UNITED STATES
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): June 8, 2015
MAGELLAN GOLD CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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Nevada |
_ 333-174287 |
27-3566922 |
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(State or other jurisdiction of incorporation) |
Commission File Number |
(I.R.S. Employer Identification number) |
2010A Harbison Drive # 312, Vacaville, CA 95687
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (707) 884-3766
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(Former name or former address, if changed since last report)
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Written communications pursuant to Rule 425 under the Securities Act |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
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Item 5.02 |
Departure of Directors or Certain Officers.; Election of Directors; Appointments of Certain Officers; Compensatory Arrangements of Certain Officers |
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Item 7.01 |
Regulation FD Disclosure |
Effective June 1, 2015, the Boards of Directors of Magellan Gold Corporation ( “ Magellan ” ) and its mineral subsidiary Gulf & Western Industries, Inc. ( “ Gulf & Western ” ) appointed W. Pierce Carson to the positions of President, Chief Executive Officer and a Director of Gulf & Western. On June 10, 2015, Magellan issued a press release, filed herewith, announcing Mr. Carson ’ s appointment.
Mr. Carson has over 40 years of experience in the mining industry and has managed the discovery, financing, development and operation of precious metals, base metals and industrial minerals properties in the United States, Australia, Africa and Papua New Guinea. He has been responsible for or closely involved with a number of mineral deposits that have been developed into mines. Mr. Carson held the positions of Senior Geologist, Overseas Mineral Evaluation, and Exploration Manager, Australia for Exxon Minerals Company; Manager of Precious Metals Exploration, North America for Kennecott Copper Corporation; President and Director of Mining & Exploration Operations in Australia, Papua New Guinea, USA, Canada and Mexico for Nord Pacific Ltd.; President and Vice-President of Exploration for Nord Resources Corporation; and Chief Executive Officer for Santa Fe Gold Corporation. Mr. Carson holds a PhD in Economic and Structural Geology and an MS in Ore Deposits from Stanford University, and a Bachelor ’ s Degree in Geology from Princeton University.
There are no arrangements or understandings between Mr. Carson and any other persons pursuant to which he was elected an officer. Except as described herein, Mr. Carson has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Mr. Carson does not have a family relationship with any member of the Boards of Directors of Magellan or Gulf & Western or any executive officer of those companies.
Compensatory Arrangements of Certain Officers
Employment Agreement
Gulf &Western and Mr. Carson have entered into the Employment Agreement in connection with the appointment of Mr. Carson as the President, Chief Executive Officer and a Director of Gulf & Western effective June 1, 2015. The Employment Agreement is filed as an Exhibit hereto.
In connection with his appointment, Gulf & Western issued Mr. Carson restricted shares of its common stock representing 15% of the total issued and outstanding shares in return for one year of his services. Mr. Carson also has agreed to provide Gulf & Western with a list of mineral properties for potential acquisition. If Gulf & Western elects to proceed with acquisition of any listed property, Gulf & Western and Mr. Carson, acting reasonable, will determine the amount of compensation, if any, due Mr. Carson related to acquisition of such property.
Item 9.01
Financial Statements and Exhibits
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Exhibits No. |
Exhibits |
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99.1 |
News release dated June 10, 2015 |
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10.1 |
Employment Agreement between Gulf & Western Industries, Inc. and W Pierce Carson effective June 1, 2015, dated June 8, 2015. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Magellan Gold Corporation |
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Date: June 11, 2015 |
By; __ / s/ John C. Power |
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John C. Power, President |
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EMPLOYMENT AGREEMENT
AGREEMENT made as of this 1 st day of June 2015 (“Effective Date”) by and between GULF & WESTERN INDUSTRIES, INC. (“Gulf & Western”), a Nevada Corporation with a registered office address of 3301 Jarbidge Way, Sparks, Nevada 89434 and W. PIERCE CARSON (“Carson”), an individual with an address of P.O. Box 831, Cedar Crest, New Mexico 87008.
WITNESSETH:
In consideration of the mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. Employment. Gulf & Western hereby employs Carson and Carson accepts such employment, for the Term (as defined below), with the duties and compensation and upon the terms and conditions hereinafter set forth in this Agreement.
2. Term. The term (“Term”) of Carson’s employment shall commence on June 1, 2015 and shall continue through and including May 31, 2016, unless earlier terminated as herein provided for in this Agreement. Prior to expiration of the Term, Gulf & Western and Carson may agree to extend the Term under new terms of compensation and conditions of employment, it being agreed that any such extension must be in writing signed by both parties.
