UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: September 30, 2021
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 |
For the transition period from __________ to __________
Commission file number: 333-171636
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GUSKIN GOLD CORPORATION |
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(Exact name of registrant as specified in its charter) |
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Nevada |
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27-1989147 |
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(State or other jurisdiction of Incorporation or organization) |
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(IRS Employer Identification No.) |
4500 Great America Parkway, PMB 38, Ste 100
Santa Clara, CA 95054
(Address of principal executive offices and zip code)
(408) 766-1511
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Par Value(s) |
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Name of each exchange on which registered |
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None |
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N/A |
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Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller Reporting company |
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Emerging Growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of March 31, 2021 (last business day of the registrant’s most recently completed second fiscal quarter), based upon the last reported trade on that date ($0.18), the aggregate market value of the voting and non-voting common equity held by non-affiliates (for this purpose, all outstanding and issued common stock minus stock held by the officers, directors and known holders of 10% or more of the Company’s common stock) was $4,176,227.70.
As of January 11, 2022, there were 51,201,265 shares of the issuer’s common stock, $0.001 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: None.
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GUSKIN GOLD CORP.
Form 10-K
INDEX
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PART I
FORWARD-LOOKING STATEMENTS
Some discussions in this Annual Report on Form 10-K contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and relate to future events or future financial performance. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Form 10-K. Forward-looking statements are often identified by words such as “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project,” “plans,” “seek” and similar expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology.
These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” below that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In addition, you are directed to factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section as well as those discussed elsewhere in this Form 10-K.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. However, readers should carefully review the risk factors set forth in other reports or documents the Company files from time to time with the Securities and Exchange Commission (the “SEC”), particularly the Company’s Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K. All written and oral forward-looking statements made subsequent to the date of this report and attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section.
YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS
The forward-looking statements made in this report on Form 10-K relate only to events or information as of the date on which the statements are made in this report on Form 10-K. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this report and the documents that we reference in this report, including documents referenced by incorporation, completely and with the understanding that our actual future results may be materially different from what we expect or hope.
ITEM 1. BUSINESS.
Corporate History
Guskin Gold Corp. (fka Inspired Builders, Inc.), a Nevada Corporation (the “Company”, “Guskin”, “we”, and “us”), was incorporated in the State of Nevada in February 2010, as Inspired Builders, Inc. We previously focused on repairing and providing home improvements for homeowners and then acquiring, investing in, developing, and managing real estate properties and related investments. On August 15, 2017, pursuant to another change in control transaction we ceased all operations as a real estate company.
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On January 16, 2020, Santa Alba, LLC, our former majority shareholder, sold 956,440 shares of common stock to Custodian Ventures, LLC for an aggregate purchase price of $145,000. At this point there was a change of control of the Company and Kai Ming Zhao resigned as President, Secretary, Treasurer and Director and David Lazar was appointed as President, Secretary, Treasurer and Director.
On April 30, 2020, Custodian Ventures, LLC, a Wyoming limited liability company (“CVL”) and the Company entered into a Stock Purchase Agreement (“Agreement”) with U Green Enterprise, a Ghana corporation (the “Purchaser”). The Agreement closed upon execution on April 30, 2020. Pursuant to the Agreement, CVL agreed to sell and Purchaser agreed to purchase 956,440 restricted common stock shares of the Company (the “Shares”), representing approximately 94.6% of the Company’s outstanding shares of common stock. The Agreement resulted in a change of control of the Company and David Lazar resigned effective immediately as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole director and Edward Somuah was appointed as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole director.
On September 3, 2020, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Guskin Gold Corporation, a Nevada limited liability company (“GGC”), and the controlling stockholders of GGC (the “GGC Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired One Hundred Percent (100%) the issued and outstanding equity interest of GGC from the GGC Shareholders (the “GGC Shares”) and in exchange the Company issued to GGC an aggregate of Twenty-Eight Million Two Hundred Thousand (28,200,000) shares of restricted common stock of the Company. As a result of the Share Exchange Agreement, GGC become a wholly owned subsidiary of the Company. The Share Exchange Agreement contains customary representations and warranties. Further, the Share Exchange Agreement contains the following conditions to closing and the closing of the Share Exchange shall only occur once the following conditions have been satisfied: (i) approval from the Company’s shareholders; and, (ii) GGC provides the Company with audited financial statements, with such financial statements being prepared by an independent accounting firm registered with the Public Company Accounting Oversight Board (PCAOB).
As of September 22, 2020 (the “Closing Date”), the transactions contemplated by the Share Exchange Agreement have been satisfied, accordingly the Share Exchange Agreement is closed (“Closing”).
Concurrent with the Closing of the Share Exchange Agreement, the Company’s Board of Directors, having received the written consent of shareholders holding a majority of the Company’s outstanding shares of common stock, approved: (i) an amendment to the Company’s Articles of Incorporation to change the Company’s name from Inspired Builders, Inc. to Guskin Gold Corp. (the “Corporate Name Change”); and (ii) a change to the Company’s OTC trading symbol from ISRB to GUSK, or if unavailable to GGCO or GKIN (the “Symbol Change”). Nevada corporate law permits holders of a majority of the voting power to take shareholder action by written consent. Accordingly, the Company did not hold a meeting of its shareholders to consider or vote upon the Corporate Name Change or Symbol Change. The Corporate Name Change and Symbol Change (to GKIN) became effective December 4, 2020.
The Share Exchange Agreement is qualified in its entirety by the complete copy of the Share Exchange Agreement, which was filed with the SEC on September 8, 2020, as part of our Current Report on Form 8-K as Item 10.01 and is incorporated by reference herein.
Our year end is September 30. We are a development stage enterprise. Accordingly, our current plan of operation consists of identifying, assessing, and vetting various gold and mineral properties, specifically focusing on gold properties and the exploration and potential development of small-scale gold mining operations in Africa, as discussed in detail below. As the new business operations and direction of the Company shall be that of its wholly owned subsidiary, Guskin Gold Corporation.
Our principal office is located at 4500 Great America Parkway, PMB 38, Ste 100 Santa Clara, CA 95054 and we maintain a mailing address as 2nd Brewery Link Box mp 2797, Momprobi-Accro, Ghana. Our telephone number is (408) 766-1511 and our e-mail contact is info@guskingold.com. Our website can be viewed at www.guskingold.com. The Company has not filed for bankruptcy, receivership or any similar proceedings nor is in the process of filing for bankruptcy, receivership, or any similar proceedings.
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Emerging Growth Company
We are an Emerging Growth Company as defined in the Jumpstart Our Business Startups (“JOBS”) Act.
We shall continue to be deemed an emerging growth company until the earliest of
(A) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
(B) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement;
(C) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b -2 of title 17, Code of Federal Regulations, or any ‘successor thereto’.
As an emerging growth company, we are exempt from Section 404(b) of Regulation S-K. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.
Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.
As an emerging growth company, we are exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.
We have elected not to opt out of the extended transition period for complying with any new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.
Our Growth Strategy & Corporate Values
Our long-term goal is to become a leading, sustainable, and efficient small to medium sized gold producer. We intend to achieve this through creating value for our shareholders by minimizing risks related to exploration, mining, and processing of our mineral resources and increasing efficiency. Our primary focus is on gold production in Ghana, West Africa, but we may diversify into other minerals and countries over time.
People
We believe that people are our most important asset, and it is our highest priority to create and maintain a safe and healthy working environment, from both personnel and an environmental prospective. We intend to operate all future properties and claims utilizing both cost effective and cutting-edge safety measures to ensure a sustainable working relationship for our employees and the communities in which we will operate.
Social responsibility
We intend to actively engage with the local communities in the areas in which we will operate by prioritizing the local population when employing staff.
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Responsible mining
Environmental responsibility is a central issue in a company with operations involving environmental risks. Accordingly, we intend to adhere to the social, environmental, and economic principles of sustainable development, and the ongoing role of sustainability as a critical differentiating factor in who we are and how we conduct our business. Our commitment to sustainability includes the promotion of fundamental human rights, especially of those who live in the communities where we operate and those with whom we work.
Integrity and Corporate Governance
We will strive to continually evaluate the Company’s compliance with corporate governance standards, reviewing and monitoring the effectiveness of the Company’s policies, standards and practices directed to ensuring that the Company complies with applicable laws and regulations and conforms with the highest standards of financial and ethical behavior.
Risk management
We will intend to establish, maintain, and evolve our risk management frameworks, systems, policies, standards and procedures to effectively manage financial, health, safety, environment, community and other operational risks and where those risks could have a material impact on the Company’s businesses and operations, formulating strategies for mitigating these risks for consideration by the Board.
Current Operations – Ghana, West Africa
Our business activity is the early-stage development of a business focusing on the acquisition of gold properties, and the exploration and potential development of gold mining operations in Africa, specifically focused currently in the Republic of Ghana, West Africa. Ms. Asante, our new CEO has travelled to Ghana four times over the past 18 months, for the purpose of meeting with geologist, attorneys, and other qualified individuals in furtherance of identifying potential acquisition properties in Ghana and the subsequent exploration of these projects, if any, and the further development of these projects with the potential goal of attaining production of gold in Ghana. Ghana is a well-known mining jurisdiction with a long history of gold production and a highly trained workforce. The mining tenure, royalty and tax laws are stable and well legislated. While the Company’s current focus is in Ghana, we are actively seeking out opportunities throughout the continent of Africa.
On June 1, 2021, the Company and Africa Exploration & Minerals Group Limited, a company incorporated in Ghana (the “AEMG”) entered into a Joint Venture & Partnership Agreement (the “JV Agreement”) setting forth the terms and conditions of a joint venture and partnership (the “Partnership”) between themselves relating to precious metal, minerals and mining exploration activities in the Country of Ghana. The initial project that the Parties were to undertake was an approximately 1 square km of the Shewn Edged Pink Concession (the “Concession”). In the beginning of November 2021, Company management, while visiting our operations in Ghana, noticed various accounting discrepancies and expenses irregularities relating to AEMG’s activities at the Concession. Additionally, during this time the Company was informed that, on information and belief, AEMG was not the rightful owner of the Concession and in fact had no legal right to enter the Partnership with the Company. Thereafter, the Company met with AEMG on several occasions seeking to resolve these matters in a manner that would be mutually agreeable to both parties. All attempts, as of the date of this report, to resolve the dispute amicably have been unsuccessful. The Company has retained Ghanaian counsel to represent and protect its interests relating to the disputed funds and our ongoing operation in Ghana. Also, on advice of counsel, the Company has turned all evidence of the foregoing over to the proper authorities and currently the matter is under review by the lead prosecutors in Accra, Ghana. The Company will continue to assist the authorities in any manner necessary and will continue to protect and preserve all remedies available to the Company at law, both in Ghana and in the United States, as necessary.
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On January 24, 2022, Guskin Gold Corp., by and through a new wholly owned subsidiary, Guskin Gold Ghana #1 Limited., a company incorporated under the Laws of the Republic of Ghana (collectively, Guskin Gold Corp. and its subsidiary Guskin Gold Ghana Ltd. shall be referred to hereinafter as the “Company”) and Danampco Company Ltd., a company incorporated under the Laws of the Republic of Ghana (the “DCL”) entered into a Joint Venture & Partnership Agreement (the “JV Agreement”) which sets forth the terms and conditions of a joint venture and partnership (the “Partnership”) between themselves relating to precious metal, minerals and mining exploration activities in the Country of Ghana. Per the Agreement DCL granted the Company an exclusive seventy (70%) percent ownership interest in that certain project, located in the Country of Ghana in which DCL has an interest known as the Kukuom Shewn Edged Pink Concession (the “Kukuom Concession”). The Kukuom Concession covers a total surface area of one-hundred fifty-six (156) square kilometers and is located between the cities of Goaso and Bibiani in the Ahafo District of Ghana. The Parties intent this to be an unincorporated contractual joint venture in respect of the exploration, development, exploitation, and operation of the Concession. Each additional project relating to the Ghana Option Interest, and agreed to be made part of, and undertaken by the Partnership, shall be governed by individual “Operating Agreements” setting forth the terms and conditions relating to each project specifically. As consideration for the Partnership, the Company shall provide all financing (“Financing”), to be remitted in accordance with a work program and budget, necessary to begin exploration of the Kukuom Concession. Additionally, the Company shall issue DCL 500,000 restricted common shares the Company’s common stock, at a per share valuation of $1.00 per share, with such shares shall be issued based on certain milestones, which are fully sent forth in the JV Agreement and Operating Agreement. The foregoing description of the JV Agreement and Operating Agreement (as Schedule A to the JV Agreement) do not purport to be complete and are qualified in their entirety by reference to the full text of both documents which are attached hereto as Exhibit 10.4 (the Operating Agreement is Schedule A to the JV Agreement) and is incorporated herein by reference.
In conducting due diligence on any potential property, the Company focuses on the following critical factors when evaluating each properties merit:
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the historical exploration work completed to date, including but not limited to, all geological, geochemical, geophysical, drill and core samples, and exploration data(s) and maps, all technical data; and, |
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the legal, government, and or regulatory affairs of the business or property. |
The Company is seeking opportunities in the alluvial and or hard-rock gold sector. We believe these sectors will give us the best advantage in Ghana initially. By way of example and for clarity, there are two types of gold: alluvial gold that is often found in riverbeds and amalgam gold that is located in ore. In Ghana, both types of gold exist, however, initially we are focused on identification of properties where alluvial mining would be the method for extracting any gold deposits as we believe these will be more be financially beneficial to the Company and our shareholders.
A successful approach to gold exploration involves a variety of traditional exploration techniques coupled with modern technological advances utilized in close conjunction in a systematically outlined manner that adhere strictly to industry standards to produce acceptable results. An example of this approach is outlined as follows:
Field Mapping
The foremost activity to be carried out in any new exploration would be field mapping. Here, field geologists and technicians will work hand in hand to assess the ground conditions and to evaluate the nature of current ground conditions. This among other things will reveal field intricacies included but not limited to artisanal workings for instance. The mapping team would be tasked to also locate the reported any old trenches and mark them out for follow up. They will carry out geological mapping such as mapping of outcrops. Another task to be carried out by the team would be to map out low lying areas which in turn will help in the future soil geochem planning.
Soil Sampling
Obtaining and storing a small amount of soil for visual inspection and laboratory testing for the determination of the soil unit geological provenance, characteristics and geotechnical engineering design parameters
Trenching
Trenching is going to be a major exploration technique on any property being explored by the Company. Trenches or pits may be dug by mechanical excavators as part of mineral exploration or mining permits. Trenches and pits may be dug when areas of earth containing minerals are shown to be present and need further testing. The trenching will be done in phases within the exploration campaign. Areas deemed as more prospective by virtue of the soil geochem results will be treated as high priority areas. Positive outcomes will warrant adjacent trenches to be opened along strike and that will be done when results are received from the laboratory.
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Auger Drilling & Geophysical
In areas where trenching becomes a challenge, auger drilling would be the ideal approach to turn to. Such an approach is carefully followed through when there is a positive indication as to the continuation an anomaly. Geophysical surveys could also come in handy in confirming such scenarios but must be done with caution especially where there is limited geological evidence to prove such an occurrence. When there is great certainty of continuation of anomalous trends into alluvial terrains; such terrains will be auger drilled to verify the continuity of anomalies at depth.
Drilling
If the foregoing approach indicates noteworthy gold targets, coupled with the geophysics, the next step will be to complete a preliminary drill program to evaluate the potential size and nature of the deposit (s) there is within the prospects.
Quality Assurance Quality Control (QAQC)
A good Quality Control Quality Assurance program will identify problems in the sampling and analyses stream so that they may be fixed as soon as possible. QAQC will be designed and implemented to accompany all datasets during the exploration program especially during the drilling phase. The objective of the QAQC implementation is largely to ensure general sample quality as well as guaranteed results at all stages of drilling. It is a best practice that every drill database be accompanied by a sound QAQC program as a stamp of authority at all times. To this end, there is a huge responsibility to the technical (geological) team to ensure that human errors are reduced to the barest minimal and that will pave way to be able to monitor the laboratory in an effective manner.
Operations in Ghana
Ghana is situated on the west coast of Africa, approximately 600 kilometers (“km”) north of the Equator on the Gulf of Guinea. Accra, the capital city of Ghana, is located almost exactly on the Prime Meridian. The former British colony changed its name from the Gold Coast to Ghana upon achieving independence on March 6, 1957. Ghana is now a republic with a population of approximately 28 million people and a democratically elected government. English remains the official and commercial language.
Ghana is the fastest growing economy in the world according to the World Bank’s Ease of Doing Business Report 2019. It also has one of the best judicial systems in the world measured by rule of law, World Justice Projects (WJP) Rule of Law Index 2017-2018. In 2015, Ghana ranked 6th in Africa on the World Bank’s Ease of Doing Business barometer. It’s ranked as the most stable political environment in West Africa, with the most competitive economy, backed by a government committed to policies that reduce the cost of doing business and promoting investor confidence. Growth potential can be seen through improved taxes in Ghana. Ghana cut its corporate tax rate in 2016 and 2017 and has a mineral royalty to a sliding scale based on gold prices, from a 5 percent flat rate.
The Ghanaian legal system is generally modelled after and based on the British common law. The laws of Ghana include the Constitution, national laws passed by Parliament (or under authority granted by Parliament) and the common law of Ghana. The common law of Ghana includes customary rules which apply to particular communities in Ghana and which may or may not be consistent with the Constitution or a specific national law.
Ghana is a mining friendly country with two mining colleges and a large workforce trained in the disciplines of geology, exploration methods and mining engineering.
The Company is of the view that any risks associated with its corporate structure and its foreign operations are minimal and can be effectively managed by the Company without undue burden or associated costs.
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Rights in Ghana
The Constitution of Ghana vests title in every mineral in its natural state to the Government of Ghana. The exercise of any mineral right in the form of reconnaissance, exploration, or exploitation of any mineral in Ghana requires an appropriate license or mineral right to be issued by the Government of Ghana acting through the Minister responsible for Lands and Natural Resources. The Minister responsible for Lands and Natural Resources administers, promotes and regulates Ghana’s mineral wealth through the Minerals Commission, a governmental organization designed in accordance with the Minerals Commission Act 1993 (Act 450) and the Minerals and Mining Act 2006 (“2006 Mining Act”).
Pursuant to the 2006 Mining Act, a number of regulations were passed in 2012 to clarify and implement provisions of the 2006 Mining Act. These regulations relate to matters such as licensing, local content, technical issues, mineral right holding costs, mine support services and payment of compensation to persons impacted by mining operations. Once a license or mineral right is issued to an entity by the Government of Ghana, Ghanaian mining laws prevent that license or mineral right from being transferred, assigned, or mortgaged by the licensee or mineral right holder without the prior written approval of the Government of Ghana. The Ghana Minerals Commission is also required to maintain a public register of all applications, grants, variations, transfers, suspensions and cancellations of such licenses or mineral rights. Official searches may be conducted in the public register to obtain information regarding any license or mineral right granted by the Government of Ghana.
In order to confirm the Company’s title in its material mineral properties, the Company will, from time to time, obtain legal opinions from its local Ghanaian counsel regarding rights, title and interests in and to its material mineral properties.
Ghanaian law sets mineral royalties at a flat rate of 5% of mineral revenues.
Government Regulation
General
The Company’s activities are subject to extensive federal, state, and local laws governing the protection of the environment, prospecting, development, production, taxes, labor standards, occupational health, mine safety, toxic substances, and other matters. The costs to comply with such regulatory requirements are substantial and possible future legislation and regulations could cause additional expense, capital expenditures, restrictions and delays in the development and continued operation of the Company’s properties, the extent of which cannot be predicted. In the context of environmental permitting, including the approval of reclamation plans, the Company must comply with known standards and regulations which may entail significant costs and delays. Although the Company has been recognized for its commitment to environmental responsibility and believes it is in substantial compliance with applicable laws and regulations, amendments to current laws and regulations, more stringent application or interpretation of these laws and regulations through judicial review, or administrative action or the adoption of new laws could have a material adverse effect upon the Company and its results of operations.
