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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended March 31, 1998
[X] 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 33-2150-LA
PANTHER RESOURCES LTD.
(Exact name of registrant as specified in its charter)
Nevada Not Applicable
(State of incorporation) (I.R.S. Employer Identification No.)
2nd Floor
1111 West Hastings Street
Vancouver, BC Canada V6E 2J3
(address of principal executive office) (zip code)
(604)689-5377
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
Title of each class Name of each exchange on which registered
Ordinary Shares, $0.001 par value
Securities registered pursuant to,section 12(b) of the Act:
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 90 days. Yes -X- No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. _____
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The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately 17,176,100 as of March 31, 1998
The number of shares of common stock outstanding as of March 31, 1998 was
29,161,100.
ITEM 1. DESCRIPTION OF BUSINESS
Introduction
On March 10, 1998, the Company filed with the Secretary of State of the State
of Nevada a Certificate of Amendment to its Articles of Incorporation,
changing the Company's name from "Golden Panther Resources, Ltd.,, to "Panther
Resources Ltd." This name change was duly adopted by the Company's Board of
Directors and by its stockholders at a special meeting of stockholders held
March 5, 1998. A definitive proxy statement was filed with the Securities and
Exchange Commission with respect to this matter on February 5, 1998.
See the Exhibit Index, Part III, Item 13 of this Report.
Panther Resources Ltd. (hereinafter referred to as the "Company") is engaged
in the mining and processing of silver, gold and copper ore in the state of
Sinaloa, Mexico and in the exploration, evaluation and development of its
precious metals properties. The Company was incorporated in Nevada in 1984, is
headquartered in Vancouver, British Columbia, Canada and its common stock is
traded on NASD BB OTC market under the symbol "PTHR".
The corporate structure of Panther Resources Ltd. includes a number of wholly
owned subsidiaries. See the Exhibit Index of this Report.
Golden Panther Resources Ltd. incorporated in the Province of British
Columbia, Canada on November 20, 1995 and is 100% owned by Panther Resources
Ltd. Golden Panther Resources Ltd. owns 95% of the issued and outstanding
shares of P.T. Golden Panther Resources, incorporated in Indonesia in March,
1996 which owns the mineral properties in Indonesia and has applied for the
7th Generation Contract of Work (COW). A Contract of Work is a contract
between the Government of the Republic of Indonesia and the Project Company
for exploration for and exploitation and development of minerals in a specific
contract area or part of it.
Go lden Panther Investments Ltd. incorporated in the Bahamas on March 25, 1997
is a wholly owned subsidiary of Panther Group Ltd., incorporated in Bermuda on
October 16, 1997 . Panther Group Ltd. is a wholly owned subsidiary of the
parent company Panther Resources Ltd.
General
Golden Panther Investments Ltd. of the Bahamas has a contract to acquire 100%
of the La Verde properties in Mexico. The company has five other concessions
in the state of Sinaloa, Mexico where it is in the process of beginning some
exploration work for 1998. The Kutai property in Indonesia is owned by P.T.
Golden Panther Resources.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The U.S. securities laws provide a "safe harbor" for certain forward-looking
statements. This annual report contains forward-looking
statements that involve risks and uncertainties that could cause actual
results to differ materially from those projected in such forward-looking
statements. Statements regarding the expected commencement dates of mining
operations, projected quantities of future production, capital costs,
production rates, costs and expenditures and other operating and financial
data are based on expectations that the Company believes are reasonable, but
it can give no assurance that such expectations will prove to have been
correct. Factors that could cause actual results to differ materially include,
among other: risks and uncertainties relating to general domestic and
international economic and political conditions, the cyclical and volatile
prices of gold, silver and copper, political and economic risks associated
with foreign operations, unanticipated ground and water conditions,
unanticipated grade and geological problems, availability of materials and
equipment, the delays in the receipt of or failure to receive necessary
governmental permits, changes in laws or regulations or the interpretation and
enforcement thereof, the occurrence of unusual weather or operating
conditions, force major events, lower than expected ore grades, the failure of
equipment or processes to operate in accordance with specifications or
expectations, labor relations, accidents, delays in anticipated start-up
dates, environmental risks, the results of financing efforts and financial
market conditions. These and other risk factors are discussed in more detail
herein. Many such factors are beyond the Company's ability to control or
predict. Readers are cautioned not to put undue reliance on forward-looking
statements. The Company disclaims any intent or obligations to update these
forward-looking statements, whether as a result of new information, future
events or otherwise.
KUTAI PROPERTY, INDONESIA
Panther acquired in 1996 a property known as Kutai. It is 123,548 acres
(50,000 hectares) in size and is located in the province of Eastern Kalimantan
on the Island of Borneo. Panther has a joint venture agreement on the
property with an Indonesian partner, P.T. Pertiwi Kencana Abadi, a company
incorporated in Indonesia. Panther has 80% of the concession while PKA has
20%. Panther can acquire an additional 10% of the property for a US $ 5
million lump sum payment to PKA. The Kutai property is located in a
geologically prospective region of Borneo. The property shares similar rock
stratigraphy and geochemical signatures to mineralisation found at the 5
million oz Kelian gold deposit, located 60 miles to the south. The Kutai
property is a seventh generation contract of work (COW). Recently the Company
received verbal notification that the COW application has been ratified by the
Indonesian government. We are still awaiting written documentation of this
approval.
The Company ceased operating in Indonesia as at July, 1997 due to economic and
political instability. It is expected that Panther will return to Indonesia
when the country is more stable.
LAVERDE PROPERTY, SINALOA, MEXICO
The La Verde properties are located near Cosala in the State of Sinaloa, about
99 miles north of Mazatlan, the port and tourist area of the Pacific, and 97
miles southeast of Culiacan, the Capital of Sinaloa. Access to the mill and
service yard is by paved roads from Culiacan and Mazatlan to Cosala. The mine
is approximately 13 miles by gravel road from the mill in Cosala. The property
consists of 22,000 acres (six miles by six miles) of mixed
exploration and exploitation claims and licences. All claims have been
surveyed by the Company and approved by the Federal Department of Mines.
Geology
The LaVerde deposit is a type of massive sulphide occurrence where copper and
silver bearing sulphides are hosted in bedded volcanics. The mine zones are
slabs of parallel beds in clusters within barren segments of the bedding. ore
horizons have been faulted both normal to bedding and normal to dip with large
offsets in bedding. Mining has defined at least three faulted blocks. The
massive sulphide occurrences cluster in the bedding with three identified in
the immediate mine area and several clusters along a six kilometer strike of
the favourable volcanic stratigraphy. The age of the formation is proposed as
Triassic and the mine volcanics are one piece of a complex faulted group of
plates of different geology in the mine area.
Mining
The LaVerde mine has been producing at the rate of 200 tonnes per day since
1986. The annual production has been about 65,000 tonnes grading about 210
grams silver and 0.90% copper per tonne. There are minor credits for gold.
Mining methods have been open stope on three parallel slabs from near surface
to 278 feet below surface along a zone for 328 feet. Sublevels are accessed by
ramp using diesel truck and scooptrams. ore is trucked 13 miles to Cosala
where total flotation is performed on tetrahedrite (copper-silver-
antimony-sulphide) and chalcopyrite (copper-iron-sulphide) bearing rock. The
LaVerde mine is "grandfathered" under the Mexican environmental laws and
regulations, but the mill and tailings have been reviewed by the Mexican
government and approved. The LaVerde ore lacks pyrite and arsenic bearing
sulphides and the volcanic rocks hosting ore are rich in lime.
Current development work by the Company consists of driving 2 crosscuts into
the newly discovered Navarro zone parallel to and adjacent to the previously
mined LaVerde zone and 2 crosscuts into a faulted segment of the LaVerde zone
undetected by previous mining. Each of these zones has the potential to
develop significant reserves to justify expansion of the current production
and establishing a larger mill in the district.
Future Exploration and Development Activities
Exploration Costs: Exploration and evaluation costs increased in 1997 since
the Company expanded its exploration activities to include Mexico. once Mexico
was underway all exploration activities were suspended in Indonesia (as of
July 1997) due to the uncertainty of the working environment.
Exploration Expenses: The Company currently estimates that it will spend
approximately $2 (two) million on its 1998 exploration programs to prove
mineral deposits on the LaVerde properties.
Financing Activities: In the ensuing 12 month period, the Company plans to
seek financing of US$25 million. The funds will be used to retire any monies
owing on the La Verde property, to up-grade the mining and milling operations
at La Verde and for exploration activities. The anticipated financing could be
silver backed or silver enhanced preferred shares and loans with the interest
being converted to silver at a strike price to be determined upon
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issue. Conversely, the Company may elect to do an equity issue of common
stock with or without a warrant which could convert to silver at a certain
strike price. However, at this time the Company does not have an underwriter
nor has it contacted any financing institution regarding this type of
financing. once the Company's Annual Report on Form 10-KSB for the fiscal
year ended March 31, 1998 has been completed and filed, the company will be
actively seeking financing via the methods disclosed above. There can be
no assurance that this financing will complete.
Currently, Panther Resources is one of a very few primary silver producers in
the world. The properties known as La Verde, are situated in the state of
Sinaloa in Mexico. The La Verde mine has the potential to become one of the
largest primary silver mines in Mexico. Historic production is over 30 million
ounces of silver and over 40 million pounds of copper.
Silver
Silver prices had been extremely low for a number of years prior to 1997,
which discouraged new mine development and fueled demand. As a result, for
several years the gap between supply and demand was met by drawdown of
above-ground stock. In retrospect, it was apparent that silver prices were
positioned for a dramatic rise in price which was propelled by the likes of
Warren Buffett accumulating a substantial position and taking delivery of the
silver. The Company offers no assurances with respect to the price of
silver
ITEM 2. DESCRIPTION OF PROPERTY
The Company maintains administrative offices under a sub-lease at 211 - 1111
West Hastings Street, Vancouver, B.C. WE 2J3.
Kutai Property, Indonesia
The Kutai property is 123,548 acres (50,000 hectares) in size and is located
in the province of Eastern Kalimantan on the Island of Borneo. Panther has a
joint venture agreement on the property with an Indonesian partner, Pertiwi
Kencana Abadi. Panther has 80% of the concession while PKA has 20%. Panther
can acquire an additional 10% of the property for a US $ 5 million lump sum
payment to PKA. This property is in the exploration stage. The Company does
not intend to continue an exploration program on the Kutai property in the
foreseeable future.
LaVerde Property, Mexico
The La Verde mine is currently operating at 200 tons per day and has been
netting the owner/operator approximately 1 million dollars during previous
years. No previous exploration has been done on the orebody and the operator
is mining without a plan. Historical production grades have ranged between 180
and 220 g/t Ag - silver (6 to 7 oz per ton), 0.75% and 1.2% Cu- copper, and
0.5 g/t Au - gold. Average total production costs are approximately $16 USD
per tonne.
Panther is currently exploring the property and has undertaken surface and
underground mapping and surveying, a geophysics survey, and a six hole diamond
drill program. It has recently commenced an exploration drifting program to
intercept new ore zones.
Panther's work to date has revealed that the orebody is open ended along a
2300 foot strike and at 820 feet depth. It has complex faulting and the
orebody is divided in several blocks, the interpretation of which was
previously unknown to the Mexican operator. Panther's work has identified
additional ore zones, which had been hidden from the miners. The
mineralization is massive sulfide related and could lead to very high
grades being discovered. However, there is no assurances that the Company will
discover high grades.
The La Verde mine has a total resource of almost 14 million tonnes of
geologically indicated reserves of mineable ore, with additional potential in
zones identified by the Induced Polarization Survey. It is the intention of
Panther Resources to prove up this indicated reserve and expand production
capacity to 2000 tons per day or more within two years. The indicated average
in situ grade is 12 oz./350 g/t Ag and 1.25% Cu. The historical mined head
grade is 6-7oz./220 g/t Ag and .9% Cu. This is due to high dilution through
inappropriate mining methods and smelter limitations which do not allow
concentrates of more than 210 oz./6000 g/t Ag.
The total concessions package controlled by Panther Resources is in excess of
22,000 acres (8000 Ha.) Numerous other previously mined and explored prospects
with remaining reserves potential exist within the land package. Panther's
goal is to prove up several multi million ton deposits within the area.
Location & Access
The La Verde mine is located approximately 3 miles, as the crow flies, to the
north of the town of Cosala. Cosala lies 97 miles to the northeast of the port
of Mazatlan on the West Coast of Sinaloa, Mexico. Cosala lies in a broad
valley situated in the front range of the Sierra Madre Occidental mountain
range, which runs along the length of Western Mexico.
Cosala is the administrative center of the county of Cosala. The town counts
approximately 10,000 people and the whole county 18,000 people. Agriculture is
the main occupation, with much of the population living on a subsistence
basis. Corn is the main crop, and cattle farming has a large role. Cosala also
serves as a supplies base for many of the surrounding outlying mountain
villages and communities.
The area is warm and dry for most of the year. There is lush tropical growth
during the hot rainy season from mid July through September. The mountains are
thickly wooded in general while the valleys have been cleared for farming.
Cosala is easily reached in two hours by car from Mazatlan. Approximately half
the journey is over an excellent four-lane highway linking Mazatlan to
Culiacan, while the second part is a good paved road all the way to Cosala.
The pavement ends in Cosala.
There are daily flights from Seattle, Los Angeles, San Francisco, Tucson and
Phoenix to Mazatlan. Mazatlan and the state capital Culiacan are also well
connected via a domestic network to major cities in Mexico.
Access to the La Verde mine from Cosala is along a county dirt road that is in
reasonable shape, and then over a dirt road built by the mine operator. The
road distance is approximately 13 miles. The mine maintains its access road
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on a regular basis both with a bulldozer and a road grader. The county road is
regularly maintained with a grader.
The nearest railway head is at La Cruz, 43 miles to the southwest of Cosala.
La Cruz is on the main trunk line from Nogales, Arizona, to Guadelajara.
COBala also possesses an all- weather paved landing strip suitable for light
aircraft. Several air-taxi companies use this as a base to serve mountain
communities.
Cosala is linked to the national power grid as well as the telephone network.
Power has been extended all the way to the La Verde mine. There is a
hydropower dam and water reservoir nearby, to the north.
Ownership, Legal, & Concession
The La Verde mine is owned and controlled 100% by Minera Humaya S.A. de C.V.
Minera Humaya is a privately held company incorporated under the laws of
Sinaloa State, Mexico and whose principal director is Mr. Jaime Guinea. The
mine is situated within the 247 acres (100 Ha) mineral concession La Verde.
The La Verde concession is surrounded by 14 other concessions under direct
control by Minera Humaya, for a total of 21,644 acres (8760 hectares).
<TABLE>
<S> <C> <C> <C> <C>
Name Conc. No. Area Acres Expiration Date
La Verde 156662 100 Has. 247 04/13/2022
La Estrella 172855 55 Has 136 06/28/2034
San Jose 205217 237 Has 586 07/07/2047
Silvia Maria 147043 40 Has 99 01/27/2017
La Dora 186334 15 Has 37 03/28/2040
Name Conc. No. Area Acres Expiration Date
La Cosalteca 204171 504 Has 1245 12/17/2046
Ampli. Los Cristos 178095 96 Has 237 07/10/2036
Humaya 191471 540 Has 1334 12/18/2047
Magda 191476 733 Has 1811 12/18/2047
La Roja 202947 608 Has 1502 04/02/2002
Jimmy 203466 3036 Has 7501 08/08/2002
Amplicion La Verde 203725 2079 Has 5137 09/26/2002
Amplic. La Verde B 203726 147 Has 363 09/26/2002
Amplic. La Verde C 203727 293 Has 724 09/26/2002
Jimmy 2 205300 241 Has 596 07/14/2003
Campanillas Tres 181590 36 Has 89 08/11/2037
</TABLE>
within the above concessions package exist several other prospects which have
been previously mined and/or explored (Cajon, Mamut, El Habal, Estrella, La
Proffesora, La Bufa, San Rafael).
Panther Resources and Minera Humaya have signed a purchase agreement on Nov
29, 1997 for the purchase of 10OW of Minera Humaya and all its assets,
concessions, operations, and mineral rights by Panther Resources. An 8-K was
filed on December 17th, 1997 with full disclosure on the Minera Humaya
acquisition. A further 8-K was filed February 23, 1998 disclosing the audited
financial information for Minera Humaya to December 31, 1995 and 1996.
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History
The mine was developed from scratch in an original partnership by Minera
Humaya's principal director, Mr. Jaime Guinea and several others. In 1985 Mr.
Guinea acquired all rights to the mine from the remaining partners and
consolidated these within Minera Humaya.
Small-scale (25 tons per day) production on La Verde was started in 1972, from
which original assay and smelting records are still available. The existing
milling facility in Cosala was constructed in 1982 with an initial production
of 100 tons per day. This was increased to an installed capacity of 250 tons
per day in 1990, while the average production has been 200 ton per day since
1992.
The available infrastructure has been developed gradually during the past
years. original access to the mine was along a poorly maintained track
susceptible to perpetual damage during the rainy season. The track was
initially built and then improved to an acceptable dirt road usable by 10-ton
trucks.
Water and power were unavailable at the La Verde, which is the reason why the
mill is installed in Cosala, a distance of 13 miles by road. Electricity power
was brought to the mine in 1996, which operated on diesel generators until
then.
Mr. Guinea has been mining in the La Verde area since 1972, and has extracted
mineral from other prospects beside the La Verde as well. Intermittent
production has come from the Magistral, Mamut, El Cajon, and La Iguana
prospects. These remain favorable prospects for future mining, but were
discontinued due to access problems, under-capitalization, and concentration
of operations on the La Verde mine.
Geology
The package of volcanic rocks that hosts the La Verde mine run in a northwest
direction for over 1 mile, but only 600 - 700 feet of strike length of the
nearly vertical mineralized beds have had any exploration, and that has only
been done recently by Golden Panther. At the San Antonio site, which is about
one~half of a mile to the southeast along strike, there are several rounded
clasts of chalcopyrite, including one as large as 11 by 6 inches, in the same
type of rock units as in the La Verde mine. To the northwest, there are
anecdotal reports of old mine showings half a kilometer along strike. These
areas will be explored as soon as the present mine area exploration is
completed. The possibility of finding more ore along strike, beyond the
immediate mine area, and at depth, is excellent although there is no assurance
that the Company will find this ore. The La Verde sequence of lavas are tilted
almost vertical (70 degree dip to the north, and strike N60 degrees west) and
can be traced along strike for nearly 1.2 miles.
The basal member is several hundred feet thick. Near the top of this unit,
there is a marked changeover in about 60 feet of thickness to the debris flows
in that they contain clasts of several different rock types. As the ore, zones
are reached the carbonate content of the beds increases and tetrahedrite and
chalcopyrite fragments appear. Some beds and portions of beds contain over 50%
tetrahedrite. These beds are fine-grained cracked crystal tuffs with coarser
clasts that have no alteration rims around the fragments or clasts. The lack
of an alteration rim around the clasts means that the sulphide fragments and
the rock fragments were at the same temperature as the hot tuff flow when the
sulphide zone was ripped up and carried down by the hot debris flow to form
the bed.
This means that there had to be a source for the sulphides in the same
volcanic pile rock units as the debris flow. This source can not be very far
away for the sulphides as they are still large and angular in shape. The
coarser sulphide fragments are in the coarser lower portions of each of the
size-graded beds and the finer more dust sized sulphide fragments are in the
finer upper portion of the graded beds. This means that the sulphides are true
fragments moved into the bed as it formed and are not later hydrothermal
mineralization deposited long after the rock was formed. Neither is the
mineralization related to the regional skarn development peripheral to the
stocks coming off the Sinaloa batholith.
La Verde Mine Geology
The La Verde lava flow beds in the ore zones can be considered as crystal and
fragmental lahars, or ignimbrites, or rubble volcanic debris flows. Often
these flows, which are typically one foot thick, show graded bedding. As the
cobbles, pebbles, and finer sand sized volcanic fragments are laid down, the
heavier and larger pieces settle to the bottom of the bed and the fragments
become successively finer towards the tops of the bed. The next bed will often
repeat this size grading feature. This feature is routinely used to tell which
side was facing up when beds were laid down.
An important feature of the La Verde mineralization is that the tetrahedrite
(silver) and chalcopyrite (copper) minerals follow this upward size grading of
successively finer fragments in the mineralized beds. This means that
fragments of the sulphides were eroded from somewhere upsweep on the source
volcano and then incorporated in the beds as they formed. This kind of
mineralization can be expected to continue along strike and down dip for long
distances.
Many of the rock fragments are banded chert, massive chemical precipitate
chert, coarse calcite crystals with high iron and magnesium content, and
rarely clasts of a well mineralized pinky brown latite (adamellite = quartz
monzonite) intrusive/ extrusive. The matrix of the debris flows is a medium
grained dacite or latite tuff similar to the older unmineralized units but
invariably coarser grained. The mineralized beds have abundant broken feldspar
crystals, a very few quartz eyes (small patches of usually dark quartz), and
lots of calcite disseminated throughout the rock unit.
