<PAGE>
As filed with the Securities and Exchange Commission on May 20, 1998.
Registration No. 333-51275
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
ALTA GOLD CO.
(Exact name of registrant as specified in its charter)
--------------------------
NEVADA 87-0259249
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
601 WHITNEY RANCH DRIVE, SUITE 10, HENDERSON, NEVADA 89014, (702) 433-8525
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN A. BIELUN
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
601 WHITNEY RANCH DRIVE, SUITE 10
HENDERSON, NEVADA 89014
(702) 433-8525
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
MICHAEL J. BONNER, ESQ.
JOHN C. JEPPSEN, ESQ.
KUMMER KAEMPFER BONNER & RENSHAW
3800 HOWARD HUGHES PARKWAY, 7TH FLOOR
LAS VEGAS, NEVADA 89109
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933 (the "Securities Act"),
other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================================
Proposed Proposed Amount of
Title of each class of Amount to maximum offering maximum aggregate registration
securities to be registered be registered <F1> price per share <F2> offering price <F2> fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001............ 978,301 $2.421875 $2,369,323 $699*
========================================================================================================================
* Previously paid.
<FN>
<F1> Solely for the purpose of estimating the number of shares of
Common Stock to be included in the Registration Statement, the
Company calculated the actual number of shares of Common Stock
issuable in connection with the exercise of the Company's
Warrants granted in the first and second tranches, and 150% of
the estimated number of shares issuable in connection with the
exercise of the Warrants to be granted in the third tranche
based upon a hypothetical closing price of $2.46875 (which was
the closing price of the Common Stock on May 15, 1998) and
assuming the total outstanding principal balance of the
Company's 4% Convertible Debentures is $4,700,000 (which was
the total outstanding principal balance of the 4% Convertible
Debentures on May 15, 1998). In addition to the estimated
number of shares set forth in the table, the amount to be
registered includes a presently indeterminate number of shares
issuable upon the exercise of the Company's Warrants, as such
number may be adjusted as a result of stock splits, stock
dividends and antidilution provisions (including the floating
closing price with respect to the third tranche) in accordance
with Rule 416.
<F2> Calculated in accordance with Rule 457(c) based upon the
average of the bid and asked prices reported on the Nasdaq
National Market on May 15, 1998.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"), ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
================================================================
<PAGE>
PROSPECTUS (SUBJECT TO COMPLETION)
MAY 20, 1998
978,301 SHARES
[ALTA GOLD CO. LOGO]
COMMON STOCK
The shares offered hereby (the "Shares") consist of up to
978,301 shares of common stock, $.001 par value per share (the
"Common Stock"), of Alta Gold Co., a Nevada corporation (the
"Company"), which may be issuable by the Company to the persons
listed herein under "Selling Stockholders" (the "Selling
Stockholders") upon the exercise of the Warrants (as defined
below). On November 11, 1997, the Company entered into an
agreement (the "Master Agreement") with the holders of its
4% Convertible Debentures issued on April 14, 1997 (the
"Debentures"), whereby the Company agreed to issue warrants (the
"Warrants") to the Selling Stockholders in three tranches based
upon the closing price of the Common Stock, and the outstanding
principal amount of the Debentures, on November 15, 1997, March
31, 1998 and September 30, 1998. The exercise price (the
"Exercise Price") for each tranche is 120% of the closing price
of the Common Stock on the respective issuance date of the
Warrants. The Warrants are exercisable at any time after their
issuance date and within a three-year period for the first
tranche and within a five-year period for the second and third
tranches. On November 15, 1997, the Company issued Warrants to
purchase 231,724 shares of Common Stock at an Exercise Price of
$2.175 per share. On March 31, 1998, the Company issued Warrants
to purchase 318,222 shares of Common Stock at an Exercise Price
of $2.3625 per share. The total outstanding principal amount of
the Debentures was $4,700,000 as of May 15, 1998. Solely for the
purpose of estimating the number of Shares included in this
registration statement of which this Prospectus is a part, the
number of Shares registered for sale by this Prospectus equals
the number of shares of Common Stock issuable upon the exercise
of the Warrants granted in the first and second tranches, and
150% of the estimated number of shares issuable upon the exercise
of the Warrants to be granted in the third tranche using a
hypothetical closing price of $2.46875 (which was the closing
price of the Common Stock on May 15, 1998, which date was
arbitrarily selected) and assuming the total outstanding
principal balance of the Debentures on September 30, 1998 is
$4,700,000. The use of such hypothetical Exercise Price is not
intended, and should in no way be construed, to constitute a
prediction as to the future market price of the Common Stock.
This Prospectus covers the sale of the Shares from time to time
by the Selling Stockholders. The issuance of the Shares upon the
exercise of the Warrants is not covered by this Prospectus,
rather only the resale of such Shares by the Selling Stockholders
or their respective pledgees, donees, transferees or other
successors in interest.
The Shares may be offered from time to time by the Selling
Stockholders or their respective pledgees, donees, transferees or
other successors in interest. The Company has agreed to pay
certain expenses of the registration of the Shares. Any brokers'
or underwriters' fees or commissions incurred by the Selling
Stockholders in connection with the sale of the Shares will be
borne by the Selling Stockholders. The Company will not receive
any proceeds directly from the sale of the Shares by the Selling
Stockholders. See "Use of Proceeds." The aggregate proceeds to
the Selling Stockholders from the sale of the Shares will be the
sale price of the Shares sold, less the aggregate underwriters'
commissions and discounts, if any, and the expenses of
distribution not borne by the Company.
The Selling Stockholders have not advised the Company of any
specific plans for the distribution of the Shares covered by this
Prospectus, but it is anticipated that the Shares will be sold
from time to time by the Selling Stockholders or their respective
pledgees, donees, transferees or other successors in interest,
primarily in transactions (which may include block transactions)
on the Nasdaq National Market, or such
[This text appears on the left hand margain of the page.]
[Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.]
1
<PAGE>
other market on which the Company's securities may from time to
time be trading at the market price then prevailing, although
sales may also be made in negotiated transactions or otherwise.
The Selling Stockholders and the brokers and dealers through whom
sales of the Shares may be made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and their commissions or
discount and other compensation may be regarded as underwriters'
compensation. See "Plan of Distribution."
The Common Stock is currently listed on the Nasdaq National
Market under the symbol "ALTA." On May 15, 1998, the last
reported sale price of the Common Stock on the Nasdaq National
Market was $2.46875 per share.
THERE ARE CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED
BEFORE PURCHASING THE SHARES. SEE "RISK FACTORS" BEGINNING ON
PAGE 5.
