As filed with the Securities and Exchange Commission on May 13, 1996
Registration No. ---------
- -------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GOLD STANDARD, INC.
-----------------------------------
(Exact name of Registrant as specified in its charter)
UTAH 1040 87-0302579
- ------------------------- --------------------- -----------------
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorporation Industrial Classifi- Identification
or organization) cation Code Number) Number)
712 Kearns Building
Salt Lake City, Utah 84101
(801) 328-4452
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(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
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Mr. Scott L. Smith
President
712 Kearns Building
Salt Lake City, Utah 84101
(801) 328-4452
------------------------------------------
(Name, address, including zip code,
and telephone number, including area code,
of agent for service)
Copy to:
James W. Burch, Esq.
Jones, Waldo, Holbrook & McDonough
170 South Main Street, Suite 1500
Salt Lake City, Utah 84101
This Registration Statement consists of a total of 36 pages.
The Exhibit Index is on pages 25-6 and 29-30.
- -------------------------------------------------------------------------
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement.
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, check the following box. [X]
CALCULATION OF REGISTRATION FEE
Title Proposed Proposed
each class of maximum maximum Amount of
securities to Amount to be price aggregate Registra-
be registered Registered per share offering price tion fee
- ---------------- ------------- ------------ -------------- ---------
Common stock(1) 7,680,000 $ 1.25 (1) $ 9,600,000 $3,310.34
($.001 par value) shares
(1) Estimated solely for the purpose of calculating the registration
fee and based upon the May 9, 1996 market price ($1.25 per share) on the
NASDAQ automated quotation system for Gold Standard, Inc. Common Stock.
The Registrant hereby amends this Registration Statement on such 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 such date as the Commission, acting
pursuant to said Section 8(a), may determine.
[END OF FACING PAGE]
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Filed pursuant to RULE 424(C)
[Cover Page] of the Securities Act of 1933
REGISTRATION STATEMENT NO. --------
PROSPECTUS
GOLD STANDARD, INC.
7,680,000 SHARES
This Prospectus covers seven million six hundred eighty thousand
(7,680,000) shares (the "Securities" or the "Shares") of the Common Stock,
$.001 par value ("Common Stock"), of Gold Standard, Inc. ("GSI" or the
"Company") which are being offered by certain securityholders (the
"Selling Securityholders") of the Company and which were or will be
acquired by such persons either upon exercise by them of certain
outstanding warrants of the Company or by direct purchase from the Company
in private transactions. The Company's Common Stock is traded in the
over-the-counter market and is quoted on NASDAQ under the symbol "GSTD."
The Company's Common Stock is also traded on the Pacific Stock Exchange
under the symbol "GAU".
-----------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK
SEE "PRINCIPAL RISK FACTORS"
ON PAGES -- THROUGH -- OF THIS PROSPECTUS.
-----------------------------------
The Securities may be offered by or on behalf of the Selling
Securityholders from time to time in or through transactions or
distributions in the over-the-counter market, in privately negotiated
transactions, on any stock exchange on which the Securities may be listed
at prices prevailing in such market or exchange or as may be negotiated at
the time of sale. The Securities may be publicly offered through
underwriting syndicates or through dealers. In such event, the Selling
Securityholders may enter into an agreement with respect to the Securities
then offered providing for the sale of the Securities to, and for the
purchase of such Securities being offered by, the members of such
syndicate or such dealers. See "PLAN OF DISTRIBUTION."
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When a particular offer of Securities is made, to the extent
required, a supplement to this Prospectus will be delivered together with
this Prospectus setting forth with respect to such offer the aggregate
principal amount of Securities offered and the terms of the offering,
including the names of any underwriters, dealers or agents involved, any
discounts, commissions and other items of compensation from, and the
resulting net proceeds to, the Selling Securityholders. The Selling
Shareholders and any agents, dealers, or underwriters that participate
with the Selling Securityholders in the distribution of the Securities may
be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any commissions received by
them and any profit on the resale of the Securities purchased by them may
be deemed to be underwriting commissions or discounts under the Securities
Act. This offering is expected to terminate no later than the date upon
which all Selling Securityholders have sold all of the Securities held by
them pursuant to the Registration Statement, as amended, which has been
filed by the Company in connection with this Prospectus or otherwise or
until they are legally permitted to sell their remaining Securities
pursuant to an exemption from registration.
-----------------------------------
The date of this Prospectus is May 10, 1996
[End of Cover Page]
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if
given or made, such information or representations must not be relied on
as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any
securities in any jurisdiction in which such offer or solicitation would
be unlawful. Neither delivery of this Prospectus nor any sale made
hereunder at any time implies that information contained herein is correct
as of any time subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and accordingly
files reports, proxy statements, and other information with the Securities
and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information filed with the Commission are available
for inspection and copying at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, and at certain of the Commission's regional
offices located at: Room 1228, Everett McKinley Dirksen Building, 219
South Dearborn Street, Chicago, Illinois 60604; and Room 1100, Federal
Building, 26 Federal Plaza, New York, New York 10278. Copies of such
documents may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549, at prescribed rates.
The Company has filed with the Commission, under the Securities Act,
a registration statement on Form S-3 (herein, together with all amendments
and exhibits thereto, collectively referred to as the "Registration
Statement") with respect to the Securities offered hereby. This
Prospectus does not contain all the information set forth in such
Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Statements contained in
this Prospectus as to the contents of any contract or other document are
not necessarily complete, and are qualified in their entirety by reference
to the copy of such contract or document appearing as an exhibit to the
Registration Statement. Such Registration Statement and any amendments
thereto, including exhibits filed as a part thereof, are available for
inspection and copying as set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
(File No. 0-9496) are incorporated herein by reference:
The Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1995, and its Quarterly Report on Form 10-Q for the fiscal
quarter ended January 31, 1995.
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All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Securities shall be
deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a
Prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents which are incorporated by reference
herein, other than exhibits to such documents which are not specifically
incorporated by reference therein. Requests should be directed to:
President, Gold Standard, Inc., 712 Kearns Building, Salt Lake City, Utah
84101 (Telephone (801) 328-4452).
