As filed with the Securities and Exchange Commission on September 12, 1996.
Registration No. 333-____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GOLDEN CYCLE GOLD CORPORATION
(Exact name of registrant as specified in its charter)
Colorado
84-0630963
(State or other jurisdiction of incorporation (I.R.S. Employer
Identification No.)
or organization)
2340 Robinson Street, Suite 209
Colorado Springs, Colorado 80904
(719) 471-9013
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Birl W. Worley, Jr.
Golden Cycle Gold Corporation
2340 Robinson Street, Suite 209
Colorado Springs, Colorado 80904
(719) 471-9013
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
David M. Englander, Esq.
Zimet, Haines, Friedman & Kaplan
460 Park Avenue
New York, New York 10022
(212) 486-1700
Approximate date of commencement of proposed sale to the public: From time
to time after the date on which this registration statement becomes effective.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
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, other than securities offered only in connection with dividend or
interest 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
block and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following block and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
________________________________________________________________________
Title of each Amount to be Proposed maximum Proposed maximum
Amount of
class of registered price per unit of
aggregate price registration fee
securities to securities to be of
securities to
be registered registered(1) be
registered(1)
____________ ________ _______________ _______________
____________
Common Stock, 170,000 $9.00 $1,530,000
$528
no par value
________________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the highest and lowest sale
prices of the Common Stock as quoted on the Pacific Stock Exchange on September
5, 1996.
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.
<PAGE>
GOLDEN CYCLE GOLD CORPORATION
Cross Reference Sheet
Item Number and Caption
Heading in Prospectus
_____________________________________________ ______________________
1. Forepart of the Registration Statement and Outside *
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of *
Prospectus
3. Summary Information, Risk Factors and Ratio of Prospectus Summary;
Earnings to Fixed Charges The Company; Risk Factors
4. Use of Proceeds *
5. Determination of Offering Price Cover Page; Plan of
Distribution
6. Dilution *
7. Selling Security Holders Registering
Stockholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Incorporation
of Certain Documents by Reference
10. Interest of Named Experts and Counsel Experts; Legal
Matters
11. Material Changes *
12. Incorporation of Certain Information by Reference Incorporation
of Certain Documents by Reference
13. Disclosure of Commission Position on Disclosure of Commission
Indemnification for Securities Act Liabilities Position on
Indemnification
for Securities Act Liabilities
* Not applicable or item caption is sufficiently descriptive to locate
required information in Prospectus.
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement, of which this Prospectus is a part, relating to these
securities has been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted prior to the time
the Registration Statement becomes effective. This Prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED SEPTEMBER 12, 1996
170,000 Shares
GOLDEN CYCLE GOLD CORPORATION
Common Stock
(No Par Value)
This Prospectus relates to up to 170,000 shares (the "Shares") of Common
Stock, no par value (the "Common Stock"), of Golden Cycle Gold Corporation (the
"Company"
or "GCGC"). The Shares may be offered for sale by certain stockholders of the
Company (the "Registering Stockholders"). See "Registering Stockholders." The
Company will not receive any of the proceeds from the sale of the Shares.
The Shares may be offered by the Registering Stockholders from time to time
in transactions (which may include block transactions) on the Pacific Stock
Exchange, in the over-the-counter market, in negotiated transactions, through
the writing of options on Shares, or a combination of such methods of sale, at
fixed prices which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market
prices, or at negotiated prices. See "Registering Stockholders" and "Plan of
Distribution."
The Company has agreed to bear all out-of-pocket expenses (other than
selling discounts and commissions) in connection with the registration of all
of the Shares
which may be offered by this Registration Statement, estimated to be
approximately $15,000. The Registering Stockholders have agreed to indemnify
the Company, and
the Company has agreed to indemnify the Registering Stockholders, against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").
The Securities Which May Be Offered Hereby Are Subject To Certain Risks
Which Should Be Carefully Considered By Potential Investors. See "Risk
Factors."
The Common Stock is listed on the Pacific Stock Exchange under the symbol
GCC. The last reported sale price per share of the Common Stock on the
Exchange on September 5, 1996 was $9.00.
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.
The date of this Prospectus is____________, 1996.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates or an offer
to sell or a solicitation of an offer to buy to any person in any jurisdiction
where such offer would be unlawful.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy and information statements
and other information with the Commission. Such reports, proxy and information
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, as well as the following regional
offices: Seven World Trade Center, 13th Floor, New York, New York 10048; and
500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
The Company has filed a registration statement on Form S-3 with the
Commission under the Securities Act, with respect to the securities covered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement (of which this Prospectus is a part), certain portions
of which have been omitted pursuant to the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement. The Registration Statement may be inspected without
charge at the principal office of the Commission in Washington, D.C. and copies
of all or any part of it may be obtained from the Commission upon payment of
prescribed fees.
DOCUMENTS INCORPORATED BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
following documents filed with the Commission:
(a) The Company's Annual Report on Form 10-K for the Fiscal Year
ended December 31, 1995, as amended by Form 10-K/A filed on August 27, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the Fiscal
Quarter ended March 31, 1996;
(c) The Company's Quarterly Report on Form 10-Q for the Fiscal
Quarter ended June 30, 1996;
(d) The Company's Proxy Statement dated April 15, 1996, filed
pursuant to Section 14 of the Exchange Act;
(e) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated January 13, 1987, filed
pursuant to Section 12(g) of the Exchange Act; and
(f) All other reports and other documents filed by the Company
pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 1995.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
which may be offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be
incorporated by reference in 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, including any
beneficial owner of any of the Common Stock, to whom a copy of this Prospectus
has been delivered, upon the written or oral request of such person, a copy of
any and all
of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, except that exhibits to such documents shall not
be provided unless they are specifically incorporated by reference into such
documents. Requests for such copies of any document should be directed to R.
Herbert Hampton, Secretary, Golden Cycle Gold Corporation, 2340 Robinson
Street, Suite 209, Colorado Springs, Colorado 80904, telephone number (719)
471-9013.
