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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 3
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM .............. TO................
COMMISSION FILE NUMBER 0-14136
CASMYN CORP.
(Exact name of Company as specified in its charter)
COLORADO 84-0987840
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification no.)
1335 GREG STREET, UNIT 104, SPARKS, NEVADA 89431
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 331-5524
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
TITLE OF CLASS: COMMON STOCK, $0.04 PAR VALUE
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Check whether issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months (or for such shorter period that the Company was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [_]
Check if disclosure of delinquent filers pursuant to Item 405 of
regulation S-K is not contained herein and will not be contained, to the best of
Company's knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[X]
The aggregate market value of the common stock held by non-affiliates of
the Company as of December 17, 1996 was approximately $83,116,000 (8,985,598
shares at $9.25 per share).
As of December 17, 1996 there were 12,528,469 shares of common stock
outstanding, par value $.04 per share.
Documents Incorporated By Reference: None
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PART I
ITEM 1: DESCRIPTION OF BUSINESS
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The discussions contained in this 10-K contain various "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Sections 21E of the Securities Exchange Act of 1934, as amended,
which represents the Company's expectations or beliefs concerning future events,
including statements regarding the calculated mineral reserves located at the
Company's mining properties in Zimbabwe and the ability of the Company to secure
additional debt and/or equity financing to fund future expansion and operations.
In addition, statements containing expressions such as "believes,"
"anticipates," "plans" or "expects" used in the Company's periodic reports filed
with the SEC are intended to identify forward-looking statements. The Company
cautions that these and similar statements included in this and in previously
filed periodic reports are further qualified by important factors that could
cause actual results to differ materially from those in the forward-looking
statement, including, without limitation, the following: political and economic
instability in international markets; the effect of economic conditions; the
effect of regulatory and governmental actions; fluctuations in world gold
prices, exchange rates, tariffs and other barriers.
HISTORY OF THE COMPANY
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Casmyn Corp. ("Casmyn" or the "Company", which term shall include, unless the
context so requires, its subsidiaries) was originally incorporated under the
laws of the State of Colorado on December 4, 1984, as Fintech, Inc. In November,
1985, the Company completed its initial public offering of securities. On
November 29, 1991, the Company changed its name from Fintech, Inc. to Summa
Metals Corporation. On March 31, 1994, Amyn Dahya, an individual, acquired
2,400,000 shares (74% of the voting securities of the Company at that time) from
certain officers, directors and shareholders. The Company was in the development
stage from its inception until August 1994 when it purchased for approximately
$150,000 all of the common stock of Casmyn USA, Inc., a Nevada corporation, from
Dahya Holdings, Inc., a related party. On September 14, 1994 the Company changed
its name from Summa Metals Corporation to Casmyn Corp. Prior to 1994, the
Company's principal business was performing contract research and development
services for the mining and environmental industries.
The Company currently operates through the following active subsidiaries:
<TABLE>
<CAPTION>
JURISDICTION
OF
ENTITY ORGANIZATION BUSINESS PURPOSE
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<S> <C> <C>
Casmyn Mining Corporation Nevada Mining exploration - South Africa
Casmyn Mining Zimbabwe [Private] Ltd. Zimbabwe Mining operations - Zimbabwe
Casmyn Gold Corporation Bahamas Gold acquisition and export
Copperbelt Associates Limited. Zambia Mining exploration - Zambia
Auromar Development Corporation Canada Mining exploration - South Africa
</TABLE>
BUSINESS - GENERAL
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Since the acquisition of the majority ownership of the Company by Mr. Dahya in
1994, the business activities of the Company have centered around mineral
resource development. The primary focus to date has been the acquisition and
exploration of precious and base metal resource properties in Zimbabwe, Zambia
and South Africa and precious stones in South Africa, and research and
development related to minerals testing, process engineering and environmental
technologies.
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On May 13, 1995 the Company obtained an option to acquire 100% of the shares of
a group of private mining companies in Zimbabwe. After extensive geological and
engineering review of the properties the Company exercised its option on January
31, 1996. The Company acquired 100% of the shares of a group of five (5) private
mining companies (the "Zimbabwe Companies"): Matabeleland Minerals (Private)
Limited, Greenhorn Mines (Private) Limited, Morven Mining (Private) Limited,
Motapa Minerals (Private) Limited and Turk Mines (Private) Limited. The Zimbabwe
Companies own a 100% interest in mining claims controlling gold and silver
mineral rights on properties that lie within the Bubi Greenstone Belt, Zimbabwe
and the mines contain numerous shafts, mining equipment and mineral processing
mills with a total capacity of 2,000 metric tons per day (in a combination of
milling and dump retreatment capacity). There are no underlying royalties
payable on any gold production from these properties. The Company has commenced
gold production as well as completed the first phase of a capital expenditure
program to upgrade and retrofit various mine facilities.
Also on January 31, 1996, the Company purchased the assets of the Dawn Mine
property in Zimbabwe from Olympus Gold Mines Limited for approximately $455,000
(Zim $4,250,000). The group of mines making up the Dawn Mine property had
produced over 340,000 ounces of gold at an average grade of 0.48 ounces of gold
per tonne. The Dawn Mine is located in close proximity (eleven kilometers) to
the Turk mine and mill and will be operated under a mine plan which includes the
Turk mine and other mining properties in the area owned by the Company.
In addition, Casmyn has an exploration license covering property in the Zambia
copper belt where exploration is currently on-going. This property is adjacent
to some of the largest copper mining operations in the world. Previous
exploration at the Casmyn controlled property has yielded ore grade drill
intercepts of copper together with uranium and cobalt. The Company has completed
a ground and airborne geophysical program and is currently drilling several
targets identifed by the geophysical surveys.
