UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934
_________
VIKING EXPLORATION, INC.
(Name of the Small Business Issuer in its charter)
Nevada
86-0885924
(State of incorporation) (Employer Identification No.)
45 La Rose Avenue, Suite #1608, Weston, Ontario, Canada M9P 1A8
(Address of principal offices) (Zip Code)
Issuer's telephone number, (416) 244-6373
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Name of Each Exchange On
Title of Each Class Which Securities to be
Registered
Common Stock Over-the-Counter
Par Value $0.00001
PART I
Item 1. Description of Business
General
Viking Exploration, Inc. (the "Company"), a Nevada corporation was
incorporated in the name of Alpha Diamond Corporation on January 23, 1997.
The Company changed the name to African Resources, Inc. on June 18, 1998 and
later to Viking Exploration, Inc. on April 09, 1999.
The Company is a natural resource, development and production Company
which has acquired the mineral and mining rights with a 50% working interest
to 30 kilometers of River Property (the "Property") on the Konkoure River in
the province of Telimele, Republic of Guinea. The city of Telimele is located
within the province of Telimele approximately 240 kilometers northeast of the
Capital City of Conakry. This area supports several active diamond recovery
operations and numerous diamonds have been recovered from the Region since
1980.
In 1999, the Company retained an experienced geological team within the
Republic of Guinea to conduct preliminary investigation and prepare an
analytical report concerning the Property. Based on the positive prospects
for the property cited in the preliminary investigation, the Company has
commenced a detailed survey to determine the location of diamonds on the
property.
The Property
The Company acquired sole working interest for mineral and mining rights
from its joint venture partner, Gold River of Africa, Guinea, a Company
incorporated in the Republic of Guinea, who has secured a permit to 30
kilometers of diamond bearing property (Property) on the Konkoure River in the
province of Telimele, Republic of Guinea. These mineral rights are detailed in
File No. A99/1348 of the Ministry of Mining.
Telimele is located in the Bankou Region 240 kilometers northeast of the
capital, Conakry. With a population of 800,000, Telimele is an urban centre
which is serviced by highway from the capital.
The property follows the river, is curved shaped and extends 30
kilometers.
The river is approximately 250 meters above sea level. Its topography ranges
from flat to rolling. Some areas on the land are forested. The weather
conditions (rainy season) allow for mining to occur for 9-10 months per year.
The property can be reached from dirt roads which extend south from the city
of Telimele. No electrical, water or sewer utilities exist on or adjacent to
the Property.
The climate is typical of low-lying tropical forest, humid and hot, with
daytime temperatures averaging 35 degrees Celsius. The annual rainfall is
about 700 millimeters, to 900 millimeters, with a dry season of about 8
months occurring from October to May.
The local topography ranges in elevation from 200-300 meters above sea
level, and is characterized by a patchwork of original tropical forests and
cleared areas currently used for agriculture. The Region is considered to be
very remote.
The discovery of alluvial diamonds in the mid-1970's by Russian
geologists resulted in many of the creeks and river areas having been mined
in an unorganized manner. These areas are dotted with diggings partially
filled with water, mounds of gravel tailings and primitive access roads.
Most of the Region remains virtually untouched by present mining standards.
Diamond Mining in Republic of Guinea
Diamonds were discovered in Guinea around 1955 although it is believed
that local people had seen diamond crystals much earlier. Since 1955
approximately 100,000 carats were recovered in Guinea mainly from
the Bankoro Region in the province of Kerouane (the Aredor mines
are located here). Diamond mining activity began in the late 1980's. The
majority of activity has only been initiated since 1995 with the introduction
of more sophisticated mining equipment and mining methods. Changes in
government mining laws and regulations have been primarily responsible for
increased activity.
Guinea is known for its high quality diamonds both in size and quantity.
Estimates indicate the percentage of gem quality diamonds is approximately
80%. This year the average sale price for rough diamonds is over $400 per
carat. The Ministry of Mines has reported that the country has in excess of
over 30 million carats. Given the fact that only about 100,000 carats have
been recovered until now, there is tremendous potential in this industry.
Major Historical Diamonds Found in Guinea since 1980
Uncut Price
Locality Carats Sold
Aredor 70.1 $ 2,765.000
Aredor 255 $10,036,000
Aredor 284 $ 8,105,000
Aredor 181 $ 8,618,177
Nearly all historical diamond recovery has originated from surface or
shallow alluvial deposits . Most diamonds continue to be recovered from
alluvial gravel deposits.
Diamond Mining and Exploration in the Province of Telimele
In the mid-1980's, alluvial diamonds were found in the Bankou Region in
the Telimele province by American geologist, Dr. Hegarty. Dr. Hegarty
determined that the Region has a presence of Kimberlite - A geological
formation that is frequently a source of diamond deposits. At that time the
area was and remains largely inaccessible due to the absence of roads and
airstrips and the heavy vegetation typical of jungle areas within the
Region. As a result, only small scale local mining activity has
occurred.
Geological Investigations of the Property
Preliminary exploratory work has been done around the Property by the
Company. The exploration conducted in the spring of 1999 by a team of
Guinean geologists and engineers utilized standard geological evaluation
techniques to determine the diamond bearing characteristics of the property as
well as other precious metal characteristics including gold. Samples were taken
from 10 pits of the Konkoure River concession. At present, Ledux and Company
laboratories, located in Teaneck, New Jersey, are evaluating and analyzing
the samples. Reports should be available in August of 1999.
A second exploration was initiated in June of 1999 and will continue
until the beginning of August, 1999. The purpose is to assess the location
of indicator rocks for diamond and gold presence. The resulting reports
will give the Company the specific information needed to begin mining
operations in the fourth quarter of 1999. The geological team is also
responsible for fixing the perimeter of the Property described in the permit
issued by the Minister of Mines.
Marketing
The Company has conducted negotiations with several established diamond
buyers and has received expressions of interest and letters of intent for the
purchase of all, or a substantial portion of the Company's projected
production.
Regulation
There have been considerable recent changes by the Guinean government in
an attempt to attract more foreign capital to the mining sector. Prior to
1995, the government required 49% ownership of all mining Companies. In
addition, the government exercised full decision-making power over all the
structure and activities of the mining Companies. Since 1995 the government
now requires 15% of materials recovered and has given the mining Companies
full decision-making power to structure and manage their respective
Companies.
Competition
The Company will be competing with other diamond production companies in
the production of diamonds. Many of these companies have significantly
greater financial resources than the Company. Competitors with greater
financial resources may employ more sophisticated, efficient, and less costly
techniques of recovering diamonds, or may be more successful than the Company
with respect to acquiring interests in additional properties. New
discoveries of diamond reserves in Guinea or elsewhere in the world may
dramatically increase the supply of diamonds and depress diamond prices.
