<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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 0-31986 (82-689)
---------------------------------------------------------
GLAMIS GOLD LTD.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
British Columbia, Canada None.
------------------------------ ------------------
(Jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
5190 Neil Road, Suite 310, Reno, Nevada, 89502
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
775-827-4600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 180 days. Yes [X] No [ ]
The number of shares outstanding of the Registrant's common stock, as of May 7,
1999, was 68,439,932.
<PAGE> 2
GLAMIS GOLD LTD.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements.................................................... 1
Consolidated Balance Sheets as at March 31, 1999 and
December 31, 1998................................................... 1
Consolidated Statement of Earnings for the three months ended
March 31, 1999 and 1998............................................. 2
Consolidated Statement of Retained Earnings (Deficit) for the three
months ended March 31, 1999 and 1998................................ 2
Consolidated Statement of Cash Flows for the three months
ended March 31, 1999 and 1998....................................... 3
Notes to Interim Consolidated Financial Statements.................. 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................... 6
Item 3. Qualitative and Quantitative Disclosures About Market Risk ............. 14
Part II - Other Information
Item 1. Legal Proceedings....................................................... 15
Item 2. Changes in Securities.................................................. 15
Item 3. Defaults Upon Senior Securities......................................... 15
Item 4. Submission of Matters to a Vote of Security Holders..................... 15
Item 5. Other Information....................................................... 15
Item 6. Exhibits and Reports on Form 8-K........................................ 16
Signatures...................................................................... 16
Exhibit Index .................................................................. 16
</TABLE>
<PAGE> 3
-3-
[Part I - Item 1]
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
=====================================================================================================
MARCH 31, December 31,
ASSETS 1999 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash $ 41,885 $ 26,170
Other current assets (note 3) 18,453 12,048
- -----------------------------------------------------------------------------------------------------
Current assets 60,308 38,218
Plant and equipment and mine development costs net 127,589 79,655
Other assets 10,753 1,288
=====================================================================================================
$ 198,650 $ 119,161
LIABILITIES
Current liabilities $ 26,090 $ 4,062
Long term liabilities 18,603 4,740
SHAREHOLDERS' EQUITY
Share capital (note 5):
Authorized:
200,000,000 common shares without par value
5,000,000 preferred shares, $10 par value, issuable in Series
Issued and fully paid:
68,357,432 common shares (1998- 38,860,612) 156,506 109,587
Contributed surplus 63
63
Retained earnings (deficit) (2,612)
709
- -----------------------------------------------------------------------------------------------------
153,957 110,359
- -----------------------------------------------------------------------------------------------------
$ 198,650 $ 119,161
=====================================================================================================
</TABLE>
Prepared by Management without audit Approved by the Directors:
Signed: "A. Dan Rovig" Signed: "C. Kevin McArthur"
------------------------ -----------------------------
A. Dan Rovig C. Kevin McArthur
Director Director
<PAGE> 4
-4-
CONSOLIDATED STATEMENT OF OPERATIONS
(Expressed in thousands of U.S. dollars)
(Except per share amounts)
<TABLE>
<CAPTION>
===============================================================================
THREE MONTHS ENDED
MARCH 31,
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Revenue from gold production $ 7,986 $ 8,955
Cost of production 7,189 5,186
- -------------------------------------------------------------------------------
797 3,769
- -------------------------------------------------------------------------------
Expenses
Depreciation & depletion 2,107 2,302
Royalties 367 640
Selling, general & administrative 1,202 678
Exploration 647 5
- -------------------------------------------------------------------------------
4,323 3,625
- -------------------------------------------------------------------------------
Earnings (loss) from operations (3,526) 144
Interest and other income 542 351
Other income (expense) (625) (10)
- -------------------------------------------------------------------------------
Earnings before income taxes (3,609) 485
Provision for (Benefit from) income taxes (288) 151
- -------------------------------------------------------------------------------
Net earnings (loss) $(3,321) $ 334
===============================================================================
Earnings per share (loss) $ (0.07) $ 0.01
===============================================================================
</TABLE>
CONSOLIDATED STATEMENT OF RETAINED EARNINGS (DEFICIT)
(Expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
===============================================================================
THREE MONTHS ENDED
MARCH 31,
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Retained earnings, beginning of period $ 709 2,716
Net earnings (loss) (3,321) 334
Dividends -- --
- -------------------------------------------------------------------------------
Retained earnings (deficit), end of period $(2,612) 3,050
===============================================================================
</TABLE>
<PAGE> 5
-5-
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in thousand of U.S. dollars)
<TABLE>
<CAPTION>
===============================================================================
THREE MONTHS ENDED
MARCH 31,
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings (loss) $ (3,321) $ 334
Adjustment for items not affecting 2,699 2,372
working capital
Net changes in non-cash working capital 1,879 1,364
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 1,257 $ 4,070
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES*
Capital expenditure (2,967) (1,912)
Business acquisition (note 2) 7,146 --
Other assets 1,477 --
- -------------------------------------------------------------------------------
Net cash flows from investing activities 5,656 (1,912)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Stock issues 143 74
Note payable 8,629 --
- -------------------------------------------------------------------------------
Net cash flows from financing activities 8,772 74
Increase in cash 15,685 2,232
Cash, beginning of period 26,170 26,913
- -------------------------------------------------------------------------------
Cash, end of period $ 41,855 $ 29,145
===============================================================================
</TABLE>
*NOTE:
NON-CASH INVESTING ACTIVITIES
The acquisition of all issued and outstanding shares of Rayrock Resources
Inc. for consideration as follows:
<TABLE>
<S> <C>
Fair value of assets received $ 98,270
Less cash and transaction costs paid (51,494)
--------
Consideration paid through the issuance of common shares $ 46,776
</TABLE>
<PAGE> 6
-6-
GLAMIS GOLD LTD.
Notes to Interim Consolidated Financial Statements
(tables expressed in thousands of United States dollars)
Three months ended March 31, 1999
1. GENERAL
In the opinion of management, the accompanying unaudited consolidated balance
sheet, consolidated statement of operations, consolidated statement of retained
earnings (deficit) and consolidated statement of cash flows contain all
adjustments, consisting only of normal recurring accruals, necessary to present
fairly in all material respects the financial position of Glamis Gold Ltd. ("the
Company") as of March 31, 1999 and December 31, 1998 and the consolidated
results of operations and cash flows for the three months ended March 31, 1999
and 1998.
These unaudited interim consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements and
related footnotes included in the Company's annual report on Form 10-K for the
year ended December 31, 1998. Certain of the comparative figures have been
reclassified to conform with the current period's presentation.
The financial statements are prepared in accordance with accounting principles
generally accepted in Canada which conform, in all material respects, with
accounting principles generally accepted in the United States, except as
described in note 7 hereof.
2. ACQUISITION OF RAYROCK RESOURCES, INC.
In March 1999, the Company completed the acquisition of 100% of the issued and
outstanding shares of Rayrock Resources Inc. ("Rayrock"), an Ontario
corporation. The Company issued 29,277,820 common shares and paid Cdn.
$52,883,007 (approximately U.S. $35.0 million) in connection with the
acquisition. The acquisition was accounted for as a purchase and, accordingly,
the financial statements presented herein reflect the consolidated position of
the Company, including Rayrock, as at March 31, 1999 but only include the
operating results of Rayrock for the month of March 1999. Also refer to Part II,
Item 2 for details of the acquisition.
3. OTHER CURRENT ASSETS
Included in other current assets are the following inventories:
<TABLE>
<CAPTION>
March 31, 1999 December 1998
------------------------------------------------------------------------
<S> <C> <C>
Finished goods $ 2,124 $ 4,048
Work-in-progress 5,956 5,835
Supplies and spare parts 2,975 746
------------------------------------------------------------------------
$11,055 $10,629
========================================================================
</TABLE>
<PAGE> 7
-7-
4. NOTE PAYABLE
To facilitate the acquisition of Rayrock the Company negotiated a bridge loan
effective March 1, 1999 of Cdn. $13 million (approximately US $8.7 million) at
the bank's prime rate plus 0.75%. The loan was secured by cash balances and was
payable on or before April 30, 1999. In April 1999 this loan was fully paid .
5. SHARE CAPITAL
<TABLE>
<CAPTION>
Three months Ended Three months Ended
March 31, 1999 March 31, 1998
- ------------------------------------------------------------------------------------------------
# of Shares Amount (in 000's) # of Shares Amount (in 000's)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Issued and fully paid:
Balance at beginning of
period 38,860,612 $ 109,587 31,222,707 $ 89,650
Issued during the period:
For cash consideration
under the terms of
Directors' and
Employee's stock
Options 219,000 143 13,000 74
Issued upon acquisition
of Rayrock (see note 2) 29,277,820 46,776 -- --
- ------------------------------------------------------------------------------------------------
Balance at End of Period 68,357,432 $ 156,506 31,245,707 $ 89,724
================================================================================================
</TABLE>
<PAGE> 8
-8-
6. SEGMENT REPORTING
(a) Operating segments:
<TABLE>
<CAPTION>
Producing Mines
---------------
Exploration
and
Development
Gold Copper Properties Corporate Total
---- ------ ----------- --------- -----
<S> <C> <C> <C> <C> <C>
1999
- ----
Revenue $ 7,183 $ 803 $ -- $ -- $ 7,986
Earnings (loss) from operations (685) (949) -- (1,892) (3,526)
Net earnings (loss) $ (685) $ (949) $ (460) $(1,227) $ (3,321)
------- ------- ------- ------- --------
Identifiable assets $68,007 $25,570 $43,851 $61,222 $198,650
======= ======= ======= ======= ========
1998
- ----
Revenue $ 8,955 $ -- $ -- $ -- $ 8,955
Earnings (loss) from operations 827 -- -- (683) 144
Net earnings (loss) $ 827 $ -- $ -- $ (493) $ 334
======= ======= ======= ======= ========
</TABLE>
(b) Geographic Information
As at March 31, 1999 and for the quarter ended March 31, 1999
(in thousands of dollars)
<TABLE>
<CAPTION>
Central &
North America South America Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $ 7,183 $ 803 $ 7,986
Earnings (loss) from operations $ (2,260) $ (1,266) $ (3,526)
Identifiable Assets $ 168,406 $ 30,244 $ 198,650
</TABLE>
As at March 31, 1998 and for the quarter then ended, all revenues, earnings and
identifiable assets were in North America.
7. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
Accounting in these interim consolidated financial statements under Canadian and
United States generally accepted accounting principles is substantially the same
except for accounting for income taxes and investments in equity securities.
However, these differences have no material effect on the amounts presented in
the consolidated financial statements as at March 31, 1999, December 31, 1998,
or for the three months ended March 31, 1999 or 1998.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL REVIEW
Glamis Gold Ltd. ("the Company") continues to focus on being a quality,
cost-effective producer. With the current depressed world gold market the
Company continues its cost containment programs at all locations.
The Company is actively seeking growth opportunities. In March 1999 the Company
acquired Rayrock Resources Inc. ("Rayrock") (refer to note 2 to the financial
statements and Part II, Item 2 for details of the transaction). This acquisition
added three operating mines to the Company with expected annual output of over
100,000 ounces of gold.
As noted previously, the first quarter 1999 financial statements of the Company
reflect the acquisition of Rayrock effective March 1999. Accordingly, the
Company's consolidated balance sheet includes the assets and liabilities of
Rayrock as at March 31, 1999. However, the Company's statement of operations
reflects a complete quarter for the Glamis operations, but only one month (March
1999) of the newly acquired Rayrock operations. Certain of the information
provided below is not reflected in the financial statements, but is provided to
inform readers of the performance of the various properties both prior to and
subsequent to the acquisition date. The Company reported a first quarter loss of
$3.3 million ($0.07 per share) compared to earnings of $0.3 million ($0.01) per
share in the first quarter of 1998. The difference is attributable to a $1.3
million loss from the Ivan mine, $0.8 million from decreased production
primarily at Rand and $0.4 million reduction in profits resulting from the
decline in the realized price in gold. Selling, general and administrative
charges and exploration expenses (net of interest income and tax credits)
increased approximately $1.1 million in the quarter ended March 31, 1999
compared to a year earlier.