The Company is conducting a diamond exploration program in the Schweizer
Property in South Africa, where the Company has acquired a 100% interest in
options on certain mineral properties located approximately 140 miles from the
Kimberly diamond mining area. Historically, there has been mining of diamonds in
the alluvial gravels in the area currently under option by the Company. The
Company has conducted research on indicator minerals that are normally found in
such diamond operations. These indicator minerals suggest the potential presence
of a diamondiferous kimberlite pipe or a cluster of pipes in close proximity to
the properties under option. The Company is undertaking an exploration program
in this area directed at identifying potential locations of kimberlite pipes.
The exploration program consists of geophysical studies which include gravity
and magnetic surveys and soil sampling. To date, no kimberlite pipe(s) have been
discovered and there is no assurance that such pipe(s) will be discovered.
Effective August 12, 1996, pursuant to approval of a Plan of Arrangement by the
Supreme Court of British Columbia, Canada, the Company acquired approximately
7,023,000 common shares of Auromar Development Corporation ("Auromar", 100% of
the outstanding common stock) in exchange for 2,701,103 common shares of the
Company. This transaction has been accounted for as a purchase with the purchase
price of the net assets (principally mineral property options) being recorded at
predecessor cost prior to their acquisition by Auromar. The acquisition of
Auromar provides the Company with full control of the Schweizer-Reneke
exploration program. The Company believes that such control will facilitate
negotiations with major mining companies in the development of this program
should exploration success be achieved.
The Company has positioned itself in the environmental industry through an
equity investment in Vector Environmental Technologies, Inc. ("VETI") which is
engaged in the development, manufacture, sales and management of water treatment
equipment and facilities. VETI's shares are traded on the NASD Bulletin Board.
On June 29, 1995, the Company acquired a controlling interest in VETI through
the acquisition of 3,000,000 convertible preferred shares, in exchange for
approximately $2,400,000 in liabilities owing to the Company. On September 29,
1995, the Company purchased an additional 1,000,000 preferred shares of
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VETI at $2.00 per share. On September 30, 1996, the Company elected to convert
its preferred shares into common shares of VETI, resulting in the Company owning
approximately 24.3% of VETI. Also, during the fourth quarter of 1996, the
Company exchanged 425,750 shares of Auromar common stock for 1,532,700 shares of
VETI restricted common stock, resulting in the Company increasing its percentage
ownership in VETI to approximately 31.2%. This investment is accounted for using
the equity method. VETI is also related to the Company through certain common
officers, directors and significant stockholders.
VETI operates through its 95% owned subsidiary, Vector Venture Corp. ("VVC"),
and various wholly owned subsidiaries: Vector Venture Corp. which holds certain
technologies and licenses; Vector Manufacturing Corp. ("VMC"), which provides
purchasing and manufacturing services; Vector Vietnam, Ltd., which holds and
manages Vietnamese operations; Alpine Water Purification, Inc., which markets
consumer water treatment equipment; STOX Systems, Inc., which markets hazardous
materials storage systems; CGL Technologies, Inc., which performs research and
development of water purification technologies; Vector India, which was formed
to develop business in India; and Vector Water Technologies, which markets water
purification systems in the United Arab Emirates.
OTHER TRANSACTIONS
On May 24, 1996, the Company entered into a Stock Purchase Agreement to exchange
shares with WestAmerica Corporation ("WACC"), an oil and gas and exploration
company, whereby the Company received 5,680,514 common shares of WACC
(approximately a 65% interest) in exchange for 606,061 shares of the Company's
common stock. On September 30, 1996, the Company and WACC agreed to cancel the
transaction and have returned the respective shares to each party.
On September 29, 1995, the Company completed a private placement of 714,286
units for net proceeds of $4,750,009. Each unit consists of one share of Common
Stock of the Company, plus one warrant; two warrants, plus $8.50, will entitle
the holder to purchase one share of the Company's Common Stock. All warrants
expire on October 1, 1997. Also, during the year ended September 30, 1995, the
Company completed private placements of 405,000 shares of its common stock for
net proceeds of $2,252,850. VETI completed private placements of 1,500,000
shares of its common stock during the year ended September 30, 1995 for net
proceeds of $3,375,000. At September 30, 1995, $7,125,002 of these amounts was
included in Common Stock subscriptions receivable. All of the subscriptions
receivable were collected subsequent to September 30, 1995.
On March 29, 1996, the Company completed a private placement of 750,000 units
for net proceeds of $8,745,683. Each unit consists of one share of the Company's
restricted common stock, plus one warrant; two warrants, plus $13.00, will
entitle the holder to purchase one share of the Company's common stock. These
warrants expire two years from the date of issue.
On September 11, 1996, the Company completed a private placement of 409,091
units for net proceeds of $4,230,000. Each unit consists of one share of the
Company's common stock, plus one warrant; two warrants, plus $11.00, will
entitle the holder to purchase one share of the Company's common stock. These
warrants expire two years from the date of issue.
On November 8, 1996, the Company completed a private placement of 155,000 units
for net proceeds of $1,410,500. Each unit consists of one share of the Company's
common stock, plus one warrant; two warrants, plus $10.00 will entitle the
holder to purchase one share of the Company's common stock. These warrants
expire two years from the date of issue.
On May 7, 1996, the Company entered into a 50:50 joint venture with Newgold
Incorporated ("Newgold"), a public company listed on the NASD Bulletin Board,
for the development of the Relief Canyon Mine located in Pershing County,
Nevada. The Company has contributed $775,000 against a total commitment of
$1,398,000 for its 50% interest in the venture. Subsequent to September 30,
1996, the Company sold its interest back to Newgold for $900,000 and 1,000,000
restricted common shares of Newgold common stock and a release from the $623,000
balance of its commitment.
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MINERAL RESOURCE DEVELOPMENT
GLOSSARY OF MINING TERMS AND DEFINITIONS
Presented below are the definitions of various mining terms:
KIMBERLITE PIPES - geologic structures containing mantle derived material that
may be diamond bearing.
INDICATOR MINERALS - minerals such as garnets, ilmenites, chromites and chrome
diopside that are found in soil sampling that are indicative of the presence of
kimberlitic materials.
