole geophysical information or other such surveys should also be kept with
the drill log. A photographic record of the core is recommended, where appropriate.
8. Sample Security The security of samples from sample acquisition to analysis is a vital component of the
sampling process. Procedures should include the use of secure core logging,
sampling, storage and preparation facilities, as appropriate, and the prompt, secure
and direct shipping of samples to the laboratories. The QP(s) should endeavour to put
in place the best security procedures practical, given the geographic and topographic
conditions and the logistics created by the site location.
9. Sample Preparation The selection of sample preparation procedures should be approved by the QP and
should be appropriate to the material being tested, the elements being analyzed and
should be subject to the security measures as stated above. All samples that are
reduced or split should be processed in a manner such that the fraction analyzed or
tested is as representative of the whole sample as possible. Representative fractions
of the material to be analyzed or tested should be retained for an appropriate period of
time, as decided by the QP. Quality control checks should be undertaken as
determined by the QP.
10. Analysis and Testing Analysis and testing of samples should be done by a reputable and preferably
accredited laboratory qualified for the particular material to be analyzed or tested. The
selection of a laboratory, testing or mineral processing facility and the analytical
methods used will be the responsibility of the QP. The analytical methods chosen must
be documented and justified. All analytical or test results should be supported by duly
signed certificates or technical reports issued by the laboratory or testing facility and
should be accompanied by a statement of the methods used. The reliability of the
analytical and testing results should be measured using the results of the quality control
samples inserted in the process by the QP. Duplicate analyses at other laboratories
should be undertaken.
11. Interpretation A comprehensive and ongoing interpretation of all the exploration data is an essential
activity at all stages of the project and should be undertaken to assess the results of
the work.
This interpretation should be based on all of the information collected to date, be
systematic and thorough, describe and document the interpretation and discuss any
information that appears at variance with the selected interpretation. The density of the
exploration data should be critically assessed as to its ability to support the qualitative
and quantitative conclusions.
12. Mineral Resource and Reserve Estimation
Estimation of a mineral resource and a mineral reserve are both fundamental steps in
project development. The classification and categorization of these estimates must be
done in accordance with National Instrument 43-101 and be prepared by a QP(s). The
methods and parameters used in making these estimates should be in accordance with
the principles generally accepted in Canada and should be presented and justified with
the estimate.. A mineral resource can be estimated for material where the geological
characteristics and the continuity are known or reasonably assumed and where there is
the potential for production at a profit. Reserves can be estimated when a positive prefeasibility
or feasibility study as defined by NI 43-101 has established the technical,
economic and other relevant factors that indicate that these resources can be produced
at a profit. Reserve estimates should be based on input and information from a
multidisciplinary team under the direction of QP(s).
d
13. Environment, Safety and Community Relations
All field work should be conducted in a safe, professional manner with due regard for
the environment, the concerns of local communities and with regulatory requirements.
An environmental program, including baseline studies, appropriate to the stage of the
project should be carried out.
14. Recommendations The interpretation and assessment of the program results at the end of each phase
should determine if the program objectives have been met and if further work is
justified. Any plan for further work should identify exploration targets, recommend an
exploration program and present a budget and schedule. Any changes in working
hypotheses and objectives should be recorded.
15. Technical Reporting A comprehensive technical report signed by the QP(s) should be prepared on
completion of a particular phase or stage of work following the format presented in
Form 1 of the National Instrument 43-101.
How to value mining exploration stocks
http://www.moneyweek.com/investments/stock-markets/how-to-value-mining-exploration-stocks.aspx
May 19, 2006
Print this article
We looked at how to value mining companies last week. Since these companies have real assets (mines), cash flow, and even perhaps earnings (if we're lucky), putting a value on them is fairly straightforward. Exploration companies are a completely different story.
Exploration companies don't have assets, cash flow or earnings. They typically only have a management team, sometimes a bit of cash, and one to several properties.
The cash will get spent, usually a lot quicker than anticipated. Their projects aren't assets: they are liabilities where the cash is going to get spent. That leaves us with management, and management is absolutely an exploration company's biggest asset - if not its only asset.