The diamonds the Company expects to recover will mostly be of industrial grade
and will be purchased for industrial functional purposes which improve the
abrasive qualities of certain cutting, boring and polishing tools. New
technologies may be developed which replace the use of diamonds in such tools
and may reduce the demand for industrial diamonds.
The sale of any diamonds recovered by the Company will be affected by
fluctuating market conditions which are beyond the control of the Company.
One competitor, De Beers Consolidated Mining, controls the production and
marketing of more than 70% of the world's diamonds and is able independently
to influence the diamond markets. Because diamonds are a commodity product,
the Company has limited opportunities to improve the prices it receives for
its diamonds by employing marketing techniques. There can be no assurance
that the Company's revenues will not be adversely affected by competitive
factors.
Office Facilities
The Company presently maintains its executive offices at 45 La Rose
Avenue, Suite #1608, Weston, Ontario, Canada. M9P 1A8. Mr. Brodzik is
donating office space for the Company without charge. The Company does not
plan to increase its office space at present time.
The Company leases in Guinea through the Guinean Corporation, Gold River
of Africa, at South Cornishe, Conakry at a cost of $700 per month. The
office space is approximately 1500 square feet.
The Company also leases a 6 bedroom villa located in Conakry at a cost
of $2,000 per month. The villa is approximately 3500 square feet.
Employees
The Company has no employees at present.
Seasonality
The Company's operations are expected to be materially affected by
seasonality. The diamond exploration and production activities of the Company
will be slowed down and then stopped by the rainy season which occurs from
June until October.
Item 2. Management's Discussion and Analysis or Plan of Operation
Most of the diamond mining activity in the Bankou Region involves
placer and river dredging operations. Diamonds are found on the surface or
in shallow gravel and many individual prospectors search for diamonds by hand
picking or panning surface materials. Current recovery operations in the
area are small scale by small groups or individuals engaged in more
recreational type mining.
The Company's plan for mining and recovery of diamonds entails surface
mining the Property's diamond bearing gravel. Ground surface vegetation and
overburden will be removed and diamond bearing gravel will be transported to
a processing site. During the first phase of the Company's mining and
recovery activity, the gravel will be run over a series of screens and jigs to
concentrate the "heavies" which contain diamonds. This product will then be
further concentrated manually until nothing but an assortment of diamonds
remains. The Company plans to implement a washing plant consisting of a
laser sorter and a heavy liquid specific gravity system along with additional
material handling equipment during phases one and two of the Company's mining
and recovery activities. The quality of recoverable diamonds on the Property
ranges from industrial to near gem and gem quality.
The Company's mining plans will require $800,000 to $1,000,000 of
capital to begin its operations in the fourth quarter of 1999. At this time,
a complete geological evaluation by an independent international firm will be
conducted to determine projections for amount of material to be moved, number
of carat recovered and revenues generated. The Company will need to raise
the capital required.
Item 3. Properties
The Company presently maintains its executive offices at 45 La Rose Ave.,
Suite 1608, Weston, Ontario, Canada M9P 1A8, pursuant to Mr. Brodzik donating
space at no charge. The space covers 750 square feet. The Company does not
plan to increase its office space at the present time.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the amount and nature of beneficial
ownership of each of the executive officers and directors of the Company and
each person known to be a beneficial owner of more than five percent of the
issued and outstanding shares of the Company as of June 30, 1999. The table
sets forth the information based on 17,219,600 common shares issued and
outstanding as of June 30, 1999.
Amount and
Name of Nature of Percent
Beneficial Beneficial of
Title of Class Owner Ownership Class
Common Rick Brodzick 1,611,000 9.35%
45 La Rose Ave
Suite 1608
Weston Ontario
Canada M9P 1A8
Common A. Joseph Tafoya 500,000 2.90%
6009 S Garland Way
Littleton, CO 80213
Common All Directors and 2,111,000 12.26%
Officers as a Group
Common Transworld International 2,800,000 16.26%
Buyers and Traders, Inc.
221 Ashland Place
Suite BE
Brooklyn, NY 11217-1122
None of the foregoing have any right to acquire other or additional
shares of the Company. There is no existing arrangement which may
result in a change in control of the Company. However, if an active
business is found with which to enter into some form of corporate
reorganization, a change in control of the Company will be
contemplated as part of such reorganization.
Item 5. Directors and Executive Officers of Registrant.
The following table lists the names and ages of the executive officers,
directors and key consultants of the Company. The directors will continue to
serve until the next annual shareholders meeting, scheduled for
December, 1999, or until their successors are elected and qualified.
All officers serve at the discretion of the Board of Directors. No family
relationships exist between or among any of the directors of the Company.
Name Age Position Held Since
Rick Brodzik 44 President, Director January 1997
45 La Rose Ave
Suite 1608
Weston Ontario
Canada M9P 1A8
A. Joseph Tafoya 59 Secretary and Treasurer, January 1998
6009 S. Garland Way Director
Littleton, CO 80213
Rick Brodzik: President. Mr. Brodzik has fifteen years of international
business experience in marketing, sales administration, and distribution. To
date he has been primarily responsible for raising venture capital,
negotiating the Guinea mining concessions, and positioning the Company for
public listing.
A. Joseph Tafoya: Vice President and a Director of AFRI. Mr. Tafoya has
over fifteen years of experience in the mining industry. He has served as
President of several companies and has been involved with acquisitions,
leases, financing, evaluating, and managing.
None of the officers or directors of the Company are officers,
directors or affiliates of any reporting companies. There are no
family relationships between any of the directors or executive
officers of the Company or any person beneficially owning or
controlling more than 5% of its outstanding common shares.
To the knowledge of the Company, no present or former
director, executive officer or person nominated to become a director
or executive of the Company has ever:
1) Filed a bankruptcy petition by or against any business
of which such person was a general partner or executive officer wither at
the time of the bankruptcy or with two years prior to that time;
2) Had any conviction in a criminal proceeding or being
subject to a pending criminal proceeding (excluding traffic violations and
other minor offenses);
3) Been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; and
4) Been found by a court of competent jurisdiction (in a
civil action), the Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed suspended or vacated.
Item 6. Executive Compensation
The Company currently is not now paying, and has not
during the past three years, paid any compensation to officers,
directors or executives. It does not have any pension,
profit-sharing, stock bonus, or other benefit plans. Such plans may
be adopted in the future at the discretion of the Board of
Directors
Item 7. Certain Relationships and Related Transactions
With one exception, the only transactions between the Company and any
officers, directors or holders of more than five percent of any class of
outstanding securities of the issuer involve the issuance of common shares as
compensation for services.
On September 8, 1997 the Board of Directors approved the issuance of 600,000
common shares to the President and Chairman of the Board, and an additional
200,000 shares to the Secretary of the corporation who was also a director.
The shares were valued at $.07, the Board's evaluation of the value of the
services received in exchange therefor.