<PAGE>
PROSPECTUS SUMMARY
The Company
Golden Cycle Gold Corporation (the "Company") was incorporated under the
laws of the State of Colorado in 1972 for the purpose of acquiring and
developing the mining
properties (the "Mining Properties") of The Golden Cycle Corporation located in
the Cripple Creek Mining District of Colorado. The primary business of the
Company consists of its participation in the Cripple Creek and Victor Gold
Mining Company, a joint venture (the "Joint Venture") with Pikes Peak Mining
Company ("Pikes Peak"), a subsidiary of Independence Mining Company, which is a
subsidiary of Minorco (U.S.A.) Inc. Pikes Peak serves as manager of the Joint
Venture. The Joint Venture mining properties consist of owned, leased and
optioned mining claims and other land covering approximately 10,000 acres in
and around the Cripple Creek Mining District
of Teller County, Colorado, including the Ajax, Cresson, Portland,
Independence, Vindicator and Golden Cycle mines. The principal mining
activities of the Joint Venture are currently conducted at the Cresson mine,
with commercial production having commenced there during the first half of
1995. See "The Company-The Joint Venture."
In addition to its Joint Venture activities, the Company is currently
exploring the possibility of engaging in gold and copper mining activities in
the Republic of the Philippines. It has recently entered into a letter of
intent with Benguet Corporation, a Philippine mining company, relating to the
joint participation by that entity and a new subsidiary of the Company in the
exploration, development and production of
mining properties in certain areas of the Philippines. See "The Company-Other
Company Activities" for further information regarding the letter of intent and
the proposed activities in the Philippines.
The Offering
Number of Shares Registered by
the Registering Stockholders 170,000
Shares Outstanding Prior to
the Sale of any Shares
Registered Pursuant Hereto 1,743,050
Shares Outstanding After
the Sale of Shares Registered
Pursuant Hereto, Assuming Sale
of All Shares Being Registered 1,743,050
Pacific Stock Exchange Symbol GCC
Risk Factors
Purchase of the securities offered hereby is speculative and involves a
high degree of risk. See "Risk Factors."
THE COMPANY
The Company was incorporated under the laws of the State of Colorado in
1972 for the purpose of acquiring and developing the Mining Properties. The
primary business of the Company currently consists of its participation in the
Joint Venture with Pikes Peak. The Company acquired its equity interest in the
Joint Venture in 1976 in exchange for the
contribution to the Joint Venture of certain of the Mining Properties. The
Company also owns certain water rights and other mineral and oil and gas
rights, and plans to engage in
mining activities in the Republic of the Philippines.
The Company's principal offices are located at 2340 Robinson Street,
Suite 209, Colorado Springs, Colorado 80904, telephone number (719) 471-9013.
The Joint Venture
The Joint Venture is conducted under the name "Cripple Creek & Victor
Gold Mining Company" and is managed by Pikes Peak. The Joint Venture was
organized in 1976 for the purpose of engaging in land leasing or acquisition,
exploration and development work with respect to the Mining Properties and in
the acquisition, construction, installation and operation of mining, milling
and beneficiation facilities on the Mining Properties for the recovery and sale
of products containing gold and such other minerals and derivative products as
may be recovered or produced therefrom.
The Joint Venture mining properties consist of owned, leased and optioned
mining claims and other land covering approximately 10,000 acres in and around
the Cripple Creek Mining District of Teller County, Colorado, including the
Ajax, Cresson, Portland, Independence, Vindicator and Golden Cycle mines. The
Joint Venture currently owns approximately 97% of the minable properties in the
historic Cripple Creek Mining District, and substantially all of the claims of
the Joint Venture in the properties are patented. The principal mining
activities of the Joint Venture are currently conducted
at the Cresson mine, with commercial production having commenced there during
the first half of 1995.
The rights and obligations of the parties in the Joint Venture are set
forth in a joint venture agreement, which has been amended and restated
effective January 1, 1991 (and, as further amended effective December 31, 1991,
is referred to herein as the "Joint Venture Agreement"). The Joint Venture
Agreement provides for management of the Joint Venture by Pikes Peak. The
Joint Venture Agreement defines an Initial
Phase that will end when (i) $58 million of Net Proceeds (defined in the Joint
Venture Agreement as generally gross revenues less costs) have been distributed
to the joint
venturers in the proportion of 80% to Pikes Peak and 20% to the Company, and
(ii) the Initial Loans (defined below) have been repaid. After the Initial
Phase, the Joint Venture will distribute metal in kind in the proportions of
67% to Pikes Peak and 33% to the Company. Notwithstanding the foregoing, the
Company will generally be entitled to receive, in each year during the Initial
Phase or until the mining of ore by the Joint Venture ceases due to the
exhaustion of economically recoverable reserves (if that occurs prior to the
end of the Initial Phase), a minimum annual distribution of $250,000
(each, a "Minimum Annual Distribution"). The first three Minimum Annual
Distributions (which were received by January 15, 1993) were not deemed to be a
distribution of Net Proceeds to the Company and were not applied against the
Company's
share of any Net Proceeds. The Minimum Annual Distribution paid in 1994 and
thereafter constitute advances on Net Proceeds and will be recouped against
future distributions of Net Proceeds (if any) allocable to the Company. No
interest
will be charged on any Minimum Annual Distribution received by the Company
which is to be recouped against future distributions.
The Joint Venture Agreement provides that, during the period from January
1, 1991 until the end of the Initial Phase, all funds required for operations
and mine development
by the Joint Venture will be loaned (the "Initial Loans") to the Joint Venture
by either Pikes Peak or, if such loans are available at a lower cost than from
Pikes Peak, financial
institutions. Except for the Minimum Annual Distributions, the Initial Loans
and interest thereon must be repaid prior to distributions of Net Proceeds to
the Joint Venturers. Pikes Peak reported that, as of June 30, 1996, the Joint
Venture had $144,940,000 in Initial Loans payable to Pikes Peak. After the
Initial Phase, the Joint Venturers will contribute funds (if required) in
proportion to their respective distributive shares.
In view of the amount of Initial Loans currently outstanding and the
amount of operating income which can reasonably be expected to be generated by
the Joint Venture
from the mining of existing reserves, management of the Company believes that
it is unlikely that distribution of Net Proceeds to the Company will be made by
the Joint Venture in the foreseeable future in excess of the Minimum Annual
Distributions payable in each year. See "Risk Factors."
Other Company Activities
Water Rights: The Company owns certain water rights located in Fremont
County, Colorado. The Company has contracted to sell these water rights to the
City of Cripple
Creek pursuant to a purchase agreement dated July 10, 1992 (the "Water Purchase
Agreement"). The Water Purchase Agreement provides for the sale by the
Company of up to 1,097 cubic feet per second (approximately 794 acre feet).
The minimum amount payable for the rights is $312,500. The sales price will be
paid as follows: 20% on the date of final approval by the Water Court and the
balance due over a five year period.
The contract contains substantial contingencies, including approval by
the local Water Court, and may or may not finally close. The attorney for the
City of Cripple Creek has recently advised the Company that the City
anticipates concluding the adjudication of the water rights, including review
by the Water Court, during the second half of 1996.
Nevertheless, the Company cannot predict with any certainty when the sale of
the water rights will occur, if ever.
