Unassociated Document
As
filed
with the Securities and Exchange Commission on November 26, 2007
Registration
No. 333-138858
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
AMENDMENT
NO. 2 TO
FORM
SB-2
REGISTRATION
STATEMENT
ON
FORM
S-3
UNDER
THE
SECURITIES ACT OF 1933
CAPITAL
GOLD CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
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|
1040
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13-3180530
|
(State
or jurisdiction of
incorporation
or organization)
|
|
(Primary
Standard Industrial
Classification
Code Number)
|
|
(I.R.S.
Employer
Identification
Number)
|
76
Beaver
Street
New
York,
NY10005
(212)
344-2785
(Address,
including zip code, and telephone number, including area code, of principal
executive offices)
Gifford
A. Dieterle, Chief Executive Officer
Capital
Gold Corporation
76
Beaver
Street
New
York,
NY10005
(212)
344-2785
(Name,
address, including zip code, and telephone number, including area code, of
agent
for service)
Copies
of
all communications to:
Richard
Feiner, Esq.
381
Park
Avenue South, Suite 1601
New
York,
New York, 10016
(212)
779-8600
Fax
(212)
779-8858
Approximate
date of proposed sale to the public: From time to time or at any time after
the
effective date of this Registration Statement.
If
the
only securities being registered on this form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. o
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933
("Securities Act"), other than securities offered only in connection with
dividend or reinvestment plans, check the following box. x
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If
this
form is a post-effective amendment filed pursuant to 462(c) under the Securities
Act, check the following box and list the Securities Act registration number
of
the earlier effective registration statement for the same offering. o
If
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. o
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
Pursuant
to Rule 429 under the Securities Act of 1933, as amended, the prospectus
included in this Registration Statement also relates to the remaining unsold
shares which were previously registered by the Registrant under Registration
Statement 333-133565, 333-129939 and 333-123216.
The
Registrant hereby amends this registration statement on the date or dates as
may
be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on a date as the Securities and Exchange Commission, acting pursuant
to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be amended. Neither
we
nor the selling stockholders may sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective.
This
prospectus is not an offer to sell these securities and it is not soliciting
an
offer to buy these securities in any state where an offer or sale is not
permitted.
Subject
to Completion
Preliminary
Prospectus Dated November 26, 2007
CAPITAL
GOLD CORPORATION
55,604,696
Shares of Common Stock
This
prospectus relates to the resale of 55,604,696 shares
of
our common stock, including 13,700,000 shares
of
common stock issuable upon the exercise of outstanding warrants and options,
that may be offered and sold from time to time by the selling stockholders
listed herein.
We
will
not receive any proceeds from the sale of the shares of common stock by the
selling stockholders other than payment of the exercise price of the warrants
and options.
Our
common stock is listed on the Over-The-Counter Bulletin Board under the symbol
"CGLD." The closing price per share of our common stock as reported by the
OTC
Bulletin Board on November 23, 2007, was $0.72. On common stock also trades
on
the Toronto Stock Exchange (“TSX”) under the symbol “CGC.” On November 23, 2007,
the closing price of our common stock on the TSX was $0.72 CDN
(approximately $0.71 USD).
Please
see the risk factors beginning on page 4 to
read
about certain factors you should consider before buying shares of common
stock.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined that this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is November __, 2007
PROSPECTUS
SUMMARY
In
the following summary, we have highlighted information that we believe is the
most important about us. However, because this is a summary, it may not contain
all information that may be important to you. You should read this entire
prospectus, including the information incorporated by reference and the
financial data and related notes, before making an investment decision. When
used in this prospectus, the terms “we,” “our” and “us” refer to Capital Gold
Corporation and not to the selling stockholders. You should also see the
“Glossary”
for
definitions of some of the terms used to describe our business.
About
Capital Gold
Through
wholly-owned subsidiaries, Capital Gold Corporation owns 100% of 16 mining
concessions located in the Municipality of Altar, State of Sonora, Republic
of
Mexico totaling approximately 3,544 hectares (8,756 acres or 13.7 square miles).
We commenced mining operations on two of these concessions in late March 2007
and achieved gold production and revenue from operations in early August 2007.
During our first fiscal quarter ended October 31, 2007, we produced
approximately 10,000 ounces of gold. Of this production, we sold 9,194 ounces
of
gold for proceeds amounting to approximately $6,540,000. The gold dore is being
refined for us in Mexico by Met-Mex Penoles. We sometimes refer to the
operations on these two concessions as the El Chanate Project.
In
May
2007, we completed an expanded 72-hole reverse circulation drilling campaign
to
identify additional proven and probable gold reserves at the El Chanate Project.
The 72 holes totaled approximately 8,300 meters, and were positioned to fill
in
gaps in the ore body and test the outer limits of the currently known ore zones.
We turned the assay data over to Independent Mining Consultants, Inc. (“IMC”) of
Tucson, AZ to update our ore reserve and our mine plan. On August 30, 2007,
IMC
delivered to us an updated resource block model and an updated mine plan and
mine production schedule (the “2007 Report”). The original feasibility study
(the “2003 Study”) on the El Chanate Project was prepared by M3 Engineering of
Tucson in August 2003. M3 updated the 2003 Study in October 2005 (the “2005
Study”). An August 2006 technical report from SRK Consulting, Denver, Colorado
(the “2006 Update”) further updated the feasibility study.
According
to the 2007 Report, our proven and probable reserve tonnage has increased by
approximately 98 percent from 19.9 million to 39.5 million metric tonnes with
a
gold grade of 0.66 grams per tonne (43.5 million US short tons at 0.019 ounces
per ton). The open pit stripping ratio is 0.6:1 (0.6 tonnes of waste to one
tonne of ore). The updated pit design for the revised plan in the 2007 Report
is
based on a plant recovery of gold that varies by rock types, but is expected
to
average 66.8%. A gold price of US$550 (three year average as of July 31, 2007
as
determined by IMC) per ounce was used to re-estimate the reserves compared
with
a gold price of $450 per ounce used in the previous estimate.
Gold
production at El Chanate is currently near the feasibility study rate of 4,000
ounces per month. We plan to slowly start to ramp up daily tonnage levels from
7,500 tonnes per day (“tpd”) to 10,000 tpd. This should boost our gold
production toward 5,000 ounces per month (60,000 ounces per year). Initially,
we
anticipate that the increased plant throughput will not require any capital
since an additional ore crushing and stacking capacity was factored into the
original design.
With
the
recent reserve increase, we are analyzing what steps are necessary to
effectively increase production rates to 100,000 ounces per year and improve
gold recoveries by conducting further metallurgical test work at our laboratory
facilities at the mine. To this end, we have engaged Golder Engineering and
its
Mexican associates to supply EPCM (engineering, procurement and construction
management) services for leach pad expansion and to study the impact of the
planned mining increase. Golder previously successfully completed the
construction management of our existing leach pads. In addition, we are
discussing options available with the crusher manufacturer, Excel Machinery,
with regards to adding an additional secondary crusher into the crushing
circuit, to enable the system to handle increased tonnage. We anticipate that
another crusher should move daily tonnage up closer to 14,000 tpd.
Our
principal executive offices are located at 76 Beaver Street, 14th
floor,
New York, NY10005, and our telephone number is (212) 344-2785.