3. Duties.
(a) Carson shall be the President and Chief Executive Officer (“CEO”) of Gulf & Western during the Term and shall perform the services as set forth in Gulf & Western’s bylaws and as Gulf & Western’s Board of Directors (“Board”) shall direct, which services shall be commensurate with Carson’s status as CEO of Gulf & Western. Carson shall perform his services subject only to the direction and control of the Board and will report only to the Board.
(b) During the Term, Carson shall devote at least half and up to substantially all of his working time and attention to the business and affairs of Gulf & Western as may be required to fulfill the duties of CEO, provided however that the Company acknowledges that Carson shall have the right to be a director or officer of other corporations not affiliated with Gulf & Western and that a portion of his time will be devoted to those other activities; provided that Carson’s positions and activities for such other corporations shall not be in conflict with the interests of Gulf & Western. Should a potential conflict arise, Carson shall discuss such potential conflict with the Board and shall obtain the consent of the Board in writing before proceeding with such positions or activities.
(c)
Upon execution of this Agreement, Carson shall be appointed as a director of Gulf & Western and shall devote such time and attention to the affairs of Gulf & Western as may be required to fulfill the duties of director. Carson shall not be entitled to any additional compensation for his services as director, and Carson’s service as a director shall terminate upon the termination of this agreement unless otherwise agreed in writing by Gulf & Western.
(d)
Carson shall at all times conduct himself in a manner consistent with his duty of loyalty to Gulf & Western and shall present all opportunities that may fit Gulf & Western’s corporate objectives of which he becomes aware during the Term.
(e)
Carson shall provide the Board with a confidential list of up to twelve mineral opportunities that may potentially fit Gulf & Western’s corporate objectives of which he became aware prior to the Term. Gulf & Western shall have a right to elect to pursue selected opportunities on reasonable terms of compensation to be agreed with Carson. Carson shall be free to pursue for his own account any opportunities Gulf & Western determines not to pursue, and also shall be free to pursue any opportunities that do not fall within Gulf & Western’s corporate objectives.
4. Compensation. The Company and Gulf & Western shall compensate Carson for his services during the Term in the form of stock in Gulf & Western and shall, contemporaneously herewith, issue to Carson restricted common stock such that following such new issue Carson owns fifteen percent (15%) of the outstanding stock in Gulf & Western. Although issued contemporaneously herewith, Gulf & Western shall not be required to certificate Carson’s stock until May 31, 2016. On or before May 31, 2016, Gulf & Western shall deliver the subject stock certificate(s) to Carson. Carson’s stock shall be subject to “lock up” and sale restrictions as provided in Section 9. Carson shall be solely responsible for paying any local, state or federal payroll taxes levied as a result of the issuance of the stock as compensation and agrees to indemnify and hold harmless Gulf & Western from any liability therefore.
5. Expenses. Gulf & Western will pay or reimburse Carson within 30 days for all travel and other expenses reasonably incurred by Carson during the Term in connection with the performance of his duties hereunder upon presentment of written expense receipts reflecting such expenses. Carson shall in advance incorporate estimated expenses in project budgets to be coordinated with the Board.
6. Discharge for Cause. The Board of Directors of Gulf & Western may discharge Carson For Cause at any time. Such discharge shall be effected by written notice to Carson which shall specify the reasons for Carson’s discharge and the effective date thereof. As used herein, the term “For Cause” shall mean only chronic alcoholism, drug addiction, criminal dishonesty or willful violation of direct written instructions from the Board relating to a material matter which directions are consistent with all applicable laws, rules and regulations and orders to which Carson or Gulf & Western are subject and the provisions of this Agreement unless cured within ten (10) days after notice. Upon
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termination of Carson’s employment as provided for in this Section 6, Carson shall forfeit that portion of the stock issued to him pursuant to Section 4 prorated from the date of termination to the end of the Term.
7. Voluntary Termination by Carson. Carson shall have the right to voluntarily terminate his employment with Gulf & Western during the Term. To effect such voluntary termination, Carson shall provide Gulf & Western at least 60 days advanced written notice of such termination. Upon termination of Carson’s employment as provided for in this Section 7, Carson shall forfeit that portion of the stock issued to him pursuant to Section 4 prorated from the date of termination to the end of the Term.
8. Indemnification. Gulf & Western shall indemnify Carson to the fullest extent permitted by law and the certificate of incorporation and bylaws of Gulf &Western from and against any loss, claim, liability and/or expense incurred for, or by reason of, or arising out of, acts of Carson as an officer and/or director of Gulf & Western or affiliated company or subsidiary.
9. Sale of Carson’s Gulf & Western Stock . Carson covenants with Gulf & Western that until the earlier of May 31, 2017 or his termination of employment with Gulf & Western, he shall “lock up” and not sell any of his stock. Carson further covenants that after the above “lock up” provision no longer applies, if he intends to sell stock he shall first offer to sell such stock to Gulf & Western and to the major shareholders of Gulf & Western.