Oil and Gas Properties: The Company owns oil and gas rights with respect
to approximately 7,300 acres of land in the Penrose Area of Fremont County,
Colorado. There currently is no drilling activity in similar geographic
formations nearby and the properties have no carrying value on the Company's
financial statement.
Philippine Activities: The Company is currently exploring the possibility
of engaging in gold and copper mining activities in the Republic of the
Philippines. The Company
has entered into a letter of intent dated August 30, 1996 with Benguet
Corporation, a Philippine mining company ("Benguet"), relating to the joint
participation of Benguet and a new subsidiary of the Company (to be organized
under the laws of the Philippines) in the exploration, development and
production of mining properties in certain areas of the
Philippines. The letter of intent contemplates the execution of a definitive
operating agreement between Benguet and the new subsidiary, pursuant to which
each of the parties is to have a 50% undivided share in all mining interests
acquired under the agreement, and each party would bear 50% of the costs
related to all activities undertaken pursuant to the agreement. The letter of
intent provides that if an operating agreement is not entered into within 60
days after the date of the letter, either the Company or Benguet is entitled to
terminate the arrangement. There is no assurance that the parties will enter
into an operating agreement.
It is currently anticipated that the parties will, if the operating
agreement is entered into, seek to lease or manage mining properties owned by
unaffiliated third parties, and/or
acquire minority interests in properties owned and operated by third parties.
Although Benguet and the Company have identified certain properties which they
believe would be
appropriate for exploration and development pursuant to the operating
agreement, there is no assurance that such properties will be available on
acceptable terms. In addition, although the Company anticipates allocating up
to $200,000 of its existing working capital to its Philippine subsidiary for
activities to be undertaken through the end of
1996 pursuant to the operating agreement, it is possible that the Company will
have to furnish substantial additional capital in order to participate in some
or all of the activities to be conducted by the parties under the agreement.
There is no assurance that the Company will have on hand, or be able to obtain,
such additional capital if and when
required to be furnished. Furthermore, there is no assurance that any
properties in which the parties acquire interests or otherwise seek to
commercially exploit pursuant to the
operating agreement can be successfully developed, and it is likely that, even
if such properties are successfully developed, revenues from the sale of ore
derived from such
properties will not be generated for several years.
RISK FACTORS
The Shares being offered hereby involve a high degree of risk and are,
therefor, speculative in nature and should not be purchased by anyone who
cannot afford a loss of his or her entire investment. Prospective investors,
prior to purchasing any of the Shares, should carefully consider the risks and
speculative factors inherent in and affecting the business of the Company,
including those set forth below.
This Prospectus and certain of the information incorporated herein
contain forward looking statements. Actual results could differ materially
from those projected in
the forward looking statements as a result of the risk factors set forth below
and elsewhere in this Prospectus, including but not limited to fluctuations in
the market price of gold, uncertainties regarding the ability of the Joint
Venture to operate profitably and uncertainties regarding the Company's
proposed activities in the Republic of the Philippines.
1. Receipt of Net Proceeds from Joint Venture Unlikely in Foreseeable
Future. Based on the amount of the Initial Loans payable by the Joint Venture
to Pikes Peak ($144,940,000 as of June 30, 1996) which must be repaid prior to
the distribution of any Net Proceeds to the Company and the amount of income
which the Joint Venture can reasonably be expected to generate over the next
several years, management of the
Company believes that, absent a significant and sustained increase in the price
of gold and an improvement in the efficiency of the operations of the Joint
Venture, it is unlikely that the Company will receive more than the Minimum
Annual Distributions from the Joint Venture for the foreseeable future based on
the current terms of the Joint Venture Agreement. See "The Company - The
Joint Venture."
2. History of Losses by the Joint Venture; Profitability Dependent on
Price of Gold. The Joint Venture has incurred substantial losses during each
year of operation, including
net losses of $3,654,000 for the year ended December 31, 1995, $9,350,000 for
the year ended December 31, 1994 and $8,538,000 for the year ended December 31,
1993. For the six months ended June 30, 1996, the Joint Venture incurred a net
loss of $63,000. There is no assurance that the Joint Venture will be able to
achieve profitability in any subsequent period or to sustain profitability for
an extended period. The ability of the Joint Venture to operate on a
profitable basis depends, to a large degree, on the market price for gold. The
market price of gold is volatile, subject to speculative movement and
is affected by numerous factors beyond the control of the Company, including
international, economic and political conditions, levels of supply and demand,
the inventory levels maintained by gold producers and others and, to a lesser
degree, inventory carrying costs (primarily interest charges) and international
exchange rates. Whether gold prices will maintain a level that will enable the
Joint Venture to operate
profitability on a continuing basis cannot be assured, and until a broader
historical record of commercial production at the Joint Venture's facilities
has been established, the
minimum price of gold necessary to sustain profitable operations over the long
term cannot be readily determined. Furthermore, even should the Joint Venture
achieve
profitability for a sustained period, it is unlikely that this would have any
impact on the Company's cash flow for the foreseeable future.
3. Estimates of Reserves and Mineral Resources. Based on drilling
results, the Joint Venture has estimated (as of December 31, 1995) the
existence of more than 2.6 million troy ounces of proven and provable reserves
of near-surface, low-grade gold ore (with an overall rate of recovery estimated
by Pikes Peak at 68.5%) and 1.4 million troy ounces of inferred deposits (which
do not meet the SEC's criteria of proved or probable reserves). "Proven
reserves" are those for which (i) quantity is computed from dimensions revealed
in outcrops, trenches, workings or drill holes, (ii) grade and/or quality are
computed from the results of detailed sampling and (iii) the sites for
inspection, sampling and measurement are spaced so closely and the geologic
character is so well defined that the size, shape, depth and mineral content of
reserves are well established. "Probable reserves" are those for which
quantity, grade and/or quality are computed using information from sites for
inspection, sampling and measurement which are farther apart or otherwise less
adequately spaced than for proven reserves. The ore reserve and mineral
resources figures are estimates and no assurance can be given that a
particular mineral resource will ever qualify as a minable ore reserve, that
any particular level of recovery of gold from ore reserves will in fact be
realized or that ore reserves may be mined and milled on a profitable basis.
4. Risks Inherent in the Mining Industry. The Company is subject to
all of the risks inherent in the mining industry. Exploration for minerals is
highly speculative and involves substantial risks, even when conducted on
properties known to contain significant quantities of mineralization. Most
exploration projects do not result in the discovery of minable deposits of ore.
