Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported)
July
11, 2008
CAPITAL
GOLD CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
|
0-13078
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13-3180530
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(state
or other juris-
|
(Commission
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(I.R.S.
Employer
|
diction
of incorporation)
|
File
Number)
|
(Identification
No.)
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76
Beaver Street, New York, NY
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10005
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (212)
344-2785
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(Former
name or former address, if changed since last
report)
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
1 - Registrant's Business and Operations
Item
1.01 Entry into a Material Definitive Agreement.
On
July
17, 2008, we closed in escrow pending execution of Mexican collateral documents
and certain other ministerial matters an Amended And Restated Credit Agreement
(the “Credit Agreement”) involving our wholly-owned Mexican subsidiaries Minera
Santa Rita S. de R.L. de C.V. (“MSR”) and Oro de Altar S. de R.L. de C.V.
(“Oro”), as borrowers (“Borrowers”), us, as guarantor, and Standard Bank PLC
(“Standard Bank”), as the lender. The Credit Agreement amends and restates the
prior credit agreement between the parties dated August 15, 2006 (the “Original
Agreement”). Under the Original Agreement, MSR and Oro could borrow, and did
borrow, money in an aggregate principal amount of up to US$12,500,000 (the
“Term
Loan”) for the purpose of constructing, developing and operating the El Chanate
gold mining project in Sonora State, Mexico. We guaranteed the repayment of
the
Term Loan and the performance of the obligations under the Original Agreement.
For more detailed information on the terms of the Original Agreement, please
see
the disclosure in our Current Report on Form 8-K filed with the Securities
and
Exchange Commission on August 16, 2006, and a copy of the Original Agreement
attached thereto as Exhibit 10.1.
The
material amendments to the Original Agreement contained in the Credit Agreement
are as follows:
The
Credit Agreement establishes a new senior secured revolving credit facility
that
permits Borrowers to borrow up to $5,000,000 (the “Revolving Commitment”) during
the one year period after the closing of the Credit Agreement (the “Revolving
Commitment Termination Period”). The Borrowers may request a borrowing of the
Revolving Commitment from time to time, provided that the Borrowers are not
entitled to request a borrowing more than once in any calendar month (each
borrowing a “Revolving Loan”). Repayment of the Revolving Loans will be secured
and guaranteed in the same manner as the Term Loan.
The
aggregate principal amount of all Revolving Loans shall be due at the end of
the
Revolving Commitment Termination Period. Term Loan principal shall be repaid
quarterly commencing on September 30, 2008 and consisting of four payments
in
the amount of $1,125,000, followed by eight payments in the amount of $900,000
and two final payments in the amount of $400,000. There is no prepayment
fee.
Principal
under the Term Loan and the Revolving Loans shall bear interest at a rate per
annum equal to the LIBO Rate, as defined in the Credit Agreement, for the
applicable Interest Period plus the Applicable Margin. An Interest Period can
be
one, two, three or six months, at the option of the Borrowers. The Applicable
Margin for the Term Loan and the Revolving Loans is 2.5% per annum and 2.0%
per
annum, respectively.
The
Borrowers are required to pay a commitment fee in respect of the Revolving
Commitment at the rate of 1.5% per annum on the average daily unused portion
of
the Revolving Commitment.
Pursuant
to the terms of the Original Credit Agreement, Standard Bank exercised
significant control over the operating accounts of MSR located in Mexico and
in
the United States. Standard Bank’s control over the accounts has been lifted
significantly under the terms of the Credit Agreement, giving the Borrowers
authority to exercise primary day-to-day control over the accounts. However,
the
accounts remain subject to an account pledge agreement between MSR and the
Lender.
Pursuant
to the Credit Agreement, we issued to Standard Bank 600,000 Common Stock
Purchase Warrants. In addition, in conjunction with the closing of the Credit
Agreement, Standard Bank exercised its existing Common Stock Purchase Warrants.
For more information, please see “Item 3.02 Unregistered Sales Of Equity
Securities” below.
Section
2 - Financial Information
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Section
3 - Securities And Trading Markets
Item
3.02 Unregistered Sales Of Equity Securities.
Pursuant
to the Credit Agreement, we have agreed to issue to Standard Bank a two year
warrant to purchase an aggregate of 600,000 shares of our common stock at an
exercise price of $0.852 per share.
In
addition, as part of the Credit Agreement transaction, on July 11, 2008,
Standard Bank exercised its outstanding warrants for an aggregate of 13,600,000
shares of our common stock for gross proceeds of $ 4,314,200.00.
The
warrant and shares were issued to Standard Bank in reliance upon the exemption
from registration requirements set forth in Section 4(2) of the Securities
Act
of 1933, as amended.
Section
5 - Corporate Governance and Management
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
July
17, 2008,
at the
recommendation of the Compensation Committee of our Board of Directors,
our executive officers were awarded cash bonuses, and salary increases, and
share grants under our 2006 Equity Incentive Plan (the “Plan”). In addition, our
non-executive directors were granted stock under the Plan. The specific awards
are as follows:
Executive
Officer
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Cash
Bonus
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Share
grant
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|
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Salary
effective
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|
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#
shares
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|
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August
1, 2008
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Gifford
Dieterle
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$
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250,000
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100,000
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$
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287,500
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John
Brownlie
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$
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250,000
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100,000
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$
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258,750
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Jeff
Pritchard
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$
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225,000
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100,000
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$
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224,250
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Chris
Chipman
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$
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225,000
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|
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100,000
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$
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201,250
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Scott
Hazlitt
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$
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100,000
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50,000
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$
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155,250
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Non-Executive
Directors
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Ian
Shaw
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15,000
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Mark
Nesbitt
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15,000
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John
Postle
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15,000
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Roger
Newell
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10,000
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Robert
Roningen
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10,000
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CAPITAL
GOLD
CORPORATION |
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July
17,
2008 |
By: |
/s/
Gifford A. Dieterle |
|
Gifford
A. Dieterle, President |
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