The chemistry of the mineralized bed units changes to more carbonate rich and
has a tendency to alter to green to dark green chlorite around late vein
fractures. The chlorite alteration of the older debris free flows of tuff is
very weak around crosscutting fractures. No sulphide minerals were seen in
either the unmineralized or mineralized flows. There are no alteration rims on
the sulphides but there are always chlorite alteration shells on veinlets. The
mineralization was not introduced into these units by veining or hydrothermal
processes. There are at least three mineralized zones in the La Verde system.
Each has a basal or near basal high-grade zone with gradual diminishing of
grade upward (Southwest) and finally a marked increase in both carbonate in
the groundmass and preponderance of limestone fragments in the debris.
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Some of the top flows for each mineralized zone are almost all lime with
shards of coarse-grained calcite, fine-grained iron and magnesium rich calcite
and sparry (transparent or clear] dolomite. The oldest, eastern, richest and
thickest zone has a limited amount of lime and the thickest and richest
mineralized layers. The middle zone is narrower than the eastern and has much
more carbonate on the west (top) side with less mineralization both in
thickness and apparent grade. There is more fine-grained sulphides in this
horizon than any of the other two. The last known zone (especially on Level 2
where the sequence is truncated somewhat) has the most lime on the western
(top) side (could be called a carbonate breccial, has a few narrow high-grade
beds, and is capped by relatively mafic volcanics. These andesitic to
diacritic flows, tuffs and related units seem to be in part sub-aerial. There
is much more oxidation of the shards than could be explained by weather or
reaction with water.
The Possible Sequence of Events at La Verde
The possible sequence of events to form the La Verde suite of rocks consists
of the following:
1. The start is the formation of a large (or cluster of smaller) dacite
submarine volcano. There were periodic lava extrusions with strong interaction
of the water and the lava. The volcano was in relatively shallow water so that
there was insufficient confining pressure from the weight of water to stop the
development of steam to burst the lava to dust. The resultant hot debris slid
down a paleo slope of the volcano to come to rest in the current location.
This sort of volcano building is well known and documented for relatively
acidic (quartz rich] volcanoes.
2. Hot spots near the volcano start to accumulate tetrahedrite, chalcopyrite,
sphalerite, galena in a patch with zoning of tetrahedrite surrounding a rind
of chalcopyrite right over, or just downslope of, the hot spot (hydrothermal
vent) and calcite surrounding all and growing coarse crystals over the vent.
3. Debris flows run over the partly consolidated massive sulphide zone picking
up fragments and carrying them downslope to rest with coarse clastic
sulphides, if the sulphides are very soft (poorly consolidated) they come to
rest as fine grained sulphides dispersed in the debris flow.
4. The hot spot cools down with the massive sulphide covered in fine-grained
calcite derived from the warm water still coming from the vent. The volcanic
activity continues unabated but the debris flow only picks up calcite from the
area of the massive sulphide.
5. The hotspring re-activates or another activates nearby with the
accumulation of similar mineralization to the first horizon. Either the new
hotspot or the reactivated previous hotspot on the older massive sulphide is
ripped up by the continuing volcanic activity with accumulation of the
sulphide rich debris in the same area as the first event. Some of the clastic
debris may be formed by explosive disruption of the sulphide zone caused by
the build up of pressure in the vent. Also during this phase, there is the
start of the extrusion of mineralized and/or altered feldspar porphyry
obviously intimately associated with the mineralization, the formation of a
massive sulphide and the heating up of the area to produce the heat engine to
make the sulphide rich zone. Clasts of this type of material have only been
<PAGE>
located in a very few debris zones and they are always large (+12 inches),
highly altered (some to clay) and mineralized with tetrahedrite, chalcopyrite
and pyrite.
6. The hotspring slows in sulphide deposition for a second time and later
reactivates as above. The final slowdown is sooner than in the previous two
cycles and there is considerable development of calcite. Some of the carbonate
looks like reef development to the point that the debris flows look like
fore-reef accumulations of angular and large self-supporting (pieces touch
each other] clasts of dolomitic limestone separated by a matrix of tuffaceous
lime.
7. A new volcano starts in the area and extrudes considerable thin hot mafic
lava. There is no mineralization or acid volcanics visible for the first 400
feet of accumulation. The distance from the mine mineralization to the massive
sulphide must be fairly small as we have located both in-place and float
pieces of the volcanic debris with thin layers of chemical sediment. This
white, banded layer is of the type produced by a vent and covers a large area
well beyond the calcite zone. one of these layers has a clast of tetrahedrite
that clearly fell onto and disrupted the soft silica/carbonate gel. It is
possible the clastic sulphide debris is material ejected from the throat of
the hot spring during warming up (steam burst explosions) and the tuff has
moved this debris to the site we find at the mine. The ejecta located in the
thin chemical sediment is critical for us, as it is very hard to move small
particles long distances under water. Unlike air explosions the dispersal
underwater is a short distance.
The source of the clastic debris tetrahedrite and chalcopyrite must be within
a few hundred feet and probably less than 1500 feet away from the current
mining site. The source should have a large flattish mass of chalcopyrite with
inter-layered tetrahedrite and calcite. The massive sulphide should be
adjacent to an ancient hot spring zone with a dome of pinkish orange potassium
feldspar porphyry intrusive/extrusive.
Current Mining Operations
Previous Workings:
The La Verde mine has been gradually established over the past twelve years,
with the orebody being developed from an "old timer's prospect" to the +/- 200
ton per day operation which it is today. The La Verde orebody is hosted within
the La Verde mountain, and it is being exploited top down through a series of
undergr ound drifts and ramps.
Initial mining of the orebody started near the crest of the La Verde mountain,
where historical prospectors have driven adits through the uppermost surface
extension, leaving part of the orebody exposed. It was here that the first
level (Level 1) was started by the current owner, and further below Level 2,
which was an adit into the mineralized zone. Levels 1 and 2 collapsed after 5
years of mining, after which the Level 3 adit was subsequently opened. The
collapse of Levels 1 and 2 leaves the structure of the orebody clearly
exposed.
Current Workings:
Mining method:
Currently, the mining advances by a combination of drifts along the richer
mineralized zones, and development of the orebody by driving a spiraling ramp
down through (mostly) the orebody to be able to open up new sublevels. The
mining method can be considered a mix of room and pillar and shrinkage
stoping. The ineffective execution of this method leads to a high dilution and
substantial ore being left in place.
Layout:
The ramp is in some parts out of the orebody to protect it from future
stoping. From the entrance of Level 3 Sublevel A has been developed, and new
sublevels are being developed as the ramp spirals downward. The levels below
the entrance are referred to as 3 1/2, with each new sublevel being denoted in
alphabetical sequence. At present, the ramp extends down to sublevel 3 1/2 E.
At Sublevel A there are a series of drawpoints, which enables the operation to
draw broken ore from Level 2. Currently the ramp has descended a total of
222.5 feet down from the adit level.
Level 4 is approximately 328 feet below the entrance of Level 3. The entrance
of Level 4 is near the bed of the nearby arroyo on the other side of the Le
Verde mountain relative to the Level 3 adit. Level 4 runs SE to the strike of
the La Verde ore beds, and has a north crosscut with a raise up to level 3 to
be used as an ore shoot and for ventilation. The ramp from Level 3.0 is being
continued down to Level 4 to provide the ore trucks a shorter haulage route.
Work method:
The mining breakup method used is by single jack leg mining, and single round
random pattern blasting. Blasting method is by ANFO charging and Tovex
initiation from caps and black fuse. Drifts are stoped along the richest
mineralized zones, which are identified visually, and drilling and blasting is
carried out vertically up to 41 feet.
Grade control of the ore is done by visual inspection of the face, and the
development has been done with only minimal planning. The consequence has been
high pillars left in place, some containing high-grade material.
Mucking of the ore is being carried out by 3 1/2 yd3 rubber tire scoop trams.
These dump the ore directly into full road, worthy 10 T dump trucks, which
haul the ore to the mill located in Cosala, 9 miles away by road. The trucks
drive through the adit and down the ramp directly to the loading area.
Rock stability:
The rock competence factor is extremely high; as testified by the large rooms
and stopes left over from the mining advance. No rock control method other
than pillaring is used whatsoever, and the ribs and backs are left as they
are. Other than usual explosive cracking no excessive rock strain and cracking
is observed.
Water:
The mine has no problem with excess water and the need for a large pumping
system to keep the workings dry. If anything, the mine experiences an
occasional water shortage problem.
Schedule:
The mine works on a single shift basis 6 1/2 days per week. It has no onsite
manager, and all operations are planned, lead, and surveyed by a local foreman
with no formal training but who is reasonably competent. Currently the mine
has an underground labor force of 25 people.
Maintenance
The mining company possesses a workshop and office facilities half a kilometer
from the mill. It is here that all major repairs are executed for all mining
equipment. A smaller shop exists at the mine but is only used for smaller
intermittent repairs.
No maintenance schedule existed, and equipment is repaired only a breakdown
basis. In addition, the workshop is run by an independent manager who is
onsite only 3 or 4 days per week. There is very little integration between the
mining operations and the workshop in Cosala.
Current Milling operations
The mill used to process the La Verde ore is located in Cosala, 10 miles away.
It is a nominal 200 tpd flotation plant that consists of the following:
(a) A small coarse ore bin of +/- 20 ton live capacity
(b) Two stage closed circuit jaw/cone crushing plant which reduces
nominal 1011 (250 mm) ore to minus 3/811 (9mm).
The jaw is a 2011x3611 single toggle crusher, of a contemporary
anti-friction bearing design. It appears to be identical to the one that
is installed at La Verde.
The cone crusher is a 31 or 41 unit of apparent Mexican design an
manufacture
A nominal 41x8l vibrating screen
(c) Two cylindrical steel fine ore bins each of about 150 tons live
capacity
(d) A single 71x101 - 200 HP ball mill operating in closed circuit with
a 1011 hydrocyclone.
Installation site for a second, apparently smaller mill
(e) The cyclone overflow flows by gravity to a nominal 61x6l
conditioning tank to which reagents are added
(f) A flotation circuit consisting of 28 cel ls of Denver #24 Sub A, of
which 24 cells are used for roughing, and the balance for 3 separate
single stage cleaners.
The very large number of rougher cells was probably a result to the
plant having been constructed as a lead-zinc mill.
(g)A concentrate dewatering circuit which consists of 3 settling sumps
and a solar drying pad, which achieve shipping moisture of <10 W
moisture content in about 3 days. Hand turning of the partially
dried concentrate facilitates drying.
(h) A tailing pond which is located above the mill, and which uses a 3
stage pumping system to elevate the tailing slurry
The concentrate is shipped by a contractor to a smelter in the state of San
Luis Potosi (300 km away by road), usually every 7 to 10 days.
Process Metallurgy:
A 7 month summary for 1997 concentrate is presented below;
<TABLE>
Assay Distribution(%)
Product Wt% Ag(oz./t) Cu(%) Ag Cu
<S> <C> <C> <C> <C> <C>
Flot conc. 2.7 199 24.00 86.4 86.0
Tailing 97.3 .8 0.11 13.6 14.0
Feed 100.0 198.2 0.75 100.0 100.0
</TABLE>
Flotation reagents:
The Cosala mill utilizes the following reagents in the flotation circuit:
* Lime, a pH modifier
* 3 collectors consisting of Cytec 238, Minetek B, a "collector bisulfurado",
and xanthate.
* MIBC, a frother
Feed head-grade to the mill is artificially diluted to an average of 7 oz./t
Ag - silver due to penalty from the smelter. The smelter does not allow grades
greater than 212 oz./t Ag - silver of concentrate. This problem does not exist
at most other smelters. It is necessary for Panther Resources to use this
smelter due to the small tonnage of concentrate per month.
The mill operates 3 shifts for 6 1/2 days per week. It is led by a mill
manager who has no formal training but who is reasonably competent. The mill
has a labor force of 25 people.
A small lab is present, which takes daily assays of feed, concentrate and
tailings. However, no pre-emptive assaying is done before ore is fed to the
mill, which leads to erratic grade feed.
Work Done By Panther Resources To Date Summary
A. Surface Mapping:
GPR work on the La Verde property started during the due diligence period.
Initial geological survey work revealed the La Verde mineralization to be of
volcanic origin. The mineralization was found to be in three different beds,
composed of two high grade zones and one medium to low grade zone split in
two. The mineralized sequence was also found to contain an ademalite (synetic
rock fragments) marker zone. This marker zone has been useful in tracing the
extent of the mineralized zone on the property.
Geological work undertaken consisted of mapping the structure of the bed
sequences at the surface and identifying major features. It was discovered
that the La Verde sequence has been offset in different blocks by faulting.
This faulting is right angle vertical faulting normal to bedding with vertical
offset (which appears to give horizontal movement). Geological mapping also
showed the mineralization extent to the northeast, dubbed La
Verde Norte, and to the southeast on the backside of the La Verde mountain,
dubbed block 0, and continuing further on to the San Antonio prospect, 1.9
miles further away. Geological surface work showed the possible existence of a
massive sulfide deposit through samples, which were banded with thick
sulfides.
B. Underground Mapping:
Initial underground geological surveying revealed a narrow high grade mineral
zone separated from the La Verde beds in Level 4, named San Juan. The La Verde
mineralization is chiefly chalcopyrite and tetrahedryte. It appears that much
of the high grade mineralization in the mine is finely disseminated and less
visible and therefore remained unmined by the Mexican operator, now much of it
left in pillars.
C. Geophysical Survey
Following initial geological work a series of geophysical lines were sounded
across the strike of the orebody and the La Verde mountain. Six lines 3280
yards long each were done with a depth reading of approximately 820 feet.
These lines revealed the continuation at depth of the La Verde mineral beds.
In addition, a hidden mineralized sequence, baptized "Navarro" was inferred as
being parallel to the south of the La Verde sequence and therefore hidden in
the mountain. The geophysical lines also identified another possible separate
zone further to the south of the Navarro, baptized "Enrique", and also an as
yet unnamed zone 980 feet to the north of Level 3.0
The geophysical and geological work led to the model of the La Verde orebody
being continuous over a minimum strike length of 1,970 feet confirmed by the
IP and open at either end. This orebody has been faulted and offset into
different blocks. Level 1 was mined in block 1, Level 2 in block 2, all
current mining (Level 3 and sublevels thereof) occurs in block 3, and Level 4
was initiated in block 4. Block 0 is to the southeast of block 1 and La Verde
Norte is to the northwest.
D. Diamond drilling:
Following completion of the due diligence period and signing of the purchase
contract a six hole diamond drill program was initiated. The objectives were
to intersect the unmined portions of the La Verde beds at depth in blocks 1
and 2, as well as intersection and identification of the hidden Navarro zone.
Drill results show that although the La Verde beds are continuous along strike
and to depth, they have been offset by cross faulting and at depth by dip slip
faulting, which has subsequently been identified in underground mapping.
Strongest evidence of this faulting is visible in the remaining Level 2 adit
and in Level 3.0.
The Navarro zone does not outcrop and the main part could not be reached by
diamond drilling because it is hidden behind the La Verde working. Drilling
did intercept the keel of the Navarro zone, confirming its existence. Several
intervals of sulfide mineralization were identified, which have been
interpreted as being the outer limits of the volcanic mineral flow sequence
(outer "slivers", or "fingers" of bulk of mineral deposition), on
the outside edge of the Navarro zone. In addition, it was interpreted that at
least the La Verde zone plunges to the northeast.
Drill interception of the bulk of the high grade zone has proven to be not
feasible from surface due to physical/geographical restrictions. The location
of the mine workings prohibit an effective interception angle of the Navarro
zone from the attempted drill sites, and the La Verde mountain is too steep on
the opposite side of the mountain crest to be able to situate a drill pad for
intersection of the Navarro zone from the south. Interception at depth of the
La Verde zone was not realized because of the previously unmapped dip slip
faults, and the suspected exact location of the down dip beds have not
been determined accurately enough yet to make another attempt from surface.
Further geological mapping and evidence from the crosscut started at Level 4
has revealed the possibility of additional diagonal intrablock faulting as
well. The net effect of the block cross faults and the strike slip dip faults
has been the offsetting of the mineralized beds, which caused the miners to
believe that these were dying out, as they were unable to locate the faulted
off portions. At least half or more of the offset portions of the mineralized
beds were never found, and of the portions which they did find a considerable
amount of the ore was left as pillars.
9. La Verde Mine Potential Estimate
The La Verde orebody model can be summarized as follows:
* Three distinct beds of mineralization (1, 2a, 2b, & 3) in the La Verde
* Two distinct zones of mineralization (Navarro & La Verde)
* Possible other zones of mineralization (San Juan, Enrique)
* Possible additional high grade pods in between mineralized zones & beds
* offset superimposing of each mineralized bed to produce a net rake
* Tilting and overturning of the beds to 70 degrees dip
* Plunging orebodies; La Verde plunging to the northeast, Navarro still
undetermined
* offset faulting; vertical division of orebody into blocks
* Dip slip faulting; horizontal division of orebody
* Possible diagonal in[AVH11tra-block faulting
* Principal mineralization is tetrahedryte and chalcopyrite
* Fine mineral dissemination; higher grade often less visible
Identified Resources as of March 1998
Seven independent mine blocks have been confirmed in the first 700 m (2296 ft)
of strike. Block 2 is known to have a strike of 160 meters (525 ft) and width
of 50 meters (165 feet). It is expected to have a vertical extent in excess of
100 m (328 feet), which is shown by the IP, which has shown the mineralization
to continue to significant depth. Panther Resources expects to prove up 2
million tonnes in this block.
Five of the other blocks have geologically indicated resources of similar
dimensions and tonnage as identified in mine block 2. The remaining ore block
3 has had over 650,000 tonnes of ore mined from it with an additional 650,000
tonnes of indicated reserves remaining.
This is a total resource of almost 14 million tonnes of indicated and inferred
reserves of mineable ore in only the first 700 meters (2296 ft) of strike,
which remains open at both ends. These abovementioned independent mine blocks
are from only 1 (one) area of an additional 7 (seven) areas confirmed by
previous trenching, drilling, and mining operations. It is important to note
that these estimates do not include the newly discovered orebodies of the
Navarro or the Enrique which have been identified from the IP.
GLOSSARY
Adit: a tunnel driven horizontally into a mountainside providing access to a
mineral deposit.
Alteration: change in mineralogical composition of a rock commonly brought
about by reactions with hydrothermal solutions.
Amphibolites: metamorphic rock of primarily mafic minerals, chiefly
hornblende.
Argillic alteration zone: a form of alteration where the original constituents
of a rock are converted to clay minerals.
Arsenic: semi- metallic element often associated with gold and which provides
a geochemical indication of possible gold mineralisation.
Artisanal Mining: small-scale mineral exploitation by local people.
Assay: the chemical test of rock samples to determine the mineral content.
Base metal: a non-precious metal- usually refers to copper, zinc, lead, and
nickel.
Breccia: a fragmental rock whose components are angular and not water-worn.
Clastic: a descriptive term applied to rock formed from the fragments of other
rocks.
Contained ounces: represents ounces in the ground without the reduction of
ounces not recovered by the applicable metallurgical process.
Crushing and Grinding: the process by which ore is broken into small pieces to
prepare it for further processing.
Dacite: generally volcanic, igneous rock, containing essential plagioclase and
quartz.
Diamond drill holes: rotary drilling using diamond impregnated bitB to produce
a solid continuous core sample of the rock.
Drift: a horizontal underground tunnel driven alongside or through an ore
deposit, from either an adit or shaft, to gain access to the deposit.
Epithermal: a term applied to low temperature (100-200C) hydrothermal process.
Feasibility: program to establish whether a mineral deposit can be
successfully mined considering technical and economic parameters.
Flotation: a process by which some mineral particles are induced to become
attached to bubbles and float, and other particles sink, BO that the valuable
minerals are concentrated and separated from the worthless gangue.
G/t (PPM): grams per ton ( parts per million), a measure of precious metal
content in a sample.
Geochemical anomaly: the occurrence of higher than average content of an
element in rock or soil.
Geochemistry: study of variation of chemical elements in rocks or soils.
Geophysics: study of the earth by quantitative physical methods.
Geosyncline: a downward flexure of the earth's crust.
Gossan: (to contain a particular) quantity of ore or mineral relative to other
constituents, in a specified quantity of rock.
Grade: the amount of valuable mineral in each ton of ore, expressed as troy
ounces per ton for precious metals and as a percentage for other metals.
Granodiorite: the intrusive rock with intermediate composition.
Hydro-thermal: pertaining to hot water, especially with respect to its action
in dissolving, re-depositing, and otherwise producing mineral changes within
the crust of the globe.
Lapilli tuffs: fragments of pyroclastic rocks.
Layback: the amount of material that must be mined for the slope of a pit wall
to be at a safe angle.
Leaching: the dissolution of mineral components in rocks and ores by acids or
other reagents.
Lode: a tubular or vein-like deposit of valuable mineral between well defined
walls of rock.
Massive sulphide: mineralised rock rich in sulphide minerals (>50%)
Mineralisation: rock containing an undetermined amount of minerals or metals.
mineral resource: in-situ mineral occurrence from which valuable or useful
minerals may be recovered, according to the Australasian Code, as follows:
1. Inferred: a mineral resource inferred from geoscientific evidence,
drill holes, underground openings or other sampling procedures where the lack
of data is such that continuity cannot be predicted with confidence and
where geoscientific data are not known with a reasonable level of reliability.