Promoters of these stocks will tell you their company's management has a superb track record, but the reality is that there aren't even enough mediocre management teams to run the thousands of exploration companies resident in Vancouver alone.
If an exploration company's only asset is management, how do we put a value on it?
Unfortunately the answer is 'with difficulty'. There is no easy way to put a value on exploration companies. It is easy to spot a really good deal when it stares you in the face, and it is equally simple to see when a stock is overvalued, but the nature of the business does not readily allow for valuations that one can use for short-term trading or 'value investing'.
Exploration is risky business. Buying exploration stocks is tantamount to gambling, and there are two safe bets when it comes to any exploration company. One: it will spend the money it has and two: it is highly unlikely that it will make a discovery.
Yet I personally invest essentially all of my net worth in exploration stocks because I believe that there are ways to mitigate the risks and to shift the odds of success in my favor. Fortunately this part is straightforward.
The Nineties were rough for mining and there are now very few new exploration geologists graduating from school. To make things worse, most of the graduates of the past decade want desk jobs, making their odds of discovering anything very slim.
When the major mining companies downsized their exploration efforts during the Nineties they not only curtailed exploration expenditures, they fired most of their geologists, closed regional offices and let many of their projects go. This caused a shift in exploration demographics - the more innovative and experienced exploration professionals got together and formed new junior exploration companies, and picked up many of the projects the majors dropped. As a result, major mining companies now lack the human resources needed to explore for new ore deposits.
Still, mining is a depleting business - the more you mine, the less you have left to mine and without exploration, mining will cease very rapidly. The mining companies know they need access to good exploration projects and, more importantly, good exploration teams. We know it too.
We need to look for companies whose managements have the ability to generate new exploration projects and the business acumen to joint venture those projects to major mining companies. A joint venture partnership allows the junior exploration company to use its intellectual capital to generate exploration ideas but the mining company's financial capital to test them. It is absurd to think that the average exploration company has but the remotest chance of making a discovery given how much money and time it takes. The only rational way to approach exploration is to marry the innovative skills of quirky, and often unsocial, exploration geologists with the balance sheets of mining companies in a win-win partnership.
In a typical deal the exploration company will generate an exploration idea, acquire the ground and perhaps spend a little bit of money to confirm that the geologic model it is proposing has merit by looking at soil geochemistry, geophysics and good old-fashioned geological mapping. Thereafter it will attempt to get a mining company to commit exploration funds to test its ideas in return for earning a percentage interest in the project. Typically the mining company can earn up to 70% to 80% by completing a bankable feasibility study or even financing the project to production.
This means that if our company is successful, we will end up owning 20% to 30% of a mine, whereas if it is unsuccessful it would have lost some time and a little bit of money because the mining company footed the heavy bills. This way an exploration company can use its limited cash resources to generate numerous projects, all funded by joint venture partners. It increases the life expectancy of the exploration company and by enabling it to generate and test more projects it also increases the probability that it will eventually be successful. I would much rather own 30% of a successful project than 100% of a dud.
There is something else that happens here. With this model the exploration company has to convince the geologists working for the mining company that its projects have merit. Not only do they need to have merit, they need to have sufficient merit to compete with the exploration projects generated internally by the mining company and all the other exploration projects being presented to the major by other juniors. This is a lot more difficult for a junior to do than to convince doctors, lawyers, dentists and taxi drivers that its projects are one drill hole away from changing the world (with all due respect to doctors, lawyers, dentists and taxi drivers).
I therefore avoid exploration companies that tell me they are going to spend millions of dollars drilling on their wholly owned projects, unless there are very, very, very compelling reasons.
We also have to look at what kind of projects the exploration company is looking for. You will be surprised how many times I have sat through presentations only to learn at the end that the geological target is unlikely to ever be economic or, if it might be, that it is likely to be so small that no major mining company will have any interest in it. The only thing we are interested in is making world-class discoveries.