MINERALIZED DEPOSIT - a mineralized body which has been physically delineated by
drilling, underground work, surface trenching and other workings or drill holes
to contain a sufficient amount of mineralized material with an average grade
sufficient to warrant further evaluation. Such deposit does not qualify as a
commercially mineable (or viable) ore body until technical, economic and legal
factors have been sufficiently satisfied to classify the mineralized material as
a reserve.
RESERVE - That part of a mineral deposit which could be economically and legally
extracted or produced at the time of the reserve determination.
PROVEN (MEASURED) RESERVES - Reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or
quality are computed from the results of detailed sampling and (b) the sites for
inspection, sampling and measurement are spaced so closely and the geologic
character is so well defined that size, shape, depth and mineral content of
reserves are well established.
PROBABLE (INDICATED) RESERVES - Reserves for which quantity and grade and/or
quality are computed from information similar to that used from proven
(measured) reserves, but the sites for inspection, sampling, and measurement are
farther apart or are otherwise less adequately spaced. The degree of assurance,
although lower than that for proven (measured) reserves, is high enough to
assume continuity between points of observation.
TONNE - Refers to metric ton and is equal to 1.102 short tons or 2,204.622
pounds.
1 ounce (TROY) = 31.103 grams
g/t = gram per metric ton (tonne)
1 TROY ounce/short ton = 34.2857 grams per metric ton
MINING ACTIVITIES
Casmyn is responsible for exploration and mining activities in Zimbabwe through
its wholly owned subsidiary, Casmyn Mining Zimbabwe [Private], Ltd.; exploration
in Zambia through its wholly owned subsidiary, Copperbelt Associates Limited;
and exploration in South Africa through its wholly owned subsidiary, Casmyn
Mining Corporation. The primary business activities of these subsidiaries are
described below.
ZIMBABWE GOLD PROPERTIES
Casmyn Mining Zimbabwe [Private] Ltd. was organized and incorporated in Zimbabwe
to acquire mineral properties and mining operations as described below. The
Company's objectives in the acquisition of these properties and operations are
the exploration, development and production of gold resources. The Company is
approaching its exploration and development activities so as to balance
exploration and proving of reserves with the development of mining and
processing capacity to maintain an optimum mine life. In this connection the
Company has spent in excess of $16.5 million through December 31, 1996 in the
purchase and development of these properties.
As indicated above, on January 31, 1996, the Company acquired 100% of the shares
of the Zimbabwe Properties. The total consideration for this acquisition was
$4,071,415 (Zim $37,986,300) cash plus applicable taxes of $993,660 (Zim
$9,496,575) to be paid upon assessment of said taxes as
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defined in the terms of the Memorandum of Agreement. The amount of consideration
is subject to certain adjustments. The funds used to conclude this acquisition
were obtained from Company bank accounts. Those funds originated from a
combination of private placements of Company Common Stock and from proceeds of a
convertible debenture.
The purchase price was determined as a result of arm's length negotiations
between E.W.B. Properties (Private) Limited and the Company. The principal
factors considered in the determination of the consideration given for the
Zimbabwe Companies include: i) the tangible and intangible asset values of the
businesses acquired including primarily gold reserves; ii) the potential for
increasing gold production of the Zimbabwe Companies; and, iii) the expected
future operations and related contributions that the companies are expected to
make to the total value of the Company. The shafts, mining equipment and mineral
processing mills acquired in this transaction were used by the Zimbabwe
Companies for the purpose of mining and processing gold. It is the intention of
the Company to continue such use.
Through the acquisition of the Zimbabwe Companies, the Company owns a 100%
interest in 18 past producing gold mines that have produced in excess of
1,000,000 ounces of gold since mining commenced in the early 1900's. The
Company believes that through the modernization of the physical plant and
implementation of advanced mining technologies significant increases in gold
recovery can be realized. In addition, the Company is expanding its gold
reserves through the application of advanced exploration techniques.
Independent consultants have calculated that the Company has in excess of
1,020,000 ounces of proven and probable gold reserves for the mines owned by
the Company (See Item 2 "Description of Property"). As of September 30, 1996,
the Company was operating three (the Turk, Dawn and Lonely Mines) of the 18
mines acquired.
The Company's first phase of expansion of the physical plant at a cost of
approximately $12 million has been completed. This phase consisted of: i) mill
refurbishing; ii) installation of a new crushing plant; iii) new leach and gold
recovery circuits; iv) refurbishing three existing shafts at the Turk Mine; v)
sinking a new shaft at the Turk Mine western extension; vi) new tailings
reprocessing plants at the Turk and Lonely Mines; vii) housing and
infrastructure; and, viii) preparation of new tailings disposal sites.
Also, on January 31, 1996, the Company purchased the assets of the Dawn Mine
property in Zimbabwe from Olympus Gold Mines Limited for approximately $455,000
(Zim $4,250,000). The group of mines making up the Dawn Mine property had
produced over 340,000 ounces of gold at an average grade of 0.48 ounces (14.9
grams per tonne) of gold per tonne. The Dawn Mine is located in close proximity
(eleven kilometers) to the Turk Mine and mill and will be operated under a mine
plan which includes the Turk Mine and other mining properties in the area owned
by the Company.
On August 1, 1996, an option agreement was concluded with Mr. Philip Austin
Williams on the "Elumba and Up To Date" gold mining properties which are within
5 kilometers of the Turk Mine and mill and were past producers of gold and
silver. The options are exercisable for a period of 24 months for an exercise
price between $60,000 and $125,000 depending upon the date exercised.
On December 20, 1996, the Company acquired an option to purchase, on or before
March 1, 1997, the assets of the Teutonic Mine property in Zimbabwe for
approximately $770,000 (Zim $8,000,000). The Teutonic Mine produced over
133,000 ounces of gold at an average grade of 0.66 ounces (20.5 grams per
tonne) of gold per tonne. The Teutonic Mine is located approximately 120
kilometers from the Turk Mine and other mining properties in the area owned by
the Company.