2. Indicated: a mineral resource sampled by drill holes, underground openings
or other sampling procedures at locations too widely spaced to ensure
continuity but close enough to give a reasonable indication of continuity and
where geoscientific data are known with a reasonable level of reliability. An
indicated resource estimate is based on more data, and therefore more reliable
than an inferred resource.
3. measured: mineral resources intersected and tested by drill holes,
underground openings or other sampling procedures at locations which are
<PAGE>
spaced closely enough to confirm continuity and where geoscientific data are
reliably known. A measured mineral resource is based on a substantial amount
of reliable data, interpretation and evaluation of which a clear determination
to be made of shapes, sizes, densities and grades.
Ore: a natural aggregate of one or more minerals which, at a specific time and
place, may be mined and sold at profit, or from which some part may be
profitable separated.
Orebody: a mineral deposit with sufficient tonnage and grade from which a
commodity may be mined, processed and sold economically.
Porphyry: any igneous rock in which relatively large conspicuous crystals are
set in a finer-grained groundmass.
Propylitic: a term that may be applied to any kind of a vein, meaning that the
ore solution which has furnished the vein filling has also effected a
decomposition or alteration of the wall rock as well, so that the walls of the
vein consist of clay, talc, etc.
Prospect: mineral occurrence with potential for an economic deposit.
Reconnaissance: first-pass exploration of a large area.
Rhyolite: an igneous rock composed essentially of quartz and alkalic feldspar,
or of rock having substantially the same composition.
Shaft: a vertical passageway to an underground mine for moving personnel,
equipment, supplies and material including ore and waste rock.
Strike length: the ratio of the number of tons of waste material removed to
the number of tons of ore removed, used in connection with open pit mining.
Sulphide ore: a sub-group of refractory ore-mineralised rock in which much of
the gold is encapsulated in sulphides and is not readily amenable to
dissolution by cyanide solutions-associated with sulphide minerals (primarily
pyrite) that have not been oxidised. Some sulphide ore may require autoclaving
or roasting prior to milling.
Troy ounce: troy ounce of a fineness of 999.9 parts per 1,000 parts, equal to
31.3034 grams.
Vein: sheet
ITEM 3. LEGAL PROCEEDINGS
The Company, Panther Resources Ltd., currently is neither a party to nor does
it have any property which is subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 5th, 1998, the Company held a Special meeting of Shareholders at 211
- - 1111 West Hastings Street, Vancouver, B.C. V6E 2J3 to approve a change of
<PAGE>
name from Golden Panther Resources, Ltd. to Panther Resources Ltd. The name
change was approved by the shareholders at the Special Meeting with a majority
percentage in excess of fifty-five percent (55%) of the total outstanding
shares.
On September 26th, 1997, the Company held an Annual Meeting of Shareholders at
the Rio Suite Hotel, Flamingo at Valley View, Las Vegas, Nevada to approve (1)
Election of Directors; (2) To adopt new By-Laws; (3) To amend Article IV of
the Articles of Incorporation (a) changing the authorized capital common stock
from 50,000,000 shares of authorized capital common stock with a par value of
$0.001 to 100,000,000 shares of authorized capital common stock with a par
value of $0.001; and (b) authorizing 10,000,000 preferred shares with a par
value of $0.10 to be issued in series; (4) to amend Article III to change the
Business purpose; (5) To obtain shareholder approval to provide the Directors
with general authority to (a) split the issued and outstanding stock of the
Corporation; (b) to issue 2,000,000 of the newly authorized preferred shares;
(c) declare and issue stock options; (6) To obtain shareholder approval to
issue Debentures in series; and (7) To obtain shareholder approval to the 1997
Stock Option Plan for the Directors, Officers land key employees of the
Company.
Each of the foregoing proposals were approved by the shareholders at the
Annual Meeting with a majority percentage in excess of seventy percent (70%)
of the total outstanding shares.
On March 26, 1997, the Company held a Special Meeting to approve an
Acquisition and Plan of Reorganization whereby the Company acquired all of the
issued and outstanding common stock of Golden Panther Resources, Ltd., in
exchange for 3,000,000 "unregistered" and "restricted" shares of the Company's
common stock. The stockholders also voted to elect the following persons to
the Company's Board of Directors: Penny Perfect, J. Michael Pinkney and
Katharine Johnston.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Shareholders
At March 31, 1998, there were 1,147 shareholders of record of the Company's
common stock.
Market Information
Currently, the Company's common stock is traded over-the-counter and quoted on
NASD's bulletin board (the "Bulletin Board") under the symbol 11PTHR11. The
high and low bid prices for the Common Stock as reported by the Bulletin Board
since April 1, 1996 are listed below. The prices in the table reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may
not represent actual transactions.
The reported bid prices have been adjusted to reflect the 1 for 10 stock split
that occurred on March 1, 1997 and the 1 for 20 reverse stock split that
occurred on March 22, 1997 prior to the share exchange with Golden Panther
Resources Ltd.
<TABLE>
<S> <C> <C> <C>
Calendar Year Quarter High Low
1996 Jan. - March 0.125 0.125
April - June 0.125 0.01
July - Sept. 0.125 0.01
Oct. - Dec. 0.0625 0.01
Calendar Year Quarter High Low
1997 Jan. - March 0.01 0.001
April - June 3.28 0.25
July - Sept. 2.05 0.15
Oct. - Dec. 1.75 .40625
1998 Jan. - March 1.015 0.23
</TABLE>
Dividends
The Company has never declared any cash dividends and does not anticipate
- -paying such dividends in the near future. The Company anticipates all
earnings, if any, over the next twelve (12) to twenty (20) months will be
retained for future investments in business. Any future determination to pay
cash dividends will be at the discretion of the Board of Directors and will be
dependent upon the Company's results of operations, financial conditions,
contractual restrictions, and other factors deemed relevant by the Board of
Directors. The Company is under no contractual restrictions in declaring or
paying dividends to its shareholders.
The future sale of presently outstanding "unregistered" and "restricted"
common stock of the Company by present members of management and persons who
own more than five percent of the outstanding voting securities of the Company
may have an adverse effect on any market that may develop in the shares of the
common stock of the Company.
Recent Sales of "Unregistered" Securities
The following unregistered securities have been issued since April ist, 1997
and are previously disclosed in the appropriate 10-QSB's or 8-K filings
indexed at the end of this document unless otherwise noted:
<TABLE>
offering
Date No. of Shares Title Price Rule Reason
<S> <C> <C> <C> <C> <C>-
Apr. 1/97 3,000,000 Common $1.00 144 Share Exchange
May 26/97 450,000 Common $1.00 144 Kutai Property
May 26/97 100,000 Common $1.00 144 Finders Fee
June 10/97 453,000 Common $0.74 144 Payment of Advances
June 10/97 225,000 Common $0.51 144 Payment of Advances
Oct. 23/97 1,500,000 Common $0.25 144 Management Fees
July 26/97 112,450 Common $0.75 144 Private Placement
July 26/97 1,000,000 Common $0.25 Reg S Private Placement
Oct. 30/97 2,000,000 Common $0.25 Reg S Private Placement
Oct. 31/97 1,000,000 Common $0.80 Reg S Private Placement
Dec. 11/97 246,000 Common $1.00 144 Private Placement
Jan. 5/98 150,000* Common $1.00 144 Consulting Services
Feb. 5/98 500,000* Common $0.50 144 Private Placement
<PAGE>
Feb. 5/98 300,000* Common $0.36 144 Debt Settlement
Feb. 11/98 50,000* Common $0.50 144 Debt Settlement
Mar. 13/98 2,000,000* Common $0.25 Reg S Private Placement
Dec. 11/97 2,000,000 Class "A" Preferred $0.10 144 Takeover Avoidance
Subsequent to March 31st the following unregistered shares were issued:
Apr. 13/98 2,035,160 Common $0.25 144 Private Placement
Apr. 13/98 400,000 Common $0.50 144 Private Placement
May 6/98 30,000 Common $0.30 144 Staff Compensation
</TABLE>
* have not previously been disclosed.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements of the Company. The Company's financial
condition and results of operations are not necessarily indicative of what may
be expected in future years. Unless otherwise indicated, all references to
dollars are to U.S. dollars.
Panther has been in continuous operations for three years. The Company was
formed in 1995 and operated in the private stage for two years until March,
1997 when the Company began operating as a publicly traded company.
General
Panther Resources Ltd. (herein referred to as Panther) is an international
natural resources company with silver exploration and development interests in
Mexico. Panther was founded in the Province of British Columbia Canada for the
purpose of exploring, developing and producing precious metals
internationally. Panther has a long-term strategy to aggressively acquire and
develop diversified natural resource properties. The Company's business
approach in the future will be to combine its own exploration and operational
skills with the financial strength of a major partner.
Management's Discussion of Past Results
Indonesian Interests: At the current time the Company, Golden Panther
Resources, Ltd. is waiting for the final approval of their seventh generation
Contract of work (COW) for the Kutai property located on the island of
Kalimantan in Indonesia. The Contract of work is held by our wholly owned
subsidiary, Golden Panther Resources Ltd., a B.C. registered company. our
joint venture partner, PKA ( Pt. Pertiwi Kencana Abadi) has informed the
company in writing that our seventh generation COW has been accepted by the
Department of Mines in Indonesia although the company has not yet received the
final documentation.
In early April of 1997, the Bre-Ex scandal caused a major shift in the ability
to get funding for any mining company that held Indonesian mineral property
assets. In fact, it strained the Company's financial reserves to be in a
country that had no appeal to investors. In July of 1997, the Company decided
to put its operations in Indonesia on hold until the market conditions were
more favorable.
<PAGE>
During this time of political and economic upheaval in Indonesia, the company
decided to focus on developing new acquisitions in a country with a more
favorable working environment. The Company was left with total liabilities in
Indonesia of approximately $50,000 (excluding disputed salaries) and wrote off
approximately $50,000 worth of equipment and furniture. The company has
retired approximately $20,000 of this debt and currently has remaining
liabilities of $32,000. With respect to the disputed salaries, the Company has
notified the senior staff responsible for Indonesia, that some unpaid wages
are in dispute until all employees return equipment and corporate documents to
the Company. These disputed amounts totaled $49,000. Since none of the
equipment or corporate data was returned to the company within the ensuing six
month period, the Company assumed they were not going to be returned and wrote
off the salaries against the loss of assets.
Mexico
On November 30, 1997, the Company entered into an agreement with Minera Humaya
S.A. de C.V. to purchase 100% of the assets for a total of $14 million to be
paid in incremental payments. At the time of signing this agreement the
company had a commitment to pay $250,000 on signing. The payment schedule was
as follows: $750,000 on February 28, May 28, and August 28, 1998, $4.5 million
on November 28th, 1998 and $1,750,000 on February 28, May 28, August 28, and
November 28, 1999. This final agreement with these payments was presented
first to the seller as an equity situation wherein the company would
immediately own 100% of the property and the revenues and would issue
redeemable preferred stock as full payment. They were to be redeemed in the
amounts aforementioned. As the negotiations proceeded, the seller decided
against accepting preferred shares and the company signed the agreement so as
not to put the property acquisition in jeopardy. However, it soon
became apparent that these property payments were too onerous given the state
of the market for minerals and for mining stocks in general. Certainly the
company wanted to preserve its right to the property and devote more money to
exploration so we approached the seller with a request to re-enter the
negotiations for the acceptance of equity rather than just make property
payments. We also requested a delay in any further payments during this
negotiating period.
To date, the Company has paid the shareholders of Minera Humaya the following
amounts: $50,000 upon signing the letter of intent in August 1997, $250,000
upon signing the agreement in November 1997 and $450,000 in February 1998.
In May of 1998 the company entered into an amended agreement with the seller
to reduce the payments to the following: on November 30, 1998 $300,000, on May
30, 1999 - $500,000, On November 30, 1999 -$750,000 and a final payment of
$12,000,000 on May 30, 2000. In addition, the company agreed to pay $300,000
for the purchase of the necessary equipment to upgrade the production
capabilities to 450 tonnes/day from 200 tonnes/day. This is to be paid in two
payments: $150,000 30 days after the amendment is signed and the balance of
$150,000 30 days after the mill capacity has been increased to 450 tonne/day.
Although the amounts of the payments do not match with the initial agreement,
the company is not delinquent in any payments and has a good working
relationship with the sellers of the property. At the present time we are
still talking with the vendors about paying for the acquisition through an
equity issuance of stock in Panther Resources.
Results of Operations
The Company is a mining exploration and development company with no current
operating income or cash flow. The only source of revenue is interest income.
The Company realized a net loss from operations of $2,973,706 during the
calendar year ended March 31, 1997.
The General and Administrative expenses of $2,970,269 are comprised of the
following expenses: Cash and non-cash items - $1,385,000 in payment of
services for 1996 and 1997 including restricted stock awards. $36,500 legal
and accounting costs. $230,000 for advertising and promotion costs. $96,500
for travel and accommodation. The remaining expenses are general expenses
normally related to a mining company. The Company also incurred other
expenses, comprised of $213,000 of bad debt expense and $146,000 of loss of
assets in Indonesia. There are no comparative figures to 1997 or 1996 as the
Company was a private mining company at that time.
Liquidity and Capital Requirements
Panther's financial performance is dependent on many external factors. World
prices and markets for oil, gas, and minerals are cyclical, difficult to
predict, volatile, subject to governmental fixing or controls and respond to
changes in domestic and international political, social and economic
environments. Additionally, in the current period of worldwide economic
upheavals, the availability and the cost of funds for production of mineral
properties have become increasingly hard to project. These changes and events
could materially affect the financial performance of Panther.
As of March 31, 1998, the company had a working capital deficiency of
$492,225. At this time, the company does not have adequate cash for all of its
planned operations and payments for the next twelve months. It will be
necessary for the company to raise additional operating funds, seek a
financial partner, do a joint venture on one of its properties or restructure
the company. Consequently, should the company be unsuccessful in its efforts
to raise additional operating funds or find a financial partner, there may be
substantial doubt as to the economic viability of the ongoing success of the
Company. The Company believes that it will be able to finance its currently
planned exploration and other operating activities in the foreseeable future
through the issuance of preferred shares, or selling a joint venture interest,
or selling one of its properties. There can be no assurance that the funding
will or can be secured on terms favorable to the Company.
Risks and Uncertainties
The Company is subject to various risks and uncertainties, substantially all
of which are inherent to conducting mineral exploration activities in foreign
jurisdictions. Foreign investments are subject to taxation imposed at various
levels within each country, capital investment and repatriation limitations,
and the effects of changes in foreign currency rates. Environmental laws
imposed presently or in the future may also result in additional costs of
conducting mineral exploration or mining activities. Finally, amounts recorded
by the Company as mining claims and deferred exploration are dependent upon
the discovery of economically recoverable reserves, the Company's ability to
obtain financing to develop the properties, and the ultimate realization of
profits through future production or sale of properties.
The risks and uncertainties inherent to the Company's business, in concert
with limited capital resources, result in substantial risk to investors.
However, the Company's strategic plan is directed toward reducing overall
exploration risks while maintaining substantial potential for economic gain
from discoveries and production of mineral resources. Specific elements of the
Company's risk management program include acquiring a diverse portfolio of
high potential prospects based on findings from advanced technologies and
using joint ventures to preserve working capital while conducting
substantial exploration programs. Risks and uncertainties will be further
mitigated as the Company develops stability in its working capital be
developing or retaining interests in production.
Title to Mineral Properties
Although it is the Company's policy to confirm the validity of its rights to
title to, or contract rights with respect to, each mineral property in which
it has a material interest, there is no guarantee that title to its properties
will not be challenged or impugned. Title insurance generally is not
available, and the Company's ability to ensure that it has obtained secure
claim to individual mineral properties or mining concessions may be severely
constrained. The Company has conducted surveys of all of the claims in which
it holds direct or indirect interests and, therefore, the precise area and
location of such claims is not in doubt.
Mining Risks and Insurance
The business of mining is generally subject to a number of risks and hazards,
including adverse environmental effects, industrial accidents, labor disputes,
technical difficulties posed by unusual or unexpected geologic formations,
cave-ins, flooding and periodic interruptions due to inclement or hazardous
weather conditions. Such risks can result in damage to and destruction of
mineral properties or producing facilities, as well as personal injury,
environmental damage, delays in mining, monetary losses and possible legal
liability. Although the Company intends to maintain, insurance with respect to
its operations and mineral properties within ranges of coverage consistent
with industry practice, no assurance can be given that such insurance will be
available at economically feasible premiums. Insurance against environmental
risks (including potential liability for pollution or other disturbances
resulting from mining exploration and production) is not generally available
to the Company.
Foreign Operations
The Company currently conducts exploration activities in countries with
developing economies, including Mexico and Indonesia. Both of these countries
have experienced recently, or are experiencing currently, economic or
political instability. Hyperinflation, volatile exchange rates and rapid
political and legal change, often accompanied by military insurrection, have
been common in these and certain other emerging markets in which the Company
may conduct operations. The Company may be materially adversely affected by
possible political or economic instability in any one or more of those
countries. The risks include, but are not limited to terrorism, military
repression, expropriation, changing fiscal regimes, extreme fluctuations in
currency exchange rates, high rates of inflation and the absence of industrial
and economic infrastructure. Changes in mining or investment policies or
shifts in the prevailing political climate in any of the countries in which
the Company conducts exploration and development activities could adversely
affect the Company's business. operations may be affected in varying degrees
by government regulations with respect to production restrictions, price
controls, export controls, income and other taxes, expropriation of property,
maintenance of claims, environmental legislation, labor, welfare benefit
policies, land use, land claims of local residents, water use and mine safety.
The effect of these factors cannot be accurately predicted.
Holding Company Structure Risks
The Company currently conducts, and will continue to conduct, all of its
operations through subsidiaries. The Company's ability to obtain dividends or
other distributions from its subsidiaries may be subject to, among other
things, restrictions on dividends under applicable local law and foreign
currency exchange regulations in the jurisdictions in which the subsidiaries
operate. The subsidiaries, ability to pay dividends or make other
distributions to the Company may also be subject to their having sufficient
funds from their operations legally available for the payment thereof which
are not needed to fund their operations, obligations or other business plans.
In the event of a subsidiary's liquidation, there may not be assets sufficient
for the Company to recoup its investment therein.
Dependence on Key Personnel
The Company is dependent on the services of certain key executives including
the Chief Executive Officer and the President. The loss of these persons,
other key executives or personnel, or the inability to attract and retain the
additional highly skilled employees required for the expansion of the
Company's activities, may have a material adverse effect on the Company's
business or future operations. The Company does not intend to maintain
"Key-man" life insurance on any of its executive officers or other personnel
at this time.
Metals Market Overview: Silver Market
Silver has traditionally served as a medium of exchange, much like gold. while
silver continues to be used for currency, the principal uses of silver can be
divided into three main categories: (i) industrial uses, primarily electrical
and electronic components; (ii) photography; and (iii) jewelry and silverware.
According to the CPM Group (11CPM11), in 1997, approximately 798.9 million
ounces of silver were consumed for these and other industrial purposes, up 5.5
percent from 1996. Silver's strength, malleability, ductility, thermal and
electrical conductivity, sensitivity to light and the ability to endure
extreme changes in temperature combine to make silver a widely used industrial
metal. Specifically, it is used in batteries, computer chips, electrical
contacts and high-technology printing. Silver's anti-bacterial properties also
make in valuable for use in medicine and in water purification.
Most silver production is obtained from mining operations for which silver is
not the principal or primary product. Approximately 78 percent of mined silver
is produced as a by-product of mining of lead, zinc, gold or copper deposits.
CPM estimated that recycled or secondary production accounts for a decreasing
proportion of total silver supply, approximately 27 percent of total silver
production in 1997, compared to an average of 31 percent of aggregate silver
production between 1980 and 1990. CPM further estimates that total silver
supply from mine production, recycling and estimated dishoarding
<PAGE>
and government stockpile sales has been insufficient to meet industrial demand
since 1990, and stockpiles have been diminishing. CPM studies indicate that
approximately 584.7 million ounces of silver were supplied from all sources in
1997, up 5.8 percent from 1996. Mine production of silver rose 6.1 percent to
419.7 million ounces.
The following table sets forth the London Silver Market's annual average, high
and low spot price of silver in U.S. dollars per troy ounce since 1977.
<TABLE>
<S> <C> <C> <C>
Year Average High Low
(dollars per troy ounce)
1977 $4.63 $4.97 $4.31
1978 5.42 6.26 4.82
1979 11.06 32.20 5.94
1980 20.98 49.45 10.89
1981 10.49 16.30 8.03
1982 7.92 11.11 4.90
1983 11.43 14.67 8.37
1984 8.14 10.11 6.22
1985 6.13 6.75 5.45
1986 5.46 6.31 4.85
1987 7.01 10.93 5.36
1988 6.53 7.82 6.05
1989 5.50 6.21 5.04
1990 4.83 5.36 3.95
1991 4.06 4.57 3.55
1992 3.95 4.34 3.65
1993 4.31 5.42 3.56
1994 5.28 5.75 4.64
1995 5.19 6.04 4.41
1996 5.19 5.83 4.71
1997 5.17 6.27 4.22
Source: Silver Institute and Kitco
</TABLE>
Conversion Table
In this Form 10-KSB, figures are presented in both United States standard and
metric measurements. Conversion rates from United States standard to metric
and metric to United States standard measurement systems are provided in the
table below.