__________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is May ____, 1998.
TABLE OF CONTENTS
PAGE
INCORPORATION OF DOCUMENTS BY REFERENCE........................3
THE COMPANY....................................................4
RISK FACTORS...................................................5
USE OF PROCEEDS...............................................13
SELLING STOCKHOLDERS..........................................13
PLAN OF DISTRIBUTION..........................................15
LEGAL MATTERS.................................................16
EXPERTS.......................................................16
AVAILABLE INFORMATION.........................................16
2
<PAGE>
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which have been filed by the
Company with the Securities and Exchange Commission (the
"Commission"), are hereby incorporated by reference into this
Prospectus:
(i) The Company's annual report on Form 10-K for the
fiscal year ended December 31, 1997;
(ii) The Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1998;
(iii) The Company's proxy statement on Schedule 14A for the
Company's annual meeting of stockholders to be held
on June 12, 1998; and
(iv) The description of the Common Stock contained in the
Company's registration statement on Form S-3,
Amendment No. 4 (Registration No. 33-84046), as filed
with the Commission under the Securities Act.
All documents filed by the Company after the date of this
Prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and prior to the termination of the offering hereunder shall be
deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or
oral request of any such person, a copy of any or all of the
documents incorporated herein by reference, other than exhibits
to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Written requests
for such copies should be directed to Margo R. Bergeson,
Secretary, Alta Gold Co., at the Company's principal executive
offices located at 601 Whitney Ranch Drive, Suite 10, Henderson,
Nevada 89014. Telephone requests may be directed to Ms. Bergeson
at (702) 433-8525.
3
<PAGE>
THE COMPANY
Alta Gold Co. (the "Company") is engaged in the exploration,
development, mining and production of gold on properties located
in Nevada. The Company also has three base metals properties in
the western United States which are in various stages of
development. The Company operates solely in the metals mining
industry segment. The Company was incorporated in Nevada on May
7, 1962, under the name of Silver King Mines, Inc. On November
24, 1989, the Company merged with Pacific Silver Corporation, and
the Company's name was changed to Alta Gold Co. The Company's
principal executive offices are located at 601 Whitney Ranch
Drive, Suite 10, Henderson, Nevada 89014, and its telephone
number is (702) 433-8525.
In 1991, the Company ceased mining activities because of
higher than expected mining costs, and lower than anticipated ore
grades and recoveries, as well as declining gold prices.
Following a change in management and the implementation of a new
mining plan, the Company resumed mining in 1993 at the Easy
Junior mine ("Easy Junior") located near Ely, Nevada. In 1994,
the Company acquired three gold properties, the Kinsley mine
("Kinsley") located in Elko County, Nevada, the Olinghouse
property ("Olinghouse") located in Washoe County, Nevada, and the
Griffon property ("Griffon") located in White Pine County,
Nevada, and one copper property, the Copper Flat property
("Copper Flat") located in Sierra County, New Mexico. Kinsley
was permitted, developed and put into operation in October 1994,
and the Company completed mining all reserves at Easy Junior in
August 1994.
In 1996, the Company (i) produced 49,486 ounces of gold at
Easy Junior and Kinsley; (ii) completed gold processing at Easy
Junior; (iii) continued mining activities at Kinsley;
(iv) continued permitting, development drilling and mine planning
at Olinghouse, as well as preparing a feasibility study;
(v) continued permitting and mine planning at Griffon;
(vi) continued permitting at Cooper Flat; (vii) acquired control
of the Excalibur property ("Excalibur") located in Mineral
County, Nevada; and (viii) entered into an agreement giving the
Company an option to acquire a 50% interest in, and right to
manage, the Osceola property ("Osceola") located in White Pine
County, Nevada.
In 1997, the Company (i) produced 38,472 ounces of gold at
Kinsley; (ii) completed site development and construction and
began mining at Griffon; (iii) continued permitting, development
drilling and mine planning and completed a feasibility study at
Olinghouse; (iv) continued permitting at Copper Flat; and
(v) initiated the acquisition of the Lookout Mountain gold
property ("Lookout Mountain") located in Eureka County, Nevada
from Echo Bay Exploration, Inc. In the first quarter of 1998,
the Company (i) completed mining operations at Kinsley; and
(ii) completed the acquisition of Lookout Mountain.
Currently, the Company is (i) continuing to conduct mining
activities at Griffon; (ii) conducting site development and
construction at Olinghouse; (iii) continuing to permit Copper
Flat; and (iv) conducting exploration at Excalibur, Lookout
Mountain and Osceola.
RECENT DEVELOPMENTS
On April 16, 1998, the Company entered into an interim loan
and security agreement (the "Interim Loan") with U.S. Bancorp
Leasing & Financial. Under the terms of the Interim Loan, the
Company can borrow up to $4.7 million for the purpose of
financing the construction of a crushing and conveyor system for
Olinghouse. The Interim Loan accrues interest at prime plus one
percent, with interest payable monthly. Upon completion and
acceptance by the Company of the crushing and conveyor system,
the Company has the option of either paying off the Interim Loan
or converting the Interim Loan into an equipment loan, which will
carry an interest rate of approximately eight and one-half
percent and be repaid
4
<PAGE>
in sixty equal monthly installments. The Interim Loan is secured
by the crushing and conveyor system. As of May 13, 1998, the
Company had borrowed $1.0 million under the Interim Loan.
The Company entered into a $17.0 million revolving credit
and term loan agreement (the "Revolving Credit and Term Loan")
dated as of April 30, 1998, with Standard Chartered Bank, Gerald
Metals, Inc. and Credit Agricole Indosuez. The Revolving Credit
and Term Loan carries an interest rate of LIBOR plus two percent,
payable monthly, and is comprised of two components, a $6.0
million line of credit and a $11.0 million term loan. The line
of credit expires October 31, 1999. The term loan is to be
repaid in eleven equal installments beginning June 30, 1999. The
Company used $6.8 million of the Revolving Credit and Term Loan
to repay certain indebtedness to Gerald Metals and BHF-Bank. The
remaining funds are to be used for (i) site development,
construction and equipment for Olinghouse, (ii) working capital
and (iii) the payment of certain expenses. The Revolving Credit
and Term Loan is secured by first priority trust deeds on
Olinghouse, Griffon, Kinsley and Copper Flat, and a first
priority security interest in all of the Company's tangible and
intangible personal property. Covenants include restrictions on
the ability of the Company to, among other things, change the
Company's corporate structure, pay dividends on or repurchase the
Company's common stock, and create or suffer to exist any liens
(other than permitted liens) on the Company's assets or
properties. In addition, the Company is required to sell 100% of
its gold production to Gerald Metals, Inc. through April 30,
2003. All sales to Gerald Metals, Inc. are made at the market
price prevailing at the time of sale. As of May 13, 1998, the
Company had borrowed $12.0 million under the Revolving Credit and
Term Loan.