Furthermore, mining activities are subject to substantial operating hazards,
including weather, environmental conditions, unforeseen technical difficulties,
unusual or unexpected geological formations, equipment
breakdowns or malfunctions and work interruptions. There may also be limited
availability of water, which is essential to milling operations. In addition,
the industry consists of numerous companies, many of which are significantly
larger than the Company and the Joint Venture, which compete in the acquisition
and development of mining properties.
5. Environmental Regulation. The mining and mineral processing
industries are subject to extensive governmental regulations for the protection
of the environment, including regulations relating to air and water quality,
mine reclamation, solid and hazardous waste handling and disposal and the
promotion of occupational safety. Although the Company is not aware of any
circumstances which would cause the Joint Venture or any of the Company's other
properties to be in violation of any environmental regulations, there can be no
assurance that the Joint Venture and the Company will be able to be in
compliance with such regulations in the future. As of December 31, 1995 the
Joint Venture had posted a bond of approximately $18 million with the Colorado
Mined Land Reclamation Board to secure reclamation of mining disturbances
arising from the Joint Venture's mining activities, and will likely be required
to post additional sums to accommodate further mining at the Cresson site.
6. Reliance on Joint Venture Partner. The exploration and
development of the Joint Venture's properties are governed by the terms of the
Joint Venture Agreement, which grants operational responsibility and management
authority in the Joint Venture to Pikes Peak. If Pikes Peak, whose
proportionate share of the Joint Venture's costs is much
larger than the Company's, is not in a position to furnish (or otherwise
chooses not to furnish) any operating funds required by the Joint Venture, it
is unlikely that the Joint Venture would continue in operation.
7. Effect of Sales of Shares by Selling Stockholders on Market Price
of the Common Stock. The Shares represent approximately 9.8% of the total
number of shares of Common Stock outstanding on the date of this Prospectus.
Although the Common Stock is listed on the Pacific Stock Exchange, the trading
volume is limited, averaging approximately 26,000 shares per month during the
first six months of 1996. Consequently, sales of substantial amounts of the
Shares pursuant to this registration or otherwise could adversely affect the
market price of the Common Stock.
REGISTERING STOCKHOLDERS
The following table sets forth the name of each Registering
Stockholder and the number of shares of Common Stock that each Registering
Stockholder (i) beneficially owned as of September 1, 1996 (and the percentage
of all outstanding shares which such Shares represent), (ii) is offering hereby
and (iii) will beneficially own after completion of the offering (and the
percentage of all outstanding shares which such shares represent).
Percentage Number of
Percentage
of Number of Shares
of
Number of Shares Outstanding Shares
Beneficially Outstanding
Beneficially Owned Shares Before Offered Owned After
Shares After
Name Before Offering Offering Hereby
Offering Offering
_____
Midas Fund, Inc. 185,500 10.6% 150,000
35,500 2.0%
Bull & Bear Gold 50,000 2.7% 20,000
30,000 1.7%
Investors, Ltd.
PLAN OF DISTRIBUTION
The Shares are being registered in order to facilitate their sale from
time to time by the Registering Stockholders should the Registering
Stockholders determine to make such sale. The Company is unable to predict
whether or when the Registering Stockholders will determine to proceed with
sales of the Shares, as such determination will be made by the Registering
Stockholders. The sale of the Shares by the Registering Stockholders may be
effected from time to time in transactions (which may include block
transactions) in the over-the-counter market, in negotiated transactions,
through the writing of options on Shares, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices, or at
negotiated prices. The Registering Stockholders may effect such transactions
by selling Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Registering Stockholders and/or the purchasers of Shares for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
The Registering Stockholders and any broker-dealers that act in
connection with the sale of the Shares hereunder might be deemed to be
"underwriters" within the meaning of
Section 2(11) of the Securities Act and any commissions received by them and
any profit on the resale of Shares as principal might be deemed to be
underwriting discounts and
commissions under the Securities Act.
The Company is paying the out-of-pocket expenses of registering the
Shares under the Securities Act (other than any commissions or brokerage fees
incurred by the Registering Stockholders in connection with the sale of the
Shares), estimated at $15,000. The Company has agreed to keep the registration
statement covering the Shares current for a period of 180 days after the
effective date or until such earlier time as all of the Shares registered
hereby have been sold. If the Company is required to update this Prospectus
during such period, the Company may incur additional expenses.
The Company and the Registering Stockholders have agreed to indemnify
each other against certain civil liabilities, including liabilities under the
Securities Act.
Any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under that Rule
rather than pursuant to this Prospectus.
EXPERTS
The financial statements of Golden Cycle Gold Corporation as of December
31, 1995 and 1994, and for each of the years in the three-year period ended
December 31, 1995, have been included (incorporated by reference) herein and in
the registration statement in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, appearing elsewhere
(incorporated by reference) herein, and upon the authority of said firm as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the Shares has been passed upon by Zimet, Haines, Friedman
& Kaplan, 460 Park Avenue, New York, New York 10022.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company and the Registering Stockholders have agreed to indemnify each
other against certain civil liabilities, including liabilities under the
Securities Act. In addition,
The Company's Articles of Incorporation and By-Laws provide for the
indemnification of directors and officers under certain circumstances from
certain liabilities, including
liabilities arising under the Securities Act. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and
is therefore unenforceable.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Registration fee. . . . . . . . . . . . . . . . . $ 528
Accounting fees and expenses. . . . . . 1,500
Legal fees and expenses . . . . . . . . . . 12,500
Miscellaneous. . . . . . . . . . . . . . . . . . 472
_______
Total. . . . . . . . . . . . . . . . . . . . . . . . $15,000
_____________________________
* All of the expenses listed are estimated except for the registration
fee, and all
expenses are payable by the Company.
Item 15. Indemnification of Directors and Officers.
1. Indemnification
a. Colorado Law
Section 3-105.5 of the Colorado Corporation Code grants
corporations organized thereunder the power to indemnify on certain conditions
any individual against
liability incurred in any action or proceeding to which he is a party by reason
of being or having been a director of the corporation. However, a corporation
may not so indemnify an individual in connection with a proceeding in which he
is found to be liable to the corporation or where he is found to have received
an improper benefit. Unless limited by a corporation's articles of
incorporation, a corporation is required to indemnify any of its directors or
officers of the corporation who was wholly successful in defense of any
proceeding to which he was a party, against reasonable expenses, including
attorney fees, incurred by him in connection with the proceeding. A
corporation may indemnify an officer of the corporation to a greater extent if
consistent with law and if provided for in the corporation's articles of
incorporation, by-laws, board or shareholder resolutions, or in a contract.
b. Articles of Incorporation
Article VIII(b) of the Registrant's Articles of
Incorporation provides that each person who is made a party or is threatened to
be made a party or is involved in any action or proceeding by reason of the
fact that he or she is or was a director or officer of the Registrant or is or
was serving at the request of the Registrant as a director or officer of
another entity will be indemnified by the Registrant to the fullest extent
authorized by the Colorado Corporation Code against all liability and expense
(including attorneys' fees) reasonably incurred in connection therewith.
c. By-Laws
The Registrant's By-laws generally provide for indemnification
for any individual in connection with any action or proceeding in which he is
made a party by reason of being or having been a director or officer of the
Registrant or served for another entity in such capacity at the request of the
Registrant. The Registrant may also reimburse any director or officer the
reasonable costs of settlement of any such action or proceeding if such
settlement is in the best interest of the Registrant.