<TABLE>
U.S. Measure Metric Unit Metric Measure U.S. Unit
<S> <C> <C> <C>
2.47 acres 1 hectare 0.4047 hectares 1 acre
3.28 feet 1 meter 0.3048 meters 1 foot
0.62 miles 1 kilometer 1.609 kilometer 1 mile
0.032 ounces (troy) 1 gram 31.103 grams 1 ounce
1.102 tons 1 tonne 0.907 tonnes I ton
</TABLE>
Year 2000 Date Conversion
The inability of computer programs to correctly interpret the century from a
date which consists of two-digit years, does not appear to be a significant
problem to the Company. As of March 31, 1998, the Company has no mainframe or
central database. The Company's accounting system is directed by personal
computers and software. Although minor adjustments may be required on the
software applications, these costs will be immaterial. To further mitigate the
risk of loss of data, the Company intends to perform regular tape back-ups of
all files, contact software manufacturers about updates to their products and
keep informed of the latest developments concerning year 2000 issues.
ITEM 7. FINANCIAL STATEMENTS
Financial Statements for the year ended March 31, 1998
Independent Auditors Report
Consolidated Balance Sheet - March 31, 1998
Consolidated Statement of Operations for the period ended March 31, 1998
Consolidated Statements of Stockholders Equity to March 31, 1998
Consolidated Statements of Cash Flows to March 31, 1998
Notes to Consolidated Financial Statements
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS
Directors and Executive officers
Identification of Directors and Executive officers: The following information
is as of March 31, 1998, and is provided with respect to each director and
executive officer. The term of office for each director is specified and noted
in the table below. The executive officers serve at the discretion of the
Board.
Directors of the Company receive no cash compensation for their services as
directors, other than reimbursement for certain expenses in connection with
attendance at board meetings.
The following individuals were elected as Directors at the Company Annual
General Meeting held September 26, 1997.
Name, Age and Other Principal occupations of Employment and
Positions Held with the company Occupation for the Past Five Years
GORDON J. MUIR President/Director of Golden Panther Resources
Chief Executive officer Ltd.; President/Director of PT Golden Panther
Chairman of the Board Resources; Secretary/Director of Panther Group
Ltd.; President/Director Investments Ltd.; From 1994 -1997 Director and
of Golden Panther later Chief Executive Officer of Urban Resource
Age: 44 Technologies Inc.; Prior to 1994 Self Employed
Term of office: 3 years Investor.
PENNY PERFECT Director of Golden Panther Resources Ltd.
President President/Director of Panther Group Ltd.
Vice-Chairman of the Board Director of Golden Panther Investments Ltd.;
Age: 44 From 1996-1997 Director and later President
Term of office: 3 years of Urban Resource Technologies Inc.; Prior to
1994 Owner of Worldwide Investor Network Corp.,
a firm specializing in corporate finance,
investment banking and venture capital financing
KATHARINE JOHNSTON Director of Golden Panther Resources Ltd.
Executive Vice-President, Secretary of Panther Group Ltd.; From
Legal & Finance November, 1996 to August, 1997 Director and
Vice-President of Urban Resource Technologies
Age: 44 Inc.; From 1987 to 1997 President of Keremy
Term of office: 2 years Mngt. Services Ltd., a private company providing
Free lance Legal Assistant Services and
Administration of public companies.
F. BRYSON FARRILL Financial Consultant; Director of Devine
Chief Investment Officer Entertainment Corp. 1994 to date; director of
Solar Pharmaceutical Ltd. 1997 to date;
Age: 62 Director of Futurelink Distribution Corp.
Term of Office: 1 year 1998 to date
ROBERT NEEDHAM Principal of Needham & Associates
Mining Management Consultants;
Age: 69 1992 - 1994 Managing Director and CEO
Term of Office: 1 year mineral Resources Development Company;
1994 - present Chairman and CEO, Tri-Star
Gold, Inc. and Managing Director of
Minesupplies Limited Ghana;
1995 - present Director, International
Tournigan Corporation Inc., Canada
1995 - present Director of Diversified
Minerals Resources, Australia
Subsequent Events:
ALEXANDER VAN HOEKEN Director of PT Golden Panther Resources
Vice-President Operations Superintendent of Royal Boskaus,
Corporate Development, from 1993 to 1996; Director of Urban Resource
Technologies Inc.
Mr. Van Hoeken resigned as Director on June 2, 1998.
ANDREW RACZ Executive Vice-President of CPM Group, March
1998 to present; Employed by Bishop, Rosen, a
Age: 60 member of the NYSE from May, 1995 to March,
Term of Office: 1998; Private Consultant from 1994 to May, 1995
Until next annual general
meeting
<PAGE>
Mr. Racz was appointed as a Director on June 19, 1998.
Family Relationships
Gordon Muir and Penny Perfect are married. There are no other family
relationships between any other Directors or executive officers of the Company
either by blood or marriage.
Involvement in Certain Legal Proceedings
In 1991, Ms. Penny Perfect became subject to an order of the Alberta
Securities Commission restricting her from trading in securities for a period
of three years from the date of said order. This Order expired on July 31,
1994 and Ms. Perfect subsequently was approved as a Director of a publicly
traded company on the Alberta Stock Exchange in December, 1995.
To the knowledge of management, during the past five years, no present or
former director or an executive officer of the Company:
1) Filed a petition under the federal bankruptcy laws or any state insolvency
law, nor had a receiver, fiscal agent or similar officer appointed by a court
for the business or property of such person, or any partnership in which he
was a general partner at or within two years before the time of such filing,
or any corporation or business association of which he was an executive
officer at or within two years before the time of such filing;
2) Was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offences);
3) Was the subject of any order, judgement or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him or her from or otherwise limiting his
involvement in any type of business, securities or banking activities (except
as previously noted);
4) Was found by a court of competent jurisdiction in a civil action by the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated any federal or state securities law, and the judgement in
such civil action or finding by the Securities and Exchange Commission has not
been subsequently reversed, suspended, or vacated.
ITEM 10. EXECUTIVE COMPENSATION
The following table summarizes certain information concerning executive
compensation paid or accrued for each of the Company's last three fiscal years
to the Company's Chief Executive Officer, President and Executive
Vice-President (as determined at March 31, 1998).
<TABLE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
Award Payouts
Name and Fiscal Other Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation Award SARs(#)Payout Compensation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gordon Muir 1998 $262,500 $100,000 None 200,000 400,000 0 0
CEO (accrued)
Penny Perfectl998$262,500 $100,000 None 200,000 400,000 0 0
President (accrued)
K. Johnston 1998 $51,000 $25,000 None 100,000 100,000 0 0
Vice-President
Jon Dooley 1997 -0- -0- -0- -0- -0- -0- -0-
CEO
Jon Dooley 1996 -0- -0- $13,950 -0- -0- -0- -0-
CEO
Jon Dooley 1995 -0- -0- $55,800 -0- -0- -0- -0-
CEO
Richard Surber 1995 -0- $2,473 -0- -0- -0- -0- -0-
President
</TABLE>
Penny Perfect and Gordon Muir have never drawn a cash salary from the Company.
All funds due Ms. Perfect and Mr. Muir for both salary and corporate
expenditures have been settled by the issuance of shares.
Employment Contracts
Panther Group Ltd. entered into a Consulting Agreement with Micro-America,
Inc. (a private Bahamian company controlled by Gordon Muir) for a term of five
years expiring December 31, 2002. The agreements provides for, inter alia, the
following remuneration: In 1998 $500,000 U.S. per annum; in 1999 $650,000 U.S.
per annum; in 2000 $750,000 U.S. per annum; in 2001 $850,000 U.S. per annum
and in 2002 $1,000,000 U.S. per annum. The agreement also provides for bonus',
restricted stock awards and stock options as well as other corporate benefits
in consideration of Mr. Muir providing exclusive service to the Company. This
agreement was approved by the Board of Directors of Panther Resources Ltd. on
January 6, 1998.
Panther Group Ltd. entered into a Consulting Agreement with Jupiter
Consultants Inc. (a private Bahamian company controlled by Penny Perfect) for
a term of five years expiring December 31, 2002. The agreements provides for,
inter alia, the following remuneration: In 1998 $500,000 U.S. per annum; in
1999 $650,000 U.S. per annum; in 2000 $750,000 U.S. per annum; in 2001
$850,000 U.S. per annum and in 2002 $1,000,000 U.S. per annum. The agreement
also provides for bonus', restricted stock awards and stock options as well as
other corporate benefits in consideration of Ms. Perfect providing exclusive
service to the Company. This agreement was approved by the Board of Directors
of Panther Resources Ltd. on January 5, 1998.
Panther Group Ltd. entered into a Consulting Agreement with Mandarin
Enterprises Inc. (a private B.C. company controlled by Katharine Johnston) for
a term of five years expiring December 31, 2002. The agreements provides for,
inter alia, the following remuneration: In 1998 $60,000 U.S. per annum; in
1999 $70,000 U.S. per annum; in 2000 $90,000 U.S. per annum; in 2001 $120,000
U.S. per annum and in 2002 $180,000 U.S. per annum. The agreement also
provides for bonus', restricted stock awards and stock options as well as
other corporate benefits in consideration of Mrs. Johnston providing exclusive
service to the Company. This agreement was approved by the Board of
Directors of Panther Resources Ltd. on January 6. 1998.
The Company has a consulting contract with Jose Manuel Madero Garza of Mexico
to assist in its exploration activities in Mexico. The contract calls for a
monthly fee of $2000 to be accrued on a quarterly basis starting August 1,
1997 and to be used exclusively for the exercise of stock options. As part of
this contract, Mr. Jose Manuel Garza owns the right to exercise 200,000 stock
options within a four year period equivalent to 50,000 stock options per year
at a strike price of $ .50/share every three months.
Bonuses and Deferred Compensation
The Board of Directors granted bonuses to the individuals noted above in
recognition of their extra-ordinary service and commitment to the company. The
bonuses were used to exercise stock options.
Compensation Pursuant to Plans
None
Pension Table
None - not applicable
Other Compensation
None of the Directors receive a fee for serving as Directors of the Company.
Directors are reimbursed for direct out-of-pocket expenses for attendance at
meetings of the Board of Directors and for expenses incurred for and on behalf
of the Company.
The Company has adopted a policy of reimbursing F. Bryson Farrill for his
expenses, incurred in the course of conducting business on behalf of the
Company.
Compliance with Section 16 of the Exchange Act.
The following table sets forth the names of each person who, at any time
during the fiscal year ended March 31, 1998, was a director, executive
officer, or beneficial owner of more than ten percent of the Common Stock
("Reporting Person"), and failed to file on a timely basis reports required by
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"),
during such fiscal year or prior fiscal years:
Known failure
Number of Number of Transactions Not to file a
Name Late Reports Reported on a Timely Basis Required Report
None
However, the Company has no knowledge if Alexander Van Hoeken who resigned as
a Director on June 2, 1998, See item 9, "Directors and Senior Officers",
complied with Section 16(a) as the Company has not been provided with copies
of any Form 4's prepared and filed by Mr. Van Hoeken. The Company provided
every Director with written notification as to the filing requirements for
insider trading.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the stock
ownership as of March 31, 1998, of: (i) each person who is known to the
Company to be the beneficial owner of more than 5 percent of the Company's
common stock; and (ii) directly or indirectly by each director, by each person
who was an executive officer during the fiscal year ending March 31, 1998 and
by directors and executive officers of the Company as a group:
<TABLE>
(i) Larger than 5% shareholders
Number Percentage
Title of Class Beneficial Owner of Shares Of Class
<S> <C> <C> <C>
Common Gordon J. Muir - CEO/Director 4,502,000 17%
23B - 1500 Alberni Street,
Vancouver B.C. V6G 3C9
Common Penny Perfect - Pres./Director 4,502,000 17%
23B - 1500 Alberni Street,
Vancouver B.C. V6G 3C9
(ii) Shareholdings of Directors and Executive officers
Number Percentage
Title of Class Beneficial Owner of Shares Of Class
Common Gordon J. Muir - CEO/Director 4,502,000 17%
Class A Preferred Gordon J. Muir - CEO/Director 875,000 44%
23B - 1500 Alberni Street,
Vancouver B.C. V6G 3C9
Common Penny Perfect - Pres./Director 4,502,000 17%
Class A Preferred Penny Perfect - Pres./Director 875,000 44%
23B - 1500 Alberni Street,
Vancouver B.C. V6G 3C9
Common Katharine Johnston-V.P./Director 110,000 .004%
Class A Preferred Katharine Johnston-V.P./Director 100,000 .05%
3400 Norcross Way,
North Vancouver, B.C. V6E 4E4
Common F. Bryson Farrill - Director 57,000 .002%
Class A Preferred F. Bryson Farrill - Director 25,000 .01%
305 Old Oaks Road, Fairfield,
Connecticut 06432 U.S.A.
Common Robert Needham - Director nil
F 57/8 Abafum Cres. North. Labone,
Accra, GHANA
Common All executive officers and directors
as a group (five persons) 9,171,000 34%
<PAGE>
Class A Preferred All executive officers and directors
As a group (four persons) 1,875,000 94%
If Class "All Preferred were converted to common shares
On a five to one ratio, the total owned by the Directors
And Executive Officers would be: 18,546,000 52%
Subsequent to March 31st, 1998 there was the following additions to the share
positions of the Directors and Senior Officers are as follows:
Recent Total Shares
Title of Class Beneficial owner Acquisitions Held to Date
Common Gordon J. Muir CEO/Director 1,332,000 5,834,000
Common Penny Perfect Pres./Director 1,332,000 5,834,000
Common Katharine Johnston - V.P./Director 150,000 260,000
Common All executive officers and directors
as a group (five persons) 11,985,000- 40%
If Class "All Preferred were converted to common shares
on a five to one ratio, the total owned by the Directors
And Executive Officers would be: 21,360,000 53%
</TABLE>
1997 and 1998 STOCK INCENTIVE PLANS
Stock Incentive Plans were adopted in 1997 and 1998 authorizing the issuance
of the following shares to Directors, Executive Officers, Employees and
Consultants of which the unexercised balances are as follows:
<TABLE>
Year Stock Options Price per share Optionee
<S> <C> <C> <C>
1997 972,000 $0.50 (1)
1998 1,291,000 $0.30 (2)
1998 200,000 $0.50 Bryson Farrill
1998 200,000 $0.75 Robert Chapman
(1) 1997 Optionees (2) 1998 Optionees
Gordon Muir 200,000 shares Gordon Muir 400,000 shares
Penny Perfect 200,000 shares Penny Perfect 400,000 shares
Katharine Johnston 50,000 shares Katharine Johnston 300,000 shares
Robert Needham 25,000 shares Robert Needham 25,000 shares
Michael Pinkney 25,000 shares Anthony Canzi 20,000 shares
William DeMorrow 50,000 shares Linda Conceicao 5,000 shares
Management Company 125,000 shares F. Marshall Smith 50,000 shares
William Pinkeny 75,000 shares Robert Chapman 30,000 shares
Jose Madero 172,000 shares Neil Rand 56,000
Alex Burton 50,000 shares
</TABLE>
PREFERRED SHARES
At the Annual General Meeting of the shareholders of the company held
September 26, 1997 a Resolution was passed (a) authorizing 10,000,000
preferred shares with a par value of $0.10 to be issued in series and (b)
obtaining shareholder approval to provide the Directors with general authority
to issue 2,000,000 of the newly authorized preferred shares. The Board
authorized the creation of a class of 2,000,000 Class "All preferred
shares on December 11, 1997. The Class "All preferred shares have the
following features:
1. each preferred share to convert into 5 underlying common shares at a
conversion price of $0.75 per common share;
2. each holder of Preferred Shares shall be entitled to five (5) votes
for every preferred share held to vote on any matters brought before the
shareholders of the Company;
3. The process for conversion will be as follows:
(a) a cheque made payable to the Company (the number of common shares
at $0.75 per share), or written notification from the preferred shareholder to
redirect funds owing or compensation due from the Company towards the
conversion of the preferred shares into common;
(b) surrender of the share certificate for the preferred shares to the
Company. If the shareholder is not redeeming the entire number of preferred
shares, a Preferred Share Certificate for the number of preferred shares not
converted will be reissued;
(c) Upon resignation or termination from the Company these shares will
be cancelled immediately.
The Class "All Preferred Shares were issued as an anti-takeover provision so
that management had an effective tool to stock hostile takeovers. The shares
were issued as follows:
<TABLE>
Shareholder No. of Preferred Shares
<S> <C>
Jupiter Consultants Inc. 875,000
Micro-America, Inc. 875,000
533056 B.C. Ltd. 100,000
Mandarin Enterprises Inc. 100,000
F. Bryson Farrill 25,000
J. Michael Pinkney 25,000
Total 2,000,000
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transaction with Management and Others
During the past two years, there have been no material transactions, series of
similar transactions or currently proposed transactions, to which the Company
or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any director or executive officer, or
any security holder who is known to the Company to own of record or
beneficially more than five percent of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, had a material
interest.
Certain Business Relationships
During the past two years, there have been no material transactions, series of
similar transactions, currently proposed transactions, or series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeds $60,000 an in which any promoter
or founder, or any member of the immediate family of any of the foregoing
persons, had a material interest.
Indebtedness of Management
During the past two years, there have been no material transactions, series of
similar transactions or currently proposed transactions, to which the Company
or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $60,000 and in which any director or executive officer, or
any security holder who is known to the Company to own of record or
beneficially more than five percent of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, had a material
interest.
Parents of the Issuer
Except and to the extent that Gordon Muir and Penny Perfect may be deemed to
be a parent of the company by virtue of their substantial stock ownership, the
Company has no parents.
Transactions with Promoters
During the past two years, there have been no material transactions, series of
similar transactions, currently proposed transactions, or series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be
a party, in which the amount involved exceeds $60,000 an in which any promoter
or founder, or any member of the immediate family of any of the foregoing
persons, had a material interest.
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Reports on Form 8-K
8-K dated July 26, 1997 and filed with the Securities and Exchange
Commission on December 10, 1997.
8-K dated November 28, 1997 and filed with the Securities and Exchange
Commission on December 17, 1997.
8-K dated February 5, 1998 and filed with the Securities and Exchange
Commission on February 28, 1998.
Exhibit
Exhibits* Number
(i)
Certificate of Amendment to the 3.1
Articles of Incorporation
Amended and restated By-Laws 3.2
Joint Venture Agreement between 10
Golden Panther and P.T.
English Translation of the Amending **
Agreement between Golden Panther
Investments Ltd. and Minera Humaya
dated November 30, 1997 regarding the
restructuring of the payments
Subsidiaries of the Registrant 21
Financial Data Schedule 27
** These documents and related exhibits have previously been filed
with the Securities and Exchange Commission and are incorporated
herein by this reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 19034, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Panther Resources Ltd.
Dated June 26, 1998 By:/s/Gordon J. Muir
Gordon J. Muir
CEO/Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant,
in the capacities, and on the dates, indicated.
