SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 29, 1997
Dakota Mining Corporation
(Exact Name of Registrant as Specified in its Charter)
Canada 0-17583 84-1094683
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
410 Seventeenth Street, Suite 2450
Denver, Colorado 80202
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (303) 573-0221
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition of Assets
On May 29, 1997, USMX, Inc., a Delaware corporation ("USMX"), merged
with and into Dakota Merger Corporation, a Delaware corporation and a
wholly-owned subsidiary of the Registrant, with USMX surviving the merger as a
wholly-owned subsidiary of the Registrant. USMX is engaged in the exploration
for and development of precious metals properties and the production of gold.
The merger occurred pursuant to an Agreement and Plan of Merger dated
February 5, 1997, among the Registrant, USMX, and Dakota Merger Corporation, as
amended as of April 21, 1997. Former shareholders of USMX received one Common
Share of the Registrant for every 1.1 shares of USMX Common Stock owned of
record on May 29, 1997. The share-exchange ratio was determined through
negotiations between the Registrant and USMX, and was approved by the each
companies' respective Boards of Directors and shareholders. In addition, the
Registrant and USMX received fairness opinions from Canaccord Capital
Corporation and Newcrest Capital, Inc., respectively, with respect to the
fairness of the terms of the merger.
In connection with the merger, the Registrant filed a Registration
Statement on Form S-4 (Registration No. 333-23453) with the Securities and
Exchange Commission, which was declared effective on April 30, 1997, and issued
the press releases attached hereto as Annex 1, each of which is incorporated
herein by reference.
Item 7.
(a) Financial Statements of Business Acquired
The response to this item is set forth in the Consolidated Financial
Statements of USMX, Inc. contained in Appendix G to the Registration Statement
on Form S-4 (Registration Number 333- 23453), as declared effective by the
Securities and Exchange Commissions on April 30, 1997, which are incorporated
herein by reference.
(b) Pro Forma Financial Information
The response to this item is set forth in the Selected Pro Forma
Consolidated Financial Information of the Registrant contained in the
Registration Statement on Form S-4 (Registration Number 333-23453), as declared
effective by the Securities and Exchange Commissions on April 30, 1997, which
are incorporated herein by reference.
(c) Exhibits
2.4 Agreement and Plan of Merger dated February 5, 1997 among the
Registrant, Dakota Merger Corporation and USMX (incorporated herein by reference
to Annex A to the Registration Statement on Form S-4 (Registration Number
333-23453), as declared effective by the Securities and Exchange Commissions on
April 30, 1997).
<PAGE>
2.5 Amendment No. 1 to Agreement and Plan of Merger dated April 21,
1997 among the Registrant, Dakota Merger Corporation, and USMX (incorporated
herein by reference to Annex A to the Registration Statement on Form S-4
(Registration Number 333-23453), as declared effective by the Securities and
Exchange Commissions on April 30, 1997).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DAKOTA MINING CORPORATION
Date: June __, 1997 By:
Robert R. Gilmore, Vice President, Finance
and Chief Financial Officer
<PAGE>
Annex 1
Press Releases
DAKOTA MINING CORPORATION USMX, Inc.
410 Seventeenth Street, Suite 2450 141 Union Boulevard, Suite 100
Denver, Colorado 80202 Lakewood, Colorado 80228
303 573-0221 o FAX 573-1012 303 985-4665 FAX 980-1363
Dakota Mining Corporation News Release No. 1 1997 Release Number: 1
Joint News Release
DAKOTA MINING CORPORATION AND USMX, INC. TO MERGE
AND RAISE CDN.$40 MILLION
DENVER, CO--January 6, 1997 - Dakota Mining Corporation (DKT:TSE; AMEX 35.5
million common shares outstanding) and USMX, Inc. (USMX:NASDAQ; USM:TSE, 16.2
million common shares outstanding) today announced an agreement in principle to
combine the two companies. Under the terms of the merger agreement, shareholders
of USMX will receive one Dakota common share for every 1.1 common shares of USMX
held and USMX will become a wholly owned subsidiary of Dakota. The business
combination is subject to completion of the financing by Dakota as set forth
below, approval by The Toronto Stock Exchange, shareholder and creditor
approval, review by regulatory authorities, a definitive merger agreement, and
other customary conditions. Pegasus Gold Inc., which holds approximately 30% of
the outstanding common shares of USMX, has agreed in principle to support the
proposed transaction.