THE COMPANY
Gold Standard, Inc. was incorporated pursuant to the laws of the
State of Utah on November 28, 1972, for the purpose of engaging in the
exploration for, and the production and sale of, gold. The Company is
presently engaged in acquiring, exploring, leasing and selling hard
mineral properties, and developing those properties which have the most
potential. The Company also seeks joint ventures or other financial
arrangements with other companies to develop and/or operate the properties
it controls. At present, the Company does not own or lease any ore body
proven to be commercially viable. During fiscal year 1995 and to date,
Registrant has continued to engage in exploration activities on its
various mining properties. By way of priority, Registrant's activities on
its property in the Mercur Mining District of Tooele County, Utah were the
most important in terms of commitment of assets, followed by its
continuing exploration of its properties in Uruguay, acquired in 1988 by
Gold Standard South, a wholly owned subsidiary of Registrant, and its
continuing exploration of its property in the Dugway Mining District of
Tooele County, Utah. Those properties and those activities are further
described under "Item 2: Properties," in the 1995 10-K. Registrant has
continued similar exploration activities in fiscal year 1996.
The Company's principal executive offices are located at 712 Kearns
Building, Salt Lake City, Utah 84101, and its telephone number is (801)
328-4452.
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PRINCIPAL RISK FACTORS
NO PRESENT ACTIVE MINING OPERATIONS
COMPANY HAS NO PRESENT ACTIVE MINING OPERATIONS; COMPANY'S CASH FLOW
AND WORKING CAPITAL SITUATION. Although the Company is actively engaged
in mining exploration activities, the Company has no physical mining
operations and no current cash flow or working capital is generated from
the Company's mining operations. Currently, the only source of capital
available to finance the Company's activities is through investment in the
Company, principally attributable to the exercise of warrants to purchase
the Company's stock and other capital infusions.
OTHER SPECIFIC RISKS RELATED TO GOLD STANDARD
UNCERTAINTY OF LITIGATION. The Company is the plaintiff in a lawsuit
filed on December 8, 1986, against American Barrick Resources Corporation
("Barrick"), Texaco, Inc., Getty Oil Company and Getty Mining Company
("GMC") and which was styled as GOLD STANDARD, INC. V. AMERICAN BARRICK
RESOURCES CORPORATION, ET AL., (Civil Case No. 86-374), in the Third
Judicial District Court of Utah in and for the County of Tooele, State of
Utah. The lawsuit sought various alternative and cumulative remedies
including the value of all gold mined from the Mercur Gold Mine, in
Mercur, Utah (the "Mercur Mine") since 1983, and punitive and actual
damages, which if considered in the aggregate could exceed one billion
dollars ($1,000,000,000), from the defendants and certain of their
subsidiaries. Texaco, Inc., as to its own conduct, was dismissed as a
defendant by the District Court. Further, on May 13, 1993, settlement
was reached with one of the defendants, Barrick, under which the Company
received $5,225,000, pursuant to which the Company ceased claims of
ownership in the Mercur Mine.
On September 3, 1993, a jury returned a verdict in favor of the
Company in the amount of $404,164,000 against GMC and Getty Oil Company
(collectively, "Getty"). Subsequently, the presiding judge in the case
granted a judgment notwithstanding the verdict which denied the jury's
award to the Company. The Company appealed the District Court's ruling on
the verdict and other rulings with respect to other claims in the case.
Upon appeal, the Company has to pay taxable costs of court for Getty or
bond against such costs. In the event that the Company is ultimately
unsuccessful in prosecuting the appeal, the Company will have to pay
taxable costs of court for Getty. Taxable costs of court are typically
nominal compared to the overall amount at issue, and in the present case
are expected to be approximately $47,398.29, plus an additional amount
attributable to the appeal that is not expected to exceed $10,000.00. The
appeal was argued before the Utah Supreme Court in June of 1995. A
decision affirming the judgment of the lower court was issued on January
11, 1996. Following such decision, Registrant filed a Petition for
Rehearing with the Utah Supreme Court. No decision on the Petition for
Rehearing has been received from the Court as of the date of this
Prospectus.
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Briefly stated, the lawsuit concerns the rights of the Company to the
Mercur Mine, located in the Camp Floyd Mining District (which district is
better known as the Mercur Mining District) in Tooele County, Utah.
Pursuant to an Operating Agreement between the Company and GMC, dated
December 11, 1973 (the "Agreement"), GMC was to bear the expense of
exploration and pre-mine development at the Mercur Mine until a
feasibility study had confirmed the commercial practicality of placing
into production mining operations at the Mercur Mine. After final
completion of such feasibility study, the Company was to bear 25% and GMC
75% of the costs necessary to place the Mercur Mine, or a portion thereof,
into production. In return for the Company's 25% payment, the Company was
to receive a proportionate share of the profits "in kind" from the Mercur
Mine. The Agreement further stated that if the Company did not
participate in the costs, the Company would be limited to a 15% net
profits interest from the operation of the Mercur Mine, and would not be
entitled to take any share of the profits "in kind."
In 1980, GMC commissioned a study that purported to be a feasibility
study as described in the Agreement, and pursuant to such study,
unilaterally began pre-development activities. GMC demanded that the
Company pay 25% of GMC's costs. The Company, at the time of the study
commissioned by GMC and continuously thereafter, maintained that the study
was not a proper feasibility study as required by the Agreement. In March
of 1982, GMC converted the Company's 25% interest in the Mercur Mine to a
15% net profits interest over the Company's objections that the conversion
and GMC's prior actions were in violation of the Agreement. Such
violations form the primary focus of the lawsuit.
NEITHER THE COMPANY NOR ITS LEGAL COUNSEL ARE ABLE TO PREDICT THE
ULTIMATE OUTCOME OF SUCH LITIGATION. FURTHERMORE, THERE CAN BE NO
ASSURANCE THAT THE OUTCOME OF THIS LITIGATION WILL FAVOR THE COMPANY. IN
THAT EVENT, THE INVESTMENT IN SHARES OF THE COMPANY BY INVESTORS IN THIS
OFFERING COULD BE MATERIALLY ADVERSELY AFFECTED.
UNCERTAINTY OF FUNDING FOR EXPLORATION. The Company has historically
attempted to fund its exploration and acquisition activities through joint
venture arrangements, for the purpose and with the intent of minimizing
the cost of such activities to the Company and allowing it to explore and
acquire a greater number of properties than it would otherwise have been
able to explore or acquire. The Company's participation in the Mercur
Gold Project was through a joint venture with Getty Mining Company, which
was subsequently sold to Texaco in 1984 and the mine was later sold to
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Barrick Mercur Mining Company in 1985. The Company intends to enter into
joint venture arrangements to explore and develop its other properties.
