Private Placement Memorandum Summary
I got a chance to read through the Private Placement Memorandum and I am impressed with the detail that was included. I found a lot of current updates and facts that I had not previously known about. Here are a few details...
First, here is the structure of the Offering:
-The offering is $100,000-$10,000,000. Each promissory note is worth $100,000 and there is a total of 100 notes being offered
-The annual interest rate is 10%
-50% of the principal is due back in the 42nd month, and 100% of the principal is due back in the 54th month
-There will be a "gold payment" equivalent to 10 ounces of gold per one promissory note per year into he first two years of production. This will only happen if gold is above $1,200 per/ounce.
-Offering expires July 31st
Allocations for the funding are as follows:
-If the company raises the minimum of $100,000...
-La Cuesta Lease Payment ($27,000)
-Technical Report Expanding Resource ($15,000)
-Engagement of Capital Raising Form ($15,000)
-Fund Raising Investor Events ($15,000)
-Mining Consultant ($10,000)
-SEC Attorney ($5,000)
-Regulatory Filings ($5,000)
-Working Capital ($13,000)
-If the company raises the maximum of $10,000,000...
-Permitting and Engineering ($700,000)
-Bonding ($1,200,000)
-Capital Expenditure for Mine Build Out ($3,300,000)
-Potential Joint Venture ($4,000,000)
-Working Capital ($800,000)
Included was a list of things the company has achieved so far:
• Confirmation of Historic Resource of 34,000 oz. gold
• Re-Assay of drill pulps discovered at La Cuesta’s storage facilities confirmed the reliability of the original Chemex assays.
• Metallurgical Testing at McClelland Labs provided data for optimum rock-crush size to yield most economic gold recovery.
• Acid Based Accounting chemical lab tests confirmed the rock/material falls within the non-acid generating category and has no potential for acid generation which could contaminate the ground.
• Commenced permitting process with Federal, State and local government agencies.
• Engaged the General Manager/Mine Engineer at the nearby Moss Mine, which recently completed a pilot run, resulting in recovery of $5 million worth of gold.
• Received a US Department of Labor MSHA ID number - An MSHA ID is required for each mine site and must be issued before any operations may begin.
• Completed Storm Water Pollution Prevention Plan
• Applied for Arizona DEQ Air Quality exemption
• Created Spill Prevention and Contingency Plan for the Van Deemen Project - the plan will ensure an effective, comprehensive response to prevent injury or damage to the construction personnel, public, and environment during the project.
• Provided numerous sections of required data/analysis to the BLM related to filing of a Mine Plan of Operation.
• Identified additional drill holes that may allow ILST to substantially increase the reserve base from the historic 34,000 oz.
• Made required payments to the BLM for annual claim maintenance fees
Lastly, here are some interesting, random facts that were also included:
-Production is expected to start in 18-24 months
-$4,000,000-$4,500,000 is the minimum needed to raise, either now or in the future, to fund the project into production
-They lease the Van Deemen. They pay the owner every six months with a payment around $6,000. Also, the owner will get 2% of all gold recovered from the mine.
-There are 4 owners total in the company who each own 25%. The four are Mike Shea, Barbara Carol, Howard Metzler, and Donnell Vigil (who is no longer with the company.)
-If funded, the three of them will take salaries in 2016 totaling $146,000 altogether
-There are two debt holders on the books. The loans are old and ILST has defaulted on them, which means the debt owners own a sizable portion of the mine. They both have a lien on the mine but no leins have been filed as of now. Both companies now have new ownership so upon funding, ILST will attempt to restructure the loans so the debt holders own less, if any of the mine.
Overall I was extremely impressed by the content and detail of the memorandum. These were the facts I found most interesting but there is a lot more included in the memorandum. I encourage everyone to go and look through it