On May 8, 1998, the U.S. Bureau of Land Management issued
the Record of Decision on Olinghouse. The Record of Decision is
the final permit required to begin site development and gold
production at Olinghouse.
RISK FACTORS
EXCEPT FOR HISTORICAL INFORMATION CONTAINED IN THIS
PROSPECTUS, THE MATTERS DISCUSSED HEREIN CONTAIN FORWARD-LOOKING
STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF SECTION
27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT,
INCLUDING MANAGEMENT'S EXPECTATIONS REGARDING THE COMPANY'S
RESERVES, TIMING OF RECEIPT OF GOVERNMENT PERMITS, PLANNED DATES
FOR COMMENCEMENT OF PRODUCTION AT THE COMPANY'S MINING OPERATIONS
AND GOLD PRODUCTION AT THE COMPANY'S MINING PROPERTIES,
ANTICIPATED DRILLING AND RECLAMATION EXPENDITURES AS WELL AS
OTHER CAPITAL SPENDING, FINANCING SOURCES AND THE EFFECTS OF
REGULATION. SUCH FORWARD-LOOKING STATEMENTS ARE INHERENTLY
UNCERTAIN, AND INVESTORS MUST RECOGNIZE THAT ACTUAL RESULTS MAY
DIFFER FROM MANAGEMENT'S EXPECTATIONS. KEY FACTORS IMPACTING
CURRENT AND FUTURE OPERATIONS OF THE COMPANY INCLUDE THE FACTORS
DISCUSSED BELOW.
PROSPECTIVE PURCHASERS OF THE SHARES SHOULD CONSIDER
CAREFULLY THE FOLLOWING FACTORS IN ADDITION TO THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE MAKING AN
INVESTMENT IN THE SHARES.
VOLATILITY OF THE PRICE OF GOLD
The profitability of the Company's current operations is
affected by the market price of gold, which is currently at
depressed levels. The average daily closing spot price for gold
on the Commodity Exchange ("COMEX") dropped from approximately
$388 per ounce in 1996 to approximately $332 per ounce in 1997.
Gold continued to drop in 1998, falling to an 18 year low of $278
per ounce in January 1998. The average daily closing spot price
for gold in 1998 (through May 15, 1998) on COMEX was $299 per
ounce. Gold prices can fluctuate widely and are affected by
numerous factors beyond the Company's control, including
industrial and jewelry demand, expectations with respect to the
rate of inflation, the strength of the U.S. dollar (the currency
in which the price of gold is generally quoted) and of
5
<PAGE>
other currencies, interest rates, central bank sales, forward
sales by producers, global or regional political or economic
events and production costs in major gold-producing regions such
as South Africa and the former Soviet Union. In addition, the
price of gold sometimes is subject to rapid short-term changes
because of speculative activities.
The demand for and supply of gold affect gold prices, but
not necessarily in the same manner as supply and demand may
affect the prices of other commodities. The supply of gold
consists of a combination of new mine production and existing
stocks of bullion and fabricated gold held by governments, public
and private financial institutions, industrial organizations and
private individuals. As the amounts produced in any single year
constitute a very small portion of the total potential supply of
gold, normal variations in current production do not necessarily
have a significant impact on the supply of gold or on its price.
If the price of gold should decrease, the value of the
Company's gold properties which are being explored or developed
would also decrease and the Company might not be able to recover
its investment in those properties. The decision to place a mine
in production, and the commitment of funds necessary for that
purpose, must be made well in advance of the time when a mining
company will receive the first revenues from that production.
Price fluctuations between the time that such a decision is made
and the commencement of production can dramatically change the
economics of a mine. If the Company's revenue from gold sales
falls for a substantial period below its costs of production at
any or all of its operations, the Company could determine that it
is not economically feasible to continue commercial production at
any or all of its operations. One of the reasons the Company
ceased gold production activities from 1991 to 1993 was because
of depressed gold prices during that period.
The volatility of gold prices is illustrated in the
following table of annual high and low gold fixing prices per
ounce on the London P.M. Fix:
Year High Low
---------------------------------------------------------
1985................................... $341 $284
1986................................... 438 326
1987................................... 500 436
1988................................... 484 395
1989................................... 416 356
1990................................... 424 346
1991................................... 403 344
1992................................... 360 330
1993................................... 406 326
1994................................... 396 370
1995................................... 396 372
1996................................... 415 367
1997................................... 367 283
1998 (through May 15, 1998)............ 313 278
On May 15, 1998, the afternoon fixing for gold on the London
P.M. Fix was $301. Gold prices on the London P.M. Fix are
regularly published in most major financial publications and many
nationally recognized newspapers.
6
<PAGE>
CURRENT DEPENDENCE ON TWO PRODUCING PROPERTIES
All of the Company's operating revenues in 1997 were derived
from its mining operations at Kinsley, which mining operations
were completed in the first quarter of 1998. Future operating
revenues are dependent upon processing the remaining recoverable
gold on the leach pad at Kinsley and on gold production at
Griffon, which commenced gold production in January 1998. If
operations at Griffon and, to a lesser extent, Kinsley, were
interrupted or curtailed, the Company's ability to generate
operating revenues and earnings would be materially and adversely
affected unless and until other properties were put into
production.
LIMITED LIFE OF MINING PROJECTS
The Company derives all of its operating revenues from
mining projects which have a limited life. Mining at Kinsley was
completed in the first quarter of 1998, with remaining gold
production from heap leaching and pad rinsing expected to
continue in declining amounts through 2000. Based on the reserve
estimate as of December 31, 1997, the Company expects mining
activities at Griffon to continue for at least two years, with
gold production from heap leaching and pad rinsing to continue
thereafter in declining amounts through 2000. No assurance can
be given that the estimated time for completion of mining
activities at Griffon or gold production at Griffon and Kinsley
is accurate. Site development and construction began at
Olinghouse in May 1998; however, the Company has not yet
initiated production at either Olinghouse or its other primary
development stage property, Copper Flat. The Company's ability
to generate future operating revenues and earnings after Griffon
and Kinsley are depleted is dependent on its ability to bring one
or more of these or other properties into production. The
commencement of production at Copper Flat is subject to, among
other things, obtaining necessary governmental permits and
obtaining outside sources of funding. No assurance can be given
that the Company will have any mining properties in operation
once the mining and/or processing of ore from Griffon and Kinsley
or other future operating properties, if any, are completed.
GOVERNMENT PERMITS AND PROJECT DELAYS
The Company is seeking government permits and approvals for
the development of Copper Flat. Obtaining the necessary
government permits is a complex and time-consuming process
involving numerous federal, state and local agencies. The
duration and success of each permitting effort are contingent
upon many variables not within the Company's control.