<PAGE> 9
-9-
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $34.2 million at March 31, 1999, the same as
at December 31, 1998. The working capital includes approximately $30.0 million
of uncommitted cash. Long term liabilities increased to $18.6 million at March
31, 1999 from $4.7 million at December 31, 1998. This increase is due almost
entirely to reclamation reserves and deferred taxes attributable to the Rayrock
acquisition. As noted, the Company had a bridge loan of $8.7 million outstanding
from March 1, 1999 to April 30, 1999. This was incurred to facilitate the
Rayrock acquisition.
Excluding the acquisition of Rayrock, the Company's capital expenditures for the
first quarter of 1999 were $3.0 million. The major expenditures were $1.5
million for deferred stripping at the Rand mine; $0.9 million spent at San
Martin, primarily for land acquisition; $0.3 million spent on the Imperial
Project; and $0.1 on the new Dee underground project. These were financed out
of the Company's working capital.
The Company generated $1.3 million of positive cash flow in the first quarter of
1999 with the Rand and Picaco operations contributing almost $2.0 million in
cash flow during the first quarter of 1999 (compared to $4.0 million in the same
period in 1998), offset by cash used at the Ivan mine. Again, the decline in the
production and low gold and copper prices negatively impacted cash flows.
Comparative production highlights of the first quarters of 1999 and 1998
respectively are as follows:
PRODUCTION/REVENUE DATA
<TABLE>
<CAPTION>
For comparative purposes only.
Nevada gold properties acquired
GLAMIS GOLD LTD. from Rayrock
THREE MONTHS ENDED Three months ended
- ----------------------------------------------------------------------------------------------
MARCH 31, 1999(1) MARCH 31, 1998 March 31, 1999 March 31, 1998
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Gold Ounces sold 24,559 27,337 30,990 24,099
- ----------------------------------------------------------------------------------------------
Average revenue per ounce $ 292 $ 328 $ 287 $ 304
- ----------------------------------------------------------------------------------------------
Average Market price per Ounce $ 287 $ 294 $ 287 $ 294
- ----------------------------------------------------------------------------------------------
Total cash cost per ounce $ 235 $ 213 $ 232 $ 244
- ----------------------------------------------------------------------------------------------
Total cost per ounce $ 329 $ 297 $ 305 $ 312
- ----------------------------------------------------------------------------------------------
</TABLE>
1. Includes the results of the new Nevada properties' operations for March 1999
only.
<PAGE> 10
-10-
OPERATIONS REVIEW
MINE PRODUCTION
(Note: The Marigold, Dee and Daisy properties were acquired in March 1999 as
part of the Company's acquisition of Rayrock (see note 2)).
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
- --------------------------------------------------------------------------------------------
March 31, 1999 March 31, 1999 March 31, 1998 March 31, 1998
Total Cash cost Gold ounces Cash cost of Gold ounces
Mine of production produced production produced
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Picacho $ 160 2,238 $ 136 5,689
- --------------------------------------------------------------------------------------------
Rand $ 256 11,900 $ 227 21,209
- --------------------------------------------------------------------------------------------
Marigold(2) $ 242(1) 15,907(1) $ 225 12,317
- --------------------------------------------------------------------------------------------
Daisy(3) $ 545(1) 3,663(1) $ 280 2,670
- --------------------------------------------------------------------------------------------
Dee $ 191(1) 11,420(1) $ 257 9,112
- --------------------------------------------------------------------------------------------
</TABLE>
(1) The Company's share of this production (March 1999 only) totals 4,344
ounces from Marigold, 1,305 ounces from Daisy and 4,130 ounces from Dee;
total cash costs are based on March 1999 only. 1998 data on Marigold, Dee
and Daisy for information only.
(2) Marigold is 66.7% owned
(3) Daisy was owned 35% in 1998, 100% in 1999.
PICACHO MINE, CALIFORNIA
Reclamation activities continue at the Picacho Mine while the remaining ounces
are being extracted from the heap. The mine produced 2,238 ounces of gold during
the first quarter of 1999, compared to 5,689 for the same period in 1998. As it
winds down, the mine is projected to produce approximately 6,800 ounces of gold
this year.
RAND MINE, CALIFORNIA
The Rand Mine produced 11,900 ounces of gold in the quarter ending March 31,
1999. While the ounces produced are on plan this is significantly below the
ounces produced in the first quarter of 1998 due to two factors. First, ounces
stacked in the fourth quarter of 1998 were lower than ounces stacked in the
fourth quarter of 1997, second a planned major stripping program also impacted
the ounces stacked in the first quarter of 1999. Mine production suffered in
February and March as mechanical problems on two large hydraulic shovels
resulted in tonnage being down in February, and again in March. The March
breakdown resulted in a shortfall of 7,600 gold ounces being stacked. This will
impact ounces produced in the second quarter of 1999. The shovels are back on
line now and the mine is attempting to make up the shortfall. Costs were higher
than planned due to high maintenance costs associated with the shovels and tire
usage in mine operations. The Company anticipates total production from Rand to
exceed 75,000 ounces of gold in 1999.
<PAGE> 11
-11-
MARIGOLD MINE, NEVADA
The 66.7%-owned Marigold Mine was acquired in the Rayrock acquisition. Marigold
is an open-pit mine in central Nevada at the north end of the Battle
Mountain-Eureka Trend. Glamis is the operator of Marigold. March production for
Glamis' account from Marigold totaled 4,344 ounces of gold, 12% above the
budgeted amount. The mill, which is normally operated only part of the year, ran
an additional month. While incurring additional costs due to mill production,
the mill ounces produced an additional $916,000 in revenue. The overall cash
cost per ounce was as budgeted ($242 per ounce). Marigold is projected to
produce an additional 30,000 ounces for the Company in 1999.
DEE MINE, NEVADA
The Dee Mine was also acquired as part of the Rayrock acquisition. This open-pit
mine is located along the Carlin Trend in northeast Nevada, five miles north of
the Barrick Goldstrike property. Underground expansion is planned at the Dee
Mine, and on April 15, 1999, the Company approved a $3.4 million underground
development program. Dee's March production of 4,130 ounces of gold were below
plan by approximately 15%. Heap leach costs were above plan as the good weather
allowed for unbudgeted operation, but mining and milling costs on a per-unit
basis were both below plan due to the additional tons mined. The Company
anticipates production of approximately 46,000 ounces during the balance 1999.
DAISY MINE, NEVADA
The third Nevada property acquired from Rayrock is the Daisy Mine. Daisy is an
open-pit mine in Nye County, Nevada. Daisy experienced a difficult month during
March as only 1,305 ounces of gold were produced as compared to the budget of
2,778 ounces. The Mother Lode pit was determined to have less leachable ore than
expected and was abandoned at the end of February. Mining costs incurred in
March were higher than expected due to a revised mining schedule generated to
accommodate the production shortfall. March mining was all within the Secret
Pass pit. Development at the Reward Project continued on schedule. The Company
expects Daisy to produce approximately 33, 000 ounces for the last three
quarters of 1999.
IMPERIAL PROJECT
Work continues on the permitting for the Imperial Project. The Company's legal
counsel has written letters to the BLM stating our concern with the pace of the
process and issues such as the BLM "preferred" formatting of the final EIS. The
Company received the Draft Biologic Opinion from the U.S. Fish and Wildlife
Service during February. The document is generally acceptable, with a few
requested changes to clarify the document.
<PAGE> 12
-12-
CIENEGUITA PROJECT, MEXICO
Gold production continues to be problematic. Production of 642 ounces of gold
during the first quarter is 46% below budget. No mining activities occurred in
February or March as the heaps were fully charged with ore. Percolation
characteristics of the newly stacked ore and water shortages have negatively
impacted the production capabilities throughout the quarter. It is expected that
gold production will improve as solution delivery to the heap becomes more
regular.
MINA IVAN, CHILE
The Ivan Mine is a copper mine acquired in the Rayrock transaction. Ivan is
located in the coastal range of northern Chile, approximately 40 kilometers
north of the major port city of Antofagasta. Mining at Ivan has been from
underground and open-pit workings. March production was 601.5 tonnes of copper
versus a budget of 850.0 tonnes. There was no underground production in March as
extremely low-grade ores had been produced in the previous months. Total cash
costs for the month of March 1999 were $1.03 per pound of production, versus a
realized sales price of $0.64 per pound. The Company is currently assessing the
operation at Ivan to determine how best to proceed.
SAN MARTIN PROJECT, HONDURAS
Work is progressing at the San Martin Project. Additional drilling on the Palo
Alto Zone has increased the San Martin resource to 41.5 million tons and over 1
million ounces. Drilling on the Palo Alto Zone and the Rosa deposit continues.
The Company is actively working on converting its Exploration Concession to a
Mining Concession. Significant efforts were expended on completing the annual
reports for the concessions due at the end of March. Project managers continue
to work closely with the community of San Ignacio on construction projects of
mutual benefit.
CERRO BLANCO PROJECT, GUATEMALA
The on-going drilling program progressed through the first quarter of 1999.
Substantial data has been produced which is currently being analyzed. Results
are expected to be reported shortly.
OTHER MATTERS
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize the
year 2000 as 1900 or some other date resulting in errors when information-using
year 2000 dates is processed. In addition similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before, on, or after
January 1, 2000, and if not addressed, the impact on operations and financial
reporting may range from minor
<PAGE> 13
-13-
errors to significant systems failure, which could affect an entity's ability to
conduct normal business operations. It is not possible to be certain that all
aspects of the Year 2000 issue affecting the entity, including those related to
the efforts of customers, suppliers, or other third parties, will be fully
resolved.
The Company disclosed its readiness and plans relating to Y2K compliance issues
in the Form 10K for the year ending December 31, 1998. The current status of
this project is that our major equipment suppliers are keeping the Company
informed of their progress. Contingency planning is ongoing and consists of
continuing contact with major suppliers not yet certifying compliance regarding
correction or mitigation efforts. The Company expects total in-house compliance
and completion of supplier assessment by early third quarter 1999.
To March 31, 1999 there have been limited specific Year 2000 costs incurred by
the Company. Hardware and software upgrades during 1998 and the first quarter of
1999 were planned based on business requirements resulting from the relocation
of the Company's corporate office from Vancouver to Reno in March 1998 and the
subsequent centralization of several management functions there throughout 1998
and to date in 1999. Additional expenditures directly related to Y2K issues
prior to year-end 1999 are not expected to exceed $10,000.
FORWARD-LOOKING STATEMENTS
Certain of the information contained herein constitutes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and other applicable laws or regulatory policies. Such forward-looking
statements, involve known and unknown risks, uncertainties and other factors
which may cause the actual results to be materially different from any future
results, performance or achievements expressed or implied by such forward
looking statements. Such factors include, among others, the actual results of
current exploration activities, conclusions of feasibility studies now underway,
changes in project parameters as plans continue to be refined, future prices for
gold and other mineral commodities, as well as those factors discussed in the
section entitled "Other Considerations" in the Company's Form 10-K. Although the
Company has attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause actual
results not to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate as actual results and
future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
As noted in Item 7 "Other Risks" in the Company's annual report on Form 10K for
the year ended December 31, 1998, the Company is subject to changes in metals
prices, which directly impact its profitability and cash flows. Because the
markets in which the Company sells its
<PAGE> 14
-14-
products set prices outside of the Company's control, the Company believes it is
important to reduce the impact of negative price movements through hedging
transactions. These hedging transactions utilize so-called "derivatives", the
value of which is "derived" from movements in the prices or rates associated
with the underlying product.
The Company's hedging policy attempts to protect the Company's production by use
of forward contracts, spot deferred contracts, and options, in any combination.
The Company continuously monitors its position with respect to the unrealized
gains and losses and to ensure compliance with Company policy.
The Company also invests cash balances in short-term investments, which are
subject to interest rate fluctuations. Because these investments are in highly
liquid, short-term instruments, any impact of an interest rate change will not
be material.
The table below sets forth the positions of the Company at March 31, 1999 and
December 31, 1998. Fair values are estimated based on market quotations of the
variables based on expected maturity date.