10. Dispute Resolution. Any controversy or claim arising out of or relating to this Agreement and the obligations and responsibilities of the parties hereto or the breach or alleged breach by any of the parties of their respective obligations hereunder shall be settled by arbitration in the city of Denver, Colorado by one arbitrator in accordance with the then governing Rules of the American Arbitration Association. The written decision of the arbitrator shall be final and binding upon Magellan, Gulf & Western and Carson. Judgment upon the award rendered may be entered and enforced in any court of competent jurisdiction. Notwithstanding the above, any party shall be entitled to seek and obtain injunctive or similar relief from a court of competent jurisdiction where appropriate pending arbitration. The parties hereby submit to the exclusive jurisdiction of the courts of the State of Colorado or Federal Courts situated in Denver County, Colorado for such purpose and for purposes of enforcing any arbitration award. Gulf & Western shall pay all legal fees and expenses reasonably incurred by Carson in good faith as a result of any claim or arbitration arising from this Agreement.
11. Miscellaneous.
(a) This Agreement contains the entire understanding between the parties hereto concerning the subject matter hereof. Only an instrument in writing executed by the parties hereto may amend this Agreement.
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(b) This Agreement shall be construed and enforced in accordance with the laws of the State of Colorado.
(c) This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of the successor or successors of Gulf & Western whether by merger, consolidation or otherwise.
(d) Any notice to be given pursuant to the terms of this Agreement shall be in writing and delivered by hand or sent by registered or certified mail to such party at such party’s address set forth above or to such other address or to the attention of such other person as any party has specified by prior written notice to the other party.
(e) A party’s waiver of a breach of this Agreement by any other party shall not operate or be construed as a waiver of any subsequent breach of this Agreement by such other party. No waiver shall be valid unless in writing and signed respectively by an authorized officer of Gulf & Western and Carson.
(f) Carson acknowledges that his services are unique and personal. Accordingly, Carson shall not assign his rights or delegate his duties or obligations under this Agreement.
(g) Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
(h) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Magellan and Gulf & Western have caused this Agreement to be executed by its officers thereunto duly authorized, and Carson has executed this Agreement all as of the dates set forth below..
GULF & WESTERN INDUSTRIES, INC.
/s/ John C. Power ________________________
John C. Power
June 8, 2015
President and Director
W. PIERCE CARSON
/s/ W. Pierce Carson ______________________
W. Pierce Carson
June 8, 2015
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Magellan Gold Corporation Appoints Senior Mining Executive to Head its Minerals Subsidiary
Focus to be on the Company’s Silver District Property and on new mineral opportunities
FOR IMMEDIATE RELEASE
June 10, 2015
Reno, Nevada – Magellan Gold Corporation (OTCBB: MAGE) ( “ Magellan ” or “the Company ”) is pleased to announce that Dr. Pierce Carson has accepted the position of President and Chief Executive Officer of Gulf & Western Industries, Inc., the Company’s 85% owned minerals subsidiary. Dr. Carson is an unusually well qualified mining executive who has managed the discovery, financing, development and operation of mining properties internationally and domestically over an accomplished career spanning over forty years. Among the companies he has worked for are Exxon Minerals Company, Kennecott Copper Corporation, Nord Pacific Limited and Santa Fe Gold Corporation. Dr. Carson holds a PhD in Economic and Structural Geology and an MS in Ore Deposits from Stanford University, and a Bachelor’s Degree in Geology from Princeton University.
John Power, President & CEO of Magellan, said, “We are delighted to welcome Pierce and are fortunate to have the benefit of his vast experience in finding and developing new mines, especially at this critical time in the strategic growth of our company.”
Dr. Carson said, “I am excited about this challenge and will be focusing on advancing the Silver District property toward development and production. We also will be assessing new mineral opportunities with a view to acquiring additional quality projects. In particular we will be seeking properties with potential for early production.”
About the Silver District Property, La Paz Co., Arizona
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The Silver District Property in southwest Arizona is an advanced exploration to development stage project. It appears to have promising potential for development of a silver mine with by-products fluorspar, barite and lead-zinc.
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Historic recorded production during 1883-1893 from small underground mines was 1.56 million ounces silver and 2.33 million pounds lead.
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The property consists of over 2,000 acres of patented and unpatented mining claims and mill site claims, and an Arizona state mining lease. The project area covers all of the important mines and prospects in the Silver District. Mineralization is controlled by three principal sub-parallel vein systems extending over a collective strike length of eight miles.
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From 1973-1992, New Jersey Zinc Company and Orbex Minerals Ltd and its successor companies drilled 465 shallow holes for an aggregate length of 62,866 feet, conducted metallurgical test work and carried out scoping studies.