The
Offering
Common
stock to be offered
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by
the selling stockholders
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55,604,696
Shares
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Common
stock outstanding
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prior
to this offering
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174,243,646
Shares
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Use
of Proceeds
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We
will not receive any of the proceeds from the sale of the shares
of common
stock because they are being offered by the selling stockholders
and we
are not offering any shares for sale under this prospectus, but
we may
receive proceeds from the exercise of warrants and options held
by the
selling stockholders. We will apply such proceeds, if any, toward
future
exploration and/or acquisitions and for working capital. See "Use of
Proceeds."
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Over-The-Counter
Bulletin
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Board
symbol
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CGLD
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Toronto
Stock Exchange symbol
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CGC
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The
55,604,696 shares
of
our common stock offered consist of:
· |
Up
to 41,904,696 shares of common stock owned by certain of the selling
stockholders; and
|
· |
Up
to13,700,000 shares of common stock issuable upon the exercise of
outstanding warrants and options.
|
RISK
FACTORS
WE
ARE SUBJECT TO VARIOUS RISKS THAT MAY MATERIALLY HARM OUR BUSINESS, FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. YOU SHOULD CAREFULLY CONSIDER THE RISKS
AND
UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS PROSPECTUS
BEFORE DECIDING TO PURCHASE OUR COMMON STOCK. IF ANY OF THESE RISKS OR
UNCERTAINTIES ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION OR OPERATING
RESULTS COULD BE MATERIALLY HARMED. IN THAT CASE, THE TRADING PRICE OF OUR
COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR
INVESTMENT.
Risks
related to our business and operations
We
have just begun generating operating revenues. If we are unable to sustain
operating revenues, we will not be able to generate profits and our business
may
fail.
Until
recently, we had no producing properties and, historically, have operated and
continue to operate at a loss. We only commenced gold producing activities
and
started to generate revenues in August 2007. Our ultimate success will depend
on
our ability to generate profits from our properties. Our viability is largely
dependent on the successful commercial development of our El Chanate gold mining
project in Sonora, Mexico. While we have commenced revenue producing mining
operations, we cannot assure if or when revenues will cover cash flow or
generate profits.
We
just recently started to receive cash flow from operations and, historically,
have relied on external funding sources. While we believe that, with continuing
cash flow from operations, we have adequate funds to permit us to reach positive
cash flow from such operations, if we encounter unexpected problems and we
are
unable to generate positive cash flow in a timely manner, we may need to raise
additional capital. If additional capital is required and we are unable to
obtain it from outside sources, we may be forced to reduce or curtail our
operations or our anticipated exploration activities.
Historically,
we have not generated cash flow from operations. We believe that we have
adequate funds to cover our financial requirements until such time as mining
operations at the El Chanate Project generate positive cash flow. However,
if we
encounter unexpected problems and we are unable to generate positive cash flow
in a timely manner, we may need to raise additional capital. We also may need
to
raise additional capital for property acquisition and new exploration. To the
extent that we need to obtain additional capital, management intends to raise
such funds through the sale of our securities and/or joint venturing with one
or
more strategic partners. We cannot assure that adequate additional funding,
if
needed, will be available.
If
we
need additional capital and we are unable to obtain it from outside sources,
we
may be forced to reduce or curtail our operations or our anticipated exploration
activities.
Our
Credit Facility with Standard Bank plc imposes restrictive covenants on us.
Our
Credit Facility with Standard Bank requires us, among other obligations, to
meet
certain financial covenants including (i) a debt service coverage ratio of
not
less than 1.2 to 1.0, (ii) a projected debt service coverage ratio of not less
than 1.2 to 1.0, (iii) a loan life coverage ratio of at least 1.6 to 1.0, (iv)
a
project life coverage ratio of at least 2.0 to 1.0 and (v) a minimum reserve
tail. We are also required to maintain a certain minimum level of unrestricted
cash. In addition, the Credit Facility restricts, among other things, our
ability to incur additional debt, create liens on our property, dispose of
any
assets, merge with other companies or make any investments. A failure to comply
with the restrictions contained in the Credit Facility could lead to an event
of
default thereunder which could result in an acceleration of such indebtedness.
We
are using reconditioned equipment which could adversely affect our cost
assumptions and our ability to economically and successfully mine the
project.
We
are
using reconditioned carbon column collection equipment to recover gold and
Sinergia, our mining contractor, is using equipment that
is
not new. Such equipment is subject to the risk of more frequent breakdowns
and
need for repair than new equipment. If the equipment that we or Sinergia uses
breaks down and needs to be repaired or replaced, we will incur additional
costs
and operations may be delayed resulting in lower amounts of gold recovered.
In
such event, our capital and operating cost assumptions may be inaccurate and
our
ability to economically and successfully mine the project may be hampered,
resulting in decreased revenues and, possibly, a loss from operations.
The
gold deposit we have identified at El Chanate is relatively low-grade. If our
estimates and assumptions are inaccurate, our results of operation and financial
condition could be materially adversely affected.
The
gold
deposit we have identified at our El Chanate Project is relatively low-grade.
If
the estimates of ore grade or recovery rates contained in the feasibility study
turn out to be higher than the actual ore grade and recovery rates, if costs
are
higher than expected, or if we experience problems related to the mining,
processing, or recovery of gold from ore at the El Chanate Project, our results
of operation and financial condition could be materially adversely affected.
Moreover, it is possible that actual costs and economic returns may differ
materially from our best estimates. It is not unusual in the mining industry
for
new mining operations to experience unexpected problems during the initial
production phase and to require more capital than anticipated. There can be
no
assurance that our operations at El Chanate will be profitable.
We
have only one project. As a result, our chances of conducting viable mining
operations are dependent upon the success of that
project.
Our
only
current properties are the El Chanate concessions. Accordingly, we are dependent
upon the success of the El Chanate concessions.
Gold
prices can fluctuate on a material and frequent basis due to numerous factors
beyond our control. If and when we commence production, our ability to generate
profits from operations could be materially and adversely affected by such
fluctuating prices.
The
profitability of any gold mining operations in which we have an interest will
be
significantly affected by changes in the market price of gold. Gold prices
fluctuate on a daily basis. During the first ten months of 2007, the spot price
for gold on the London Exchange has fluctuated between $608.30 and $792.50
per
ounce. During calendar 2006, the spot price for gold on the London Exchange
fluctuated between $524.75 and $725.00 per ounce. Gold prices are affected
by
numerous factors beyond our control, including:
· |
the
level of interest rates,
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· |
world
supply of gold and
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· |
stability
of exchange rates.
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Each
of
these factors can cause significant fluctuations in gold prices. Such external
factors are in turn influenced by changes in international investment patterns
and monetary systems and political developments. The price of gold has
historically fluctuated widely and, depending on the price of gold, revenues
from mining operations may not be sufficient to offset the costs of such
operations.
We
may not be successful in hedging against gold price and interest rate
fluctuations and may incur mark to market losses and lose money through our
hedging programs.
We
have
entered into metals trading transactions to hedge against fluctuations in gold
prices, using call option purchases and forward sales, and have entered into
various interest rate swap agreements. The terms of our Credit Facility with
Standard Bank require that we utilize various price hedging techniques to hedge
a portion of the gold we plan to produce at the El Chanate Project and hedge
at
least 50% of our outstanding loan balance. There can be no assurance that we
will be able to successfully hedge against gold price and interest rate
fluctuations.