This brings us to the next part: you should have access to a critical and well-seasoned exploration geologist. I am not a geologist yet I have to sift through geological evidence every day and decide whether to accept or reject the risk of exploration. I work very closely with a consulting geologist, and without access to a consultant I can trust it would be almost impossible to succeed in this business.
If an exploration company consistently comes up with new projects and continues to get exploration funding from major mining companies then this is a business I am interested in owning. I view stocks as fractional ownership in a company, not as trading cards. So if I find a business I would like to own I often watch it for several years, waiting for an opportune time to buy.
KAT EXPL INC ( KATX ) prices from 05/20/2010 through 06/20/2010
Date Volume High Low Open Close
05/20/10 9.09 M 0.21 0.159 0.195 0.192
05/21/10 6.06 M 0.235 0.175 0.178 0.229
05/24/10 7.33 M 0.25 0.19 0.201 0.214
05/25/10 4.64 M 0.24 0.19 0.23 0.215
05/26/10 6.26 M 0.252 0.22 0.22 0.238
05/27/10 3.36 M 0.248 0.23 0.24 0.242
05/28/10 2.96 M 0.249 0.2231 0.244 0.239
06/01/10 8.05 M 0.245 0.18 0.245 0.21
06/02/10 6.66 M 0.215 0.161 0.21 0.172
06/03/10 3.03 M 0.189 0.161 0.161 0.184
06/04/10 1.14 M 0.185 0.175 0.185 0.185
06/07/10 4.11 M 0.2259 0.20 0.21 0.226
06/08/10 2.99 M 0.232 0.202 0.231 0.22
06/09/10 2.56 M 0.2275 0.15 0.22 0.21
06/10/10 1.39 M 0.21 0.19 0.21 0.20
06/11/10 6.85 M 0.20 0.165 0.20 0.19
06/14/10 19.98 M 0.185 0.119 0.185 0.136
06/15/10 9.10 M 0.135 0.119 0.13 0.12
06/16/10 7.38 M 0.145 0.12 0.123 0.128
06/17/10 2.89 M 0.13 0.111 0.13 0.125
06/18/10 6.36 M 0.18 0.121 0.121 0.168
How to value mining exploration stocks
http://www.moneyweek.com/investments/stock-markets/how-to-value-mining-exploration-stocks.aspx
May 19, 2006
Print this article
We looked at how to value mining companies last week. Since these companies have real assets (mines), cash flow, and even perhaps earnings (if we're lucky), putting a value on them is fairly straightforward. Exploration companies are a completely different story.
Exploration companies don't have assets, cash flow or earnings. They typically only have a management team, sometimes a bit of cash, and one to several properties.
The cash will get spent, usually a lot quicker than anticipated. Their projects aren't assets: they are liabilities where the cash is going to get spent. That leaves us with management, and management is absolutely an exploration company's biggest asset - if not its only asset.
Promoters of these stocks will tell you their company's management has a superb track record, but the reality is that there aren't even enough mediocre management teams to run the thousands of exploration companies resident in Vancouver alone.
If an exploration company's only asset is management, how do we put a value on it?
Unfortunately the answer is 'with difficulty'. There is no easy way to put a value on exploration companies. It is easy to spot a really good deal when it stares you in the face, and it is equally simple to see when a stock is overvalued, but the nature of the business does not readily allow for valuations that one can use for short-term trading or 'value investing'.
Exploration is risky business. Buying exploration stocks is tantamount to gambling, and there are two safe bets when it comes to any exploration company. One: it will spend the money it has and two: it is highly unlikely that it will make a discovery.
Yet I personally invest essentially all of my net worth in exploration stocks because I believe that there are ways to mitigate the risks and to shift the odds of success in my favor. Fortunately this part is straightforward.
The Nineties were rough for mining and there are now very few new exploration geologists graduating from school. To make things worse, most of the graduates of the past decade want desk jobs, making their odds of discovering anything very slim.