Signature Title Date
/s/Gordon J. Muir Director June 26, 1998
Gordon J. Muir
/s/Penny Perfect Director June 26, 1998
Penny Perfect
/s/Katharine Johnston Director June 26, 1998
Katharine Johnston
- ---------------------- Director June___, 1998
Bryson Farrill
/s/Robert Needham Director June 26, 1998
Robert Needham
/s/Andrew Racz Director June 26, 1998
Andrew Racz
<PAGE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998 and 1997
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Panther Resources Ltd.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Vancouver, B.C. Canada
We have audited the accompanying consolidated balance sheet of Panther
Resources Ltd. (formerly Golden Panther Resources, Ltd.) (a development stage
company) as of March 31, 1998 and the related consolidated statements of
operations, stockholders' equity and cash flows for the year ended March 31,
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Panther Resources Ltd. (formerly Golden Panther Resources, Ltd.) (a
development stage company) as of March 31, 1998 and the consolidated results
of its operations and its cash flows for the year ended March 31, 1998 in
conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to
the consolidated financial statements, the Company is a development stage
company with no significant operating results to date which raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 3. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
June 18, 1998<PAGE>
<TABLE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Consolidated Balance Sheet
<CAPTION>
ASSETS
March 31,
1998
<S> <C>
CURRENT ASSETS
Cash $ -
Prepaid expenses 25,983
Total Current Assets 25,983
FURNITURE AND EQUIPMENT, NET (Note 4) 73,665
OTHER ASSETS
Mineral properties and deferred expenditures (Note 5) 3,024,905
Deposits 24,717
Total Other Assets 3,049,622
TOTAL ASSETS $ 3,149,270
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Cash overdraft $ 22,245
Accounts payable 238,922
Notes payable (Note 6) 230,700
Management fee payable (Note 7) 26,371
Total Current Liabilities 518,238
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS' EQUITY
Preferred stock: 10,000,000 shares
authorized of $0.10 par value,
2,000,000 shares issued and outstanding 200,000
Common stock: 100,000,000 shares authorized
of $0.001 par value, 29,161,100 shares issued
and outstanding 29,161
Additional paid-in capital 7,266,636
Stock subscription receivable (254,281)
Currency translation adjustment 268,031
Deficit accumulated during the development stage (4,878,515)
Total Stockholders' Equity 2,631,032
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,149,270<PAGE>
</TABLE>
<TABLE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Consolidated Statements of Operations
<CAPTION>
From
Inception on
November 10,
For the Years Ended 1995 Through
March 31, March 31,
1998 1997 1998
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and administrative 2,970,269 1,086,816 4,203,006
Depreciation 3,437 5,492 8,929
Total Expenses 2,973,706 1,092,308 4,211,935
LOSS FROM OPERATIONS (2,973,706) (1,092,308) (4,211,935)
OTHER INCOME (EXPENSE)
Write off of mineral property (145,900) (303,148) (449,048)
Bad debt expense (213,313) - (224,941)
Interest income 342 7,067 7,409
Total Other Income (Expense) (358,871) (296,081) (666,580)
NET LOSS $ (3,332,577) $(1,388,389) $ (4,878,515)
NET LOSS PER SHARE OF
COMMON STOCK $ (0.16) $ (0.46)
</TABLE>
<TABLE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
<CAPTION>
Additional
Preferred Stock Common Stock Paid-In
Shares Amount Shares Amount Capital
<S> <C> <C> <C> <C> <C>
Balance at
November 10, 1995
(Inception) - $ - - $ - $ -
Common stock issued
for cash at
approximately $0.00
per share - - 2 - -
Currency translation
adjustment - - - - -
Net loss for the
year ended
March 31, 1996 - - - - -
Balance, March 31, 1996 - - 2 - -
Common stock issued
for cash at
approximately $0.38
per share - - 2,884,998 2,885 1,086,602
Common stock issued
for services at
approximately $0.76
per share - - 115,000 115 87,441
Currency translation
adjustment - - - - -
Net loss for the year
ended March 31, 1997 - - - - -
Balance, March 31, 1997 - $ - 3,000,000 $ 3,000 $1,174,043
Recapitalization
(Note 1) - - 12,308,990 12,309 381,753
Common stock issued
for cash at
approximately $0.36
per share - - 6,107,610 6,107 2,816,020
Common stock issued
for services at
approximately $0.36
per share - - 3,366,500 3,367 1,176,259
Issuance of warrants - - - - 17,220
Common stock issued
for debt at
approximately $0.26
per share - - 3,828,000 3,828 991,891
Common stock issued
for mineral properties
at $1.00 per share - - 550,000 550 549,450
Preferred stock issued
for services at
$0.18 per share 2,000,000 200,000 - - 160,000
Currency translation
adjustment - - - - -
Net loss for the
year ended
March 31, 1998 - - - - -
Balance, March 31,
1998 2,000,000 $ 200,000 29,161,100 $ 29,161 $7,266,636
</TABLE>
<TABLE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
<CAPTION>
Deficit
Accumulated
Stock Currency During the
Subscription Translation Development
Receivable Adjustment Stage
<S> <C> <C> <C>
Balance at
November 10, 1995
(Inception) $ - $ - $ -
Common stock issued
for cash at
approximately $0.00
per share - - -
Currency translation
adjustment - (1,230) -
Net loss for the
year ended
March 31, 1996 - - (157,549)
Balance, March 31, 1996 - (1,230) (157,549)
Common stock issued
for cash at
approximately $0.38
per share - - -
Common stock issued
for services at
approximately $0.76
per share - - -
Currency translation
adjustment - 8,542 -
Net loss for the year
ended March 31, 1997 - - (1,388,389)
Balance, March 31, 1997 - $ 7,312 (1,545,938)
Recapitalization
(Note 1) - - -
Common stock issued
for cash at
approximately $0.36
per share (100,000) - -
Common stock issued
for services at
approximately $0.36
per share (154,281) - -
Issuance of warrants - - -
Common stock issued
for debt at
approximately $0.26
per share - - -
Common stock issued
for mineral properties
at $1.00 per share - - -
Preferred stock issued
for services at
$0.18 per share - - -
Currency translation
adjustment - 260,719 -
Net loss for the
year ended
March 31, 1998 - - (3,332,577)
Balance, March 31,
1998 $ (254,281) $ 268,031 $(4,878,515)
</TABLE>
<TABLE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
<CAPTION>
From
Inception on
November 10,
For the Years Ended 1995 Through
March 31, March 31,
1998 1997 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,332,577) $(1,388,389) $ (4,878,515)
Adjustments to reconcile net
loss to net cash:
Depreciation expense 3,437 5,492 8,929
Stock issued for services 1,385,345 87,556 1,472,901
Bad debt expense 213,313 - 224,941
Write-off mineral property 145,900 303,148 449,048
Issuance of warrants 17,220 - 17,220
Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable (179,245) (34,067) (213,312)
(Increase) decrease in deposits
and prepaid expenses (24,717) (104,306) (129,023)
Increase (decrease) in cash
overdraft 22,245 - 22,245
Increase (decrease) in accounts
payable (443,802) 661,710 223,649
Increase (decrease) in management
fee payable 26,371 - 26,371
Net Cash (Used) by Operating
Activities (2,166,510) (468,856) (2,775,546)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (66,822) (82,132) (149,014)
Purchase of mineral property and
deferred exploration costs (1,386,226) (850,000) (2,236,226)
Net Cash (Used) by Investing
Activities (1,453,048) (932,132) (2,385,240)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock 2,722,127 1,089,487 3,811,614
Proceeds on notes payable 644,181 540,064 1,349,172
Net Cash Provided by Financing
Activities 3,366,308 1,629,551 5,160,786
NET INCREASE (DECREASE) IN CASH (253,250) 228,563 -
CASH AT BEGINNING OF PERIOD 253,250 24,687 -
CASH AT END OF PERIOD $ - $ 253,250 $ -
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Common stock issued for
acquisition $ 394,062 $ - $ 394,062
Common stock issued for debt
conversion $ 995,719 $ - $ 995,719
Common stock issued for mineral
properties $ 550,000 $ - $ 550,000
</TABLE>
PANTHER RESOURCES LTD.
(Formerly Golden Panther Resources, Ltd.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 1998 and 1997
NOTE 1 - ORGANIZATION AND HISTORY
The consolidated financial statements presented are those of Panther
Resources Ltd. (the Company). The Company was originally incorporated
as Thermacor Technology, Inc. on September 21, 1984 under the laws of
the State of Nevada. On March 26, 1997, the Company changed its name to
Golden Panther Resources, Ltd. and on March 10, 1998, the Company
changed its name to Panther Resources Ltd.
Golden Panther Resources Ltd. (premerger) (GPR) was incorporated under
the Company Act of British Columbia on November 10, 1995 as 508556 B.C.
Ltd. and changed its name to Golden Panther Resources Ltd. on March 28,
1996.
On April 2, 1997, Panther Resources Ltd. and Golden Panther Resources,
Ltd. completed an Agreement and Plan of Reorganization whereby the
Company issued 3,000,000 shares of its common stock in exchange for all
of the outstanding common stock of GPR. Immediately prior to the
Agreement and Plan or Reorganization, the Company had 12,308,990 shares
of common stock issued and outstanding.
The acquisition was accounted for as a recapitalization of GPR because
the shareholders of GPR controlled the Company after the acquisition.
Therefore, GPR is treated as the acquiring entity. There was no
adjustment to the carrying value of the assets or liabilities of GPR in
the exchange. The Company is the acquiring entity for legal purposes
and GPR is the surviving entity for accounting purposes. On March 1,
1997, the Company completed a reverse stock split of 1-for-10 shares.
All references to shares of common stock have been retroactively
restated. On March 22, 1997, the shareholders of the Company authorized
a reverse stock split of 1-for-20 shares. All references to shares of
common stock have been retroactively restated.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. The Company has elected a March 31 year end.
b. Cash and Cash Equivalents
Cash equivalents include short term, highly liquid investments with
maturities of three months or less at the time of acquisition.
c. Loss Per Share
The computations of loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Provision for Taxes
At March 31, 1998, the Company had net operating loss carryforwards of
approximately $4,800,000 that may be offset against future taxable
income through 2012. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater
chance the carryforward will expire unused. Accordingly, the potential
tax benefits of the loss carryforward are offset by a valuation account
of the same amount.
e. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
f. Preferred Stock
The Company has authorized 10,000,000 shares of preferred stock, par
value $0.10 per share. 2,000,000 shares of the preferred stock have
been issued as a Class A issuance. Each share is convertible into 5
shares of common stock at $0.75 per share.
g. Mineral Properties
The costs associated with acquiring and exploring mineral properties are
capitalized on an individual property basis. When a property is
developed to the stage of commercial production, the related costs will
be amortized over the estimated reserve life of the property. If a
property is abandoned or if it is determined that its net recoverable
value is less than book value, the related costs will be charged against
operations in the year of abandonment or impairment in value.
The recorded amounts represent cost to date and do not necessarily
reflect present or future value.
Mineral property option receipts received by the Company upon sale of an
interest in a mining property are considered a recovery of costs and are
recorded as a reduction of the mineral property costs.
h. Title to Mineral Properties
Although it is the Company's policy to confirm the validity of its
rights to title to, or contract rights with respect to, each mineral
property in which it has a material interest, there is no guarantee that
title to its properties will not be challenged or impugned. Title
insurance generally is not available, and the Company's ability to
ensure that it has obtained secure claim to individual mineral
properties or mining concessions may be severely constrained. The
Company has conducted surveys of all of the claims in which it holds
direct or indirect interests and, therefore, the precise area and
location of such claims is not in doubt.
i. Foreign Operations
The Company currently conducts exploration activities in countries with
developing economies, including Mexico and Indonesia. Both of these
countries have experienced recently, or are experiencing currently,
economic or political instability. Hyperinflation, volatile exchange
rates and rapid political and legal change, often accompanied by
military insurrection, have been common in these and certain other
emerging markets in which the Company may conduct operations. The
company may be materially adversely affected by possible political or
economic instability in any one or more of those countries. The risks
include, but are not limited to terrorism, military repression,
expropriation, changing fiscal regimes, extreme fluctuations in currency
exchange rates, high rates of inflation and the absence of industrial
and economic infrastructure. Changes in mining or investment policies
or shifts in the prevailing political climate in any of the countries in
which the Company conducts exploration and development activities could
adversely affect the Company's business. Operations may be affected in
varying degrees by government regulations with respect to production
restrictions, price controls, export controls, income and other taxes,
expropriation of property, maintenance of claims, environmental
legislation, labor, welfare benefit policies, land use, land claims of
local residents, water use and mine safety. The effect of these factors
cannot be accurately predicted.
j. Capital Assets and Amortization
Capital assets are recorded at cost and amortization is provided over
the estimated economic life on a straight line basis at the following
rates:
Office furniture and equipment 20% per year
Computer equipment 30% per year
Drilling equipment 20% per year
k. Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies
are translated into United States dollars at the period and
exchange rate. Non-monetary assets are translated at the
historical exchange rate and all income and expenses are translated
at the exchange rates prevailing during the period. Foreign
exchange currency translation adjustments are included in the
stockholders' equity section.
l. Fair Value of Financial Instruments
As at March 31, 1998, the fair value of cash, accounts receivable
and accounts and advances payable including amounts due to and from
related parties, approximate carrying values because of the short-
term maturity of these instruments.
m. Principles of Consolidation
The consolidated financial statements include the accounts of
Panther Resources Ltd., P.T. Golden Panther Resources,
Incorporated, Golden Panther Investments, Ltd. and Panther Group,
Ltd. All significant intercompany accounts have been eliminated.
NOTE 3 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the Company does not have significant cash or other
current assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue
as a going concern. It is the intent of the Company to complete
the acquisition of Minera Humaya S.A de C.V. (Minera Humaya) by
which it will begin to receive revenues from the mining of silver
ore.
The Company is in the business of acquiring and exploring mineral
properties and has not yet determined whether these properties
contain ore reserves that are economically recoverable.
The recoverability of amounts shown for mineral properties is
dependent upon the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying mineral
claims, the ability of the Company to obtain necessary financing to
complete the development, future profitable production or proceeds
from the disposition thereof, and the Company's ability to obtain
the requisite government and regulatory approvals at each stage of
exploration and development of its properties.
NOTE 4 - FURNITURE AND EQUIPMENT
<TABLE>
1998
Accumulated Net Book
Cost Depreciation Value
<S> <C> <C> <C>
Office furniture and equipment $ 73,080 $ 11,407 $ 61,673
Drilling equipment 11,992 - 11,992
$ 85,072 $ 11,407 $ 73,665
</TABLE>
During the years ended March 31, 1998 and 1997, the Company
expensed $3,437 and $5,492 in depreciation, respectively.
Depreciation on the drilling equipment will commence in April of
1998.
NOTE 5 - MINERAL PROPERTIES AND DEFERRED EXPENDITURES
La Verde, Mexico property $ 820,208
Exploration costs - La Verde property 721,004
Kutai property - East Kaumantan, Indonesia 1,250,000
Exploration and development costs - Kutai property 233,693
$ 3,024,905
Kutai Property, Indonesia
Panther acquired in 1996 a property known as Kutai. It is 123,548
acres (50,000 hectares) in size and is located in the province of
Eastern Kalimantan on the Island of Borneo. Panther has a joint
venture agreement on the property with an Indonesian partner, P.T.
Pertiwi Kencana Abadi, a company incorporated in Indonesia.
Panther has 80% of the concession while PKA has 20%. Panther can
acquire an additional 10% of the property for a $5,000,000 lump sum
payment to PKA.
La Verde Property, Sinaloa, Mexico
The La Verde properties are located near Cosala in the State of
Sinaloa, about 99 miles north of Mazatlan, the port and tourist
area of the Pacific, and 97 miles southeast of Culiacan, the
capital of Sinaloa.
NOTE 6 - NOTES PAYABLE
The Company has received funds from various individuals. These
advances are non-interest bearing and due upon demand. The Company
is currently in negotiations to convert these amounts due to
equity. The balance due at March 31, 1998 was $230,700.
NOTE 7 - MANAGEMENT FEE PAYABLE
The Company had a management agreement with a former officer and
director of the Company. The Company is disputing the amount due
to this individual, but has not been able to reach a final
settlement. The amount due at March 31, 1998 was $26,371.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company has signed employment agreements with its President,
Chief Executive Officer and Vice President - Legal and Finance
which call for yearly compensation as summarized:
<TABLE>
Vice
Chief President
Executive Legal and
President Officer Finance
<S> <C> <C> <C>
1998 $ 500,000 $ 500,000 $ 60,000
1999 650,000 650,000 70,000
2000 750,000 750,000 90,000
2001 850,000 850,000 120,000
2002 1,000,000 1,000,000 180,000
Total $ 3,750,000 $ 3,750,000 $ 520,000
</TABLE>
The Company has a month-to-month office lease agreement which calls
for payments of $6,292 per month.
NOTE 9 - OPTIONS AND WARRANTS
The Company has authorized a 1997 and 1998 Stock Option Plan.
<TABLE>
Exercise Number Number Number Number
Price Authorized Exercised Canceled Outstanding
<S> <C> <C> <C> <C> <C>
1997 Stock Option Plan A $ 0.50 1,250,000 (450,000) (150,000) 650,000
1997 Stock Option Plan B $ 0.50 350,000 (28,000) - 322,000
1998 Stock Option Plan A $ 0.30 1,591,500 (250,500) (100,000) 1,241,000
1998 Stock Option Plan B $ 0.75 200,000 - - 200,000
1998 Stock Option Plan B $ 0.50 200,000 - - 200,000
1998 Stock Option Plan B $ 0.30 50,000 - - 50,000
Totals 3,641,500 (728,500) (250,000) 2,663,000
The options are exercisable at a price equal to, or greater than, the
trading price on the date of issuance.
The Company has 112,450 warrants outstanding which are exercisable at
$1.00 per share which expire on July 26, 1998, and 246,000 warrants
which are exercisable at $1.25 per share which expire by December 11,
1999.
NOTE 10 - SUBSEQUENT EVENT
a. Acquisition of Minera Humaya
The Company has a signed agreement wherein the Company will purchase
Minera Humaya, a Mexican corporation engaged in silver mining and
exploration. Terms of the agreement call for the following payments
to be made. It is expected that these terms will be renegotiated.
November 30, 1998 $ 300,000
May 30, 1999 500,000
November 30, 1999 750,000
May 30, 2000 12,000,000
$ 13,550,000
</TABLE>
CERTIFICATE OF AMENDMENT
TO
THE ARTICLES OF INCORPORATION
OF
GOLDEN PANTHER RESOURCES, LTD.
The undersigned Secretary of Golden Panther Resources, Ltd.,
a Nevada corporation pursuant to the provisions of Section
78.385 and 78.390. of the Nevada Revised Statutes, for the purpose
of amending the Articles of Incorporation of the said Corporation
do certify as follows:
That the Board of Directors of the said corporation, at a
meeting duly convened and held on the 5th day of March, 1998,
adopted resolutions to amend the Articles of Incorporation, as
follows:
ARTICLE I shall be amended as follows:
The name of the corporation is "Panther Resources Ltd."
The foregoing amendment to the Articles of Incorporation was duly
adopted by the shareholders of the Corporation at a Special
Meeting held March 5th, 1998, pursuant to Section 78.320 of the
Nevada Revised Statute.
The number of shares of Common Stock of the Corporation
outstanding and entitled to vote on the foregoing amendments to
the Articles of Incorporation on March 5th, 1998 were 23,031,004
shares and the said amendments were approved and consented to by
12,601,988 shares being voted in person or by proxy, which
represented more than a 50% majority of the issued and
outstanding shares of the Common Stock of the Corporation.
The undersigned Secretary of the Corporation hereby declares that
the foregoing Certificate of Amendment to Articles of
Incorporation is true and correct to the best of her knowledge and
belief.
IN WITNESS WHEREOF, this certificate has been executed by the
undersigned on March 5th, 1998.
/s/Katharine Johnston
Katharine Johnston, Secretary/Director
BYLAWS
OF
GOLDEN PANTHER RESOURCES, LTD.
Article I
Offices
Section 1. The registered office of this corporation shall be in the
State of Nevada.
Section 2. The corporation may also have offices at such other places
both within and without the State of Nevada as the Board of Directors may from
time to time determine or the business of the corporation may require.
Article II
Meetings of Stockholders
Section 1. All annual meetings of the stockholders shall be held at the
registered office of the corporation or at such other place within or without
the State of Nevada as the directors shall determine. Special meetings of the
stockholders may be held at such time and place within or without the State of
Nevada as shall be stated in the notice of the meeting, or in a duly executed
waiver of notice thereof.
Section 2. Annual meetings of the stockholders, commencing with the
year 1997, shall be held at such time as may be set by the Board of Directors
from time to time, at which the stockholders shall elect by vote a Board of
Directors and transact such other business as any properly be brought before
the meeting.
Section 3. Special meetings of the Stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, may be called by the President or the Secretary by resolution
of the Board of Directors or at the request shall state the purpose of the
proposed meeting.
Section 4. Notices of meetings shall be in writing and signed by the
President or a Vice-President or the Secretary or an Assistant Secretary or by
such other person or persons as the directors shall designate. Such notice
shall state the purpose or purposes for which the meeting is called and the
time and place, which may be within or without this State, where it is to be
held. A copy of such notice shall be either delivered personally to or shall
be mailed , postage prepaid to each stockholder of record entitled to vote at
such meeting not less than ten nor more than sixty days before such meeting.
If mailed, it shall be directed to a stockholder at his address as it appears
upon the records of the corporation and upon such mailing of any such notice,
the service thereof shall be complete and the time of the notice shall begin
to run from the date upon which such notice is deposited in the mail for
transmission to such stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership
shall constitute delivery of such notice to such corporation, association or
partnership. In the event of the transfer of stock after delivery of such,
notice of and prior to the holding of the meeting it shall not be necessary to
deliver or mail notice of the meeting to the transferee.
Section 5. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 6. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Articles of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted at the meeting as originally notified.
Section 7. When a quorum is present or represented at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy shall be sufficient to elect directors or to
decide any question brought before such meeting, unless the question is one
upon which by express provision of the statutes or of the Articles of
Incorporation, a different vote is required in which case such express
provision shall govern and control the decision of such decision of such
question.
Section 8. Each stockholder of record of the corporation shall be
entitled at each meeting of stockholders to one vote for each share of stock
standing in his name on the books of the corporation. Upon the demand of any
stockholder, the vote for directors and the vote upon any question before the
meeting shall be by ballot.
Section 9. At any meeting of the stockholders any stockholder may be
represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instrument in writing shall designate two
or more persons to act as proxies, a majority of such persons present at the
meeting, or, if one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of
the persons so designated unless the instrument shall otherwise provide. No
proxy or power of attorney to vote shall be used to vote at a meeting of the
stockholders unless it shall have been filed with the secretary of the meeting
when required by the inspectors of election. All questions regarding the
qualification of voters, the validity of proxies and the acceptance or
rejection of votes shall be decided by the inspectors of election who shall be
appointed by the Board of Directors, or if not so appointed, then by the
presiding officer of the meeting.