Further,
there can be no assurance that the use of hedging techniques will always be
to
our benefit. Hedging instruments that protect against metals market price
volatility may prevent us from realizing the full benefit from subsequent
increases in market prices with respect to covered production, which would
cause
us to record a mark-to-market loss, decreasing our revenues and profits. Hedging
contracts also are subject to the risk that the other party may be unable or
unwilling to perform its obligations under these contracts. Any significant
nonperformance could have a material adverse effect on our financial condition,
results of operations and cash flows.
We
had
not yet physically produced gold dore on March 31 and June 30, 2007, the first
two quarters ended upon which we were required to settle a forward sale of
5,285
and 7,841 ounces of gold, respectively, with Standard Bank. Rather than
modifying the original Gold Price Protection agreement with Standard Bank to
satisfy these forward sale obligations, we opted for a net cash settlement
between the call option purchase price of $535 and the forward sale price of
$500, or $35.00 per oz. We paid Standard Bank approximately $185,000 and
$274,000, respectively, due to these settlements with corresponding reductions
in our derivative liability. As we commenced gold production in August 2007,
we
believe we will be able to deliver the quantity of gold required by our forward
sales on a going forward basis; however, we again opted for a cash settlement
for the quarter ended September 30, 2007 and may continue to net cash settle
these forward sale obligations if, as on September 30, 2007, it is the most
cost
effective option for us. If we are unable for any reason to produce the quantity
of gold required by our forward sales and generate sufficient cash flow to
settle these forward sales in gold or cash, it could have a material adverse
effect on our financial condition and cash flows.
Our
material property interests are in Mexico. Risks of doing business in a foreign
country could adversely affect our results of operations and financial
condition.
We
face
risks normally associated with any conduct of business in a foreign country
with
respect to our El Chanate Project in Sonora, Mexico, including various levels
of
political and economic risk. The occurrence of one or more of these events
could
have a material adverse impact on our efforts or operations which, in turn,
could have a material adverse impact on our cash flows, earnings, results of
operations and financial condition. These risks include the
following:
· |
invalidity
of governmental orders,
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· |
uncertain
or unpredictable political, legal and economic
environments,
|
· |
war
and civil disturbances,
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· |
changes
in laws or policies,
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· |
delays
in obtaining or the inability to obtain necessary governmental
permits,
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· |
governmental
seizure of land or mining claims,
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· |
limitations
on ownership,
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· |
limitations
on the repatriation of earnings,
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· |
increased
financial costs,
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· |
import
and export regulations, including restrictions on the export of gold,
and
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· |
foreign
exchange controls.
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These
risks may limit or disrupt the project, restrict the movement of funds or impair
contract rights or result in the taking of property by nationalization or
expropriation without fair compensation.
We
sell gold in U.S. dollars; however, we incur a significant amount of our
expenses in Mexican pesos. If applicable currency exchange rates fluctuate,
our
revenues and results of operations may be materially and adversely affected.
We
sell
gold in U.S. dollars. We incur a significant amount of our expenses in Mexican
pesos. As a result, our financial performance would be affected by fluctuations
in the value of the Mexican peso to the U.S. dollar.
Changes
in regulatory policy could adversely affect our exploration and future
production activities.
Any
changes in government policy may result in changes to laws
affecting:
· |
environmental
regulations,
|
· |
repatriation
of income and/or
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Any
such
changes may affect our ability to undertake exploration and development
activities in respect of future properties in the manner currently contemplated,
as well as our ability to continue to explore, develop and operate those
properties in which we have an interest or in respect of which we have obtained
exploration and development rights to date. The possibility, particularly in
Mexico, that future governments may adopt substantially different policies,
which might extend to expropriation of assets, cannot be ruled out.
Compliance
with environmental regulations could adversely affect our exploration and future
production activities.
With
respect to environmental regulation, future environmental legislation could
require:
· |
stricter
standards and enforcement,
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· |
increased
fines and penalties for non-compliance,
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· |
more
stringent environmental assessments of proposed projects and
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· |
a
heightened degree of responsibility for companies and their officers,
directors and employees.
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There
can
be no assurance that future changes to environmental legislation and related
regulations, if any, will not adversely affect our operations. We could be
held
liable for environmental hazards that exist on the properties in which we hold
interests, whether caused by previous or existing owners or operators of the
properties. Any such liability could adversely affect our business and financial
condition.
We
have insurance against losses or liabilities that could arise from our
operations. If we incur material losses or liabilities in excess of our
insurance coverage, our financial position could be materially and adversely
affected.
Mining
operations involve a number of risks and hazards, including:
· |
metallurgical
and other processing,
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· |
mechanical
equipment and facility performance problems.
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Such
risks could result in:
· |
damage
to, or destruction of, mineral properties or production
facilities,
|
· |
personal
injury or death,
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· |
monetary
losses and /or
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· |
possible
legal liability.
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Industrial
accidents could have a material adverse effect on our future business and
operations. We currently maintain general liability, auto and property insurance
coverage. We cannot be certain that the insurance we have in place will cover
all of the risks associated with mining or that we will be able to maintain
insurance to cover these risks at economically feasible premiums. We also might
become subject to liability for pollution or other hazards which we cannot
insure against or which we may elect not to insure against because of premium
costs or other reasons. Losses from such events may have a material adverse
effect on our financial position.
Calculation
of reserves and metal recovery dedicated to future production is not exact,
might not be accurate and might not accurately reflect the economic viability
of
our properties.
Reserve
estimates may not be accurate. There is a degree of uncertainty attributable
to
the calculation of reserves, resources and corresponding grades being dedicated
to future production. Until reserves or resources are actually mined and
processed, the quantity of reserves or resources and grades must be considered
as estimates only. In addition, the quantity of reserves or resources may vary
depending on metal prices. Any material change in the quantity of reserves,
resource grade or stripping ratio may affect the economic viability of our
properties. In addition, there can be no assurance that mineral recoveries
in
small scale laboratory tests will be duplicated in large tests under on-site
conditions or during production.
We
are dependent on the efforts of certain key personnel and contractors to develop
our El Chanate Project. If we lose the services of these personnel and
contractors and we are unable to replace them, our planned operations at our
El
Chanate Project may be disrupted and/or materially adversely
affected.
We
are
dependent on a relatively small number of key personnel, including but not
limited to John Brownlie, Chief Operating Officer, who oversees the El Chanate
Project, the loss of any one of whom could have an adverse effect on us. We
are
also dependent upon Sinergia to provide mining services. Sinergia
commenced mining operations on March 25, 2007, and transitioned from the
pre-production to production phase of the mining contract in July 2007.
Sinergia has mobilized its mining fleet to the site ; however, its mining fleet
is not new. If we lose the services of our key personnel, or if Sinergia is
unable to effectively maintain its fleet, our planned operations at our El
Chanate Project may be disrupted and/or materially adversely
affected.
There
are uncertainties as to title matters in the mining industry. We believe that
we
have good title to our properties; however, any defects in such title that
cause
us to lose our rights in mineral properties could jeopardize our planned
business operations.