Notwithstanding the Company's good faith expectations, no
assurance can be given that any government permit or approval
will be issued when anticipated or without conditions that may
have a material adverse effect on the project. In the context of
environmental permitting, including the approval of reclamation
plans, the Company must comply with existing standards, laws and
regulations which may entail unexpected costs and delays
depending on the nature of the activity to be permitted and the
interpretation of the regulations implemented by the permitting
authority. Substantial delays in obtaining, or a failure to
obtain, certain government permits or approvals without
burdensome conditions could have a material adverse effect on the
Company's business and operations.
An owner of real property known as the Ladder Ranch, near
Copper Flat in New Mexico, has threatened to challenge the
permitting and opening of Copper Flat. The owner of the Ladder
Ranch has raised concerns that operations at Copper Flat would
affect his quality of life and is allegedly concerned about the
impact of Copper Flat's operations on the environment. The
Company believes that the allegations made by the owner of the
Ladder Ranch are without merit, and it intends to vigorously
defend
7
<PAGE>
any such challenge to Copper Flat. However, no assurance can be
given that any such challenge will not prevent or delay the
permitting or opening of Copper Flat.
UNCERTAINTY OF FUNDING
Mining operations require a substantial amount of capital
prior to the commencement of, and in connection with, the actual
production of gold. Such capital requirements relate to the
costs of, among other things, acquiring mining claims and
properties, obtaining government permits, exploration and
delineation drilling to determine the underground configuration
of the ore body, designing and constructing the mine and process
facilities, purchasing and maintaining mining equipment, and
complying with bonding requirements established by various
regulatory agencies regarding the future restoration and
reclamation activities for each property.
For the last nine calendar months of 1998, the Company has
budgeted cash expenditures of (i) $17.1 million to put Olinghouse
into production, including $11.1 million for additional
equipment, $4.3 million for deferred development and working
capital and $1.7 for site development and facilities, (ii) $8.2
million for debt amortization, (iii) $0.8 million for permitting
and holding costs, primarily for Copper Flat and Lookout
Mountain, and (iv) $0.4 million for exploration and reclamation.
These expenditures are expected to be funded from (i) the $17.0
million Revolving Credit and Term Loan, (ii) the $4.7 million
Interim Loan, (iii) $2.7 million in additional equipment loans,
which are being negotiated, and (iv) funds from revenues
generated from Griffon, Kinsley and, later in the year,
Olinghouse, which is scheduled to begin gold production in August
1998. No assurance can be given that (i) expenditures will not
exceed budgeted amounts, (ii) the Company will be able to obtain
the $2.7 million in additional equipment loans or (iii) the
Company's mines will be able to meet their anticipated gold
production rates.
ENVIRONMENTAL CONTROLS
The Company is required to comply with numerous
environmental laws and regulations imposed by federal and state
authorities. At the federal level, legislation such as the Clean
Water Act, the Clean Air Act, the Federal Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the National
Environmental Policy Act impose effluent and waste standards,
performance standards, air quality and emissions standards and
other design or operational requirements for various components
of mining and mineral processing, including gold ore mining and
processing. Although the majority of the waste produced by the
Company's operations are "extraction" and "beneficiation" wastes,
which the United States Environmental Protection Agency ("EPA")
does not regulate under its current "hazardous waste" program,
the EPA is currently developing a separate program under the RCRA
to regulate such waste. Until the new regulatory program is
formally proposed by the EPA, there is not a sufficient basis on
which to predict the potential impacts of such regulations on the
Company.
Many states, including the State of Nevada (where a majority
of the Company's properties are located), have also adopted
regulations that establish design, operation, monitoring, and
closing requirements for mining operations. Under these
regulations, mining companies are required to provide a
reclamation plan and financial assurance to insure that the
reclamation plan is implemented upon completion of mining
operations. Additionally, Nevada and other states require mining
operations to obtain and comply with environmental permits,
including permits regarding air emissions and the protection of
surface water and groundwater.
8
<PAGE>
The Company's compliance with federal and state
environmental laws may necessitate significant capital outlays or
delays, may materially and adversely affect the economics of a
given property, or may cause material changes or delays in the
Company's intended exploration, development and production
activities. Further, new or different environmental standards
imposed by governmental authorities in the future could adversely
affect the Company's business activities.
PROPOSED LEGISLATION AFFECTING THE MINING INDUSTRY
During the past several years, the United States Congress
considered a number of proposed amendments to the General Mining
Law of 1872, as amended (the "General Mining Law") which governs
mining claims and related activities on federal lands. In 1992,
a holding fee of $100 per claim was imposed upon unpatented
mining claims located on federal lands. Beginning in October
1994, a moratorium on processing of new patent applications was
approved. In addition, a variety of legislation is now pending
before the United States Congress to amend further the General
Mining Law. The proposed legislation would, among other things,
change the current patenting procedures, limit the rights
obtained in a patent, impose royalties on unpatented claims, and
enact new reclamation, environmental controls and restoration
requirements. The royalty proposals range from a 2% royalty on
"net profits" from mining claims to an 8% royalty on modified
gross income/net smelter returns. The extent of any such changes
that may be enacted is not presently known and the potential
impact on the Company as a result of future congressional action
is difficult to predict. If enacted, the proposed legislation
could adversely affect the economics of development of operating
mines on the federal unpatented mining claims held by the
Company. Many of the Company's properties, including Griffon and
portions of Olinghouse and Copper Flat, consist of unpatented
mining claims on federal lands. The Company's financial
performance could therefore be materially and adversely affected
by passage of all or pertinent parts of the proposed legislation.
UNCERTAINTY OF DEVELOPMENT PROPERTY ECONOMICS
Exploration for and production of minerals is highly
speculative and involves greater risks than are inherent in many
other industries. Many exploration programs do not result in the
discovery of mineralization, and any mineralization discovered
may not be of sufficient quantity or quality to be profitably
mined. Also, because of the uncertainties in determining
metallurgical amenability of any minerals discovered, the mere
discovery of mineralization may not warrant the mining of the
minerals on the basis of available technology.
The Company's decision as to whether any of the mineral
development properties it now holds or which it may acquire in
the future contain commercially minable deposits, and whether
such properties should be brought into production, depends upon
the results of its exploration programs and/or feasibility
analyses and the recommendations of engineers and geologists.
The decision will involve the consideration and evaluation of a
number of significant factors, including, but not limited to,
the: (i) receipt of government permits; (ii) costs of bringing
the property into production, including exploration and
development work, preparation of feasibility studies and
construction of production facilities; (iii) availability and
costs of financing; (iv) ongoing costs of production; (v) market
prices for the metals to be produced; and (vi) estimates of
reserves or mineralization. No assurance can be given that any
of the development properties the Company owns, leases or
acquires contain (or will contain) commercially minable mineral
deposits, and no assurances can be given that the Company will
ever generate a positive cash flow from production operations on
such properties. The Company has identified Olinghouse and
Copper Flat as having minable reserves. No assurance can be
given, however, that either of these development properties can
attain profitable operations.