The combination of Dakota and USMX sets the stage for Dakota to become a
mid-sized gold producer with production approximating 140,000 ounces annually
commencing in 1997, growing to 200,000 ounces in 1998. The combined Company will
continue its activities with significant cash resources, excellent opportunities
to expand known reserves on existing properties, and a highly prospective
portfolio of quality exploration properties in North and Latin America, and
expects to pursue additional acquisition opportunities. Alan R. Bell, President
and CEO of Dakota, will be the President and CEO of the merged company and
Donald P. Bellum, Chairman, President and CEO of USMX will be the Chairman of
the Board.
Dakota has engaged Canaccord Capital Corporation, ScotiaMcLeod Inc. and Newcrest
Capital Inc. to market in January 1997, on a best effort basis, by way of
private placement Special Warrants representing gross proceeds to Dakota of
Cdn.$40 million. The offering will be subject to the completion of the
combination of Dakota and USMX.
USMX has prepared a revised development and operating plan for its Illinois
Creek Mine located in Alaska. Based on the revised plan, USMX anticipates that
it will require additional funding of approximately $12.1 million to achieve
production at the Illinois Creek Mine. The Company also presently estimates that
additional funding of several million dollars may be required for other
operating expenses, corporate overhead and to comply with the financial
covenants of the project loan from N. M. Rothschild until the Illinois Creek
Mine is generating cash flow. The current capital estimate for the completion
and start-up of the mine is $47.8 million. The increase from an earlier estimate
of $36.7 million is due to the delay in projected start-up from November 1996 to
May 1997, increased capital costs and higher working capital requirements.
The proceeds to be realized by Dakota from the private placement will be used to
achieve production at Illinois Creek, property development activities at
Dakota's operating mines and to pursue property and acquisition targets outside
the combined Company's existing property holdings.
The combined company will have a well funded exploration program for a portfolio
of USMX properties in North and Latin America. About 600,000 acres of
exploration ground is located in the Sonora District of Northern Mexico, with
additional holdings in Ecuador, Chile and the western United States.
USMX's Thunder Mountain property is located 14 miles east of Dakota's Stibnite
mine and is currently undergoing a feasibility study, environmental impact
study, and permitting. This project could be producing 40,000 ounces per year by
1999. Additionally, the new company will retain a 50% interest in the Yellow
Pine Joint Venture, containing approximately 3 million ounces of sulfide gold
resources.
Alan R. Bell, President and Chief Executive Officer of Dakota stated, "The
primary benefit to the merger is the immediacy of increased gold production, to
140,000 ounces in 1997 and 200,000 ounces in 1998. This is without the usual
construction risks to achieve this production level, the mines are built and
ready to go."
Donald P. Bellum, President and Chief Executive Officer of USMX stated, "The
combination of two junior gold producers into a mid-sized company with financial
stability, quality reserves and positive cash flows represents a significant
opportunity for shareholders of both companies. In addition, there is good
synergy between the two companies. The Dakota management has extensive operating
experience with cold weather heap leach and USMX brings strong production and
exploration expertise, as well as a portfolio of quality exploration
opportunities to the combined company."
Dakota Mining Corporation and USMX are both publicly held Denver-based precious
metals mining companies.
For further information, please contact:
Alan R. Bell John Haigh
President and Chief Executive Officer Vice Pres. Investor Relations
Dakota Mining Corporation & Public Affairs
303 573-0221 FAX 573-1012 USMX, Inc.
303 985-4665 FAX 980-1363
DAKOTA MINING CORPORATION USMX, Inc.