In November of 1997, and May 1998, the Board authorized the issuance of an
additional 1,503,904 common shares to officers and directors in exchange for
services valued by the Board at $105,005. As a result of these transactions,
the following present and former officers and directors own common shares of
the Company as follows:
Larry O'Brien 333,333 common shares
Steve Radford (former director and officer) 150,000 common shares
Rick Brodzik 1,611,000 common shares
2,094,333 common shares
In fiscal 1999 the Board of Directors authorized the issuance of 2,050,000
common shares in exchange for investor relation services valued at $135,004.
A. Joseph Tafoya, who is presently a director and officer of the Company, is
the owner of 500,000 common shares issued in January of 1998 in connection
with the Company's acquisition of a Joint Venture Agreement with Gold Rivers
of Africa, Inc. in which Mr. Tafoya owned an equity interest. He became an
officer and director of the Company after the completion of this
transaction.
Item 8. Description of Registrant's Securities to be
Common Stock
The Company is authorized to issue 100,000,000 shares of common stock,
par value of $0.00001, of which 17,219,600 shares are issued and outstanding
as of June 30, 1999. Holders of Common Stock are entitled to dividends when,
as and if declared by the Board of Directors out of funds available therefor,
subject to any priority as to dividends for Preferred Stock that may be
outstanding. Holders of Common Stock are entitled to
cast one vote for each share held at all stockholder meetings for all
purposes, including the election of directors. The holders of more than 50%
of the Common Stock issued and outstanding and entitled to vote, present in
person or by proxy, constitute a quorum at all meetings of stockholders. The
vote of the holders of a majority of Common Stock present at such a meeting
will decide any question brought before such meeting, except for certain
actions such as amendments to the Company's Certificate of Incorporation,
mergers or dissolutions which require the vote of the holders of a majority of
the outstanding Common Stock. Upon liquidation or dissolution, the holder of
each outstanding share of Common Stock will be entitled to share equally in
the assets of the Company legally available for distribution to such
stockholder after payment of all liabilities and after distributions to
preferred stockholders legally entitled to such distributions. Holders of
Common Stock do not have any preemptive, subscription or redemption rights.
They are entitled to cumulative voting rights under the California
Corporations Code. Under cumulative voting, minority shareholders may have
the right to vote one or more members onto the Company's Board of Directors.
All outstanding shares of Common Stock are fully paid and nonassessable. The
holders of the Common Stock do not have any registration rights with respect
to the stock.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of Preferred Stock
with such rights, preferences and privileges as are determined by the
Company's Board of Directors. No Preferred Stock is outstanding.
Transfer Agent and Registrar
The transfer agent for the Company's Shares is American Securities
Transfer in Trust, Inc. (AST) located at 12039 W. Alameda Parkway, Suite Z-2,
Lakewood, Colorado 80228, Telephone (303) 986-5400.
Reports to Stockholders
The Company will furnish to holders of record its common stock annual
reports which will contain financial statements examined and reported upon by
an independent certified public accountant, and quarterly reports with
unaudited financial statements.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Related Stockholders Matters.
The Company is organized under the laws of Nevada, and its common stock
has been traded on the OTC Bulletin Board since August 1997 under the
symbols of VIKE and VIKEE. No dividends on the Company's common stock
have been declared or paid since the Company's inception and none
are anticipated in the near future, since retained earnings in the foreseeable
future are expected to be reinvested by the Company into the expansion
of its marketing programs and the development of new products.
The Company had approximately 800 listed shareholders as of June 1, 1999
Calendar Quarter Ending High (1) Low (1)
September 30, 1997 0 0
December 31, 1997 5 1/8 3/4
March 31, 1998 .91 1/2
June 30, 1998 .34 7/32
September 30, 1998 .61 7/32
December 31, 1998 .36 5/32
March 31, 1999 .22 .16
June 30, 1999 .23 .035
The above chart reflects the trading range during each quarter.
Item 2. Legal Proceedings
At the present time the only legal proceeding in which the Company, its
officers or directors are named as parties defendant is Intercorp
International, Ltd., Plaintiff v. P. Campbell and Does 1 through 100,
Defendants: Patrick Campbell, Cross-complainant v. Steven Sanford, Intercorp
International, Ltd. and Does 101 through 200, Cross-defendants, Case No. LC
046472 in the Superior Court for the State of California, County of Los
Angeles, Northwest District - Van Nuys., in which Viking and its president
Rick Brodzik are named as John Doe defendants. The complaint in this matter
charges fraud, breach of contract, complaints for accounting and constructive
trust, claims for injunctive relief and charges of violations of RICO. There
is a pending motion for dismissal based on lack of jurisdiction which is
scheduled to be heard on August 9, 1999. Jay S. Bulmash, the Company's
litigation counsel in this matter is of the opinion that this case is utterly
groundless, that it has been brought by Steven Sanford, a well-known
"greenmailer" who has previously been sanctioned by California Courts for
bringing groundless complaints, and that if the Motion to Dismiss is not
granted, Viking will strenuously defend the case. Counsel expects the case to
be dismissed and that substantial sanctions will be imposed upon Mr. Sanford.
The Company places the likelihood that Plaintiff will prevail against it or
Mr. Brodzik in this matter at nil.
Item 3. Changes in and Disagreements with Accountants.
The Company has not had any disagreements with its accountants regarding
accounting and financial disclosure. The Company has utilized Alex N. Chaplan
& Associates, independent Certified Public Accountants, since 1996 to conduct
the audits of the entity. The Company intends to use Alex N. Chaplan &
Associates, Certified Public Accountants, as its independent accounting firm
in the foreseeable future.
Item 4. Recent Sales of Unregistered Securities
Since March of 1997 the Company has engaged in the following sales of
unregistered securities.
a. In March of 1997 110,000 common shares were issued to founders in at a
subscription price of two cents ($.02) per share in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act of 1933 (the
"Act"). No underwriter was involved in the transactions and no commissions
or selling commissions were paid.
b. In April, 1997 3,611 common shares were issued at $20 per share in
reliance on the exemption from registration provided by Section 4(2) of the
Act. Commissions and offering expenses of $28,972 were paid in connection
with the transaction.
c. During 1997, 571,429 shares were issued to officers and directors in
exchange for services in reliance on the exemption from registration provided
by Section 4(2) of the Act
d. In September, 1997 5,500,000 common shares were issued in exchange for
mining contract rights valued by the Board of Directors at a sum of $.07 for
each share issued. The shares were issued in reliance on Section 4(2) of the
Act.
e. In November of 1997 173,000 common shares were issued in exchange for
legal services valued by the Board of Directors at a sum equal to $.07 for
each share issued in reliance on Section 4(2) of the Act.
f. In December 1997 and May 1998 1,461,942 common shares were issued in
private placements at offering prices ranging from $.12 to $.75, without the
payment of commissions or selling concessions, in reliance on the exemption
from registration provided by Section 4(2) of the Act.