In the event the Company is unable to attract joint venturers in future
years, it will be required to either reduce the level of its exploration
and development activities or continue to fund exploration and development
with its own capital. Unless the Company is able to raise substantial
additional funds (as to which there can be no assurance), it would be
unable to fund significant exploration and development activities on its
own. In addition, if the Company's continuing exploration activities
indicate economically minable ore on any other properties now owned or
hereafter acquired by it, it would be required to expend potentially large
sums to put such properties into production. Because the future success
of the Company will depend in part on its ability to generate a positive
cash flow from operations, the Company must raise substantial additional
capital through debt, equity or joint venture financing to fund presently
contemplated and any future production activities. Although the Company
is pursuing such funding, there can be no assurance that such funding will
be available in amounts or at times to meet the Company's needs. Even if
such funding becomes available, there can be no assurance that any
properties now owned or hereafter acquired by the Company can be mined
economically.
UNCERTAINTY OF PROPERTY ECONOMICS. The decision as to whether any of
the mineral properties which the Company now holds or may acquire in the
future contain commercially minable deposits, and should therefore be
brought into production, depends upon the results of exploration programs
and/or feasibility analysis and the recommendations of duly qualified
engineers or geologists. Any such decision involves consideration and
evaluation of several significant factors, including, but not limited to,
the (a) costs of bringing a property into production, including
exploration and development work, preparation of production feasibility
studies and construction of production facilities, (b) availability and
costs of financing, (c) ongoing costs of production, and (d) market prices
for the mineral to be produced. There can be no assurance that any
property now held by the Company or which may be acquired by the Company
contains a commercially minable mineral deposit, and therefore no
assurance that the Company will ever generate a positive cash flow from
the Company's production operations.
EXPLORATION AND DEVELOPMENT NATURE OF THE COMPANY. The Company's
principal revenues are, and since its inception have been, joint venture
payments and interest earned on the proceeds of its previous private
offerings of its securities. To date, the Company's business has
consisted solely of the acquisition and initial exploration and
development of prospective mining properties. The Company has not had any
period of profitable operations since its inception. Although various
members of the Company's staff have experience in the mining industry, the
Company has had no direct experience in the hands-on operation of a
producing mine. In the future, if funds are available, the Company
intends to obtain production capabilities, if needed, from its properties
through joint venture arrangements with other companies with operating
experience and capabilities. However, it is possible that the Company
will be unsuccessful in making such arrangements and may be required to
secure production capabilities, if needed, from its properties through its
own efforts. There can be no assurance that it will be successful in
doing so.
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NO DIVIDENDS. For the foreseeable future, it is anticipated that the
Company will use any earnings to finance its growth and that dividends
will not be paid to shareholders.
MARKET OVERHANG. This Prospectus relates to the possible sale of
7,680,000 shares of the Common Stock of the Company during the duration of
the effectiveness of the Registration Statement. As of May 10, 1996 there
were approximately 14,847,500 shares of the Company's Common Stock
outstanding. Due to the possibility that all or many of the shares
proposed to be sold in this Prospectus could be sold in a relatively short
period of time, there is a possibility that the sale of such shares might
have an adverse effect on the market for and the price of the Company's
Common Stock. Potential purchasers of shares of the Company's stock
pursuant to this Prospectus should be aware of such possible adverse
effects.
GENERAL RISKS RELATED TO THE MINING INDUSTRY
NATURE OF MINERAL EXPLORATION. Exploration for minerals is highly
speculative and involves greater risks than many other businesses. Many
exploration programs do not result in the discovery of mineralization and
any mineralization discovered may not be of sufficient quantity or quality
to be profitably mined. Uncertainties as to the metallurgical amenability
of any minerals discovered may not warrant the mining of these minerals on
the basis of available technology. The Company's operations are subject
to all of the operating hazards and risks normally incident to exploring
for and developing mineral properties, such as encountering unusual or
unexpected formations, environmental pollution, and personal injury.
COMPETITION AND SCARCITY OF MINERAL LANDS. Many companies and
individuals are engaged in the mining business, including large,
established mining companies with substantial capabilities and long
earnings records. There is a limited supply of desirable mineral lands
available for claim staking, lease or other acquisition in the United
States and other countries or areas where the Company contemplates
conducting exploration activities. The Company may be at a competitive
disadvantage in acquiring mining properties since it must compete with
these individuals and companies, many of which have greater financial
resources and larger technical staffs than the Company.
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FLUCTUATION IN PRICE. The market price of gold and other minerals is
extremely volatile and beyond the control of the Company. If the price of
gold or other minerals should drop dramatically, the value of the
Company's properties which are being explored or developed for that
mineral could also drop dramatically and the Company might not be able to
recover its investment in those properties. The decision to put a mine
into production, and the commitment of the funds necessary for that
purpose, must be made long before the first revenues from production will
be received. Price fluctuations between the time that such a decision is
made and the commencement of production can change completely the
economics of the mine. Although it is possible to protect against price
fluctuations by hedging in certain circumstances, the volatility of the
prices of gold and other minerals represents a substantial risk in the
mining industry generally which no amount of planning or technical
expertise can eliminate.
ENVIRONMENTAL CONTROLS. Compliance with environmental quality
requirements and reclamation laws imposed by federal, state, and local
governmental authorities may necessitate significant capital outlays, may
materially affect the economics of a given property, or may cause material
changes or delays in the Company's intended activities. New or different
environmental standards imposed by any governmental authority in the
future may adversely affect the Company's activities.
UNCERTAINTY OF TITLE. Since many of the Company's mining properties
are unpatented mining claims, the Company has only possessory title with
respect to those claims. Because title to unpatented mining claims is
subject to inherent uncertainties, it is difficult to determine
conclusively the ownership of such claims. In addition, in order to
retain title to an unpatented mining claim, a claim holder must meet
annual assessment work requirements and comply with stringent state and
federal regulations pertaining to the filing of assessment work
affidavits. Since most mining claims in the United States are unpatented,
this uncertainty is inherent in the mining industry.