ZAMBIAN COPPERBELT
During the fiscal year ended September 30, 1996, the Company purchased 100% of
the common shares of Copperbelt Associates Limited for $65,700 thereby acquiring
full interest in a prospecting license covering an area of approximately 4,388
square kilometers at the Luswishi Property located in the Zambian Copperbelt.
Earlier work, including drilling in the area covered by the prospecting license,
has shown the presence of copper,
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uranium and cobalt. The Company has commenced a drilling and exploration program
aimed at proving economically viable mining reserves on this property position.
The Company spent approximately $94,000 on exploration activities in the fiscal
year ended September 30, 1996. The Company estimates that it will expend
approximately $1,200,000 in the fiscal year ending September 30, 1997. It is not
the Company's intention to become a copper mining operating company. Any success
from the current exploration program will result in the Company obtaining a
joint venture partner(s) to develop the property.
SOUTH AFRICA
Casmyn Mining Corporation, a Nevada corporation with a branch operation in South
Africa, is conducting mineral exploration programs in various areas of South
Africa, primarily the Schweizer Property where the Company holds a 100% interest
in options on certain mineral properties located in the Schweizer-Reneke area of
South Africa. The acquisition of Auromar provided the Company with full control
of the Schweizer-Reneke program. The Company believes that such control will
facilitate negotiations with major mining companies in the development of this
program. These properties are located approximately 220 kilometers from the
Kimberly diamond mining area. Any success from exploration will result in the
Company seeking to obtain joint venture partner(s) to develop the property.
There has been significant mining of diamonds in the alluvial gravels in the
area currently under option by the Company. The Company has conducted research
on indicator minerals that are normally found in such diamond operations. These
indicator minerals suggest the potential presence of a diamondiferous kimberlite
pipe or a cluster of pipes within close proximity to the properties under
option. The Company is undertaking an exploration program in this area directed
at discovering diamond bearing kimberlite pipes. The exploration program
consists of geophysical studies which include gravity and magnetic surveys and
soil sampling. The Company spent approximately $200,000 on exploration
activities in the fiscal year ended September 30, 1996. The Company estimates
that it will expend approximately $165,000 in the fiscal year ending September
30, 1997. To date no kimberlite pipe(s) have been discovered and there is no
assurance that such pipe(s) will be discovered.
INDUSTRY OVERVIEW AND CERTAIN FACTORS RELATING TO THE COMPANY'S PROPERTIES
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Competition
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Competition includes large established mining companies having substantial
capabilities and greater financial and technical resources than the Company.
Therefore, the Company may be unable to acquire future potential mining
properties on terms it considers acceptable. The Company also competes with
other mining companies in the recruitment and retention of qualified employees.
The Company's smaller size and broad strategic objectives, however, may provide
the Company with increased flexibility and certain strategic advantages over its
competitors in developing countries. Most mining companies in Zimbabwe are
small owner operated mines with limited capital and expertise.
Government Approval/Regulations
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The mining operations of the Company, through its wholly-owned subsidiaries
Casmyn Mining Corporation and Casmyn Mining Zimbabwe [Private] Ltd., are
conducted primarily through its offices located in South Africa and Zimbabwe.
Casmyn Mining Corporation is qualified to do business in South Africa and, as
such, is subject to the laws of that country, which includes permits to allow
the Company to conduct exploration activities on optioned properties. Casmyn
Mining Zimbabwe [Private] Ltd. received approval from the Zimbabwe Investment
Centre to carry out exploration and mining activities and from the Zimbabwe
Reserve Bank to purchase 100% of the five mining companies in Zimbabwe.
Compliance With Environmental Laws
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The mining operations of the Company in South Africa are directed at determining
the presence of economically viable mineral deposits on properties under option.
It is the Company's intention, once such mineral deposits are discovered, to
identify a joint venture partner to develop and operate the mining properties.
Under the South Africa Minerals Act, 1991, the Company and/or its joint venture
partner are responsible for development of an environmental impact assessment
and an environmental
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management program for the proposed mining venture which must be approved prior
to the start of exploration and/or mining operations. The cost of environmental
compliance relating to mineral development is estimated by management to be
immaterial as of September 30, 1996 due to the nature of the Company's
exploration activities. At September 30, 1996, the Company was not actively
involved in mining. On January 31, 1996, the Company acquired various gold
mining properties and processing facilities in Zimbabwe and has begun mining and
processing gold at those facilities. The Company believes that it is in
compliance with the environmental laws of Zimbabwe.
Risk of Development, Construction and Mining Operations
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Should the Company, alone or with a joint venture partner, decide to proceed
with development of a mineral resource property, the ability to meet cost
estimates and construction and production time estimates cannot be assured.
Technical considerations, delay in obtaining governmental approvals, inability
to obtain financing or other factors could cause delays in developing mineral
resource properties.
The businesses of gold and/or diamond, copper, cobalt and uranium mining are
subject to a variety of risks and hazards, including environmental hazards,
industrial accidents, flooding and the discharge of toxic chemicals. The
Company has obtained insurance in amounts it considers to be adequate to protect
itself against certain of these risks of mining and processing. However, the
Company may become subject to liability for certain hazards for which it cannot
obtain insurance or which it may elect not to obtain insurance against because
of premium costs or other reasons.
Exploration Programs
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A major part of the Company's business is the exploration of its existing
properties and the evaluation and pursuit of potential new prospects in the
exploration stage. Substantial expenditures may be incurred in an attempt to
establish the economic feasibility of mining operations by identifying mineral
deposits and establishing reserves through drilling and other techniques,
designing facilities and planning mining operations. The economic feasibility of
a project depends on numerous factors, including the cost of mining and
production facilities required to extract the desired minerals, the total
mineral deposits that can be mined using a given facility and the market price
of the minerals at the time of sale. There is no assurance that existing or
future exploration programs or acquisitions will result in the identification of
deposits that can be mined profitably.
The Company generally acquires the rights to explore for mineral resources on
various parcels of land through option agreements negotiated with the property
owner. The agreements generally have a term of one year with the right to extend
on a year to year basis. The Company is in the process of determining the
potential for economically viable mineral resources on properties under option
and will either renew or cancel options based upon this determination.