Environmental matters in Ghana, including those related to mining, fall primarily under the oversight of the Environmental Protection Agency (“EPA”), as well as the Minerals Commission and their Mines Inspectorate Division. The EPA has acts and regulations that govern, among other things, environmental and socioeconomic impact assessments and statements, environmental management plans, emissions to the environment, environmental auditing and review, and mine closure and reclamation, to which the Company’s operations are subject. Additional provisions governing mine environmental management are provided in the Minerals and Mining Act, 2006, and Minerals and Mining Regulations, 2012.
The Company’s future mining, processing, development, and mineral exploration activities will also subject to various laws governing prospecting, development, production, taxes, labor standards, occupational health and safety, land rights of local people and other matters. New rules and regulations may be enacted, or existing rules and regulations may be modified and applied in a manner that could have an adverse effect on the Company’s financial position and results of operations.
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Market, Customers, and Distribution Methods
Although there can be no assurance, large and well capitalized markets are readily available for all metals and precious metals throughout the world. A very sophisticated futures market for the pricing and delivery of future production also exists. The price for metals is affected by a number of global factors, including economic strength and resultant demand for metals for production, fluctuating supplies, mining activities and production by others in the industry, and new and or reduced uses for subject metals.
The mining industry is highly speculative and of a very high-risk nature. As such, mining activities involve a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Few mining projects actually become operating mines.
The mining industry is subject to a number of factors, including intense industry competition, high susceptibility to economic conditions (such as price of metal, foreign currency exchange rates, and capital and operating costs), and political conditions (which could affect such things as import and export regulations, foreign ownership restrictions). Furthermore, the mining activities are subject to all hazards incidental to mineral exploration, development and production, as well as risk of damage from earthquakes, any of which could result in work stoppages, damage to or loss of property and equipment and possible environmental damage. Hazards such as unusual or unexpected geological formations and other conditions are also involved in mineral exploration and development.
Competition
The mineral exploration industry is highly competitive. We are a new and exploration stage company and have a weak competitive position in the industry. We compete with junior and senior mineral exploration companies, independent producers and institutional and individual investors who are actively seeking to acquire mineral exploration properties throughout the world together with the equipment, labor and materials required to operate on those properties. Competition for the acquisition of mineral exploration interests is intense with many mineral exploration leases or concessions available in a competitive bidding process in which we may lack the technological information or expertise available to other bidders.
Many of the mineral exploration companies with which we compete for financing and for the acquisition of mineral exploration properties have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquiring mineral exploration interests of merit or on exploring or developing their mineral exploration properties. This advantage could enable our competitors to acquire mineral exploration properties of greater quality and interest to prospective investors who may choose to finance their additional exploration and development. Such competition could adversely impact our ability to attain the financing necessary for us to acquire further mineral exploration interests or explore and develop our current or future mineral exploration properties.
We also compete with other junior mineral exploration companies for financing from a limited number of investors that are prepared to invest in such companies. The presence of competing junior mineral exploration companies may impact our ability to raise additional capital in order to fund our acquisition or exploration programs if investors perceive that investments in our competitors are more attractive based on the merit of their mineral exploration properties or the price of the investment opportunity. In addition, we compete with both junior and senior mineral exploration companies for available resources, including, but not limited to, professional geologists, land specialists, engineers, camp staff, helicopters, float planes, mineral exploration supplies and drill rigs.
General competitive conditions may be substantially affected by various forms of energy legislation and/or regulation introduced from time to time by the governments of Ghana, the United States and other countries, as well as factors beyond our control, including international political conditions, overall levels of supply and demand for mineral exploration.
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In the face of competition, we may not be successful in acquiring, exploring or developing profitable gold or mineral properties or interests, and we cannot give any assurance that suitable gold or mineral properties or interests will be available for our acquisition, exploration or development. Despite this, we hope to compete successfully in the gold or mineral industry by:
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keeping our costs low; |
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relying on the strength of our management’s contacts; and |
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using our size and experience to our advantage by adapting quickly to changing market conditions or responding swiftly to potential opportunities. |
Legal Proceedings
None. From time to time, we are subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of our business. We are not aware of any threatened or pending litigation.
Employees
Other than our officers and directors, we currently have no full-time employees.
Mine Safety Disclosures
No information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is required to be disclosed herein because we are not the operator of any mine.
Intellectual Property
None.
Research and Development
We have not incurred any research and development expenses since our inception.
Company’s Common Stock
Our common stock trades on the OTC Pink Market Place under the symbol “GKIN.” On December 3, 2020, FINRA to declared effective our corporate action to change the Company’s OTC trading symbol from ISRN to GKIN and change our name to “Guskin Gold Corp.” from Inspired Builders, Inc. Trading under the new ticker symbol began at market opening December 4, 2020. No action is required from current shareholders in relation to the change in the trading symbol. The Company’s CUSIP will also change to 40330L100.
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WHERE YOU CAN GET ADDITIONAL INFORMATION
We file annual, quarterly, and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
Our principal office is located at 4500 Great America Parkway, PMB 38, Ste 100 Santa Clara, CA 95054. We also maintain a mailing address at 2nd Brewery Link Box mp 2797, Momprobi-Accro, Ghana. Our telephone number is (408) 766 1511 and our e-mail contact is info@guskingold.com. We currently rent this space on a month-to-month basis. This space is sufficient to meet our needs, however, once we expand our business to a significant degree, we will have to find a larger space. We do not foresee any significant difficulties in obtaining any required additional space. We do not currently own any real property.
ITEM 3. LEGAL PROCEEDINGS.
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our directors, officers or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Description of Securities
Our authorized capital stock consists of 250,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of Preferred Stock of which NIL have been designated.
Common Stock
Of the authorized common stock, 51,201,265 shares are outstanding as of September 30, 2021, and 51,201,265 as of January 10, 2022. The holders of our common stock are entitled to receive dividends from our funds legally available therefor only when, as and if declared by our Board, and are entitled to share ratably in all of our assets available for distribution to holders of our common stock upon the liquidation, dissolution or winding-up of our affairs. Holders of our common stock do not have any preemptive, subscription, redemption or conversion rights. Holders of our common stock are entitled to one vote per share on all matters which they are entitled to vote upon at meetings of stockholders or upon actions taken by written consent pursuant to Nevada corporate law. The holders of our common stock do not have cumulative voting rights, which mean that the holders of a plurality of the outstanding shares can elect all of our directors. All of the shares of our common stock currently issued and outstanding are fully- paid and nonassessable. No dividends have been paid to holders of our common stock since our incorporation, and no cash dividends are anticipated to be declared or paid in the reasonably foreseeable future.
Preferred Stock
There are no shares of Preferred Stock outstanding.
Stock Transfer agent
The stock transfer agent for our securities is Vstock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598
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Market Information
Our common stock is quoted on the OTC Markets under the trading symbol “GKIN”. The OTC Markets is generally considered to be a less active and efficient market than the NASDAQ Global Market, the NASDAQ Capital Market or any national exchange and will not provide investors with the liquidity that the NASDAQ Global Market, the NASDAQ Capital Market or a national exchange would offer. Since being listed on the OTC Markets our common stock has only had limited trading volume. We currently trade on the OTCQB.
As there is only a limited public trading market for our securities and a regular trading market may not develop, or if developed, may not be sustained. A stockholder in all likelihood, therefore, will not be able to resell his or her securities should he or he desire to do so when eligible for public resale. Furthermore, it is unlikely that a lending institution will accept our securities as pledged collateral for loans unless a regular trading market develops. We have no plans, proposals, arrangements, or understandings with any person with regard to the development of a trading market in any of our securities.
Market Price of and Dividends on Common Equity and Related Stockholder Matters
Our common stock trades on the OTC Pink Market Place under the symbol “GKIN.” On December 3, 2020, FINRA to declared effective our corporate action to change the Company’s OTC trading symbol from ISRN to GKIN and change our name to “Guskin Gold Corp.” from Inspired Builders, Inc. Trading under the new ticker symbol began at market opening December 4, 2020. The Company’s CUSIP changed to 40330L100.
The following table sets forth the high and low closing prices for the Company’s Common Stock per quarter as reported by the OTC Bulletin Board for the quarterly periods indicated below based on its fiscal year end of September 30. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions. In the past 2 years, our stock has had very minimal trades. Our stock did not have any trades between September 14, 2018, and May 2021, as such we have only reported for the two quarters ended June 30, 2021, and September 30, 2021
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Fiscal Quarter |
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High |
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Low |
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June 30, 2021 |
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$ | 4.95 |
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$ | 1.03 |
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September 30, 2021 |
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$ | 2.68 |
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$ | 1.37 |
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Trades in our common stock may be subject to Rule 15g-9 of the Exchange Act, which imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, broker/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction before the sale.
Penny Stock Considerations
Our shares likely will be “penny stocks” as that term is generally defined in the Exchange Act and the rules and regulations promulgated thereunder to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale. Generally, an individual with a net worth in excess of $1,000,000 or an income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:
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● |
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt; |
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● |
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities; |
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● |
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and |
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● |
Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account. |
Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our Common Stock, which may affect the ability of Selling Stockholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities if our securities become publicly traded. In addition, the liquidity for our securities may be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules and our stockholders will, in all likelihood, find it difficult to sell their securities.
Stockholders
As of January 10, 2022, we had 60 holders of record of our Common Stock.
Dividends
We have not declared any cash dividends on our Common Stock since our inception and do not anticipate paying such dividends in the foreseeable future. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.
Stock Incentive Plan
We do not have a stock incentive plan.
Recent Sales of unregistered Equity Securities
Other that previously reported, none.
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ITEM 6. SELECTED FINANCIAL DATA.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the three month period ended December 31, 202. The discussion and analysis that follows should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Overview
On September 22, 2020, Inspired Builders, Inc., a Nevada corporation (the “Company”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Guskin Gold Corporation, a Nevada limited liability company (“GGC”), and the controlling stockholders of GGC (the “GGC Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired One Hundred Percent (100%) the issued and outstanding equity interest of GGC from the GGC Shareholders (the “GGC Shares”) and in exchange the Company issued to GGC an aggregate of Twenty-Eight Million Two Hundred Thousand (28,200,000) shares of restricted common stock of the Company.
As a result of the acquisition, we acquired all of the business operations and will continue the existing business operations of GGC as a wholly-owned subsidiary of our publicly-traded company.
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As the result of this acquisition and the change in business and operations of the Company, a discussion of the past financial results of the Company is not pertinent, and under applicable accounting principles the historical financial results of GGC, the accounting acquirer, prior to the acquisition are considered the historical financial results of the Company.
The Company’s fiscal year end is September 30.
In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have had a minimal impact on our day to day operations. However, this could impact our efforts to enter into a business combination as other businesses have had to adjust, reduce or suspend their operating activities. The extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19. The Company is unable to predict the ultimate impact at this time.
The following discussion highlights GGC’s results of operations and the principal factors that have affected its financial condition as well as its liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s audited consolidated financial statements contained in this report, which were prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such consolidated financial statements and the related notes thereto.
Results of Operations
For the Fiscal Year Ended September 30, 2021 and for period from May 28, 2020 (inception) to September 30, 2020.
For the fiscal year ended September 30, 2021, we incurred operating expenses of $3,007,867. For the period from May 28, 2020 (inception) September 30, 2020, we incurred operating expenses of $68,144. The increase in operating expenses is attributable to stock-based compensation of $2,593,500 which was paid in 2021 as well as increase in accounting and legal and consulting fees due to a full 12 months of activity in the fiscal year ended September 30,2021 versus only four months of operating activity during the prior period ended September 30, 2020.
Net Loss
For the fiscal year ended September 30, 2021, we incurred net losses of $13,406,994. For the period from May 28, 2020 (inception) to September 30, 2020, we incurred net loss of $71,150. The increase in net losses is attributable to the issuance of stock-based compensation in the amount of $2,593,500 which was paid in 2021, in addition to a $10,304,893 change in derivative value as well as increase in accounting and legal and consulting fees due to a full 12 months of activity in the fiscal year ended September 30, 2021 versus only four months of operating activity during the period ended September 30, 2020.
Liquidity and Capital Resources
As of September 30, 2021, we have $11,044 in current assets and $11,690,159 in current liabilities. We had $6,044 in cash and our working capital deficit was $11,679,115. As of September 30, 2020, we have $13,767 in current assets and $2,231,316 in current liabilities. We had $13,767 in cash and our working capital deficit was $2,217,549.
Cash Flows:
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|
|
For the Fiscal Year Ended September 30, 2021 |
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|
For the period from May 28, 2020 (inception) to September 30, 2020 |
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||
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Cash Flows Used in Operating Activities |
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$ | (225,839 | ) |
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$ | (37,127 | ) |
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Cash Flows Provided by Investing Activities |
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5,426 |
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27,500 |
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Cash Flows Provided by Financing Activities |
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228,967 |
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23,394 |
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Net change in cash |
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$ | (7,723 | ) |
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$ | 13,767 |
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Cash Flows Used in Operating Activities
We used $225,839 of cash in our operating activities during the fiscal year ended September 30, 2021 These are attributable to our net loss adjusted by the non-cash items of $2,593,500 for the fair value of shares issued for services, $79,236 for amortization of debt discount, $10,304,893 change in fair value of derivative liability and $50,000 of in-kind contribution of services. We used $37,127 of cash in our operating activities during the period from May 28, 2020 (inception) to September 30, 2020. These are attributable to our net loss adjusted by the non-cash items of $28,200 for the fair value of shares issued for services and $2,614 for amortization of debt discount. This was also offset by $3,220 of increase in accounts payable and accrued interest.
Cash Flows Provided by Investing Activities
We provided $5,426 non cash investment in mineral rights during the fiscal year ended September 30, 2021. We received $27,500 of cash under the reverse merger. during the period from May 28, 2020 (inception) to September 30, 2020.
Cash Flows Provided by Financing Activities
We received $228,967 from the issuances of loans payable from related parties totaling $149,357 and a common stock subscriptions in the amount of $110,000 during the fiscal year ended September 30, 2021. We received $23,394 from the issuances of loans payable from related parties totaling $15,894 and a note payable from an unrelated party in the amount of $7,500 during the period from May 28, 2020 (inception) to September 30, 2020.
Going Concern and Management’s Liquidity Plans
As reflected in the accompanying consolidated financial statements, the Company has a net loss of $13,406,994 for the fiscal year ended September 30, 2021. In addition, the Company has an accumulated deficit of $13,478,144 and a working capital deficit of $11,679,115 as of September 30, 2021.
The accompanying consolidated financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to raise additional funding. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
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The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles of the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The more significant areas requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
We believe the following is among the most critical accounting policies that impact or consolidated financial statement. We suggest that our significant accounting policies, as described in our consolidated financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the Company’s consolidated financial statements beginning on page F-1 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, our Chief executive officer and Chief financial officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our Chief Executive Officer has concluded that, based on the material weaknesses discussed below, our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission’s rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of the Company’s Chief Executive Officer, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
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The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting at September 30, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as of September 30, 2021, our internal control over financial reporting was not effective.
Our internal controls are not effective for the following reasons: (i) due to the size of the Company and available resources, there are limited personnel to assist with the accounting and financial reporting function, which results in a lack of segregation of duties and, (ii) the Company does not have an audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
In order to mitigate the foregoing material weakness, we have engaged an outside accounting consultant with significant experience in the preparation of financial statements in conformity with GAAP to assist us in the preparation of our financial statements to ensure that these financial statements are prepared in conformity with GAAP. We will continue to monitor the effectiveness of this action and make any changes that our management deems appropriate.
We would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will continue to reassess this matter to determine whether improvement in segregation of duty is feasible. In addition, we would need to expand our board to include independent members.
Going forward, we intend to evaluate our processes and procedures and, where practicable and resources permit, implement changes in order to have more effective controls over financial reporting.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuers that are not “large accelerated filers” nor “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting in the fiscal year ended September 30, 2021, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
There were no disclosures of any information required to be filed on Form 8-K during the three months ended September 30, 2021, that were not filed.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Identification of Directors and Executive Officers and Term of Office
The following table sets forth the names and ages of our current directors and executive officers and those of our wholly owned direct subsidiary and indirect wholly owned subsidiaries. Our Board of Directors appoints our executive officers. Each director of the Company serves for a term of one year or until the successor is elected at the Company’s annual shareholders’ meeting and is qualified, subject to removal by the Company’s shareholders. Each officer serves, at the pleasure of the Board of Directors, for a term of one year and until the successor is elected at the annual meeting of the Board of Directors and is qualified. There are no family relationships among our directors or executive officers. None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last five years. The Company is not aware of any proceedings to which any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the Company or any of the Company’s subsidiaries or has a material interest adverse to it or any of its subsidiaries.
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Name and Address of Beneficial Owner Directors and Officers: |
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AGE |
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Position |
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Date of Appointment |
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Naana Asante |
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45 |
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CEO, President, Secretary and Director |
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September 22, 2020 (1) |
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Mario Beckles |
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48 |
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CFO and Treasurer |
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July 13, 2021 |
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Samuel “Jojo” Andrews |
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46 |
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Director |
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November 10, 2021 |
____________
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(1) |
On September 22, 2020, pursuant to the terms and conditions of the Share Exchange Agreement, the Board of Directors (the “Board”) of the Company held a Special Board of Directors Meeting whereby they appointed Mrs. Naana Asante to the serve as member of the Company’s Board of Directors and as the Company’s Chief Executive Officer. On November 8, 2021, Ms. Asante became president and secretary of the Company. |
Information about our Executive Officers
The business experience during the past five years of the person presently listed above as an Officer or Director of the Company is as follows:
Naana Asante – Mrs. Asante, has been actively pursuing business opportunities in Ghana’s mineral and precious metal commodifies industry over the past five years. Most notably, she has traveled to Ghana on four separate occasions over the past twelve months to develop and formalize her private exploration and mining interests. She has met with over 50 individuals and companies active in the exploration, mining, refinement, and import/export business, including by example Gold Coast Mining, PMMC, Blaze Metals and U Green Enterprise, a company associated with Mr. Somuah. Mrs. Asante has a considerable network in Ghana’s finance, banking, government, and import/export sectors, in addition to many personal relationships with landowners of high-value, exploration targets in some of Ghana’s most prominent gold-bearing areas.
A Ghana native, Mrs. Asante grew up and went to college in Ghana, majoring in marketing, and immigrated to the United States in 1999. Mrs. Asante is a professional businesswoman who has owned her own businesses in the USA and Ghana, and practiced residential and commercial real estate in San Jose, CA for the past 2 years.
Mario Beckles- Mr. Beckles has over 24 years of experience in financial reporting, financial accounting, tax and audit works. Mr. Beckles areas of expertise include, inter alia, information technology and retail. He began his career as a Senior Auditor with Deloitte and has since held positions as CFO of First Liberty Power Corp, a publicly traded mining company (FLPC), was a Partner at Jersey Fortress Capital Partners, a boutique investment banking firm or was a Senior Financial Reporting Analyst with SimplexGrinnell, a $2B Fire & Security Contractor. Mr. Beckles has operated Beckles & Co., an accounting, tax and business advisory company, for the past five years, and has been Chief Financial Officer of Boatim Inc. (OTC:BTIM) since March 2021. Mr. Beckles is a member of the American Institute of Certified Public Accountants and holds a CPA license with the state board of Florida.
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Samuel “Jojo” Andrews - Mr. Andrews has worked both as a private legal practitioner, a corporate law specialist, and a consultant in law, commerce, and investment. He is the founder and Managing Director of Blackwood Legal Services in Ghana, Africa, with local and international clients from Europe, China, the United States and South America including Huawei, Samsung, Lavilla Hotel, China Geo Engineering, Hongtai Mining, TRAC Oil and Gas, Harvest Commodities International, I-Banking Ghana, Azuke Energy, the China News Agency (XIn Hua) and the Managing Director of the Agricultural Development Bank (ADB). Since 2008, Mr. Andrews has represented Huawei Technologies and been a supervisor for all legal affairs in Cameroun, Gabon, Kenya, and in Central Africa. Mr. Andrews brings extensive expertise in matters of Ghana corporate, compliance and regulatory law; mining, real-estate, and property law; investment, commercial transactions, and international business, and mergers and acquisitions. Mr. Andrews holds a Bachelor of Arts from the University of Ghana, an LLB from the University of Ghana and a Barrister at Law from Ghana School of Law in 2006. Mr. Andrews is currently working on his MBA from the University of Ghana business school.