We
have
investigated our rights to explore, exploit and develop our concessions in
manners consistent with industry practice and, to the best of our knowledge,
those rights are in good standing. However, we cannot assure that the title
to
or our rights of ownership in the El Chanate concessions will not be challenged
or impugned by third parties or governmental agencies. In addition, there can
be
no assurance that the concessions in which we have an interest are not subject
to prior unregistered agreements, transfers or claims and title may be affected
by undetected defects. Any such defects could have a material adverse effect
on
us.
Our
ability to remain profitable long-term eventually will depend on our ability
to
find, explore and develop additional properties. Our ability to acquire such
additional properties will be hindered by competition. If we are unable to
acquire, develop and economically mine additional properties, we most likely
will not be able to be profitable on a long-term
basis.
Gold
properties are wasting assets. They eventually become depleted or uneconomical
to continue mining. The acquisition of gold properties and their exploration
and
development are subject to intense competition. Companies with greater financial
resources, larger staffs, more experience and more equipment for exploration
and
development may be in a better position than us to compete for such mineral
properties. If we are unable to find, develop and economically mine new
properties, we most likely will not be able to be profitable on a long-term
basis.
Our
ability on a going forward basis to discover additional viable and economic
mineral reserves is subject to numerous factors, most of which are beyond our
control and are not predictable. If we are unable to discover such reserves,
we
most likely will not be able to be profitable on a long-term
basis.
Exploration
for gold is speculative in nature, involves many risks and is frequently
unsuccessful. Few properties that are explored are ultimately developed into
commercially producing mines. As noted above, our long-term profitability will
be, in part, directly related to the cost and success of exploration programs.
Any gold exploration program entails risks relating to
· |
the
location of economic ore bodies,
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· |
development
of appropriate metallurgical processes,
|
· |
receipt
of necessary governmental approvals and
|
· |
construction
of mining and processing facilities at any site chosen for mining.
|
The
commercial viability of a mineral deposit is dependent on a number of factors
including:
· |
the
particular attributes of the deposit, such as its
|
·
|
proximity
to infrastructure,
|
· |
importing
and exporting gold and
|
· |
environmental
protection.
|
The
effect of these factors cannot be accurately predicted.
Risks
related to ownership of our stock
Our
stock price may be adversely affected if a significant amount of shares,
including those offered herein, are sold in the public
market.
As
of
November 1, 2007, approximately 82.9 million shares of our common stock,
constituted "restricted securities" as defined in Rule 144 under the Securities
Act of 1933. We have registered herein and in other registration statements
more
than half of these shares for public resale. In addition, we have registered
herein and in other registration statements 15.5 million shares
of
common stock issuable upon the exercise of outstanding warrants and options
that, as of the date hereof, have not expired or been exercised. All of the
foregoing shares, assuming exercise of all of the above options and warrants,
would represent in excess of 50% of the then outstanding shares of our common
stock. Registration
of the shares permits the sale of the shares in the open market or in privately
negotiated transactions without compliance with the requirements of Rule 144.
To
the extent the exercise price of the warrants or options is less than the market
price of the common stock, the holders of the warrants are likely to exercise
them and sell the underlying shares of common stock and to the extent that
the
exercise prices of these securities are adjusted pursuant to anti-dilution
protection, the securities could be exercisable or convertible for even more
shares of common stock. We
also
may issue
shares
to be used to meet our capital requirements or use shares to compensate
employees, consultants and/or directors. We are unable to estimate the amount,
timing or nature of future sales of outstanding common stock. Sales of
substantial amounts of our common stock in the public market could cause the
market price for our common stock to decrease. Furthermore, a decline in the
price of our common stock would likely impede our ability to raise capital
through the issuance of additional shares of common stock or other equity
securities.
We
do not intend to pay cash dividends in the near future.
Our
board
of directors determines whether to pay cash dividends on our issued and
outstanding shares. The declaration of dividends will depend upon our future
earnings, our capital requirements, our financial condition and other relevant
factors. Our board does not intend to declare any dividends on our shares for
the foreseeable future. We anticipate that we will retain any earnings to
finance the growth of our business and for general corporate purposes.
Provisions
of our Certificate of Incorporation, By-laws and Delaware law could defer a
change of our management which could discourage or delay offers to acquire
us.
Provisions
of our Certificate of Incorporation, By-laws and Delaware law may make it more
difficult for someone to acquire control of us or for our stockholders to remove
existing management, and might discourage a third party from offering to acquire
us, even if a change in control or in management would be beneficial to our
stockholders. For example, our Certificate of Incorporation allows us to issue
different series of shares of common stock without any vote or further action
by
our stockholders and our Board of Directors has the authority to fix and
determine the relative rights and preferences of such series of common stock.
As
a result, our Board of Directors could authorize the issuance of a series of
common stock that would grant to holders the preferred right to our assets
upon
liquidation, the right to receive dividend payments before dividends are
distributed to the holders of other common stock and the right to the redemption
of the shares, together with a premium, prior to the redemption of other series
of our common stock.
FORWARD-LOOKING
STATEMENTS
Risks
Associated With Forward-Looking Statements
Certain
statements in this prospectus constitute “forwarding-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the
Securities and Exchange Act of 1934. Certain, but not necessarily all, of such
forward-looking statements can be identified by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “should,” or
“anticipates” or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and uncertainties.
All statements other than statements of historical fact, included in this
prospectus regarding our financial position, business and plans or objectives
for future operations are forward-looking statements. Without limiting the
broader description of forward-looking statements above, we specifically note
that statements regarding exploration, costs, grade, production and recovery
rates, permitting, financing needs and the availability of financing on
acceptable terms or other sources of funding are all forward-looking in nature.
Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors, including but not limited to, the risk factors discussed above,
which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements and other factors referenced in
this
prospectus. We do not undertake and specifically decline any obligation to
publicly release the results of any revisions which may be made to any
forward-looking statement to reflect events or circumstances after the date
of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
USE
OF PROCEEDS
Proceeds,
if any, from stockholders exercising some or all of the warrants and options
will be used for future exploration and/or acquisitions and for working capital.
SELLING
STOCKHOLDERS
The
following table provides information regarding the selling stockholders and
the
number of shares of common stock they are offering, which includes shares
issuable upon exercise of warrants and options held by the selling stockholders.
Under the rules of the SEC, beneficial ownership includes shares over which
the
indicated beneficial owner exercises voting or investment power. Shares of
common stock subject to warrants and options that are currently exercisable
or
will become exercisable within 60 days are deemed outstanding for computing
the percentage ownership of the person holding the options but are not deemed
outstanding for computing the percentage ownership of any other person.
Unless
otherwise indicated in the footnotes below, we believe that the persons and
entities named in the table have sole voting and investment power with respect
to all shares beneficially owned. The information regarding shares beneficially
owned after the offering assumes the sale of all shares offered by each of
the
selling stockholders. The percentage ownership data is based on 174,243,646
shares of our common stock issued and outstanding as of November 23,
2007.
The
shares of common stock covered by this prospectus may be sold by the selling
stockholders, by those persons or entities to whom they transfer, donate,
devise, pledge or distribute their shares or by other successors in interest.
We
are registering the shares of our common stock for resale by the selling
stockholders defined below. The shares are being registered to permit public
secondary trading of the shares, and the selling stockholders may offer the
shares for resale from time to time. See "How
The Shares May Be Distributed"
below
The
following table has been prepared based solely upon information furnished to
us
as of the date of this prospectus by the selling stockholders listed below.