<TABLE>
<CAPTION>
(in thousands of U.S. dollars unless indicated)
As of March 31, 1999 As of December 31, 1998
- ----------------------------------------------------------------------------------------------------------
Estimated Fair Estimated Fair Value
Maturity 1999 Value at 3/31/99 Maturity 1999 at 12/31/98
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Short-term investments $ 22.9 million $ 22.9 million $ 23.0 million $ 23.0 million
- ----------------------------------------------------------------------------------------------------------
Derivatives:
Gold Forward Sales
Ounces 3,000 $ 17.0
Price per ounce $ 294
- ----------------------------------------------------------------------------------------------------------
Gold Put Options Purchased
Ounces 10,800 $ 71.0
Price per ounce $ 286
Ounces 13,500 $140.0
Price per ounce $ 290
- ----------------------------------------------------------------------------------------------------------
Gold Call Options sold:
Ounces 13,500 Nil 10,000 Nil
Price per ounce $ 320 $ 310
Ounces 10,800 Nil
Price per ounce $ 310
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 15
-15-
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS: None
ITEM 2 CHANGES IN SECURITIES:
Issuance of Unregistered Securities:
On March 2, 1999, the Company completed the acquisition ("the
Acquisition") of 100% of the issued and outstanding shares of Rayrock
Resources Inc. The consideration for the acquisition was the issuance of
29,277,820 common shares of the Company and payment of Cdn.$52,883,007
(approximately US$35.0 million) in cash to the shareholders of Rayrock.
The cash portion of the consideration paid came from the Company's
working capital. As part of the Acquisition, share purchase options in
respect of 1,649,500 common shares of Rayrock were exchanged for share
purchase options (the "Replacement Options") providing for the right to
acquire 4,470,145 shares of the Company. Also as part of the
Acquisition, the Company issued 857,780 share appreciation rights in
exchange for 316,524 Rayrock share appreciation rights.
The Acquisition was carried out through an arrangement pursuant to
section 182 of the Business Corporations Act (Ontario) (the
"Arrangement"). Under the Arrangement, shareholders of Rayrock were
entitled to receive in exchange for each common share of Rayrock held
either: (a) 2.4 Shares (the "All Share Consideration"); or (b) 1.6
Shares and Cdn.$3.00 (the "Cash/Share Consideration"). Each holder of
Rayrock common shares was deemed to elect to receive the All Share
Consideration unless they made a proper election to receive the
Cash/Share Consideration. No fractional shares were issued under the
Acquisition. A holder of common shares of Rayrock who was entitled to
receive a fractional Share received cash in lieu thereof based on a
whole Share being valued at Cdn.$3.75.
The Shares and Replacement Options were not registered under the
Securities Act in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 3(a)(10) thereof.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES: None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None
ITEM 5 OTHER INFORMATION: None
<PAGE> 16
-16-
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits
Exhibit No. Exhibit Description
10.54 Services Agreement between the Company and C. Kevin
McArthur dated January 1, 1998
10.55 Services Agreement between the Company and Daniel J.
Forbush dated March 1, 1998
10.56 Letter Loan Agreement between the Company and the Bank
of Nova Scotia dated February 24, 1999
10.57 Services Agreement between the Company and Charles A.
Jeannes dated April 26, 1999
27 Financial Data Schedule
(b) Reports on Form 8-K
(i) Report on Form 8-K filed February 4, 1999 pertaining to details of
an agreement to acquire Rayrock Resources, Inc.
(ii) Report on Form 8-K filed March 15, 1999 and amended by a Form
8-K-A filed May 14, 1999 with respect to the acquisition of
Rayrock Resources Inc.
SIGNATURES
Pursuant to the requirements 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.
GLAMIS GOLD LTD.
(registrant)
/s/ DANIEL J. FORBUSH
Date: May 14, 1999 ______________________________________________
DANIEL J. FORBUSH
Chief Financial Officer, Treasurer & Secretary
(Principal Accounting and Financial Officer)
<PAGE> 1
-17-
EXHIBIT 10.54
SERVICES AGREEMENT
THIS AGREEMENT Effective as of January 1, 1998
BETWEEN:
GLAMIS GOLD LTD., A British Columbia company having an address at 3324
Four Bengal Centre, 1055 Dunsmuir Street, Vancouver, British Columbia,
V7X 1L3
("Glamis") OF THE FIRST PART
AND:
C. KEVIN MCARTHUR, having a mailing address at
5190 Neil Road, Suite 310
Reno, Nevada
89502
("McArthur")
OF THE SECOND PART
WHEREAS:
(A) McArthur is currently the Chief Operating Officer, North America of
Glamis;
(B) Glamis wishes to engage McArthur to perform the duties of President and
Chief Executive Officer of Glamis effective the date hereof.
NOW THEREFORE THIS AGREEMENT WITNESSES that the parties mutually agree as
follows:
ENGAGEMENT
1) The Services Agreement between McArthur and Glamis dated August 1, 1997
is terminated as of the date hereof and Glamis hereby engages (the
"Engagement") McArthur as and McArthur agrees to serve as, the President
and Chief Executive Officer ("CEO") of Glamis and as President of Glamis
Gold, Inc., and it subsidiaries and to perform the duties described in
Section 3, on the terms and subject to the conditions set out herein.
<PAGE> 2
-18-
TERM
2) The term ("Term") of the Engagement will commence on the date hereof and
will continue thereafter on a month basis until terminated by either
party pursuant to the terms hereof.
DUTIES AND OBLIGATIONS OF MCARTHUR
3) McArthur will consent to stand as a director of Glamis at Annual General
Meetings of the Shareholders of Glamis held during the Term and as
President and CEO of Glamis, will perform those duties and functions
(the "Duties") that are described in Schedule A hereto, together with
such other functions and duties as may be specified from time to time by
the Board of Directors (the "Board") of Glamis.
PERFORMANCE OF DUTIES
4) McArthur will perform the Duties as follows:
a) subject to ill-health and subsection 4(c), McArthur will perform the
Duties during each day that is a Business Day in the Term (a
"Business Day" being a day, other than a Saturday or a Sunday, on
which the main branch of Glamis Gold, Inc.'s banker in Reno, Nevada
is open for the transaction of business);
b) subject to subsection 4(c), McArthur will devote substantially all
of his time and energy during normal business hours on each working
day during the Term to performing the Duties to the best of his
skill and ability; and
c) notwithstanding subsections 4(a) and 4(b), McArthur will not be
required to perform the Duties on statutory holidays and during
periods of holidays, which will be not less than four weeks in the
aggregate in respect of each calendar year, provided however, that
if McArthur does not take his full entitlement to vacation days in a
year he may use such vacation days during the next 2 succeeding
calendar years and if such unused vacation days are not taken by the
end of such 2 year period, McArthur will forfeit the right to take
such days as vacation days.
REMUNERATION
5) In consideration of the performance of the Duties by McArthur, Glamis,
through Glamis Gold, Inc., will:
a) pay McArthur a salary ("Salary") of U.S. $182,500 (or such other
amount as the parties may mutually agree in writing) per calendar
year during the Term by paying 1/24 thereof on the 15th of each
month and 1/24th thereof on the last day of each month or, if such
days are not Business Days, on the first prior day that is a
business day, such payments to be
<PAGE> 3
-19-
reduced by the amount of applicable withholding and other
requirements of the Internal Revenue Code (United States) and any
other applicable United States legislation in respect of
remuneration paid to employees;
b) reimburse McArthur for all reasonable expenses incurred by McArthur
in carrying out his functions as President and CEO of Glamis and
will provide Glamis such particulars as Glamis may reasonably
require;
c) permit McArthur to participate in medical, dental and other employee
benefit plans of Glamis Gold, Inc. as they are from time to time
initiated, if and to the extent that participation is permitted by
the plans, such plans to include, without limitation, the Glamis
Gold, Inc. Profit Sharing and Retirement Plan and the Glamis Gold,
Inc. Group Insurance Benefits Plan;
d) indemnify and hold McArthur harmless from and against any and all
costs, damages or losses resulting from the performance by McArthur
of the Duties and as a result of McArthur acting as Director,
President and CEO of Glamis and its direct and indirect
subsidiaries;
e) perform a review of the Salary on an annual basis, as a minimum;
f) grant to McArthur share purchase options from time to time on an
aggregate of not less than 200,000 common shares of Glamis
("Shares") under Glamis' Incentive Share Purchase Option Plan (the
"Plan"), in accordance with the rules and regulations of applicable
regulatory authorities and the Plan, it being understood that 50% of
such options shall be exercisable immediately upon grant and that
the remaining 50% of the options may be exercised in 4 equal
installments on or after each of the 1st, 2nd, 3rd and 4th
anniversaries of the date of grant of the options; and
g) notwithstanding the provisions of subsection 5(f), Glamis shall,
through its Executive Compensation Committee, continuously monitor
the performance of McArthur and of Glamis and shall grant McArthur
additional share purchase options if, in the sole discretion of the
Executive Compensation Committee, such is warranted.
TERMINATION OF ENGAGEMENT
6. The following will govern termination under this Agreement:
a) McArthur may deliver to Glamis a notice to terminate the Engagement
on a day not less than 60 days after the day of such delivery and
the Engagement will terminate at the expiration of such 60-day or
longer period and in such case any outstanding share purchase
options held at such time by McArthur will expire on the 30th day
after the effective date of the termination;
<PAGE> 4
-20-
b) Glamis may terminate the Engagement without notice and without any
payment in lieu of notice if
i) McArthur is guilty of any willful act, neglect, or conduct that
causes substantial damage or discredit to Glamis; or
ii) McArthur is convicted of any offence involving fraud,
and in such case any outstanding share purchase options held at such
time by McArthur will expire on the 30th day after the effective date of
termination;
c) Except for those matters referred to in subsection 6(b), Glamis may,
at its sole option, terminate the Engagement for cause by providing
three months written notice to McArthur and in such case any
outstanding share purchase options held at such time by McArthur
will expire on the 30th day after the effective date of the
termination;
d) Glamis may, at its sole option, terminate the Engagement without
cause by notice (the "Termination Notice") to McArthur, in which
case McArthur will be paid any remuneration due hereunder to the
date of termination, together with an aggregate amount equal to 2
times the Salary which is in force at the time of delivery of the
Termination Notice and the cash value of 24 months of full benefit
coverage under subsection 5(c), less applicable withholding and
other requirements of the Internal Revenue Code (United States) and
any other applicable United States legislation in respect of
remuneration paid to employees and in such case any outstanding
share purchase options held at such time by McArthur will expire on
the 30th day after the effective date of the termination;
e) If McArthur becomes permanently disabled prior to termination of the
Engagement hereunder the provisions of subsection 6(c) will not
apply, however, Glamis may terminate the Engagement pursuant to
subsection 6(d), provided however that such termination will not
affect any benefits which McArthur would be entitled to as a
disabled employee under the plans described in subsection 5(c).
McArthur will be deemed to be permanently disabled if he is unable
to perform the material and substantial portion of the Duties
because of sickness or injury. For the purposes hereof "sickness"
means an organic disease, including without limitation mental
illness, and the medical or surgical treatment of the disease and
"injury" means bodily injury caused directly by external, violent
and purely accidental means;
f) On termination of the Engagement, McArthur will deliver to Glamis in
a reasonable state of repair all property of Glamis used by or in
the possession of McArthur; and
g) Termination of the Engagement will not terminate Glamis' obligation
under subsection 5(d), which obligation will survive such
termination.
<PAGE> 5
-21-
DISCLOSURE
7. McArthur undertakes to refrain, both during the Term and thereafter,
except so far as may be necessary or proper in performing the Duties,
from making public or disclosing to any person who is not an employee,
officer or director of Glamis or one of its subsidiaries, any
confidential information that may come to the knowledge of McArthur
during the Term including any information in respect of the business
dealings of Glamis or its subsidiaries or in respect of any of the
contractual agreements of Glamis or its subsidiaries and McArthur will,
at the request of Glamis, enter into a separate agreement with respect
to such matters.