Market Factors and Volatility
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Active international markets have historically existed for gold. There has been
an active market for diamonds, copper, cobalt and uranium which are of a
commodity nature. As such, the Company anticipates no barriers to the sale of
these minerals. Prices of certain minerals have fluctuated widely, particularly
in recent years, and are affected by numerous factors beyond the control of the
Company. Future mineral prices cannot be accurately predicted. A significant
decline in the price of gold being produced or expected to be produced by the
Company could have a material adverse effect on the Company.
Need for Additional Financing
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To achieve the full potential of continued exploration, development and
production of the Company's mineral properties, including the purchase of
additional properties, the exercise/extension of options on properties
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and construction of mining facilities are likely to require substantial
additional financing, and there is no assurance that the Company will be able to
secure such financing on acceptable terms.
Patents, Copyrights and Licenses
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The Company holds patents on a continuous grind-leach process for gold ore grade
evaluation.
Employees
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The Company and its subsidiaries currently have approximately five-hundred-fifty
(550) employees. Approximately five hundred (500) of these employees are mine
workers who are covered by Zimbabwe government and Chamber of Mines labor
agreements. The balance of employees are management and professional staff who
are not subject to any collective bargaining agreements or union affiliations.
Management believes that relations between management and employees are
considered good.
Certain Tax Considerations
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The Company is predominantly invested in foreign subsidiaries. Those
subsidiaries are subjected to taxes imposed on them in the foreign jurisdictions
in which they operate and in which they are organized. Further, their income is
subject to US federal and state income taxes when distributed, deemed
distributed or otherwise attributed to, the Company, which is a US corporation.
Complex US tax rules apply for purposes of determining the calculation of those
US taxes, the availability of a credit for any foreign taxes imposed on the
foreign subsidiaries or the Company and the timing of the imposition of US tax.
Normally, all foreign income earned by a US multinational eventually will be
subject to US tax. Income earned by a foreign branch of a US company is taxable
currently in the United States, and income earned by a foreign subsidiary could
be subject to US tax either in the year distributed to the US as a dividend or
in the year earned by means of Subpart F, foreign personal holding company or
other federal tax rules requiring current recognition of certain income earned
by foreign subsidiaries.
Income earned in foreign countries often is subject to foreign income taxes. In
order to relieve double taxation, the US federal tax law generally allows US
corporations a credit against their US tax liability in the year the foreign
earnings become subject to US tax in the amount of the foreign taxes paid on
those earnings. The credit is limited, however, under complex limitation rules,
to, in general, the US (pre-credit) tax imposed on the US corporation's foreign
source income. Further, complex rules exist for allocating and apportioning
interest, research and development expenses and certain other expense deductions
between US and foreign sources. Limiting provisions of the source rules decrease
the amount of foreign source income many US multinationals can generate. Reduced
foreign source income results in a smaller foreign tax credit limitation, as the
limitation is based on the ratio of foreign source net income to total net
income.
These rules can prevent US multinationals from crediting all of the foreign
taxes they pay. To the extent that foreign taxes are not creditable, foreign
source income bears a tax burden higher than the US tax rate.
General Political Risks
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The Company is actively engaged in exploration and production activities in
Zimbabwe, Zambia and South Africa. The political situation in these countries
introduces a certain degree of risk. The governments exercise control over
exploration licensing, gold and other mineral sales and exporting, which may
impact on the Company's ability to carry out exploration, development and other
mining activities.
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OTHER
WATER TREATMENT AND PURIFICATION
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Vector Environmental Technologies, Inc.
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As mentioned above, the Company owns approximately 31.2% of the issued and
outstanding common stock of VETI. VETI's principal business is to develop or
acquire leading edge environmental technologies for rapidly expanding global
markets in water treatment and purification. The corporate goal is to build VETI
into a major multinational corporation with a strong technical foundation,
capable of providing lasting solutions which address short, medium and long-term
water related environmental issues.
VETI's current focus is primarily in the area of water treatment and
purification. VETI's Diamond Rain/TM/ water purification systems are designed to
purify water from rivers, lakes and other water sources using a combination of
filtration, adsorption and microbial destruction processes to produce safe and
healthy drinking water, with technical and economic efficiency that is required
for conditions which exist in developing nations. The MCV process, used in many
Diamond Rain/TM/ systems, was the recipient of the NASA Invention of the Year
and Commercial Invention of the Year Awards in April, 1994.
During 1996, VETI's primary market focus was in Vietnam. However, VETI is in the
process of developing programs in India, Ghana and the United States.
Vector Vietnam Ltd. ("VVL", a wholly owned subsidiary of VETI)
- --------------------------------------------------------------
VVL markets the full range of VETI's water treatment and purification equipment,
products and services throughout the country of Vietnam. The primary markets
currently addressed by VVL include: the sale of personal and household water
purification systems to both the retail and wholesale markets; the sale and
lease of water purification systems to schools and hospitals; the sale of
purified water and water products through company and operator owned retail
water stores; the development and operation of water bottling plants and sale of
bottled water; and the installation and management of water supply plants for
rural and semi-urban communities.
-10-
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY
ZIMBABWE
The Company owns 100% of 18 past producing gold mines in Zimbabwe covering
approximately 1,200 hectares (2,965 acres) in the Bubi Greenstone belt in
central Zimbabwe (See Figure 1, Page 17). These properties have produced in
excess of 1,000,000 ounces of gold since mining commenced in the early 1900's
(See Figure 2, Page 18). Within the Company's properties, several producing
mines exist, the largest of which is the Turk Mine with historical production in
excess of 400,000 ounces of gold. In addition, the Company is presently
conducting mining operations at the Lonely and Dawn Mines.
