As filed with the Securities and Exchange Commission on May 13, 1997.
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
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 box
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. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum
Title of each class of Amount to be Proposed maximum price per unit aggregate price of securities Amount of
securities to be registered registered of securities to be registered(1) to be registered(1) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 100,000 $9.00 $900,000 $272.73
====================================================================================================================================
</TABLE>
(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
May 8, 1997.
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 Prospectus Summary;
Factors and Ratio of Earnings to The Company; Risk Factors
Fixed Charges
4. Use of Proceeds *
5. Determination of Offering Price Cover Page; Plan of Distribution
6. Dilution *
7. Selling Security Holders Registering Stockholder
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Incorporation of Certain
Registered Documents by Reference
10. Interest of Named Experts and Experts; Legal Matters
Counsel
11. Material Changes *
12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
13. Disclosure of Commission Disclosure of Commission Position on
Position on Indemnification for Indemnification for Securities Act
Securities Act Liabilities 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 MAY 13, 1997
100,000 Shares
GOLDEN CYCLE GOLD CORPORATION
Common Stock
(No Par Value)
This Prospectus relates to up to 100,000 shares (the "Shares") of Common
Stock, no par value (the "Common Stock"), of Golden Cycle Gold Corporation (the
"Company" or "GCGC") which are owned by Midas Fund, Inc. (the "Registering
Stockholder"). See "Registering Stockholder." The Company will not receive any
of the proceeds from the sale of the Shares.
The Shares may be offered by the Registering Stockholder, or by pledgees,
donees, transferees or other successors in interest of the Registering
Stockholder, 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 Stockholder"
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 Stockholder has agreed to indemnify the
Company, and the Company has agreed to indemnify the Registering Stockholder,
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."
<PAGE>
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 May 9, 1997 was $9.125.
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 ____________, 1997
<PAGE>
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, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997;
(c) The Company's Proxy Statement dated April 30, 1997, filed pursuant to
Section 14 of the Exchange Act;
(d) 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
- 3 -
<PAGE>
(e) 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, 1996.
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.
- 4 -
<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 seeking to
participate in gold and copper mining activities in the Republic of the
Philippines. In November 1996, the Company incorporated Golden Cycle
Philippines, Inc. ("GCPI") as a wholly-owned subsidiary under the laws of the
Philippines and in January 1997 GCPI entered into an agreement with Benguet
Corporation ("Benguet"), a Philippine mining company, providing for the joint
participation by GCPI and Benguet 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 proposed activities of
GCPI in the Philippines.
The Offering
Number of Shares Registered by
the Registering Stockholder 100,000
Shares Outstanding Prior to
the Sale of any Shares
Registered Pursuant Hereto 1,870,050
Shares Outstanding After
the Sale of Shares Registered
Pursuant Hereto, Assuming Sale
of All Shares Being Registered 1,870,050
- 5 -
<PAGE>
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 is seeking 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.
- 6 -
<PAGE>
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 December 31, 1996, the Joint Venture had $149,300,000 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
- 7 -
<PAGE>
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. In 1992, the Company contracted to sell these water rights to
the City of Cripple Creek pursuant to a purchase agreement (the "Water Purchase
Agreement"). The Water Purchase Agreement provided for the sale by the Company
of up to 1,097 cubic feet per second (approximately 794 acre feet) with a
minimum price of $312,500 based upon a price for the first 125 acre feet
transferred at $2,500 per acre foot. The City also agreed to buy all additional
acre feet which could be transferred at $1,500 per acre foot. The sale was
subject to approval by the local Water Court and other contingencies.
In December 1996, the sale of the first 125 acre feet of water for the
minimum price of $312,500 was completed. Approximately 75% of the purchase price
was paid by the City of Cripple Creek through delivery of a promissory note
bearing interest at the rate of 8%, with interest and principal payable in
annual installments, calculated on the basis of a 15 year term, through 2001,
and with the balance of the principal payable in December 2001. The sale of all
or a portion of the remaining acre feet subject to the agreement will be
completed if and when the Water Court approves such transfer.
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: During 1996 Company formed a wholly owned Philippine
subsidiary, Golden Cycle Philippines, Inc. ("GCPI"), for the purpose of
exploring gold and gold/copper deposits in the Republic of the Philippines. This
subsidiary has entered into an exploration and operating agreement (the "BGA
Agreement") with Benguet Corporation ("Benguet") covering mineral property
acquisition, exploration, development, permitting and mining in the eastern
Mindanao gold belt in the Philippines. The cost of activities undertaken under
the BGA Agreement will be shared by GCPI and Benguet on a 50-50 basis, with all
interests acquired to be owned equally. GCPI, as stipulated in the BGA
Agreement, will purchase and operate all interests acquired for the account of
- 8 -
<PAGE>
the BGA Agreement. GCPI is in the process of negotiating for the acquisition of
high potential mineral properties in the areas of interest, subject to the
approval of the Boards of Directors of Benguet and the Company. Although Benguet
and GCPI have identified certain properties, including properties owned by
Benguet, which they believe are appropriate for inclusion within the BGA
Agreement, there is no assurance that such properties, or any other properties
which GCPI or Benguet believe are appropriate for inclusion within the BGA
Agreement, will be available on acceptable terms.