Term of Office
Each director of the Company serves for a term of one year and until his successor is elected and qualified at the next Annual Shareholders’ Meeting, or until his death, resignation or removal. Each officer of the Company serves for a term of one year and until his successor is elected and qualified at a meeting of the Board of Directors.
Significant Employees
While the Company has engaged various consultants, other than management, we currently have no significant employees other than our officers.
Involvement in Certain Legal Proceedings
During the past ten years no director, executive officer, promoter, or control person of the Company has been involved in the following:
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(1) |
A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; |
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(2) |
Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
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(3) |
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: |
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i. |
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
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ii. |
Engaging in any type of business practice; or |
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iii. |
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
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(4) |
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity; |
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(5) |
Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
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(6) |
Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated; |
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(7) |
Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended, or vacated, relating to an alleged violation of: |
|
i. |
Any Federal or State securities or commodities law or regulation; or |
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ii. |
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
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iii. |
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
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(8) |
Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer and principal financial officer. We intend to adopt a Code of Ethics as we develop our business.
Committees of the Board of Directors
The Company does not presently have a separately designated standing audit committee, compensation committee, nominating committee, executive committee, or any other committees of our Board of Directors. The functions of those committees are undertaken by our Board of Directors.
Audit Committee
The Company has not established a separately designated standing audit committee. However, the Company intends to establish a new audit committee of the Board of Directors that shall consist of independent directors. The audit committee’s duties will be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee shall at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.
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Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Since inception, we have not had a class of equity securities registered under the Securities Exchange Act of 1934, as amended. Hence, compliance with Section 16(a) thereof by our officers and directors was not required.
Risk Oversight
Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight among the full Board of Directors, and fostering an appropriate culture of integrity and compliance with legal responsibilities.
Corporate Governance
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the SEC and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules, and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.
In lieu of an Audit Committee, the Company’s Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results, and effectiveness of the annual audit of the Company’s financial statements and other services provided by the Company’s independent public accountants. The Board of Directors reviews the Company’s internal accounting controls, practices, and policies.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officer received total annual salary and bonus compensation in excess of $100,000.
| 24 |
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| Table of Contents |
SUMMARY COMPENSATION TABLE(1)
|
Name and Principal Position |
|
Fiscal
|
|
Salary ($) |
|
All Other
($)(2) |
|
Total ($) |
|
Naana Asante(3) CEO, President & Director |
|
2021 |
|
NIL |
|
NIL |
|
NIL |
|
|
2020 |
|
NIL |
|
NIL |
|
NIL |
|
|
|
2019 |
|
- |
|
- |
|
- |
|
|
Mario Beckles (4) |
|
2021 |
|
NIL |
|
NIL |
|
NIL |
|
|
2020 |
|
- |
|
- |
|
- |
|
|
|
2019 |
|
- |
|
- |
|
- |
|
|
Edward Somuah(5) Former CEO, CFO, Secretary & Director |
|
2021 |
|
NIL |
|
NIL |
|
NIL |
|
|
2020 |
|
NIL |
|
NIL |
|
NIL |
|
|
|
2019 |
|
- |
|
- |
|
- |
|
|
David Lazar(6) Former CEO, CFO, Secretary & Director
|
|
2021 |
|
- |
|
- |
|
- |
|
|
2020 |
|
NIL |
|
NIL |
|
NIL |
|
|
|
2019 |
|
- |
|
- |
|
- |
|
|
Kai Ming Zhao(7) Former Sole-Officer & Director |
|
2021 |
|
- |
|
- |
|
- |
|
|
2020 |
|
NIL |
|
NIL |
|
NIL |
|
|
|
2019 |
|
NIL |
|
NIL |
|
NIL |
____________
|
1. |
We have omitted certain columns in the summary compensation table pursuant to Item 402(a)(5) of Regulation S-K as no compensation was awarded to, earned by, or paid to any of the executive officers or directors required to be reported in that table or column in any fiscal year covered by that table. |
|
|
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2. |
The “All Other Compensation” column is used to disclose the aggregate amount of all compensation that the Company could not properly report in any other column of the Summary Compensation Table (with a limited exceptions). |
|
|
|
|
3. |
Ms. Naana Asante was appointed as the CEO and Director of the Company as of September 22, 2020, and was appointed as President and Secretary on November 8, 2021. |
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|
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4. |
Mr. Beckles was appointed as CFO and Treasurer on July 13, 2021. |
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|
|
5. |
Mr. Edward Somuah was originally appointed as the sole-officer and director of the Company on April 30, 2020. As a result of the Share Exchange Agreement, on September 22, 2020, Mr. Somuah resigned from the position of Chief Executive Officer. On July 13, 2021, he resigned as the Company’s, Chief Financial Officer and Treasurer and November 8, 2021 he resigned as President, Secretary and as a member of the Company’s Board of Directors. |
|
|
|
|
6. |
Mr. David Lazar was appointed as the Company’s sole-officer and director on January 28, 2020, he resigned from all positions held with the Company as of April 30, 2020. |
|
|
|
|
7. |
Mr. Kia Ming Zhao was appointed as the Company’s sole-officer and director on February 15, 2018, he resigned from all positions held with the Company as of January 28, 2020 |
Option Grants
We have not granted any options or stock appreciation rights to our named executive officers or directors since inception. We do not have any stock option plans.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
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Compensation Committee
We do not currently have a compensation committee of the board of directors or a committee performing similar functions. The board of directors as a whole participates in the consideration of executive officer and director compensation.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information as of January 10, 2022, with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially five percent (5%) or more of the outstanding shares of our common stock. As of January 10, 2022, there were 51,201,265 shares of common stock outstanding.
|
Name and Address of Beneficial Owner(1) |
|
Amount and
|
|
|
Percentage of
|
|
||
|
Naana Asante, CEO and Director(2) |
|
|
15,000,000 |
|
|
|
29.30 | % |
|
Mario Beckles |
|
|
- |
|
|
|
- |
|
|
Samuel Andrews |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|||
|
All Directors and Executive Officers as a Group |
|
|
15,000,000 |
|
|
|
29.30 | % |
|
5%+ Shareholders |
|
|
|
|
|
|
|
|
|
Akwasi Bonsu(3) 2nd Brewery street, MP box 2797 Mamprobi-Accra Ghana |
|
|
3,250,000 |
|
|
|
6.35 | % |
|
Diego Manfredi(4)
|
|
|
3,250,000 |
|
|
|
6.35 | % |
|
Participator Ventures, Inc.(5) 1 King West, Suite 2209 Toronto, Ontario, M5H 1A1 Canada |
|
|
3,000,000 |
|
|
|
5.86 | % |
|
Confederate Capital LLC(6)
|
|
|
3,500,000 |
|
|
|
6.84 | % |
____________
|
(1) |
Applicable percentage of ownership is based on 51,201,265 shares of common stock outstanding on January 10, 2022. Unless otherwise stated, all shareholders can be reached at mailing address 4500 Great America Parkway, PMB 38, Ste 100, Santa Clara, CA 95054 |
|
|
|
|
(2) |
Naana Asante is the Company’s current CEO and member of the Company’s Board of Directors, she received the shares a part of the Share Exchange Agreement between the Company and Guskin Gold Corporation of which she was a former shareholder. |
|
|
|
|
(3) |
Akwasi Bonsu received the shares a part of the Share Exchange Agreement between the Company and Guskin Gold Corporation of which he was a former shareholder. Mr. Bonsu is associated with UGreen Company Ltd., a company having loans payable owed to them by Guskin Gold Corporation. |
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|
(4) |
Diego Manfredi received the shares a part of the Share Exchange Agreement between the Company and Guskin Gold Corporation of which he was a former shareholder. |
|
|
|
|
(5) |
Participator Ventures, Inc. received the shares a part of the Share Exchange Agreement between the Company and Guskin Gold Corporation of which it was a former shareholder. Andrew Jenkins, has voting and dispositive control over these shares as he is a director of Participator Ventures, Inc. |
|
|
|
|
(6) |
Confederate Capital LLC received the shares a part of the Share Exchange Agreement between the Company and Guskin Gold Corporation of which it was a former shareholder. Kevin Wright has voting and dispositive control over these shares as he is the sole-officer and director of Confederate Capital LLC. |
|
|
|
|
(7) |
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on January 10, 2022. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Related Party Transactions
On June 1, 2020, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $1,630 for expenses paid for on behalf of the company. On June 18, 2020, the Company received an additional $4,500 from Naana Asante for expenses paid on behalf of the Company. During the period July 1 through September 30, 2020, the Company received an additional $354. The unsecured loans mature on June 1, 2021 and bears an interest rate of 2.5%. As of September 30, 2020, the Company recorded accrued interest expenses of $48. During the fiscal year ended September 30, 2021, the Company received an additional loans totaling $102,800 and repaid $3,096. These loans mature on February 5, 2022, February 22, 2022, March 26, 2022, April 10, 2022 and May 19, 2022. As of September 30, 2021 a total of $108,451 remains outstanding as of September 30, 2021, the Company recorded accrued interest expense of $1,508.
On June 1, 2020, the Company entered into a loan agreement with an entity controlled by a shareholder in the amount of $3,500 for expenses paid for on behalf of the Company. On June 26, 2020, the Company received an additional $5,910 for expenses paid on behalf of the Company. The unsecured loans mature one year from the date of the loan and bears an interest rate of 2.5%. As of September 30, 2021, the Company recorded accrued interest expenses of $314. As of September 30, 2020, the Company recorded accrued interest expenses of $78.
On September 22, 2020, the Company assumed, as part of the reverse merger and share exchange agreement a related party loan payable dated April 30, 2020, owed to U Green Enterprise, a Ghana corporation controlled by our Board of Directors. As of September 30, 2021 and September 30, 2020, the Company had a loan payable of $14,496 owed to U Green Enterprises. The loan payable is non-interest bearing and due on demand.
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On January 12, 2021, the Company, entered into a Consulting Agreement with Edward Somuah, (“Mr. Somuah”) an individual, to memorialize and formalize Mr. Somuah’s commitment and services to the Company. Mr. Somuah was a member of the Company’s Board of Directors, the Chief Financial Officer, and Secretary. The Company paid Mr. Somuah a monthly salary in the total amount $4,500 per month. Additionally, on January 11, 2021, the Company issued 13,000,000 shares of restricted common stock for services valued at $2,340,000 to Edward Somuah as compensation for services rendered. On July 13, 2021, Edward Somuah, the Company’s current Chief Financial Officer (“CFO”), resigned from his position as CFO and Treasurer. Upon resignment, Mr. Somuah will no longer receive a monthly salary of $4,500 per month.
On January 4, 2021, the Company entered into a loan agreement in the amount of $17,000 from a related third party. The loan is unsecured and bears an interest rate of 2.5% and is payable one year from the date of signing. As of September 30, 2021, the accrued interest was $311.
Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its common stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past two fiscal years, or in any proposed transaction, which has materially affected or will affect the Company.
With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:
|
● |
Disclosing such transactions in reports where required; |
|
|
|
|
|
|
● |
Disclosing in any and all filings with the SEC, where required; |
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|
|
|
|
|
● |
Obtaining disinterested directors’ consent; and, |
|
|
|
|
|
|
● |
Obtaining shareholder consent where required. |
Director Independence
For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of the Company’s Common Stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Director” means a person other than an Executive Officer or employee or any other individual having a relationship, which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
According to the NASDAQ definition, we have no independent directors.
Review, Approval or Ratification of Transactions with Related Persons
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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| Table of Contents |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table shows the fees paid or accrued by us for the audit and other services provided by Liggett & Webb P.A. and BF Borgers, for the fiscal periods shown.
|
|
|
For the years ended |
|
|||||
|
|
|
September 30,
|
|
|
September 30,
|
|
||
|
Audit Fees |
|
$ | 27,500 |
|
|
$ | 20,000 |
|
|
Audit Related Fees |
|
|
3,000 |
|
|
|
7,875 |
|
|
Tax Fees |
|
|
- |
|
|
|
- |
|
|
All Other Fees |
|
|
- |
|
|
|
- |
|
|
Total |
|
$ | 30,500 |
|
|
$ | 27,875 |
|
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements. Fees billed by Liggett & Webb P.A. totaled $17,500 and fees billed by BF Borgers totaled $10,000.
Audit-Related Fees are fees for assurance and related services by the principal accountant that are traditionally performed by the principal accountant and which are reasonably related to the performance of the audit or review of the registrant’s financial statements and fees attributed to the audit of Guskin Gold Corporation, our wholly owned subsidiary. Audit related fees billed by Liggett & Webb P.A. during the fiscal year ended September 30, 2021, totaled $3,000, which were related to the Company’s Registration Statement on Form S-1.
In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm for the fiscal year ended September 30, 2021, and for the period from May 28, 2020 (inception) to September 30, 2020. The percentage of hours expended on the principal accountant’s engagement to audit the Company’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
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| Table of Contents |
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this Annual Report:
|
(a) |
Consolidated Financial Statements: |
|
|
|
Page |
|
|
F-1 |
|
|
Consolidated Balance Sheet as of September 30, 2021 and September 30, 2020 |
|
F-3 |
|
|
F-4 |
|
|
|
F-5 |
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|
|
F-6 |
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|
|
F-7 |
| 30 |
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| Table of Contents |
|
(b) |
Exhibits: |
The following exhibits are included with this report.
|
|
|
|
|
|
|
Certificate of Amendment to Articles of Incorporation, dated December 18, 2017.(1) |
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|
|
Certificate of Amendment to Articles of Incorporation, dated November 30, 2020(1) |
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|
|
Stock Purchase Agreement dated April 30, 2020 between U Green and Custodian Ventures(1) |
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|
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)(2) |
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|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)(2) |
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|
|
101.INS* |
Inline XBRL Instance Document |
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|
|
101.SCH* |
Inline XBRL Schema Document |
|
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|
|
101.CAL* |
Inline XBRL Calculation Linkbase Document |
|
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|
|
101.DEF* |
Inline XBRL Definition Linkbase Document |
|
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|
|
101.LAB* |
Inline XBRL Label Linkbase Document |
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|
|
101.PRE* |
Inline XBRL Presentation Linkbase Document |
|
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|
|
104* |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
____________
|
(1) |
Previously Filed |
|
|
(2) |
Filed Herewith |
|
|
|
|
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|
* |
Filed Herewith. Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Guskin Gold Corp. |
|||
|
Date: January 31, 2022 |
By: | /s/ Naana Asante | |
|
|
Name: |
Naana Asante |
|
| Title: |
Chief (Principal) Executive Officer |
||
|
Date: January 31, 2022 |
By: |
/s/ Mario Beckles |
|
|
|
Name: |
Mario Beckles |
|
|
|
Title: |
Chief Financial Officer (Principal Accounting Officer) |
|
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
|
Guskin Gold Corp. |
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|
|
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|
|
Date: January 31, 2022 |
By: |
/s/ Naana Asante |
|
|
|
Name: |
Naana Asante |
|
|
|
Title: |
Chief (Principal) Executive Officer and Director |
|
|
|
|
|
|
|
Date: January 31, 2022 |
By: |
/s/ Mario Beckles |
|
|
|
Name: |
Mario Beckles |
|
|
|
Title: |
Chief Financial Officer (Principal Accounting Officer) and Director |
|
| 32 |
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| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the board of directors of Guskin Gold Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Guskin Gold Corp. (the "Company") as of September 30, 2021, the related statement of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company's auditor since 2021
Lakewood, CO
January 31, 2022
| F-1 |
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| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of:
Guskin Gold Corp. (formerly known as Inspired Builders, Inc.)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Guskin Gold Corp. (formerly known as Inspired Builders, Inc) and Subsidiary (the “Company”) as of September 30, 2020, and the related consolidated statement of operations, stockholders’ deficit, and cash flows for the period from May 28, 2020 (inception) to September 30, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2020, and the results of its operations and its cash flows for the period from May 28, 2020 (inception) to September 30, 2020, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 in the consolidated financial statements, the Company has a net loss, an accumulated deficit and a working capital deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Liggett & Webb, P.A.
We served as the Company’s auditor from 2014.
Boynton Beach, Florida
January 8, 2021
| F-2 |
|
|
| Table of Contents |
GUSKIN GOLD CORP. AND SUBSIDIARIES
FKA INSPIRED BUILDERS, INC.
