Replies to post #23525 on Dutch Gold Resources Inc. (fka DGRI)

[tradewell]

Nice post for us confused...

[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.

[Helter Skelter]

CLARIFICATION

Here's a little clarification on a few...fronts.

Simon Big Daddy said:

I'm confident Dutch has not sold any of their 4,950,000 shares of AGDI. As you note, they are most likely currently restricted. I believe they may not listed in ADGI's filings because Dutch is not considered an affiliate and they are not a beneficial owner having less than 9.9%

If you carefully read my earlier posting on this issue you would have seen that the beneficial ownership reporting is for an owner of 5% or more not the 9.9% figure that you are using.

I've underlined, below, in red the 5% threshold limit. DGRI claims to be "holding/retaining" 4.95M shares. So, even if the OS of AGDI were 99M shares...their {AGDI's} beneficial owner declaration would require the listing of DGRI's 4.95M shares...IF...indeed, DGRI still "holds/retains" them {as of AGDI's declaration date, September 30, 2010, in this case}.



My original post on the AGDI board:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57841466

Notwithstanding the above, there IS a problem with this table declaration by AGDI {Shamika2Gold}. You'll notice that I've highlighted in blue the particulars of NOTE (1) which states that the OS as of September 30, 2010 is 26,452,933 and that ownership is based upon that figure. Well, if you look at the column, outlined in blue, of percentages, you can quickly deduce that the percentages only add up to 49.66%. That would indicate that there are actually closer to, or exactly, 50M shares OS at that date. AGDI should file an amendment to this filing and correct their error in this table. Regardless, the beneficial ownership of DGRI's alleged holdings {4.95M} should be represented and accounted for in this table IF either OS figure is used {~26.4M or 50M} AND DGRI had filed a Schedule 13D or Schedule 13G...now, carefully read the wording that is included in almost all beneficial ownership tables...Unless otherwise specified in the table below, such information, other than information with respect to the directors and officers of the Company, is based on a review of statements filed, with the Securities and Exchange commission (the "Commission") pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act with respect to the Company's Common Stock.

DGRI seems to have "avoided" filing with the SEC an acquired securities ownership statement {SC13D/SC13G}. Somewhat clever manuevering for some reason? Is this what Keaveney is paid/compensated...to accomplish? Not filing forms? Of course, AGDI "saw" the retained shares in filings "other than" a Schedule 13D/13G but, apparently, would like to claim that in review of SEC filings...did not come across a Schedule 13D or Schedule 13G...lol...whatever.

Schedule 13D

Schedule 13D is commonly referred to as a “beneficial ownership report.” The term "beneficial owner" is defined under SEC rules. It includes any person who directly or indirectly shares voting power or investment power (the power to sell the security).

When a person or group of persons acquires beneficial ownership of more than 5% of a voting class of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934, they are required to file a Schedule 13D with the SEC. (Depending upon the facts and circumstances, the person or group of persons may be eligible to file the more abbreviated Schedule 13G in lieu of Schedule 13D.)

Schedule 13D reports the acquisition and other information within ten days after the purchase. The schedule is filed with the SEC and is provided to the company that issued the securities and each exchange where the security is traded. Any material changes in the facts contained in the schedule require a prompt amendment. The schedule is often filed in connection with a tender offer.

You can find the Schedules 13D for most publicly traded companies in the SEC’s EDGAR database. You can learn how to use EDGAR to find information about companies. You can find an HTML version of the Schedule and download a PDF version for easier printing.

http://www.sec.gov/answers/sched13.htm

Simon Big Daddy said:

While on the topic of some of the issues pertaining to Dutch and its ownership in AGDI, you probably already know this but another poster previously suggested Perttu received 23 million shares of AGDI for his debt to the company. The poster suggested he was given 23 million shares which would be valued now at 70 cents or roughly $16 million. This was completely innacurate and false. I believe if they'd dug a little deeper they'd noticed that Perttu's AGDI interest they cited was actually pre-reverse split.

Well, there NEVER WAS a reverse split. There appeared to be one as the symbol at one time was appended with a "D" indicating "new shares" but it wasn't a reverse split. There was however a cancellation of AGDI shares. See table below:



On October 15, 2010 the Company authorized the issuance of 23,547,024 shares of common stock in exchange for the retirement and satisfaction of obligations and debt in the principal amount of $301,512, plus any and all accrued interest and fees owed to our former principal stockholder, officer and director Rauno Perttu. Mr. Perttu assigned his rights to receive a number of the shares in independently negotiated transactions.

On November 19, 2010, the Company authorized the issuance of 3,600,000 additional shares of founders’ stock to the principals of its operating companies and members of its Board of Directors including 2,000,000 shares to Robert Vivian, our Chairman, Chief Executive and Financial Officer, and 1,000,000 shares to Terrance Orstlan, our Director, pending the consummation of the amendment of the Company’s Articles of Incorporation to increase its authorized common stock.

So, you can readily see that Perttu's windfall of shares came after the cancellation of shares {prior to Balance September 30, 2010}.
And there NEVER WAS a reverse split. Which can easily be verified via otcmarket.com, formerly pinksheets.com, or through the OTCBB Daily List @ http://www.otcbb.com/dailylist/

So, as you so often like to admonish other posters...about being careful with what they post...before they have the facts...and/or...carelessly harming shareholders...perhaps it is YOU that should reflect/research more on what you post, in factual accuracy AND harmfulness to shareholders and...potential future shareholders.

If you were referring to me as "the poster", in your statements above, then I believe you owe me a public apology regarding this statement, in particular > "This was completely innacurate and false. I believe if they'd dug a little deeper they'd noticed that Perttu's AGDI interest they cited was actually pre-reverse split."

Do you really think that DGRI would allow AGDI to reverse split DGRI's alleged 4.95M shares? I didn't think so.

And...if Perttu has received so much as 2.5M shares of his "bonus windfall" 23.5M shares...then he should have Keaveney file his Schedule 13D/Schedule 13G {2.5M = 5% of 50M AGDI OS}, immediately, if not sooner. Oh, and suggest to him that he file DGRI's Schedule 13D/Schedule 13G, also. Not to mention Form Ds, Form 8-Ks, Form 144s...am I missing some forms? Tia...

Simon Big Daddy said:

I'm confident Dutch has not sold any of their 4,950,000 shares of AGDI. As you note, they are most likely currently restricted.

More on this, later.

Good day.