When the major mining companies downsized their exploration efforts during the Nineties they not only curtailed exploration expenditures, they fired most of their geologists, closed regional offices and let many of their projects go. This caused a shift in exploration demographics - the more innovative and experienced exploration professionals got together and formed new junior exploration companies, and picked up many of the projects the majors dropped. As a result, major mining companies now lack the human resources needed to explore for new ore deposits.
Still, mining is a depleting business - the more you mine, the less you have left to mine and without exploration, mining will cease very rapidly. The mining companies know they need access to good exploration projects and, more importantly, good exploration teams. We know it too.
We need to look for companies whose managements have the ability to generate new exploration projects and the business acumen to joint venture those projects to major mining companies. A joint venture partnership allows the junior exploration company to use its intellectual capital to generate exploration ideas but the mining company's financial capital to test them. It is absurd to think that the average exploration company has but the remotest chance of making a discovery given how much money and time it takes. The only rational way to approach exploration is to marry the innovative skills of quirky, and often unsocial, exploration geologists with the balance sheets of mining companies in a win-win partnership.
In a typical deal the exploration company will generate an exploration idea, acquire the ground and perhaps spend a little bit of money to confirm that the geologic model it is proposing has merit by looking at soil geochemistry, geophysics and good old-fashioned geological mapping. Thereafter it will attempt to get a mining company to commit exploration funds to test its ideas in return for earning a percentage interest in the project. Typically the mining company can earn up to 70% to 80% by completing a bankable feasibility study or even financing the project to production.
This means that if our company is successful, we will end up owning 20% to 30% of a mine, whereas if it is unsuccessful it would have lost some time and a little bit of money because the mining company footed the heavy bills. This way an exploration company can use its limited cash resources to generate numerous projects, all funded by joint venture partners. It increases the life expectancy of the exploration company and by enabling it to generate and test more projects it also increases the probability that it will eventually be successful. I would much rather own 30% of a successful project than 100% of a dud.
There is something else that happens here. With this model the exploration company has to convince the geologists working for the mining company that its projects have merit. Not only do they need to have merit, they need to have sufficient merit to compete with the exploration projects generated internally by the mining company and all the other exploration projects being presented to the major by other juniors. This is a lot more difficult for a junior to do than to convince doctors, lawyers, dentists and taxi drivers that its projects are one drill hole away from changing the world (with all due respect to doctors, lawyers, dentists and taxi drivers).
I therefore avoid exploration companies that tell me they are going to spend millions of dollars drilling on their wholly owned projects, unless there are very, very, very compelling reasons.
We also have to look at what kind of projects the exploration company is looking for. You will be surprised how many times I have sat through presentations only to learn at the end that the geological target is unlikely to ever be economic or, if it might be, that it is likely to be so small that no major mining company will have any interest in it. The only thing we are interested in is making world-class discoveries.
This brings us to the next part: you should have access to a critical and well-seasoned exploration geologist. I am not a geologist yet I have to sift through geological evidence every day and decide whether to accept or reject the risk of exploration. I work very closely with a consulting geologist, and without access to a consultant I can trust it would be almost impossible to succeed in this business.
If an exploration company consistently comes up with new projects and continues to get exploration funding from major mining companies then this is a business I am interested in owning. I view stocks as fractional ownership in a company, not as trading cards. So if I find a business I would like to own I often watch it for several years, waiting for an opportune time to buy.