CONSOLIDATED BALANCE SHEET
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
|
|
| Table of Contents |
GUSKIN GOLD CORP. AND SUBSIDIARIES
FKA INSPIRED BUILDERS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
|
|
|
For Fiscal Year Ended |
|
|
For the period from May 28, 2020
|
|
||
|
|
September 30,
|
|
|
September 30,
|
|
|||
|
|
|
|
|
|
|
|
||
|
Operating Expenses: |
|
|
|
|
|
|
||
|
Stock based compensation |
|
$ | 2,593,500 |
|
|
$ | - |
|
|
Professional fees |
|
|
211,234 |
|
|
|
66,078 |
|
|
General and administrative expenses |
|
|
121,210 |
|
|
|
2,066 |
|
|
Impairment |
|
|
81,923 |
|
|
|
- |
|
|
Total Operating Expenses |
|
|
3,007,867 |
|
|
|
68,144 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(3,007,867 | ) |
|
|
(68,144 | ) |
|
|
|
|
|
|
|
|
|
|
|
Other Expense |
|
|
|
|
|
|
|
|
|
Change in fair value of derivative |
|
|
(10,304,893 | ) |
|
|
12 |
|
|
Interest expense |
|
|
(94,234 | ) |
|
|
(3,018 | ) |
|
Total other expense |
|
|
(10,399,127 | ) |
|
|
(3,006 | ) |
|
|
|
|
|
|
|
|
|
|
|
Net loss before income tax provision |
|
|
(13,406,994 | ) |
|
|
(71,150 | ) |
|
Provision for income tax |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ | (13,406,994 | ) |
|
$ | (71,150 | ) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ | (0.32 | ) |
|
$ | (0.00 | ) |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
41,917,101 |
|
|
|
28,964,615 |
|
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
|
|
| Table of Contents |
GUSKIN GOLD CORP. AND SUBSIDIARIES
FKA INSPIRED BUILDERS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 AND FOR THE PERIOD FROM MAY 28, 2020 (INCEPTION) TO SEPTEMBER 30, 2020
|
|
|
Common Stock |
|
|
Capital |
|
|
Stock subscription |
|
|
Accumulated |
|
|
|
||||||||||
|
|
|
Shares |
|
|
Par Value |
|
|
Deficiency |
|
|
receivable |
|
|
Deficit |
|
|
Total |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Balance - May 28, 2020 (inception) |
|
|
|
|
$ | - |
|
|
$ | - |
|
|
$ | - |
|
|
$ | - |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued to founder |
|
|
15,000,000 |
|
|
|
15,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
15,000 |
|
|
Common stock issued for services |
|
|
13,200,000 |
|
|
|
13,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,200 |
|
|
Share exchange and reverse merger |
|
|
1,011,265 |
|
|
|
1,011 |
|
|
|
(2,175,610 | ) |
|
|
|
|
|
|
|
|
|
|
(2,174,599 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(71,150 | ) |
|
|
(71,150 | ) |
|
Balance - September 30, 2020 |
|
|
29,211,265 |
|
|
$ | 29,211 |
|
|
$ | (2,175,610 | ) |
|
$ | - |
|
|
$ | (71,150 | ) |
|
$ | (2,217,549 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for services |
|
|
13,000,000 |
|
|
|
13,000 |
|
|
|
2,327,000 |
|
|
|
|
|
|
|
|
|
|
|
2,340,000 |
|
|
Debt conversion into common stock |
|
|
8,000,000 |
|
|
|
8,000 |
|
|
|
1,432,002 |
|
|
|
|
|
|
|
|
|
|
|
1,440,002 |
|
|
Common stock subscriptions |
|
|
740,000 |
|
|
|
740 |
|
|
|
184,260 |
|
|
|
(75,000 | ) |
|
|
|
|
|
|
110,000 |
|
|
In-kind contribution of services |
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
Common stock issued for mineral rights |
|
|
250,000 |
|
|
|
250 |
|
|
|
5,176 |
|
|
|
|
|
|
|
- |
|
|
|
5,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(13,406,994 | ) |
|
|
(13,406,994 | ) |
|
Balance - September 30, 2021 |
|
|
51,201,265 |
|
|
$ | 51,201 |
|
|
$ | 1,822,827 |
|
|
$ | (75,000 | ) |
|
$ | (13,478,144 | ) |
|
$ | (11,679,115 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
|
|
| Table of Contents |
GUSKIN GOLD CORP. AND SUBSIDIARIES
FKA INSPIRED BUILDERS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2021 AND THE PERIOD FROM MAY 28, 2020
(INCEPTION) TO SEPTEMBER 30, 2020
|
|
|
For the
|
|
|
For the
|
|
||
|
|
|
September 30,
|
|
|
September 30,
|
|
||
|
|
|
|
|
|
|
|
||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
|
Net loss |
|
$ | (13,406,994 | ) |
|
$ | (71,150 | ) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
|
79,236 |
|
|
|
2,614 |
|
|
Change in fair value of derivative liability |
|
|
10,304,893 |
|
|
|
(11 | ) |
|
In-kind contribution of service |
|
|
50,000 |
|
|
|
- |
|
|
Common stock issued for services |
|
|
2,593,500 |
|
|
|
13,200 |
|
|
Common stock issued for founder |
|
|
- |
|
|
|
15,000 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid expense |
|
|
(5,000 | ) |
|
|
- |
|
|
Accounts payable and accrued expenses |
|
|
144,248 |
|
|
|
3,220 |
|
|
Net Cash Used in Operating Activities |
|
|
(225,839 | ) |
|
|
(37,127 | ) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Cash acquired under reverse merger |
|
|
|
|
|
|
27,500 |
|
|
Investment in mineral rights |
|
|
5,426 |
|
|
|
- |
|
|
Net Cash Provided by Investing Activities |
|
|
5,426 |
|
|
|
27,500 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Proceeds from related party debt, net of repayment |
|
|
118,967 |
|
|
|
15,894 |
|
|
Proceeds from notes payable |
|
|
- |
|
|
|
7,500 |
|
|
Common stock subscriptions |
|
|
110,000 |
|
|
|
- |
|
|
Net Cash Provided by Financing Activities |
|
|
228,967 |
|
|
|
23,394 |
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH |
|
|
(7,723 | ) |
|
|
13,767 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH - BEGINNING OF PERIOD |
|
|
13,767 |
|
|
|
- |
|
|
CASH - END OF PERIOD |
|
$ | 6,044 |
|
|
$ | 13,767 |
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ | - |
|
|
$ | - |
|
|
Cash paid for interest |
|
$ | - |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of convertible notes payable |
|
$ | 1,440,000 |
|
|
$ | - |
|
|
Convertible notes payable converted to common stock |
|
$ | 80,000 |
|
|
$ | - |
|
|
Derivative liability extinguished upon conversion of convertible notes |
|
$ | 1,360,000 |
|
|
$ | - |
|
|
Recapitalization – reverse merger |
|
$ | - |
|
|
$ | 2,174,599 |
|
|
Investment in mineral rights |
|
$ | 5,426 |
|
|
$ | - |
|
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
|
|
| Table of Contents |
GUSKIN GOLD CORP. AND SUBSIDIARIES
FKA INSPIRED BUILDERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2021
Note 1 – Organization and basis of accounting
Basis of Presentation and Organization
Guskin Gold Corp. (fka Inspired Builders, Inc.) (the “Company”,”Guskin”, “We”, and “Us”) was incorporated in the State of Nevada in February 2010. Until August 15, 2017, the Company was directing its focus on acquiring, investing in, developing and managing real estate properties and related investments. On August 15, 2017, pursuant to a change in control transaction, we relocated to Miami, Florida and ceased all operations as a real estate company.
On January 16, 2020, Santa Alba, LLC sold the 956,440 shares of common stock to Custodian Ventures, LLC for an aggregate purchase price of $145,000. At this point there was a change of control of the Company and Kai Ming Zhao resigned as President, Secretary, Treasurer and Director and David Lazar was appointed as President, Secretary, Treasurer and Director.
On April 30, 2020, Custodian Ventures, LLC, a Wyoming limited liability company (“CVL”) and the Company entered into a Stock Purchase Agreement (the “Agreement”) with U Green Enterprise, a Ghana corporation (the “Purchaser”). The Agreement closed upon execution on April 30, 2020 (“Closing”). Pursuant to the Agreement, CVL agreed to sell and Purchaser agreed to purchase 956,440 restricted common stock shares of the Company (the “Shares”), representing approximately 94.6% of the Company’s outstanding shares of common stock. Pursuant to the Agreement, Purchaser agreed to pay CVL as follows: (i) $157,640 payable at the Closing in exchange for the Shares, and (ii) to repay the note outstanding to CVL in amount of $67,360 immediately following the Closing. The Agreement resulted in a change of control of the Company and David Lazar resigned effective immediately as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole director and Edward Somuah was appointed as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole director.
Guskin Gold Corporation (“GGC”) was incorporated in May 28, 2020 in the state of Nevada. GGC’s business activity is the early-stage development of a business focusing on the acquisition of gold properties, and the exploration and potential development of small-scale gold mining operations in the Republic of Ghana, West Africa.
On September 3, 2020, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with GGC, and the controlling stockholders of GGC (the “GGC Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired One Hundred Percent (100%) the issued and outstanding equity interest of GGC from the GGC Shareholders (the “GGC Shares”) and in exchange the Company issued to GGC an aggregate of Twenty-Eight Million Two Hundred Thousand (28,200,000) shares of restricted common stock of the Company.
The Share Exchange is accounted for as a reverse recapitalization under U.S. GAAP as the Share Exchange results in a change of control of the Company. GGC was determined to be the accounting acquirer based upon the terms of the Share Exchange and other factors including: (i) GGC’s shareholders are expected to own approximately 96.54% of the Company issued and outstanding common stock immediately following the effective time of the Share Exchange (the “Closing”), and (ii) GGC’s management will hold all key positions in the management of the combined company.
As of September 22, 2020 (the “Closing Date”), GGC provided us with valid and accepted audited financial statements, accordingly the transactions contemplated by the Share Exchange Agreement have been satisfied, accordingly the Share Exchange Agreement is closed (“Closing”).
The Company filed the Amended Articles of Incorporation effecting the Name Change with the Nevada Secretary of State, effective November 30, 2020. As previously reported, shareholders approved the Name Change and Symbol Change on September 22, 2020, in connection with the Closing of the Share Exchange Agreement between the Company and Guskin Gold Corp.
| F-7 |
|
|
| Table of Contents |
On December 3, 2020, the Financial Industry Regulatory Authority (“FINRA”) announced the effectiveness of a change in the Company’s name from “Inspired Builders, Inc.” to “Guskin Gold Corp.” (the “Name Change”) and a change in the Company’s ticker symbol from “ISRB” to the new trading symbol ”GKIN” (the “Symbol Change”). Trading under the new ticker symbol began at market opening December 4, 2020. The Company’s CUSIP also changed to 40330L100.
Note 2 – Summary of significant accounting policies
Principles of Consolidation
The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, GGC and Guskin Gold Ghana #1 Limited from June 02, 2021, inception date. All intercompany accounts, balances and transactions have been eliminated in the consolidation as at September 30, 2020.
Cash and Cash Equivalents
For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of 90 days or less to be cash and cash equivalents. There were cash equivalents of $6,044 at September 30, 2021 and no cash equivalents at September 30, 2020. As of September 30, 2020, $13,752 was held with an escrow agent.
Earnings (Loss) per Share
In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. As of September 30, 2021, the Company had $45,000 in convertible debt which if exercised would convert into 4,500,000 and as of September 30, 2020, and $125,000 in convertible debt which if exercised would convert into 12,500,000 shares of common stock.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the assumptions used in valuation of equity-based transactions, valuation of derivative liabilities and valuation of deferred taxes.
Revenue Recognition
The Company accounts for revenue under Accounts Standard Codification (“ASC”) ASC 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
The Company has only recently changed its business focus to its current business of exploration, development, production, and export of gold in Ghana, and to smartly find, build, and operate profitable gold and precious metal properties. Consequently, we have only limited operating history and an unproven business strategy, no current properties and prospects that have yet to be developed. As such, no revenue has been recognized to date.
| F-8 |
|
|
| Table of Contents |
Impairment of Long-lived Assets
We review and evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated undiscounted pretax future cash flows are less than the carrying amount of the asset. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups. An impairment loss is measured by discounted estimated future cash flows and recorded by reducing the asset’s carrying amount to fair value. Future cash flows are estimated based on estimated quantities of recoverable minerals, expected gold prices (considering current and historical prices, trends, and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans.
Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves are included when determining the fair value of mine site asset groups at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of gold, silver, lead, and zinc that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from exploration stage mineral interests are risk adjusted based on management’s relative confidence in such materials. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those risk factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.
Gold prices are volatile and affected by many factors beyond the Company’s control, including prevailing interest rates and returns on other asset classes, expectations regarding inflation, speculation, currency values, governmental decisions regarding precious metals stockpiles, global and regional demand and production, political and economic conditions and other factors may affect the key assumptions used in the Company’s impairment testing. Various factors could impact our ability to achieve forecasted production levels from proven and probable reserves. Additionally, production, capital and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. Actual results may vary from the Company’s estimates and result in additional Impairment of Long-lived Assets.
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Investments
ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2021 and 2020.
| F-9 |
|
|
| Table of Contents |
Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:
Level 1 - Quoted market prices available in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts payable, accrued liabilities, convertible notes, loans payable, and notes payable. Fair values were assumed to approximate carrying values for these financial instruments due to their short-term maturities.
We account for derivative liability at fair value on a recurring basis under level 3 at September 30, 2021 and 2020 (see Note 9).
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations.
Derivative Instrument Liability
The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2021 and 2020, the Company had a derivative liability of $11,070,004 and $2,125,113, respectively.
Recent Accounting Pronouncements
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.
Note 3 – Reverse Merger
On September 03, 2020, the Company and its controlling stockholders entered into a Share Exchange Agreement (the “Share Exchange”) with GGC and the shareholders of GGC. GGC’ current plan of operation consists of identifying, assessing and vetting various gold and mineral properties, specifically focusing on gold properties and the exploration and potential development of small-scale gold mining operations in the Republic of Ghana, West Africa.
| F-10 |
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| Table of Contents |
At the closing of the transactions contemplated by the Share Exchange (the “Closing”), in exchange for 28,200,000 shares of GGC’ common stock which represents 100% of the currently issued and outstanding capital stock of GGC, the Company will issue 28,200,000 newly issued shares of the Company’s common stock to the GGC’ shareholders, representing approximately 96.54% of the Company’s issued and outstanding common stock of the Company upon Closing. As a result of the Share Exchange, GGC shall become the Company’ wholly owned subsidiary, and the Company shall acquire the business and operations of GGC. The Closing of the Share Exchange is subject to certain conditions, including the approval of the Company’s shareholders. The Share Exchange closed September 22, 2020.
For accounting purposes, GGC is considered to be the acquiring company and the Share Exchange was accounted for as a reverse recapitalization of the Company by GGC because (i) GGC’ shareholders own approximately 96.54% of the Company’s issued and outstanding common stock immediately following the effective time of the Share Exchange, and (ii) GGC’ management holds all key positions in the management of the combined company following the Closing. Under reverse recapitalization accounting, the assets and liabilities of the Company are recorded, as of the Closing, at their fair value which approximates its book value because of the short-term nature of the instruments. No goodwill or intangible assets were recognized. Consequently, the financial statements of GGC reflect the operations of the acquirer for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former stockholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer.
The following is the fair value of the assets acquired and the liabilities assumed by GGC in the Share Exchange:
|
Total Assets assumed |
|
$ | 27,502 |
|
|
Total Liabilities assumed |
|
|
(2,202,101 | ) |
|
Net Liabilities assumed |
|
$ | (2,174,599 | ) |
Note 4 – Going Concern
As reflected in the accompanying consolidated financial statements, the Company has net losses of $13,153,494 and $71,150 for the fiscal year ended September 30, 2021 and for the period from May 28, 2020 (inception) to September 30, 2020, respectively. In addition, the Company has accumulated deficit of $13,478,144 and $71,150 and working capital deficit of $11,350,615 and $2,217,549 as of September 30, 2021 and 2020, respectively.
The accompanying consolidated financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to raise additional funding. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
Note 5 – Investment in mineral rights
On June 10, 2021, the Board of Directors of the Company ratified entry into a Joint Venture & Partnership Agreement (the “JV Agreement”) with Africa Exploration & Minerals Group Limited, a company incorporated in Ghana (the “AEMG”), dated June 1, 2021, Additionally, AEMG granted to the Company an exclusive option to earn and acquire up to a 50% ownership interest in certain project, properties and concession located in the Country of Ghana in which AEMG has an interest (the “Ghana Option Interest”). The initial project that the Parties shall endeavor to undertake pursuant to the Partnership is approximately 1 square km or 247 acres of land, (which is approximately 61.75 Ghana acers) of the Shewn Edged Pink Concession (the “Concession”). The Parties intend this to be an unincorporated contractual joint venture in respect of the exploration, development, exploitation, and operation of the Concession. The Company has formed a wholly owned subsidiary incorporated in Ghana and duly authorized to conduct business in precious metals and in mining activities in Ghana named Guskin Gold Ghana #1 Limited. All operations relating to the Concession will be undertaken by Guskin Gold Ghana #1 Limited. The Company, through Guskin Gold Ghana #1 Limited now holds 25% non-controlling interest of the Shewn Edged Pink Concession. The JV is considered as an unincorporated legal entity for accounting purposes, in accordance with ASC 323, therefore the Company has elected to account for all activity related to the JV under proportional consolidation of the results of operations. The Company issued 250,000 restricted common shares the Company’s common stock, at a per share valuation of $0.0217 per share (the “Shares”) for a total fair value of $5,426. There are no proven mineral reserves on the Shewn Edged Pink Concession as of September 30, 2021. During the fiscal year ended September 30, 2021, Guskin Gold advanced $67,500 to AEMG. Management evaluated the investment in mineral rights annually for impairment and determined that the total amount capitalized was impaired. An impairment loss total $81,923 was recorded.
| F-11 |
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| Table of Contents |
In the beginning of November 2021, Company management, while visiting our operations in Ghana, noticed various accounting discrepancies and expenses irregularities relating to AEMG’s activities at the Concession. Additionally, during this time the Company was informed that, on information and belief, AEMG was not the rightful owner of the Concession and in fact had no legal right to enter the Partnership with the Company. Thereafter, the Company met with AEMG on several occasions seeking to resolve these matters in a manner that would be mutually agreeable to both parties. All attempts, as of the date of this report, to resolve the dispute amicably have been unsuccessful. The Company has retained Ghanaian counsel to represent and protect its interests relating to the disputed funds and our ongoing operation in Ghana. Also, on advice of counsel, the Company has turned all evidence of the foregoing over to the proper authorities and currently the matter is under review by the lead prosecutors in Accra, Ghana.
Note 6 – Loans Payable - Related Party and Related Party Transactions
On June 1, 2020, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $1,630 for expenses paid for on behalf of the company. On June 18, 2020, the Company received an additional $4,500 from Naana Asante for expenses paid on behalf of the Company. During the period July 1 through September 30, 2020, the Company received an additional $354. The unsecured loans mature on June 1, 2021, and bears an interest rate of 2.5%. As of September 30, 2020, the Company recorded accrued interest expenses of $48. During the fiscal year ended September 30, 2021, the Company received an additional loan totaling $102,800 and repaid $3,096. These loans mature on February 5, 2022, February 22, 2022, March 26, 2022, April 10, 2022, and May 19, 2022. As of September 30, 2021, a total of $108,451 remains outstanding as of September 30, 2021, the Company recorded accrued interest expense of $1,508.
On June 1, 2020, the Company entered into a loan agreement with an entity controlled by a shareholder in the amount of $3,500 for expenses paid for on behalf of the Company. On June 26, 2020, the Company received an additional $5,910 for expenses paid on behalf of the Company. The unsecured loans mature one year from the date of the loan and bears an interest rate of 2.5%. As of September 30, 2021, the Company recorded accrued interest expenses of $314. As of September 30, 2020, the Company recorded accrued interest expenses of $78.
On September 22, 2020, the Company assumed, as part of the reverse merger and share exchange agreement a related party loan payable dated April 30, 2020, owed to U Green Enterprise, a Ghana corporation controlled by our Board of Directors. As of September 30, 2021, and September 30, 2020, the Company had a loan payable of $14,496 owed to U Green Enterprises. The loan payable is non-interest bearing and due on demand.
On January 4, 2021, the Company entered into a loan agreement in the amount of $17,000 from a related third party. The loan is unsecured and bears an interest rate of 2.5% and is payable one year from the date of signing. As of September 30, 2021, the accrued interest was $311.
Note 7 – Note payable
On September 22, 2020, the Company entered into a loan agreement with a third party in the amount of $7,500 for expenses paid for on behalf of the Company. This unsecured loan matures one year from the date of the loan and bears an interest rate of 2.5%. As of September 30, 2021, and September 30, 2020, $7,500 of note payable remains outstanding.
| F-12 |
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| Table of Contents |
Note 8 – Income taxes
The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.
FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to 100% of the deferred tax asset has also been recorded resulting in no net deferred tax asset. The cumulative deferred tax asset which is calculated by multiplying a 21% estimated tax rate by the cumulative net operating loss (NOL) adjusted for the following items:
|
For the period ended September 30, |
2021 | 2020 | ||||||
| Book loss for the year | $ | (13,153,494 | ) | $ | (71,150 | ) | ||
| Temporary differences: |
|
|
|
|
|
|
|
|
|
Accrued interest |
|
|
19,701 |
|
|
|
4,702 |
|
|
Accounts payable and accrued expenses |
|
|
142,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Permanent differences: |
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
2,340,000 |
|
|
|
28,200 |
|
|
Amortization of debt discount |
|
|
79,236 |
|
|
|
2,614 |
|
|
Change in derivative liability |
|
|
10,304,893 |
|
|
|
(12 | ) |
|
Tax loss for the year |
|
|
(48,672 | ) |
|
|
(35,646 | ) |
|
|
|
|
|
|
|
|
|
|
|
Estimated effective tax rate |
|
|
21 | % |
|
|
21 | % |
|
Deferred tax asset |
|
$ | (56,157 | ) |
|
$ | (7,486 | ) |
|
Less: Valuation allowance |
|
|
7,486 |
|
|
|
7,486 |
|
|
Net Deferred tax asset |
|
$ | (48,672 | ) |
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
Rate Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income tax at statutory rate |
|
$ | (2,762,234 | ) |
|
$ | (14,942 | ) |
|
Temporary difference |
|
|
34,009 |
|
|
|
987 |
|
|
Permanent difference |
|
|
2,672,067 |
|
|
|
6,469 |
|
|
Change in Valuation Allowance |
|
|
7,486 |
|
|
|
7,486 |
|
|
|
|
$ | (48,672 | ) |
|
$ | - |
|
| F-13 |
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| Table of Contents |
The tax period since inception is open for examination by taxing authorities through 2026.
Pursuant to Section 382 of the Internal Revenue Code, or IRC, annual use of the Company’s net operating loss (NOL) carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company determined that because of various stock issuances used to finance its operations, an ownership change as defined in the provisions of Section 382 of the IRC occurred on September 22, 2020. Such ownership change resulted in annual limitations on the utilization of tax attributes, including NOL carryforwards and tax credits. The Company estimates that $950,000 of its NOL carryforwards were effectively eliminated under Section 382 for federal income tax purposes. A portion of the remaining NOL carryforwards limited by Section 382 will become available each year. Limitations on NOL carryforwards relating to change in ownership may be imposed during the year ended September 30, 2021. The Company’s Section 382 estimated analysis has not been completed through September 30, 2021.