g. One Million common shares were relinquished without consideration in
connection with an unsuccessful financing arrangement in which the shares were
improperly released from an escrow account without payment of the required
consideration.
h. During the balance of 1998, an additional 1,503,904 common shares
were issued to officers and directors for services valued by the Board of
Directors at between $.05 and $.09 for each share issued.
i. On 10,323,868 preferred shares were issued as a dividend paid pro
rata to all holders of the Company's common stock without consideration.
j. Between July and October of 1998, 775,000 Class B common shares and
775,000 Preferred Shares were issued for cash at prices ranging from $.10 to
$.16 in reliance on Section 3(b) of the Act and Rule 504 thereunder, without
the payment of selling commissions or concessions.
k. In March, 1998 936,000 Class B common shares and 936,000 Preferred
shares were issued for cash at an offering price of $.05 per share without the
payment of selling commissions or concessions in reliance on Section 3(b) of
the Act and Rule 504 thereunder.
l. Finally, in 1998, 2,050,000 common shares and 2,050,000 Preferred
shares were issued to consultants in exchange for investor relations services
in reliance on Section 4(2) of the Act.
As a result of the foregoing, there are presently 14,085,266 common shares and
14,085,266 Preferred shares of the Company outstanding.
Item 5. Indemnification of Directors and Officers
Under the laws of Nevada and the Company's Articles of Incorporation, the
Company's directors will have no personal liability to the Company or its
stockholders for monetary damages incurred as the result of the breach or
alleged breach by a director of his duty of care. This provision does not
apply to the directors (i) breach of their duty of loyalty, (ii) acts or
omissions not in good faith or involving intentional violations of law, (iii)
illegal payment of dividends, stock repurchases, or stock redemption, and
(iv) approval of any transaction from which a director derives an improper
personal benefit. Directors may be responsible to the Company's shareholders
for damages suffered by the Company or its shareholders as a result of a
breach of their fiduciary duty.
In so far as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted for directors, officers or person
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission
each indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
PART F/S
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS'
July 29, 1999
To the Board of Directors
Viking Exploration
Totronto, Ontario
We have audited the accompanying balance sheet of Viking Exploration, Inc. (a
development stage company, the "Company," formerly Alpha Diamond Corporation
and African Resources, Inc.) as of June 30, 1999, and the related statements
of operations, cash flows and changes in stockholders' equity (deficit) for
the years ended June 30, 1999 and 1998, and the related amounts included in
the cumulative amounts for the period from January 22, 1997 (inception) to
June 30, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Viking Exploration, Inc. at
June 30, 1999, and the results of its operations and its cash flows for the
years ended June 30, 1999 and 1998, and the related amounts included in the
cumulative amounts for the period from January 22, 1997 (inception) to June
30, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statements have been presented assuming that the
Company will continue as a going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business. As more fully discussed in Note A to the financial statements, as
of June 30, 1999, the Company has no assets, has significant working capital
and stockholders' deficits and since its inception has incurred substantial
losses. The Company presently has no product or producing properties and
requires significant additional financing to satisfy its outstanding
obligations and commence operations. Unless the Company successfully obtains
suitable significant additional financing as discussed in Note A, there is
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note A.
The financial statements do not include any adjustments to reflect the
possible future effect on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the
outcome of this uncertainty.
Oatley Bystrom & Hansen
<PAGE>
VIKING EXPLORATION, INC.
(A Development Stage Company)
BALANCE SHEET
June 30, 1999
ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Bank Overdraft $ 583
Advances to President 273,284
Other related party advances 6,309
Accured interest on advances 38,053
Total current liabilities 315,529
STOCKHOLDERS' EQUITY (DEFICIT)
Prefered stock, par value $.00001 per share;
100 million shares Authorized;
14, 085,266 shares issued and
outstanding 141
Common stock, par value $.00001 per share;
100 million shares Authoirized;
14, 085,266 shares issued and
outstanding 141
Additional paid-in capital 990,959
Deficit accumulated in the development stage (1,306,770)
Total stockholders' (deficit) (315,529)
Total liabilities and
stockholders' equity (deficit) $ -
See accompanying notes
<PAGE>
VIKING EXPLORATION, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
January 22, 1997
Year Ended June 30, (Inception) to
1999 1998 June 30, 1999
EXPLORATION $( 173,781) $( 583,770) $( 757,551)
ADMINISTRATION AND GENERAL ( 237,159) ( 196,007) ( 511,065)
Operating Expenses ( 410,940) ( 779,777) (1,268,616)
INTEREST EXPENSE ( 26,099) ( 12,055) ( 38,154)
NET(LOSS) $( 437,039) $( 791,832) $(1,306,770)
BASIC AND DILUTIVE NET (LOSS) PER SHARE $( .04) $( .12) $( .16)
WEIGHTED AVERAGE SHARES OUTSTANDING 11,945,465 6,870,404 8,076,500
See acompanying notes.
<PAGE>
VIKING EXPLORATION, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
January 22, 1997
Year Ended June 30, (Inception) to
1999 1998 June 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(437,039) $(791,873) $(1,306,770)
Adjustments to reconcile net (loss)
to net cash provided by operating
activities
Stock issued ofr services 134,025 117,125 291,150
Stock issued for interest in
joint venture - 385,000 385,000
Changes in operating
liabilities:
accured interest on advances 26,099 11,954 38,053
Net cash flows from (used for)
operating activities (276,915) (277,753) (592,567)
CASH FLOWS FROM FIANANCING ACTIVITIES
Bank overdrafts 582 - 582
Advanced from President and other
related party 115,195 134,982 276,893
Issuance of stock for cash 159,918 145,846 344,064
Stock issuance costs - ( 2,500) ( 28,972)
Net cash flows(used for) from
fianancing activities 275,695 278,328 592,567
NET INCREASE (DECEASE) IN CASH ( 1,220) 575 -
CASH AT BEGINNING OF YEAR 1,220 645 645
CASH AT BEGINNING OF YEAR - 1,220 645
See Accompanying notes.