KAT EXPL INC ( KATX ) daily prices from 05/14/2010 through 06/14/2010
Date Volume High Low Open Close
05/14/10 8.34 M 0.1298 0.102 0.105 0.128
05/17/10 7.92 M 0.145 0.1101 0.114 0.139
05/18/10 9.40 M 0.178 0.142 0.145 0.177
05/19/10 15.17 M 0.24 0.185 0.20 0.196
05/20/10 9.09 M 0.21 0.159 0.195 0.192
05/21/10 6.06 M 0.235 0.175 0.178 0.229
05/24/10 7.33 M 0.25 0.19 0.201 0.214
05/25/10 4.64 M 0.24 0.19 0.23 0.215
05/26/10 6.26 M 0.252 0.22 0.22 0.238
05/27/10 3.36 M 0.248 0.23 0.24 0.242
05/28/10 2.96 M 0.249 0.2231 0.244 0.239
06/01/10 8.05 M 0.245 0.18 0.245 0.21
06/02/10 6.66 M 0.215 0.161 0.21 0.172
06/03/10 3.03 M 0.189 0.161 0.161 0.184
06/04/10 1.14 M 0.185 0.175 0.185 0.185
06/07/10 4.11 M 0.2259 0.20 0.21 0.226
06/08/10 2.99 M 0.232 0.202 0.231 0.22
06/09/10 2.56 M 0.2275 0.15 0.22 0.21
06/10/10 1.39 M 0.21 0.19 0.21 0.20
06/11/10 6.85 M 0.20 0.165 0.20 0.19
06/14/10 6.85 M 0.185 0.119 0.185 0.136
Question? Is the movement of Handcamp into BVIG and the restricted shares called an additional equity in the Press Release the same as a Spin-Off/Spin-Out?
Spin-Offs
In a "spin-off," a parent company distributes shares of a subsidiary to the parent company's shareholders. The shares are usually distributed on a pro rata basis and the subsidiary becomes a separate company. State law and the rules of the stock exchanges determine whether a company must seek shareholder approval for a spin-off.
A subsidiary does not have to register the shares of the spin-off under the Securities Act of 1933 if it meets certain conditions. One of the conditions requires the parent company to provide adequate information about the spin-off to its shareholders and the trading markets. But when registration is required, the subsidiary must file a registration statement with the SEC. In these situations, the SEC's Division of Corporation Finance may examine the registration statement to determine whether it complies with our disclosure requirements. Please note, however, the SEC does not evaluate the merits of the spin-off, nor do we determine if the securities offered are "good" investments. For more information about spin-offs, please read the SEC's Division of Corporation Finance staff legal bulletin.
If you have questions about spin-offs, you can direct them to the Office of Chief Counsel in the SEC's Division of Corporation Finance at (202) 551-3500.
http://www.sec.gov/answers/spinoffs.htm
Investment Dictionary: Spinoff
The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. A spinoff is a type of divestiture.
Investopedia Says:
Businesses wishing to 'streamline' their operations often sell less productive, or unrelated subsidiary businesses as spinoffs. The spun-off companies are expected to be worth more as independent entities than as parts of a larger business.
Spin out
From Wikipedia, the free encyclopedia
(Redirected from Corporate spin-off)
Jump to: navigation, search
For the attraction, see Spin Out (ride).
A spin-out refers to a type of corporate action where a company "splits off" sections of itself as a separate business.
The common definition of spin-out is when a division of a company or organization becomes an independent business. The "spin-out" company takes assets, intellectual property, technology, and/or existing products from the parent organization.
Many times the management team of the new company are from the same parent organization. Often, a spin-out offers the opportunity for a division to be backed by the company but not be affected by the parent company's image or history, giving potential to take existing ideas that had been languishing in an old environment and help them grow in a new environment.
In most cases, the parent company or organization offers support doing one or more of the following:
• investing equity in the new firm,
• being the first customer of the spin-out (helps to create cash flow),
• providing incubation space (desk, chairs, phones, internet access, etc.) or
• providing services such as legal, finance, technology, etc.
All the support from the parent company is provided with the explicit purpose of helping the spin-out grow.
http://en.wikipedia.org/wiki/Corporate_spin-off
Spin-offs
Spin-offs occur when a parent corporation distributes all or most of its holdings of stock in a subsidiary to the parent's shareholders based on the proportion to their holdings in the parent company, i.e. on a pro rata basis. As a result, the subsidiary company is no longer owned or controlled by the parent company and there are two separate publicly traded companies. Prior to the spin-off, shareholders only own the parent company's stock, whereas after the spin-off they own shares in both the parent and the subsidiary. In these transactions, no funds change hands, and the assets of the subsidiary are not revalued. The transaction is considered to be a stock dividend and a tax-free exchange under Internal Revenue Code Section 355.