Note 9 – Convertible notes
On September 22, 2020, the Company assumed a convertible note offering of up to $3,000,000 under regulation S as part of the reverse merger with Inspired Builders, Inc. The note offering calls for a minimum investment of $10,000. The note bears an interest rate equal to 10% per annum and matures after one year from the date of subscription. The note is convertible at the rate equivalent to the lessor of $0.01 per share or a 20% discount to market based upon the 10-day Volume Weighted Average Price (VWAP) prior to Maturity. The Company intends to regularly issue notes payable which are convertible at a discount of the trading price of the Company’s common stock. Due to these provisions, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. The company assumed seven convertible note subscriptions totaling $125,000 with unrelated parties. The convertible notes have an original issuance cost of $7,360, and a debt discount of $117,640 for the fair value of the embedded conversion feature on issuance dates.
On April 16, 2021, the holder of the note in the amount of $15,000 converted all of its note into 1,500,000 shares of common stock valued at $270,000 or $0.18 per share and the unamortized discount at the date of conversion of $542 was expensed to interest expense.
On April 17, 2021, the holder of the note in the amount of $15,000 converted all of its note into 1,500,000 shares of common stock valued at $270,000 or $0.18 per share and the unamortized discount at the date of conversion of $500 was expensed to interest expense.
On April 18, 2021, the holder of the note in the amount of $25,000 converted all of its note into 2,500,000 shares of common stock valued at $450,000 or $0.18 per share and the unamortized discount at the date of conversion of $1,875 was expensed to interest expense.
A summary of value changes to the notes for the year ended September 30, 2021, and 2020 is as follows:
|
|
|
September 30, 2021 |
|
|
From May 28, 2020 (Inception) to September 30, 2020 |
|
||
|
|
|
|
||||||
|
Carrying value of Convertible Notes |
|
$ | 45,764 |
|
|
$ | - |
|
|
Convertible notes assumed - reverse merger |
|
|
- |
|
|
|
125,000 |
|
|
Less: Conversion of principal |
|
|
80,000 |
|
|
|
- |
|
|
Less: debt discount |
|
|
79,236 |
|
|
|
(79,236 | ) |
|
Carrying value of Convertible Notes, net |
|
$ | 45,000 |
|
|
$ | 45,764 |
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| F-14 |
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| Table of Contents |
Note 10 – Derivative liability
The Company has determined that the variable conversion prices under its convertible notes caused the embedded conversion feature to be a financial derivative. The derivative instruments were valued at loan origination date, date of debt conversion and at September 30, 2020. The fair values of the derivative liabilities related to the conversion options of these notes was estimated on the transaction dates (loan original date and reporting date) using the Black Scholes option pricing model, under the following assumptions:
|
|
|
September 30, 2021 |
|
|
September 30, 2020 |
|
||
|
|
|
|
||||||
|
Shares of common stock issuable upon exercise of debt |
|
|
4,500,000 |
|
|
|
12,500,000 |
|
|
Estimated market value of common stock on measurement date |
|
$ | 2.47 |
|
|
$ | 0.18 |
|
|
Exercise price |
|
$ | 0.01 |
|
|
$ | 0.01 |
|
|
Risk free interest rate (1) |
|
0.11–0.16 |
% |
|
0.11-0.16 |
% |
||
|
Expected dividend yield (2) |
|
|
0 | % |
|
|
0 | % |
|
Expected volatility (3) |
|
|
64.21 | % |
|
91.28-191 |
% |
|
|
Expected exercise term in years (4) |
|
0.60 – 1.00 |
|
|
0.60 – 1.00 |
|
||
|
(1) |
The risk –free interest rate was determined by management using the one-month Treasury bill yield as of the valuation dates. |
|
(2) |
The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. |
|
(3) |
The volatility was determined by referring to the average historical volatility of a peer group of public companies because we do not have sufficient trade history to determine our historical volatility. |
|
(4) |
The exercise term is the remaining contractual term of the convertible instrument at the valuation date. |
The change in fair values of the derivative liabilities related to the Convertible Notes for the fiscal year ended September 30, 2021 is summarized as:
|
|
|
Fair value at
|
|
|
Quoted
|
|
|
Significant
|
|
|
Significant
|
|
||||
|
|
|
2021 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
|
Derivative Liability |
|
$ | 11,070,004 |
|
|
$ | - |
|
|
$ | - |
|
|
$ | 11,070,004 |
|
|
|
|
Derivative
|
|
|
|
Derivative liability as of September 30, 2020 |
|
$ | 2,125,113 |
|
|
Change in fair value of derivative liability |
|
|
10,304,893 |
|
|
Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability |
|
|
(1,360,000 | ) |
|
Derivative liability as of September 30, 2021 |
|
$ | 11,070,004 |
|
|
|
|
Change in
|
|
|
|
Change in fair value of derivative liability at the beginning of period |
|
$ | - |
|
|
Day one gains/(losses) on valuation |
|
|
- |
|
|
Gains/(losses) from the change in fair value of derivative liability |
|
|
11,070,004 |
|
|
Change in fair value of derivative liability at the end of the period |
|
$ | 11,070,004 |
|
|
** |
The fair value at the remeasurement date is equal to the carrying value on the balance sheet. |
| F-15 |
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| Table of Contents |
The change in fair values of the derivative liabilities related to the Convertible Notes for the period from May 28, 2020 (inception) to September 30, 2020 is summarized as:
|
|
|
Fair value at
2020 |
|
|
Quoted
(Level 1) |
|
|
Significant
(Level 2) |
|
|
Significant
(Level 3) |
|
||||
|
Derivative Liability |
|
$ | 2,125,113 |
|
|
$ | - |
|
|
$ | - |
|
|
$ | 2,125,113 |
|
|
|
|
Derivative
|
|
|
|
Derivative liability as of May 28, 2020 (inception) |
|
$ | - |
|
|
Fair value for convertible instruments – reverse merger |
|
|
2,125,125 |
|
|
Change in fair value of derivative liability |
|
|
(12 | ) |
|
Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability |
|
|
- |
|
|
Derivative liability as of September 30, 2020 |
|
$ | 2,125,113 |
|
|
|
|
Change in
|
|
|
|
Change in fair value of derivative liability at May 28, 2020 (inception) |
|
$ | - |
|
|
Day one gains/(losses) on valuation |
|
|
- |
|
|
Gains/(losses) from the change in fair value of derivative liability |
|
|
12 |
|
|
Change in fair value of derivative liability at September 30, 2020 |
|
$ | 12 |
|
|
** |
The fair value at the remeasurement date is equal to the carrying value on the balance sheet. |
Note 11 – Commitment and Contingencies
In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have had a minimal impact on our day to day operations. However, this could impact our efforts to enter into a business combination as other businesses have had to adjust, reduce or suspend their operating activities. The extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19. The Company is unable to predict the ultimate impact at this time.
On June 1, 2020, (the “commencement date”) the Company entered into a consulting agreement with Dr. Kweku Ainuson to provide consulting services on as needed basis. The consultant shall be responsible for advising the Chief Executive Officer, President, Chief Geologist, and Chairman of the Board of Directors on all legal matters of the Company. In addition, the consultant is to provide legal advice on areas including but not limited to business contracts or any other legal documentation that requires legal expertise; assisting in the management of internal and external legal resources; reading and reviewing legal documents that the Client receives and making sure that they are properly drafted and any other legal services. As compensation for the services provided by Consultant, the Consultant should vest 50,000 shares common shares valued at $0.001 every quarter for total compensation value of 200,000 shares. In addition, every 90 days, from the commencement date, the company shall pay the consultant $5,000 plus additional fees per quarter. During the fiscal year ended September 30, 2021, a total of $15,000 in cash has been paid to Mr. Anuison. As of September 30, 2021, a total of $5,000 in cash compensation and 200,000 shares valued at $253,500 in stock based compensation is owed to Mr. Anuison.
| F-16 |
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| Table of Contents |
On August 31, 2020, (the “commencement date”) the Company entered into a three-month term consulting agreement to provide consulting services on as needed basis. The consultant shall be responsible to perform business development and general consulting services on a non -exclusive basis for and on behalf of the Client in relation to business development, developing and creating operation documents, and will consult with and advise, as necessary and requested, The Client on matters pertaining to its general business operations. As compensation for the services provided by Consultant, the company shall pay the consultant $7,500 in month one, $2,500 in month two and $2,500 in month three. On December 15, 2020, the Company amended the consulting contract for an additional six months from the amendment date. As compensation for the services provided, the Company shall pay the consultant $2,500 per month.
On January 12, 2021, the Company, entered into a Consulting Agreement with Edward Somuah, (“Mr. Somuah”) an individual, to memorialize and formalize Mr. Somuah’s commitment and services to the Company. Mr. Somuah was a member of the Company’s Board of Directors, the Chief Financial Officer (“CFO”), and Secretary. The Company paid Mr. Somuah a monthly salary in the total amount $4,500 per month. Additionally, on January 11, 2021, the Company issued 13,000,000 shares of restricted common stock for services valued at $2,340,000 to Edward Somuah as compensation for services rendered. On July 13, 2021, Edward Somuah, the Company’s current Chief Financial Officer (“CFO”), resigned from his position as CFO and Treasurer. Upon resignment, Mr. Somuah will no longer receive a monthly salary of $4,500 per month.
On June 10, 2021, the Board of Directors of the Company ratified entry into a Joint Venture & Partnership Agreement (the “JV Agreement”) with Africa Exploration & Minerals Group Limited, a company incorporated in Ghana (the “AEMG”), dated June 1, 2021, which sets forth the terms and conditions of a joint venture and partnership (the “Partnership”) between AEMG and the Company relating to precious metal, minerals and mining exploration activities in the Country of Ghana. Additionally, AEMG granted to the Company an exclusive option to earn and acquire up to a 50% ownership interest in certain project, properties and concession located in the Country of Ghana in which AEMG has an interest (the “Ghana Option Interest”). The initial project that the Parties shall endeavor to undertake pursuant to the Partnership is approximately 1 square km or 247 acres of land, (which is approximately 61.75 Ghana acers) of the Shewn Edged Pink Concession (the “Concession”). The Parties intend this to be an unincorporated contractual joint venture in respect of the exploration, development, exploitation and operation of the Concession. Each additional project relating to the Ghana Option Interest, and agreed to be made part of, and undertaken by the Partnership, shall be governed by individual “Operating Agreements” setting forth the terms and conditions relating to each project specifically.
The specific terms and conditions relating to the operations of the Concession are set forth in that certain Operating Agreement (“Operating Agreement”), which is attached to the JV Agreement as Schedule A.
The Company has formed a wholly owned subsidiary incorporated in Ghana and duly authorized to conduct business in precious metals and in mining activities in Ghana named Guskin Gold Ghana #1 Limited. All operations relating to the Concession will be undertaken by Guskin Gold Ghana #1 Limited.
As consideration for the Partnership and the Ghana Option Interest, the Company shall advance to AEMG, or other parties as directed by AEMG, and as mutually agreed to by the Parties, a financing (“Financing”) in the aggregate of Five Hundred Thousand ($500,000) dollars, to be remitted in accordance with a work program and budget. Such funds advanced as part of the Financing shall not be considered a capital contribution relating to the operations of the Partnership but shall be a debt due from the operations of the Partnership to the Company which shall be repaid from proceeds derived from operations, or upon the dissolution and liquidation of the operation. Additionally, the Company shall issue an aggregate 2,000,000 restricted common shares the Company’s common stock, at a per share valuation to be determined based on separate performance obligations (the “Shares”). Such Shares shall be earned and issued based on reaching and completion of certain milestones, which are fully set forth in the JV Agreement and Operating Agreement. In accordance with the JV Agreement, AEMG received approximately 250,000 shares of restricted common stock valued at $0.0217 per share for a total fair value of $5,426 were issued to AEMG.
| F-17 |
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From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
Note 12 – Common stock
On May 28, 2020, the Company issued 15,000,000 shares of common stock to Naana Asante for services valued at $15,000. From the period May 28, 2020 (inception) through September 30, 2020, the Company issued 13,200,000 shares of common stock for services valued at $13,200.
On September 3, 2020, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with GGC, and the controlling stockholders of GGC (the “GGC Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired One Hundred Percent (100%) the issued and outstanding equity interest of GGC from the GGC Shareholders (the “GGC Shares”) and in exchange the Company issued to GGC an aggregate of Twenty-Eight Million Two Hundred Thousand (28,200,000) shares of restricted common stock of the Company. As a result of the Share Exchange Agreement, GGC become a wholly owned subsidiary of the Company.
On January 11, 2021, the Company issued 13,000,000 shares of restricted common stock for services valued at $2,340,000 to Edward Somuah as compensation for services rendered.
On April 16, 2021, the holder of the note in the amount of $15,000 converted all of its note into 1,500,000 shares of common stock valued at $270,000 or $0.18 per share and the unamortized discount at the date of conversion of $542 was expensed to interest expense.
On April 17, 2021, the holder of the note in the amount of $15,000 converted all of its note into 1,500,000 shares of common stock valued at $270,000 or $0.18 per share and the unamortized discount at the date of conversion of $500 was expensed to interest expense.
On April 18, 2021, the holder of the note in the amount of $25,000 converted all of its note into 2,500,000 shares of common stock valued at $450,000 or $0.18 per share and the unamortized discount at the date of conversion of $1,875 was expensed to interest expense.
On April 19, 2021, the holder of the note in the amount of $25,000 converted all of its note into 2,500,000shares of common stock valued at $450,000 or $0.18 per share and the unamortized discount at the date of conversion of $5,554 was expensed to interest expense.
On June 10, 2021, in accordance with the JV Agreement, AEMG is entitled to receive approximately 250,000 shares of restricted common stock as of the date of the Partnership agreement. As June 30, 2021, 250,000 shares of restricted common stock valued at $0.0217 per share for a total fair value of $5,426 were issued to AEMG.
During the period from July 1, 2021, to September 30, 2021, the Company received funds from an unrelated third party in the amount of $110,000 in exchange for 440,000 shares of common stock. In addition, the company recorded a subscription receivable of $75,000 in exchange for 300,000 shares of common stock. This is recorded in stockholder equity.
As of September 30, 2021, a total of 51,201,265 shares of common stock with par value $0.001 remain outstanding.
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On October 06, 2021, the Company received $75,000 from unrelated third party for payment of 300,000 shares of common stock. On October 28, 2021, the Company received $25,000 in exchange for a convertible note from an unrelated third party.
On November 16, 2021, the Company received $34,978 in exchange for a convertible note from a n unrelated third party.
In the beginning of November 2021, Company management, while visiting our operations in Ghana, noticed various accounting discrepancies and expenses irregularities relating to AEMG’s activities at the Concession. Additionally, during this time the Company was informed that, on information and belief, AEMG was not the rightful owner of the Concession and in fact had no legal right to enter the Partnership with the Company. Thereafter, the Company met with AEMG on several occasions seeking to resolve these matters in a manner that would be mutually agreeable to both parties. All attempts, as of the date of this report, to resolve the dispute amicably have been unsuccessful. The Company has retained Ghanaian counsel to represent and protect its interests relating to the disputed funds and our ongoing operation in Ghana. Also, on advice of counsel, the Company has turned all evidence of the foregoing over to the proper authorities and currently the matter is under review by the lead prosecutors in Accra, Ghana.
On January 24, 2022, Guskin Gold Corp., by and through a new wholly owned subsidiary, Guskin Gold Ghana #1 Limited., a company incorporated under the Laws of the Republic of Ghana (collectively, Guskin Gold Corp. and its subsidiary Guskin Gold Ghana Ltd. shall be referred to hereinafter as the “Company”) and Danampco Company Ltd., a company incorporated under the Laws of the Republic of Ghana (the “DCL”) entered into a Joint Venture & Partnership Agreement (the “JV Agreement”) which sets forth the terms and conditions of a joint venture and partnership (the “Partnership”) between themselves relating to precious metal, minerals and mining exploration activities in the Country of Ghana. Per the Agreement DCL granted the Company an exclusive seventy (70%) percent ownership interest in that certain project, located in the Country of Ghana in which DCL has an interest known as the Kukuom Shewn Edged Pink Concession (the “Kukuom Concession”). The Kukuom Concession covers a total surface area of one-hundred fifty-six (156) square kilometers and is located between the cities of Goaso and Bibiani in the Ahafo District of Ghana. The Parties intent this to be an unincorporated contractual joint venture in respect of the exploration, development, exploitation, and operation of the Concession. Each additional project relating to the Ghana Option Interest, and agreed to be made part of, and undertaken by the Partnership, shall be governed by individual “Operating Agreements” setting forth the terms and conditions relating to each project specifically. As consideration for the Partnership, the Company shall provide all financing (“Financing”), to be remitted in accordance with a work program and budget, necessary to begin exploration of the Kukuom Concession. Additionally, the Company shall issue DCL 500,000 restricted common shares the Company’s common stock, at a per share valuation of $1.00 per share, with such shares shall be issued based on certain milestones, which are fully sent forth in the JV Agreement and Operating Agreement. The foregoing description of the JV Agreement and Operating Agreement (as Schedule A to the JV Agreement) do not purport to be complete and are qualified in their entirety by reference to the full text of both documents which are attached hereto as Exhibit 10.4 (the Operating Agreement is Schedule A to the JV Agreement) and is incorporated herein by reference.
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EXHIBIT 10.4
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JOINT VENTURE
&
PARTNERSHIP AGREEMENT
Between
DANAMPCO COMPANY LTD.
And
GUSKIN GOLD GHANA LTD.
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JOINT VENTURE & PARTNERSHIP AGREEMENT
This JOINT VENTURE PARTNERSHIP AGREEMENT (“Agreement”) is made and entered into as of the date first set forth below with an effective date of January 1, 2022, (the “Effective Date”), by and between DANAMPCO COMPANY LTD. (“DCL”), incorporated under the laws of the Republic of Ghana and GUSKIN GOLD GHANA LTD. (“GGGL”), incorporated under the laws of the Republic of Ghana. For purposes of this Agreement DCL and GGGL are sometimes collectively referred to as the “Parties” and individually as a “Party” or as the “Partners” and individually as a “Partner”.
RECITALS
WHEREAS, Danampco Company Ltd. is a company incorporated in Ghana and is duly authorized to conduct business in precious metals and in mining activities;
WHEREAS, Guskin Gold Ghana Ltd. is a company incorporated in Ghana and is in the process of becoming duly authorized to conduct business in precious metals and in mining activities, additionally, GGGL is a wholly owned subsidiarity of Guskin Gold Corp., a Nevada corporation (“GKIN”). GKIN is a publicly traded corporation in the United States under the ticker symbol “GKIN” with its head office in Santa Clara, California;
WHEREAS, the Parties desire to enter into this Agreement in order to set forth the terms and conditions of a Joint Venture & Partnership (the “Partnership”) between themselves relating to precious metal, minerals and mining exploration activities in the Country of Ghana;
WHEREAS, DCL wishes to grant to GGGL an exclusive seventy (70%) percent ownership interest in that certain project, located in the Country of Ghana in which DCL has an interest known as the Kukuom Shewn Edged Pink Concession (the “Kukuom Concession”). The “Kukuom Concession” covers a total surface area of one-hundred fifty-six (156) square kilometers and is located between the cities of Goaso and Bibiani in the Ahafo District of Ghana;
WHEREAS, upon the execution of this Agreement, the Parties wish to enter into an unincorporated contractual joint venture in respect of the exploration, development, exploitation and operation of the Kukuom Concession on the terms and conditions as set forth in this Agreement and as set forth in SCHEDULE A hereto; and,
NOW THEREFORE THIS AGREEMENT WITNESSED, that in consideration of the premises and the mutual covenants, agreements and conditions herein contained, it is hereby covenanted, agreed, and declared by and among the Partners (as defined herein) as follows:
ARTICLE 1
INTRODUCTION
1.1 Definitions. In this Agreement (as defined herein), unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the respective meanings ascribed below:
(a) “Accountants” means such firm of accountants as the Partners may from time to time determine to be the accountants of the Partnership (as defined herein);
(b) “Agreement”, “this Agreement”, “hereto”, “herein”, “hereby”, “hereunder” and similar expressions refer to this Agreement and not to any Article, Section, or other portion hereof, and include any and every instrument supplemental or ancillary to or in implement hereof;
(c) “Business” means any business or businesses carried on by the Partnership as may be deemed by the Partners to be in the best interest of the Partnership and any other general business activities related or incidental thereto;
(d) “Commercial Production” means, and is deemed to have been achieved, on: (i) the later of the date that the concentrator producing a mixed rare earth product and, if applicable, the separator producing separated rare earth products from ores derived from a property, other than for testing purposes, for a period of 90 consecutive production days; or, (ii) if a concentrator and/or separator is not erected in connection with the Project, when ores have been produced for a period of 90 consecutive production days.