TURK MINE
- ---------
The Turk Mine is located approximately 55 km north of Bulawayo, Zimbabwe. A
single lane paved road accesses the mine and a national power grid parallels the
road. The Turk Mine is a typical Archean shear hosted lode gold vein deposit
that has been partially exploited down to 800 meters. The mine was owned and
operated by Turk Mine (Pvt) Ltd. from 1963 to 1996. The Company purchased Turk
Mine (Pvt) Ltd. from the Muir family in January 1996. Historical grades are
approximately .175 ounces (6 grams per tonne (or "g/t") over widths averaging 2
meters in a series of multiple vein sets. The mine has been dewatered down to
the 360 meter level and current rehabilitation and development work is being
concentrated in the first 140 meters. A diamond drilling program by the Company
late in 1995 identified a new discovery to the west of the previous development.
Detailed surface and underground drilling and underground drifting along these
new extensions is being carried out on several levels between 25 and 350 meters
below surface.
The current proven reserves at the Turk Mine are about 90,000 tonnes grading 9.4
g/t for a contained gold reserve of approximately 27,000 ounces. The Company has
calculated a probable reserve of an additional 3.3 million tonnes of
approximately 7.0 g/t gold. This probable reserve would add an additional
742,000 contained ounces of gold. The Turk Mine has a combination of open pit
oxide, underground sulphide and surface mill tailings as its ore sources.
EXISTING INFRASTRUCTURE - The Turk Mine consists of managers and workers'
houses; mine offices, work shops, mill buildings, thickener tanks and water
reservoirs; 330 tonne and 75 tonne per day mills and associated crusher
circuits; four compressors, carbon in pulp (CIP) tanks; tailings dams; three
operational shafts and a fleet of earthmoving equipment.
REFURBISHMENT AND CONSTRUCTION - The Company has completed or currently has in
process the following projects at the Turk Mine:
i) Additional offices and mine worker and manager housing
ii) New 1,500 tonne per day CIP circuit; new sluicing bays for dump
retreatment and refurbishment of old CIP tanks
iii) New 2,000 tonne per day tailings facility
iv) Refurbished mill and crushing circuits and new coarse gold circuits
v) Refurbished underground pumping; increased surface boreholes for
water supply; new back-up generators and new compressors
vi) New 300 sample per day assay lab and geochemical lab
vii) Refurbished two vertical and one incline shaft
viii) Currently sinking a new vertical shaft
During the fiscal year ended September 30, 1996, the Company expended
approximately $3,390,000 on these projects and anticipates spending
approximately $10,000,000 on these projects at the Turk Mine in the future.
-11-
<PAGE>
EXPLORATION AND DEVELOPMENT - The Company has either completed or currently has
in progress the following exploration and development projects at the Turk Mine:
i) Four surface core drills and six underground core drills during 1996
delineated underground sulphide ore zones, continuing surface and
underground core drilling and underground development in 1997
ii) Underground primary and secondary development on underground sulphide
ore zones on levels between 25 meters and 350 meters below the
surface
iii) New shaft sinking on Armenian shaft from surface to 60 meters below
surface and continuing to 150 meters below surface
iv) Several hundred meters of trenching of open pit oxide ore and related
metallurgical test work
v) Development of two open pits in oxide ore
vi) Augering and metallurgical test work on old mill tailings dumps
vii) Re-mapping and sampling of old underground workings
viii) Exploration drives and cross-cuts on multiple underground levels
LONELY MINE
- -----------
The Lonely Mine is located 30 km north of the Turk Mine and is located on the
national electric power grid. From 1991 to 1996, the dumps were being treated
by Greenhorn Mines (Pvt) Ltd. using a 100 tonne per day CIP plant. Greenhorn
Mines (Pvt) Ltd. was acquired by Casmyn in January 1996 from the Muir family.
The Company has the surface rights to the mine that includes 1.8 million metric
tons of mill tailings grading 1.5 to 2.0 g/t gold. The Company has recently
installed a new 1,500 Tonne per day CIP processing facility to recover gold from
tailings. This CIP facility can be easily disassembled and moved to another
site at the end of operations at the Lonely minesite.
EXISTING INFRASTRUCTURE - The Lonely Mine consists of a mine shaft, hoist and
headframe with a CIP circuit and tailings dam.
REFURBISHMENT AND CONSTRUCTION - The Company has completed or currently has in
progress the following projects at the Lonely Mine:
i) New 1,500 tonne per day CIP circuit and tailings facility
ii) Refurbished headframe and hoist for the mine shaft
iii) New underground water pumps
iv) New workers' and managers' housing and offices
v) New back-up electrical generators and compressors
vi) New surface boreholes for water
During the fiscal year ended September 30, 1996, the Company expended
approximately $550,000 on the above projects and anticipates spending
approximately $500,000 on these projects at the Lonely Mine in the future.
EXPLORATION AND DEVELOPMENT - In 1996, the Company completed augering and bulk
sampling of the mill tailings dumps and related metallurgical test work.
DAWN MINE
- ---------
The Dawn Mine is located 42 km north of Bulawayo accessed via an all weather tar
road and is located on the national electric power grid. The group of mines
making up the Dawn Mine property has produced over 340,000 ounces of gold at an
average grade of 0.48 ounces of gold per tonne since mining operations began.
Olympus Gold Mines Ltd. purchased the property in 1969 and operated underground
mining from 1970 to 1986 and carried out dump Retreatment until January 1996.
Casmyn purchased the mine property from Olympus in January 1996. Underground
sulphide ore is trucked to the Turk Mine mill, and surface mill tailings dumps
are processed at the Dawn Mine site.
EXISTING INFRASTRUCTURE - The Dawn Mine consists of mine shafts and headframes,
tailings dams, thickener tanks, mine offices, workshops, mill buildings and
manager and worker housing.
REFURBISHMENT AND CONSTRUCTION - The Company has completed or currently has in
process the following projects at the Dawn Mine:
-12-
<PAGE>
i) Carbon regeneration and elution plant
ii) Dawn Mine shaft refurbished to the second level
iii) Upgraded water supply, underground pumps and surface boreholes
During the fiscal year ended September 30, 1996, the Company expended
approximately $25,000 on these projects and anticipates spending approximately
$250,000 on these projects at the Dawn Mine in the future.