It is important to distinguish corporate spin-offs from three types of related transactions—equity carve-outs, split-offs, and split-ups. Under an equity carve-out, a portion of the subsidiary's shares are offered for sale to the general public. This has the effect of injecting cash into the parent firm without the loss of control. Under a split-off, shareholders exchange their parent stock for the shares of the subsidiary. These transactions provide the company an opportunity to dispose of a subsidiary in a tax-free manner, and even to relieve itself of an unwanted shareholder. A split-up occurs when the parent distributes shares in each of its subsidiaries, and the parent firm liquidates and ceases to exist.
Spin-offs come in two forms: voluntary and involuntary. Voluntary spin-offs typically yield benefits to the stockholders of the parent company, because companies tend to spin off successful subsidiaries that are not core companies and thus not essential to the parent companies. Corporation may have a number of reasons for spinning off subsidiaries such as to improve the value of a subsidiary or to take advantage of tax benefits as discussed below. On the other hand, involuntary spin-offs generally result from complaints by federal and state regulatory agencies. For example, the Federal Trade Commission or the U.S. Department of Justice might file complaints against a parent company for antitrust violation if it acquired a competitor and thereby eliminated a substantial amount of competition. AT&T's divestiture of Lucent Technology (formerly Bell Laboratories) in 1996 is an example of a voluntary spin-off, whereas CBS Inc.'s divestiture of Viacom International, Inc. to comply with the Federal Communications Commission's rules is an example of an involuntary spin-off.
Although tax rules have permitted spin-offs since the mid-1950s, spin-offs did not occur with as much frequency and within major corporations until the 1980s, when a trend was ushered in by the spin-off of seven regional Bell companies by AT&T between 1982 and 1983. Since the 1980s, the number and value of corporate spin-offs has escalated. By 1996, the value of all U.S. spin-offs totaled $85.3 billion, according to David Sadtler et al. in Breakup!. In contrast, the value of U.S. spin-offs was only $16.6 billion in 1992 and under $5 billion in the 1980s. Furthermore, whereas spin-offs accounted for under 10 percent of U.S. divestitures in the 1980s, they accounted for almost 50 percent by the late 1990s.
KEY MOTIVATIONS FOR SPIN-OFFS
According to Ronald J. Kudla and Thomas H. Mclnish in Corporate Spin-offs, corporations have a variety of motivations for spin-offs, including management reasons, capital market factors, risks, tax benefits, marketing factors, and regulatory/legal reasons. Spin-offs can alleviate management problems of both parent companies and spun-off companies, because both kinds of companies often have different lines of business and different business environments. Since the parent companies generally are large diverse operations, they cannot provide the kind of management, financial, and resource support that the subsidiary needs for continuous growth. Moreover, parent companies usually focus their attention and resources on their core operations. Consequently, the spin-off allows the spun-off company to negotiate management, finance, and resource issues with its own board of directors and to make decisions for itself. The parent company benefits from the transaction because it can concentrate on its most important operations unencumbered by the spun-off company.
Furthermore, spin-offs may result after major shifts in the economic environment affecting corporations and their subsidiaries. While a combined organizational structure may have been optimal in the past, the separation of operations may now be appropriate. In particular, management synergy may be nonexistent for firms in unrelated businesses. Spin-offs enable managers to focus on the specific operating and financial characteristics of the subsidiary rather than being overly concerned with the impact of subsidiary decisions on the performance of the parent company.
Incentive contracts tied to the performance of the common stock of the parent company may not be meaningful for managers in the subsidiary. On the other hand, a spun-off subsidiary has the advantage of an independent stock price which should reflect the capital market's assessment of management's performance. Thus, compensation can be more directly related to performance with the existence of the spunoff unit.
Some parent companies decide to spin-off subsidiaries because they believe that all their lines of business are not accurately valued in the capital market. Spin-offs enable each company to obtain capital consistently based on its own operations and each company can raise capital according to the way capital markets affect each company's business. In essence, the motivation here for spinning-off a company is to give investors a clearer view of each company's business operations. The spin-off might attract new investors to the spun-off company and it might improve the parent company's value because the undervalued subsidiary is no longer associated with it.