9
<PAGE>
COMPETITION AND SCARCITY OF MINERAL LANDS
Although many companies and individuals are engaged in the
mining business, including large, established mining companies,
there is a limited supply of desirable mineral lands available
for claim staking, lease or other acquisition in the United
States and other areas where the Company contemplates conducting
exploration and/or production activities. The Company may be at
a competitive disadvantage in acquiring suitable mining
properties since it must compete with these other individuals and
companies, many of which have greater financial resources and
larger technical staffs than the Company. As a result, there can
be no assurance the Company will be able to acquire new reserves
or replace its current reserves once they are depleted.
RESERVES ESTIMATES
The reserves reported in that certain Pincock Allen & Holt
report dated March 6, 1998 are based upon estimates and no
assurance can be given that the Company will recover the
indicated amount of metals. Further, estimated reserves for
properties that have not yet commenced production (such as
Olinghouse and Copper Flat) may require revision if the Company
commences actual production. Fluctuations in the market price of
the metals produced by the Company as well as increased
production costs or reduced recovery rates, could make the mining
of ore reserves containing relatively lower grades of
mineralization uneconomic, and could ultimately cause the Company
to restate its reserves. Moreover, short-term operating factors
relating to the ore reserves, such as the need for sequential
development of ore bodies and the processing of new or different
ore grades, could adversely affect the Company's profitability in
any particular accounting period.
UNCERTAINTY OF TITLE
A majority of the Company's properties consist of unpatented
mining claims or mill site claims which the Company owns or
leases. These claims are located on federal land or involve
mineral rights which are subject to the claims procedures
established by the General Mining Law. Under this law, if a
claimant complies with the statute and the regulations for the
location of a mining claim or mill site claim, the claimant
obtains a valid possessory right to the land or the minerals
contained therein. To preserve an otherwise valid claim, the
claimant must also make certain additional filings with the
county in which the land or mineral is situated and the Bureau of
Land Management, and pay an annual holding fee of $100 per claim.
If a claimant fails to make the annual holding payment or make
the required filings, the mining claim or mill site claim is void
or voidable.
Because mining claims and mill site claims are self-
initiated and self-maintained rights, they are subject to unique
vulnerabilities not associated with other types of property
interests. It is difficult to ascertain the validity of
unpatented mining claims or mill site claims from public property
records and, therefore, it is difficult to confirm that a
claimant has followed all of the requisite steps for the
initiation and maintenance of a claim. The General Mining Law
requires the discovery of a valuable mineral on each mining claim
in order for such claim to be valid, and mining claims may be
challenged by rival mining claimants and the United States.
Under judicial interpretations of the rule of discovery, the
mining claimant has the burden of proving that the mineral found
is of such quality and quantity as to justify further
development, and that the deposit is of such value that it can be
mined, removed and disposed of at a profit. The burden of
showing that there is a present profitable market applies not
only to the time when the claim was located, but also to the time
when such claim's validity is challenged. It is therefore
conceivable that, during times of falling metal prices, claims
which were valid when they were located could become invalid if
challenged.
10
<PAGE>
Title to unpatented claims and other mining properties in
the western United States typically involves certain other
inherent risks due to the frequently ambiguous conveyance history
of those properties, as well as the frequently ambiguous or
imprecise language of mining leases, agreements and royalty
obligations. No generally applicable title insurance is
available for mining or mill site claims. As a result, some of
the titles to the Company's properties may be subject to
challenge.
MINING RISKS AND INSURANCE
The Company's operations are subject to all of the operating
hazards and risks normally incident to exploring for and
developing mineral properties, such as unusual or unexpected
geological formations, environmental pollution, personal
injuries, flooding, cave-ins, changes in technology or mining
techniques, periodic interruptions because of inclement weather
and industrial accidents. Although the Company currently
maintains insurance within ranges of coverage consistent with
industry practice to ameliorate some of these risks, no assurance
can be given that such insurance will continue to be available at
economically feasible rates, or that the Company's insurance is
adequate to cover the risks and potential liabilities associated
with exploring, owning and operating its properties. Insurance
against environmental risks is not generally available to the
Company or to other companies in the mining industry.
RISK OF HEDGING STRATEGIES
In order to mitigate some of the risks associated with
fluctuating gold prices, the Company has in the past and may in
the future use various price hedging strategies, such as selling
future contracts for gold, or using call and put options, to lock
in delivery prices for its gold production. The Company
continually evaluates the potential short- and long-term benefits
of engaging in such price hedging strategies based upon the then
current market conditions. In addition, lenders may from time to
time require the Company to use such hedging strategies. No
assurance can be given, however, that the use of price hedging
strategies will always benefit the Company. There is a
possibility that the Company could lock in forward deliveries at
prices lower than the market price at the time of delivery. The
Company could also be subject to margin calls if the market price
of gold were to significantly rise above the contracted forward
delivery prices, which could materially and adversely affect the
Company's cash flows and financial condition. In addition, the
Company could fail to produce enough gold to satisfy its forward
delivery obligations, causing the Company to purchase gold in the
spot market at higher prices to fulfill its delivery obligations.
UNKNOWN ENVIRONMENTAL LIABILITIES FOR PAST ACTIVITIES
Mining operations involve a potential risk of releases to
soil, surface water and groundwater of metals, chemicals, fuels,
liquids having acidic properties and other contaminants. In
recent years, regulatory requirements and improved technology
have significantly reduced those risks. However, those risks
have not been eliminated, and the risk of environmental
contamination from present and past mining activities exists for
mining companies. Companies may be liable for environmental
contamination and natural resource damages relating to properties
which they currently own or operate or at which environmental
contamination occurred while or before they owned or operated the
properties. The Company has conducted limited reviews of
potential environmental cleanup liability at its operating and
primary development properties, as well as other properties
acquired by the Company subsequent to 1992. The Company has
conducted limited or no reviews of potential environmental
cleanup liability at other properties owned currently or
previously by the Company. On a few occasions at operating
sites, the Company has detected leaks in excess of allowable
rates in the primary liners at heap leach pads or ponds. In each
such case, the pad or pond was equipped with a second liner and
either the location of the leak in the primary liner was taken
out of service or the leak was repaired. Other than known
conditions which
11
<PAGE>
will be remediated pursuant to approved or proposed reclamation
plans, the Company is not aware of any significant environmental
contamination which could give rise to cleanup obligations or
natural resource damages on the part of the Company as a result
of past activities (by the Company or others) on these
properties. However, no assurance can be given that potential
liabilities for such contamination or damages caused by past
activities at these properties do not exist.