410 Seventeenth Street, Suite 2450 141 Union Boulevard, Suite 100
Denver, Colorado 80202 Lakewood, Colorado 80228
303 573-0221 o FAX 573-1012 03 985-4665 FAX 980-1363
Dakota Mining Corporation News Release No. 1 1997 Release Number: 1
Joint News Release
DAKOTA MINING CORPORATION AND USMX, INC. TO MERGE
AND RAISE CDN.$40 MILLION
DENVER, CO--January 6, 1997 - Dakota Mining Corporation (DKT:TSE; AMEX 35.5
million common shares outstanding) and USMX, Inc. (USMX:NASDAQ; USM:TSE, 16.2
million common shares outstanding) today announced an agreement in principle to
combine the two companies. Under the terms of the merger agreement, shareholders
of USMX will receive one Dakota common share for every 1.1 common shares of USMX
held and USMX will become a wholly owned subsidiary of Dakota. The business
combination is subject to completion of the financing by Dakota as set forth
below, approval by The Toronto Stock Exchange, shareholder and creditor
approval, review by regulatory authorities, a definitive merger agreement, and
other customary conditions. Pegasus Gold Inc., which holds approximately 30% of
the outstanding common shares of USMX, has agreed in principle to support the
proposed transaction.
The combination of Dakota and USMX sets the stage for Dakota to become a
mid-sized gold producer with production approximating 140,000 ounces annually
commencing in 1997, growing to 200,000 ounces in 1998. The combined Company will
continue its activities with significant cash resources, excellent opportunities
to expand known reserves on existing properties, and a highly prospective
portfolio of quality exploration properties in North and Latin America, and
expects to pursue additional acquisition opportunities. Alan R. Bell, President
and CEO of Dakota, will be the President and CEO of the merged company and
Donald P. Bellum, Chairman, President and CEO of USMX will be the Chairman of
the Board.
Dakota has engaged Canaccord Capital Corporation, ScotiaMcLeod Inc. and Newcrest
Capital Inc. to market in January 1997, on a best effort basis, by way of
private placement Special Warrants representing gross proceeds to Dakota of
Cdn.$40 million. The offering will be subject to the completion of the
combination of Dakota and USMX.
USMX has prepared a revised development and operating plan for its Illinois
Creek Mine located in Alaska. Based on the revised plan, USMX anticipates that
it will require additional funding of approximately $12.1 million to achieve
production at the Illinois Creek Mine. The Company also presently estimates that
additional funding of several million dollars may be required for other
operating expenses, corporate overhead and to comply with the financial
covenants of the project loan from N. M. Rothschild until the Illinois Creek
Mine is generating cash flow. The current capital estimate for the completion
and start-up of the mine is $47.8 million. The increase from an earlier estimate
of $36.7 million is due to the delay in projected start-up from November 1996 to
May 1997, increased capital costs and higher working capital requirements.
The proceeds to be realized by Dakota from the private placement will be used to
achieve production at Illinois Creek, property development activities at
Dakota's operating mines and to pursue property and acquisition targets outside
the combined Company's existing property holdings.
The combined company will have a well funded exploration program for a portfolio
of USMX properties in North and Latin America. About 600,000 acres of
exploration ground is located in the Sonora District of Northern Mexico, with
additional holdings in Ecuador, Chile and the western United States.
USMX's Thunder Mountain property is located 14 miles east of Dakota's Stibnite
mine and is currently undergoing a feasibility study, environmental impact
study, and permitting. This project could be producing 40,000 ounces per year by
1999. Additionally, the new company will retain a 50% interest in the Yellow
Pine Joint Venture, containing approximately 3 million ounces of sulfide gold
resources.
Alan R. Bell, President and Chief Executive Officer of Dakota stated, "The
primary benefit to the merger is the immediacy of increased gold production, to
140,000 ounces in 1997 and 200,000 ounces in 1998. This is without the usual
construction risks to achieve this production level, the mines are built and
ready to go."
Donald P. Bellum, President and Chief Executive Officer of USMX stated, "The
combination of two junior gold producers into a mid-sized company with financial
stability, quality reserves and positive cash flows represents a significant
opportunity for shareholders of both companies. In addition, there is good
synergy between the two companies. The Dakota management has extensive operating
experience with cold weather heap leach and USMX brings strong production and
exploration expertise, as well as a portfolio of quality exploration
opportunities to the combined company."
Dakota Mining Corporation and USMX are both publicly held Denver-based precious
metals mining companies.
For further information, please contact:
Alan R. Bell John Haigh
President and Chief Executive Officer Vice Pres. Investor Relations &
Dakota Mining Corporation Public Affairs USMX, Inc.
303 573-0221 FAX 573-1012 303 985-4665 FAX 980-1363