2. Limited Liability
a. Colorado Law
Section 3-105(u) of the Colorado Corporation Code permits a
Colorado corporation to include within its articles of incorporation a
provision eliminating or limiting the personal liability of its directors to
the corporation or its shareholders for monetary damages resulting from certain
breaches of the directors' fiduciary duty of care.
b. Articles of Incorporation
The Registrant's Articles of Incorporation limit the personal
liability of its directors to the fullest extent permitted by Colorado law.
At present the Company does not provide insurance for its directors and
officers against expenses and liabilities in connection with the defense of
actions, suits or proceedings to which they are parties by reason of being or
having been such directors or officers.
Item 16. Exhibits.
(1) Not Applicable
(2) Not Applicable
(4) Instruments defining the
rights of securityholders,
including indentures:
(A) Excerpts from Articles of Incorporation*
(B) Excerpts from By-Laws*
(C) Stock Purchase Agreement between the
Registrant and Midas Fund, Inc. dated
May 10, 1996**
(5) Opinion of Zimet, Haines, Friedman & Kaplan**
(8) Not Applicable
(12) Not Applicable
(15) Not Applicable
(16) Not Applicable
(23) (A) Consent of KPMG Peat Marwick LLP**
(B) Consent of Zimet, Haines, Friedman &
Kaplan (included in the opinion filed as
Exhibit No. 5)
(24) See page II-7
(25) Not Applicable
(26) Not Applicable
(27) Not Applicable
(28) Not Applicable
(99) Not Applicable
* Incorporated by reference to the Exhibits to the
Registrant's Registration Statement on Form 8-A
dated January 13, 1987.
** Filed herewith.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made hereunder, a post-effective amendment to this registration statement: (i)
to include any prospectus
required by section 10(a)(3) of the Securities Act of 1933; (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; (iii) to include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) 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
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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, pursuant to the provisions described in Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by any such director, officer or controlling
person in connection with the securities being registered, the registrant 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 of whether or not such indemnification is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
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
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Colorado Springs in the State of Colorado on
September 10, 1996.
GOLDEN CYCLE GOLD CORPORATION
By /s/ Birl W. Worley, Jr.
Birl W. Worley, Jr.
President and Chief
Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Birl W. Worley, Jr. and R. Herbert Hampton, and
each of them individually, his true and lawful attorney-in-fact and agent with
full powers of substitution and resubstitution, for him and his name, place and
stead, in any and all capacities, to sign any or all amendments to this
registration statement, including post-effective amendments, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intent and purposes as he might or could do in
person, and hereby ratifies and confirms all his said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title
Date
/s/ Birl W. Worley, Jr. President, Chief Executive September
10, 1996
Birl W. Worley Jr. Officer and Director
(Principal Executive Officer)
/s/ R. Herbert Hampton Vice President-Finance September
10, 1996
R. Herbert Hampton (Principal Financial and
Accounting Officer)
/s/ Melvin L. Cooper Director Septem
ber 10, 1996
Melvin L. Cooper
/s/ Rex H. Hampton Director Septem
ber 10, 1996
Rex H. Hampton
/s/ John A. Love Director Septem
ber 10, 1996
John A. Love
/s/ Frank M. Orrell Director Septem
ber 10, 1996
Frank M. Orrell
/s/ Alan P. Ploesser Director Septem
ber 10, 1996
Alan P. Ploesser
<PAGE>
EXHIBIT INDEX
(1) Not Applicable
(2) Not Applicable
(4) Instruments defining the rights of securityholders,
including indentures:
(A) Excerpts from Articles of Incorporation*
(B) Excerpts from By-Laws*
(C) Stock Purchase Agreement between the Registrant and
Midas Fund, Inc. dated May 10, 1996**
(5) Opinion of Zimet, Haines, Friedman & Kaplan**
(8) Not Applicable
(12) Not Applicable
(15) Not Applicable
(16) Not Applicable
(23) (A) Consent of KPMG Peat Marwick LLP**
(B) Consent of Zimet, Haines, Friedman & Kaplan
(included in the opinion filed as Exhibit No. 5)
(24) See page II-7
(25) Not Applicable
(26) Not Applicable
(27) Not Applicable
(28) Not Applicable
(99) Not Applicable
* Incorporated by reference to the Exhibits to the Registrant's
Registration Statement on Form 8-A dated January 13, 1987.
** Filed herewith.
<PAGE>
EXHIBIT 4(C)
Golden Cycle Gold Corporation
2340 Robinson Street
Suite 209
Colorado Springs, Colorado 80904
STOCK PURCHASE AGREEMENT
Midas Fund, Inc.
11 Hanover Square
11th Floor
New York, New York 10005
Gentlemen:
GOLDEN CYCLE GOLD CORPORATION, a Colorado corporation (the "Company"),
upon the terms and subject to the conditions hereinafter set forth, hereby
issues and sells to you (the "Purchaser"), on the date hereof, 170,000 shares
of Common Stock, no par value ("Common Stock"), of the Company (the "Shares")
at a purchase price of $6.00 per share.
1. Purchase and Sale of Shares. Subject to the terms and conditions
hereinafter set forth, the Purchaser hereby purchases from the Company, and the
Company hereby issues and sells to the Purchaser, the Shares for the sum of
$1,020,000 (the "Total Purchase Price"). Simultaneously with the delivery to
the Company by the Purchaser of a copy hereof executed by the Purchaser, the
Purchaser has delivered to the Company a certified or bank cashier's check made
payable to the order of the Company in the full amount of the Total Purchase
Price or has transferred to the Company the full amount of the Total Purchase
Price by telegraphic bank transfer or other means satisfactory to the Company.
Promptly after receipt thereof by the Company, the Company shall deliver to the
Purchaser a certificate or certificates representing the Shares, registered in
the name of the Purchaser or in the name or names of such nominee or nominees
as the Purchaser shall have requested.