In addition, many portfolio managers prefer" pure play" companies. Investment professionals may be interested in one or the other of a company's basic businesses, but not both. To the extent that financial markets are incomplete, spin-offs provide investors with a wider range of investment opportunities appealing to different investor clienteles. In addition, the issuance of separate financial reports on the operations of the subsidiary facilitate the evaluation of the firm's performance. Thus, this technique enables managers to uncover the hidden value of the subsidiary.
Since parent companies and some subsidiaries often unrelated business lines, they also have different business risks, which affect operating earnings. Parent companies sometimes spin-off subsidiaries to protect both companies from each other's risks, which generally stabilizes the earnings of the parent company. The spin-off of a riskier subsidiary allows each company to finance its expansion based on its own growth rates and projections.
Marketing concerns also prompt parent companies to spin off subsidiaries. The first concern is that consumers and suppliers will think parent company is not committed to its core line of business if it has an unrelated subsidiary. The second concern is the association of lines of business that are perceived as being incompatible. Hence, having diverse business lines may cause confusion among customers, investors, and suppliers who perceive a company as offering inconsistent products or services.
Another important motive for corporate spin-offs is to take advantage of tax benefits. Tax advantages can be achieved by the creation and spin-off into natural resource royalty trusts or real estate investment trusts. As long as these entities pay out 90 percent of their earnings to shareholders, they are tax exempt, permitting the parent company to shield income from taxes.
Finally, laws and regulations may cause companies to spin-off subsidiaries voluntarily or involuntarily. As previously mentioned, laws and regulations sometimes lead to involuntary spin-offs when complaints are filed to federal and state agencies. Nevertheless, parent companies sometimes spin off their subsidiaries to split up regulated and unregulated companies or to avoid legal hurdles associated with ownership of certain kinds of companies. A spin-off in such scenarios allows the unregulated companies to operate and expand unfettered by regulation.
However, David Sadtler et al. argue in Breakup! that the release of latent value is the ultimate motivation for spin-offs and that spin-offs generally result in increased value because they remove factors that impede the growth of value, according to Sadtler et al. These authors contend that simply being split up often enables subsidiaries to increase their value, because the spin-off frees them from the constraints of belonging to another company. Despite the possible advantages of being a subsidiary such as lower costs for borrowing, savings on administrative costs, expert management, and reduced costs through centralized purchasing, the subsidiary status also has possible disdvantages such as lack of knowledge of subsidiary needs, loss of freedom to operate as the subsidiary sees fit, and unnecessary and inhibiting policies. When the value of these disadvantages exceeds the value of the advantages, a subsidiary is better off operating as a separate company. Hence, both parent and subsidiary companies are free to realize their full potential value after a spin-off.
Sadtler et al. estimate that on average corporations inhibit about 10 percent their subsidiaries' potential value and that in the case of most spin-offs the amount of value inhibited is much greater. This loss of value stems from the costs associated with corporate centers, bureaucracy, ineffectual guidance, and investor preference for less diversified companies.
SPIN-OFF PROCEDURES
After a company decides to spin-off a subsidiary, it generally begins to prepare a work plan, which provides detailed information on the steps leading up to the completion of the spin-off, the projected dates for each step, and the parties responsible for the timely completion of each step.
A spin-off also involves the preparation of a plan of reorganization, which serves as the agreement between the parent and subsidiary for the specifics of the spin-off. Consequently, both boards of directors must approve of the plan of reorganization. This plan also includes information on the relationship between the parent and subsidiary companies during and after the spin-off process and it indicates any transfers of assets or liabilities from one company to another. If the company being spun off is going to be greatly restructured, the plan of reorganization will go into considerable detail describing the intended changes. The plan also provides information on the number of shares to be distributed and the key dates for distribution and payment.