MISCELLANEOUS
8.
a) Each party will, on the request of the other, execute and deliver
such other agreements, deeds, documents and instruments, and do such
further acts and things as the other may reasonably request in order
to evidence, carry out and give full force and effect to the terms,
conditions, intent and meaning of this Agreement.
b) If any provision of this Agreement is invalid or unenforceable for
any reason whatsoever, such provision will be severable from the
remainder of this Agreement, the validity of the remainder will
continue in full force and effect and this Agreement will be
construed as if it had been executed without the invalid or
unenforceable provision.
c) No consent or waiver, express or implied, by either party to or of
any breach or default by the other party in the performance by the
other of any or all of its obligation under this Agreement.
i) will be valid unless it is in writing and specifically stated
to be a consent or waiver pursuant to this subsection,
ii) may be relied upon by the other as consent or waiver to or of
any other breach or default of the same or any other
obligation,
iii) will constitute a general consent or waiver under this
Agreement, or
iv) will eliminate or modify the need for a specific consent or
waiver pursuant to this subsection in any other instance.
d) Notices, requests, demands or directions to one party to this
Agreement by another will be in writing and will be delivered as
follows:
<PAGE> 6
-22-
If to Glamis at:
5190 Neil Road, Suite 310
Reno, NV 89502-8502
Attention: Mr. C.F. Millar, Chairman
If to McArthur at;
5190 Neil Road, Suite 310
Reno, NV 89502-8502
Attention: Mr. C. Kevin McArthur
or to such other address as may be specified by one party to the other in a
notice given in the manner provided in this subsection.
e) This Agreement is made in British Columbia with the intention that
its construction and validity and all other issues related to its
administration will in all respects be governed by the laws
prevailing in that province.
f) In the event of any dispute between the parties in respect of the
interpretation of this Agreement or any matter to be agreed on, such
dispute will be determined by a single arbitrator appointed and
acting pursuant to the Commercial Arbitration Act (British Columbia)
and the decision of the arbitrator shall be final and binding on the
parties.
g) This Agreement constitutes the entire agreement between the parties
and there are no representations or warranties, express or implied,
statutory or otherwise, and no agreements collateral hereto other
than as expressly set forth or referred to herein.
h) This Agreement will ensure to the benefit of and be binding upon the
respective legal representatives and successors and permitted
assigns of the parties.
i) None of the parties may assign any right, benefit or interest in
this Agreement without the written consent of the others and any
purported assignment without such consent will be void, save and
except that Glamis may assign any or all of its rights and
obligations hereunder to Glamis Gold Inc.
<PAGE> 7
-23-
IN WITNESS WHEREOF the parties hereto have executed the Agreement on the day
first above written.
The Common Seal of GLAMIS GOLD LTD. )
Was hereunto affixed in the presence of: )
)
Signed: "C. F. Millar"
- -----------------------------------
Signed Sealed and Delivered by
C. KEVIN MCARTHUR in the presence of: )
)
- ----------------------------------- )
Name )
- ----------------------------------- )
Address ) Signed: "C. Kevin McArthur"
- ----------------------------------- ) C. KEVIN MCARTHUR
)
- ----------------------------------- )
Occupation )
<PAGE> 1
-24-
EXHIBIT 10.55
SERVICES AGREEMENT
THIS AGREEMENT Effective as of March 1, 1998
BETWEEN:
GLAMIS GOLD LTD., A British Columbia company having an address at 3324
Four Bentall Centre, 1055 Dunsmuir Street, Vancouver, British Columbia,
V7X 1L3
("Glamis") OF THE FIRST PART
AND:
DANIEL J. FORBUSH, having a mailing address at
5190 Neil Road, Suite 310
Reno, Nevada
89502
("Forbush")
OF THE SECOND PART
WHEREAS:
(B) Forbush is currently the Controller of Glamis Gold, Inc., a wholly owned
subsidiary of Glamis;
(B) Glamis wishes to engage Forbush to perform the duties of Chief Financial
Officer and Treasurer of Glamis effective the date hereof.
NOW THEREFORE THIS AGREEMENT WITNESSES that the parties mutually agree as
follows:
ENGAGEMENT
2) Glamis, effective the date hereof, engages (the "Engagement") Forbush as
and Forbush agrees to serve as, the Chief Financial Officer ("CFO") of
Treasurer of Glamis and to perform the duties described in Section 3, on
the terms and subject to the conditions set out herein.
<PAGE> 2
-25-
TERM
2) The term ("Term") of the Engagement will commence on the date hereof and
will continue thereafter on a month basis until terminated by either
party pursuant to the terms hereof.
DUTIES AND OBLIGATIONS OF FORBUSH
3) Forbush will, as CFO and Treasurer of Glamis, perform those duties and
functions (the "Duties") that are described in Schedule A hereto,
together with such other functions and duties as may be specified from
time to time by the Board of Directors (the "Board") of Glamis.
PERFORMANCE OF DUTIES
6) Forbush will perform the Duties as follows:
a) subject to ill-health and subsection 4(c), Forbush will perform the
Duties during each day that is a Business Day in the Term (a
"Business Day" being a day, other than a Saturday or a Sunday, on
which the main branch of Glamis Gold, Inc.'s banker in Reno, Nevada
is open for the transaction of business);
b) subject to subsection 4(c), Forbush will devote substantially all of
his time and energy during normal business hours on each working day
during the Term to performing the Duties to the best of his skill
and ability; and
c) notwithstanding subsections 4(a) and 4(b), Forbush will not be
required to perform the Duties on statutory holidays and during
periods of holidays, which will be not less than four weeks in the
aggregate in respect of each calendar year, provided however, that
if Forbush does not take his full entitlement to vacation days in a
year he may use such vacation days during the next 2 succeeding
calendar years and if such unused vacation days are not taken by the
end of such 2 year period, Forbush will forfeit the right to take
such days as vacation days.
REMUNERATION
7) In consideration of the performance of the Duties by Forbush, Glamis,
through Glamis Gold, Inc., will:
h) pay Forbush a salary ("Salary") of U.S. $125,000 (or such other
amount as the parties may mutually agree in writing) per calendar
year during the Term by paying 1/24 thereof on the 15th of each
month and 1/24th thereof on the last day of each month or, if such
days are not Business Days, on the first prior day that is a
business day, such payments to be
<PAGE> 3
-26-
reduced by the amount of applicable withholding and other
requirements of the Internal Revenue Code (United States) and any
other applicable United States legislation in respect of
remuneration paid to employees;
i) reimburse Forbush for all reasonable expenses incurred by Forbush in
carrying out his functions as President and CEO of Glamis and will
provide Glamis such particulars as Glamis may reasonably require;
j) permit Forbush to participate in medical, dental and other employee
benefit plans of Glamis Gold, Inc. as they are from time to time
initiated, if and to the extent that participation is permitted by
the plans, such plans to include, without limitation, the Glamis
Gold, Inc. Profit Sharing and Retirement Plan and the Glamis Gold,
Inc. Group Insurance Benefits Plan;
k) indemnify and hold Forbush harmless from and against any and all
costs, damages or losses resulting from the performance by Forbush
of the Duties and as a result of Forbush acting as CFO and Teasurer
of Glamis;
l) perform a review of the Salary on an annual basis, as a minimum;
m) grant to Forbush share purchase options from time to time on an
aggregate of not less than 125,000 common shares of Glamis
("Shares") under Glamis' Incentive Share Purchase Option Plan (the
"Plan"), in accordance with the rules and regulations of applicable
regulatory authorities and the Plan, it being understood that 50% of
such options shall be exercisable immediately upon grant and that
the remaining 50% of the options may be exercised in 4 equal
installments on or after each of the 1st, 2nd, 3rd and 4th
anniversaries of the date of grant of the options; and
n) notwithstanding the provisions of subsection 5(f), Glamis shall,
through its Executive Compensation Committee, continuously monitor
the performance of Forbush and of Glamis and shall grant Forbush
additional share purchase options if, in the sole discretion of the
Executive Compensation Committee, such is warranted.
TERMINATION OF ENGAGEMENT
8. The following will govern termination under this Agreement:
a) Forbush may deliver to Glamis a notice to terminate the Engagement
on a day not less than 60 days after the day of such delivery and
the Engagement will terminate at the expiration of such 60-day or
longer period and in such case any outstanding share purchase
options held at such time by Forbush will expire on the 30th day
after the effective date of the termination;
b) Glamis may terminate the Engagement without notice and without any
payment in lieu of
<PAGE> 4
-27-
notice if
i) Forbush is guilty of any willful act, neglect, or conduct that
causes substantial damage or discredit to Glamis; or
ii) Forbush is convicted of any offence involving fraud,
and in such case any outstanding share purchase options held at such
time by Forbush will expire on the 30th day after the effective date
of termination;
c) Except for those matters referred to in subsection 6(b), Glamis may,
at its sole option, terminate the Engagement for cause by providing
three months written notice to Forbush and in such case any
outstanding share purchase options held at such time by Forbush will
expire on the 30th day after the effective date of the termination;
d) Glamis may, at its sole option, terminate the Engagement without
cause by notice (the "Termination Notice") to Forbush, in which case
Forbush will be paid any remuneration due hereunder to the date of
termination, together with an aggregate amount equal to 2 times the
Salary which is in force at the time of delivery of the Termination
Notice and the cash value of 24 months of full benefit coverage
under subsection 5(c), less applicable withholding and other
requirements of the Internal Revenue Code (United States) and any
other applicable United States legislation in respect of
remuneration paid to employees and in such case any outstanding
share purchase options held at such time by Forbush, which have not
vested at the time of the Termination Notice, will be immediately
exercisble and will expire on the 30th day after the effective date
of the termination;
e) If Forbush becomes permanently disabled prior to termination of the
Engagement hereunder the provisions of subsection 6(c) will not
apply, however, Glamis may terminate the Engagement pursuant to
subsection 6(d), provided however that such termination will not
affect any benefits which Forbush would be entitled to as a disabled
employee under the plans described in subsection 5(c). Forbush will
be deemed to be permanently disabled if he is unable to perform the
material and substantial portion of the Duties because of sickness
or injury. For the purposes hereof "sickness" means an organic
disease, including without limitation mental illness, and the
medical or surgical treatment of the disease and "injury" means
bodily injury caused directly by external, violent and purely
accidental means;
f) On termination of the Engagement, Forbush will deliver to Glamis in
a reasonable state of repair all property of Glamis used by or in
the possession of Forbush; and
g) Termination of the Engagement will not terminate Glamis' obligation
under subsection 5(d), which obligation will survive such
termination.
<PAGE> 5
-28-
DISCLOSURE
9. Forbush undertakes to refrain, both during the Term and thereafter,
except so far as may be necessary or proper in performing the Duties,
from making public or disclosing to any person who is not an employee,
officer or director of Glamis or one of its subsidiaries, any
confidential information that may come to the knowledge of Forbush
during the Term including any information in respect of the business
dealings of Glamis or its subsidiaries or in respect of any of the
contractual agreements of Glamis or its subsidiaries and Forbush will,
at the request of Glamis, enter into a separate agreement with respect
to such matters.
MISCELLANEOUS
8.
a) Each party will, on the request of the other, execute and deliver
such other agreements, deeds, documents and instruments, and do such
further acts and things as the other may reasonably request in order
to evidence, carry out and give full force and effect to the terms,
conditions, intent and meaning of this Agreement.
b) If any provision of this Agreement is invalid or unenforceable for
any reason whatsoever, such provision will be severable from the
remainder of this Agreement, the validity of the remainder will
continue in full force and effect and this Agreement will be
construed as if it had been executed without the invalid or
unenforceable provision.
c) No consent or waiver, express or implied, by either party to or of
any breach or default by the other party in the performance by the
other of any or all of its obligation under this Agreement.
i) will be valid unless it is in writing and specifically stated
to be a consent or waiver pursuant to this subsection,
ii) may be relied upon by the other as consent or waiver to or of
any other breach or default of the same or any other
obligation,
iii) will constitute a general consent or waiver under this
Agreement, or
iv) will eliminate or modify the need for a specific consent or
waiver pursuant to this subsection in any other instance.
d) Notices, requests, demands or directions to one party to this
Agreement by another will be in writing and will be delivered as
follows:
<PAGE> 6
-29-
If to Glamis at:
5190 Neil Road, Suite 310
Reno, NV 89502-8502
Attention: Mr. C.F. Millar, Chairman
If to Forbush at;
5190 Neil Road, Suite 310
Reno, NV 89502-8502
Attention: Mr. Daniel J. Forbush
or to such other address as may be specified by one party to the other in a
notice given in the manner provided in this subsection.
e) This Agreement is made in British Columbia with the intention that
its construction and validity and all other issues related to its
administration will in all respects be governed by the laws
prevailing in that province.
f) In the event of any dispute between the parties in respect of the
interpretation of this Agreement or any matter to be agreed on, such
dispute will be determined by a single arbitrator appointed and
acting pursuant to the Commercial Arbitration Act (British Columbia)
and the decision of the arbitrator shall be final and binding on the
parties.
g) This Agreement constitutes the entire agreement between the parties
and there are no representations or warranties, express or implied,
statutory or otherwise, and no agreements collateral hereto other
than as expressly set forth or referred to herein.
h) This Agreement will ensure to the benefit of and be binding upon the
respective legal representatives and successors and permitted
assigns of the parties.
i) None of the parties may assign any right, benefit or interest in
this Agreement without the written consent of the others and any
purported assignment without such consent will be void, save and
except that Glamis may assign any or all of its rights and
obligations hereunder to Glamis Gold Inc.