GCPI is also conducting negotiations with other parties for mineral
property acquisition in other portions of the Philippines for its own account,
subject to approval of the Company's Board of Directors.
There is no assurance that any properties or interests acquired pursuant to
the BGA Agreement, or which GCPI acquires for its own account, will contain
mineral deposits which can be economically exploited, or that permits for mining
such deposits can be secured.
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 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 ($149,327,000 as of December 31, 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
- 9 -
<PAGE>
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 recorded net income of $1,930,000 for the year ended
December 31, 1996. However, prior to 1996, the Joint Venture incurred
substantial losses during each year of operation, including net losses of
$3,654,000 for the year ended December 31, 1995 and $9,350,000 for the year
ended December 31, 1994. 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, 1996) the existence of more
than 3,000,000 troy ounces of proven and provable reserves of near-surface,
low-grade gold ore based on the existence of 111,077,000 short tons of gold ore
with an average grade of 0.0274 contained ounces per ton, which will be
subjected to an average processing recovery rate estimated by Pikes Peak of
64.5%. In addition, the Joint Venture has estimated the existence of 89,647 tons
of mineralized deposits (based on drilling and the types of surface and
underground supply), with an average grade of 0.0197 contained ounces per ton.
The Joint Venture is unable to estimate at this time the processing recovery
rate for these mineral deposits. "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
- 10 -
<PAGE>
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.
"Mineralized material" or "deposit" is a mineralized body which has been
delineated by appropriate drilling and/or underground sampling to support a
sufficient tonnage and average grade of metal(s). Under SEC standards, such a
deposit does not qualify as a reserve until a comprehensive evaluation, based
upon unit cost, grade, recoveries and other factors, concludes economic
feasibility. 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, 1996 the Joint Venture had posted
a bond of approximately $20,870,000 with the Colorado Mined Land Reclamation
Board to secure reclamation of mining disturbances
- 11 -
<PAGE>
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. Risks Related to Philippine Activities. The Company is focusing
significant management efforts on seeking to engage in mining activities in the
Republic of the Philippines. To date, the Company has formed a wholly owned
subsidiary, GCPI, under the laws of the Philippines, and GCPI has entered into
the BGA Agreement with Benguet which contemplates that the parties will jointly
acquire, explore, develop and operate mining properties in the eastern Mindanao
region of the Philippines. To date, no properties have been acquired under the
BGA Agreement. GCPI is also seeking to acquire mining properties or interests
for its own account in other parts of the Philippines. See "The Company - Other
Company Activities." Although certain of the Company's officers and consultants
have prior experience with other entities in the exploration, development and
operation of mining properties in the Republic of the Philippines, the Company
has never before engaged in such activities in that country. Moreover, the
Company, since its inception in 1972, has never served as manager of any mining
project in the United States or any foreign country. Consequently, the Company
will, in connection with its activities in the Philippines, be subject to the
risks and uncertainties inherent in any new business enterprise, and may also be
subject to certain risks, including but not limited to currency risks, of doing
business in foreign countries. Furthermore, the Company may be required to
allocate a significant portion of its existing working capital to fund its
activities in the Philippines. If opportunities to economically expand
Philippine operations beyond acquisition and initial exploration are available,
additional working capital not currently on hand may also be needed. There is no
assurance that the Company will be able to obtain such additional capital, if
required. Furthermore, it is unlikely that any mining activities undertaken by
GCPI in the Philippines would generate positive cash flow and/or profit for
several years.
- 12 -
<PAGE>
8. Effect of Sales of Shares by Registering Stockholder and Affiliate on
Market Price of the Common Stock. In addition to the Shares being registered
hereby, the Company has previously registered for public resale 150,000 shares
of Common Stock owned by the Registering Stockholder and 20,000 shares owned by
an affiliate of the Registering Stockholder (collectively, the "Previously
Registered Shares"), which shares were sold to the holders by the Company in May
1996. The Registering Stockholder and the affiliate also own an additional
86,000 shares of Common Stock, which shares were purchased by the holders in the
open market. The total number of shares owned by the Registering Stockholder and
the affiliate (i.e, 356,000) represent an aggregate of approximately 19.0% 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 11,200 shares per month
during the four months ended April 30, 1997. Consequently, sales of substantial
amounts of the Shares and/or the Previously Registered Shares pursuant to this
registration or otherwise could adversely affect the market price of the Common
Stock.
REGISTERING STOCKHOLDER
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 April 30, 1997 (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).
<TABLE>
<CAPTION>
Percentage Percentage
of of
Number of Shares Outstanding Number of Number of Shares Outstanding
Beneficially Owned Shares Before Shares Beneficially Owned Shares After
Name Before Offering Offering Offered Hereby After Offering Offering
- ---- --------------- -------- -------------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Midas Fund, 285,500 15.3% 100,000 185,500(1) 9.9%
Inc.
