Dutch Gold Resources Inc. (fka DGRI)

[nodummy]

I am curious of your take about something. You have obviously been involved in this stock for a very long time and so your knowledge runs deep.

I found this information buried deep down in an 8K filing for Aultra Gold Inc (AGDI):

http://img01.otcmarkets.com/edgar/GetFilingHtml?FilingID=4995014

Since its inception on January 20, 2006, AGI has incurred the following expenses. Operating costs were $648,611. Mining development and explorations costs were $53,181 with related administrative costs of $15,928. Extraordinary costs of $393,373 were incurred with respect to AGI’s investment in the Benton Mine Property, in Josephine County, Southwestern Oregon, which was written off in connection with a decision by management to discontinue funding mining operations under an agreement that has been terminated by AGI with Dutch Mining LLC. AGI had obtained mining rights to the Benton Mine gold project through a direct buy out of the controlling rights from Dutch Mining, LLC (DMO), a limited liability company formed in 1994 in Merlin, Oregon, USA. In 1994, DMO acquired by assignment a Mining Lease and Option to Purchase covering the Benton Mine Group, which consists of 24 mining claims in good standing.

The Benton Mine was historically one of the largest gold mines in the area, and is currently the only operating underground gold mine in Oregon. Eight veins had been identified on the property with the Benton Vein, pending further exploration, being the largest and most persistent currently known. Some of the other veins are expected to become important with exploration. To date, most of the mine production has come from the Benton Vein, which received most of the historic exploration. The ore was simple, with the gold content within the pyrite found in the quartz. The Benton Vein has been developed since the early 1900s along 1,550 feet of its strike and for about 500 feet down dip. The width of the Benton varies from thin veinlets to as wide as 25 feet. The average width was about 4 feet. The mine was shut down in 1942 under WWII regulations. Management determined in fall 2006 that further economic exploitation of the Benton Property was economically unattractive.


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Do obviously Aultra Gold Inc owned Dutch Mining LLC and the Benton mine up until the fall of 2006. Almost immediately after Aultra Gold Inc relinquished ownership of Dutch Mining LLC and the Benton Mine, Dutch Gold Resources Inc (DGRI) entered into an acquisition agreement which they finalized in January of 2007.

My question to you is what made Dutch Gold Resources Inc think that Dutch Mining LLC and their Benton mine property was such a good purchase after Aultra Gold decided it wasn't? Not just a good acquisition, but a good enough acquisition that they were willing to take on over $2.5 million in debt Notes that came along with the acquisition.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=4899439

The Company assumed a note issued by Dutch Mining, LLC in the amount of $1,214,916 to Embassy International, LLC, and Florida limited liability company controlled by the family of the former Chairman of the Board, Ewald Dienhart. This is a demand note with $900,000 secured by the mill equipment at an interest rate of 6% and the balance unsecured with a 0% interest rate.  The parties have agreed not to demand the loans through December 31, 2012 therefore the loans are recorded as long-term liabilities

The Company assumed notes issued by Dutch Mining, LLC in the amount of $250K to Gabriela Dienhart-Engel, who is the daughter of the former Chairman of the Board, Ewald Dienhart. The note is dated July 31, 2006 and carries an interest rate of 6.0%.  The note is partially secured by the title to the Gold Bug Mine, and may be converted into shares of the Company.  The related parties have agreed not to demand the loans through December 31, 2012 therefore the loans are recorded as long-term liabilities

The Company assumed notes issued by Dutch Mining, LLC in the amount of $100,000 to CD TBE, LLC, a Company related to the former Chairman of the Board, Ewald Dienhart. The note is dated July 31, 2006 and carries an interest rate of 6.0%.  The note is partially secured by the Gold Bug mine and certain equipment used by the Company, and may be converted into shares of the Company.  The related parties have agreed not to demand the loans through December 31, 2012 therefore the loans are recorded as long-term liabilities.

The Company assumed a note issued by Dutch Mining LLC in the amount of $950,000 to Josef Bauer for working capital.  The note is guaranteed by Ewald Dienhart and carries an interest rate of 8.0%.  The related parties have agreed not to demand the loans through December 31, 2012 therefore the loans are recorded as long-term liabilities.

The Company leases space from Rendata Industrial Park, LLC. Rendata Industrial Park ownership: The Ebert Family Trust owns 52% and the remaining 48% is owned by the Caruso Dienhart (TBE) Family LLC. For the period ended December 31, 2009 the Company accrued rent and related expenses in the amount of $142,380 and had a payable balance accrued of $311, 775 at June 30, 2010.

The Company had an agreement with HPUs, LLC, whose Managing Member Patrick Engel[Deinhart's son-in-law], is related to the Company’s former Chairman, effective November 30, 2007 to provide management services. The contract was for one year, automatically renewable unless terminated for a monthly amount of $9,500.

The company owed $69,683 is owed to Caruso Dienhart (TBE) Family LLC for short term advances at December 31, 2009.


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That's a heck of a lot of debt Notes to take on. Notes which not so coincidentally are all owed to to the owners of Dutch Mining LLC (and pretty much entirely to members of the Dienhart family). As far as I can tell none of the principal balances to any of these Notes/debts have even been paid yet and DGRI just keeps issuing shares to cover the interest that keeps accumulating on the Notes. Seems like a pretty dumb acquisition especially since the Benton mine property has been lost.


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You are right it is a complicated company. The relationship between these companies seems to go back further than just the filings. The way the mining properties seem to play musical chairs between the companies is intreging too.