The
selling stockholders identified below may have sold, transferred or otherwise
disposed of, in transactions exempt from the registration requirements of the
Securities Act, all or a portion of their shares since the date on which the
information in the following table is presented.
None
of
the selling stockholder has had any position, office or other material
relationship with us or any of our affiliates within the past three years,
other
than as disclosed in the footnotes to the table.
Selling
Stockholder
|
|
Common
Stock Owned Prior
To
Offering
|
|
No.
of Shares
Being
Offered
|
|
Common
Stock Owned After
The
Offering
|
|
SPGP(1)
|
|
|
11,295,000
|
(1)
|
|
11,295,000
|
(1)
|
|
—
|
|
NCL
Smith & Williamson Ltd(2)
|
|
|
180,000
|
(2)
|
|
180,000
|
(2)
|
|
—
|
|
Regent
Pacific Group Ltd(3)
|
|
|
720,000
|
(3)
|
|
720,000
|
(3)
|
|
—
|
|
Tameem
Auchi(4)
|
|
|
176,000
|
(4)
|
|
176,000
|
(4)
|
|
—
|
|
Compagnie
Internationale de
Participations Bancaires et
Financieres(5)
|
|
|
1,760,000
|
(5)
|
|
1,760,000
|
(5)
|
|
—
|
|
Sook
Hee Chang(6)
|
|
|
48,000
|
(6)
|
|
48,000
|
(6)
|
|
—
|
|
AGF
Precious Metals Fund(7)
|
|
|
3,520,000
|
(7)
|
|
3,520,000
|
(7)
|
|
—
|
|
Minh-Thu
Dao-Huy(8)
|
|
|
375,000
|
(8)
|
|
375,000
|
(8)
|
|
—
|
|
Michael
White(9)
|
|
|
29,568
|
(9)
|
|
29,568
|
(9)
|
|
—
|
|
Charles
L. Stafford(10)
|
|
|
324,700
|
(10)
|
|
271,000
|
(10)
|
|
53,700
|
|
Standard
Bank Plc.(11)*
|
|
|
15,750,000
|
(11)
|
|
15,750,000
|
(11)
|
|
—
|
|
Josephine
Scott(12)
|
|
|
842,817
|
(12)
|
|
502,727
|
|
|
340,090
|
|
Peter
I. Wold(13)
|
|
|
550,000
|
|
|
250,000
|
|
|
300,000
|
|
John
P. Wold(13)
|
|
|
450,000
|
|
|
250,000
|
|
|
200,000
|
|
John
S. Wold(13)
|
|
|
1,000,001
|
|
|
250,001
|
|
|
750,000
|
|
Andrew
Fraser (14)
|
|
|
336,900
|
(14)
|
|
336,900
|
(14)
|
|
—
|
|
RBC/David
Paterson Trust(15)
|
|
|
397,000
|
(15)
|
|
397,000
|
(15)
|
|
—
|
|
Selling
Stockholder
|
|
Common
Stock Owned Prior
To
Offering
|
|
No.
of Shares
Being
Offered
|
|
Common
Stock Owned After
The
Offering
|
|
Van
Eck International Investors Gold
Fund(16)*
|
|
|
8,300,000
|
(16)
|
|
8,300,000
|
(16)
|
|
—
|
|
Van
Eck Long/Short Gold Portfolio
Ltd.(17)*
|
|
|
1,700,000
|
(17)
|
|
1,700,000
|
(17)
|
|
—
|
|
Global
Gold and Precious(18)
|
|
|
1,000,000
|
(18)
|
|
1,000,000
|
(18)
|
|
—
|
|
Eric
T. Inkilainen
|
|
|
50,000
|
|
|
50,000
|
|
|
—
|
|
Russ
Fromm*
|
|
|
750,000
|
|
|
750,000
|
|
|
—
|
|
Shane
Baghai
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
Philip
Emanuele(19)
|
|
|
8,500
|
(19)
|
|
8,500
|
(19)
|
|
—
|
|
Robert
Krahn
|
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
Firestone
Fund Limited(20)
|
|
|
1,960,000
|
(20)
|
|
1,960,000
|
(20)
|
|
—
|
|
Guy
Huet(21)
|
|
|
50,000
|
(21)
|
|
50,000
|
(21)
|
|
—
|
|
Alison
Dyer(22)
|
|
|
7,500
|
(22)
|
|
7,500
|
(22)
|
|
—
|
|
Beat
Invest Ltd.(22)
|
|
|
100,000
|
(22)
|
|
100,000
|
(22)
|
|
—
|
|
Donald
G. Lang(23)
|
|
|
225,000
|
(23)
|
|
225,000
|
(23)
|
|
—
|
|
Stuart
W. Lang(23)
|
|
|
75,000
|
(23)
|
|
75,000
|
(23)
|
|
—
|
|
Ebner
Beteiligungsgesellschaft (24)
|
|
|
425,000
|
(24)
|
|
425,000
|
(24)
|
|
—
|
|
Ebner
Industrieofenbau(24)
|
|
|
312,500
|
(24)
|
|
312,500
|
(24)
|
|
—
|
|
Sentinel
Associates Ltd. (22)
|
|
|
75,000
|
(22)
|
|
75,000
|
(22)
|
|
—
|
|
Shirley
Hom (22)
|
|
|
7,500
|
(22)
|
|
7,500
|
(22)
|
|
—
|
|
Alfred
G. Wirth (25)
|
|
|
500,000
|
(25)
|
|
500,000
|
(25)
|
|
—
|
|
Gonzalo
Ojeda
|
|
|
20,000
|
|
|
20,000
|
|
|
—
|
|
John
Andrew McKee
|
|
|
20,000
|
|
|
20,000
|
|
|
—
|
|
The
Gresham Family Trust (26)
|
|
|
300,000
|
(26)
|
|
300,000
|
(26)
|
|
—
|
|
Selling
Stockholder
|
|
Common
Stock Owned Prior
To
Offering
|
|
No.
of Shares
Being
Offered
|
|
Common
Stock Owned After
The
Offering
|
|
Eddye
Ann Kelley
|
|
|
200,000
|
|
|
200,000
|
|
|
—
|
|
Robert
Louis Rosenthal
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
Gregory
James McCoach
|
|
|
400,000
|
|
|
400,000
|
|
|
—
|
|
Robert
H. Norris and Shirley B. NorrisReal
Estate Trust(27)
|
|
|
1,250,000
|
(27)
|
|
1,250,000
|
(27)
|
|
—
|
|
Hans
Von Michaelis(28)
|
|
|
600,000
|
(28)
|
|
500,000
|
(28)
|
|
100,000
|
|
William
M. Knapp
|
|
|
500,000
|
|
|
500,000
|
|
|
—
|
|
C.