</TABLE>
- ----------
(1) Assumes no sale by the Registering Stockholder of any Previously Registered
Shares, and does not include 70,500 shares owned by Bull & Bear Gold
Investors, Ltd., an affiliate of the Registering Stockholder.
- 13 -
<PAGE>
PLAN OF DISTRIBUTION
The Shares are being registered in order to facilitate their sale from time
to time by the Registering Stockholder and/or by pledgees, donees, transferees
or other successors in interest of the Registered Stockholder (collectively
"Transferees") should the Registering Stockholder and/or any of its Transferees
determine to make such sale. The Company is unable to predict whether or when
the Registering Stockholder and/or any of its Transferees will determine to
proceed with sales of the Shares, as such determination will be made by the
Registering Stockholder and/or any of its Transferees. The sale of the Shares by
the Registering Stockholder and/or any of its Transferees may be effected 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. The Registering Stockholder and/or any of its
Transferees 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 Stockholder, any of
its Transferees and/or the purchasers of Shares for whom such broker-dealers may
act as agent or to whom they sell as principal (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
The Registering Stockholder and/or any of its Transferees 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 Stockholder 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 Stockholder have agreed to indemnify each
other against certain civil liabilities, including liabilities under the
Securities Act.
- 14 -
<PAGE>
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, 1996 and 1995, and for each of the years in the three-year period ended
December 31, 1996, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, 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 Stockholder 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.
- 15 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Registration fee........................................ $ ______
Accounting fees and expenses............................ 1,000
Legal fees and expenses................................. 12,500
Miscellaneous........................................... ______
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
II-1
<PAGE>
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*
II-2
<PAGE>
(B) Excerpts from By-Laws*
(C) Stock Purchase Agreement between the Registrant and Midas Fund,
Inc. dated December 2, 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,
II-3
<PAGE>
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
II-4
<PAGE>
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.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it 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 May 12, 1997.
GOLDEN CYCLE GOLD CORPORATION
By /s/ Birl W. Worley, Jr.
------------------------
Birl W. Worley, Jr.
President and Chief
Executive Officer
II-6
<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 May 12, 1997
- ------------------------- Officer and Director
Birl W. Worley, Jr. (Principal Executive Officer)
/s/ R. Herbert Hampton Vice President-Finance May 12, 1997
- ------------------------- (Principal Financial and
R. Herbert Hampton Accounting Officer)
/s/ Melvin L. Cooper Director May 12, 1997
- -------------------------
Melvin L. Cooper
/s/ Rex H. Hampton Director May 12, 1997
- -------------------------
Rex H. Hampton
/s/ John A. Love Director May 12, 1997
- -------------------------
John A. Love
/s/ Frank M. Orrell Director May 12, 1997
- -------------------------
Frank M. Orrell
/s/ Alan P. Ploesser Director May 12, 1997
- -------------------------
Alan P. Ploesser
II-7
<PAGE>
EXHIBIT INDEX
Item No. Description of Item Exhibit No.
- -------- ------------------- -----------
(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 Registant 1
and Midas Fund, Inc. dated December 2, 1996**
(5) Opinion of Zimet, Haines, Friedman & Kaplan** 2
(8) Not Applicable
(12) Not Applicable
(15) Not Applicable
(16) Not Applicable
(23) (A) Consent of KPMG Peat Marwick LLP** 3
(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.
Exhibit 1
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, 100,000 shares of Common
Stock, no par value ("Common Stock"), of the Company (the "Shares") at a
purchase price of $10.00 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
$1,000,000 (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.
<PAGE>
(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"), the Company's Quarterly Reports on Form 10- Q for the first three
quarters of 1996 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.
<PAGE>
(f) No Material Adverse Changes. Since the date of filing with the
Commission of the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 (the "September Form 10-Q", 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. Except for the exercise of options to purchase 5,000
shares of Common Stock subsequent to September 30, 1996, the capitalization of
the Company is as set forth in the 1995 Form 10-K and the September Form 10-Q,
and except as set forth herein and in said reports, 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
<PAGE>
(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
<PAGE>
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
<PAGE>
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 until
the second anniversary of the date hereof (or until such earlier time as all the
Shares have been publicly sold); provided, however, that, subject to the
provisions of Section 4(c)(iii)(E), upon the prior written request of Purchaser,
such registration statement shall be kept effective until the third anniversary
of the date hereof (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.
<PAGE>
The 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 third 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, (D) fees and expenses
of counsel and accountants for the Purchaser and (E) any costs, fees and
expenses relating to keeping effective the registration statement on which
the Shares are registered after the second anniversary of the date hereof,
which costs, fees and expenses shall be the sole responsibility of
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,
<PAGE>
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
<PAGE>
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,
<PAGE>
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: December 2, 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
-----------------------------
Exhibit 2
May 12, 1997
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 100,000 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
Exhibit 3
Consent of Independent Auditors
The Board of Directors
of 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 March 14, 1997,
relating to the consolidated balance sheets of Golden Cycle Gold Corporation as
of December 31, 1996 and 1995, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1996, which report appears in the December
31, 1996 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.
KPMG Peat Marwick LLP
Denver, Colorado
May 12, 1997