<PAGE> 7
-30-
IN WITNESS WHEREOF the parties hereto have executed the Agreement on the day
first above written.
The Common Seal of GLAMIS GOLD LTD. )
Was hereunto affixed in the presence of: )
)
Signed: "C. F. Millar" )
- -----------------------------------
Signed Sealed and Delivered by
DANIEL J. FORBUSH in the presence of: )
)
- ----------------------------------- )
Name )
- ----------------------------------- )
Address ) Signed: "Daniel J. Forbush"
- ----------------------------------- ) DANIEL J. FORBUSH
)
- ----------------------------------- )
Occupation )
<PAGE> 8
-31-
SCHEDULE A
Duties of Chief Financial Officer and Treasurer of Glamis
1. administer Glamis' financial reporting obligations under laws and
regulations promulgated by securities and other administrative bodies
having jurisdiction over Glamis' corporate financial matters;
2. recommend financial policy to the Board of Directors of Glamis ("the
Board") and implement all such policies as are approved by the Board;
3. have responsibility for preparing monthly, quarterly and annual
financial statements and reporting regularly to the Board thereon;
4. design and implement financial and accounting systems to provide
information for planning and control purposes;
5. assume responsibility for management, corporate banking and the treasury
of Glamis;
6. undertake strategic and financial planning for the purposes of preparing
and monitoring budgets and forecasts;
7. monitor and evaluate the financial performance of Glamis, including
analyzing statistics;
8. communicate with Glamis' auditors, bankers and financial institutions as
required;
9. participate in tax planning;
10. participate in financial and tax aspects of merger and acquisition
negotiations;
11. prepare financial aspects of reports to the shareholders;
12. attend to insurance matters;
13. become familiar with all the agreements to which Glamis or its
subsidiaries are parties and to administer the due compliance by Glamis
of the financial terms thereof; and
14. assist the President and Chief Executive Officer as requested and to
otherwise act in accordance with his instructions.
<PAGE> 1
-32-
EXHIBIT 10.56
CONFIDENTIAL
24 February 1999
Glamis Gold Ltd.
5190 Neil Road
Suite 310
Reno, Nevada
89502
Attention: Mr. Daniel J. Forbush
Dear Sirs:
Re: Rayrock Resources Inc.
We are pleased to confirm that, subject to your acceptance, we will
establish a credit in your favour on the following terms and conditions:
PARTIES
BORROWER Glamis Gold Ltd. (the "Borrower")
RESTRICTED
PARTIES Glamis Gold Inc. ("Glamis USA"), Rayrock Mines, Inc.
("RMI") and Rayrock Resources Inc. ("RRI" and collectively
with Glamis USA and RMI, the "Guarantors"), together with
the Borrower and the subsidiaries of the Borrower and the
Guarantors, are collectively referred to as the
"Restricted Parties."
LENDER The Bank of Nova Scotia (the "Lender")
CREDIT FACILITY
All references to "$" in this letter mean Canadian
dollars, unless otherwise specified.
Non-revolving short term credit (the "Credit") of up to
$15,000,000 which will be available in a single advance.
Once repaid the Credit may not be reborrowed.
<PAGE> 2
-33-
PURPOSE OF CREDIT
The Borrower has entered into an agreement providing for
an arrangement (the "Arrangement") relating to RRI by
which the Borrower would acquire all of the issued and
outstanding shares of RRI (collectively the "RRI Shares"),
all as more particularly described in a circular to the
holders of the RRI Shares dated 26 January 1999 (the
"Circular").
The Credit is available to provide funds to assist the
Borrower in paying the cash portion of the purchase price
for 100% of the RRI Shares pursuant to the Arrangement and
to pay the Borrower's expenses in connection with the
Arrangement. The Credit will be cancelled to the extent it
is not required for those purposes.
TERM, MATURITY AND REPAYMENT
The Credit will be payable in full on 30 April 1999.
Outstanding Prime Rate advances may be voluntarily prepaid
in whole or in part without penalty. Bankers' Acceptances
may not be prepaid.
INTEREST RATES AND FEES
At the Borrower's option, advances under the Credit will
be available as Canadian dollar Prime Rate advances
bearing interest at Prime Rate plus 0.75% per annum or,
subject to availability, seven day bankers' acceptances in
respect of which a bankers' acceptance fee of 1.5% per
annum shall be payable. For the purposes of this Term
Sheet "Prime Rate" shall mean, on any day, the higher of
(i) the rate used by Scotiabank as its reference rate for
commercial loans made in Canada in Canadian dollars, and
(ii) the average rate for 30 day Canadian dollar bankers'
acceptances that appears on the Reuters Screen CDOR page
at 10:00 a.m. Toronto time on that day, plus 0.75% per
annum.
Standby Fee
A standby fee of 0.50% per annum on the undrawn principal
amount of the Credit will accrue beginning on 1 March 1999
and be payable on the date of the advance or on the date
of cancellation of the Credit, whichever is earlier.
Upfront Fee
<PAGE> 3
-34-
A non-refundable upfront fee of Cdn. $275,000 is payable
to the Lender, of which Cdn. $100,000 has been paid and
the balance is payable on acceptance of this Agreement.
SECURITY
The Borrower shall deliver or cause the delivery of the
following documents (collectively, the "Security") in form
and substance satisfactory to the Lender with all
registrations, consents, ancillary agreements and legal
opinions required by the Lender:
(a) unconditional, unlimited guarantees by each of the
Guarantors of the Borrower's obligations under and in
connection with the Credit;
(b) first-ranking pledges by Glamis USA of cash or cash
equivalent securities in the amounts of U.S.
$18,000,000,
(c) a first-ranking pledge of all issued and outstanding
RRI Shares.
Immediately after completion of the Arrangement, the
Borrower shall make arrangements satisfactory to the
Lender to (i) provide security over cash or cash
equivalent securities currently held by RMI, including
security from or in respect of Rayrock Finance Company
("RFC") as the Lender may reasonably consider necessary
having regard to its role in any repatriation of the cash
currently held by RMI, or (ii) promptly make other
arrangements satisfactory to the Lender in order to allow
repayment of the Credit.
CONDITIONS PRECEDENT
The Lender's obligation to advance the Credit is subject
to fulfillment of the following conditions prior to or
contemporaneously with the advance under the Credit:
(a) the Lender having received satisfactory legal
opinions relating to this Agreement, the Security and
any other documents relating to the Credit
(collectively, the "Credit Documents") and such other
matters including the fulfilment of the condition set
out in (e) below as the Lender may reasonably
require;
(b) the applicable requirements under the heading
"Security," other than the last paragraph under that
heading, being satisfied;
<PAGE> 4
-35-
(c) the Lender having entered into an agreement
satisfactory to the Lender with a third party
custodian satisfactory to the Lender covering the
cash or cash equivalent securities being pledged by
Glamis USA, which will provide for the Lender to have
control of the collateral;
(d) the Lender having received confirmation satisfactory
to it from a third party custodian satisfactory to it
(or having received other evidence satisfactory to
the Lender) as to the amount of unencumbered cash or
cash equivalent securities the custodian is holding
for the account of RMI; to the extent the amount held
is less than U.S.$10,000,000, the amount of the
Credit shall be reduced by the Canadian dollar
equivalent of the difference;
(e) the Borrower having become the owner of 100% of the
RRI Shares;
(f) the Lender being satisfied that there have been no
material changes to the terms of the Arrangement from
those distributed in the Circular except those
approved by the Lender, and that all conditions of
the Borrower's agreement with RRI concerning the
Arrangement have been satisfied, or have been waived
on grounds satisfactory to the Lender and that any
discretion by the Borrower concerning the
satisfaction of conditions has been exercised on
grounds satisfactory to the Lender;
(g) the Lender having received acknowledgments and
agreements, if applicable, from any other lenders or
secured creditors of the Borrower or the Guarantors
as reasonably required to ensure the priority of the
Lender's security;
(h) the first advance under the Credit being made on or
before 31 March 1999;
(i) the Lender having received certificates of each of
the Borrower and the Guarantors, to which are
attached copies of its constating documents, a list
of its officers and directors and copies of
resolutions authorizing it to execute, deliver and
perform its obligations under the Credit Documents;
(j) the Borrower having paid any cash component of the
acquisition price of 100% of the RRI Shares in excess
of $60,000,000 from funds available to the Borrower
that are not borrowed by any of the Restricted
Parties.
In addition, the Lender's obligation to make an Advance
under the Credit is subject to the conditions precedent
that no Event of Default (as defined below) or event that,
with the passage of time,
<PAGE> 5
-36-
giving of notice or other condition subsequent would be an
Event of Default (such event being a "Pending Event of
Default") has occurred and is continuing on the date of
the Advance, or would result from making the Advance and
that the Lender has received prior written notice from the
Borrower requesting the Advance as required by this
Agreement.
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Guarantors represents and
warrants to the Lender that, with respect to itself and,
as to items (a), (e), (g) to (l) inclusive and (p) below,
the other Restricted Parties:
(a) it is a duly incorporated and validly existing
corporation and has the corporate power and
authority, and all material permits required as of
the date hereof, to enter into and perform its
obligations under the Credit Documents to which it is
or will be a party, to own its property and to carry
on the business in which it is engaged;
(b) the entering into and the performance by it of the
Credit Documents to which it is or will be a party
(i) have been duly authorized by all necessary
corporate action on its part, and (ii) do not and
will not violate its constating documents, any law,
treaty, regulation, ordinance, decree, judgment,
order or similar legal requirement (each, a
"Requirement of Law"), or any material agreement,
franchise, lease, permit, privilege or other right
acquired from any person (each, a "Contract") to
which any Restricted Party is a party;
(c) the Credit Documents to which it is a party from time
to time will, when executed and delivered, constitute
legal, valid and binding obligations enforceable
against it in accordance with their respective terms,
subject to the availability of equitable remedies and
the effect of bankruptcy, insolvency and other laws
affecting the rights of creditors generally;
(d) from and after the date on which the relevant
Security is delivered, the Lender will have legal,
valid and enforceable security upon the property that
is encumbered by that Security (as to which the
grantor is the legal and/or beneficial owner) subject
only to Permitted Encumbrances (as defined below),
the availability of equitable remedies and the effect
of bankruptcy, insolvency and other laws affecting
the rights of creditors generally;
<PAGE> 6
-37-
(e) it is not in default under any of the Permitted
Encumbrances relating to it, except for violations
that would not, in the aggregate, have a material and
adverse effect on its ability to perform its
obligations under any Credit Documents to which it is
a party;
(f) neither its constating documents nor any shareholder
agreement to which it is a party restrict the power
of its directors to borrow money, to give guarantees
or to encumber any or all of its present and future
property to secure its obligations under or in
connection with the Credit;
(g) as of the date of execution of this Agreement, there
are no litigation, arbitration or administrative
proceedings outstanding and, to its knowledge after
having made reasonable inquiry, there are no
proceedings pending or threatened against it which
were not disclosed in the Circular or which, in
either case, could materially and adversely affect
the acquisition of the RRI Shares, its business or
property or its ability to perform its obligations
under the Credit Documents;
(h) no Event of Default or Pending Event of Default has
occurred and is continuing;
(i) it is not in violation of any term of its constating
documents, and to its knowledge after having made
reasonable inquiry, is not in violation of any
Requirement of Law or any Contract, the violation of
which would materially and adversely affect its
ability to own its property and conduct its business,
nor will its execution, delivery and performance of
any Credit Documents to which it is a party result in
any such violation;
(j) all of the historical financial statements which have
been furnished to the Lender in connection with this
Agreement are complete and, to its knowledge after
reasonable inquiry, fairly present its financial
position as of the dates referred to therein and have
been prepared in accordance with generally accepted
accounting principles of Canada or the United States,
consistently applied ("GAAP");
(k) as of the date of execution of this Agreement, it has
no liabilities (contingent or other) or other
obligations of the type required to be disclosed in
accordance with GAAP which are not fully disclosed in
the financial statements (FS) section of the
Circular, including the pro forma statements
(collectively, the "Financial Statements"), other
than liabilities and obligations incurred thereafter
in the
<PAGE> 7
-38-
ordinary course of its business and the obligations
under or in connection with the Credit;
(l) its business and assets are being operated in
substantial compliance with all applicable laws
(including, without limitation, laws intended to
protect the environment), to the best of its
knowledge after reasonable inquiry there are no
breaches thereof and no enforcement actions in
respect thereof are threatened or pending which, in
any such case, could materially and adversely affect
its business or property or its ability to perform
its obligations under the Credit Documents to which
it is or will be a party;
(m) there are no governmental licenses, authorizations,
consents, registrations, exemptions, permits or other
approvals required by law that are required to
complete the acquisition of the RRI Shares that have
not been obtained and are not in full force and
effect without unduly burdensome provisions, other
than the court order approving the Arrangement and
the issuance of articles implementing the
Arrangement, which will be obtained before the Credit
is advanced;
(n) there are no consents that are required from the
directors or shareholders of RRI, either in
connection with the pledge of the RRI Shares or in
connection with any disposition of the RRI Shares
pursuant to the Security;
(o) its chief executive office is located in Nevada, in
the case of the Borrower, Glamis USA and RMI and
Ontario in the case of RRI;
(p) there is no fact that it has not disclosed to the
Lender in writing that materially adversely affects
its business or property or its ability to perform
its obligations under the Credit Documents to which
it is or will be a party.