Michael Nielsen
|
|
|
460,000
|
|
|
460,000
|
|
|
—
|
|
Daniela
Porter
|
|
|
60,000
|
|
|
60,000
|
|
|
—
|
|
Richard
Feiner
|
|
|
200,000
|
(29)
|
|
100,000
|
(29)
|
|
—
|
|
*
|
This
selling stockholder has identified itself as an affiliate of a registered
broker-dealer.
|
(1)
|
The
selling stockholder has identified Xavier
Roulet,
as a natural person with voting and investment control over shares
of our
common stock beneficially owned by the selling stockholder.
|
(2)
|
The
shares are held of record by NCL Investments Limited. The selling
stockholder has identified Mrs. F. A. Irving as a natural person
with
voting and investment control over shares of our common stock beneficially
owned by the selling stockholder.
|
(3)
|
The
shares are held of record by Willbro Nominees Limited. The selling
stockholder has identified Jamie Gibson as a natural person with
voting
and investment control over shares of our common stock beneficially
owned
by the selling stockholder.
|
(4) |
The
shares are held of record by Fitel Nominees Limited.
|
(5) |
The
shares are held of record by Fitel Nominees Limited. The selling
stockholder has identified Mr. Nadhmi Auchi as a natural person with
voting and investment control over shares of our common stock beneficially
owned by the selling stockholder.
|
(6) |
The
selling stockholder has indicated that her husband, Paul Ensor, also
exercises voting and investment control over shares of our common
stock
beneficially owned by the selling
stockholder.
|
(7) |
The
shares are held of record by Roytor & Co. The selling stockholder has
identified Charles Oliver and Bob Farquharson as natural persons
with
voting and investment control over shares of our common stock beneficially
owned by the selling stockholder. Messrs. Oliver and Farquharson
disclaim
beneficial ownership of the shares
offered.
|
(8)
|
The
shares are held of record by GundyCo. The
selling stockholder is an officer of IBK Capital Corp., the placement
agent in the 2005 and one of the 2006 private
placements.
|
(9)
|
The
selling stockholder is an officer of IBK Capital Corp., the placement
agent in the 2005 and one of the 2006 private placements.
|
(10)
|
Shares
offered and owned include shares issued in trust for the benefit
of his
children.
|
(11)
|
Shares
offered includes 13,600,000 shares issuable upon exercise of warrants.
The
selling stockholder has identified its directors and senior management
as
natural persons with voting and investment control over shares
of our
common stock beneficially owned by the selling
stockholder.
|
(12)
|
Shares
owned includes 250,000 shares issuable upon exercise of options.
The
selling stockholder is one of our
employees.
|
(13)
|
John
P. Wold and Peter I. Wold are brothers. John S. Wold is the father
of John
P. and Peter I. Wold. Each disclaims beneficial ownership of the
shares
owned by the others.
|
(14)
|
The
shares are held of record by Willbro Nominees Limited.
|
(15)
|
The
shares are held of record by Willbro Nominees Limited. The selling
stockholder has identified David Paterson as a natural person with
voting
and investment control over shares of our common stock beneficially
owned
by the selling stockholder.
|
(16)
|
The
selling stockholder has identified Joseph Foster, the portfolio
manager
for Van Eck Associates Corporation (the selling stockholder’s investment
adviser), as a natural person with voting and investment control
over
shares of our common stock beneficially owned by the selling stockholder.
Van Eck International Investors Gold Fund and Van Eck Long/Short
Gold
Portfolio Ltd. are both clients of related investment
advisors.
|
(17)
|
The
selling stockholder has identified Joseph Foster, the portfolio
manager
for Van Eck Absolute Return Advisers Corp. (the selling stockholder’s
investment adviser), as a natural person with voting and investment
control over shares of our common stock beneficially owned by the
selling
stockholder. Van Eck International Investors Gold Fund and Van
Eck
Long/Short Gold Portfolio Ltd. are both clients of related investment
advisors.
|
(18)
|
The
selling stockholder has identified Jean Bernard Guyon, as a natural
person
with voting and investment control over shares of our common stock
beneficially owned by the selling
stockholder.
|
(19)
|
Shares
offered and owned are owned by the selling stockholder for the
benefit of
one of his minor children.
|
(20)
|
The
selling stockholder has identified HL Huet and Guy Huet, directors,
as
natural persons with voting and investment control over shares
of our
common stock beneficially owned by the selling stockholder. HL
Huet and
Guy Huet disclaim beneficial ownership of the shares offered.
|
(21)
|
The
shares are held of record by Bank Julius Baer & Co. Ltd. The selling
stockholder is a director of Firestone Fund Limited. The selling
stockholder disclaims beneficial ownership of the shares owned
by
Firestone.
|
(22)
|
The
selling stockholder has identified Alfred G. Wirth and Thomas A.
Starkey
of Wirth Associates Inc. as persons with voting and investment
control
over shares of our common stock beneficially owned by the selling
stockholder.
|
(23)
|
The
selling stockholder has identified Alfred G. Wirth and Thomas A.
Starkey
of Wirth Associates Inc. as persons with voting and investment
control
over shares of our common stock beneficially owned by the selling
stockholder. Donald and Stuart Lang are
brothers.
|
(24)
|
Ebner
Beteiligungsgesellschaft owns 100% of Ebner Industrieofenbau. Accordingly,
all shares owned by Ebner Industrieofenbau are deemed to be beneficially
owned by Ebner Beteiligungsgesellschaft and included in the shares
listed
as owned and offered by Ebner Beteiligungsgesellschaft (the shares
owned
by Ebner Industrieofenbau are also listed in the table separately
as owned
by Ebner Industrieofenbau). The selling stockholder has identified
Alfred
G. Wirth and Thomas A. Starkey of Wirth Associates Inc. as persons
with
voting and investment control over shares of our common stock beneficially
owned by the selling
stockholder.
|
(25)
|
The
selling stockholder has identified himself and Thomas A. Starkey
of Wirth
Associates Inc. as persons with voting and investment control over
shares
of our common stock beneficially owned by the selling
stockholder.
|
(26)
|
The
selling stockholder has identified James A. Gresham and Margaret
F.
Gresham, Trustees of the trust, as natural persons with voting
and
investment control over shares of our common stock beneficially
owned by
the selling stockholder.
|
(27)
|
The
selling stockholder has identified Robert H. Norris, Trustee of
the trust,
as the natural person with voting and investment control over shares
of
our common stock beneficially owned by the selling
stockholder.
|
(28)
|
Shares
owned includes 100,000 shares owned jointly with the Stockholder’s spouse.
The Stockholder has indicated that his spouse shares voting and
investment
control over shares of our common stock beneficially owned by
him.
|
(29)
|
Shares
offered and owned include 200,000 shares issuable upon exercise
of
options, 100,000 shares of which are registered for resale herein
and the
balance of which are registered for resale in another registration
statement.
|
2005
and 2006 Private Placements
The
shares registered on behalf of selling stockholders herein include shares that
were issued in private placements that closed in February 2005 and February
and
March 2006 and shares issued upon exercise of warrants issued in those private
placements. Information about these private placements is as
follows:
We
closed
two private placements in 2006 pursuant to which we issued an aggregate of
21,240,000 units, each unit consisting of one share of our common stock and
a
warrant to purchase ¼ of a share of our common stock. The Warrant issued to each
purchaser were exercisable for one share of our common stock, at an exercise
price equal to $0.30 per share. Each Warrant had a term of eighteen months
and
was fully exercisable from the date of issuance. We issued to the placement
agent in one of the placements eighteen month warrants to purchase up to 934,000
shares of our common stock at an exercise price of $0.25 per share. 4,630,000
of
the warrants issued to investors and all of the placement agent warrants were
exercised. The balance of the investor warrants expired.