EFFECT OF CERTAIN ANTI-TAKEOVER PROVISIONS
The Company's Bylaws contain certain measures designed to
make it more difficult and time consuming to change majority
control of the Company's Board of Directors and to reduce the
vulnerability of the Company to an unsolicited offer to take
control of the Company. The Company has also entered into
employment agreements with its Chief Executive Officer, Chief
Financial Officer and Vice President of Engineering and
Construction which provide for certain payments upon termination
or resignation resulting from a change in control of the Company.
Furthermore, Nevada's "Combination with Interested Stockholders
Statute" and "Control Share Acquisition Statute" may have the
effect of delaying or making it more difficult to effect a change
in control of the Company.
These corporate and statutory anti-takeover measures may
have certain negative consequences, including an effect on the
ability of stockholders of the Company or other individuals to
(i) change the composition of the incumbent Board of Directors;
(ii) benefit from certain transactions which are opposed by the
incumbent Board of Directors; and (iii) make a tender offer or
otherwise attempt to gain control of the Company, even if such
attempt was beneficial to the Company and its stockholders.
Since such measures may also discourage accumulations of large
blocks of the Company's Common Stock by purchasers whose
objective is to seek control of the Company or have such Common
Stock repurchased by the Company (or other persons) at a premium,
these measures could also depress the market price of the
Company's Common Stock. Accordingly, stockholders may be
deprived of certain opportunities to realize the "control
premium" associated with takeover attempts.
RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS
The Company periodically considers the acquisition of mining
claims, properties and businesses. In connection with any such
future acquisitions, the Company may incur indebtedness or issue
equity securities, resulting in dilution of the percentage
ownership of existing stockholders. The Company intends to seek
stockholder approval for any such acquisitions only to the extent
required by applicable law, regulations or stock market listing
rules.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the services of certain key
executives, including Robert N. Pratt, Chief Executive Officer,
President and Chairman of the Board of Directors, and John A.
Bielun, Senior Vice President and Chief Financial Officer. The
loss of either of these individuals could have a material adverse
effect on the Company's business and operations. The Company
currently does not have key person insurance on these
individuals. The Company has entered into employment agreements
with certain of its key executives, including Messrs. Pratt and
Bielun. Each of these employment agreements expires in October
1998.
12
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds directly from the
sale of the Shares by the Selling Stockholders. The aggregate
proceeds to the Selling Stockholders from the sale of the Shares
will be the sale price of the Shares sold, less the aggregate
underwriters' commissions and discounts, if any, and the expenses
of distribution not borne by the Company. The Company has agreed
to pay certain expenses of the registration of the Shares.
SELLING STOCKHOLDERS
The table below sets forth the names of the Selling
Stockholders, the number of Shares which may be sold respectively
by the Selling Stockholders as of the date of this Prospectus
(assuming a closing price of $2.48675 for the Warrants to be
granted in the third tranche), regardless of whether such Selling
Stockholders have a present intent to sell, and the number of
Shares which may be offered for resale pursuant to this
Prospectus. The number of Shares included in the registration
statement on file with the Commission of which this Prospectus is
a part (i) is based upon the actual number of Shares underlying
the Warrants issued in the first and second tranches, and upon an
estimate of the number of Shares underlying the Warrants to the
issued in the third tranche using a hypothetical closing price of
$2.48675 (which was the closing price of the Common Stock on May
15, 1998, which date was arbitrarily selected) and assuming the
total outstanding principal amount of the Debentures on September
30, 1998 is $4,700,000; (ii) is subject to adjustment; and (iii)
could be materially less or more than such estimated amount
depending on factors which cannot be predicted by the Company at
this time, including, among others, the future market price of
the Common Stock and outstanding principal balance of the
Debentures on September 30, 1998. The use of such hypothetical
price is not intended, and should in no way be construed, to
constitute a prediction as to the future market price of the
Common Stock.
Except for the ownership of the Debentures and the Warrants
and any Shares upon the exercise thereof, the Selling
Stockholders have not had any material relationship with the
Company or any of its predecessors or affiliates within the past
three years. The information included below is based upon
information provided by the Selling Stockholders. Because the
Selling Stockholders may offer all, some or none of the Shares,
no definitive estimate as to the number of Shares thereof that
will be held by the Selling Stockholders after this offering of
the Shares can be provided and the table below has been prepared
on the assumption that all of the Shares offered under this
Prospectus will be sold to unaffiliated parties. The Shares are
being registered to permit public secondary trading of the
Shares, and the Selling Stockholders may offer the Shares for
resale from time to time. See "Plan of Distribution."
The Shares being offered by the Selling Stockholders hereby
are issuable by the Company to the Selling Stockholders upon the
exercise of the Warrants. Pursuant to the terms of the Master
Agreement, the Company agreed to issue the Warrants to the
Selling Stockholders in three tranches based upon the closing
price of the Common Stock, and upon the outstanding principal
amount of the Debentures, on November 15, 1997, March 31, 1998
and September 30, 1998. The Exercise Price is 120% of the
closing price of the Common Stock on the respective issuance date
of the Warrants. On November 15, 1997, the Company issued
Warrants to purchase 231,724 shares of Common Stock at an
Exercise Price of $2.175 per share. On March 31, 1998, the
Company issued Warrants to purchase 318,222 shares of Common
Stock at an Exercise Price of $2.3625 per share. The total
outstanding principal amount of the Debentures was $4,700,000 as
of May 15, 1998.
13
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENTAGE
NUMBER OF SHARES BENEFICIALLY BENEFICIALLY
BENEFICIALLY NUMBER OF OWNED AFTER OWNED AFTER
OWNED<F1>,<F2>,<F3> SHARES THAT THE SALE OF THE THE SALE OF
SELLING STOCKHOLDER MAY BE SOLD<F2>,<F3>,<F4> SHARES<F5> THE SHARES
- ---------------------------- -------------------- ------------------------- --------------- --------------
<S> <C> <C> <C> <C>
RGC International
Investors, LDC 2,062,759<F6> 411,755 1,651,004 4.9
The Tail Wind Fund Ltd. 263,808<F7> 79,104 184,704 *
Nelson Partners<F12> 600,899<F8> 139,139 461,760 1.4
Olympus Securities, Ltd.<F12> 600,899<F9> 139,139 461,760 1.4
Halifax Fund L.P. 45,700<F10> 44,309 1,391 *
Keyway Investments Ltd. 22,069<F11> 22,069 -0- *
____________________
* Beneficial ownership does not exceed 1% of the outstanding
Common Stock.