Section 10. Any action which may be taken by the vote of the
stockholders at a meeting may be taken without a meeting if authorized by the
written consent of stockholders holding at least a majority of the voting
power, unless the provisions of the statutes or of the Articles of
Incorporation require a greater proportion of voting power to authorize such
action in which case such greater proportion of written consents shall be
required.
Article III
Directors
Section 1. The business of the corporation shall be managed by its
Board of Directors which may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the Articles of
Incorporation or by these Bylaws directed or required to be exercised or done
by the stockholders.
Section 2. The number of directors which shall constitute the whole
board shall be a minimum of three (3) and a maximum of eleven (11). The
number of directors may from time to time be increased or decreased to not
less than one nor more than fifteen by action of the Board of Directors. The
directors shall be elected at the annual meeting of the stockholders and
except as provided in Section 4 of this Article, each director elected and
qualified. Directors need not be stockholders.
Section 3. Vacancies in the Board of Directors including those caused
by an increase in the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole remaining
director, and each director, and each director so elected shall hold office
until his successor is elected at an annual or a special meeting of the
stockholders. The holders of seventy-five percent (75%) of the outstanding
shares of stock entitled to vote may at any time peremptorily terminate the
term of office of all or any of the directors by vote at a meeting called for
such purpose or by a written statement filed with the secretary or, in his
absence, with any other officer. Such removal shall be effective immediately,
even if successors are not elected simultaneously and the vacancies on the
Board of Directors resulting therefrom shall be filled only by the
stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed
to exist in case of the death, resignation or removal of any directors, or if
the authorized number of directors be increased, or if the stockholders fail
at any annual or special meeting of stockholders at which any director or
directors are elected to elect the full authorized number of directors to be
voted for at that meeting.
The stockholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. If the Board of
Directors accepts the resignation of a director tendered to take effect at a
future time, the Board or the stockholders shall have power to elect a
successor to take office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect
of removing any director prior to the expiration of his term of office.
Section 4. At each annual general meeting of the Company, Directors
shall be elected to the Board of Directors as may be required to fill any
positions then vacant, whether vacant by reason of the expiration of the term
of office of one or more of the Directors or otherwise. A Director may be
elected for a term of office of one or more year of office as may be specified
by ordinary resolution at the time he is elected. In the absence of such
ordinary resolution a Director's term of office will be one year of office.
No Director shall be elected for a term of office exceeding three years. The
members may by special resolution vary the term of office of any Director.
For purposes of these By-Laws "year of office" means the period of time
commencing on the date of an annual general meeting of the Company and ending
on the date of the annual general meeting held in the next subsequent calendar
year.
If any calendar year the Company does not hold an annual general meeting
the Directors whose term of office would have expired in such calendar year
shall be deemed to have been elected as Directors on the last date on which
the annual general meeting could have been held in such calendar year and each
Director so deemed elected may hold office until the next annual general
meeting is held and other Directors are elected".
Article IV
Meetings of the Board of Directors
Section 1. Regular meetings of the Board of Directors shall be held at
any place within or without the State which has been designated from time to
time by resolution of the Board or by written consent of all members of the
Board. In the absence of such designation, regular meetings shall be held at
the registered office of the corporation. Special meetings of the Board may
be held either at a place so designated or at the registered office.
Section 2. The first meeting of each newly elected Board of Directors
shall be held immediately following the adjournment of the meeting of
stockholders and at the place thereof. No notice of such meeting shall be
necessary to the directors in order legally to constitute the meeting,
provided a quorum be present. In the event of such meeting is not so held,
the meeting may be held at such time and place as shall be specified in a
notice given as hereinafter provided for special meetings of the Board of
Directors.
Section 3. Regular meetings of the Board of Directors may be held
without call or notice at such time and at such place as shall from time to
time be fixed and determined by the Board of Directors.
Section 4. Special meetings of the Board of Directors may be called by
the Chairman or the President, by any Vice-President, or by any two directors.
Written notice of the time and place of special meetings shall be
delivered personally to each director, or sent to each director by mail or by
any other form of written communication, charges prepaid, addressed to him at
his address as it is shown upon the records or is not readily ascertainable,
at the place in which the meetings of the directors are regularly held. In
case such notice is mailed or telegraphed, it shall be deposited in the United
States mail or delivered to the telegraph company at least forty-eight (48)
hours prior to the time of the holding of the meeting. In case such notice is
delivered at least twenty-four (24) hours prior to the time of the holding of
the meeting. Such mailing, telegraphing or delivery as above provided shall
be due, legal and personal notice to such director.
Section 5. Notice of the time and place of holding an adjourned meeting
need not be given to the absent directors if the time and place be fixed at
the meeting adjourned.
Section 6. The transactions of any meeting of the Board of Directors,
however called and noticed or wherever held, shall be as valid as though had
at a meeting duly held after regular call and notice, if a quorum be present,
and if, either before or after the meeting, each of the directors not present
signs a written waiver of notice, or a consent to holding such meeting, or an
approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
Section 7. A majority of the authorized number of directors shall be
necessary to constitute a quorum for the transaction of business, except to
adjourn as hereinafer provided. Every act or decision done or made by a
majority of the directors present at a meeting duly held at which a quorum is
present shall be regarded as the act of the Board of directors, unless a
greater number be required by law or by the Articles of Incorporation. Any
action of a majority, although not at a regularly called meeting, and the
record thereof, if assented to in writing by all of the other members of the
board shall be as valid and effective in all respects as if passed by the
Board in regular meeting.
Section 8. A quorum of the directors may adjourn any directors meeting
to meet again at a stated day and hour; provided , however, that in the
absence of a quorum, a majority of the directors present at any directors
meeting, either regular or special, may adjourn from time to time until the
time fixed for the next regular meeting of the Board.
Section 9. In the event of an equal number of votes for and votes
against by the Directors present at a duly called meeting of the Board of
Directors the Chaiman will have a second casting vote. In the event the
Chairman is unable to attend a duly called meeting of the Board of Directors
then the Vice-Chairman shall have the casting vote.
Article V
Committees of Directors
Section 1. The Board of Directors may, by resolution adopted by a
majority of the whole Board, designate one or more committees of the Board of
Directors, each committee to consist of two or more of the directors of the
corporation which, to the extent provided in the resolution, shall have and
may exercise the power of the Board of Directors in the management of the
business and affairs of the corporation and may have power to authorize the
seal of the corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be
determined from time to time by the Board of Directors. The members of any
such committee present at any meeting and not disqualified from voting may,
whether or not they constitute a quorum, unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any absent or
disqualified member. At meetings of such committees, a majority of the
members or alternate members shall constitute a quorum for the transaction of
business, and the act of a majority of the members or alternate members at any
meeting at which there is a quorum shall be the act of the committee.
Section 2. The committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors.
Section 3. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken without a
meeting if a written consent thereof is signed by all members of the Board of
Directors or of such committee, as the case may be, and such written consent
is filed with the minutes of proceedings of the Board or committee.
Article VI
Compensation of Directors
Section 1. The directors may be paid their expenses of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall prelude any director from serving the
corporation in any other capacity and receiving compensation thereof. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
Article VII
Notices
Section 1. Notices to directors and stockholders shall be in writing
and delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
Section 2. Whenever all parties entitled to vote at any meeting,
whether of directors or stockholders, consent, either by a writing on the
records of the meeting or filed with the secretary, or by presence at such
meeting and oral consent entered on the minutes, or by taking part in the
deliberations at such meeting without objection, the doings of such meeting
shall be valid as if had at a meeting regularly called and noticed, and at
such meeting any business may be transacted which is not excepted from the
written consent or to the consideration of which no objection for want of
notice is made at the time, and if any meeting be irregular for want of notice
or of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered likewise
valid and the irregularity or defect therein waived by a writing signed by all
parties having the right to vote at such meeting; and such consent or approval
of stockholders may be proxy or attorney, but all such proxies and powers of
attorney must be in writing.
Section 3. Whenever any notice whatever is required to be given under
the provisions of the statutes, of the Articles of Incorporation or of these
Bylaws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
Article VIII
Officers
Section 1. The officers of the corporation shall be chosen by the Board
of Directors and shall be a President, a Secretary and a Treasurer. Any
person may hold two or more offices.
Section 2. The Board of Directors at its first meeting after each
annual meeting of stockholders shall choose a Chairman of the Board who shall
be a director, and shall choose a President, a Secretary and a Treasurer, none
of whom need be directors.
Section 3. The Board of Directors may appoint a Vice-Chairman of the
Board, Vice-Presidents and one or more Assistant Secretaries and Assistant
Treasurers and such other officers and agents as it shall deem necessary who
shall hold their offices for such duties as shall be determined from time to
time by the Board of Directors.
Section 4. The salaries and compensation of all officers of the
corporation shall be fixed by the Board of Directors.
Section 5. The officers of the corporation shall hold office at the
pleasure of the Board of Directors. Any officer elected or appointed by the
Board may be removed at any time by the Board of Directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal or
otherwise shall be filled by the Board of Directors.
Section 6. The Chairman of the Board shall preside at meetings of the
stockholders and the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
Section 7. The Vice-Chairman shall, in the absence or disability of the
Chairman of the Board, perform the duties and exercise the powers of the
Chairman of the Board and shall perform such other duties as the Board of
Directors may from time to time prescribe.
Section 8. The President shall be the chief executive officer of the
corporation and shall have active management of the business of the
corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution
thereof shall be expressly designated by the Board of Directors to some other
officer or agent of the corporation.
Section 9. The Vice-President shall act under the direction of the
President and in absence or disability of the President shall perform the
duties and exercise the powers of the President. They shall perform such
other duties and have such other powers as the President or the Board of
Directors may from time to time prescribe. The Board of Directors may
designate one or more Executive Vice-Presidents or may otherwise specify the
order of seniority of the Vice-Presidents. The duties and powers of the
President shall descend to the Vice-Presidents in such specified order of
seniority.
Section 10. The Secretary shall act under the direction of the
President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the President or
the Board of Directors.
Section 11. The Assistant Secretaries shall act under the direction of
the President. In order of their seniority , unless otherwise determined by
the President or the Board of Directors, they shall, in the absence or
disability of the Secretary, perform the duties and exercise the power of the
Secretary. They shall perform such other duties and have such other powers as
the President or the Board of directors may from time to time prescribe.
Section 12. The Treasurer shall act under the direction of the
President. Subject to the direction of the President he shall have custody of
the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered
by the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors,
at its regular meetings, or when the Board of Directors so requires, an
account of all his transactions as Treasurer and of the financial condition of
the corporation.
Section 13. If required by the Board of Directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, incase of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The Assistant Treasurer in the order of their seniority,
unless otherwise determined by the President or the Board of Directors, shall,
in the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer. They shall perform such other duties and have
such other powers as the President or the Board of Directors may from time to
time prescribe.
Article IX
Certificates of Stock
Section 1. Every stockholder shall be entitled to have a certificate
signed by the President or a Vice-President and the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the corporation,
certifying the number of shares owned by him in the corporation. If the
corporation shall be authorized to issue more than one class of stock or more
than one series of any class, the designations, preferences and relative,
participating, optional or other special rights of the various classes of
stock or series thereof and the qualifications, limitations or restrictions of
such rights, shall be set forth in full or summarized on the face or back of
the certificate which the corporation shall issue to represent such stock.
Section 2. If a certificate is signed (a) by a transfer agent other
than the corporation or its employees or (2) by a registrar other than the
corporation or its employees, the signatures of the officers of the
corporation may be facsimiles. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be such
officer before such certificate is issued, such certificate may be issued with
the same effect as though the person had not ceased to be such officer. The
seal of the corporation, or a facsimile thereof, may, but need not be, affixed
to certificates of stock.
Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require
and/or give the corporation a bond in such sum as it may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation or the transfer agent of the corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, it shall be on the duty of the
corporation, if it is satisfied that all provisions of the laws and
regulations applicable to the corporation regarding transfer and ownership of
shares have been complied with, to issue a new certificate to the person
entitled thereto, cancel the old certificates and record the transaction upon
its books.
Section 5. The Board of Directors may fix in advance a date not
exceeding sixty (60) days nor less than ten (10) days preceding the date of
any meeting of stockholders, or the date for the payment of any dividend, or
the date for the allotment of rights, or the date when any change or
conversion or exchange of capital stock shall go into effect, or a date in
connection with obtaining the consent of stockholders for any purpose, as a
record date for the determination of the stockholders entitled to notice of
and to vote at any such meeting, and any adjournment thereof, or entitled to
receive payment of any such dividend, or to give such consent, and in such
case, such stockholders, and only such stockholders as shall be stockholders
of record on the date fixed, shall be entitled to notice of an d to vote at
such meeting, or any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights,
or to give such consent, as the case may be, notwithstanding any transfer of
any stock on the books of the corporation after any such record date fixed as
aforesaid.
Section 6. The corporation shall be entitled to recognize the person
registered on its books as the owner of shares to be the exclusive owner for
all purposes including voting and dividends, and the corporation shall not be
bound to recognize any equitable or other claim to or interest in such share
or shares on the part of the other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
British Columbia.
Article X
General Provisions
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the Articles of Incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital stock,
subject to the provisions of the Articles of Incorporation.
Section 2. Before payment of any dividend , there may be set aside out
of any funds of the corporation available for dividends such sums or sums as
the directors from time to time, in their absolute discretion, think proper as
a reserve or reserves to meet contingencies, or for equalizing dividends or
for repairing or maintaining any property of the corporation or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish and such reserve in the
manner in which it was created.
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
Section 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.
Section 5. The corporation may or may not have a corporate seal, as
may from time to time be determined by resolution of the Board of Directors.
If a corporate seal is adopted, it shall have inscribed thereon the name of
the corporation and the words "Corporate Seal" and "State of Nevada". The
seal may be used by causing it or a facsimile thereof to be impressed,
affixed, or in any manner reproduced.
Article XI
Indemnification
Every person who was or is a party or is threatened to be made a party
or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or a person of
whom he is the legal representative is or was a director or officer of the
corporation or is or was serving at the request of the corporation or for its
benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless to the fullest extent legally
permissible under the General Corporation Law of State of Nevada from time to
time against all expenses, liability and loss (including attorney's fees,
judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith. The expenses of officers
and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final deposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if
it is ultimately determined by a court of competent jurisdiction that he is
not entitled to be indemnified by the corporation. Such right of
indemnification shall be a contract right which may be enforced in any manner
desired by such person. Such right of indemnification shall not be exclusive
of any other right which such directors, officers or representatives may have
or hereafter acquire and, without limiting the generality of such statement,
they shall be entitled to their respective rights of indemnification under any
bylaw, agreement, vote of stockholders, provision of law or otherwise, as well
as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director of officer
of the corporation, or is or was serving at the request of the corporation as
a director or officer of another corporation, or as its representatives in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out
of such status, whether or not the corporation would have the power to
indemnify such person.
The Board of Directors may from time to time adopt further Bylaws with
respect to indemnification and may amend these and such Bylaws to provide at
all times the fullest indemnification permitted by the General Corporation Law
of the State of Nevada.
Article XII
Amendments
Section 1. The Bylaws may be amended by a majority vote of all the
stock issued and outstanding and entitled to vote at any annual or special
meeting of the stockholders, provided notice of intention to amend shall have
been contained in the notice of the meeting.
Section 2. The Board of Directors by a majority vote of the whole Board
at any meeting may amend these Bylaws, including Bylaws adopted by the
stockholders, but the stockholders may from time to time specify particular
provisions of the Bylaws which shall not be amended by the Board of Directors.
APPROVED AND ADOPTED this 26th day of September, 1997
CERTIFICATE OF SECRETARY
I hereby certify that I am the Secretary of GOLDEN PANTHER RESOURCES,
LTD., and that the foregoing Bylaws, consisting of ____ pages, constitute the
code of Bylaws of Golden Panther Resources, Ltd., as duly adopted at a regular
meeting of the Board of Directors of the Corporation held September 26th,
1997.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 26th day of
September, 1997.
/s/ Katharine Johnston
-----------------------
Katharine Johnston - Secretary
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT ("Agreement") is made the 29th day of August
1996.
BETWEEN:
GOLDEN PANTHER RESOURCES LIMITED ("Panther"), a company incorporated in the
Province British Colombia having its principal place of business at Suite 23B
- - 1500 Alberni Street, Vancouver, B.C., Canada, V6G 3C9
AND:
P.T. PERTIWI KENCANA ABADI ("Pertiwill), a company incorporated in Indonesia
having its principal place of business at Wisma A.K.R. Lt 6, No. 607, Jl.
Perjuangan, Kebun Jeruk, West Jakarta 11530, Indonesia (Hereinafter together
referred to as the "Parties" and separately as a "Party")
WHERE AS:
A. Pertiwi is wholly owned by Indonesian citizens and is the holder of
certain information pertaining to the mineral potential of the Contract Area.
B. Panther is a company incorporated in British Columbia, Canada, and has
expertise in mineral exploration, development and mining.
C. The Parties have agreed to cooperate for general survey, exploration,
development and exploitation of Minerals within the Contract Area described in
Schedule A.
D. Panther and Pertiwi intend to ask the Government of the Republic of
Indonesia to grant a Contract of Work in respect of the Contract Area, to
enable them to explore for, mine, treat and sell minerals in and from that
area and to carry out related activities.
E. The Parties have agreed to participate in the activities described in
Recital D in the following manner:
(a) by formation of a Project Company, the initial issued shares in which
shall be held by Panther as to 80% and by Pertiwi as to 20%.
(b) by causing the Project Company to execute and perform a contact of work;
and
(c) by subscribing for shares in, and making loans to, the Project Company;
F. The Parties have agreed to enter into this Agreement to regulate the
formation of the Project Company, their share holdings in it and the business
and affairs of the Project Company.
NOW THIS AGREEMENT WITNESSES AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATIONS
1.1 Definitions
In this Agreement, unless the context otherwise requires:
"Approval Date" means the date on which a draft COW for the Contract Area is
approved and initialed by the Parties and the Government;
"Articles" means the articles of association of the Project Company in such
form as the Parties may agree, as amended from time to time (and any reference
to an "Article" shall be a reference to that article of those articles of
association);
"Board" means the Board of Directors of the Project Company;
"Completion Date" means the date on which the Project Company certifies to the
Parties and to the third party Lenders to the Project Company (if any) that
the decision to proceed with construction of the mine and related facilities
to be operated by the Project Company in its mining in the Contract Area has
been approved by the Board of Directors;
"Commencement Period" means the period commencing on the date on which
approval is received from the Minister for the construction of a mine and
facilities to be used by the Project Company in the conduct of the Project
under Cow and ending on the Completion Date;
"Contract Area" 11 means the area described in Schedule A, and, upon grant
of the COW, shall have the meaning given to that expression in the COW
together with such additional land as the Parties may agree from time to time;
"COW" means a contract between the Government of the Republic of Indonesia
and the Project Company for exploration for and exploitation and development
of minerals in the Contract Area or part of it;
"Director" means a Director of the Project Company;
"Dividend" includes a bonus distribution in specie or in cash;
"Encumbrance" means any mortgage, pledge, lien, charge or other form of
security interest or interest in the nature of a security interest
whatsoever;
"Foreign Capital Investment Law" means the Foreign Investment Law No. I of
1967 of Indonesia as amended by Laws No. 11 of 1970 and Nols. 20 and 15 of
1994;
"Government" means the Government of the Republic of Indonesia and as the
context, may require the Department of Mines and Energy thereof;
"LIBOR" means, in relation to the amount of any loan, the London Inter Bank
Offered Rate for the United States Dollar in that amount determined on the
date on which the loan falls due to be made under Clause 5, or, if no such
rate is determined on that data, the most recent date on which such a rate
has been determined;
"Minerals" (and "minerals") means all naturally occurring deposits and
natural accumulations containing chemical elements of all kinds either in
elemental form or in association or chemical combination with other metallic
or non-metallic elements and, upon grant of the COW, shall have the meaning
given to that expression in the COW;
"Panther Shares means Shares held by Panther;
"Pertiwi Shares means Shares held by Pertiwi;
"Pledge of Shares Agreement" means the Pledge of Shares Agreement to be
executed by Panther and Pertiwi in a form agreed between the Parties;
"Project" means the exploration for and, if so decided, mining and treatment
of Minerals in the Contract Area, the sale of those minerals and such
related activities as may be required or permitted to be carried out under the
COW;
"Project Company" means the company to be formed pursuant to Clause 3.1;
"Related Corporation" means, in relation to a Party, a corporation (wherever
incorporated) which controls, is controlled by or is under common control
with that Party, where "control" means the power, whether held directly or
indirectly and whether with or without the concurrence of any other person
or corporation;
(a) to control the composition of the board of directors of a corporation;
(b) to cast or to control the casting of, more than one-half of the maximum
number of votes that might be cast at a general meeting of a corporation; or
(c) to hold more than one-half of the issued share capital of a corporation.