EXPLORATION AND DEVELOPMENT - In 1996, the Company conducted surface core
drilling and underground development of sulphide ore zones. Further drilling and
underground development is scheduled to continue in 1997.
CHARLIESONA MINE
- ----------------
The Charliesona Mine is located 6 kilometers northwest of the Turk Mine on an
all weather road and is located on the national electric power grid. Casmyn
acquired the Charliesona Mine in January 1996 by purchasing the owner-operator,
Matabeleland Minerals (Pvt) Ltd., from its owners, the Muir family. The mine
was operated by Matabeleland Minerals from the mid-1980's to 1995. The ore
sources for the Charliesona Mine are open pit oxide, underground sulphide and
surface mill tailings dumps.
EXISTING INFRASTRUCTURE - The Charliesona Mine consists of three vertical mine
shafts with headgear and hoists, a mill building with a 100 tonne per day ball
mill, crusher circuit, water reservoir, CIP tanks, flotation cells and vat leach
tanks.
REFURBISHMENT AND CONSTRUCTION - The Company has completed or currently has in
progress the following projects at the Charliesona Mine:
i) New CIP circuit and tailings facility under construction
ii) Ball mill and crushing circuit currently being refurbished
The Company anticipates spending approximately $100,000 on these projects.
EXPLORATION AND DEVELOPMENT - In 1996, the Company completed surface trenching,
percussion drilling, underground development, geological mapping, sampling of
tailings dumps and metallurgical test work. Further work in these areas is
scheduled to continue in 1997.
DING DONG, SANDY AND PETER PAN
- ------------------------------
All of these properties are on the national electric power grid and within
close proximity of the Turk Mine. The ore sources for these mines consist of
open pit oxide and underground sulphide mineral deposits.
The Ding Dong Mine was operated from the 1940's to 1959 by Norman Levine Mines
(Pvt) Ltd. who then sold it to Matabeleland Minerals (Pvt) Ltd. Casmyn acquired
the property through the purchase of Matabeleland Minerals (Pvt) Ltd. in January
1996. The Sandy and Peter Pan properties were operated in the 1980's by the
owner/operator Motapa Minerals (Pvt) Ltd. The Company acquired the property by
purchasing Motapa Minerals in January 1996 from the Muir family.
EXISTING INFRASTRUCTURE - These mines consist of vertical and incline mine
shafts, surface excavations and boreholes for water. There is a crushing circuit
and vat leach tanks at the Peter Pan Mine.
REFURBISHMENT AND CONSTRUCTION - The Company has completed or currently has in
progress the following projects at the mines:
i) Refurbishment of the incline shaft at the Peter Pan Mine
ii) New surface boreholes for water at the Sandy Mine
iii) Surface excavations for bulk sampling at the Sandy Mine
During the fiscal year ended September 30, 1996 the Company expended
approximately $390,000 on these projects, and anticipates spending approximately
$200,000 on these projects in the future.
EXPLORATION AND DEVELOPMENT - At certain of these mines in 1996, the Company
completed surface trenching, core and precussion drilling, underground
development and shaft sinking, surface and geological mapping, sampling and
metallurgical test work. Further work in these areas is scheduled to continue in
1997.
GEOLOGY
The regional geology of the area of the mines comprises metasediments,
metavolcanics and serpentinite of the Bulawayan Group as shown on the simplified
geological map of Zimbabwe (See Figure 3, Page 19). The gold mineralization is
greenstone type hosted quartz veins or shear zones.
-13-
<PAGE>
RESERVES
The tables presented below set forth the Company's interest in estimated proven
and probable reserves of contained ounces of gold in place at each property.
These estimates have been prepared by Mr. P. Bekker, Consulting Geologist, an
independent mineral consultant.
TABLE 1 - PROVEN RESERVES
<TABLE>
<CAPTION>
GRAMS PER CONTAINED
LOCATION TONNES TONNE OUNCES Au
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
TURK MINE:
1 - 16 Level -Sulphides 89,910 9.42 27,230
Oxides 229,506 1.59 11,732
Tailings Dump A 310,000 1.14 11,362
Tailings Dump B 465,000 1.30 19,435
Tailings Dump C 240,000 1.35 10,417
Tailings Dump D 1,320,000 0.97 41,166
DAWN MINE:
Sulphide 3,851 4.50 557
Tailings Dump - high grade 84,300 2.01 5,448
Tailings Dump - low grade 60,000 0.79 1,524
CHARLIESONA MINE:
Oxides 113,750 1.71 6,254
Tailings Dump A 95,000 0.85 2,596
Tailings Dump D 35,000 0.82 923
PETER PAN MINE:
Oxides 30,000 1.30 1,254
DING DONG MINE:
Sulphides 17,200 11.60 6,417
SANDY MINE:
Oxides 1,158,965 1.06 39,498
LONELY MINE:
Tailings Dump A 425,000 0.87 11,888
Tailings Dump C 435,000 0.86 12,028
Tailings Dump D 615,000 1.06 20,959
---------
TOTAL PROVEN RESERVES 230,688
=========
</TABLE>
-14-
<PAGE>
TABLE 2 - PROBABLE RESERVES
<TABLE>
<CAPTION>
GRAMS PER CONTAINED
LOCATION TONNES TONNE OUNCES Au
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TURK MINE:
1 - 16 Level - sulphides 2,533,680 7.60 619,099
Pillars 13 - 28 Level - sulphides 750,000 5.10 122,978
DAWN MINE:
Sulphides 28,241 9.74 8,844
Tailings Dump - high grade 32,760 1.21 1,274
CHARLIESONA MINE:
Crushed oxide 100,000 1.00 3,215
PETER PAN MINE:
Sulphides 164,245 4.86 25,664
DING DONG MINE:
Sulphides 37,291 7.14 8,560
--------
TOTAL PROBABLE RESERVES 789,634
========
</TABLE>
GOLD RECOVERY RATES
The recovery of gold from the Company's in-place contained gold reserves has
been measured and it varies by location and type of material. Gold recoveries
resulting from the different mining methods and benefication processes are as
follows: milled oxide gold recovery rates range from 90% to 92%; sulphide gold
recovery rates are between 80% and 90%; heap leach oxide gold recovery rates are
65% to 70%; and retreatment tailings (dump) gold recovery rates range from 49%
to 68%. The above table shows contained ounces of gold after mining and
processing, the Company anticipates that approximately 75% of this gold will
actually be recovered.