Shareholders of the parent company generally receive an outline of the plan and a copy of the agreement in the proxy statement, which informs shareholders of the meeting where they will vote on the plan. The proxy statement and the prospectus for the plan of reorganization provide balance sheets and income statements of both the parent and subsidiary companies. These financial statements show how assets and liabilities will be divvied between the companies.
The parent company also must prepare a registration statement, which indicates the shares to be distributed in the spin-off. These shares generally are registered with the Securities and Exchange Commission and all shareholders who will receive shares of the spin-off company are sent a copy of the registration statement. Much of the information in this statement is the same as that in the proxy statement.
IMPACT OF CORPORATE SPIN-OFFS.
As indicated above, parent companies sometimes spin-off subsidiaries to increase the value of both parent and subsidiary companies. Nevertheless, different studies report different results from companies involved in spin-offs. Studies by the investment firm Oppenheimer and Co. indicate that companies increase their value at the time of the spin-off announcement, but also show that value may stagnate or decrease over a longer period. According to one such study of 19 spin-offs, 16 companies experienced increased value at the time of the announcement, 1 company's value decreased, and 2 companies' value did not change. However, only 11 companies and the companies they spun off had increased in value six months after the spin-off, whereas eight declined—although the combined value each company and the company it spun off still was greater than it was at the time of the spin-off announcement.
Other studies produced similar findings. Constantinos Markides found in his 1995 study Diversification, Refocusing and Economic Performance that spin-off announcements are accompanied by increases in share prices and that share prices of highly diversified or unprofitable companies showed the most dramatic increases. Over a longer period of time, Markides reported that spin-offs led to greater profitability for highly diversified companies. Moreover, in another 1995 study, Robert Comment and Gregg Jarrell examined companies involved in spin-offs over a three-year period and discovered that companies that spun-off subsidiaries performed about 7 percent better than companies that diversified.
However, other studies present a different view of spin-off effects. A Clarus Research Performance Database study of spin-offs by the world's 500 largest companies between 1996 and 1998 indicated that companies involved in spin-offs tended to underperform the market by 17 percent two after the spin-off announcement. This study suggests that spinning a subsidiary off will not lead to an increase in value in and of itself. Instead, the Clarus Research Performance Database study revealed that the companies whose value increased implemented restructuring and refocusing initiatives in addition to the spin-offs. Spin-offs fail to increase share prices alone because they are usually dependent on factors other than the spin-off.
http://www.referenceforbusiness.com/encyclopedia/Sel-Str/Spin-Offs.html
KAT EXPL INC ( KATX ) weekly prices from 03/12/2010 through 06/11/2010
Date Volume High Low Open Close 03/12/10 11.58 M 0.059 0.049 0.059 0.052
03/19/10 8.77 M 0.06 0.051 0.0521 0.052
03/26/10 12.43 M 0.059 0.0525 0.0525 0.056
04/01/10 32.57 M 0.092 0.055 0.056 0.078
04/09/10 18.39 M 0.08 0.06 0.08 0.061
04/16/10 9.12 M 0.065 0.056 0.061 0.06
04/23/10 10.29 M 0.065 0.055 0.06 0.057
04/30/10 9.81 M 0.063 0.058 0.0598 0.061
05/07/10 17.78 M 0.085 0.062 0.064 0.078
05/14/10 30.38 M 0.1298 0.076 0.084 0.128
05/21/10 47.65 M 0.24 0.1101 0.114 0.229
05/28/10 24.57 M 0.252 0.19 0.201 0.239
06/04/10 18.90 M 0.245 0.161 0.245 0.185
06/11/10 17.92 M 0.232 0.15 0.21 0.19
Warrant,
Anything that happens with handcamp will show up under the BVIG and have a direct effect on KATX because of the restricted shares to be issued. This effect on KATX will change at different stages:
1. When restricted shares are issued
2. When restricted shares are settled/recorded/ex-div
3. When KATX is rolled into a shell
When all is said and done (shares issued, settled, recorded/ex-div)all handcamp operations/profits/finance/losses/gains will show up under BVIG or it's future symbol with little or no effect on what is known as KATX.