<PAGE>
VIKING EXPLORATION, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY(DEFICIT)
Additional
Preferred Stock Common Stock Paid In Accumulated
Shares Amount Share Amount Capital Deficit
Balances,
January 22, 1997
(Inception) - $ - - $ - $ - $-
Issued to founders in
March 1977 ($.02/share) - - 110,000 2 2,198 -
Issued to investors in
April 1997 ($20/share) - - 3,611 - 7,127 -
Issued to offciers and
directors for services - - 571,429 6 39,994 -
Net (loss) - - - - - (77,899)
Balances at
June 30, 1997 - - 685,040 8 48,319 (77,899)
Issued for mining
contract rights in
September ($.07/share) - - 5,500,000 55 384,945 -
Issued for legal
services in November
($.07/share) - - 173,000 1 12,109
Issued in private
placement in December
and May ($.12 to $.75
per share) - - 1,461,942 14 159,850 -
Shares relinquished
in unsuccessful
financing arrangements - - 1,000,000 10 - -
Issued to officers and
directors forservices
($.05 to $.09 per share) - - 1,503,904 15 104,990 -
Issuance of preferred
stock June 17, 1998 for
each share of common
stock issued and
outstanding 10,323,886 103 - (103) -
Net (loss) - - - - - (791,832)
Balances at
June 30, 1998 10,323,886 103 10,323,886 103 711,110 (869,731)
Issued for cash in
July and October
($.10 to $.16/share) 775,380 8 775,380 8 99,009 -
Issued for cash in
March ($.05/share) 938,000 9 936,000 9 46,857 -
Issued to consultants
for investor
relations services
($.05 to $.12/share) 2,050,000 21 2,050,000 21 133,983 -
Net (loss) - - - - - (437,039)
Balances at
June 30, 1999 14,086,266 414 14,085,266 141 990,959 (1,306,770)
See accompanying notes
<PAGE>
VIKING EXPLORATION, INC.
(A Development Stage Company)
Notes Financial Statements
Note A - Organization and Business
Organization and Nature of Business
Viking Exploration, Inc. (a development stage company, the "Company,"
formerly Alpha Diamond Corporation and African Resources, Inc.) incorporated
in Nevada January 22, 1997. The Company is engaged in precious mineral
exploration and has entered into a Joint Venture Agreement for that purpose
with Gold Rivers of Africa, Inc, a corporation organized in the Republic of
Guinea, Africa (see Note F). Activities since inception have been devoted
primarily to exploration, organization and financing. The Company presently
has no salaried employees or dedicated facilities.
Going Concern Considerations
The accompanying financial statements have been presented assuming the
Company will continue as a going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business. As of June 30, 1999, the Company has no assets, has significant
working capital and stockholders' deficits and since its inception has
incurred substantial losses. The Company presently has no product or producing
properties and requires significant additional financing to satisfy its
outstanding obligations and commence operations. Unless the Company
successfully obtains suitable significant additional financing, there is
substantial doubt about the Company's ability to continue as a going concern.
Management's plans to address these matters include proposed private
placements of stock, obtaining short-term loans, and the acquisition of
operating properties that will provide cash flow. The financial statements do
not include any adjustments to reflect the possible future effect on the
recoverability and classification of assets or the amounts and classification
of liabilities that may result from the outcome of this uncertainty.
Earnings (Loss) Per Share
Basic earnings per share are computed using the weighted average number of
common shares outstanding during each period.
Concentrations
Concentrations include: reliance on a single area mining prospect in an
isolated region of a foreign country; limited financial capacity of related
parties and/or others to continue funding operations; and, reliance on the
future stability, capacity and cooperation of a joint venture partner, Gold
Rivers of Africa, Inc. If the Company is successful in commencing sustained
commercial levels of production in Guinea, it will need significant
quantities of mining equipment and supplies that are presently in short supply
or unavailable. Also, equipment may either be very expensive or of restricted
availability; and transportation of heavy equipment in the region poses
practical difficulties and is weather dependent.
Note B - Summary of Significant Accounting Policies
Use of Estimates
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results inevitably will differ from those estimates, and such
differences may be material to the financial statements.
Income Taxes
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which
incorporates the use of the asset and liability approach of accounting for
income taxes. The asset and liability approach requires the recognition of
deferred tax assets and liabilities for the expected future consequences of
temporary differences between the financial reporting basis and tax basis of
assets and liabilities (see Note C).
Statement of Cash Flows Information and Supplemental Non-Cash Financing
Activities Cash and cash equivalents include cash and short-term investments
with original maturities of three months or less. There were no payments of
interest or income taxes in the periods presented.
Note C - Income Taxes
As of June 30, 1999, the Company had net operating loss carryforward totaling
approximately $1.61 million that may be offset against future taxable income,
if any. The loss carryforward begins to expire in 2017 and is limited by
certain changes in the Company's ownership.
A tax benefit has not been reported in the accompanying financial statements
for the operating loss carryforward because the Company is uncertain as to the
likelihood of utilization. Accordingly, the approximate tax benefit of
$170,000 of the loss carryforward has been offset by a valuation allowance of
the same amount (an increase of $60,000 for the year ended June 30, 1999).
Note D - Capital Stock
Stock Issued for Cash
During March 1997, the Company issued a total of 110,000 shares of common
stock to its founders at $.02 per share. In April 1997, the Company received
a total of $36,100 for 3,611 shares of common stock from investors ($10 per
share) in an offering of stock pursuant to Regulation 504 of the Securities
Act of 1993.
In December 1997 and May 1998, the Company issued a total of 1,461,942 shares
of common stock to four investors pursuant to a Regulation 504 private
placement of stock for a total of $159,864 (ranging from $.07 to $.25 per
share).
In fiscal 1998, the Company issued a total of 1,711,380 shares of common stock
to investors for a total of $145,883 (ranging from $.05 to $.16 per share).
Stock Issued for Services
On September 8, 1997 the board of directors approved a resolution to issue for
services rendered through August 31, 1997, 600,000 shares of common stock to
the President and Chairman of the Board of Directors and 200,000 shares to the
corporate secretary and board member (a total of 800,000 shares). The
issuable were recorded at $.07 per shares, the estimated fair value of the
services.
In November 1997, the Company issued 173,000 shares for legal services at an
estimated value of $12,110 ($.07 per share). In addition, the Company issued
and additional 1,503,904 shares in November 1997 and May 1998 to officers and
directors for services with an estimated value of $105,005 ($.05 to $.09 per
share).
In fiscal 1999, the Company issued a total of 2.05 million shares of both
common and preferred shares to consultants for investor relation services with
an estimated value of $134,004 ($.05 to $.12 per share).
Stock Issued For Joint Venture Interest And Other
In January 1998, the Company agreed to issue 5.5 million shares of common
stock for partial payment of an interest in a Joint Venture Agreement (see
Note F). The estimated value of the common stock has been classified as
exploration expense in the accompanying statement of operations ($.07 per
share).
In fiscal 1998, the Company deposited 1 million shares of unissued common
stock as security for payment of prospective financing arrangements. The
trustee, without the Company's authorization subsequently sold the stock. The
financing was not arranged and proceeds from the sale of stock kept by the
trustee. Return of the stock is subject to a favorable outcome of arbitration
proceedings presently underway among the parties. Subject to outcome of the
arbitration, the Company has recorded the issuance of the stock for the
unsuccessful financing at par value.