DESCRIPTION OF SECURITIES
The Company has authorized capital stock consisting of 100,000,000
shares of Common Stock, par value $.001 per share. All shares are
non-assessable. The Common Stock has noncumulative voting rights. Each
outstanding share is entitled to one vote on each matter submitted to a
vote at any meeting of stockholders. A majority of the outstanding Common
Stock may elect the entire Board of Directors. Other than registration
rights and certain rights of FCMI Financial Corporation to acquire certain
percentages of any partial issuances of its Common Stock by the Company
as further described in the documents incorporated herein by reference),
there are no preemptive rights, or other subscription, conversion rights
or other shareholder rights with respect to the shares of the Company's
Common Stock. On liquidation, holders of the Common Stock are entitled to
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receive, pro rata, the Company's assets remaining after payment of all
debts of the Company. Holders of Common Stock are entitled to such
dividends as the Board of Directors may declare.
American Registrar and Stock Transfer Co., Salt Lake City, Utah, is
the Company's transfer agent for its Common Stock.
PLAN OF DISTRIBUTION
The Securities offered hereby may be sold from time to time to
purchasers directly by any of the Selling Securityholders at varying
prices determined at the time of sale or at negotiated prices.
Alternatively, the Securities may be offered from time to time by the
Selling Securityholders through agents, brokers, dealers or underwriters,
and such agents, brokers, dealers or underwriters may receive compensation
in the form of underwriting discounts, commissions or concessions from the
Selling Securityholders and/or the purchasers of the Securities for whom
they act. The Selling Securityholders and any such underwriters, dealers
or agents that participate in the distribution of the Securities may be
deemed to be underwriters, and any profit on the sale of the Securities by
them and any discounts, commissions or concessions received by them may be
deemed to be underwriting discounts and commissions under the Securities
Act. The Company will receive no proceeds from this offering other than
the exercise price attributable to the exercise of warrants.
At the time a particular offer of Securities is made, to the extent
required, a supplement to this Prospectus will be distributed and will
describe any material arrangements for the distribution of the Securities,
including the aggregate principal amount and type of Securities being
offered, the identity of the Selling Securityholder or Securityholders,
the names of any underwriters, brokers, dealers or agents, the purchase
price paid by any underwriter for Securities purchased from the Selling
Securityholders, any discounts, commissions or concessions and other items
constituting compensation from the Selling Securityholders and/or the
Company and any discount concessions or commissions allowed, reallowed or
paid to dealers, including the proposed selling price to the public, the
expenses of the offering and the net proceeds to the Selling
Securityholders.
To comply with certain states' securities laws, if applicable, the
Securities will be sold in such states only through registered or licensed
brokers or dealers. In addition, in certain states the Securities may not
be sold unless they have been registered or qualified for sale in such
states or an exemption from registration or qualification is available and
is complied with.
There are no arrangements or agreements with any brokers or dealers
to act as underwriters of the Securities as of the date hereof. Under
applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Securities may not simultaneously engage
in market making activities with respect to the Securities for a period of
nine (9) business days prior to the commencement of such distribution. In
addition, and without limiting the foregoing, the Selling Securityholders
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will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including without limitation, Rules 10b-2,
10b-6 and 10b-7, which provisions may limit the timing of purchases and
sales of any of the Securities by the Selling Securityholders. Therefore,
Selling Securityholders are advised to consult their counsel prior to
initiating any such transaction. All of the foregoing may affect the
marketability of the Securities and the ability of any broker, dealer or
underwriter to engage in market making activities with respect to the
Securities.
The Company will pay substantially all of the expenses incident to
this offering and sale of the Securities to the public other than
commissions and discounts of underwriters, dealers or agents.
The Company will use its best efforts to keep the Registration
Statement of which this Prospectus forms a part continuously effective
until the Selling Securityholders have sold all of the Securities of the
Company which are being registered hereunder or until they are legally
permitted to sell all of such Securities to the public under the
Securities Act without an effective registration statement in place with
respect thereto.
SELLING SECURITYHOLDERS
The following table sets forth certain information with respect to
the Selling Securityholders and the Securities held by each Selling
Securityholder. Because the Selling Securityholders may actually offer
and/or sell less than all of the Securities offered by this Prospectus,
and because this offering is not being underwritten on a firm commitment
basis, it is not possible to state with certainty the amount of Securities
that will be held by the Selling Securityholders after completion of this
offering. Therefore, the table below assumes that all Securities offered
by this Prospectus will be sold. The Securities offered by this
Prospectus may be offered from time to time in whole or in part by the
Selling Securityholders. See "Plan of Distribution."
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Amount of
Securities Amount of %
Owned Amount of Securities of Class
Prior Securities Owned Owned
Selling to the to be After the After the
Securityholder Offering Offered Offering Offering
- --------------------------- --------- ---------- --------- --------
FCMI Financial Corporation 3,930,000(1) 600,000(2) 0% 0%
1,080,000(3)
Continental Casualty Company 2,650,000 1,325,000(2) 0% 0%
1,325,000(3)
Odyssey Partners, L.P. 1,030,000 515,000(2) 0% 0%
515,000(3)
Sun Valley Gold, L.P. 610,000 305,000(2) 0% 0%
305,000(3)
Sun Valley Gold
International, Ltd. 1,710,000 855,000(2) 0% 0%
855,000(3)
- -----------------------------------
(1) Two million two hundred fifty thousand of these Shares were registered
pursuant to Amendment No. 4 to Form S-3 Registration Statement
(Registration No. 33-47659), declared effective by the Commission on
October 13, 1995. At the effective date of such Amendment No. 4, FCMI
Financial Corporation ("FCMI") owned 2,730,000 shares (rather than
2,250,000 Shares, which was reported in error in such Amendment No. 4).
In May of 1996, FCMI purchased 600,000 Shares and 600,000 warrants (one share
and one warrant being referred to collectively as "Unit"), for $1.00 per
Unit. The warrants are valid for a period of three years, with an
exercise price of $1.50 per Share.
(2) These Shares have been or will be acquired by the Selling
Securityholders upon exercise by them of certain outstanding warrants of
the Company.
(3) These Shares were acquired by the Selling Securityholders by direct
purchase from the Company in a private transaction.
Pursuant to action duly taken by the Board of Directors of the
Company on June 14, 1991, the exercise price of all outstanding warrants
of the Company, as set forth in Exhibit 10.3 hereto, was reduced by fifty
cents ($0.50) per share. Pursuant to action duly taken by the Board of
Directors of the Company on June 15, 1994, the expiration date of all
outstanding warrants of the Company was extended by two years.
None of the Selling Securityholders has held any office or maintained
any relationship with the Company or any of its affiliates over the past
three (3) years other than as stockholders of the Company.