In addition to the proven and probable reserves, a substantial amount of
mineralized deposits are being evaluated which will be confirmed by independent
consultants prior to being categorized as proven or probable reserves.
ASSAYING
All of the geological samples used in the grade evaluation have their gold
content determined by fire assay. All drill intercepts are analyzed by one of
the following independent, commercial laboratories: SGS Zimlab, Antech
Laboratories, Rio Tinto Labs, Zubabwe Government Roasting Plant, or Geomet
(associated with Anglo American Research Labs). All drill core is sawn in half
with one half sent for assay and the other half kept as an archive.
Approximately 20% of samples are sent for duplicate check assay. All mill
tailings dump samples are analyzed by fire assay for their total gold content
and by bottle roll for their cyanide soluble gold. Dump samples are analyzed by
the following independent commercial laboratories: Peacocke, Simpson &
Associates; Performance Laboratories, and Geomet Labs.
ZAMBIA
LUSWISHI DOME
In January 1996, the Company acquired 100% of a three year prospecting license
covering an area of approximately 4,388 square kilometers within the Zaire-
Zambia Copperbelt in Zambia (See Figure 4, Page 20). Included in the area under
license is the Luswishi Dome project which is targeting a large tonnage copper-
cobalt-uranium mineral deposit. The Company has commenced a drilling and
exploration program aimed at proving economically viable mining reserves on this
property position.
SOUTH AFRICA
SCHWEIZER PROPERTY
The Company holds a 100% interest in options on certain mineral properties
located in the Schweizer-Reneke area of South Africa. These properties are
located approximately 220 kilometers from the Kimberly diamond mining area.
-15-
<PAGE>
FACILITIES
The Company maintains offices in Sparks, Nevada and Vancouver, Canada in office
space which is currently occupied under month-to-month leases at a cost of
approximately $4,100 and $7,600 per month respectively. The Sparks, Nevada
operations occupy a portion of a 8,000 square foot unit which includes office
and laboratory facilities which are shared with certain related companies. Those
companies reimburse the Company for a portion of the monthly rent. The Vancouver
offices, which are also shared with VETI, occupy 6,036 square feet in a high
rise office building. These facilities are adequate for the current level of
operations and sufficient office and laboratory space is conveniently located to
support future growth.
Casmyn Mining Corporation, South Africa is located in Pretoria, South Africa in
office space which is currently occupied on a month-to-month basis at a cost of
approximately $1,000 per month. Casmyn Mining Zimbabwe [Private] Ltd., is
located near Bulawayo, Zimbabwe in office space and facilities owned by Casmyn
Mining Zimbabwe [Private] Ltd.
-16-
<PAGE>
FIGURE 1
CASMYN ACTIVITY IN ZIMBABWE
This is a map showing the country of Zimbabwe in relation to the continent of
Africa, the Greenstone Belt of Zimbabwe, the location of the Company's mining
properties and certain other mines in the area showing total historical gold
production in ounces and recovered gold grade per ton.
17
<PAGE>
FIGURE 2
MINE PRODUCTION STATISTICS
This is a chart showing the Company's Zimbabwe mines along with competing mines
in the area along with total gold production in ounces and recovery grade of
gold in ounces per ton.
18
<PAGE>
FIGURE 3
LOCALITY AND GEOLOGICAL MAPS
This is a map depicting the geological formations in the country of Zimbabwe
and the location of the Company's mines in relation to those formations.
19
<PAGE>
FIGURE 4
ZAMBIAN COPPER PROJECT
This is a map showing the location of major copper producers in Zambia relative
to granite domes and the location of the area covered by the Company's
prospecting license.
FIGURE 5
MAP SHOWING THE LOCATION OF THE COMPANY'S MINES
This map shows in greater detail, the location of the Company's mining
properties.
The Turk Mine is located 55 kilometers north of Bulawayo, which is a major
industrial center and is the major supply base in the southern half of Zimbabwe.
All of the Company's mines are connected to each other by well maintained, all
weather roads, and they are on the national power grid.
The Dawn and Ding Dong Mines are 12 kilometers and 5 kilometers respectively
south of the Turk Mine. The Charliesona Mine is 7 kilometers northwest of the
Turk Mine. The Peter Pan and Sandy Mines are 28 kilometers north of the Turk
Mine. The Lonely Mine is 23 kilometers north of the Turk Mine.
20
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material litigation, whether pending or
threatened, to which it is or may become a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
-21-
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
CASMYN CORP.
By: /s/ Amyn S. Dahya 7/24/97
----------------------- -----------
Amyn S. Dahya, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 3 to Form 10-K/A has been signed below by the following persons on
behalf of the Company and in the capacities on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------------------------------------------------------------
<S> <C> <C>
/s/ Amyn S. Dahya President, Chief Executive Officer 7/24/97
- -------------------------- -------
Amyn S. Dahya and Chairman of the Board
/s/ Hanif S. Dahya Director 7/24/97
- -------------------------- -------
Hanif S. Dahya (Vice Chairman of the Board)
/s/ Sandro Kunzle Director 7/24/97
- -------------------------- -------
Sandro Kunzle
/s/ Douglas C. Washburn Vice President - Secretary, Treasurer 7/24/97
- -------------------------- -------
Douglas C. Washburn (Principal Financial Officer)
/s/ Dennis E. Welling Controller 7/24/97
- -------------------------- -------
Dennis E. Welling (Principal Accounting Officer)
</TABLE>
-70-