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(e) “Effective Date” means the date set forth in the preamble of this Agreement;
(f) “Fiscal Year” means January 1 to December 31;
(g) “Partner” means any one of DCL or GGGL or any other partner admitted pursuant to the provisions of this Agreement, “Partners” means all of them, and the “Partnership” means the partnership established by this Agreement; and,
(h) “Person” means any individual, firm, corporation, partnership, joint venture, trustee or trust, government, or agency thereof, unincorporated association, or other entity and pronouns have a similarly extended meaning.
1.2 Number and Gender. Words importing the singular include the plural and vice versa and words importing gender include all genders.
1.3 Governing Legislation. Except as expressly stipulated in this Agreement to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the laws of the Republic of Ghana or any successor legislation or other statute.
1.4 Recitals. The Partners agree that the foregoing Recitals are true and correct and are incorporated into the Agreement by this reference.
1.5 Purpose. The Parties acknowledge and agree that the overall intent and purpose of entering into this Agreement (the “Purpose”) is to prospect and explore for minerals in Ghana in order to determine whether the any certain property or concession contains a commercial rare earths deposit including, to do all things and take all steps reasonably necessary to bring a property (or any part thereof) into Commercial Production, and upon doing so, to Commercially Produce Minerals from the Property, and the Partners covenant and agree to do so diligently, in good faith and in accordance with good mineral exploration and development practice subject always to the terms and conditions of this Agreement.
ARTICLE 2
FORMATION OF PARTNERSHIP
2.1 Establishment. Subject to the terms and conditions hereof, the parties hereto agree to carry on the Business in Partnership.
2.2 Grant of Interest. DCL hereby shall grants to GGGL an exclusive seventy (70%) percent interest in and to the Kukuom Concession and in exchange GGGL shall contribute such funds reasonably necessary to develop and extract ore and to conduct all operational activities relating to the development and exploitation of the Kukuom Concession, as more fully set forth in the Operating Agreement, attached hereto as Schedule A, and such other consideration in the form of shares of GKIN’s common stock, as more fully set forth in Section 3 below.
2.3 Term. Subject to the provisions of this Agreement, the Partnership shall commence as of the Effective Date and shall continue for a term ending on the earlier of:
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the date on which the Partnership is voluntarily dissolved by unanimous agreement of the Partners; or |
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the date on which the Partnership is dissolved by operation of law. |
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2.4 Partnership. The Parties hereby associate themselves in and constitute, with effect on and from the Effective Date, an unincorporated contractual joint venture in respect of the Kukuom Concession for the following purposes:
(a) to carry out the exploration of the Kukuom Concession, according to that Work Program and certain Operating Budget, which to be included as a Schedule to the Operating Agreement, as attached hereto;
(b) if results justify so doing, to make technical, commercial, and economic feasibility studies to establish whether or not the Kukuom Concession is economically viable;
(c) if any Kukuom Concession is considered technically, commercially, and economically viable, to develop one or more mines on the Kukuom Concession and to commence and continue production of saleable mineral product on a commercial scale; and,
(d) any other activity in connection with or incidental to any of the foregoing.
2.5 Place of Business. The place of business of the Partnership shall be at such place or places as the Partners shall from time to time hereafter determine.
2.6 New Partners. No person shall be admitted as a Partner except with the unanimous consent in writing of the Partners.
2.7 Key Advisor. GGGL shall retain a “key advisor” to be determined by DCL whom will assist the Joint Venture in Ghana with governmental, regulatory, community, and other issues that may arise. The key advisor shall be retained solely by GGGL, and any such consulting fee shall be tendered by GGGL to the key advisor and shall not become a liability of the Joint Venture. Such key advisor shall be retained by separate consulting agreement to be executed concurrently with the execution hereof.
ARTICLE 3
FINANCIAL MATTERS
3.1 Initial Resource Contributions and Requirements. The initial capital of the Partnership shall be:
(a) The first partner capital contribution made by DCL to the partnership is in the form of the Kukuom Concession, DCL is a licensed leaseholder of Mining and Mineral Right’s on the Kukom Concession and holds its interest in the Kukuom Concession pursuant to that certain lease agreement dated _____________- with the Government of the Republic of Ghana (hereinafter referred to as the “Government”) and the Ghana Ministry of Lands & Natural Resources (hereinafter referred as “MLNR”). The entire Kukuom Concession covers a total surface area of 156.20 square kilometers and is located between the cities of Goaso and Bibaini in the Ahafo District of Ghana; and,
(b) The second partner capital contribution made by GGGL to the partnership shall be:
(i) to furnish such capital necessary to fund the exploration, development, and exploitation of the Kukuom Concession (“Financing”) on the terms and conditions as set forth therein as full set forth in the Operators Agreement, attached hereto as Schedule A; and,
(ii) in addition to providing the Financing, GGGL shall facilitate the transfer of 500,000 restricted common shares of GKIN to DCL as further consideration for GKIN’s participating interest in the Joint Venture (the “GKIN Shares”). The GKIN Shares shall be valued at $1.00 per share or an aggregate fair market value of Five Hundred Thousand ($500,000) dollars. The GKIN Shares shall be issued and delivered to DCL in accordance with the following milestones:
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(iii) DCL understands and acknowledges that the GKIN shares to be issued pursuant to this Agreement have not been registered and are being issued pursuant to a specific exemption under the Securities Act, as well as under certain state securities laws for transactions by an issuer not involving any public offering or in reliance on limited federal preemption from such state securities registration laws and that the GKIN Shares must be held and may not be sold, transferred, or otherwise disposed of for value, unless such securities are subsequently registered under the Securities Act or an exemption from such registration is available, and that the certificates representing the GKIN Shares issued in the Share Exchange will bear a legend in substantially the following form so restricting the sale of such securities:
The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act. The securities have been acquired for investment and may not be sold or transferred without complying with Rule 144 in the absence of an effective registration or other compliance under the Securities Act.
(iv) DCL explicitly acknowledges and agrees that this issuance of the GKIN Shares shall be subject to additional restrictions relating to the release of the GKIN Shares to DCL for resale in the public markets, such additional restrictions shall be negotiated, in good faith, by the Partners and their affiliates at the time of each issuance, as set forth in the table above. However, it is envisioned that the GKIN Shares will be subject to Lock-Up/Leak-Out Agreements setting forth both the number of shares that will be made available to DCL on a monthly basis and volume resale restrictions, restriction the number of shares that DCL shall be allowed to sell (as a percentage of total daily volume) on a daily basis.
(c) The initial valuable contributions by each of the Partners shall be credited to the capital ledger (“Capital Ledger”) of each Partner. The following provisions of this Section 3.1 shall apply in respect of the valuable contributions of the Partners:
(i) the contributions to the Partnership shall belong to the Partners in the proportionate share of the Partnership. Each contribution is acceptable to the other for the value contributed equal to the value received;
(ii) any further contribution of capital required by the Partnership may be contributed to the Partnership by any one or both of the Partners without limitation as to the amount of resources further contributed and any such additional capital contribution shall be treated in the same manner as the initial capital contributions above set out and shall have no dilution factors associated with the percentage ownership of the Partnership going forward;
(iii) Each Partner shall be entitled to an interest in the amount of an equal 50% for its initial contribution to the Partnership.
3.2 Profits, Losses and Other Financial Matters. In each Fiscal Year all items of income and gain, and expenses and loss of the Partnership shall be determined by the Capital Ledger of the Partnership at the end of each Fiscal Year.
3.3 Net Profits and Losses.
(a) Subject to the terms and conditions of each Operating Agreement, the net profits, if any, of the Partnership as determined at the end of each such Fiscal Year shall be allocated among the Partners in proportion to the respective “Capital Account(s)” of each of the Partners as calculated at the end of each such Fiscal Year.
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(b) All expenses incurred during the business and all losses, if any, arising therefrom shall be borne out of the earnings of the business, or in the case of a deficiency, the losses shall be allocated amongst the Partners pro rata to their respective percentage ownership in the Partnership at the end of each such Fiscal Year.
3.4 Drawings. Each of the Partners may draw out of the Partnership, from time to time, on account of its share of the net profits for the current year, a sum not exceeding their respective ownership share. Any sums drawn out by any Partner in excess of its share of the net profits for any such year shall be repaid in full to the Partnership unless otherwise unanimously agreed by the Partners.
3.5 Financial Statements. Proper accounts shall be kept of all transactions of the business and at the end of each Fiscal Year or as soon thereafter as possible, a statement shall be prepared showing the income and expenses of the business for the past year and what belongs and is due to each of the partners as its share of the profits.
3.6 Encumbrance of Partnership Interest. Neither partner shall, without the previous consent in writing of the other, sign or encumber its share or interest in the Partnership.
3.7 Payment of Obligations. Each of the Partners shall punctually pay and discharge its separate debts, liabilities, obligations, duties, and agreements whether at present or future and keep indemnified the Partnership property and the other partner from all actions, proceedings, costs, claims, and demands of every nature.
3.8 Indemnification. If at any time either of the Partners is required to pay or become liable for more than its proportion of the Partnership debts as provided for in this agreement, that partner shall have as against the other Partner a right of recovery of the appropriate proportion of the payment or indemnification against such liability, and the Partner shall have, on becoming liable for such debt, the first lien or charge on the capital and all other interest or interests of the offending partner in the Partnership business.
ARTICLE 4
MANAGEMENT
4.1 Management. Final authority, management and control of the business and affairs of the Partnership shall be vested in the Partners.
4.2 Action of the Partners. The powers of the Partners may be exercised by resolution passed at a meeting of the Partners or by resolution consented to by the signatures of the Partners.
4.3 Delegation of Authority.
(a) It is hereby established that GGGL will be and shall have full authority of the Partners to operate the business on a day-to-day basis, on an ongoing basis with a full support from DCL. GKIN, as the “operating partner”, will have all decision-making capabilities with respect to running the operations on a day-to-day basis and shall be allowed to make all operational decisions for this purpose. Excluding, keeping all concessions or ownership interest current with the Title Holders and Government of Ghana, which shall be the responsibility of DCL.
(b) The Partners may at any time, and from time to time, by resolution passed at a meeting of the Partners delegate any power or authority relating to the management of the business and affairs of the Partnership to any Partner and the exercise of any such authority or authority by such Partner shall be valid and binding upon all partners until such power or authority has been rescinded by resolution.
4.4 Place of Meeting. Meetings of the Partners shall be held at the principal office of the Partnership, or, at such other place as the Partners may, by unanimous agreement, determine.
4.5 Calling of Meetings. Meetings of the Partners shall be held from time to time at such time and on such day without notice as any Partner may determine.
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4.6 Power of Attorney. Each Partner grants to the other partner for such time as he remains a Partner to this agreement, an irrevocable power of attorney for the purposes of filing any notices or registrations as may be required by law in connection with the existence or carrying on of the business of the partnership on a day-to-day basis.
4.7 Fiscal Year. Until changed with the unanimous approval of the Partners, the Fiscal Year shall be the fiscal year of the Partnership.
4.8 Banking Arrangements. The Partners agree that the Partnership shall enter banking arrangements with any bank or banks or other financial institutions as the Partners shall agree on. All cheques, drafts and other instruments and documents on behalf of the Partnership may be signed by any one of the authorized Partners alone, unless otherwise agreed between the Parties. All Partnership money shall, when received from time to time, be paid and deposited with the bankers of the Partnership to the credit of the Partnership account.
4.9 Books and Records. Complete and accurate books of account shall be kept at the principal place of business of the Partnership and shall show the condition of the business and finances of the partnership, and each Partner shall have access to, and may inspect and copy, any part thereof.
4.10 Partnership Property. Unless otherwise unanimously agreed by the Partners or unless registered in the name of a trustee, all Partnership property shall be registered in the name of the partnership in proportion to ownership of each Partner.
ARTICLE 5
DETERMINATION OF PARTNERSHIP
5.1 General. Except as expressly permitted in this Article 5, or as otherwise unanimously agreed to in writing by the Partners, no Partner may sell, assign, convey, transfer, mortgage, charge or otherwise encumber all or any part of its share or interest in the Partnership.
5.2 Dissolution. The Partnership shall be dissolved at any time by unanimous resolution of the Partners passed at a meeting of the partners called for that purpose. The Partnership may also be terminated by unanimous agreement in writing signed by all the Partners.
5.3 Determination. In the event of the dissolution of the Partnership, the Partnership shall terminate, and a proper accounting shall be made of the capital and income accounts of each Partner and the profit or losses of the Partnership to the date of dissolution by the accountants. The assets of the Partnership shall be liquidated, and the proceeds of such liquidation shall then be distributed as follows, unless the Partners otherwise unanimously agree:
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firstly, to repay all costs, credits, debts, expenses, liabilities, and obligations of the Partnership; |
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secondly, to pay to each Partner its share of the capital; and, |
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thirdly, to divide the surplus, if any, between the partners in the proportions in which they are entitled to share in profits. |
In the event that such liquidation proceeds shall not be sufficient to satisfy the liabilities of the Partnership, each of the Partners shall contribute its pro rata share, as determined in accordance with their individual ownership of the Partnership, of such further funds as shall be necessary to satisfy in full, the liabilities of the Partnership.
5.4 Agreements with Transferees. In the event that any Partner (in this Section 5.4 called the “Transferor”), pursuant to the terms and conditions hereof, purports to transfer all, but not less than all, of its interest or share in the partnership to any person (such person in this Section 5.4 called the “Transferee”), then no such transfer shall be made or shall be effective until the transferee enters into an agreement with the other Partner hereto whereby the transferee agrees to assume and be bound by all of the obligations of the transferor and to be subject to all of the terms and conditions of this agreement.
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5.5 Restraining Order. If any Partner shall at any time purport to transfer, charge or mortgage its interest or share or any part thereof in the partnership in violation of the provisions of this agreement, then the other Partner shall, in addition to any rights and remedies which may be available to such partner, at law or in equity, be entitled to a decree or order restraining or enjoining such transfer, charge, or mortgage.
ARTICLE 6
GENERAL
6.1 Headings. The headings of any Article, Section or part thereof are inserted for purposes of convenience only and shall not form part hereof and shall not be considered in the interpretation hereof.
6.2 Notices. Any notice, demand, request, consent, agreement or approval which may or is required to be given pursuant to this agreement shall be in writing and shall be sufficiently given or made if served personally upon the party or a representative or officer of the party for whom it is intended, or mailed by certified or registered mail, postage prepaid, or telecopied, or electronically mailed to the appropriately addressed at such address to such officers as a party may from time to time advise to the other parties by notice in writing. The date of receipt of any such notice, demand, request, consent, agreement, or approval if served personally shall be deemed to be the date of delivery thereof, or if mailed as aforesaid, the second business day following the date of mailing, or if delivered via telecopier, or electronically mailed the business day following transmission.
6.3 Governing Law. The validity and interpretation of this agreement shall be governed exclusively by the laws of the Republic of Ghana applicable therein.
6.4 Severability. The invalidity or unenforceability of any particular provision of this agreement shall not affect any other provision hereof, but this agreement shall be construed and enforced as if such invalid or unenforceable provision was omitted.
6.5 Effective Date. Notwithstanding the actual date of execution hereof, this agreement shall be effective as of and from the Effective Date.
6.6 Entire Agreement. This Agreement embodies the entire and final agreement of the Partners with regard to the Partnership and no representations, warranties, agreements, understandings, verbal or otherwise, exist between the Partners except as herein expressly set out.
6.7 Amendments. No amendment, alteration, change, qualification or modification of this agreement shall be valid unless it is in writing and signed by each Partner hereto and any such amendment, alteration, change, qualification or modification shall be adhered to and have the same effect as if they had been originally embodied in and formed a part of this agreement.
6.8 Time. Time is of the essence of this agreement and of every part hereof.
6.9 Further Assurances. The Partners hereto, and each of them, covenant and agree that each of them shall and will, upon reasonable request of the other Partners, make, do, execute or cause to be made, done or executed all such further and other lawful acts, deeds, things, devices and assurances whatsoever for the better or more perfect and absolute performance of the terms and conditions of this agreement.
6.10 Endurement. This Agreement and the provisions hereof shall endure to the benefit of and shall be binding upon the Parties hereto and their respective successors and permitted assigns.
6.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement.
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IN WITNESS, WHEREOF the Parties hereto have duly executed this Agreement as of the date first written above.
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DANAMPCO COMPANY LTD. |
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Per: |
/s/ Danqua Smith |
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Date: 16/12/2021 |
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Name: Danqua Smith |
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Title: Managing Director |
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GUSKIN GOLD GHANA LTD. |
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Per: |
/s/ Naana Asante |
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Date: 1/24/2022 |
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Name: Naana Asante |
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Title: President and Director |
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Acknowledged and agreed solely for the purposes of the delivery of the GKIN Shares per Section 3.1(b).
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Per: |
/s/ Naana Asante |
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Date: 1/24/2022 |
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Name: Naana Asante |
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Title: President and Director |
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OPERATING AGREEMENT
BY AND AMONG
DANAMPCO COMPANY LTD.