2. Representations, Warranties and Covenants of the Company. The
Company hereby represents, warrants and covenants to the Purchaser as follows:
(a) Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado and has all corporate power and authority to own and lease
its properties and to conduct its business as presently conducted. The Company
is duly qualified to transact business as a foreign corporation in each
jurisdiction in the United States in which the conduct of its business as
presently conducted or its ownership or leasing of property makes such
qualification necessary and the failure so to qualify would have a materially
adverse effect on the business or financial condition of the Company.
(b) Authorization and Validity of this Agreement. The execution,
delivery and performance by the Company of this Agreement, including the offer,
issuance, sale and delivery of the Shares, are within the Company's corporate
power, have been duly authorized by all necessary corporate action, do not
require approval of any governmental body, agency or official and do not, and
will not, contravene, or constitute a default under, any applicable law or
regulation, the Certificate of Incorporation or By-Laws of the Company or any
agreement, judgment, injunction, order, decree or instrument binding upon the
Company, or result in the creation or imposition of any material lien, claim or
encumbrance on any asset of the Company. This Agreement constitutes a valid
and binding agreement of the Company, enforceable in accordance with its terms.
(c) Authorization and Issuance of Shares of Common Stock. The Shares
have been duly authorized and, upon the issuance thereof and payment therefor
in the manner provided herein, will be duly authorized, validly issued,
fully-paid and nonassessable. The Shares have been accepted for listing on the
Pacific Stock Exchange, Inc., subject to official notice of issuance.
(d) Consents. No consent, approval, qualification, order or
authorization of, or filing with, any governmental authority is required in
connection with the Company's valid execution, delivery or performance of this
Agreement; or the offer, sale or issuance of the Shares by the Company to the
Purchaser; or the consummation of any other transaction contemplated on the
part of the Company or the Purchaser hereby, except any such consents,
approvals, qualifications, orders, authorizations or filings as shall have been
obtained or made by the Company prior to the date hereof and such post-closing
notices, reports or similar filings required by applicable law in the ordinary
course in connection with the offering and sale of securities.
(e) Securities Filings. The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy and information
statements and other information (the "Securities Filings") with the Securities
and Exchange Commission (the "Commission"). True and correct copies of the
Company's Annual Report on Form 10-K for the calendar year 1995 (the "1995 Form
10-K") and the Company's Definitive Proxy Statement to shareholders dated April
15, 1996 (collectively, the "Delivered Filings") have been delivered to the
Purchaser. Except as amended by subsequent Securities Filings, each Delivered
Filing, including the financial information contained therein, as of its filing
date, was true and correct in all material respects, and did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in the light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing
portion of this sentence does not constitute a representation or warranty that
the Delivered Filings are or were true and correct on any date subsequent to
their respective filing dates.
(f) No Material Adverse Changes. Since the date of filing with the
Commission of the 1995 Form 10-K, there has occurred no event materially
adverse to the Company, its business or prospects.
(g) Litigation. Except as set forth in the Delivered Filings, there
is no litigation or governmental or other proceeding or investigation pending
or, to the knowledge of the Company, threatened in respect of the Company and
the Company is not aware of any claim or fact which, if disclosed to the
public, would have a material adverse effect upon the Company, its business or
prospects.
(h) Capitalization. The capitalization of the Company is as set
forth in the 1995 Form 10-K, and except as set forth in said report, the
Company has issued no capital stock or issued, or entered into any agreement to
issue, convertible securities, warrants, options or other securities or
arrangements obligating the Company to issue any securities.
3. Representations, Warranties and Covenants of the Purchaser.
In order to induce the Company to sell the Shares to the Purchaser, the
Purchaser hereby represents, warrants and covenants to the Company as follows:
(a) Investment Intent. The Purchaser is acquiring the Shares solely
for the account of the Purchaser, for investment purposes only and not with a
view to, or for, subdivision, resale, distribution, or fractionalization
thereof, or for the account, in whole or in part, of others. No other person
has or will have a direct or indirect beneficial interest in the Shares. The
Purchaser is able to bear the substantial economic risk of an investment in the
Shares, including a complete loss thereof, for an indefinite period of time.
The Purchaser has no need for liquidity in this investment and has no reason to
anticipate any change in circumstances, financial or otherwise, or other
particular occasion or event which might cause or require the Purchaser to
attempt to sell or transfer any of the Shares.
(b) Shares Not Registered. The Purchaser understands that the sale
of the Shares to the Purchaser is intended to be exempt from registration under
the Securities Act of 1933, as amended (the "Securities Act"), by virtue of
Section 4(2) of the Securities Act and applicable state securities laws. The
Purchaser will not sell, hypothecate or otherwise transfer any or all of the
Shares other than in accordance with the following provisions:
(i) pursuant to a registration statement under the Securities
Act which has become effective, and a prospectus related thereto which is
current, with respect to the securities to be disposed of, and if required, a
registration statement under applicable state securities laws; or
(ii) pursuant to a specific exemption from registration under the
Securities Act and applicable state securities laws, but only upon the
Purchaser first having delivered to the Company a favorable reasoned written
opinion of counsel for the Purchaser, reasonably satisfactory in form and
substance to the Company, to the effect that the proposed sale or transfer is
exempt from registration under the Securities Act and any applicable state
securities laws.
(c) Restrictions on Transfer. The Purchaser understands that the
Shares are not registered under the Securities Act or applicable state
securities laws and such securities must be held indefinitely, unless the
subsequent disposition thereof is registered under the Securities Act and
applicable state securities laws or an exemption from such registration is
available. Except as provided in Section 4 hereof, the Company has not
undertaken to
register the Shares pursuant to the Securities Act and, except as provided
therein, will have no obligation to effect on behalf of the Purchaser any
registration under the Securities Act or to assist the Purchaser in complying
with any exemption from registration under the Securities Act or any state
securities laws. The Purchaser understands that the exemption from
registration afforded by certain rules and regulations under the Securities Act
depends upon the satisfaction of various conditions and that, if
applicable, such rules and regulations may afford the basis for sales of the
Shares only in limited amounts.
(d) Legend. The Purchaser acknowledges that the certificates representing
the Shares, and any substitutions or replacements thereof, shall bear a legend
in substantially the
following form:
"The Shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, hypothecated or
otherwise transferred or disposed of in the absence of such registration,
unless an exemption from the requirement of such registration is available
under the circumstances at the time obtaining and demonstrated by opinion of
counsel satisfactory to the Company."