Page 14
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LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby
will be passed upon for the Company by Jones, Waldo, Holbrook & McDonough,
170 South Main Street, Suite 1500, Salt Lake City, Utah 84101.
EXPERTS
The financial statements included in the Company's Annual Report on
Form 10-K for the year ended October 31, 1995, and all amendments thereto,
are incorporated herein by reference in reliance on the report of Foote,
Passey, Griffin and Company ("FPG"), 310 South Main Street, Suite 1420,
Salt Lake City, Utah 84101, independent certified public accountants,
given on the authority of that firm as experts in accounting and auditing.
FPG are the current principal accountants for the Company.
PART II
INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Federal Registration Fee . . . . . . . . . . . . . . . $3,310.34
Legal Fees and Expenses . . . . . . . . . . . . . . . 3,000*
Accounting Fees and Expenses . . . . . . . . . . . . . 1,000*
Blue Sky Fees and Expenses . . . . . . . . . . . . . . -0-*
Total . . . . . . . . . . . . . . $7,310.34
* All amounts are estimated other than the federal registration fee.
Item 15. Indemnification of Directors and Officers.
Section 16-10a-840, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
(1) Each director shall discharge his duties as a director,
including duties as a member of a committee, and each officer with
discretionary authority shall discharge his duties under that
authority:
(a) in good faith;
(b) with the care an ordinarily prudent person in a
like position would exercise under similar circumstances; and
(c) in a manner the director or officer reasonably
believes to be in the best interests of the corporation.
(2) In discharging his duties, a director or officer is
entitled to rely on information, opinions, reports, or statements,
including financial statements and other financial data, if prepared
or presented by:
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<PAGE>
(a) one or more officers or employees of the
corporation whom the director or officer reasonably believes to
be reliable and competent in the matters presented;
(b) legal counsel, public accountants, or other persons
as to matters the director or officer reasonably believes are
within the person's professional or expert competence; or
(c) in the case of a director, a committee of the board
of directors of which he is not a member, if the director
reasonably believes the committee merits confidence.
(3) A director or officer is not acting in good faith if he
has knowledge concerning the matter in question that makes reliance
otherwise permitted by Subsection (2) unwarranted.
(4) A director or officer is not liable to the corporation,
its shareholders, or any conservator or receiver, or any assignee or
successor-in-interest thereof, for any action taken, or any failure
to take any action, as an officer or director, as the case may be,
unless:
(a) the director or officer has breached or failed to
perform the duties of the office in compliance with this section;
and
(b) the breach or failure to perform constitutes gross
negligence, willful misconduct, or intentional infliction of
harm on the corporation or the shareholders.
Section 16-10a-841, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
(1) Without limiting the generality of Subsection 16-10a-
840(4), if so provided in the articles of incorporation or in the
bylaws or a resolution to the extent permitted in Subsection (3), a
corporation may eliminate or limit the liability of a director to the
corporation or to its shareholders for monetary damages for any
action taken or any failure to take any action as a director, except
liability for:
(a) the amount of a financial benefit received by a
director to which he is not entitled;
(b) an intentional infliction of harm on the
corporation or the shareholders;
(c) a violation of Section 16-10a-842; or
(d) an intentional violation of criminal law.
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(2) No provision authorized under this section may eliminate
or limit the liability of a director for any act or omission
occurring prior to the date when the provision becomes effective.
(3) Any provision authorized under this section to be
included in the articles of incorporation may also be adopted in the
bylaws or by resolution, but only if the provision is approved by the
same percentage of shareholders of each voting group as would be
required to approve an amendment to the articles of incorporation
including the provision.
(4) Any foreign corporation authorized to transact business
in this state, including any federally chartered depository
institution authorized under federal law to transact business in this
state, may adopt any provision authorized under this section.
(5) With respect to a corporation that is a depository
institution regulated by the Department of Financial Institutions or
by an agency of the federal government, any provision authorized
under this section may include the elimination or limitation of the
personal liability of a director or officer to the corporation's
members or depositors.
Section 16-10a-902, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
(1) Except as provided in Subsection (4), a corporation may
indemnify an individual made a party to a proceeding because he is or
was a director, against liability incurred in the proceeding if:
(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or
not opposed to, the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
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(2) A director's conduct with respect to any employee
benefit plan for a purpose he reasonably believed to be in or not
opposed to the interests of the participants in and beneficiaries of
the plan is conduct that satisfies the requirement of Subsection
(1)(b).
(3) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did not
meet the standard of conduct described in this section.
(4) A corporation may not indemnify a director under this
section:
(a) in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable to
the corporation; or
(b) in connection with any other proceeding charging
that the director derived an improper personal benefit, whether
or not involving action in his official capacity, in which
proceeding he was adjudged liable on the basis that he derived
an improper personal benefit.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the corporation is
limited to reasonable expenses incurred in connection with the
proceeding.
Section 16-10a-903, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
Unless limited by its articles of incorporation, a corporation
shall indemnify a director who was successful, on the merits or
otherwise, in the defense of any proceeding, or in the defense of any
claim, issue, or matter in the proceeding, to which he was a party
because he is or was a director of the corporation, against
reasonable expenses incurred by him in connection with the proceeding
or claim with respect to which he has been successful.
Section 16-10a-904, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
(1) A corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a proceeding in
advance of final disposition of the proceeding if:
(a) the director furnishes the corporation a written
affirmation of his good faith belief that he has met the
applicable standard of conduct described in Section 16-10a-902;
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(b) the director furnishes to the corporation a written
undertaking, executed personally or on his behalf, to repay the
advance if it is ultimately determined that he did not meet the
standard of conduct; and
(c) a determination is made that the facts then known
to those making the determination would not preclude
indemnification under this part.
(2) The undertaking required by Subsection (1)(b) must be an
unlimited general obligation of the director but need not be secured
and may be accepted without reference to financial ability to make
repayment.
(3) Determinations and authorizations of payments under this
section shall be made in the manner specified in Section 16-10a-906.