The representations and warranties made in this Agreement
shall survive the execution of this Agreement and all
other Credit Documents, and shall be deemed to be repeated
as of the date of each advance and as of the date of
delivery of each quarterly certificate referred to under
"Reporting Requirements" below. The Lender shall be deemed
to have relied upon such representations and warranties at
each such time as a condition of making an Advance
hereunder or continuing to extend the Credit hereunder.
COVENANTS AND CONDITIONS
1. The Borrower and the Guarantors shall not, and
shall not permit the Restricted Parties to, create, assume
or permit the
<PAGE> 8
-39-
existence of any hypothec, mortgage, security interest,
lien or other encumbrance whatsoever on their respective
undertakings, property and assets, other than the
Security, encumbrances disclosed in the Financial
Statements and other encumbrances arising in the ordinary
course of business that do not secure Debt (collectively,
"Permitted Encumbrances").
2. Other than through the Arrangement and in
connection with the anticipated redemption of RFC's
preferred shares, the Borrower and the Guarantors shall
not, and shall not permit the Restricted Parties to effect
any change in its business, acquire material assets of any
other person except in the ordinary course of business,
acquire shares or other securities of any other person, or
make loans to or other investments in, or give financial
assistance to, any other person.
3. The Borrower and the Guarantors shall not, and
shall not permit the Restricted Parties to incur or permit
any Debt (as defined on the attached schedule) to remain
outstanding other than (a) the Credit, (b) other Debt
disclosed in the Financial Statements, (c) other Debt to
the Lender and (d) Debt owed to other Restricted Parties
as of the date of this Agreement.
4. The Borrower shall not pay any dividends or make
other payments to its direct or indirect shareholders or
make payments on notes held by affiliated corporations,
including redemptions of shares, principal or cash
interest payments, and payment of management fees.
5. The Borrower and the Guarantors shall not, and
shall not permit the Restricted Parties to consolidate,
amalgamate or merge with any other person, enter into any
corporate reorganization or other transaction intended to
effect or permit a change in its existing corporate or
capital structure (other than the Arrangement in the case
of RRI and the anticipated redemption of preferred shares
of RFC), liquidate, wind-up or dissolve itself.
6. The Borrower and the Guarantors shall not, and
shall not permit the Restricted Parties to sell, lease or
otherwise dispose of the whole or any material part of
their respective undertakings, property and assets, except
for the sale of inventory in the ordinary course of
business and except for dispositions of assets of RRI or
subsidiaries that are not related to gold mining or gold
exploration.
7. The Borrower and the Guarantors shall ensure that
each of the Restricted Parties operates its business in
accordance with sound business practice and in compliance
in all material respects with all applicable Requirements
of Law and material Contracts.
8. The Borrower and the Guarantors shall ensure that
each of the Restricted Parties, at all reasonable times
and from time to time
<PAGE> 9
-40-
upon reasonable notice, permits representatives of the
Lender to inspect any of its property and to examine and
take extracts from its financial books, accounts and
records, including but not limited to accounts and records
stored in computer data banks and computer software
systems, and to discuss its financial condition with its
senior officers and (in the presence of such of its
representatives as it may designate) its auditors, the
reasonable expense of all of which shall be paid by the
Borrower.
9. The Borrower and the Guarantors shall ensure that
each of the Restricted Parties maintains insurance on all
its property with financially sound and reputable
insurance companies or associations, including all-risk
property insurance, comprehensive general liability
insurance and business interruption insurance, in amounts
and against risks that are reasonably required by the
Lender, and furnishes to the Lender, on written request,
satisfactory evidence of the insurance carried.
REPORTING REQUIREMENTS
During the term of this Agreement, the Borrower shall:
(a) as soon as practicable and in any event within 45
days of the end of each of its fiscal quarters
(except the fourth quarter), cause to be prepared and
delivered to the Lender in a form satisfactory to the
Lender, its interim unaudited consolidated financial
statements, which shall be prepared in accordance
with GAAP;
(b) as soon as practicable and in any event within 90
days after the end of each of its fiscal years, cause
to be prepared and delivered to the Lender annual
consolidated financial statements for the Borrower
and, for 1998, RRI including, without limitation,
balance sheet, statement of income and retained
earnings and statement of changes in financial
position for such fiscal year, which shall be audited
by an internationally recognized accounting firm and
shall be prepared in accordance with GAAP;
(c) concurrently with the delivery of its quarterly
financial statements, provide the Lender with a
certificate in a form satisfactory to the Lender,
indicating whether an Event of Default or Pending
Event of Default has occurred;
(d) promptly provide the Lender with all other
information reasonably requested by the Lender from
time to time
<PAGE> 10
-41-
concerning the property and financial condition of the
Restricted Parties.
ADVANCES AND PAYMENTS
Upon timely fulfilment of all applicable conditions as set
forth in this Agreement, the Lender will make the
requested amount of a Prime Rate advance and the proceeds
of the sale of bankers' acceptances requested by the
Borrower (net of the discount on sale and the applicable
bankers' acceptance fee payable to the Lender) available
to the Borrower on the date requested by the Borrower by
crediting such amount to the Borrower's Canadian dollar
account at the Lender's branch located at 650 West Georgia
Street, Vancouver, British Columbia, V6B 4P6 or paying it
as otherwise directed in the Borrower's request for an
advance. The Borrower shall pay interest with respect to
Prime Rate advances to the Lender at its International
Banking Division, 14th Floor, 44 King Street West,
Toronto, Ontario, M5H 1H1 on the 22nd day of each month
and shall make all other payments to the Lender at that
address. All interest shall accrue from day to day and
shall be payable in arrears for the actual number of days
elapsed from and including the date of advance or the
previous date on which interest was payable, as the case
may be, to but excluding the date on which interest is
payable, both before and after maturity, default and
judgment, with interest on overdue interest at the same
rate payable on demand.
Interest calculated with reference to the Prime Rate shall
be calculated monthly on the basis of a year of 365 days.
Each rate of interest which is calculated with reference
to a period (the "deemed interest period") that is less
than the actual number of days in the calendar year of
calculation is, for the purposes of the Interest Act
(Canada), equivalent to a rate based on a calendar year
calculated by multiplying such rate of interest by the
actual number of days in the calendar year of calculation
and dividing by the number of days in the deemed interest
period.
The provisions of the Acceptance Agreement attached to
this Agreement shall apply to all bankers' acceptances
under this Agreement. The "Undersigned" referred to in the
Acceptance Agreement means the Borrower. The aggregate fee
contemplated in section 2 of the Acceptance Agreement
shall be 1.5% per annum.
The present and future debts, liabilities and obligations
of the Borrower to the Lender under or in connection with
the Credit (the "Obligations") shall be evidenced by
records maintained by the Lender, which shall constitute,
in the absence of manifest error, prima facie evidence of
the Obligations and all details relating thereto. The
failure of the Lender to correctly record any amount,
<PAGE> 11
-42-
date or other detail shall not, however, adversely affect
the obligation of the Borrower to pay the Obligations in
accordance with this Agreement.
The Borrower shall give the Lender irrevocable written
notice, in the form attached to this Agreement, of any
request for any advance to the Borrower under the Credit.
The Borrower shall also give the Lender irrevocable
written notice of any payment by the Borrower (whether
resulting from repayment, prepayment, rollover or
conversion) of any advance under the Credit. Notice shall
be given on the second business day prior to the date of
any advance or payment (a business day being a day other
than a Saturday or Sunday on which the Lender is open for
business at its principal office in Toronto), or at such
other time as is acceptable to the Lender. Notice shall be
given not later than 11:00 a.m. (Toronto time) on the date
for notice. Payments (other than those being made solely
from the proceeds of rollovers and conversions) must be
made prior to 11:00 a.m. (Toronto time) on the date for
payment. If a notice or payment is not given or made by
those times, it shall be deemed to have been given or made
on the next business day. The Lender acknowledges that the
Borrower currently expects to require the advance of the
Credit on 1 March 1999 but that the precise amount of the
advance may not be known two business days before that.
The Borrower shall promptly provide the Lender with all
available information concerning the advance and the
Lender shall endeavour to provide the advance with less
than two business days notice if necessary.
Each advance by way of bankers' acceptances shall be in
minimum amount of $1,000,000 and a whole multiple of
$100,000. Terms of seven days only may be requested by the
Borrower for bankers' acceptances, subject to availability
of bankers' acceptances of that term. No term of a
bankers' acceptance may end on a date which is not a
business day, or after the date on which the Credit is
required to be paid in full.
The Borrower may from time to time, by giving not less
than two business days express written notice to the
Lender and paying all accrued and unpaid standby fees to
the effective date of cancellation or reduction,
irrevocably cancel or permanently reduce the committed
amount of the Credit by an amount which shall be a minimum
of $1,000,000 and a whole multiple of $100,000. The
Borrower shall have no right to any increase in the
committed amount of the Credit thereafter.
EVENTS OF DEFAULT
Each of the following events shall constitute an Event of
Default under this Agreement:
<PAGE> 12
-43-
(a) the Borrower fails to pay any amount of principal or
interest when due or to pay fees or other Obligations
(apart from principal and interest) within three days
of when due; or
(b) a Restricted Party makes any representation or
warranty under any of the Credit Documents which is
incorrect or incomplete in any material respect when
made or deemed to be made; or
(c) any of the Borrower, the Guarantors and RFC ceases or
threatens to cease to carry on its business, or
admits its inability or fails to pay its debts
generally; or
(d) a Restricted Party:
(i) permits any default under one or more
agreements or instruments relating to its Debt
other than the Obligations; or
(ii) permits any other event to occur and to
continue after any applicable grace period
specified in such agreements or instruments;
if the effect is to accelerate, or to permit the
acceleration of, the date on which any material Debt
of a Restricted Party becomes due (whether or not
acceleration actually occurs); or
(e) any of the Borrower, the Guarantors and RFC becomes a
bankrupt, voluntarily or involuntarily; or
(f) any of the Borrower, the Guarantors and RFC becomes
subject to any proceeding seeking liquidation,
arrangement, reorganization, dissolution, winding-up,
relief of debtors or creditors or the appointment of
a receiver or trustee over, or any judgment or order
which has or might have a material and adverse effect
on, any material part of its property, and such
proceeding, judgment or order is consented to,
approved of or acquiesced in by any of the Borrower,
the Guarantors and RFC or, if instituted against any
of the Borrower, the Guarantors and RFC, is not
contested diligently, in good faith and on a timely
basis and dismissed or stayed within 45 days of its
commencement or issuance; or
(g) any of the Borrower, the Guarantors and RFC denies,
to any material extent, its obligations under the
Credit Documents or claims any of the Credit
Documents to be invalid or withdrawn in whole or in
part; or any of the Credit Documents is invalidated
in any material respect by
<PAGE> 13
-44-
any act, regulation or governmental action or is
determined to be invalid in any material respect by a
court or other judicial entity and such determination
has not been stayed pending appeal; or
(h) one or more final judgments, writs of execution,
garnishments, attachments or similar processes are
issued or levied against any of the property of the
Restricted Parties and are not released, bonded,
satisfied, discharged, vacated or stayed within 10
days after issuance or levy; or
(i) an encumbrancer takes possession of all or a material
portion of the property of any of the Borrower, the
Guarantors and RFC by appointment of a receiver,
receiver and manager, or otherwise; or
(j) a material adverse change occurs in the financial
condition or business prospects of the Restricted
Parties taken as a whole, as determined by the
Lender, acting in good faith and on commercially
reasonable grounds; or
(k) there is a breach of any other provision of any of
the Credit Documents and such breach is not corrected
or otherwise satisfied within 30 days after the
Lender gives written notice thereof; or
(l) following completion of the Arrangement, there is any
reduction in the Borrower's direct or indirect
percentage ownership of any Restricted Party, other
than any subsidiary of RRI that is not engaged in
gold mining or gold exploration.