(e) Information Provided to Purchaser. The Purchaser further
represents and warrants that in order to make an informed decision in
connection with the purchase of the Shares:
(i) the Purchaser has reviewed the merits and risks of an
investment in the Shares with tax and legal counsel and with an investment
advisor to the extent deemed
advisable by the Purchaser;
(ii) the Purchaser recognizes that an investment in the Shares
involves a number of significant risks, including, without limitation, those
set forth in the Delivered Filings; and the Purchaser, or the Purchaser's
agent or advisor, has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment
in the Shares; and
(iii) the Purchaser, or the Purchaser's agent or advisor, (A) has
been provided with sufficient information with respect to the business of the
Company and has carefully reviewed the same including, without limitation, the
Delivered Filings; (B) has been provided with such additional information with
respect to the Company as the Purchaser or the Purchaser's agent or advisor has
requested; and (C) has had the opportunity to discuss such information with
members of the management of the Company and any questions that the Purchaser
had with respect thereto have been answered to the full satisfaction of the
Purchaser.
(f) No Reliance on Company. The Purchaser is not relying on the
Company with respect to the economic, tax and other considerations to the
Purchaser relating to this investment. With respect to such considerations,
the Purchaser has relied on the
advice of his own qualified advisors to the extent the Purchaser has deemed
appropriate.
(g) Accredited Investor. The Purchaser represents and warrants that
the Purchaser is an "accredited investor" as that term is defined in Rule 501
promulgated under the Securities Act by virtue of being an investment company
registered under the
Investment Company Act of 1940.
(h) No Inconsistent Information. No oral or written representations
have been made or oral or written information furnished to the Purchaser or the
Purchaser's advisors or agents in connection with the sale and purchase of the
Shares which were in any way inconsistent with the information set forth in the
Delivered Filings.
(i) Fiduciary. If the Purchaser is acting in a fiduciary capacity in
purchasing the Shares, the fiduciary represents and warrants that he, she or it
has authority to execute this Agreement on behalf of the person or persons for
whom the Shares are being
purchased, that such persons have been given the Delivered Filings and this
Agreement and have confirmed to the fiduciary that they have reviewed the same,
and that the representations and warranties contained in this Agreement (and in
any other written statement or document delivered to the Company) shall be
deemed to have been made on behalf of such person or persons.
(j) Reliance by Company on Representations. All information which the
Purchaser has furnished and is furnishing to the Company, including, without
limitation, the representation as to the Purchaser's status as an "Accredited
Investor" within the meaning of Rule 501 promulgated under the Securities Act
and all other representations contained in this Agreement, are correct and
complete as of the date of this Agreement, and if there should be any material
change in such information prior to the Purchaser's receipt of the Shares, the
Purchaser will immediately furnish such revised or corrected information to the
Company. The Purchaser is executing and delivering this Agreement with full
awareness of its implications and in recognition of the fact that the Company
is relying on the Purchaser's representations and warranties in selling the
Shares to the Purchaser, and that the Company and other investors may be
damaged if such representations or warranties are incorrect.
(k) Due Incorporation, etc. (i) The Purchaser is a corporation duly
authorized and empowered to execute, deliver and perform this Agreement and to
purchase the Shares, and has duly taken all requisite action in connection
therewith; (ii) the person signing this Agreement on behalf of the Purchaser
has been duly authorized by the Purchaser to do so; (iii) this Agreement is a
valid and binding legal obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms; and (iv) the execution,
delivery and performance of this Agreement and the purchase of the Shares do
not and will not conflict with, violate or constitute a default under any
applicable law or regulation, the
Purchaser's certificate of incorporation, by-laws, or any agreement or
arrangement to which the Purchaser is a party or by which it may be bound, and
the purchase of the Shares is consistent with, and permitted by, the investment
criteria and/or guidelines for
investments to be made by the Purchaser.
(l) Additional Information. The Purchaser agrees, within five days
after receipt of a request from the Company, to provide such information and to
execute and deliver such documents as may reasonably be necessary to comply
with any and all laws and ordinances to which the Company is subject.
4. Registration of Shares.
(a) Obligation to Register. The Company agrees to use all reasonable efforts
to register the Shares with the Commission for resale by the Purchaser under
the Securities Act within six months following the date hereof and to keep the
registration statement on which the Shares are registered effective for a
period of 180 days after its initial effective date (or until such earlier time
as all the Shares have been publicly sold). Notwithstanding
the foregoing, the Company may delay filing a registration statement, and may
withhold efforts to cause the registration statement to become effective, if
the Company determines in good faith that such registration might (1) interfere
with or affect the negotiation or completion of any transaction that is being
contemplated by the Company (whether or not a final decision has been made to
undertake such transaction) at the time the right to delay is exercised, or (2)
involve initial or continuing disclosure obligations that might not be in the
best interest of the Company's shareholders. If, after a registration
statement with respect to the Shares becomes effective, the Company advises the
Purchaser that the Company considers it appropriate for the registration
statement to be amended, the Purchaser shall suspend any further sales of the
Shares until the Company advises the Purchaser that the registration statement
has been amended. The 180-day time period referred to herein during which the
registration statement must be kept current after its effective date shall be
extended for an additional number of business days equal to the number of
business days during which the rights to sell shares was suspended pursuant to
the preceding sentence, but in no event will the Company be required to update
the registration statement after the second anniversary of the date hereof.
(b) Cooperation by Purchaser. The Purchaser shall cooperate with the Company
in connection with the registration of the Shares by furnishing such
information, executing such documents, entering into any undertakings and
taking such actions relating to such registration as may be required by the
Commission or reasonably requested by the Company.
(c) Covenants of Company. The Company covenants and agrees as follows:
(i) The Company will take all necessary action which may be
required in registering or qualifying the Shares for offering and sale under
the securities or blue
sky laws of such states as are requested by the Purchaser; provided that the
Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(ii) The Company shall furnish such number of prospectuses as
shall reasonably be requested by the Purchaser.
(iii) The Company shall pay all costs, fees and expenses in
connection with any registration statement filed pursuant to this Section 4,
including, without limitation, the Company's legal and accounting fees,
printing expenses, and blue sky fees and expenses;
provided, however, that the Company shall not pay for any of the following
costs, fees or expenses: (A) underwriting discounts and commissions allocable
to the sale of Shares, (B) state transfer taxes, (C) brokerage commissions
incurred by the Purchaser in connection with the sale of the Shares and (D)
fees and expenses of counsel and accountants for the Purchaser.
(d) Indemnification.