We
closed
one private placement in 2005 pursuant to which we issued an aggregate of
27,200,004 units, each unit consisting of one shares of our Common Stock and
one
Common Stock Purchase Warrant. Each Warrant had a term of two years and was
fully exercisable from the date of issuance. We issued to the placement agent
two year warrants to purchase up to 2,702,000 shares of our Common Stock at
an
exercise price of $0.25 per share. 25,925,004 of the warrants issued to
investors and all of the placement agent warrants were exercised. The balance
of
the investor warrants expired.
Pursuant
to our agreement with the purchasers we registered the foregoing shares and
shares issuable upon the exercise of the foregoing Warrants for public resale.
We also agreed to prepare and file all amendments and supplements necessary
to
keep the registration statement effective until the earlier of the date on
which
the selling stockholders may resell all the registrable shares covered by the
registration statement without volume restrictions pursuant to Rule 144(k)
under the Securities Act or any successor rule of similar effect and the date
on
which the selling stockholders have sold all the shares covered by the
registration statement. With regard to the shares issued in the 2005 private
placement, if, subject to certain exceptions, sales of all shares registered
cannot be made pursuant to the registration statement, we will be required
to
pay to these selling stockholders in cash or, at our option, in shares, their
pro rata share of 0.0833% of the aggregate market value of the registrable
shares held by these selling stockholders for each month thereafter until sales
of the registrable shares can again be made pursuant to the registration
statement. In addition, we agreed to have our Common Stock listed for trading
on
the Toronto Stock Exchange. If our Common Stock was not listed for trading
on
the Toronto Stock Exchange within 180 days after February 8, 2005, we were
required to issue to the selling stockholders who purchased in the 2005 private
placement an additional number of shares of our Common Stock that is equal
to
20% of the number of shares acquired by them in the private placement. We did
not timely list our shares on the Toronto Stock Exchange and, in August 2005,
we
issued 5,440,000 shares to the selling stockholders.
HOW
THE SHARES MAY BE DISTRIBUTED
The
selling stockholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which
the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately
negotiated transactions;
|
·
|
short
sales
that are not violations of the laws and regulations of any state
or the
United States;
|
·
|
broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
·
|
a
combination of any such methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated.
The
compensation paid to a particular broker-dealer may be less than or in excess
of
customary commissions.
The
selling stockholders may from time to time pledge or grant a security interest
in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of common stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
The
selling stockholders have been apprised that, if a particular offer of common
stock is to be made on terms constituting a material change from the information
set forth above with respect to how the shares may be distributed, then, to
the
extent required, a post-effective amendment to the accompanying registration
statement must be filed with the Securities and Exchange
Commission.
The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
The
selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. In
addition, each of the selling stockholders who is a registered broker-dealer
or
is affiliated with a registered broker-dealer has advised us that:
|
·
|
it
purchased the shares in the ordinary course of business; and
|
|
·
|
at
the time of the purchase of the shares to be resold, it had no agreements
or understandings, directly or indirectly, with any person to distribute
the shares.
|
We
have
advised the selling stockholders that they are required to comply with
Regulation M promulgated under the Securities and Exchange Act during such
time
as they may be engaged in a distribution of the shares. With
certain exceptions, Regulation M precludes a selling stockholder, any affiliated
purchasers, and any broker-dealer or other person who participates in the
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. Regulation M also prohibits any
bids
or purchases made in order to stabilize the price of a security in connection
with the distribution of that security. All of the foregoing may affect the
marketability of the shares offered hereby in this prospectus.
We
are
required to pay all fees and expenses incident to the registration of the
shares. We have agreed to indemnify the selling stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers, and controlling persons, we have been
advised that in the opinion of the SEC this indemnification is against public
policy as expressed in the Securities Act and is therefore,
unenforceable.
Under
the
securities laws of certain states, the shares may be sold in those states only
through registered or licensed broker-dealers. In addition, the shares may
not
be sold unless the shares have been registered or qualified for sale in the
relevant state or unless the shares qualify for an exemption from registration
or qualification.
LEGAL
MATTERS
The
validity of the common stock offered in this prospectus has been passed upon
for
us by Richard Feiner, Esq., 381 Park Avenue South, Suite 1601, New York, New
York 10016. Mr. Feiner owns options to purchase an aggregate of 200,000 shares
of our common stock.
EXPERTS
Our
consolidated financial statements incorporated by reference in this Prospectus
and in the Registration Statement have been audited by Wolinetz, Lafazan &
Company, P.C., independent registered public accountants, to the extent and
for
the periods set forth in their report incorporated herein by reference, and
are
included in reliance upon such report given upon the authority of said firm
as
experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We
have
filed with the Securities and Exchange Commission a registration statement
on
Form S-3 (File No. 333-143957) under the Securities Act of 1933, as amended,
with respect to the common stock the selling stockholders are offering by this
prospectus. This prospectus does not contain all of the information included
in
the registration statement. For further information about us and our securities,
you should refer to the registration statement and the exhibits filed with
the
registration statement.
We
are
subject to the information requirements of the Securities Exchange Act of 1934
and file annual, quarterly and current reports, proxy statements and other
information with the SEC. You can read our SEC filings, including the
registration statement, over the Internet at the SEC’s website at www.sec.gov.
You may also read and copy any document we file with the SEC at its public
reference facility at 100 F Street, NE, Washington, D.C. 20549.
You
may
also obtain copies of the documents at prescribed rates by writing to the Public
Reference Section of the SEC at 100 F Street, NE, Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of
the
public reference facilities.
INFORMATION
INCORPORATED BY REFERENCE
The
Commission allows us to “incorporate by reference” the information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
is
considered to be part of this prospectus, and later information that we file
with the Commission will automatically update and supersede this information.
We
incorporate by reference the following documents and any future filing made
with
the Commission under Sections 13(a), 14 or 15(d) of the Securities Exchange
Act
of 1934 until we and the selling stockholders sell all the securities included
in this prospectus:
(a)
|
Our
annual report on Form 10-KSB for our fiscal year ended July 31,
2007.
|
(b)
|
Our
current reports on Form 8-K filed with the Commission on September
5,
2007, September 14, 2007, September 20, 2007 and November 15,
2007.
|
(c)
|
Our
proxy statement on schedule 14A for our 2007 annual
meeting.
|
(d)
|
A
description of our common stock contained in our registration statement
on
Form SB-2, SEC File No. 333-138858, and any amendment or report
filed for
the purpose of updating this description filed subsequent to the
date of
this prospectus and prior to the termination of this
offering.
|
You
may
request a copy of these filings, at no cost, by writing or telephoning us at
the
following address: Capital Gold Corporation, 76 Beaver Street, 14th
floor,
New York, NY10005, telephone number (212) 344-2785.
You
should rely only on the information incorporated by reference or provided in
this prospectus or any supplement. We have not authorized anyone else to provide
you with different information. We and the selling stockholders will not make
offers to these shares in any state where the offer is not permitted. You should
not assume that the information in this prospectus or any supplement is accurate
as of any date other that the date on the front of those documents.
No
dealer, salesman or any other person is authorized to give any information
or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. This prospectus is an offer to
sell
these securities and it is not a solicitation of an offer to buy these
securities in any state where the offer or sale is not permitted. The
information contained in this Prospectus is current only as of this
date.