Issuance of Preferred Stock
On June 17, 1998, the Board of Directors adopted a resolution to amend its
articles of incorporation to establish capital stock consisting of common
stock and preferred stock as one undetachable unit. Pursuant to the
resolution, the Company reissued the unit certificates upon cancellation of
previously issued outstanding common stock certificates. Preferred stock
rights entitle holders to a non-cumulative 3% dividend in the event of
available net profits from production. Preferred stock is non-voting.
Note E - Related Party Transactions
Through June 30, 1999, the Company's President has advanced the Company a
total f $273,284 as operating capital. The advances bear interest at 12% per
annum. In addition to the foregoing, a relative of the President has advances
the Company $3,609. The obligation is unsecured and due on demand.
Note F - Joint Venture Agreement
On January 5, 1998 the Company entered into a Joint Venture Agreement with
Gold Rivers of Africa, Inc. ("GRA") to explore for and mine precious minerals
on a concession GRA has on the Konkoure River, located in Guinea. The
Agreement was amended October 1, 1998 to delay certain effective dates
originally set forth in the Agreement.
GRA agreed to contribute 50% of its concession to the Joint Venture. The
Company's obligation was to issue 5.5 million shares of common stock (see Note
D above), followed by 1 million shares in November 1999, provided the gross
mining and trade income equals or exceeds $2 million; and 1 million shares the
third year of production if the total gross mining and trade income equals or
exceeds $8 million for the first three years of production. In addition, the
Company agreed to contribute funding to GRA for its mining operation a total
of $4 million as follows: June 1, 1999 - $500,000, June 1, 2000 - $1.5
million, and June 1, 2001 - $2 million. In the event that the Company does
not provide the funding as set forth above, its percentage interest in the
Joint Venture shall be decreased to its proportionate capital contribution.
Through June 30, 1999, the Company funded approximately $372,500 of the
obligation to GRA. These payments have been classified as exploration
expenses in the accompanying financial statements.
The Joint Venture Agreement provides that the parties divide equally all net
profits derived from mining and trading from the Konkoure River concession, as
long as the production and funding targets are met. If the funding
requirements are not met the Company's net profits percentage is to be
determined by its capital contribution. As of July 29, 1999, production on
the concession has not commenced and quantifiable reserves have not been
identified.
Note G - Events Subsequent to June 30, 1999 (Unaudited)
During July 1999, the Company's President advanced $10,000 to the Company
(see Note E).
PART III
The following documents are filed as part of this report:
Exhibits
EX-3.(i) Articles of Incorporation
EX-3.(ii) By-laws
EX-3.(iii) Articles of Amendment
EX-10.(i) Arrete No A99/134P
EX-10.(ii) Property Rights Assignment Agreement along with Cancellation of
Property Assignment
EX-10.(iii) Joint Venture Agreement Dated January 1, 1998
EX-10.(iv) Joint Venture Agreement dated October 5, 1998
SIGNATURES
Pursuant to the requirements of Section 12(g) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on July 25, 1999.
VIKING EXPLORATION, INC.
By:__________________________________________
Mr. Richard Brodzik, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on July 25, 1999.
ARTICLES OF INCORPORATION
OF
ALPHA DIAMOND CORPORATION
FIRST
The name of the corporation is ALPHA DIAMOND CORPORATION.
SECOND
Its principal office in the state of Nevada is located at 1 East First
Street, Reno, Nevada 89501. The name and address of its resident agent is The
Corporation Trust Company of Nevada, 1 East First Street, Reno, Nevada 89501.
THIRD
The purpose or purposes for which the corporation is organized:
To engage in the business of exploration, development and production
of diamonds and to engage in and carry on any lawful business activity or trade,
and to manufacture, purchase or otherwise acquire, invest in, own, mortgage,
pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and
deal with goods, wares, merchandise, securities and personal property of every
class and description.
FOURTH
The amount of the total authorized capital stock of the corporation is One
Thousand Dollars ($1,000.00) consisting of One Hundred Million (100,000,000)
shares of common stock of the par value of $0.00001 each.
FIFTH
The governing board of this corporation shall be known as directors, and
the number of directors may from time to time be increased or decreased in such
manner as shall be provided by the bylaws oi this corporation.
<PAGE>
The names and addresses of the first board of directors are:
NAME POST OFFICE ADDRESS
Rick Brodzik 25 Rugby Road
Buffalo, NY 14216
Carey O'Brien 45 LaRose Avenue
Suite 1608
Weston, Ontario
Canada M9P 1A8
Kurt Wruck 16 Parkway Avenue
Toronto, Ontario
Canada M6R 1T5
The number of members of the Board of Directors shal1 not be less than
three or more than thirteen.
SIXTH
The capital stock, after the amount of the subscription price, or par
value, has been paid in shall not be subject to assessment to pay the debts of
the corporation.
SEVENTH
The name and addresses of each of the incorporators signing the Articles
of Incorporation are as follows:
NAME POST OFFICE ADDRESS
Conrad C. Lysiak 601 West First Avenue
Suite 503
Spokane, Washington 99204
EIGHTH
The corporation is to have perpetual existence.
NINTH
In furtherance, and not in limitation of the powers conferred by statute,
the board of directors is expressly authorized:
Subject to the bylaws, if any, adopted by the stockholders, to make,
alter or amend the bylaws of the corporation.
<PAGE>
To fix the amount to be reserved as working capital over and above
its capital stock paid in, to authorize and cause to be executed mortgages and
liens upon the real and personal property of this corporation.
By resolution passed by a majority of the whole board, to designate
one (1) or more committees, each committee to consist of one (1) or more of the
directors of the corporation, which, to the extent provided in the resolution or
in the bylaws of the corporation, shall have and may exercise the powers of the
board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it. Such committee or committees shall have such name
or names as may be stated in the bylaws of the corporation or as may be
determined from time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a stockholders' meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock
issued and outstanding, the board of directors shall have power and authority
at any meeting to sell, lease or exchange all of the property and assets of
the corporation, including its good will and its corporate franchises, upon
such terms and conditions as its board of directors deem expedient and for
the best interests of the corporation.
TENTH
Meeting of stockholders may be held outside the State of Nevada, if the
bylaws so provide. The books of the corporation may be kept (subject to any
provision contained in the statutes) outside the State of Nevada at such place
or places as may be designated from time to time by the board of directors or
in the bylaws of the corporation.
ELEVENTH
This corporation reserves the right to amend alter, change or repeal any
provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed by statute, or by the Articles of Incorporation, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
TWELFTH
The corporation shall indemnify its officers, directors, employees and
agents to the full extent permitted by the laws of the State of Nevada.
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 21st day of January, 1997.
/s/ Conrad Lysiak
CONRAD C. LYSIAK
STATE OF WASHINGTON )
)
COUNTY OF SPOKANE )
On this 21st day of January, 1997, before me, a Notary Public, personally
appeared CONRAD C. LYSIAK, who acknowledged that he executed the above
instrument.
