Thanks I missed that one:
As consideration for the Agreements the Company had issued 4,888,889 post-reverse split shares of common stock (the “Consideration Shares”) of the Company’s capital to acquire a 50% interest in certain mineral claims prospective for uranium (Hatchet Lake) and an 80% interest in certain mineral claims prospective for diamonds (Smeaton Property) all located in the Province of Saskatchewan.
Of the 4,888,889 Consideration shares, 1,500,000 shares were paid for the Hatchet Lake property and 3,388,889 shares were paid for the Smeaton property. Furthermore 388,889 shares of the Smeaton Consideration Shares were paid to the property vendor, 1010 and the remaining 4,500,000 shares were paid to CMKM with the proviso that these shares were to be distributed to the CMKM shareholders.
In seeking to have the Agreements set aside, the Company claims that CMKM has breached the terms of the Agreements by not distributing the 4,500,000 shares to the CMKM shareholders as required by the Agreements; as well, the Company is seeking to have 1010 return the 388,889 shares as the Company contends that 1010 is in breach by not completing work on the Smeaton property in a workmanlike fashion by providing preliminary budget submissions, daily drill records and general field information as is the industry standard. As well, the Company contends that 1010. failed to provide documentation requested by the Company to have a NI 43-101 compliant report completed on the Smeaton property.
In 2005 and early 2006, the Company advised 1010, the Operator of the Property, that it would not participate in any exploration by 1010 unless the exploration was conducted in accordance with NI 43- 101 standards and mining best practices. 1010 nevertheless proceeded to perform work on the property and, on March 26, 2006, sent invoices to the Company totaling $280,000 which the Company has disputed.
In October 2008, attorneys for the Company and 1010 prepared settlement papers to settle ongoing lawsuits. CMKM has signed these documents and the parties agreed to keep the details and all negotiations confidential until an agreement is finalized. Currently, CMKM and 1010 are waiting for the Company to uphold and fulfill its end of the proposed agreement.
The outcome of the above legal proceedings is presently not determinable and no provision for loss or recovery has been accrued to date pending finalization of a formal settlement agreement.