TABLE
OF CONTENTS
|
|
Page
|
|
|
|
|
2
|
|
Risk
Factors
|
|
|
4
|
|
Forward-looking
Statements
|
|
|
11
|
|
Use
of Proceeds
|
|
|
12
|
|
Selling
Stockholders
|
|
|
12
|
|
How
the Shares May
|
|
|
|
|
Be
Distributed
|
|
|
19
|
|
Legal
Matters
|
|
|
20
|
|
Experts
|
|
|
21
|
|
Where
you can find
|
|
|
|
|
More
information
|
|
|
21
|
|
|
|
|
|
|
By
Reference
|
|
|
21
|
|
55,604,696
SHARES OF
COMMON
STOCK
CAPITAL
GOLD CORPORATION
PROSPECTUS
November
__, 2007
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC
Filing Fees
|
|
$
|
470.18
|
|
Printing
and Engraving Expenses*
|
|
$
|
7,000.00
|
|
Accounting
Fees and Expenses*
|
|
$
|
10,000.00
|
|
Legal
Fees and Expenses*
|
|
$
|
12,500,00
|
|
|
|
$
|
4529.82
|
|
Total
Expenses*
|
|
$
|
34,500.00
|
|
*
Estimated.
ITEM
15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The
registrant is incorporated under the laws of the State of Delaware. As permitted
by Section 102(b)(7) of the Delaware General Corporation Law, or DGCL, the
article Eighth of the registrants certificate of incorporation provides:
“Directors
of the corporation shall not be liable to either the corporation or its
stockholders for monetary damages for a breach of fiduciary duties unless the
breach involves: (1) a director's duty of loyalty to the Corporation or its
stockholders; (2) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (3) liability for unlawful
payments of dividends or unlawful stock purchases or redemption by the
Corporation; or (4) a transaction from which the director derived an improper
personal benefit.”
Article
Ninth of the registrant’s certificate of incorporation provides that the
registrant shall indemnify all persons whom it may indemnify pursuant to Section
145 of the DGCL.
Section 145 of the DGCL provides that a corporation may indemnify any person,
including an officer or director, who is, or is threatened to be made, party
to
any threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative, other than an action by or
in
the right of such corporation, by reason of the fact that such person was an
officer, director, employee or agent of such corporation or is or was serving
at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
corporation’s best interest and, for criminal proceedings, had no reasonable
cause to believe that his conduct was unlawful. A Delaware corporation may
indemnify any officer or director in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged
to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses that such officer or
director actually and reasonably incurred.
ITEM
16. EXHIBITS.
Exhibit
No. Description
|
4.1 |
Specimen certificate representing
our Common
Stock.(1)
|
|
4.2
|
Form
of Warrant for Common Stock of the Company issued in the February
2005
private placement.(2)
|
|
4.3
|
Form
of Warrant for Common Stock of the Company issued to Standard
Bank.(3)
|
|
4.4
|
Form
of Warrant for Common Stock of the Company issued in the February
and
March 2006 private placement.(4)
|
|
4.5
|
Form
of Warrant for Common Stock of the Company issued in the January
2007
private placement.(5)
|
|
4.6
|
Form
of Placement Agent Warrant for Common Stock of the Company issued
in the
January 2007 private placement.(5)
|
|
5.1 |
Opinion
of Richard Feiner, Esq., legal
counsel.*
|
|
23.1
|
Consent
of Wolinetz, Lafazan & Company, P.C., independent registered public
accountants.
|
|
23.2 |
Consent
of Richard Feiner, Esq., legal counsel (included in Exhibit
5.1).
|
|
24.1
|
Powers
of Attorney (included in Signature Pages to the Registration
Statement).*
|
* Previously
filed.
(1) |
Previously
filed as an exhibit to the Company's Registration Statement on Form
SB-2
(SEC file no. 333-123216) filed with the Commission on or about March
9,
2005, and incorporated herein by this
reference.
|
(2) |
Previously
filed as an exhibit to the Company's Current Report on Form 8-K filed
with
the Commission on or about February 10, 2005, and incorporated herein
by
this reference.
|
(3) |
Previously
filed as an exhibit to Amendment No. 1 to the Company's Registration
Statement on Form SB-2 (SEC file no. 333-123216) filed with the Commission
on or about June 27, 2005, and incorporated herein by this
reference.
|
(4) |
Previously
filed as an exhibit to the Company's Current Report on Form 8-K filed
with
the Commission on or about February 16, 2006, and incorporated herein
by
this reference.
|
(5) |
Previously
filed as an exhibit to the Company's Current Report on Form 8-K filed
with
the Commission on or about January 29, 2007, and incorporated herein
by
this reference.
|
ITEM
17. UNDERTAKINGS
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to:
(i) Include
any prospectus required by Sections 10(a) (3) of the Securities Act of 1933
(the
Act );
(ii) Reflect
in the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in
the
information set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the
effective Registration Statement;
(iii) Include
any additional or changed material information on the plan of
distribution;
provided,
however, that paragraphs (i), (ii) and (iii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Securities
and
Exchange Commission by the registrant pursuant to Section 13 or Section 15(d)
of
the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
(2) That,
for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities that remain unsold at the end of the offering.
(4)
For
determining liability of the undersigned registrant under the Securities Act
to
any purchaser in the initial distribution of the securities, the undersigned
small business issuer undertakes that in a primary offering of securities of
the
undersigned registrant pursuant to this registration statement, regardless
of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i)
Any
preliminary prospectus or prospectus of the undersigned small business issuer
relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any
free writing prospectus relating to the offering prepared by or on behalf of
the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii)
The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv)
Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Act may be permitted to
directors, officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the small business issuer of
expenses incurred or paid by a director, officer or controlling person of the
small business issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the small business issuer
will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirement of the Securities Act of 1933, this Registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this Post-Effective Amendment No. 2
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of New York, State of New York, on
the
26th
day of
November 2007.
CAPITAL
GOLD CORPORATION
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
By:
/s/
Gifford A. Dieterle
|
|
|
|
Gifford
A.
Dieterle, President
|
|
|
|
Pursuant
to the requirements of the Securities Act of 1933, this Post-Effective Amendment
No. 2 to the Registration Statement has been signed by the following
persons in the capacities indicated on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ Gifford
A.
Dieterle |
|
President,
Treasurer, and Chairman of the Board
|
|
November
26, 2007
|
Gifford
A. Dieterle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Christopher M. Chipman
|
|
Principal
Financial and Accounting officer
|
|
November
26, 2007
|
Christopher
M. Chipman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
26, 2007
|
Robert
N. Roningen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
26, 2007
|
Roger
A. Newell
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
November
__, 2007
|
John
Brownlie
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
26, 2007
|
Jeffrey
W. Pritchard
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
November
__, 2007
|
John
Postle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
November
26, 2007
|
Ian
Shaw
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
November
__, 2007
|
Mark
T. Nesbitt
|
|
|
|
|
|
|
|
|
*
By: /s/
Gifford A. Dieterle
|
|
|
|
Gifford
A. Dieterle,
|
|
|
|
Attorney-in-Fact
|
|
|
|
Capital
Gold Corporation
Post-Effective
Amendment No. 2 to
Form
SB-2
on Form S-3
Index
to
Exhibits
Exhibit
No. |
|
Description
|
23.1 |
|
Consent
of Wolinetz, Lafazan & Company, P.C., independent registered public
accountants.
|