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KUKUOM CONCESSION
OPERATING AGREEMENT
This OPERATING AGREEMENT, executed this ___ day of _______2021, is made as of the Effective Date by and among:
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DANAMPCO COMPANY LTD., a company incorporated in Ghana with its registered office at 990 Black 23, Trasacoo Valley, Adjiringano-Accra under registration number C2039522017; (hereinafter referred to as “DCL”) duly authorized to conduct import export, exploration and in mining activities (hereafter referred to as “Non-Operator”); and, |
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GUSKIN GOLD GHANA LIMITED, a company incorporated in Ghana with its registered office at 1st Floor, Number 5, Fifth Lane, Dr. Esther Ocloo Street Kuku Hill Osu, Accra, Ghana, under registration number CS130300621 (hereinafter referred to as “GGGL” or “Co-operator”) duly authorized to conduct business in precious metals and in mining activities in Ghana. |
RECITALS
WHEREAS, DCL entered into a Land Lease Agreement (“Lease Agreement”) covering that certain concession known as the Kukuom Concession (hereinafter, the “Concession”) dated April 30, 2020 with the Government of the Republic of Ghana (hereinafter referred to as the “Government”) and the Ghana Ministry of Lands & Natural Resources (hereinafter referred as “MLNR”). The Concession covers a total surface area of 156.20 square kilometers and is located between the cities of Goaso and Bibaini in the Ahafo District of Ghana;
WHEREAS, Guskin Gold Ghana Ltd. is a company incorporated in Ghana and is in the process of becoming duly authorized to conduct business in precious metals and in mining activities, additionally, GGGL is a wholly owned subsidiarity of Guskin Gold Corp., a Nevada corporation (“GKIN”). GKIN is a publicly traded corporation in the United States under the ticker symbol “GKIN” with its head office in Santa Clara, California;
WHEREAS, the Parties now wish to enter into this Operating Agreement, covering the Kukuom Concession, this concession shall be the subject property of this Operating Agreement;
WHEREAS, GKIN desires to acquire and receive seventy (70%) percent interest in Kukuom as per the term and conditions set forth herein and in that certain Joint Venture Agreement to which this Operating Agreement is Schedule A; and,
WHEREAS, the Parties desire to define their respective rights and obligations with respect to each other and the operations under the Lease Agreement and this Operations Agreement; and,
NOW THEREFORE THIS AGREEMENT WITNESSED, that in consideration of the premises and the mutual covenants, agreements and conditions herein contained, it is hereby covenanted, agreed, and declared by and among the Partners (as defined herein) as follows:
AGREEMENT
ARTICLE I — DEFINITIONS
As used in this Agreement, the following words and terms shall have the meaning ascribed to them below:
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1.1 |
Accounting Procedure means the rules, provisions and conditions set forth and contained in Exhibit A to this Agreement. |
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1.2 |
AFE means an “Authorization For Expenditure” pursuant to Article 6.6. |
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1.3 |
Affiliate means, in relation to any Party, a company, partnership, person, persons or other legal entity which controls, or is controlled by, or which is controlled by an entity which controls, a Party. Control means the ownership directly or indirectly of more than fifty percent (50%) of the voting rights in a company, partnership, or legal entity. |
| Page 11 of 48 |
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1.4 |
Agreement means this Operating Agreement, together with the Exhibit attached to this Agreement, and any extension, renewal or amendment hereof agreed to in writing by the Parties associated with the Lease Agreement. |
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1.6 |
Block of Land means lands demarcated for the use of mineral exploration and mineral and diamond mining area of land in the Republic of Ghana, in good standing, being the Lease Area as defined by Article 1.14 of the Lease Agreement. |
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1.7 |
Business Day means a day on which the banks in New York are open for business. |
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1.8 |
Calendar Quarter means a period of three (3) months commencing with January 1 and ending on the following March 31, a period of three (3) months commencing with April 1 and ending on the following June 30, a period of three (3) months commencing with July 1 and ending on the following September 30, or a period of three (3) months commencing with October 1 and ending on the following December 31 according to the Gregorian Calendar. |
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1.9 |
Calendar Year means a period of twelve (12) months commencing with January 1 and ending on the following December 31 according to the Gregorian Calendar. |
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1.10 |
Commercial Discovery means any Discovery which the Operator (as defined in the Lease Area) declares to be a Commercial Discovery pursuant to Article 7.8 of the Lease Agreement. |
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1.11 |
Completion means the area or zone ready for the reclamation phase. |
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1.12 |
Day means a calendar day unless otherwise specifically provided. |
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1.13 |
Deepening means an operation whereby an objective zone of the strata below the last deepest zone in which the extraction of precious minerals was previously excavated or drilled, proposed in the original execution plan (in the approved work program and budget) and other derivatives shall be construed accordingly. |
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1.14 |
Default Notice shall have the meaning ascribed in Article 7.1. |
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1.15 |
Defaulting Party shall have the meaning ascribed in Article 7.1. |
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1.16 |
Discovery means the discovery of other valuable or Finished Goods whose existence until that moment was unproven by prior exploration work. |
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1.17 |
Reserved. |
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1.18 |
Effective Date means the date this Agreement is effective as set forth in the Closing Conditions as set forth in Article 2.2. |
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1.19 |
Entitlement means a quantity of goods of which a Party has the right and obligation to take delivery pursuant to the Lease Agreement or, if applicable, an offtake agreement, and the terms of this Agreement, after adjustment for expenses and purities of the Finished Goods. |
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1.20 |
Exclusive Operations means exclusive operations pursuant to this Agreement. |
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1.21 |
Execution Plan means a plan for the execution and extraction of Finished Goods from the Lease Area. |
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1.22 |
Finished Goods means all precious metals, including but not limited to gold, silver, etc., base metals including but not limited to copper, iron, etc., rare earth, industrial, and all gemstone minerals including but not limited to diamonds, gems, etc. with any commercial value what-so-ever. |
| Page 12 of 48 |
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1.23 |
GGSA or the Ghana Geological Survey Authority. |
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1.24 |
Government means the Government of The Republic of Ghana, including any state or municipal government or authority within Ghana, and any political subdivision or agency or instrumentality thereof, including without limitation to MLNR. |
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1.25 |
Gross Negligence means any act or failure to act by any Party, person or entity which was intended to cause, or which was in reckless disregard of or wanton indifference to, harmful consequences such person or entity knew, or should have known, such act or failure would have on the safety or property of another person or entity, but shall not include any error or judgement or mistake by any director employee, agent or of such person or entity (including its Affiliates when acting for and on behalf of such person or entity) in the exercise, in good faith, of any function, authority or discretion conferred upon such person or entity. |
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1.26 |
In-kind means property, leases, existing infrastructure, and revenues and/or profits earned from operations that are put back into the operations of the project. |
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1.27 |
Kukuom Concession means the Kukuom Concession which covers a total surface area of 156.20 square kilometers and is located between the cities of Goaso and Bibaini in the Ahafo District of Ghana. |
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1.28 |
Lease Agreement means the Lease Agreement between the Title Holder and Operator identified in this Agreement and any extension, renewal or amendment thereof agreed to in writing by the Parties and those law statutes, rules and regulations (including the minerals commission) with respect to the exploration, development and production of Finished Goods that govern such instrument or are incorporated by the terms of such instrument. |
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1.29 |
Lease Area has the meaning given in the Lease Hold Area as defined by Article 1.14 of the Lease Agreement. |
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1.30 |
Lease Agreement Period means all periods of exploitation during which the production and removal of minerals is permitted under the Lease Agreement. |
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1.31 |
MINCOM or the Minerals Commission of Ghana. |
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1.32 |
Minimum Work Obligations means those work and/or expenditure obligations specified in the Lease Agreement which must be performed during the then current Lease Agreement phase or period in order to satisfy the obligations of the Lease Agreement. |
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1.33 |
MLNR or The Ministry of Lands and Natural Resources of Ghana. |
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1.34 |
Non-Operator(s) means Parties, if any, with less than fifty percent (50%) Participating Interest in the Project, third parties or sub-contractors to this Agreement other than the exclusive Operator(s). |
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1.35 |
Operator means a Party to this Agreement designated as such in accordance with this Agreement. |
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1.36 |
Operations means those operations and activities carried out by the Operator or Operators pursuant to this Agreement, the costs of which are chargeable to and against the mining project. |
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1.37 |
Participating Interest means the undivided percentage interest of each Party in the rights and obligations derived from this Operating Agreement. |
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1.38 |
Party means any of the entities named in the first paragraph to this Agreement and any respective permitted successors or assigns and “Parties” means all of them. |
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1.39 |
Production Period means all periods of exploitation during which the production and removal of minerals and/or diamonds is permitted under the Lease Agreement. |
| Page 13 of 48 |
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1.40 |
Profit Disbursement Account means a segregated account held by the Operator and Co-operator that is exclusively in their entity’s names. |
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1.41 |
Profit Reserve Account means an account where profit disbursements are held for ninety (90) Days prior to distribution to the Parties. |
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1.42 |
Property means, at any point in time, all facilities, equipment, materials, information, funds and the property held for use in the operations of the project. |
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1.43 |
Testing means an operation intended to evaluate the capacity of an Area or Zone of the strata to produce Finished Goods, including minerals and/or diamonds. Testing and Assays and other derivatives shall be construed accordingly. |
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1.44 |
Work Program and Budget means a work program for Operations and budget of the plan of execution therefor as described and approved in accordance with Article VI. |
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1.45 |
Zone means a stratum of earth containing or thought to contain an accumulation of valuable minerals or diamonds. |
ARTICLE II —EFFECTIVE DATE; TERM
2.1 Closing.
This Agreement will Close automatically without any action from either Party upon the execution of this Agreement (the “Effective Date”).
2.2 Term.
This Agreement shall be effective as of the Effective Date and shall continue in effect until the Lease Agreement terminates in connection with the Operations, and all precious Finished Goods, if applicable have been removed and disposed of, and final settlement has been made among the Parties.
Notwithstanding the preceding sentence:
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(A) |
Article X shall remain in effect until all lands, areas and zones have been properly reacclimated; and, |
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(B) |
Section 4.5 and Article XIV shall remain in effect until all obligations, claims, arbitrations, and lawsuits have been settled or otherwise resolved. |
Termination of this Agreement or Removal of the Operator, as per Section 4.10, shall not relieve any Party from liabilities which have accrued or been incurred prior to the date of termination.
ARTICLE III — SCOPE
3.1 Scope
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(A) |
The purpose of this Agreement is to establish the respective rights and obligations of the Parties with regard to operations under the Lease Agreement, including without limitation the exploration, appraisal, development and production of Finished Goods, including, but not limited to, mineral reserves and diamond deposits from the Kukuom Concession area. |
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(B) |
Without limiting the generality of Article 3.1(A), the following activities are part of the scope of this Agreement and are addressed herein: |
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(1) |
Exclusive Operations being conducted by the Operator(s). |
| Page 14 of 48 |
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(2) |
Construction, operation, maintenance, repair, and removal of operational facilities located within the Kukuom Concession. |
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(3) |
The Parties’ profit shares of the Finished Goods after the fulfillment of the sale of value Finished Goods provided for an Article 8.2; |
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(4) |
Any financing raised or the fulfillment of Future Finished goods to be delivered in an offtake agreement provided for in Article 8.2, made by the Operator for its share of the project operational expenses. |
3.3 Participating Interests
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(A) |
The Participating Interests of the Parties from the Kukuom Concession area, as of the Effective Date are as follows: |
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DCL |
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30.00 | % |
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GKIN |
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70.00 | % |
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To be certain and for the avoidance of doubt, DCL prior to the execution of this Operating Agreement is the rightful owner of a one hundred (100%) percent interest in the Kukuom Concession, DCL hereby wishes to assign and transfer, as per this Operating Agreement, to GGGL a seventy (70%) percent ownerships interest in the Kukuom Concession area. |
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(B) |
The Parties recognize the rights of the Government of Ghana receives a continuing, perpetual, and statutorily granted royalty of ten percent (10%) in all mineral operations conducted in the Republic of Ghana (the “Ghana Royalty”). The Ghana Royalty shall be paid for exclusively out of the ownership interest of DCL. |
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(C) |
If a Party transfers all or part of its Participating Interest pursuant to the provisions of this Agreement or a new Lease Agreement, the Participating Interests of the Parties shall be revised accordingly, if applicable. |
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(D) |
DCL is the Licensed Leaseholders of Mining and Mineral Right’s Owners of the Kukuom Concession. |
3.3 Operation Financing; Consideration
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(A) |
As consideration for GGGL’s Participating Interest in the Kukuom Concession, GGGL shall provide financing (“Financing”) as necessary to explore, exploit and develop the Kukuom Concession to be contributed to the exploration and development of the Kukuom Concession in accordance with the submitted planned Work Program and Budget pursuant to clause 6.4 of this Agreement. |
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(B) |
All funds advanced as per Article 3.3(A), must be mutually agreed to by both Parties and shall not be considered a capital contribution relating to the Operations, but shall be a debt due from Operation to GGGL to be repaid from proceeds derived from Operations, or upon the dissolution and liquidation of the Operation. |
3.4 Ownership, Obligations and Liabilities
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(A) |
Unless otherwise provided in this Agreement, all the rights and interests in and under the Lease Agreement, all Property and any mineral goods produced from the Lease Area shall be subject to the terms of the Lease Agreement, and this Operating Agreement to be owned by the Parties in accordance with their respective Participating Interests. |
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(B) |
Unless otherwise provided in this Agreement, the obligations the Parties under the Lease Agreement and all liabilities and expenses incurred by Operator(s) in connection with the project Operations shall be charged to the Project Account and all credits to the Operators Account first and all net profits shall be shared by the Parties, as among themselves, in accordance with their respective Participating Interests. |
| Page 15 of 48 |
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(C) |
Each Part shall pay or contribute value when due, in accordance with the Accounting Procedure, the project expenses, including cash advances and/or the payment of debt financing obtained for operational purposes pursuant to this Agreement. The Parties agree that time is of the essence for payments owed and other valuable contributions under this Agreement. A Party’s payment of any charge under this Agreement shall be without prejudice to its right to later contest the charge. |
ARTICLE IV — EXCLUSIVE OPERATIONS
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4.1 |
Designation of Operator. GGGL shall act as the sole and exclusive operator (“Exclusive Operator”) of the Kukuom Concession (GGGL is sometimes referred to hereinafter as the “Operator”). They agree to act as the Exclusive Operators in accordance with the terms and conditions of the Lease Agreement and this Operating Agreement, which terms and conditions shall apply to any successor operator. |
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4.2 |
Rights and Duties of Operator |
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(A) |
Subject to the terms and conditions of this Agreement, Operator shall have all the rights, functions and duties as the Operator under the Lease Agreement and shall have exclusive charge of, and shall conduct, all Operations. Operator may employ independent sub-contractors and/or agents (which may include Affiliates of Operator) in such Operations. |
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(B) |
In the conduct of Operations, Operator shall: |
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(1) |
Perform Operations in accordance with the provisions of the Lease Agreement, and this Operating Agreement; |
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(2) |
Conduct all Operations in a diligent, safe, and efficient manner in accordance with good, prudent and responsible in-field mining practices and conservation and environmental principles generally followed by the responsible international mining industry under similar circumstances; |
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(3) |
Subject to Article 4.6 and the Accounting Procedure, either gain a profit or suffer a loss as a result of being the Operator in its conduct of Operations, provided that Operator may rely upon specific accounting practices not in conflict with the Accounting Procedure; |
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(4) |
Perform the duties set out in Article V, and prepare and submit to the Parties the proposed Work Programs, Budgets and AFEs as provided in Article VI; |
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(5) |
Upon receipt of reasonable advance notice, permit the representatives of any of the Parties to have, at all reasonable times and at their own risk and expense, reasonable access to the Operations with the right to observe all such Operations and to inspect all Property and to conduct financial audits as provided in the Accounting Procedure; |
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(6) |
Maintain the Lease Agreement in full force and effect to the full extent possible in accordance with such good, prudent, and responsible international mining industry practices as are generally followed by operators in the international mining industry under similar circumstances. Operator shall, in a timely manner promptly pay and discharge all liabilities and expenses incurred in connection with Operations and use its reasonable efforts to keep and maintain the Land Property free from all liens, charges and encumbrances arising out of Operations, unless otherwise prior establishment of project expenses; |
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(7) |
Pay to the Government Account, within the periods and in the manner prescribed by the Lease Agreement and all applicable laws and regulations, including the Law, all periodic payments, royalties, taxes, fees, and other payments pertaining to Operations, but excluding any taxes measured by the income participation of the Parties; |
| Page 16 of 48 |
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(8) |
Carry out the obligations of Operator pursuant to the Lease Agreement, including, but not limited to, preparing, and furnishing such reports, records and information as may be required pursuant to the Lease Agreement; |
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(9) |
Have the exclusive right and obligation to represent the Parties in all dealings with the Government with respect to matters arising under the Lease Agreement and Operations. Operator shall notify the other Parties as soon as possible of any such meetings. Nothing contained in this Agreement shall restrict any Party from holding discussions with the Government or with MINCOM or GGSA with respect to any issue to its particular business interests arising under the Lease Agreement or this Agreement, but in such event such Party shall promptly advise the Parties, if possible, before and in any event promptly after such discussions, provided that such Party shall not be required to divulge to the Parties any matters discussed to the extent the same involve proprietary information on matters not affecting the Parties; and, |
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(10) |
Take all necessary and proper measures for the protection of life, health, the environment, and property; provided, however, that in the case of an emergency, Operator shall immediately notify the Parties of the details of such emergency and measures. |
4.3 Employees of Operator. Subject to the Lease Agreement and this Agreement, Operator shall determine the number of employees, the selection of such employees, the hours of work and the compensation to be paid all such employees in connection with Operations. Operator shall employ only such employees, agents and sub-contractor arrangements as required by good, prudent, and responsible in-field international mining practices and as are reasonably necessary to conduct Operations. The Operator will, whenever possible, hire employees from the region of the Lease Area.
4.4 Information Supplied by Operator
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(A) |
Operator shall provide Title Holder, as necessary, the following data and reports as they are currently produced or compiled from the Operations: |
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(1) |
Copies of all logs or finished project surveys, |
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(2) |
Any production progress reports, |
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(3) |
Copies of all tests, assays, and core analysis reports, |
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(5) |
Copies of the final geological and geophysical maps and reports, |
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(6) |
Engineering studies, development schedules and annual progress reports on development projects, associated with various Lease Areas and Zone Depths within the concession, |
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(7) |
In-Field performance reports, including reserve estimates, |
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(8) |
Copies of all reports relating to Operations furnished by Operator to the Government or MINCOM and GGSA as the case maybe, |
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(9) |
Other reports as frequently as is justified by the activities or as instructed by the Parties; and, |
4.5 Settlement of Claims and Lawsuits
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(A) |
Operator shall promptly notify the Parties of all material claims or suits and such other claims and suits as the Operator may direct which arise out of operations or relate in any way to Operations. Operator shall represent the Parties and defend or oppose the claim or suit. Operator may in its sole discretion compromise or settle any such claim or suit or any related series of claims or suits for an amount not to exceed the equivalent of fifty thousand (US$50,000) exclusive of legal fees. |
| Page 17 of 48 |
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(B) |
Notwithstanding Article 4.5(A), each Party shall have the right to participate in any such suit, prosecution, defense, or settlement conducted in accordance with Article 4.5(A) at its sole cost and expense; provided always that no Party may settle its Participating Interest share of any claim without first satisfying the other Parties that it can do so without prejudicing the interests of the Parties. |
4.6 Limitation on Liability of Operator
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(A) |
EXCEPT AS SET OUT IN THIS ARTICLE 4.6 NEITHER THE PARTY DESIGNATED AS OPERATOR NOR ANY OTHER INDEMNITEE (AS DEFINED BELOW) SHALL BEAR (EXCEPT AS A PARTY TO THE EXTENT OF ITS PARTICIPATING INTEREST SHARE) ANY DAMAGE, LOSS, COST, EXPENSE OR LIABILITY RESULTING FROM PERFORMING (OR FAILING TO PERFORM) THE DUTIES AND FUNCTIONS OF THE OPERATOR, AND THE INDEMNITEES ARE HEREBY RELEASED FROM LIABILITY TO NON-OPERATORS FOR ANY AND ALL DAMAGES, LOSSES, COSTS, EXPENSES AND LIABILITIES ARISING OUT OF, INCIDENT TO OR RESULTING FROM SUCH PERFORMANCE OR FAILURE TO PERFORM. EVEN THOUGH CAUSED IN WHOLE OR IN PART BY A PRE-EXISTING DEFECT, THE NEGLIGENCE (WHETHER SOLE, OPERATORS OR CONCURRENT), GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL FAULT OF OPERATOR (OR ANY SUCH INDEMNITEE). |
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(B) |
EXCEPT AS SET OUT IN THIS ARTICLE 4.6, THE PARTIES SHALL IN PROPORTION TO THEIR PARTICIPATING INTERESTS DEFEND AND INDEMNIFY OPERATOR AND ITS AFFILIATES, AND THE OFFICERS AND DIRECTORS OF BOTH (COLLECTIVELY, THE “INDEMNITEES”), FROM ANY AND ALL DAMAGES, LOSSES, COSTS, EXPENSES (INCLUDING REASONABLE LEGAL COSTS, EXPENSES AND ATTORNEYS’ FEES) AND LIABILITIES INCIDENT TO CLAIMS, DEMANDS OR CASES OF ACTION BROUGHT BY OR ON BEHALF OF ANY PERSON OR ENTITY, WHICH CLAIMS, DEMANDS OR CAUSES OF ACTION ARISE OUT OF ARE INCIDENT TO OR RESULT FROM OPERATORS OPERATIONS EVEN THOUGH CAUSED IN WHOLE OR IN PART BY A PRE-EXISTING DEFECT, THE NEGLIGENCE (WHETHER SOLE, OPERATORS OR CONCURRENT), GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL FAULT OF OPERATOR (OR ANY SUCH INDEMNITEE). |
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(C) |
Nothing in this Article 4.6 shall be deemed to relieve the Party designated as Operator from its Participating Interest share of any damage, loss, cost, expense or liability arising out of, incident to or resulting from Operations. |
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(D) |
NOTWITHSTANDING THE FOREGOING, UNDER NO CIRCUMSTANCES SHALL ANY INDEMNITEE (EXCEPT AS A PARTY TO THE EXTENT OF ITS PARTICIPATING INTEREST) BEAR ANY DAMAGES, LOSS, COST, EXPENSE OR LIABILITY FOR ENVIRONMENTAL, CONSEQUENTIAL, PUNITIVE OR ANY OTHER SIMILAR INDIRECT DAMAGES OR LOSSES, INCLUDING BUT NOT LIMITED TO THOSE ARISING FROM BUSINESS INTERRUPTION, INABILITY TO PRODUCE MINERALS, DIAMONDS OR FINISHED GOODS, LOSS OF PROFITS, POLLUTION CONTROL AND ENVIRONMENTAL RECLAMATION OR REHABILITATION. |
4.7 Insurance Obtained by Operator
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(A) |
Operator shall procure and maintain, or cause to be procured and maintained, for the Project Account all insurance in the types and amounts required by the Lease Agreement and applicable laws, rules and regulations. |
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(B) |
Operator shall obtain such further insurance, at competitive rates, as the Government may from time to time require. |
| Page 18 of 48 |
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(C) |
Any Party may elect not to participate in the insurance to be procured under Article 4.7(B) provided such Party: |
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(1) |
gives prompt notice to that effect to Operator, |
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(2) |
does nothing which may interfere with Operator’s negotiations for such insurance for the other Parties, and |
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(3) |
obtains and maintains such insurance (in respect of which an annual certificate of adequate coverage from a reputable insurance broker shall be sufficient evidence) or other evidence of financial responsibility which fully covers its Participating Interest share of the risks that would be covered by the insurance procured under Article 4.7 (B), and which the Operator may determine to be acceptable. No such determination of acceptability shall in any way absolve a non-participating Party from its obligation to meet each cash call or other valuable consideration including any remuneration call in respect of damages and losses and/or the costs of remedying the same in accordance with the terms of this Agreement. If such Party obtains other insurance, such insurance shall contain a waiver of subrogation in favor of all the other Parties, the Operator and their insurers but only in respect of their interests under this Agreement. |
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(D) |
The cost of insurance in which all the Parties are participating shall be for the Project Account and the cost of insurance in which less than all the Parties are participating shall be charged to the Parties participating in proportion to their respective Participating Interests, if applicable. |
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(E) |
Operator shall, in respect of all insurance obtained pursuant to this Article 4.7: |
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(1) |
promptly inform the participating Parties when such insurance is obtained and supply them with certificates of insurance or copies of the relevant policies when the same are issued, |
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(2) |
arrange for the participating Parties, according to their respective Participating Interests, to be named as co-insureds on the relevant policies with waivers of subrogation in favor of all the Parties, and |
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(3) |
duly file all claims and take all necessary and proper steps to collect any proceeds and credit any proceeds to the participating Parties in proportion to their respective Participating Interests. |
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(F) |
Operator shall use its reasonable efforts to require all sub-contractors performing work in respect of Operations to obtain and maintain any and all insurance in the types and amounts required by any applicable laws, rules and regulations and shall use its reasonable efforts to require all such sub-contractors to name the Parties as additional insureds on such sub-contractors’ insurance policies or to obtain from their insurers waivers of all rights of recourse against Operator and their insurers. |
4.8 Commingling of Funds. Operator may commingle with its own funds the monies which Operator receives from or for the Project Account pursuant to this Agreement.