<FN>
<F1> Except as otherwise provided, the Selling Stockholders have
and will have sole voting and sole investment power with
respect to all Shares owned.
<F2> Includes the estimated number of shares of the Common Stock
(835,515 in total) issuable upon the exercise of all the
Warrants. The calculation of the shares of the Common Stock
issuable upon the exercise of the Warrants, assumes (i) a
hypothetical closing price of $2.48675 for the Warrants to
be issued in the third tranche, which price was the closing
price for the Common Stock on the Nasdaq National Market
(as reported by the Wall Street Journal on May 15, 1998);
and (ii) a total outstanding principal balance of the
Debentures of $4,700,000, which balance was the total
outstanding principal balance for the Debentures on May
15, 1998. Therefore, the assumed results in Share
ownership may differ from what actual Share ownership
will be on the actual date of the exercise of the Warrants
to be issued in the third tranche. In addition, pursuant
to the terms of the Warrants, the Warrants are
exercisable by the holders thereof only to the extent that
the number of shares of the Common Stock to be issued
upon a particular exercise together with the number of
shares of the Common Stock then held by such holder and
its affiliates (excluding Shares underlying the
unexercised portion of the Warrant or unconverted
portions of the Debentures), would not exceed 4.9% of the
then outstanding shares of the Common Stock as
determined in accordance with Section 13(d) of the Exchange
Act. Accordingly, the number of shares of the Common Stock
set forth above may exceed the actual number of Shares
that the Selling Stockholders could own beneficially at
any given time upon the exercise of all the Warrants.
In that regard, beneficial ownership as set forth in
the table is not determined in accordance with Rule
13d-3 under the Exchange Act.
<F3> Except as set forth in footnote 2 above, ownership is
determined in accordance with Rule 13d-3 under the Exchange
Act. Subject to the provisions of footnote 2 above, the
actual number of Shares beneficially owned and offered
for sale hereunder is subject to adjustment and could be
materially less or more than the estimated amount
indicated depending upon factors which cannot be
predicted by the Company at this time, including, among
others, the closing price of the Common Stock and the
outstanding principal balance of the Debentures on
September 30, 1998.
<F4> The amount of the Common Stock offered under this
Prospectus and included in the registration statement
of which this Prospectus is a part is the actual number of
shares issuable upon the exercise of the Warrants granted
in the first and second tranches (549,946), and 150% of
the estimated number of shares issuable upon the exercise
of the Warrants to be granted in the third tranche
(428,355) using a hypothetical closing price of $2.48675
and assuming a total outstanding principal balance of the
Debentures of $4,700,000. In addition, the total amount
of the Common Stock offered under this Prospectus and
included in the registration statement of which this
Prospectus is a part includes a presently indeterminate
number of shares of the Common Stock issuable upon the
exercise of the Warrants, as such number may be adjusted
as a result of stock splits, stock dividends and
antidilution provisions (including the floating closing
price of the Warrants to be granted in the third tranche)
in accordance with Rule 416 of the Securities Act.
<F5> Assumes the sale of all of the Shares issuable upon the
exercise of the Warrants to persons who are not affiliates
of the Selling Stockholders.
<F6> Includes (i) 1,062,049 Shares issuable upon conversion of
the Debentures, assuming a conversion price of $2.165625
(90% of the average of the closing bid price of the Common
Stock for the five consecutive trading days ended May
14, 1998 or $2.40625) and the payment of all accrued
interest in cash; and (ii) 411,755 Shares issuable upon
the exercise of the Warrants, assuming (y) a hypothetical
closing price of $2.48675 for the Warrants to be issued
in the third tranche; and (z) an outstanding principal
balance of the Debentures of $2,300,000.
<F7> Includes (i) 184,704 Shares issuable upon conversion of the
Debentures, assuming a conversion price of $2.165625
(90% of the average of the closing bid price of the Common
Stock for the five consecutive trading days ended May
14, 1998 or $2.40625) and the payment of all accrued
interest in cash; and (ii) 79,104 Shares issuable upon the
exercise of the Warrants, assuming (y) a hypothetical
closing price of $2.48675 for the Warrants to be issued
in the third tranche; and (z) an outstanding principal
balance of the Debentures of $400,000.
<F8> Includes (i) 461,760 Shares issuable upon conversion of the
Debentures, assuming a conversion price of $2.165625
(90% of the average of the closing bid price of the Common
Stock for the five consecutive trading days ended May
14, 1998 or $2.40625) and the payment of all accrued
interest in cash; and (ii) 139,139 Shares issuable upon
the exercise of the Warrants, assuming (y) a hypothetical
closing price of $2.48675 for the Warrants to be issued
in the third tranche; and (z) an outstanding principal
balance of the Debentures of $1,000,000.
14
<PAGE>
<F9> Includes (i) 461,760 Shares issuable upon conversion of the
Debentures, assuming a conversion price of $2.165625 (90%
of the average of the closing bid price of the Common
Stock for the five consecutive trading days ended May
14, 1998 or $2.40625) and the payment of all accrued
interest in cash; and (ii) 139,139 Shares issuable upon
the exercise of the Warrants, assuming (y) a hypothetical
closing price of $2.48675 for the Warrants to be issued
in the third tranche; and (z) an outstanding principal
balance of the Debentures of $1,000,000.
<F10> Includes 44,309 Shares issuable upon the exercise of the
Warrants.
<F11> Includes 22,069 Shares issuable upon the exercise of the
Warrants.
<F12> Citadel Limited Partnership is the managing general
partner of Nelson Partners and the trading manager of
Olympus Securities (collectively, the "Citadel Entities")
and consequently has voting control and investment
discretion over securities held by the Citadel Entities.
The ownership for each of the Citadel Entities does not
include the ownership information for the other Citadel
Entities. Citadel Limited Partnership and each of
the Citadel Entities disclaims beneficial ownership of
the Shares held by the other Citadel Entities.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The Shares being offered by the Selling Stockholders or
their respective pledgees, donees, transferees or other
successors in interest, may be sold in one or more transactions
(which may involve block transactions) on the Nasdaq National
Market or on such other market on which the Common Stock may from
time to time be trading, in privately-negotiated transactions,
though the writing of options on the Shares, short sales or any
combination thereof. The sale price to the public may be the
market price prevailing at the time of sale, a price related to
such prevailing market price or such other price as the Selling
Stockholders determine from time to time. The Shares may also be
sold pursuant to Rule 144. The Selling Stockholders shall have
the sole and absolute discretion not to accept any purchase offer
or make any sale of Shares if they deem the purchase price to be
unsatisfactory at any particular time.