"Security Documents" means the documents listed in Clause 5.6(b) and any
other documents which are executed pursuant to Clauses 5.5(c) or (d);
"Share" and "Shares" means the share and shares of the capital of the
Project Company;
"Shareholder Loan 11 means, in relation to a Party, a loan to the Project
Company made by that Party or on behalf of that Party pursuant to this
Agreement;
"Shareholder Loan Agreement." means, with respect to either Party, the
agreement pursuant to which that Party's Shareholder's Loan are made, and
which is to be in the form agreed between the Party and the Project Company;
"Specified Percentage" means, subject to Panther exercising its right under
Clause 5.16, for Panther 80% and Pertiwi 20% or, if any Shares are
Transferred or new Shares are issued in accordance with this Agreement and the
Articles, the proportion of which a Party's paid-up capital bears to the total
paid-up capital of the Project Company, expressed as a percentage;
"Subscription Loan Agreement" means an Agreement to be executed by Panther
and Pertiwi in the form consistent herewith and otherwise as agreed between
the parties; and
"Transfer" means, in relation to a Share, entering into a transaction in
relation to the Share (or any interest therein), other than a transaction
permitted by this Agreement or the Articles, which results in a person other
than the registered holder of that Share,
(a) Acquiring any interest in that Share, including, but not limited to, an
option agreement or an agreement creating a pledge or other security
interest in respect of that Share; or
(b) Acquiring any right to receive directly or indirectly any dividends
payable in respect of that Share; or
(c) Acquiring any right of pre-emption, first refusal or like control over
the disposal of that Share; or
(d) Acquiring any rights of control over the exercise or any voting rights
or rights to appoint Directors attaching to that Share; or
(e) holding an encumbrance over that Share; or
(f) otherwise acquiring rights against the registered holder of that Share
which.have the effect of placing the person in the same position as would
exist if the person had acquired an interest in that Share itself, and
"Transferor", "Transferee" and "Transfer" have corresponding meanings.
1.2 Interpretation
In this Agreement, unless the context otherwise requ ires:
(a) the symbol 11$11 or the expression '"dollars" means the lawful currency
of the United States of America and the symbol "Rp" or the expression
"Rupiah" means the lawful currency of the Republic of Indonesia;
(b) a reference to any law or regulation or to any provision thereof
includes any modification or re-enactment thereof or any provision
substituted therefor and all statutory instruments issued thereunder;
(c) a word denoting the singular includes the plural and vice ver I sa,
(d) a word denoting an individual includes a corporation and vice versa;
(e) a reference to a Clause or Schedule is a reference to a Clause of or
Schedule to the Agreement;
(f) a reference to any document or agreement, including this Agreement,
includes a reference to that document or agreement as amended,
annotated, supplemented, varied or replaced from time to time;
(g) a word denoting any gender includes all genders; and
(h) a reference to any Party to this Agreement or any other document or
agreement includes its successors or permitted assigns.
1.3 Headings
The headings to Clauses or Schedules are for the purpose of convenient
reference only and do not form part of this Agreement or affect its
interpretation
2. THE CONTRACT OF WORK
2.1 Negotiations for COW
(a) The Parties have agreed to jointly apply for, at the discretion of
Panther, to the Government for the offer of a COW to the Project Company in
relation to the Contract Area and each of the Parties shall provide promptly
such documents as may be required in order to make that application. Panther
shall provide the draft work program.
(b) The Parties shall jointly conduct negotiations with the Government in
relation to the terms and conditions of the COW, shall consult fully with
each other and shall endeavor to obtain from the Government the most favorable
terms reasonably possible.
(c) Each of the Parties shall do all things reasonably within their
respective powers to ensure that the COW is approved, initialed and formally
offered to the Project Company as soon as practicable after the date of this
agreement.
2.2 If Application Unsuccessful
If the COW is not offered to and initialed by the Project Company within two
years after the date of application then Panther, if it so wishes, may
terminate this Agreement at any time thereafter (prior to the. Approval
Date) by giving 15 days prior notice to Pertiwi. Upon such termination,
Panther shall be entitled to a full refund of all bonds and deposits lodged
with the Government in connection with the application for the COW.
2.3 Independent Activities
Nothing in this Agreement shall preclude either Party or any of its Related
Corporations from applying for contracts of work or other exploration or
mining permits or authorizations in respect of areas outside the Contract
Area, either alone or in conjunction with third parties.
2.4 Interim Operations/Joint Venture
If so required, the Project Company may apply for Preliminary Survey Permits
("SIPPs") to conduct general exploration and survey work in the Contract
Area during the period between the Approval Date and the Commencement Date and
Pertiwi shall provide all reasonable assistance in relation to such
applications. Any deposit required for such application will be paid by
Panther and will be returned in full to Panther upon its maturity. Until
such time as the Project Company is formed, the Parties shall act as a joint
venture in all matters contemplated by this Agreement in the manner
specified in Clause 3.3.
2.5 Delivery of Data
Pertiwi agrees to deliver to Panther all geological data and information
relating to the Contract Area which is in its possession or under its
control.
2.6 Expenses
All proper and reasonable expenses covered by budgets approved in advance by
Panther incurred by a Party in relation to the application for and
negotiation of the COW and formation of the Project Company (other than those
specifically reimbursed under other provisions of this Agreement) shall be
treated as expenses of the Project Company and shall be reimbursed to the
Parties incurring such expenses as soon as practicable after formation of the
Project Company.
2.7 Notarial Fees and Other Expenses
The Project Company shall bear all legal and notarial costs and stamp duties
incurred in respect of this Agreement and the Articles and all expenses for
registration and publication of the Deed of Establishment in the Indonesian
State Gazette
3. FORMATION OF PROJECT COMPANY
3.1 Incorporation
As soon as practicable after the Approval Date the Parties will procure the
incorporation of a new limited liability company (the "Project Company")
under the Foreign Capital Investment Law as follows:
(a) the name of the Project Company shall be as agreed between the Parties;
(b) the Articles of Association of the Project Company shall be in the form
agreed between the Parties; and
(c) the authorized capital of the Project Company shall be as determined by
Panther, subject only to the Government's Investment Approval in the event
the Project Company, at Panther's option, is incorporated under the Foreign
Investment law as a PT PMA Company;
(d) the liability of the Members of the Project Company shall be limited.
3.2 Subscription of Shares
on formation of the Project Company, each of the Parties shall subscribe
and pay in the manner herein provided for those Shares which are set out below
against its name and the Parties shall procure the Project Company to so
issue such Shares;
Panther: that number of Shares which equals 80% of the initial issued
capital of the Project Company.
Pertiwi: that number of Shares which equals 20% of the initial issued
capital of the Project Company.
3.3 Prior to Approval of Deed of Establishment
(a) In addition to the provisions of this Agreement, which shall be
applicable to the Parties as of the execution hereof, as of the execution of
the Deed of Establishment of the Project Company, the relationship between
the Parties shall also be governed by the Articles of Association.
(b) Prior to the approval of the Deed of Establishment by the Minister of
Justice:
(i) any references to shareholders shall be applicable to the Parties
as founders and joint venturers and any references to meetings of
shareholders shall mean the meeting of the Parties as founders and
joint venturers)
(ii) any references herein to the Board of Directors ("Directors") and
its members shall be applicable to the person appointed in the Deed of
Establishment or otherwise designated as Directors and its members, who
shall then act as managers, and jointly as a board of management, handling
the
affairs of the joint venture contemplated hereby and the Project Company
having the same function as the Directors and its members according to this
Agreement and the Deed of Establishment;
(iii) unless otherwise provided hereunder and to the extent the
contents of this Agreement and the Deed of Establishment as agreed cannot be
made applicable, prior to the approval of the Deed of Establishment by the
Minister of Justice the provisions of Indonesian law concerning partnerships
acting under a joint name (persekutuan firma) shall supplement the
relationship between the Parties contemplated hereunder.
are subsisting.
3.5 Directors
(a) The Project Company shall be managed by a Board of Directors consisting
of not less than 5 members, 4 of whom shall be appointed on the
nomination of Panther and 1 shall be appointed on the nomination of
Pertiwi.
(b) The appointment of Directors of the Project Company, the rights and
duties of the Directors and the Board and the procedures for calling and
holding meetings of the Shareholders and the Board shall be as set out in
the Articles.
(c) Each Director shall have one vote and all decisions of the Board shall
be made by simple majority.
(d) All meetings of the Board of Directors may be validly held by telephone
conference call.
(e) The parties shall cause the General Meeting of Shareholders that elects
members of the Board of Directors to elect the person named by those
shareholders entitled to nominate persons for the position concerned
3.6 President Director
Panther shall be entitled to nominate the President Director of
the Project Company.
3.7 Commissioners
(a) The Board of Commissioners shall be comprised of 3 persons.
(b) Panther shall be entitled to nominate 2 members including the President
Commissioner and Pertiwi shall be entitled to nominate 1 member.
(c) Panther shall cause the General Meeting of Shareholders that elects
members of the Board of Commissioners to elect the person named by
those entitled to nominate persons for the position concerned.
3.8 General Meetings of Shareholders
The quorum for General Meetings of Shareholders of the Project
Company shall be one or more Shareholders holding at least 55% of the issued
and paid-up Shares. All General Meetings of Shareholders may be validly held
by telephone conference call.
3.9 Participation by Indonesian Citizens
If it is a term of the COW or if there should be at any time a
requirement of the Government for the participation in the Project or in the
Project Company of Indonesian citizens or companies owned entirely or
controlled by Indonesian citizens in addition to the participation by
Pertiwi then:
(a) Panther shall have the absolute right to determine the timing and manner
in which Panther and/or the Project Company will comply with such
obligation, which may include (without limitation):
(i) the Transfer of Shares by Panther or issue of new Shares to a
qualified party selected by Panther;
(ii) the Transfer of Shares by Panther or issue of new Shares to a
qualified venture capital; or
(iii) the listing of all or part of the Project Company's
capital
on an Indonesian stock exchange;
(b) subject to Clause 3.9(c), Pertiwi agrees to provide all reasonable co-
operation in relation to the arrangement determined by Panther under
Clause 3.9(a) provided that Pertiwils Specified Percentage is not reduced
as a consequence of the issue of new Shares;
(c) subject to Clause 5, nothing in Clause 3.9(b) shall require Pertiwi to
subscribe and pay for any new Shares or to accept a Transfer of Shares from
Panther;
(d) if Panther proposes to list any of its Shares in the Project Company, or
any new Shares on a stock exchange, then Pertiwi shall be entitled to
participate pro rata in such listing provided it bears a portion of the
costs and fees concerned which is proportionate to its percentage of the
Shares to be listed; and
(e) if, pursuant to Clause 3.9(d), Panther requires all or any of the Shares
in the Project Company to be listed, then Pertiwi will consent to the
listing of its Shares provided that no expenses of listing are required to be
paid by Pertiwi.
3.9 Director's Fees
The Parties acknowledge and agree that Directors shall be paid such fees
or remuneration if employed by the Project Company as the Board of Directors
may determine from time to time,
4. PROGRAMS AND BUDGETS
4.1 President Director to Prepare
The President Director designate of the Project Company shall prepare
annual programs and budgets for the conduct of the Project during each
calendar year and shall deliver them to the Board of Directors for
consideration and approval:
(a) in the case of the first partial calendar as soon as practicable; and
(b) in respect of each other calendar year, at least 60 days before its
commencement.
4.2 Supplementary Program and Budget
The President Director may at any time, and shall, if so directed by the
Board of Directors prepare and submit to the Board of Directors
supplementary, revised or special purpose programs and budgets.
4.3 Board to Consider and Approve
The Parties shall cause the Board of Directors of the Project Company to
meet and vote upon each program and budget submitted to it under Clause 4.1
or 4.2 prior to its specified date for commencement.
4.4 Quality of Performance
Panther shall use reasonable efforts to ensure that the programs and
budgets prepared and approved under Clauses 4.1 or 4.2 and 4.3 are
professionally prepared and carried out and comply reasonably with the
requirements of the COW, and Panther shall keep Pertiwi fully informed on
the progress of the Project.
4.5 Jakarta Office Expenses
Panther's Jakarta office expenses (if any) related directly to the
Project shall be charged to the Project Company, but if Panther carries out
work in relation to more than one COW then those expenses will be
apportioned by Panther annually to all such COW's in which Panther is
interested, and shall be charged to the relevant projects accordingly.
4.6 Assistance by Pertiwi
Pertiwi will assist Panther and the Project Company whenever reasonably
requested in any matter relating to the Project and any major or significant
costs incurred by Pertiwi in doing so and which are approved in advance in
writing by Panther shall be reimbursed by the Project Company.
5. FINANCE
5.1 Equity and Debt
Subject to Clause 5.5 and 5.8, the operations of the Project Company
shall be financed by way of additional Shares to be subscribed and paid for
by the Parties and by way of shareholder Loans from the Parties, at such times
and in such amounts as may be determined from time to time under the
Articles and this Agreement.
5.2 Contributions
Each of the Parties agrees, subject to Clause 5.5:
(a) to subscribe and pay for additional Shares; and
(b) to make Shareholder Loans to the Project Company in its Specified
Percentage, so that the respective.Share holdings and Shareholder Loan
accounts of the Parties stand at all times in the proportion that their
Specified Percentages now bear to each other.
5.3 Shareholder Loans
All Shareholder Loans shall be made on the terms of Shareholder Loan
Agreements.
5.4 Payments
All payments by the Project Company of interest and expenses and
repayments of principal under Shareholder Loan Agreements shall be made
ratably between the Shareholder Loan Agreements, according to the Parties,
respective Specified Percentages.
5.5 Financing of Pertiwi Obligations
Panther agrees that it will fund all of Pertiwils obligations under this
Agreement to subscribe for Shares or to make Shareholder Loans which shall
be made ratably between the Shareholder Loan Agreements, according to the
Parties' respective Specified Percentages, provided that:
(a) all amounts so advanced by Panther on Pertiwils behalf to the
Project Company shall bear interest at 2% over LIBOR;
(b) amounts advanced by Panther shall be applie d by Pertiwi
exclusively in satisfaction of inertia obligations under this Agreement
to pay for Shares and to make Shareholder Loans;
(c) all payments of interest and repayments of principal due by
the Project Company under the Shareholder Loan Agreement between the
Project Company and Pertiwi shall be paid directly to Panther. If it is
necessary to withhold or deduct any amounts from the payment of such
interest by Pertiwi, in accordance with Indonesian Income Tax Law,
Pertiwi shall pay such further amount as is necessary to ensure Panther
receives the amount it would have received had no such withholding or
deduction been made;
(d) Pertiwi shall assign to Panther the right to receive 80% of all
dividends paid in respect of the Pertiwi Shares, and those dividends
shall be the sole source of funds for repayment of advances or loans
made by Panther to Pertiwi under the Subscription Loan Agreement
otherwise than in the event of default by Pertiwi; and
(e) subject to Clause 5.8, Pertiwi shall grant to Panther such security over
the Pertiwi Shares in the Project Company as Panther reasonably requires
to secure payment of all amounts outstanding from time to time under the
subscription Loan Agreement.
5.6 Documentation
The Parties agree that:
(a) Immediately prior to formation of the Project Company they will enter
into the Subscription Loan Agreements;
(b) Pertiwi shall execute the following documents:
(i) Assignment of Dividends Agreement;
(ii) Pledge of Shares Agreement;
(iii) Power of Attorney to sell;
(iv) In relation to each advance under the Subscription Loan
Agreement, an Acknowledgment of Indebtedness in notarial deed
form; and
(v) Power of Attorney to vote;
in the form agreed between the Parties;
(c) Panther shall not be entitled to exercise its powers under the Power of
Attorney referred to in Clause 5.6(b)(iii) except upon the occurrence of
an Event of Default (as such term is defined in the Subscription Loan
Agreement) or an event which, with the lapse of time or giving of notice
or both, would constitute such an Event of Default;
(d) Panther shall not be entitled to exercise its power of sale under the
Power of Attorney referred to in Clause 5.6(b)(iii) except to a bona
fide purchaser at arm's length; and
(e) upon satisfaction of all of Pertiwils obligations under the Subscription
Loan Agreement) Panther shall return the documents referred to in Clause
5.6(b) to Pertiwi and cause all related obligations of Pertiwi to be
discharged and terminated.
5.7 Acknowledgement ant and Undertaking
Pertiwi acknowledges that in the event that Panther has not exercised
the option set out in Clause 5.16 to purchase Pertiwils Specific Percentage
before the Completion Date then Pertiwi is required to fund from its own
resources or financiers all obligations under Clause 5.2 in respect of the
period after the Completion Date.
5.8 External Finance
The Parties agree that the Project Company may seek third party
financial assistance and loans for the conduct of any part of the Project
including in particular the construction of a mine and related facilities,
as and when feasible and on such terms and conditions as the Board shall
decide, and if such financing is obtained and the lenders so require:
(a) Pertiwi shall grant to the lenders or as they direct such security over
its Shares and its full entitlement to dividends from the Project Company as
those lenders require, and;
(b) Panther shall enter into such arrangement with those lenders to cause
its rights under Clause 5.5 and 5.6'to be subordinated to the right of the
lenders without constituting any default on the part of Pertiwi in relation
to those rights,
5.9 Failure to Comply
If Pertiwi fails to comply with any of its obligations under this
Agreement;
(a) if such failure occurs prior to release of the security granted by the
Security Documents, Panther may freely exercise its rights under the
Security Documents; or
(b) if such failure occurs in respect of Pertiwi funding obligations under
Clauses 5.2 and 5.7 after the Completion Date, Panther may give to
Pertiwi notice of such failure and if such failure is not remedied
within 30 days of the date of such notice, then Panther shall have the
right to cause the Pertiwi Shares in the Project Company to be sold and
the proceeds applied as follows:
(i) first, in satisfaction of costs and expenses of the sale;
(ii) second, in satisfaction of all amounts (if any) owing by Pertiwi
to third parties holding security over the Pertiwi Shares;
(iii) third, in satisfaction of all amounts (if any) paid by Panther
on account of Pertiwi or which are owing by Pertiwi to Panther under
this Agreement or the Articles or any document executed pursuant
to this Agreement; and
(iv) fourth, in satisfaction of all amounts (if any) owned by Pertiwi
to the Project Company.
5.10 Power of Attorney
Pertiwi hereby grants an irrevocable power of attorney to Panther in
addition to the appointment contemplated under Clause 5.6(b)(iii) to sell
Pertiwils Shares in the Project Company, but only in the circumstances
described in Clause 5.9(b).
Panther acknowledges that its rights under such power of attorney will
not be exercised except in the circumstances described in Clause 5.9(b) and
that it shall not be entitled to exercise its power of sale under such power
of attorney except to a bona fide purchaser at arms length.
5.11 Timing
Each of the Parties shall subscribe and pay for Shares or make the
Shareholder Loans required to be made by it to the Project Company, as the
case may be, within 30 days of written request by the Board or the President
Director acting in its behalf.
5.12 No Other Financial Arrangements
Neither of the Parties shall provide any loan or share capital to the
Project Company, give any guarantee or indemnity in respect of the Project
Company's liabilities or obligations or provide any other form of financial
accommodation to the Project Company except as specifically provide in this
Agreement or as otherwise agreed by the Parties.
5.13 Compliance with Laws of Indonesia
The Parties. shall procure that the respective amounts of debt and
equity capital of the Project Company are at all times in accordance with
applicable laws of the Republic of Indonesia. Capitalization of any
Shareholder Loans to the Project Company shall be effected by issuing Shares
in the Project Company to the Parties in their Specified Percentages as and
when the lending party so agrees.
5.14 Debt to Equity Ratio
Subject to Clause 5.13, thedebt to equity ratio of the Project Company
shall be as determined by Panther from tune to time.
5.15 Repayments
Unless the Parties agree otherwise, the Project Company shall apply,
adopt and follow the policy of repaying all Shareholder Loans and loans from
third parties as contemplated hereby from funds available to the Project
Company as soon as practicable and in priority to the payment of any
dividends.
5.16 Option to Purchase Pertiwi Shares
Pertiwi agrees and warrants that Panther has the exclusive right to
purchase Pertiwils Specified Percentage of 10% in the Project Company at any
time up to the Completion Date and that Pertiwi will assist In all matters
relating to expedition of this purchase by Panther. This right shall be
exercised by written notification to Pertiwi by Panther and by payment
within 14 days of the issuance of such notification of $5 million to Pertiwi
by Panther.
6. TRANSFERS
6.1 Pertiwi Not to Transfer its Shares
Pertiwi shall not transfer the Pertiwi Shares unless it has first
offered to transfer such Shares to Panther in accordance with the procedures
set out in Clause 6.3.
6.2 Transfer by Panther
Panther shall have the right to transfer to any party all or any of:
(a) the Panther Shares;
(b) its rights and interests under this Agreement provided that the
transferee shall assume all or any of its obligation under this
Agreement.
6.3 Pre-emptive Rights
(a) If Pertiwi receives a bona fide offer from a third party who is an
Indonesian national or a legal entity owned by Indonesian nationals for
all or any number of the Pertiwi Shares and Pertiwi wishes to accept
that offer and to transfer all or any of such Shares to that third party
it shall notify Panther accordingly, stating; for all or any number of
the Pertiwi Shares and Pertiwi wishes to accept that offer and to
transfer all or any of such Shares to that third party it shall notify Panther
accordingly, stating:
(i) the number of Pertiwi Shares for which it wishes to accept the
offer,
(ii) the proposed price per share (which shall be cash consideration
only);
(iii) the name of the proposed transferee; and
(iv) all other terms conditions of the offer concerned
(b) A notification given under Clause 6.3(a) shall constitute an offer to
Panther by Pertiwi for the sale of that number of Pertiwi Shares
referred to in the notification at the price and on any other terms and
conditions specified in the notification. The offer to Panther shall be
irrevocable for a period of sixty (60) days from the date on which it is
received by Panther.