/s/ Judy Terese Lysiak
Notary public
residing in the State of Washington,
Residing in Spokane
My Commission Expires:
October 8, 1998
<PAGE>
<PAGE>
<PAGE>
September 7, 1997
By facsimile: (416) 244-9616
To: Alpha Diamond Corporation
Attention: Rick Brodzik
PROPERTY RIGHTS ASSIGNMENT AGREEMENT
SUPERA INTERNATIONAL GHANA Ltd. ("Supera") has the exclusive rights to mine
concessions in Ghana Africa, Akim Oda District, located at the juncture
Bempong and Adim Rivers including this juncture and extending 3 miles up
Bempong river and down from the juncture of these rives 700 meters (this
includes a minimum of 6 pools which will be high yielding of both gold and
diamonds). The minimum estimated values in reserve are in Excess of
$150,000,000.oo USD. Supera has the expertise to mine these properties and the
necessary licenses to do business in Ghana and the ability, resources, to
market the raw materials.
Supera will assign 100% of its net profits and 100% of its mining rights to
Alpha Diamond Corporation ("Alpha") for valuable consideration which will be
in form of financing for all mining equipment and the operational costs of
mining, and 5,500,000 in stock, and salaries of $20,000 USD for the 3 officers
and agents of Supera. Alpha will provide the following financing:
1. 150,000 USD on or before September 22, 1997.
2. 300,000 USD on or before October 30, 1997.
3. 350,000 USD on or before December 31, 1997.
Please assign the 5,500,000 share of stock to designees on the following page.
Agreed and accepted by: Agreed and accepted by:
/s/Patrick Campbell Date: /s/Rick Brodzik Date:
Patrick Campbell Rick Brodzik
Senior Vice President President
SUPERA INTERNATIONAL LTD. Alpha Diamond Corporation
<PAGE>
SENT VIA FAX TO: (416) 244-9616
October 15, 1997
TO: Rick Brodzik
Alpha Diamond
RE: Cancellation of Property Assignment
Dear Rick:
Effective immediately, the agreement on the property rights assignment of the
property in Ghana, Africa located in the Akim-Oda Distict at the junction of
Bempong and Adim River, consisting as approximately 218 acres, extending 3
miles up the Bempong River, wherein detailed and contractually defined in the
agreement dated September 7, 1997, is hereby canceled in it entirety, due to
the fact that commitments were unable to be kept in the timeline scheduled in
the same agreement.
A new agreement will be finalized and submitted to you in the coming week.
Sincerely,
Louis Supera
CEO/President
Supera International Ghana Ltd.
<PAGE>
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT is made and entered into on this the 5th day of
January 1998, by and between, Gold Rivers of Africa, Inc. Republic of Guinea,
Africa and Alpha Diamond (hereinafter "Alpha"), a Corporation duly licensed
pursuant to the laws of the State of Nevada, (hereinafter referred to
collectively as the "Parties"):
WITNESSETH
WHEREAS, Gold Rivers of Africa has special abilities and expertise in the area
of mining available for contribution to a business enterprise and;
WHEREAS, Alpha Diamond has special abilities, experience and capital available
for contribution to a business enterprise; and
WHEREAS, The Parties have heretofore agreed to joint venture abilities,
experience and capital for the purposes of investing in a mining program and
the sale of precious stones and precious metals derived from that mining
program; and
WHEREAS, it is the desire of the Parties to define and set out their
relationship in writing and the circumstances under which they are operating,
as of the date of this agreement;
NOW THEREFORE, in consideration of the mutual convents hereinafter contained,
the Parties agree as follows:
1. PRIOR AGREEMENT. It is the intent of the Parties that his agreement
supersede all other Agreements, understandings ventures or relationships
between the Parties, previously, or otherwise, existing between the Parties;
2. FORMATION, The Parties hereby from a joint venture pursuant to the laws of
the State of Nevada, the joint venture business of which shall be the mining
of Precious Stones and Precious Metals, shall be referred to hereinafter as
the "Business"
3. PURPOSE. The purpose of the Business is the mining of precious stones and
precious metals, and to carry on legitimate activities relating to mining as
may be necessary to the business of the joint venture;
4.PRINCIPAL OFFICE. The principal office of the business shall be 981 Whitney
Ranch #925 Las Vegas, Nevada, USA 89014 or such other place as the Parties
may from time to time designate;
5. TERM. The term of the Business shall commence as of the 5th day of
January, 1998, and shall continue until terminated by written agreement of the
Parties or the termination of the concession;
6. SALE OR ASSIGNMENT. The Parties agree that their respective joint venture
interest in this agreement may be freely sold or assigned to any third party,
however, the parties agree that the non selling Party must be given first
right of purchase, provided that the on selling Party matches or supersedes
the verified offer received by the selling Party;
7. CONTRIBUTION OF CAPITAL. Gold Rivers agrees to contribute fifty (50%) of
the concession that it owns on the Konkoure River, located in the Republic of
Guinea, Africa, said total concession being thirty (30) kilometers with Gold
Rivers being the exclusive operator of the Joint Venture mining operation as
to the above concession. Alpha agrees to issue seven million five hundred
thousand restricted shares of Alpha stock of Gold Rivers in consideration for
said concessions and said stock to be issued as follow:
(a) five million five hundred thousand (5,500,000), issued;
(b) one million first year of production, November 1998 - November 1999,
provided that gross mining and trade income equals or exceeds two million
U.S. dollars ($2,000,000);
(c) one million (1,000,000), the third year of production, if the total gross
mining and trade income equals or exceeds eight million dollars ($8,000,000)
for the first three (3) years of production;
Alpha, further, agrees to contribute funding to Gold Rivers for its mining
operation the cash sum of four million dollars ($4,000,000), said funds to be
paid as follows;
(d) Minimum five hundred thousand first year ($500,000.);
(e) one million five hundred thousand second year ($1,500,000.);
(f) two million third year ($2,000,000.);
First payment due on or before August 1, 1998. If Gold Rivers should fail to
meet income targets as projected the stock due to be issued as set forth above
shall be decreased proportionate to the gross income earned. If Alpha should
fail to meet its funding requirements, its percentage of its interest in the
above Gold Rivers concession shall be decreased proportionate to its capital
contribution.
8. PROFITS. Gold Rivers and Alpha shall divide equally all net profits derived
from the mining and trading of gold and precious stones, derived from the
Konkoure River concession, as long as the above production and funding targets
are reached. If the above funding projections are not reached, Alpha shall
receive net profits equal to its ownership percentage which shall be
determined by its capital contribution.
9. PRIOR AGREEMENTS. This Agreement supersedes any prior agreements, if any,
and shall be deemed legally binding on the parties on execution.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
(including licenses, permits, and other documents) between the Parties and
there are no other agreements written or otherwise hereto.