The Selling Stockholders or their respective pledgees,
donees, transferees or other successors in interest, may also
sell the Shares directly to market makers acting as principals
and/or broker-dealers acting as agents for themselves or their
customers. Brokers acting as agents for the Selling Stockholders
will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing
the Shares will do so for their own account and at their own
risk. It is possible that a Selling Stockholder will attempt to
sell shares of Common Stock in block transactions to market
makers or other purchasers at a price per share which may be
below the then market price. There can be no assurance that all
or any of the Shares offered hereby will be issued to, or sold
by, the Selling Stockholders. The Selling Stockholders and any
brokers, dealers or agents, upon effecting the sale of any of the
Shares offered hereby, may be deemed "underwriters" as that term
is defined under the Securities Act or the Exchange Act, or the
rules and regulations thereunder.
The Selling Stockholders, alternatively, may sell all or any
part of the Shares offered hereby through an underwriter. No
Selling Stockholder has entered into any agreement with a
prospective underwriter and there is no assurance that any such
agreement will be entered into. If a Selling Stockholder enters
into such an agreement or agreements, the relevant details will
be set forth in a supplement or revisions to this Prospectus.
The Selling Stockholders and any other person participating
in the sale or distribution of the Shares will be subject to
applicable provisions of the Exchange Act and the rules and
regulations thereunder, which provisions may limit the timing of
purchases and sales of any of the Shares by the Selling
Stockholders or any other such person. The foregoing may affect
the marketability of the Shares.
The Company has agreed to indemnify the Selling
Stockholders, or their transferees or assignees, against certain
liabilities, including liabilities under the Securities Act, or
to contribute to payments the Selling Stockholders or their
respective pledgees, donees, transferees or other successors in
interest, may be required to make in respect thereof.
15
<PAGE>
LEGAL MATTERS
The validity of the Shares being offered hereby will be
passed upon for the Company by Kummer Kaempfer Bonner & Renshaw,
Las Vegas, Nevada.
EXPERTS
The financial statements of the Company incorporated by
reference in this Prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said
reports.
The Company's ore reserves incorporated by reference into
this Prospectus have been audited by the independent engineering
firm of Pincock, Allen & Holt, and are included herein in
reliance upon the authority of said firm as an expert in such
matters.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Exchange Act and in accordance therewith files reports, proxy
and information statements and other information with the
Commission. Such reports, proxy and information statements and
other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the following Regional Offices of
the Commission: Northwest Atrium Center, 400 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such
material may be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission a registration
statement (the "Registration Statement") on Form S-3 under the
Securities Act, of which this Prospectus constitutes a part, with
respect to the Shares. The Registration Statement, including
exhibits and schedules thereto, may be obtained from the
Commission's principal office at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the fees
prescribed by the Commission. Statements contained in this
Prospectus as to the contents of any document referred to are not
necessarily complete and in each instance reference is made to
the copy of the appropriate document filed as an exhibit to, or
incorporated by reference into, the Registration Statement, each
statement being qualified in all respects by such reference. In
addition, the Commission maintains a web site that contains
reports, proxy and information statements, and other information
regarding registrants that file electronically with the
Commission. The Company is such a filer. The Commission web
site address is (HTTP://WWW.SEC.GOV).
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.01 Specimen certificate for the Common Stock of the
Company, is incorporated by reference to the
Company's Registration Statement on Form S-3 (file
no. 33-84046) filed on September 16, 1994.
4.02 Form of Master Agreement dated as of November 11,
1998, by and among Alta Gold Co. and RGC
International Investors, LDC, The Tailwind Fund,
Ltd., Keyway Investments Ltd., Olympus Securities,
Ltd., Nelson Partners and Halifax, L.P., including
Form of Warrant to Purchase Shares of Common Stock
and Form of First Amendment to Convertible Debenture
is incorporated by reference to the Company's Annual
Report Form 10-K (file no. 2-2274) for the year ended
December 31, 1997, Part IV, Item 14, Exhibit No.
10.44.
5.01 Opinion and consent of Kummer Kaempfer Bonner &
Renshaw as to the legality of the Shares.
23.01 Consent of Kummer Kaempfer Bonner & Renshaw,
contained in Exhibit 5.01.
23.02 Consent of Arthur Andersen LLP.
23.03 Consent of Pincock, Allen & Holt.
24.01 Power of Attorney (see p. II-4).
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Pre-effective Amendment No. 1 to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Henderson,
State of Nevada on May 20, 1998.
Alta Gold Co.
By: *
--------------------------------------
Robert N. Pratt
Chairman of the Board, Chief Executive
Officer and President
<TABLE>
<CAPTION>
Pursuant to the requirements of the Securities Act, this
Pre-effective Amendment No. 1 to the Registration Statement has
been signed by the following persons in the capacities and on
the dates indicated.
<S> <C> <C>
* Chairman of the Board of Directors, Chief
- ----------------------- Executive Officer and President
Robert N. Pratt (Principal Executive Officer)
/s/ John A. Bielun Senior Vice President and Chief Financial Officer May 20, 1998
- -----------------------
John A. Bielun (Principal Financial and Accounting Officer)
* Director
- -----------------------
Ralph N. Gilges
* Director
- -----------------------
Thomas A. Henrie
* Director
- -----------------------
John A. Keily
* Director
- -----------------------
Jack W. Kendrick
* Director
- -----------------------
Thomas D. Mueller
*By: /s/ John A. Bielun (Attorney-in-Fact) May 20, 1998
------------------
John A. Bielun
</TABLE>
II-2
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------ ----------- ------
23.02 Consent of Arthur Andersen LLP. ALTA20
23.03 Consent of Pincock, Allen & Holt. ALTA22
<PAGE>
EXHIBIT 23.02
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated February 13, 1998, included in Alta Gold Co.'s
Form 10-K for the year ended December 31, 1997 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
May 15, 1998
Las Vegas, Nevada
<PAGE>
EXHIBIT 23.03
<PAGE>
[PINCOCK ALLEN & HOLT LETTERHEAD]
May 18, 1998
Mr. John Bielun
Chief Financial Officer
Alta Gold Co.
601 Whitney Ranch Road
Suite 10
Henderson, Nevada 89014
Dear Sirs:
Pincock, Allen & Holt, a mining consulting firm based in
Lakewood, Colorado, hereby consents to the incorporation by
reference in this registration statement our report entitled
"1997 Reserve Audit, Kinsley Mountain Mine, Griffon Mine,
Olinghouse Project, Copper Flat Project and Lookout Mountain
Project," dated March 6, 1998 and all references to our firm
included in or made part of Alta Gold Co.'s Annual Report or Form
10-K for the fiscal year ending December 31, 1997.
Sincerely,
PINCOCK, ALLEN & HOLT
/s/ John W. Rozelle
John W. Rozelle, C.P.G.
Principal Geologist
JWR/sp