Section 16-10a-905, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
Unless a corporation's articles of incorporation provide
otherwise, a director of the corporation who is or was a party to a
proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt
of an application, the court, after giving any notice the court
considers necessary, may order indemnification in the following
manner:
(1) if the court determines that the director is
entitled to mandatory indemnification under Section 16-10a-903,
the court shall order indemnification, in which case the court
shall also order the corporation to pay the director's
reasonable expenses incurred to obtain court-ordered
indemnification; and
(2) if the court determines that the director is fairly
and reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the director met the
applicable standard of conduct set forth in Section 16-10a-902
or was adjudged liable as described in Subsection 16-10a-902(4),
the court may order indemnification as the court determines to
be proper, except that the indemnification with respect to any
proceeding in which liability has been adjudged in the
circumstances described in Subsection 16-10a-902(4) is limited
to reasonable expenses incurred.
Page 19
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<PAGE>
Section 16-10a-906, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
(1) A corporation may not indemnify a director under Section
16-10a-902 unless authorized and a determination has been made in the
specific case that indemnification of the director is permissible in
the circumstances because the director has met the applicable
standard of conduct set forth in Section 16-10a-902. A corporation
may not advance expenses to a director under Section 16-10a-904
unless authorized in the specific case after the written affirmation
and undertaking required by Subsections 16-10a-904(1)(a) and (b) are
received and the determination required by Subsection 16-10a-904
(1)(c) has been made.
(2) The determinations required by Subsection (1) shall be
made:
(a) by the board of directors by a majority vote of
those present at a meeting at which a quorum is present, and
only those directors not parties to the proceeding shall be
counted in satisfying the quorum; or
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(b) if a quorum cannot be obtained as contemplated in
Subsection (2)(a), by a majority vote of a committee of the
board of directors designated by the board of directors, which
committee shall consist of two or more directors not parties to
the proceeding, except that directors who are parties to the
proceeding may participate in the designation of directors for
the committee;
(c) by special legal counsel:
(i) selected by the board of directors or its
committee in the manner prescribed in Subsection (a) or
(b); or
(ii) if a quorum of the board of directors cannot
be obtained under Subsection (a) and a committee cannot be
designated under Subsection (b), selected by a majority
vote of the full board of directors, in which selection
directors who are parties to the proceeding may
participate; or
(d) by the shareholders, by a majority of the votes
entitled to be cast by holders of qualified shares present in
person or by proxy at a meeting.
(3) A majority of the votes entitled to be cast by the
holders of all qualified shares constitutes a quorum for purposes of
action that complies with this section. Shareholders' action that
otherwise complies with this section is not affected by the presence
of holders, or the voting, of shares that are not qualified shares.
(4) Unless authorization is required by the bylaws,
authorization of indemnification and advance of expenses shall be
made in the same manner as the determination that indemnification or
advance of expenses is permissible. However, if the determination
that indemnification or advance of expenses is permissible is made by
special legal counsel, authorization of indemnification and advance
of expenses shall be made by a body entitled under Subsection (2)(c)
to select legal counsel.
Section 16-10a-907, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
Unless a corporation's articles of incorporation provide
otherwise:
(1) an officer of the corporation is entitled to
mandatory indemnification under Section 16-10a-903, and is
entitled to apply for court-ordered indemnification under
Section 16-10a-905, in each case to the same extent as a
director;
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<PAGE>
(2) the corporation may indemnify and advance expenses
to an officer, employee fiduciary, or agent of the corporation
to the same extent as to a director; and
(3) a corporation may also indemnify and advance
expenses to an officer, employee fiduciary, or agent who is not
a director to a greater extent, if not inconsistent with public
policy, and if provided for by its articles of incorporation,
bylaws, general or specific action of its board of directors, or
contract.
Section 16-10a-908, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
A corporation may purchase and maintain liability insurance on
behalf of a person who is or was a director, officer, employee,
fiduciary, or agent of the corporation, or who, while serving as a
director, officer, employee, fiduciary, or agent of the corporation,
is or was serving at the request of the corporation as a director,
officer partner, trustee, employee, fiduciary, or agent of another
foreign or domestic corporation or other person, or of an employee
benefit plan, against liability asserted against or incurred by him
in that capacity or arising from his status as a director, officer,
employee, fiduciary, or agent, whether or not the corporation would
have power to indemnify him against the same liability under Section
16-10a-902, 16-10a-903, or 16-10a-907. Insurance may be procured
from any insurance company designated by the board of directors,
whether the insurance company is formed under the laws of this state
or any other jurisdiction of the United States or elsewhere,
including any insurance company in which the corporation has an
equity or any other interest through stock ownership or otherwise.
Section 16-10a-909, Utah Code Annotated 1953, as amended (Utah
Revised Business Corporation Act) provides as follows:
(1) A provision treating a corporation's indemnification of,
or advance for expenses to, directors that is contained in its
articles of incorporation or bylaws, in a resolution of its
shareholders or board of directors, or in a contract (except an
insurance policy) or otherwise, is valid only if and to the extent
the provision is not inconsistent with this part. If the articles of
incorporation limit indemnification or advance of expenses,
indemnification and advance of expenses are valid only to the extent
not inconsistent with the articles of incorporation.
(2) This part does not limit a corporation's power to pay or
reimburse expenses incurred by a director in connection with the
director's appearance as a witness in a proceeding at a time when the
director has not been made a named defendant or respondent to the
proceeding.
Article IX of the Company's By-Laws provides as follows:
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ARTICLE IX
INDEMNIFICATION
---------------
Section 1. The corporation shall indemnify, subject to the
requirements of Section 3 of this by-law, any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or
was a director, officer or employee of the corporation, or is or was
serving at the request of the corporation as a director, officer or
employee of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful. The
corporation shall grant indemnity even though such threatened,
pending or completed action or suit is by or in the right of the
corporation, however in such event the indemnification shall be
limited to expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of
the case and, in respect of any claim, issue or matter as to which
such person shall have been adjudged in any such action or suit to be
liable for negligence or misconduct in the performance of his duty to
the corporation, shall not be made without court approval.
Section 2. To the extent that any person described in Section 1 of
this by-law has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in Section 1 of this
by-law, or in the defense of any claim, issue or matter therein, the
corporation shall indemnify him against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 3. Any indemnification under Section 1 of this by-law
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that the
director, officer or employee has met the applicable standard of
conduct set forth in Section 1 of this by-law. Such determination
shall be made by the Board of Directors by a majority vote of a
quorum of the directors, or by the shareholders.
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Section 4. The corporation shall pay in advance of the final
disposition of a civil or criminal action, suit or proceeding
expenses incurred by a director, officer or employee in defending
such action, suit or proceeding upon receipt of an undertaking by or
on behalf of the director, officer or employee to repay such amount
unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation as authorized in this by-law.