11. COUNTERPARTS/FACSIMILE SIGNATURES. This Agreement may be executed in one
or more counterparts and may be executed by facsimile signature, each of which
shall be deemed an original and all of which together will constitute one and
the same instrument.
12. NOTICES. All Notices, request, demands, claims and other communication
hereunder, including notices, request, demand, claim or other communication
will be in writing. Amy notice, request, demand, claim or other communication
hereunder shall be deemed duly given three business days after it is sent by
registered or certified mail, return receipt request, postage prepaid, and
addressed to the intended recipient as set forth below:
Gold Rivers of Utah Alpha Diamond Corporation
981 Whitney Ranch Suite 925 5 La Rose Ave.
Henderson, Nevada Suite 1608
89204 Weston, Ont.
Canada M9P1A8
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
14. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interest, or violations hereunder without the prior written approval
of the other Party.
15. AMENDMENTS AND WAIVERS. Any amendments to this Agreement shall be in
writing and forwarded to the Parties pursuant to the notice provision.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement or cause
this Agreement to be executed as of January 5, 1998.
Gold Rivers of Africa Corporation Alpha Diamond Corporation
By:/s/ Lou Supera By:/s/ Richard Brodzik
Lou Supera Richard Brodzik
President President
<PAGE>
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT is made and entered into on this the 1st day of
October 1998, by and between, Gold Rivers of Africa, Inc. Republic of Guinea,
Africa and Alpha Diamond (hereinafter "Alpha"), a Corporation duly licensed
pursuant to the laws of the State of Nevada, (hereinafter referred to
collectively as the "Parties"):
WITNESSETH
WHEREAS, Gold Rivers of Africa has special abilities and expertise in the area
of mining available for contribution to a business enterprise and;
WHEREAS, Alpha Diamond has special abilities, experience and capital available
for contribution to a business enterprise; and
WHEREAS, The Parties have heretofore agreed to joint venture abilities,
experience and capital for the purposes of investing in a mining program and
the sale of precious stones and precious metals derived from that mining
program; and
WHEREAS, it is the desire of the Parties to define and set out their
relationship in writing and the circumstances under which they are operating,
as of the date of this agreement;
NOW THEREFORE, in consideration of the mutual convents hereinafter contained,
the Parties agree as follows:
1. PRIOR AGREEMENT. It is the intent of the Parties that his agreement
supersede all other Agreements, understandings ventures or relationships
between the Parties, previously, or otherwise, existing between the Parties;
2. FORMATION, The Parties hereby from a joint venture pursuant to the laws of
the State of Nevada, the joint venture business of which shall be the mining
of Precious Stones and Precious Metals, shall be referred to hereinafter as
the "Business"
3. PURPOSE. The purpose of the Business is the mining of precious stones and
precious metals, and to carry on legitimate activities relating to mining as
may be necessary to the business of the joint venture;
4.PRINCIPAL OFFICE. The principal office of the business shall be 981 Whitney
Ranch #925 Las Vegas, Nevada, USA 89014 or such other place as the Parties
may from time to time designate;
5. TERM. The term of the Business shall commence as of the 1st day of October,
1998, and shall continue until terminated by written agreement of the Parties
or the termination of the concession;
6. SALE OR ASSIGNMENT. The Parties agree that their respective joint venture
interest in this agreement may be freely sold or assigned to any third party,
however, the parties agree that the non selling Party must be given first
right of purchase, provided that the on selling Party matches or supersedes
the verified offer received by the selling Party;
7. CONTRIBUTION OF CAPITAL. Gold Rivers agrees to contribute fifty (50%) of
the concession that it owns on the Konkoure River, located in the Republic of
Guinea, Africa, said total concession being thirty (30) kilometers with Gold
Rivers being the exclusive operator of the Joint Venture mining operation as
to the above concession. Alpha agrees to issue seven million five hundred
thousand restricted shares of Alpha stock of Gold Rivers in consideration for
said concessions and said stock to be issued as follow:
(a) five million five hundred thousand (5,500,000), issued;
(b) one million first year of production, November 1998 - November 1999,
provided that gross mining and trade income equals or exceeds two million U.S.
dollars ($2,000,000);
(c) one million (1,000,000), the third year of production, if the total gross
mining and trade income equals or exceeds eight million dollars ($8,000,000)
for the first three (3) years of production;
Alpha, further, agrees to contribute funding to Gold Rivers for its mining
operation the cash sum of four million dollars ($4,000,000), said funds to be
paid as follows;
(d) minimum five hundred thousand first year ($500,000.);
(e) one million five hundred thousand second year ($1,500,000.);
(f) two million third year ($2,000,000.);
First payment due on or before January 1, 1999. If Gold Rivers should fail to
meet income targets as projected the stock due to be issued as set forth above
shall be decreased proportionate to the gross income earned. If Alpha should
fail to meet its funding requirements, its percentage of its interest in the
above Gold Rivers concession shall be decreased proportionate to its capital
contribution.
8. PROFITS. Gold Rivers and Alpha shall divide equally all net profits derived
from the mining and trading of gold and precious stones, derived from the
Konkoure River concession, as long as the above production and funding targets
are reached. If the above funding projections are not reached, Alpha shall
receive net profits equal to its ownership percentage which shall be
determined by its capital contribution.
9. PRIOR AGREEMENTS. This Agreement supersedes any prior agreements, if any,
and shall be deemed legally binding on the parties on execution.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
(including licenses, permits, and other documents) between the Parties and
there are no other agreements written or otherwise hereto.
11. COUNTERPARTS/FACSIMILE SIGNATURES. This Agreement may be executed in one
or more counterparts and may be executed by facsimile signature, each of which
shall be deemed an original and all of which together will constitute one and
the same instrument.
12. NOTICES. All Notices, request, demands, claims and other communication
hereunder, including notices, request, demand, claim or other communication
will be in writing. Amy notice, request, demand, claim or other communication
hereunder shall be deemed duly given three business days after it is sent by
registered or certified mail, return receipt request, postage prepaid, and
addressed to the intended recipient as set forth below:
Gold Rivers of Utah Alpha Diamond Corporation/African Resources Inc.
981 Whitney Ranch Suite 925 5 La Rose Ave.
Henderson, Nevada Suite 1608
89204 Weston, Ont.
Canada M9P1A8
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
14. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its
rights, interest, or violations hereunder without the prior written approval
of the other Party.
15. AMENDMENTS AND WAIVERS. Any amendments to this Agreement shall be in
writing and forwarded to the Parties pursuant to the notice provision.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement or cause
this Agreement to be executed as of October 1, 1998.
Gold Rivers of Africa Corporation Alpha Diamond Corporation/African
Ressources Inc.
By:/s/ Daniel Joseph By:/Richard Brodzik
Daniel Joseph Richard Brodzik
President President
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