(i) The Company shall indemnify the Purchaser and each person,
if any, who controls the Purchaser within the meaning of Section 15 of the
Securities Act or
Section 20(a) of the Exchange Act, against all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investigating,
preparing, or defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, arising
out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
(A) in any registration statement in which such Shares are included or (B) in
any application or other document or written communication executed by the
Company or based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Shares under the securities laws thereof
or filed with the Commission or any securities
exchange; or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission is made in reliance upon and in
conformity with written information furnished to the Company, with respect to
the Purchaser, by or on behalf of the Purchaser expressly for use in any
registration statement, or any amendment or supplement thereto, or in any
application, as the case may be.
(ii) The Purchaser shall indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Securities Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of the Purchaser
for specific inclusion in such registration
statement, to the same extent as the foregoing indemnity from the Company to
the Purchaser, but only with respect to statements or omissions if any, made in
any such
registration statement or any amendment or supplement thereof or in any
application, in reliance upon, and in conformity with, written information
furnished to the Company with respect to the Purchaser expressly for use in
such registration statement or any amendment or supplement thereto or in any
application, as the case may be.
(iii) Promptly upon receipt by an indemnified party of notice of
the commencement of any action involving a claim referred to above, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party, give written notice to the latter of the commencement of
such action. In case any such action
is brought against an indemnified party, the indemnifying party shall be
entitled to participate in and to assume the defense of such action, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, except that if, in the opinion of counsel to either the
indemnified or indemnifying party, there shall exist a conflict of interest or
other valid reason why the retention of separate counsel for the
indemnified party shall be required for the proper protection of the
indemnified party, the indemnified party may retain such separate counsel at
the expense of the indemnifying party. The indemnified party and any party
cooperating in the defense of such claim shall not settle or compromise any
such claim or admit liability without the express consent of the indemnifying
party.
(e) Reporting Requirements. The Company covenants that it will continue to
file the reports required to be filed by it under the Exchange Act for so long
as the Purchaser continues to own any Shares; and it will use reasonable
efforts to take such further action as the Purchaser may reasonably request to
the extent required to enable the Purchaser to sell Shares without registration
under the Securities Act within the limitation of the
exemptions provided by Rule 144 and Rule 144A under the Securities Act, as such
Rules may be amended or any similar rules or regulations hereafter adopted.
Upon the request of any holder, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
5. No Brokers. The Company and the Purchaser each represents and
warrants to the other that it has not employed or dealt with any broker other
than Orrell & Company in connection with any transactions contemplated by this
Agreement and shall save each other harmless from any and all claims at any
time hereafter made for brokers' or finders' fees or commissions, which claim
or claims arise out of any agreement alleged to have been made by any of them,
except that the Company shall pay the fees or commissions, if any, of Orrell &
Company.
6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ALL RESPECTS IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE FULLY PERFORMED
ENTIRELY WITHIN SUCH STATE.
7. Assignability. This Agreement, and the rights and obligations
hereunder, are not transferable or assignable by the Purchaser without the
prior written consent of the Company.
8. Modification. Neither this Agreement nor any of its provisions
shall be waived, modified, discharged or terminated except by an instrument in
writing signed by the party against whom any such waiver, modification,
discharge or termination is sought.
9 Notices. Any notice, demand or other communication which any
party to this Agreement may be required, or may elect, to give to anyone
interested hereunder shall be validly given if personally delivered or sent by
registered or certified mail, return receipt requested, addressed to the
recipient as follows: if to the Company, to the address set forth at the head
of this Agreement, and if to the Purchaser, to the address shown under the name
of the Purchaser at the head of this Agreement, or to such other address as
such party may designate by written notice to the other in accordance with the
provisions of this Section.
10. Entire Agreement. This Agreement contains the entire
understanding and agreement of the parties with respect to the subject matter
hereof and supersedes all negotiations, representations and other agreements
made by and between such parties with respect hereto.
11. Survival. All representations, warranties, agreements and
covenants contained herein shall survive the execution of this Agreement, the
purchase of the Shares contemplated hereby and any disposition thereof,
notwithstanding any investigation made at any time by any of the parties hereto.
If the Purchaser is in agreement with the foregoing, please sign the
accompanying counterpart of this Agreement and return the same to the Company.
Very truly yours,
GOLDEN CYCLE GOLD CORPORATION
By:/s/ R. Herbert Hampton
Name: R. Herbert Hampton
Title: Secretary/Treasurer
and Vice President
Dated: May 10, 1996
<PAGE>
The Purchaser hereby acknowledges agreement with the foregoing.
MIDAS FUND, INC.
By:/s/ Thomas B. Winmill
Name: Thomas B. Winmill
Title: Co-President
Tax Identification No.
41-1536110
<PAGE>
EXHIBIT 5
ZIMET, HAINES, FRIEDMAN & KAPLAN
460 Park Avenue
New York, New York 10022
September 10, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Golden Cycle Gold Corporation
Gentlemen:
We have acted as counsel to Golden Cycle Gold Corporation, a
Colorado corporation (the "Company"), in connection with the preparation and
filing of a Registration Statement on Form S-3 (the "Registration Statement")
relating to the registration under the Securities Act of 1933, as amended, and
the Rules and Regulations thereunder, of 170,000 shares (the "Shares") of
Common Stock of the Company, no par value ("Common Stock"), which are currently
held by certain shareholders of the Company.
In connection with this opinion, we have examined originals, or
copies certified to our satisfaction, of the Certificate of Incorporation of
the Company, as amended, the
By-Laws of the Company, as amended, the minutes and other records of the
proceedings of the Board of Directors and of the stockholders of the Company,
and such other documents, corporate and public records, agreements, and
certificates of officers of the
Company and of public and other officials, and we have considered such
questions of law, as we have deemed necessary as a basis for the opinions
hereinafter expressed. In such examination we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals and the conformity to original documents of all documents submitted
to us as certified or photostatic copies.
Based on and subject to the foregoing, we hereby advise you that,
in our opinion, the Shares have been duly authorized and are validly issued,
fully-paid and nonassessable.
We hereby consent to the use and filing of this opinion in
connection with the Registration Statement and to the reference to our firm
under the caption "Legal Matters" in the Registration Statement and in the
related Prospectus.
Very truly yours,
ZIMET, HAINES, FRIEDMAN
& KAPLAN
By /s/ David M. Englander
David M. Englander
Partner
<PAGE>
Consent of Independent Auditors
The Board of Directors
Golden Cycle Gold Corporation
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Golden Cycle Gold Corporation of our report dated January 24, 1996,
relating to the balance sheets of Golden Cycle Gold Corporation as of December
31, 1995 and 1994, and the related statements of operations, shareholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1995, which report appears in the December 31, 1995 annual report
on Form 10-K of Golden Cycle Gold Corporation.
We also consent to the reference to our firm under the heading "experts" in the
prospectus.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Denver, Colorado
September 6, 1996