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In 2014, Magellan drilled three holes, one of which was designed to confirm results of historic drilling. Magellan’s hole PA-01 intersected 90 feet grading 6.05 opt silver (including 10 feet of 17.06 opt silver), which compares favourably to the historic result. PA-01’s 90-foot intercept also returned previously unreported zinc-lead mineralization averaging 4.71% zinc and 1.56% lead over the 90 feet, including 10 feet grading 8.35% zinc and 4.02% lead.
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In 1991, using polygonal methods, mineralization was estimated as 3,560,211 tons grading 4.46 opt silver (15,883,500 contained ounces silver). In 1992, the fluorspar mineralization was estimated as 2,263,772 tons grading 14.5% CaF2 (328,450 tons contained fluorspar). Included within the mineralization, substantial tonnages grade 17.0% barite (BaSO4) and 3.57% lead-zinc. These historic estimations of mineralization do not constitute a reserve estimation.
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Most drilling on the veins only extended 150-200 foot to shallow open pit depth and mineralization is open below that depth. There appears to be excellent potential to increase resources with deeper drilling. There also is promising potential to substantially expand the near-surface mineralization along strike extensions of known deposits and along untested vein segments.
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Conceptual development schemes by past operators have involved multiple open pits feeding a central mill. Flow sheet designs employ fine grinding and cyanide leaching to recover silver, and conventional flotation to recover fluorspar and barite. Forecast recoveries, supported by extensive bench and pilot scale metallurgical testing, were up to 65% for silver and up to 80% for fluorspar and barite. Additional work on metallurgical options offers the potential to further improve recoveries.
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Substantial additional work will be required in order to determine the feasibility of developing a new mine. Among other items, the work will need to include drilling, reserve estimation, metallurgical studies, mine and plant design and engineering, marketing studies and assessment of permitting issues. Until that work and a positive feasibility study is concluded, there can be no assurance that the property contains commercially recoverable minerals.
About Magellan Gold Corporation
Magellan Gold Corporation (OTCBB: MAGE) is a Nevada corporation engaged in the acquisition and exploration of precious metals mineral properties. The Company holds its properties through its 85% owned subsidiary Gulf & Western Industries, Inc.
The Silver District Property consists of 94 unpatented lode mining claims, 4 patented lode claims, an Arizona mining lease of 154.66 acres and 23 unpatented mill site claims, totalling over 2,000 acres. The property covers the heart of the historic Silver District in La Paz County, approximately 50 miles north of Yuma in southwest Arizona. Magellan completed the acquisition of the Silver District in September 2014 and formed a subsidiary Gulf + Western to take title to the project. The Sacramento Mountains Project comprises 50 lode claims totalling over 1,000 acres located near Needles, California.
Important Note:
We are currently in the exploration stage and have no proven or probable reserves, as those terms are defined by the Securities and Exchange Commission (“SEC”) on any of our properties.
In order to demonstrate the existence of proven or probable reserves under SEC guidelines, it would be necessary for us to advance the exploration of our Properties by significant additional delineation drilling to demonstrate the existence of sufficient mineralized material with satisfactory continuity which would provide the basis for a feasibility study which would demonstrate with reasonable certainty that the mineralized material can be economically extracted and produced. We do not have sufficient data to support a feasibility study with regard to the Properties, and in order to perform the drill work to support such feasibility study, we must obtain the necessary permits and funds to continue our exploration efforts. It is possible that, even after we have obtained sufficient geologic data to support a feasibility study on the Properties, such study will conclude that none of the identified mineral deposits can be economically and legally extracted or produced. If we cannot adequately confirm or discover any mineral reserves of precious metals on the Properties, we may not be able to generate any revenues. Even if we discover mineral reserves on the Properties in the future that can be economically developed, the initial capital costs associated with development and production of any reserves found is such that we might not be profitable for a significant time after the initiation of any development or production. The commercial viability of a mineral deposit once discovered is dependent on a number of factors beyond our control, including particular attributes of the deposit such as size, grade and proximity to infrastructure, as well as metal prices. In addition, development of a project as significant as the ones we might be planning will likely require significant debt financing, the terms of which could contribute to a delay of profitability.
To learn more about Magellan Gold Corporation, visit www.magellangoldcorp.com .
This release contains “forward-looking statements.” Such statements are based on good faith assumptions that Magellan Gold Corporation believes are reasonable but which are subject to a wide range of uncertainties and business risks that could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Factors that could cause actual results to differ from those anticipated are discussed in Magellan Gold Corporation’s periodic filings with the Securities and Exchange Commission.
Contact: John Power, President, Magellan Gold Corporation or
Dr. Pierce Carson, President, Gulf + Western Industries, Inc. (707) 884-3766