(c) Panther may personally accept an offer made under Clause 6.3(b) or it
may accept the offer on behalf of a nominated person provided that such
person is qualified under the laws of Indonesia to hold all or part of
the Pertiwi Shares.
(d) If an offer made under Clause 6.3(b) is not accepted within the period
of sixty (60) days referred to in Clause 6,3(b) Pertiwi may at any time
within a further period of one-hundred and twenty (120) days from the
expiration of the period of sixty (60) days accept the offer referred to
in Clause 6.3(a) or accept another offer at a higher price.
6.4 Completion
If Panther transfers any of the Panther Shares or Pertiwi transfers any
of the Pertiwi Shares under and in accordance with the terms and provisions
of this clause 6, the Parties shall do all things necessary (including the
passing of resolutions at a General Meeting of Shareholders of the Project
Company) to ensure that the transfer concerned is completed in accordance
with its terms and that the transferee is recorded in the register of the
Project Company as the holder of the Shares concerned.
6.5 Board Approval
The Parties shall cause the Board to refuse to register any transfer of
Shares in the Project Company which:
(a) does not comply with the procedures set out by the Board ox required in
this Agreement and the Articles for the transfer of Shares;
(b) is not accompanied by a deed (if so required) executed pursuant to
Clause 6.6;
(c) in the opinion of the Board would result In the Project Company being in
breach of any of the provisions of the COW or the general law in
relation to the ownership of Shares; or
(d) is not accompanied by an assignment and assumption of all or a
corresponding proportion (as the case may be) of the rights and
obligations of the transferor in respect of Shareholder Loans made by
the transferor to the Project Company.
6.6 Assumption Deed
Any transfer of Shares, if the remaining.party so requires, -shall be
conditional upon the transferee entering into a deed with the remaining
party (in a form satisfactory to it) under which transferee covenants to
observe and perform the obligations of the transferor under this Agreement,
the transferor's rights and obligations in respect of its Shareholder Loans
and, in the case of a transfer by Pertiwi, the obligations of Pertiwi under
the Subscription Loan Agreement.
6.7 Waiver of Article 8.2
The Parties agree that the provisions of Article 8.2 of the Articles of
Association shall not apply to transfers by either of the Parties or by
their respective successors or assigns (but the Parties acknowledge that, in
the case of Pertiwi, the procedures in this Clause 6 shall apply) and
accordingly each of the parties irrevocable waives its pre-emptive rights
under that Article.
7. WARRANTIES
7.1 Indonesia Indonesian ownership
Pertiwi represents and warrants that it is a company controlled by
Indonesia citizens and that it shall so remain for as long as it holds any
Shares, unless Panther otherwise agrees. If at any time Pertiwi ceases to be
controlled by Indonesian citizens, Panther shall be entitled to require
Pertiwi to transfer to Indonesian nationals designated by Panther all or
some of its Shares in whatever manner and in whatever numbers Panther
reasonably consider necessary to ensure that the obligations of the Project
Company under the provisions of the COW, the general laws and any
requirements of the Government are satisfied.
7.2 Warranties by Panther
Panther represents and warrants that:
(a) it is duly incorporated and validly existing under the laws of the
province of British Columbia and has all requisite powers to own property,
to bind itself in the manner contemplated by this Agreement and to execute,
deliver and perform this Agreement; and
(b) this Agreement has been validly executed and delivered by it and
constitutes the valid, binding and enforceable obligations of Panther in
accordance with its terms.
7.3 Warranties by Pertiwi
Pertiwi further represents and warrants to Panther that:
(a) it is a duly incorporated and validly existing under the laws of the
Republic of Indonesia and has all requisite powers to own property, to
bind itself in the manner contemplated by this Agreement and to execute,
deliver and perform this Agreement; and
(b) this Agreement has been Validly executed and delivered by it and
Warranties by Pertiwi constitutes the valid, binding and enforceable
obligations of Pertiwi in accordance with its terms.
7.4 Undertaking
Pertiwi undertakes to Panther that neither Pertiwi nor any of its
Shareholders, Directors or commissioners nor any person or company which is
related or associated, directly or indirectly, with any of those persons
will take any step to apply for or hold an interest in any mining
authorization, SKIP, SIPP, or any other permit or authorization relating to
prospecting or exploration for, or mining or treatment of, Minerals within a
distance of 20 km of the boundaries of the Contract Area during term of this
Agreement without the express prior approval of Panther.
8. THE ARTICLES
8.1 This Agreement Override Articles
The Parties acknowledge that it is their intention that the provisions
of this Agreement should override the Articles in the event of inconsistency
and each of the Parties agrees to exercise its rights and comply with its
obligations with respect to the Project Company in accordance with its
obligations under this Agreement. The Parties further agree that if any
inconsistency exists between the Articles of Association and this Agreement
they will take all action which may be necessary to carry out the intentions
of the Parties as expressed in and in accordance with the terms of this
Agreement.
8.2 Voting Rights
Each Party Undertakes with the other:
(a) to exercise all votes powers and rights pursuant to the Articles so as
to give full force and effect to the provisions and intentions of this
Agreement; and
(b) subject to Clause 8.1 to observe and comply fully and promptly with the
provisions of the Articles to the Intent and effect that each and every
provisions thereof shall be enforceable.
8.3 Alteration of the Articles
If it should be necessary that, in order for any provision of this
Agreement to be effective in accordance with its terms, that provision
should be included in the Articles or any alteration must be made to the
Articles, the Parties will cause the amendment of the Articles accordingly,
9. INFORMATION, CONFIDENTIALITY & PUBLIC ANNOUNCEMENT
9.1 Confidential Information
The Parties agree to keep the provisions of this Agreement confidential
and shall not disclose to any person this Agreement or information
concerning the Project and the Project Company other than
(a) subject to clause 9.4, if and to the extent required by law or pursuant
to any necessarily applicable legislation or pursuant to the rules or
regulations of a recognized stock exchange applicable to the disclosing
Party or its Related Corporations,
(b) to a financial institution in connection with any financial
accommodation sought to be arranged by Panther or the Project Company for
purposes directly related to the Project and to a bona fide relevant
Transfer is permitted under this Agreement, but such disclosure shall only be
made for the purposes of satisfying such institution or potential Transferee
as to the value and commercial viability of the Project and those Shares or
as to the disclosing Party's rights under this Agreement;
(c) to independent consultants and contractors of either of the Parties or
of the Project whose duties in relation to the Project reasonably require
such disclosure;
(d) In court proceedings as required by a court having Jurisdiction over the
Parties or over matters contemplated by this Agreement;
(e) to the Government, if and to the extent required under the COW; and
(f) to the Project Company, but only insofar as such information relates to
the Project.
9.2 Public announcements and statements relating to the Project Company, the
Project or this Agreement, including statements to the Patties, respective
Shareholders, whether contained in an annual report or made at a general
meeting or otherwise shall only be issued by or with the prior written
consent of Panther.
9.3 Covenants
(a) Any disclosure pursuant to Clauses 9.1(c) and (d) shall only be made
subject to the person to whom disclosure is made covenanting with the
Parties that the information concerned shall not be disclosed to any other
person for any purposes whatsoever.
(b) In the case of disclosure to a Related Corporation employees or employee
of a Related Corporation pursuant to Clause 9.1(a) the disclosing Party
shall take reasonable steps to ensure that such Related Corporation or
employee does not breach the provisions of this Clause 9 which would be
binding on it if it were a Party to this Agreement.
(c) In the case of disclosure pursuant to Clause 9.1(b) and (f) the
disclosing Party shall take reasonable steps to preserve the confidentiality
of the information disclosed.
(d) The Parties shall use all reasonable efforts to agree upon the manner of
disclosure to the Government under Clause 9.1(e).
9.4 Obligations to Remain Binding after Withdrawal
The provisions of this Clause 9 shall continue to hind each of the
Parties notwithstanding that it may have ceased to be a Shareholder in the
Project Company or a Party to this Agreement until a date 2 years after the
termination of this Agreement or its ceasing to be a Shareholder, as the
case may be, whichever occurs first.
10. DURATION AND TERMINATION
10.1 Termination by Agreement
This Agreement shall continue in full force and effect until:
(a) a Party transfers all of its Shares to the other Party or its nominee in
accordance with this Agreement;
(b) it is terminated by written agreement between the Parties;
(c) cessation of the activities under the COW and the compliance with all
outstanding obligations under the COW to the satisfaction of and at the
direction of the Government;
(d) the dissolution of the Project Company;
(e) at the option of Panther a notification is received by either Party that
the Government has disallowed the application for the COW;.and
(f) a notification is received by Pertiwi from Panther, that Panther wishes
to terminate this Agreement at any time up to the Commencement Date,
whichever occurs first.
10.2 Waiver
Each of the Parties hereby waives the provisions of Article 1266 of.the
Indonesian Commercial Code which could otherwise require an order of a court
in order that this Agreement be terminated.
10.3 Confidentially obligations to Continue
Neither the termination of this Agreement' however caused, nor a Party
ceasing to hold any shares shall prejudice any obligation or rights of
either of the Parties under Clause 9 or which have accrued prior to such
termination or cessation nor shall it affect any provision of this Agreement
which is expressly or by implication provided to come into effect on or to
continue in effect following such termination or cessation.
11. FORCE MAJEURE
11.1 Suspension
Subject to Clause 11.3 where a*Party is unable, wholly or in park by
reason of force majeure, to carry out any obligations under this Agreement
and that Party gives the other Party prompt notice of that force majeure with
reasonably full particulars thereof and, so far as known, the probable
extent to which it will be unable to perform or be delayed in performing, that
obligation shall be suspended so far as it affected by the force majeure
during the continuance thereof.
11.2 Removal of Force Majeure
Each of the Parties agrees to use all reasonable diligence to remove an
event of farce majeure as quickly as possible.
11.3 Force Majeure Continues
If, after a period of six months, the force majeure has not ceased, the
Parties shall meet in good faith to discuss the situation and endeavor to
achieve a mutually satisfactory resolution to the problem.
11.4 The requirement that any force majeure shall be removed with all
reasonable diligence shall not require the settlement of strikes, lockouts
or other labor disputes, or claims or demand by any government, on terms
contrary to the wishes ofthe Party affected.
11.5 Definition of "Force Majeure"
In this Agreement "force majeure" means:
(a) in relation to an obligation to pay money, the direction, act or
restraint of any government; and
(b) in any other case, an act of God, strike lockout or other interference
with work, war declared or undeclared, blockade, disturbance, lightning,
fire, earthquake, storm, flood, explosion, governmental or quasi-governmental
restraint, expropriation, prohibition, intervention, direction or embargo,
unavailability or delay in availability of equipment or transport, inability
or delay in obtaining government or quasi governmental approvals, consents,
permits, licenses, authorities or allocations, and any other cause whether
of the kind specifically enumerated above ox otherwise which is not reasonably
within the control of the Party affected.
12. FURTHER ASSURANCES
The Parties shall do, execute and perform all such further deeds,
documents, assurances, acts and things as either of the Parties may
reasonably require-by notice in writing to the other to carry the provisions
of this. Agreement into full force and effect.
13. ENTIRE AGREEMENT
13.1 Prior Agreements Superseded
Except as expressly agreed in writing by the Parties, this Agreement
constitutes the entire agreement between the Parties with respect to the
matters dealt with herein and supersedes any previous agreement between the
parties in relation to such matters.
13.2 No Additional Warranties
Each of the Parties hereby acknowledges that in entering into this
Agreement it has not relied on any representation or warranty of the other of
or any of its Related Corporations or of any person on its behalf save as
expressly set out in this Agreement or in any document referred to herein.
14. NO PARTNERSHIP
Nothing contained in this Agreement shall be read or construed so as
constitute the relationship of principal and agent or of partnership between
the Parties. Neither of the Parties may pledge or purport to pledge the
credit of or bind contractually the other Party or make or purport to make
any representation, warranties or undertaking for the other Party.
15. VARIATIONS
No amendments to this Agreement shall be valid and binding upon the
Parties unless made in writing any duly executed by the Parties,
16. WAIVER
No failure to exercise and no delay in exercising on the part of either
of the Parties any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any right, power
or privilege preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies provided in
this Agreement are cumulative and not exclusive of any rights or remedies
otherwise provided by law.
17. COSTS
Each Party shall bear its own legal and other costs incurred in relation
the negotiation and execution of this Agreement and all agreements
contemplated by this Agreement.
18. NOTICES
18.1 Addresses for Service
Any notice, demand or other communication given or made under this
Agreement shall be in writing and shall be deemed duly given or made if
delivered or sent by post, telex or facsimile transmission as follows:
(a) In the case of GOLDEN PANTHER:
GOLDEN PANTHER RESOURCES LTD.
23B -1500 Alberni Street
Vancouver, B.C.
Canada, V6G 3C9
Facsimile: 604-684-9455
Attention: President
(b) In the case of PERTIWI:
PT PERTIWI KENCANA ABADI
Wisma A.K.R. Lt. 6, No. 607
Jl. Perjuangan No. 5
West Jakarta 11530
Republic of Indonesia
Facsimile: 62-21-5311076
Attention: President Director
18.2 Change of Address
A Party may change its address or facsimile transmission numbers for the
purpose of this Agreement by giving written notice of such change to the other
Party pursuant to this Clause 18.
18.3 Proof of Service
In the absence of proof to the contrary, any notice, demand or other
communication shall be deemed to have been received by the Party to whom it
was sent:
(a) in the case delivery by post, 10 days after the date of posting (postage
prepaid); and
(b) in the case of delivery by telex or facsimile transmission, at the time
of transmission, the sender receives the recipient's answer back code or a
transmission confirmation report (as the case may be), unless in any such
case it would be deemed to have been received on a day which is not a
business day in the place of address, or after 5:00 PM on such a business
day, in which event it shall be deemed to have been received on the next
such business day.
19. ENUREMENT
The provisions of this Agreement shall enure for the benefit and be
binding upon the Parties and upon their respective successors and assigns.
20. SEVERABILITY
Notwithstanding that any provision of this Agreement may prove to be
illegal or unenforceable, the remaining provisions of this Agreement shall
continue in full force and effect.
21. PROPER LAW
This Agreement and the rights and obligations of the Parties shall be
construed and take effect in accordance with and be governed by the laws of
the Republic of Indonesia and each Party expressly submits to the
non-exclusive jurisdiction of the courts of Indonesia
22. DISPUTE RESOLUTION
22.1 Notice
It shall be a condition precedent to either Party's cause of action or
entitlement to commence or maintain proceedings in any court or other forum in
connection with any dispute or difference whatsoever arising in connection
with this Agreement or its termination (other than in relation to the
occurrence of a default event under any Security Document or the exercise of
any rights under a Security Document) (a Dispute), that the following
preliminary conditions be satisfied:
(a) the Party claiming that a dispute has arisen shall give notice of such
Dispute to the other Parties; and
(b) the Parties shall promptly arrange negotiations in good faith to settle
the dispute.
22.2 Submission
If within twenty (20) days of the service of notice under Clause
22.1(a):
(a) the Dispute is not settled as a result of, or by a method agreed as a
result of, such negotiations; or
(b) the Parties have not agreed to appoint a person to act as an expert and
not as an arbitrator to determine,the dispute by a final and binding
termination, then either party may submit such dispute to arbitration in
Jakarta by a single arbitrator in the English language in accordance with the
UNCITRAL Arbitration Rules contained in resolution 31/98 adopted by the United
Nations General Assembly on 15 December 1976 and entitled "Arbitration Rules
of the United Nations Commission on International Trade Law" (UNCITRAL Rules).
22.3 Appointment of Arbitrators
In the event that the Parties cannot agree on a single arbitrator, each
Party shall appoint an arbitrator and the arbitrators so appointed shall
together appoint a third arbitrator who together shall constitute the Board of
Arbitration, and shall hear and finally determine the Dispute in accordance
with the UNCITRAL Rules. In the event a party does not appoint an arbitrator,
the other Party may requested the Singapore International Arbitration Centre
to do so and such selection shall be binding on the Parties.
22.4 Waiver of Article 650
The Parties expressly agree to waive the applicability of Article 650
Section 2 of the Regalement op de Rechtsvodering ("R.V.11) so that the
appointment of the Board of Arbitration shall not terminate after six (6)
months from the date of its appointment. The mandate of the Board of
Arbitration duly constituted in accordance with the terms of this Agreement
shall remain in effect until a final arbitral award has been issued by the
Board of Arbitration.
22.5 Waiver of Article 631
The Parties expressly agree to waive the applicability of Article 631
Section 2 of the R.V. and accordingly in deciding the disagreement or dispute
the Board of Arbitration shall be bound by strict rules of law, and may not
purport to decide the same ex acquo at bono.
22.6 Award is Final
The award of the Board of Arbitration shall be final and binding in the
Parties and the Parties hereby exclude any right of application or appeal to
any Court connection with any question of law arising in the course of
arbitration or respect of any award made. For this purpose, the Parties
expressly agree to waive the operation of Article 631 of the R.V. and Article
15 and 108 of Law No. I of 1950 (Supreme Court Rules).
22.7 Continuity
Pending the submission to the Board of Arbitration and thereafter until
the Board of Arbitration gives its decision, the Parties shall, except in the
event of termination of this Agreement in accordance with its terms, continue
without prejudice to a final adjustment in accordance with the award of the
Board of Arbitration.
22.8 Language
All communication relating to the arbitration proceedings shall be in
the English language.
22.9 No Separate Legal Actions
No Party shall be entitled to commence or maintain any action in a court
of law upon any matter in disagreement or dispute until such matter shall have
been submitted and decided as hereinbefore provided and then only for the
enforcement of the award of the Board of Arbitration.
22.10 Enforcement
An order of judicial acceptance or on application for enforcement of the
award may be sought in any court of competent jurisdiction within or outside
of the Republic of Indonesia.
22.11 Domicile
For the purpose of enforcing any arbitration award, the Parties hereby
choose general and permanent domicile at the Registrar's office of the
District Court of Central Jakarta (Pengadilan Negeri Jakarta Pusat), without
prejudice to a Party's right to commence proceedings in any other Court having
jurisdictions over the other Party or any of its assets.
22.12 Cost
The cost of arbitration shall be borne in accordance with the
determination of the Board of Arbitration.
22.13 Clause to Survive Termination
The provisions of this Clause 22 shall survive any termination of this
Agreement by whomsoever and for whatever reason.
IN WITNESS WHEREOF the Parties have executed this Agreement on the day and
year first written above.
SIGNED for and on behalf of
GOLDEN PANTHER RESOURCES LTD PT PERTIWI KENCANA ABADI
by:/s/Alexander Van Hoeken /s/Vincent Siboe
Name; GORDON MUIR Name; VINCENT SIBOE
Title: PRESIDENT Title: PRESIDENT DIRECTOR
August 29, 1996
POWER OF ATTORNEY
Dear Sir:
In connection with joint venture agreement between Golden Panther Resources
Ltd. and P.T. Pertiwi Kencana Abadi, I hereby authorize and request that Alex
Van Hoeken, Vice President of Golden Resources Ltd. (herein called my at
attorney) sign this agreement dated August 29, 1996.
I hereby grant unto my attorney full power and authority to act as above and
ratify and confirm all that he shall do or cause to be done by virtue
hereof.
The powers hereby granted to my attorney shall continue in full force and
effect for the complete execution of the aforementioned document.
/s/Gordon J. Muir /s/Penny Perfect
Gordon J. Muir Witness
The following is a spqcimen signature of my attorney named herein.
/s/Alex Van Hoeken /s/Leslie Smith
Alex Van Hoeken Witness
The following is a specimen signature of my attorney named herein
Dated: 29/8/96
SUBSIDIARIES OF THE REGISTRANT
Panther Resources Ltd.
Nevada
Golden Panther Resources Ltd. Panther Group Ltd.
British Columbia Bermuda
P.T. Golden Panther Resources Golden Panther Investments Ltd.
Indonesia Bahamas
The corporate structure of Panther Resources Ltd. includes a number of wholly
owned subsidiaries.
For our Asian interests Golden Panther Resources Ltd. was incorporated in the
Province of British Columbia, Canada on November 20, 1995 and is 100% owned by
Panther Resources Ltd. Golden Panther Resources Ltd. owns 95% of the issued
and outstanding shares of P.T. Golden Panther Resources, incorporated in
Indonesia in March, 1996 which owns the mineral properties in Indonesia and
has applied for the 7th Generation Contract of Work (COW).
For our Mexican interests we incorporated Golden Panther Investments Ltd. of
the Bahamas on March 25, 1997 which is a wholly owned subsidiary of Panther
Group Ltd., incorporated in Bermuda on October 16, 1997 . Panther Group Ltd.
is a wholly owned subsidiary of the parent company Panther Resources Ltd.
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