If any Event of Default occurs, the Lender shall be under
no further obligation to make Advances and may give notice
to the Borrower (i) declaring its obligations to make
Advances to be terminated, whereupon the same shall
forthwith terminate, and/or (ii) declaring the Obligations
or any of them to be forthwith due and payable, whereupon
they shall become and be forthwith due and payable without
presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the
Borrower.
Notwithstanding the preceding paragraph, if any of the
Borrower, the Guarantors and RFC becomes a bankrupt
(voluntarily or involuntarily), or institutes any
proceeding seeking liquidation, arrangement,
reorganization, dissolution, winding-up, relief of debtors
or creditors or the appointment of a receiver or trustee
over any material part of its property, then without
prejudice to the other rights of the Lender as a result of
any such event, without any notice or action of any kind
by the Lender, and without
<PAGE> 14
-45-
presentment, demand or protest, the Lender's obligation to
make Advances shall immediately terminate and the
Obligations shall immediately become due and payable.
Upon the occurrence of any event by which any of the
Obligations become due and payable, any security shall
become immediately enforceable and the Lender may take
such action or proceedings as it in its sole discretion
deems expedient to enforce the same, all without any
additional notice, presentment, demand, protest or other
formality, all of which are hereby expressly waived by the
Borrower.
In addition to and not in limitation of any rights now or
hereafter granted under applicable law, if repayment of
any Obligation is accelerated, the Lender may at any time
and from time to time without notice to the Borrower or
any other person, any notice being expressly waived by the
Borrower, set-off and compensate and apply any and all
deposits, general or special, time or demand, provisional
or final, matured or unmatured, and any other indebtedness
at any time owing by the Lender to or for the credit of or
the account of the Borrower against and on account of the
Obligations notwithstanding that any of them are
contingent or unmatured.
MISCELLANEOUS PROVISIONS
The Credit Documents shall be binding upon and enure to
the benefit of the Lender, the Borrower, the Guarantors
and their respective successors and permitted assigns,
except that the Borrower and the Guarantors shall not
assign any rights or obligations with respect to this
Agreement or any of the other Credit Documents without the
prior written consent of the Lender.
All statements, reports, certificates, opinions,
appraisals and other documents or information required to
be furnished to the Lender by the Borrower shall be
supplied without cost to the Lender. The Borrower shall
pay on demand all reasonable third party costs and
expenses of the Lender (including, without limitation, the
reasonable fees and expenses of counsel for the Lender on
a solicitor and own client basis), incurred in connection
with (a) the preparation, execution, delivery,
administration, periodic review and enforcement of the
Credit Documents; (b) obtaining advice as to its rights
and responsibilities in connection with the Credit and the
Credit Documents; and (c) other matters relating to the
Credit. Such costs and expenses shall be payable whether
or not an advance is made under this Agreement.
The Borrower shall indemnify the Lender and all of its
directors, officers, employees and representatives from
and against any and all actions, proceedings, claims,
losses (other than loss of profit),
<PAGE> 15
-46-
damages, liabilities, expenses and obligations of any kind
(collectively, "Claims") that may be incurred by or
asserted against any of them as a result of or in
connection with this Agreement, the Arrangement or the
Credit, other than as a result of the indemnitees'
negligence or wilful misconduct. A certificate of the
Lender as to the amount of any such Claim shall be prima
facie evidence as to the amount thereof, in the absence of
manifest error. No indemnitee shall be liable to the
Borrower or any other person for any consequential damages
which may be claimed as a result of or in connection with
this Agreement, the Arrangement or the Credit.
The agreements of the Borrower concerning expenses and
indemnification shall survive the termination of this
Agreement and repayment of the Obligations.
All payments to be made by or on behalf of the Borrower in
connection with the Credit Documents are to be made
without set-off, compensation or counterclaim, free and
clear of and without deduction for or on account of any
tax, including but not limited to withholding taxes,
except if such deduction is required by law or the
administration thereof. If any tax is deducted or withheld
from any payments under the Credit Documents (including
the remittance provided for in this paragraph) the
Borrower shall promptly remit to the Lender in the
currency in which such payment was made, the equivalent of
the amount of tax so deducted or withheld together with
the relevant receipt issued by the taxing or other
receiving authority. If the Borrower is prevented by
operation of law or otherwise from paying, causing to be
paid or remitting such tax, the interest or other amount
payable under the Credit Documents will be increased to
such rates as are necessary to yield and remit to the
Lender the principal sum advanced or made available
together with interest at the rates specified in the
Credit Documents after provision for payment of such tax.
If the introduction of or any change in or in the
interpretation of, or any change in the application to the
Borrower or the Lender of, any law or any regulation or
guideline from any central bank or other governmental
authority that is binding on the Borrower or the Lender
(whether or not having the force of law), including but
not limited to any reserve or special deposit requirement
or any tax (other than a general tax on the Lender's
income or capital) or any capital requirement, has due to
the Lender's compliance therewith the effect, directly or
indirectly, of (a) increasing the cost to the Lender of
performing its obligations hereunder; (b) reducing any
amount received or receivable by the Lender hereunder or
its effective return hereunder or on its capital; or (c)
causing the Lender to make any payment or to forego any
return based on any amount received or receivable by it
hereunder, then upon demand from time to time the Borrower
shall pay such amount as shall
<PAGE> 16
-47-
compensate the Lender for any such cost, reduction,
payment or foregone return that is not fully offset by an
increase in the applicable interest rate or rates or fees
hereunder. Any certificate of the Lender in respect of the
foregoing will be prima facie evidence of the foregoing,
except for manifest error, provided that the Lender
determines the amounts owing to it in good faith using any
reasonable averaging and attribution methods and provides
a detailed description of its calculation of the amounts
owing to it.
Time shall be of the essence of this Agreement. No
amendment, supplement or waiver of any provision of the
Credit Documents, nor any consent to any departure by the
Restricted Parties therefrom, shall in any event be
effective unless it is in writing, makes express reference
to the provision affected thereby and is signed by the
Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose
for which it is given. No waiver or act or omission of the
Lender shall extend to or be taken in any manner
whatsoever to affect any subsequent Event of Default or
breach by any Restricted Party of any provision of the
Credit Documents or the rights resulting therefrom.
Each of the Credit Documents, except for those which
expressly provide otherwise, shall be conclusively deemed
to be a contract made under, and shall for all purposes be
governed by and construed in accordance with, the laws of
the Province of Ontario and the laws of Canada applicable
in Ontario.
If you are in agreement with the foregoing, please sign and return to
the Lender a copy of this letter, together with $175,000 in payment of the
balance of the upfront fee. This letter replaces our letter to you and term
sheet dated 11 February 1999. This letter will be executed by RRI and RMI
immediately upon completion of the Arrangement, but will be binding upon the
other parties once they have all signed this letter, even though it has not been
signed by RRI and RMI. This letter may be executed in separate counterparts, and
transmission of this letter and your acceptance by facsimile will be considered
as binding as delivery of originally signed documents.
Yours very truly,
THE BANK OF NOVA SCOTIA
Ray Clarke
Relationship Manager
Agreed to and accepted
GLAMIS GOLD LTD.
By: /s/ C. K. McARTHUR
---------------------------------
C.K. McArthur
President
By: /s/ D. J. FORBUSH
---------------------------------
D.J. Forbush
Chief Financial Officer
<PAGE> 17
-48-
GLAMIS GOLD, INC.
By: /s/ C.K. McArthur
---------------------------------
C.K. McArthur
President
By: /s/ D.J. Forbush
---------------------------------
D.J. Forbush
Chief Financial Officer
RAYROCK RESOURCES INC.
By: /s/ D.J. Forbush
---------------------------------
Name: D.J. Forbush
Title: Secretary, Treasurer
Date: 3 March 1999
RAYROCK MINES, INC.
By: /s/ D.J. Forbush
---------------------------------
Name: D.J. Forbush
Title: Secretary, Treasurer
Date: 3 March 1999
SCHEDULE
"DEBT" means, with respect to any person, without duplication and, except as
provided in item (b) below, without regard to any interest component thereof
(whether actual or imputed) that is not due and payable, the aggregate of the
following amounts, each calculated in accordance with GAAP, unless the context
otherwise requires:
(a) indebtedness for money borrowed (including, without limitation, by way
of overdraft) or indebtedness represented by notes payable and drafts
accepted representing extensions of credit;
(b) the face amount of all bankers' acceptances and similar instruments;
(c) all obligations (whether or not with respect to the borrowing of money)
that are evidenced by bonds, debentures, notes or other similar
instruments;
(d) all liabilities upon which interest charges are customarily paid by that
person;
(e) any capital stock of that person (or of any subsidiary of that person
that is not held by that person or by a subsidiary of that person that
is wholly owned, directly or indirectly) which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part for cash or securities constituting Debt;
<PAGE> 18
-49-
(f) all capital lease obligations and purchase money obligations;
(g) the amount, if any, that the person would be required to pay to its
counterparty in any interest rate swap, basis swap, forward rate
transaction, currency hedging or swap transaction, cap transaction,
floor transaction, collar transaction or other similar transaction, or
any option with respect to such a transaction or combination of any such
transactions in order to terminate such transaction as a result of the
person being "out of the money" on a mark to market valuation of the
transaction;
(h) any guarantee (other than by endorsement of negotiable instruments for
collection or deposit in the ordinary course of business) in any manner
of any part or all of an obligation of another person of the type
included in items (a) through (g) above, including contingent
liabilities in respect of letters of credit, letters of guarantee and
surety bonds;
provided that trade payables and accrued liabilities that are current
liabilities incurred in the ordinary course of business do not constitute Debt.
FORM OF REQUEST FOR ADVANCE
TO: THE BANK OF NOVA SCOTIA
We refer to the letter loan agreement dated 24 February 1999 between,
among others, the undersigned as Borrower and The Bank of Nova Scotia as Lender,
as amended, supplemented, restated or replaced from time to time (the "Credit
Agreement"). All capitalized terms used in this notice and defined in the Credit
Agreement have the meanings defined in the Credit Agreement.
Notice is hereby given pursuant to the Credit Agreement that the
undersigned hereby irrevocably requests as follows:
A that an advance be made under the Credit
B the requested advance represents the following [check one or more]:
initial advance under the Credit ( )
rollover of existing advance under the Credit ( )
conversion of existing advance to another type of advance ( )
C the date of the advance shall be
D the advance shall be in the form of [check one or more and complete
details]:
Prime Rate advance ( )
Amount $______________
Bankers' Acceptances with a term of seven days ( )
Face Amount: $______________
<PAGE> 19
-50-
E the proceeds of the advance shall be paid as follows: [specify
account of Borrower at branch of Lender in Canada or payment
instructions for third party payee]
The undersigned hereby confirms as follows:
(a) the representations and warranties made in the Credit Agreement,
other than any expressly stated to be made as of a specific date,
are true on and as of the date hereof with the same effect as if
such representations and warranties had been made on and as of the
date hereof;
(b) no Pending Event of Default or Event of Default has occurred and is
continuing on the date hereof or will result from the Advance(s)
requested herein;
(c) the undersigned will immediately notify you if it becomes aware of
the occurrence of any event which would mean that the statements in
the immediately preceding paragraphs (a) and (b) would not be true
if made on the date the advance is made;
(d) all other conditions precedent set out in the Credit Agreement have
been fulfilled.