Section 5. The indemnification provided by this by-law shall not
limit the corporation from providing any other indemnification
permitted by law nor shall it be deemed exclusive of any other rights
to which each of those indemnified may be entitled under any by-law,
agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer or
employee and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 6. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer
or employee of the corporation, or is or was serving at the request
of the corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not
the corporation would have the power to indemnify him against such
liability under the provisions of this by-law.
The Company has not amended its Articles of Incorporation or its
By-Laws to include a provision eliminating or limiting the personal
liability of its directors as provided by Section 16-10-49.1, Utah Code
Annotated 1953, as set forth above.
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Item 16. EXHIBITS.
Exhibit
Number Description
- -----------------------------------
4.1.1 Shelf Registration Agreements between Company and Stanley D.
Michaelson(1)
4.1.2 Shelf Registration Agreement between Company and David L.
Clarke(1)
4.1.3 Shelf Registration Agreement between Company and Richard A.
Boulay(1)
4.1.4 Shelf Registration Agreement between Company and FCMI Financial
Corporation(1)
4.2.1 Agency Agreement between Company and Dean Witter Reynolds
(Canada) Inc.(2)
4.2.2 Warrant Certificate, including registration rights agreement,
between Company and Dean Witter Reynolds (Canada) Inc.(2)
4.3.1 Subscription Agreements between Company and Pictet et Cie.
Geneva, Switzerland(2)
4.3.2 Subscription Agreement between Company and Credit Lyonnais,
Paris, France(2)
4.3.3 Subscription Agreement between Company and Barclay's Bank S.A.,
Paris, France(2)
4.3.4 Subscription Agreement between Company and Assicurazioni
Generali SPA, London, England(2)
5.1 Form of Opinion of Jones, Waldo, Holbrook & McDonough as to the
legality of the shares (included as part of Exhibit 5.1)
10.1 Stock Purchase Agreement dated July 18, 1988 between Company and
FCMI Financial Corporation, including Exhibit No. 4, thereto,
relating to "Piggyback" registration rights(2)
10.2 Stock Purchase Agreement, dated June 25, 1987, between Company
and 321264 B.C. Ltd.(1)
10.3 Warrant Purchase Agreement dated June 14, 1991, between 321264
B.C. Ltd., FCMI Financial Corporation and Company, including as
an exhibit thereto a Notice of Reduction of Exercise Price on
Outstanding Warrants of the Company, as of June 14, 1991(3)
10.4 Letter of Intent, dated April 29, 1996, between Sun Valley Gold
Company and the Company(3)
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<PAGE>
24.1 Consent of Foote, Passey, Griffin and Company, Certified Public
Accountants(3)
24.3 Consent of Jones, Waldo, Holbrook & McDonough (included as
part of Exhibit 5.1)
------- ---
25.1 Power of Attorney (in signature page)
- -----------------------------------
(1) Previously filed as an exhibit to the Registration Statement on
Form S-3, Registration Statement No. 33-25752, effective as of January 9,
1989.
(2) Previously filed on January 19, 1990, as an exhibit to Amendment
No. 1, Registration No. 33-31960, to Registration Statement No. 33-25752,
which amendment became effective as of February 6, 1990.
(3) Filed herewith as an exhibit to this Registration Statement.
Item 17. UNDERTAKINGS.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions referred to in Item 15
(other than the insurance policies referred to therein), or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted against the Company by such director, officer or
controlling person in connection with the securities being registered, the
Company 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 Securities Act and will be governed by
the final adjudication of such issue.
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<PAGE>
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To 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; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material changes to such information in the Registration
Statement; provided, however, that the undertakings set forth in
paragraphs (i) and (ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Company pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities 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 being registered which remain unsold at
the termination of the offering.
Page 27
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SIGNATURES
----------
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing this Registration Statement and has duly
caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
GOLD STANDARD, INC.
Date: May 10, 1996 By /s/ Scott L. Smith
----------------------------------
Scott L. Smith, President
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated. Each person whose signature to this
Registration Statement appears below hereby reappoints Scott L. Smith as
his attorney-in-fact to sign and file on his behalf individually and in
the capacity stated below any and all amendments and post-effective
amendments to this Registration Statement, which amendment or amendments
may make such changes and additions as such attorney-in-fact may deem
necessary or appropriate.
Date: May 10, 1996 By /s/ Scott L. Smith
-----------------------------------
Scott L. Smith, President,
Treasurer, Principal Executive
Officer, Principal Financial
Officer, Principal Accounting
Officer
Date: , 1996 By
----------- -----------------------------------
David L. Clarke, Director
Date: May 10, 1996 By /s/ Charles W. Shannon
-----------------------------------
Charles W. Shannon, Director
Page 28
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- -----------------------------------
4.1.1 Shelf Registration Agreements between Company and Stanley D.
Michaelson(1)
4.1.2 Shelf Registration Agreement between Company and David L.
Clarke(1)
4.1.3 Shelf Registration Agreement between Company and Richard A.
Boulay(1)
4.1.4 Shelf Registration Agreement between Company and FCMI Financial
Corporation(1)
4.2.1 Agency Agreement between Company and Dean Witter Reynolds
(Canada) Inc.(2)
4.2.2 Warrant Certificate, including registration rights agreement,
between Company and Dean Witter Reynolds (Canada) Inc.(2)
4.3.1 Subscription Agreements between Company and Pictet et Cie.
Geneva, Switzerland(2)
4.3.2 Subscription Agreement between Company and Credit Lyonnais,
Paris, France(2)
4.3.3 Subscription Agreement between Company and Barclay's Bank S.A.,
Paris, France(2)
4.3.4 Subscription Agreement between Company and Assicurazioni
Generali SPA, London, England(2)
5.1 Form of Opinion of Jones, Waldo, Holbrook & McDonough as to the
legality of the shares(3)
10.1 Stock Purchase Agreement dated July 18, 1988 between Company and
FCMI Financial Corporation, including Exhibit No. 4, thereto,
relating to "Piggyback" registration rights(2)
10.2 Stock Purchase Agreement, dated June 25, 1987, between Company
and 321264 B.C. Ltd.(1)
10.3 Warrant Purchase Agreement dated June 14, 1991, between 321264
B.C. Ltd., FCMI Financial Corporation and Company, including as
an exhibit thereto a Notice of Reduction of Exercise Price on
Outstanding Warrants of the Company, as of June 14, 1991(3)
Page 29
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<PAGE>
10.4 Letter of Intent, dated April 29, 1996, between Sun Valley Gold
Company and the Company(3)
24.1 Consent of Foote, Passey, Griffin and Company, Certified Public
Accountants(3)
24.3 Consent of Jones, Waldo, Holbrook & McDonough(3) (included as
part of Exhibit 5.1)
------- ---
25.1 Power of Attorney (in signature page)
- -----------------------------------
(1) Previously filed as an exhibit to the Registration Statement on
Form S-3, Registration Statement No. 33-25752, effective as of January 9,
1989.