DATED 24 February 1999
GLAMIS GOLD LTD.
By: /s/ C.K. McARTHUR
----------------------------
C.K. McArthur
President
By: /s/ D.J. FORBUSH
----------------------------
D.J. Forbush
Chief Financial Officer
<PAGE> 1
-51-
EXHIBIT 10.57
SERVICES AGREEMENT
THIS AGREEMENT made as of April 26, 1999.
BETWEEN:
GLAMIS GOLD LTD., a British Columbia company having an address at 5190
Neil Road, Suite 310, Reno, Nevada, 89502 ("Glamis")
OF THE FIRST PART
AND:
CHARLES A. JEANNES, of 2420 Grant Springs Drive, Reno, Nevada, 89509
("Jeannes")
OF THE SECOND PART
WHEREAS Glamis wishes to engage Jeannes to perform the duties of Senior Vice
President, Administration and General Counsel of Glamis and Jeannes wishes to
take on such duties.
NOW THEREFORE THIS AGREEMENT WITNESSES that the parties mutually agree as
follows:
ENGAGEMENT
1. Glamis hereby engages (the `Engagement') Jeannes as and Jeannes agrees
to serve as Senior Vice President, Administration and General Counsel ("SVP") of
Glamis and as Senior Vice President, Administration and General Counsel of
Glamis Gold, Inc. and its subsidiaries and to perform the duties described in
Section 3, on the terms and subject to the conditions set out herein.
TERM
2. The term ("Term") of the Engagement will commence on April 26, 1999,
and will continue thereafter on a month-to-month basis until terminated by
either party pursuant to the terms hereof.
DUTIES AND OBLIGATIONS OF JEANNES
3. As SVP, Jeannes will perform those duties and functions (the "Duties")
that are described in Schedule A hereto.
PERFORMANCE OF DUTIES
4. Jeannes will perform the Duties as follows:
<PAGE> 2
-52-
(a) subject to ill-health and subsection 4(c), Jeannes will perform the
Duties during each day that is a business day in the Term (a
business day being a day, other than a Saturday or a Sunday, on
which the office of Glamis Gold, Inc. in Reno, Nevada is open for
the transaction of business);
(b) subject to subsection 4(c), Jeannes will devote substantially all
of his time and energy during normal business hours on each working
day during the Term to performing the Duties to the best of his
skill and ability; and
(c) notwithstanding subsections 4(a) and 4(b), Jeannes will not be
required to perform the Duties on statutory holidays and during
periods of holidays, which will be not less than four weeks in the
aggregate in respect of each calendar year.
REMUNERATION
5. In consideration of the performance of the Duties by Jeannes, Glamis,
through Glamis Gold, Inc., will:
(a) pay Jeannes a salary (the"Salary") of U.S. $200,000 (or such other
amount as the parties may mutually agree in writing) per calendar
year during the Term by paying 1/24 thereof on the 15th of each
month and 1/24th thereof on the last day of each month or, if such
days are not business days, on the first prior day that is a
business day, such payments to be reduced by the amount of
applicable withholding and other requirements of the Internal
Revenue Code (United States) and any other applicable United States
legislation in respect of remuneration paid to employees;
(b) reimburse Jeannes for all reasonable expenses incurred by Jeannes
in the performance of the Duties and in respect of such Jeannes
will provide to Glamis such particulars as Glamis may reasonable
require;
(c) permit Jeannes to participate in medical, dental and other employee
benefit plans of Glamis Gold, Inc. as they are from time to time
initiated, if and to the extent that participation is permitted by
the plans, such plans to include, without limitation, the Glamis
Gold, Inc. Profit Sharing and Retirement Plan and the Glamis Gold,
Inc. Group Insurance Benefits Plan;
(d) indemnify and hold Jeannes harmless from and against any and all
costs, damages or losses resulting from the performance by Jeannes
of the Duties;
(e) provide Jeannes with the holiday entitlement described in
subsection 4(c) provided however, that Jeannes will forfeit,
without compensation, his right to any part of such holiday
entitlement not used in a calendar year;
(f) perform a review of the Salary on an annual basis, as a minimum;
and
(g) grant to Jeannes share purchase options from time to time on an
aggregate of not less than 125,000 common shares of Glamis
("Shares") under Glamis' Incentive Share Purchase Option Plan (the
"Plan"), in accordance with the rules and regulations of applicable
regulatory authorities and the Plan, it being understood that upon
the full exercise of the 125,000 share purchase options, Jeannes
will, subject to the then prevailing policies of Glamis' Executive
Compensation Committee, be granted another share purchase option in
respect of not less than 125,000 Shares.
<PAGE> 3
-53-
TERMINATION OF ENGAGEMENT
6. The following will govern termination under this Agreement:
(a) Jeannes may deliver to Glamis a notice to terminate the Engagement
on a day not less than 60 days after the day of such delivery and
the Engagement will terminate at the expiration of such 60-day or
longer period and in such case any outstanding share purchase
options held at such time by Jeannes will expire on the 30th day
after the effective date of the termination;
(b) Glamis may terminate the Engagement without notice and without any
payment in lieu of notice if
(i) Jeannes is guilty of any wilful act, neglect, or conduct that
causes substantial damage or discredit to Glamis, or
(ii) Jeannes is convicted of any offence involving fraud, and in
such case any outstanding share purchase options held at such
time by Jeannes will expire on the 30th day after the
effective date of the termination;
(c) Except for those matters referred to in subsection 6(b), Glamis
may, at its sole option, terminate the Engagement for cause by
providing three months written notice to Jeannes and in such case
any outstanding share purchase options held at such time by Jeannes
will expire on the 30th day after the effective date of the
termination;
(d) Glamis may, at its sole option, terminate the Engagement without
cause by notice (the "Termination Notice") to Jeannes, in which
case Jeannes will be paid any remuneration due hereunder to the
date of termination together with an aggregate amount equal to 2
times the Salary which is in force at the time of delivery of the
Termination Notice and the cash value of 24 months of full benefit
coverage under subsection 5(c), less applicable withholding and
other requirements of the Internal Revenue Code (United States) and
any other applicable United States legislation in respect of
remuneration paid to employees and in such case any outstanding
share purchase options held at such time by Jeannes, will expire on
the 365th day after the effective date of the termination;
(e) If Jeannes becomes permanently disabled prior to termination of the
Engagement hereunder the provisions of subsection 6(c) will not
apply, however, Glamis may terminate the Engagement pursuant to
subsection 6(d), provided however that such termination will not
affect any benefits which Jeannes would be entitled to as a
disabled employee under the plans described in subsection 5(c).
Jeannes will be deemed to be permanently disabled if he is unable
to perform the material and substantial portion of the Duties
because of sickness or injury. For the purposes hereof "sickness"
means an organic disease, including without limitation mental
illness, and the medical or surgical treatment of the disease and
"injury" means bodily injury caused directly by external, violent
and purely accidental means;
(f) In the event that Glamis relocates its corporate offices from
Washoe County, Nevada or otherwise requires as a condition of
continued employment that Jeannes relocate from Washoe County,
Nevada, Jeannes shall have the option of terminating the Engagement
and in that event shall receive the remuneration provided in
subsection 6(d);
<PAGE> 4
-54-
(g) On termination of the Engagement, Jeannes will deliver to Glamis in
a reasonable state of repair all property of Glamis used by or in
the possession of Jeannes; and
(h) Termination of the Engagement will not terminate Glamis' obligation
under subsection 5(d), which obligation will survive such
termination.
DISCLOSURE
7. Jeannes undertakes to refrain, both during the Term and thereafter,
except so far as may be necessary or proper in performing the Duties, from
making public or disclosing to any person who is not an employee, officer or
director of Glamis or one of its subsidiaries, any information that may come to
the knowledge of Jeannes during the Term respecting the business dealings of
Glamis or its subsidiaries or any of the contractual agreements of Glamis or its
subsidiaries and Jeannes will, at the request of Glamis, enter into a separate
agreement with respect to such matters.
MISCELLANEOUS
8. (a) Each party will, on the request of the other, execute and deliver
such other agreements, deeds, documents and instruments, and do such
further acts and things as the other may reasonably request in order to
evidence, carry out and give full force and effect to the terms,
conditions, intent and meaning of this Agreement.
(b) If any provision of this Agreement is invalid or unenforceable for
any reason whatsoever, such provision will be severable from the
remainder of this Agreement, the validity of the remainder will continue
in full force and effect and this Agreement will be construed as if it
had been executed without the invalid or unenforceable provision.
(c) No consent or waiver, express or implied, by either party to or of
any breach or default by the other party in the performance by the other
of any or all of its obligations under this Agreement
(i) will be valid unless it is in writing and specifically stated
to be a consent or waiver pursuant to this subsection,
(ii) may be relied upon by the other as a consent or waiver to or
of any other breach or default of the same or any other obligation,
(iii) will constitute a general consent or waiver under this
Agreement, or (iv) will eliminate or modify the need for a specific
consent or waiver pursuant to this subsection in any other
instance.
(d) Notices, requests, demands or directions to one party to this
Agreement by another will be in writing and will be delivered as
follows: If to Glamis at:
5190 Neil Road, Suite 310
Reno, Nevada 89502
Attention: C. Kevin McArthur
If to Jeannes at: 2420 Granite Springs Drive
Reno, Nevada 89509
Attention: Charles A. Jeannes
or to such other address as may be specified by one party to the other
in a notice given in the manner provided in this subsection.
<PAGE> 5
-55-
(e) This Agreement is made in the State of Nevada with the intention
that its construction and validity and all other issues related to its
administration will in all respects be governed by the laws prevailing
in that state.
(f) In the event of any dispute between the parties in respect of the
interpretation of this Agreement or any matter to be agreed on, such
dispute will be determined by a single arbitrator appointed and acting
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association and the decision of the arbitrator shall be final and
binding on the parties.
(g) This Agreement constitutes the entire agreement between the parties
and there are no representations or warranties, express or implied,
statutory or otherwise, and no agreements collateral hereto other than
as expressly set forth or referred to herein.
(h) This Agreement may be executed in counterparts, each of which when
delivered (whether in originally executed form or by facsimile
transmission) will be deemed to be an original and all of which together
will constitute one in the same document.
(i) This Agreement will enure to the benefit of and be binding upon the
respective legal representatives and successors and permitted assigns of
the parties.
(j) None of the parties may assign any right, benefit or interest in
this Agreement without the written consent of the others and any
purported assignment without such consent will be void, save and except
that Glamis may assign any or all of its rights and obligations
hereunder to Glamis Gold Inc.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
first above written.
GLAMIS GOLD LTD.
Per:___________________________________________
A. Dan Rovig, Chairman
Per:___________________________________________
C. Kevin McArthur, President & CEO
<PAGE> 6
-56-
/s/ CHARLES A. JEANNES
- ---------------------------------
CHARLES A. JEANNES
SCHEDULE A
DUTIES
(none attached)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GLAMIS GOLD
LTD. CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 41,855
<SECURITIES> 0
<RECEIVABLES> 5,592
<ALLOWANCES> 0
<INVENTORY> 11,055
<CURRENT-ASSETS> 60,308
<PP&E> 307,070
<DEPRECIATION> 179,481
<TOTAL-ASSETS> 198,650
<CURRENT-LIABILITIES> 26,090
<BONDS> 0
0
0
<COMMON> 156,506
<OTHER-SE> (2,612)
<TOTAL-LIABILITY-AND-EQUITY> 198,650
<SALES> 7,986
<TOTAL-REVENUES> 7,986
<CGS> 7,189
<TOTAL-COSTS> 11,512
<OTHER-EXPENSES> 625
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,609)
<INCOME-TAX> (288)
<INCOME-CONTINUING> (3,321)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,321)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