(2) Previously filed on January 19, 1990, as an exhibit to Amendment
No. 1, Registration No. 33-31960, to Registration Statement No. 33-25752,
which amendment became effective as of February 6, 1990.
(3) Filed herewith as an exhibit to this Registration Statement.
Exhibit 10.4
------- ----
SUN VALLEY GOLD COMPANY
Investment Advisors
Letter of Intent
Regarding the Purchase
of an Equity Interest
in Gold Standard Inc.
AGREEMENT made this 29th day of April 1996, by and between Gold
Standard Inc. ("GSTD") and Sun Valley Gold Company ("SVGC").
GSTD is a company located at 712 Kearns Building, Salt Lake City,
Utah. GSTD desires to sell equity interest to SVGC.
SVGC is an investment advisor located at 620 Sun Valley Road,
Ketchum, Idaho. SVGC desires to purchase an equity interest in GSTD.
GSTD and SVGC agree that SVGC will purchase three million (3,000,000)
units of GSTD at US$1.00 per unit. Each unit will consist of one common
share and one whole common share purchase warrant. Each whole warrant is
exerciseable [sic] at any time up to three years from the closing date of
the transaction and entitles the holder to subscribe for one additional
common share at an exercise price of US$1.50 per share.
GSTD and SVGC agree to negotiate in good faith and are prepared to
close the transaction at the earliest possible date. GSTD and SVGC agree
that the closing date of the transaction will be the date that shares and
warrants are delivered to SVGC in acceptable form and that money changes
hands. GSTD and SVGC agree that GSTD will be entitled to 20% of the funds
paid by SVGC on the closing date and 80% of the funds will be deposited
into an escrow account, pending receipt by SVGC of free-trading unlegended
common shares. GSTD agrees to make all necessary regulatory filings and
both parties agree to act in good faith in order to provide SVGC with
free-trading unlegended common shares at the earliest possible date.
If SVGC has not received free-trading unlegended common shares by
July 31, 1996, SVGC may, at its option, issue a written notice to GSTD
(facsimile transmission acceptable), that if free-trading unlegended
common shares are not received by August 30, 1996, SVGC will return to
GSTD 80% of the units it received on the closing date, less 10% of such
units, and SVGC will be entitled to receive the funds deposited into the
escrow account plus interest.
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GSTD and SVGC agree that SVGC reserves the right to appoint one
director to the board of GSTD and reserves the right to require that any
additional appointees, in excess of the three board members that are
appointed by SVGC and the fourth board member that may be appointed by
SVGC, shall be mutually agreed upon.
IN WITNESS WHEREOF, the parties have signed this Letter of Intent on
the date first written above.
GOLD STANDARD INC. SUN VALLEY GOLD COMPANY
By: /s/ Scott L. Smith By: /s/ Peter F. Palmedo
--------------------------- ----------------------------
Scott L. Smith, President Peter F. Palmedo, President
620 Sun Valley Road - Post Office Box 2759 - Sun Valley, Idaho 83353
(208) 726-2327 - Fax: (208) 726-2469
Suite 405-The Landing-375 Water Street-Vancouver, B.C.-Canada V6B 5C6
(604) 689-1765 - Fax: (604) 689-1448
Exhibit 24.1
------- ----
FOOTE, PASSEY, GRIFFIN and COMPANY
Certified Public Accountants
310 South Main St., Suite 140
Salt Lake City, Utah 84101
Phone: (801) 364-9300
Fax (801) 364-9301
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our Firm under the caption "Experts" in the
Registration Statement of Gold Standard, Inc. on Form S-3, dated May 10,
1996.
/s/ Foote, Passey, Griffin and Company
Salt Lake City, Utah
May 10, 1996
Exhibit 24.2
------- ----
FOOTE, PASSEY, GRIFFIN and COMPANY
Certified Public Accountants
310 South Main St., Suite 140
Salt Lake City, Utah 84101
Phone: (801) 364-9300
Fax (801) 364-9301
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Gold Standard, Inc. on Form S-3, dated May 10, 1996 of our Report dated
January 18, 1996, on our examinations of the consolidated financial
statements and the financial statement schedules of Gold Standard, Inc. as
of October 31, 1995 and for the year then ended, which report is included in
the registrant's Annual Report on Form 10-K.
/s/ Foote, Passey, Griffin and Company
Salt Lake City, Utah
May 10, 1996
Exhibit 24.3
------- ----
This exhibit is included within, and is delivered as part of,
Exhibit 5.1.
- ------- ---
Exhibit 5.1
------- ---
JONES, WALDO, HOLBROOK & McDONOUGH
Post Office Box 45444 (84145-0044)
1500 First Interstate Plaza
170 South Main Street
Salt Lake City, Utah 84101
May 10, 1996
Gold Standard, Inc.
712 Kearns Building
Salt Lake City, Utah 84101
Re: SEC Form S-3 Registration Statement
Gentlemen:
We have examined the Registration Statement on Form S-3 (the
"Registration Statement") as it is proposed to be filed by Gold
Standard, Inc. (the "Company") with the Securities and Exchange
Commission (the "SEC") on or around May 10, 1996. The Registration
Statement will register with the SEC up to 7,680,000 shares of the
Company's common stock (the "Shares") for public trading under the
Securities Act of 1993, as amended. In preparing this opinion, we have
examined the Registration Statement, the Company's Articles of
Incorporation, and the Company's Bylaws.
Subject to the above qualifications and assumptions, it is our
opinion that, when the Shares are sold in accordance with the
Registration Statement (assuming compliance with the terms of warrants
pertaining to any of the Shares), the Shares will be legally issued,
fully paid, and non-assessable. We hereby consent to the inclusion of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
JONES, WALDO, HOLBROOK & McDONOUGH
/s/ Jones, Waldo, Holbrook & McDonough
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