4.9 Resignation of Operator. Subject to Article 4.11, GGGL may resign as Operator at any time by so notifying DCL at least one hundred and twenty (120) Days prior to the effective date of such resignation.
4.10 Removal of Operator
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(A) |
Subject to Article 4.11, GGGL may be removed upon receipt of notice from DCL if: |
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(1) |
An order is made by a court, or an effective resolution is passed for the reorganization under any bankruptcy law, dissolution, liquidation, or winding up of Operator, |
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(2) |
Operator dissolves, liquidates, is wound up, or otherwise terminates its existence, |
| Page 19 of 48 |
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(3) |
Operator becomes insolvent, bankrupt or makes an assignment for the benefit of creditors, or |
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(4) |
A receiver is appointed for a substantial part of Operator assets. |
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(B) |
Subject to Article 4.11, Operator may be removed by the decision of the other Party or Title Holder if Operator has committed a material breach of this Agreement and has either failed to commence to cure that breach within thirty (30) Days of receipt of a notice from the other Party or Title Holder detailing the alleged breach or failed to diligently pursue the cure to completion. Any decision of the other Party or Title Holder to give notice of breach to Operator or to remove Operator under this Article 4.10(B) shall be made by an affirmative vote of the other Party and Title Holder. |
4.11 Appointment of Successor
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When a change of Operator occurs pursuant to Article 4.9 or Article 4.10: |
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(A) |
The remaining Operator appoint a successor Operator. |
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(B) |
If the Operator disputes commission of or failure to rectify a material breach alleged pursuant to Article 4.10(B) and proceedings are initiated pursuant to Article XVII, no successor Operator may be appointed pending the conclusion or abandonment of such proceedings, subject to the terms of Article 7.3 with respect to Operator’s breach of its payment obligations. |
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(C) |
A resigning or removed Operator shall be compensated out of the Joint Account for its reasonable expenses directly related to its resignation or removal, except in the case of Article 4.10(B). |
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(D) |
The resignation or removal of an Operator and its replacement by the successor Operator shall not become effective prior to receipt of any necessary Government approvals. |
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(G) |
Upon the effective date of the resignation or removal, the successor Operator shall succeed to all duties, rights and authority prescribed for Operator. The former Operator shall transfer to the successor Operator custody of all Joint Property, books of account records and other documents maintained by Operator pertaining to the Contract Area and to Joint Operations. Upon delivery of the above-described property and data, the former Operator shall be released and discharged from all future obligations and liabilities, other than those liabilities which accrued or had been incurred prior to the date of termination. |
ARTICLE V — OPERATIONAL MEETINGS
5.1 Contents of Meeting Notice
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(A) |
Each notice of a meeting by Operators or Title Holder shall contain: |
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(1) |
The date, time, and location of the meeting, and |
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(2) |
An agenda of the matters and proposals to be considered upon. |
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(B) |
A Party, by notice to the other Parties given not less than seven (7) Days prior to a meeting, may add additional matters to the agenda for a meeting. |
5.2 Location of Meetings. All meetings shall be held in the Operator’s offices in East Legon, Accra or elsewhere as may be decided as otherwise. Additionally, all meetings shall be accessible via remote connection (i.e. Zoom, Skype, Google Meeting, etc.) and shall be recorded and made available to any Party unable to attend such meeting.
| Page 20 of 48 |
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5.3 Operator’s Duties for Meetings
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(A) |
With respect to meetings of the Operator, Operator’s duties shall include, but not be limited to: |
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(1) |
Timely preparation and distribution of the agenda, |
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(2) |
Organization and conduct of the meeting, and |
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(3) |
Preparation of a written record or minutes of each meeting. |
5.4 Notice & Proposal Consideration. In lieu of a meeting, any Party may submit any proposal to the Operator for a consideration, by notice. The proposing Party or Parties shall notify Operator who shall give each representative notice describing the proposal so submitted. Each Party shall communicate its willingness to proceed with such a proposal by giving notice to Operator, on said proposals.
ARTICLE VI — WORK PROGRAMS AND BUDGETS
6.1 Exploration and Appraisal
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(A) |
Not less than sixty (60) days prior to each date on which a Work Program and Budget is scheduled to begin the Operator will submit the planned Work Program and Budget pursuant to clause 6.4 of this Agreement, Operator shall deliver to the Parties a proposed Work Program and Budget detailing the Operations to be performed for the relevant Calendar Year. |
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(B) |
If a Discovery is made, Operator shall deliver any notice of Discovery required under the Lease Agreement and shall as soon as possible submit to the Parties a report containing available details in a new proposal (“Proposal”) concerning the Discovery and Operator’s recommendation as to whether the Discovery merits appraisal. If the Operator determines that the Discovery merits appraisal, Operator within thirty (30) Days, shall deliver to the Parties a proposed Work Program and Budget for the appraisal of the Discovery or additional proposal within fourteen (14) Days of such delivery, or earlier, if necessary, to consider, modify and then either approve or reject the appraisal Work Program and Budget. If the appraisal Work Program and Budget is approved by the Parties, the Operator shall take such steps as may be required under the Lease Agreement to secure approval of the appraisal Work Program and Budget by the necessary Government entities. In the event the Government requires changes in the newly proposed appraisal Work Program and Budget, the matter shall be resubmitted for further consideration. |
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(C) |
The Work Program and Budget agreed pursuant to this Article 6.1 shall include the Minimum Work Obligations, or at least that part of such Minimum Work Obligations required to be carried out during the Calendar Year in question under the terms of this Agreement. If within the time periods prescribed in this Article 6.1 by the Parties unable to agree on such a Work Program and Budget, then the proposal capable of satisfying the Minimum Work Obligations for the Calendar Year in question that receives the largest Participating Interest approval the Operator may proceed forward and the Exclusive Operation shall be deemed adopted as part of the annual Work Program of the new discovery proposal shall be considered added to the required Minimum Work Obligation for the given Calendar Year, but maintain a separate Budget only to be paid for from the Operators account and the Project Account. An Exclusive new Operation shall bare Participating Interest share according to the in-kind contributor’s portion. |
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(D) |
Any originally approved Work Program and Budget may be revised by the Parties from time to time. To the extent such revisions are approved by the Parties, the Work Program and Budget shall be amended accordingly. The Operator shall prepare and submit a corresponding work program and budget amendment to the Government if required by the terms of the Lease Agreement. |
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(E) |
Subject to Article 6.7, approval of any such Work Program and Budget, which includes, an Exploration Expenditures Estimate, Drilling, and testing, and or Development or Deepening, shall include approval for all expenditures necessary for Extraction Processes. |
| Page 21 of 48 |
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6.2 Development & Discovery Development(s)
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(A) |
If the Operator determines that a Discovery may be commercial, the Operator shall, as soon as practicable, deliver to the Parties a development plan together with the first annual Work Program and Budget and provisional Work Programs and Budgets for the remainder of the development of the Discovery, which shall contain, inter alia (collectively hereinafter, a “Development Plan”): |
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(1) |
Details of the proposed work to be undertaken, personnel required and expenditures to be incurred, including the timing of same, on a Calendar Year basis, |
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(2) |
An estimated date for the commencement of production, |
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(3) |
A delineation of the proposed Exploitation Area and/or level of Strata, and |
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(4) |
Any other information requested by the Parties. |
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(B) |
After receipt of the Development Plan and prior to any applicable deadline under this Agreement, the Operators shall consider, modify and then either approve or reject the Development Plan and the first annual Work Program and Budget, to be considered the original Development Plan, for the development submitted by Operator. If the Development Plan is approved by the Parties (“Consenting Parties”) Operator shall, as soon as possible, deliver any notice of Commercial Discovery required under this Agreement and take such other steps as may be required under the Lease Agreement to secure approval of the Development Plan by the Government, if additional approvals are required and applicable. In the event the Government requires changes in the Development Plan, the matter shall be resubmitted to the Parties for further consideration. |
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(C) |
If the Development Plan is approved, such work shall be incorporated into and form part of annual Work Program and Budgets, and Operator shall endeavor to agree to such Work Program and Budget, including any necessary or appropriate revisions to the Work Program and Budget for the approved Original Development Plan and adopt the additional Work Program as Minimum Work Obligations, for the Calendar Year. |
6.3 Production. On or before the 1st Day of January of each Calendar Year, Operator shall deliver to the Parties a proposed production Work Program and Budget detailing the Operations to be performed in the Lease Area and the projected production schedule for the following Calendar Year. Within fourteen (14) Days of such delivery, the Parties shall agree upon a production Work Program and Budget within (14) Days or no later than February 1st of that Calendar Year.
6.4 Itemization of Expenditures
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(A) |
During the preparation of the proposed Work Programs and Budgets unless additional new Discoveries are made that warrant a sperate new Proposal to be contemplated in this Article VI, Operator shall consult, as necessary, with the other Parties regarding the contents of such Work Programs and Budgets and Development Plans. |
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(B) |
Each Work Program and Budget and Development Plan submitted by Operator shall contain at itemized estimate of the costs of Operations and all other expenditures to be made for the Project Account during the Calendar Year in question and shall, inter alia: |
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(1) |
identify each work category in sufficient detail to afford the ready identification of the nature, scope and duration of the activity in question, |
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(2) |
include such reasonable information regarding Operator’s allocation procedures and estimated manpower costs as the Operations may require, |
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(3) |
comply with the requirements of the Lease Agreement, and |
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(4) |
contain an estimate of funds to be expended by Calendar Year. |
| Page 22 of 48 |
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(C) |
The Work Program and Budget shall designate the portion or portions of the Lease Area in which Operations itemized in such Work Program and Budget are to be conducted and shall specify the kind and extent of such operations in such detail as the Operator may deem suitable. |
6.5 Operation Estimates
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(A) |
Operator shall: |
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(1) |
Complete the development of operations process within a reasonable period of time, |
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(2) |
Inform the Parties of the entities to whom the sub-contracting work has been awarded and assigned to as Affiliates of the Operator or sub-contractors to the Operator, |
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(3) |
If it is determined that additional Parties are to be engaged in a Work Program and the Estimate of said work is in excess of US$200,000 dollars the Operator shall duly inform the Parties and seek consent prior to engaging with or Operations with sub-contractor for additional Work Programs and |
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(4) |
Upon the request of a Party, provide such Party with a copy of the final version of the sub-contracted Work Program awarded arrangement. |
6.6 Authorization for Expenditure (“AFE”) Procedure
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(A) |
Prior to incurring any commitment or expenditure for the Project Account not pre-approved in the Annual Work Program and Budget, the Operator will issue an AFE for items of a capital nature and for work, of the original annual budgeted amounts, if such amounts have changed. |
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The above will apply to exploration or appraisal, development and production Work Programs and Budgets. Notwithstanding the above, Operator shall not be obliged to furnish an AFE to the Parties with respect to any Minimum Work Obligations, approved in the Annual Budget. |
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(B) |
All AFEs shall be for informational purposes only. Approval of an operation in the current Work Program and Budget shall authorize Operator to conduct the operation (subject to Article 6.7) without further authorization from the Parties. |
6.7 Over expenditures of Work Programs and Budgets
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(A) |
For expenditures on any line item of an approved Work Program and Budget, Operator shall be entitled to incur without further approve of the Parties an over expenditure for such line item up to ten percent (10%) of the authorized amount for such line item, provided that the cumulative total of all over expenditures for a Calendar Year shall not exceed five percent (5%) of the overall total Work Program and Budget. |
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(B) |
At such time that Operator is certain that the limits of Article 6.7(A) will be exceeded, Operator shall furnish a supplemental AFE for the estimated over expenditures and shall provide the Parties with full details of such over expenditures. Operator shall promptly give notice of the amounts of over expenditures when actually incurred or prior to such overages being incurred. |
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(C) |
The restrictions contained in this Article VI shall be without prejudice to Operator’s rights to make expenditures as set forth herein. |
| Page 23 of 48 |
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ARTICLE VII — DEFAULT
7.1 Default and Notice. Any Party that fails, objects or refuses to pay, from the Profit Reserve Account and/or Non-Operations Profit Disbursement Account or contribute when due its Participating Interest share of Project Account expenses, shall be in default under this Agreement (a “Defaulting Party”). Operator, or any non-defaulting Party in the case Operator is the Defaulting Party, shall promptly give notice of such default to the Defaulting Party and each of the non-defaulting Parties (the “Default Notice”). The amount not paid by the Defaulting Party shall bear interest from the date due until paid in full. Interest shall be calculated at the prevailing commercial bank interest rate set by the nominated project bank, where the Parties Accounts are held.
7.2 Allocation of Defaulted Accounts
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(A) |
The Party providing the Default Notice pursuant to Article 7.1 shall include in the Default Notice to each non-defaulting Party a statement of the sum of money that the non-defaulting Party is to pay as its portion (such portion being in the ratio that each non-defaulting Party’s Participating Interest bears to the Participating Interests of all non-defaulting Parties) of the amount in default (excluding interest), subject to the terms of this Article 7.3. If the Defaulting Party remedies its default in full within five (5) Business Days from the date of the Default Notice, the notifying Party shall promptly notify each non-defaulting Party by telephone and electronic mail, and the non-defaulting Parties shall be relieved of their obligation to pay a share of the amounts in default. Otherwise, each non-defaulting Party shall pay Operator, within five (5) Business Days after receipt of the Default Notice, its share of the amount which the Defaulting Party failed to pay. If any non-defaulting Party fails to pay its share of the amount in default as aforesaid, such Party shall thereupon be a Defaulting Party subject to the provisions of this Article VII. The non-defaulting Parties which pay the amount owed by any Defaulting Party shall be entitled to receive their respective shares of the principal and interest payable by such Defaulting Party pursuant to this Article VII. |
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(B) |
If Operator is a Defaulting Party, then all payments otherwise payable to Operator for Project Account, Profit Reserve Account and/or Profit Disbursement Account, costs pursuant to this Agreement shall be made to the notifying Party instead until the default is cured or a successor Operator appointed. The notifying Party shall maintain such funds in a segregated account separate to funds held in the Project Account and shall apply such funds moved to the Profits reserve Account for at least ninety (90) Days to ensure adequate capital reserves to third party claims due and payable of which it has notice, before moving to the Profit Disbursement Accounts, to the extent Operator would be authorized to make such payments out of the Profit Reserve Account under the terms of this Agreement. The notifying Party shall be entitled to bill or cash call the other Parties in accordance with the Accounting Procedure for proper third-party charges that become due and payable during such ninety (90) Day period to the extent sufficient funds are available. When Operator has cured its default or a successor Operator is appointed, the notifying Party shall turn over all remaining funds in the Project Account to Operator and shall provide Operator and the other Parties with a detailed accounting of the funds received and expended during this period. The notifying Party shall not be liable for damages, losses, costs, expenses or liabilities arising as a result of its actions under this Article VIII except to the extent Operator would be liable under Article 4.6. |
7.3 Remedies
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(A) |
During the continuance of a default, the Defaulting Party shall not have a right to its Entitlement which shall vest in and be the property of the non-defaulting Parties. Operator (or the notifying Party if Operator is a Defaulting Party) shall be authorized to sell such Entitlement in an arm’s-length sale on terms that are commercially reasonable under the circumstances and, after deducting all costs, charges and expenses incurred in connection with such sale, pay the net proceeds to the non-defaulting Parties in proportion to the amounts they are owed by the Defaulting Party hereunder (and apply such net proceeds toward the Profit Reserve Account, if applicable) until all such amounts are recovered and from the Profit Reserve Account or other account of the defaulting Party as the case may be. Any surplus remaining shall be reinstated to the Defaulting Party, and/or any deficiency shall remain a debt due from the Defaulting Party to the non-defaulting Parties. When making sales under this Article 7.3(A), the non-defaulting Parties shall have no obligation to share any existing market or obtain a price equal to the price at which their own production of goods is sold. |
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(B) |
If Operator disposes of any Project Property or any other credit or adjustment is made to the Project Account while a Party is in default. Operator (or the notifying Party if Operator is a Defaulting Party) shall be entitled to apply the Defaulting Party’s Participating Interest share of the proceeds of such disposal, credit or adjustment against all amounts owing by the Defaulting Party to the non-defaulting Parties hereunder (and toward the Profit Reserve Account, if applicable). Any surplus remaining shall be Reinstated to the Defaulting Party, and any deficiency shall remain a debt due from the Defaulting Party to the non-defaulting Parties. |
| Page 24 of 48 |
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(C) |
The non-defaulting Parties shall be entitled to apply proceeds received from the Profit Reserve Account in an amount equal to the Defaulting Party’s Participating Interest share of (i) the estimated cost to surrender any Lease Areas and other property in which the Defaulting Party participated, (ii) the estimated cost of severance benefits for local employees upon cessation of operations and (iii) any other identifiable costs that the non-defaulting Parties anticipate will be incurred in connection with the cessation of operations. |
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(D) |
If a Defaulting Party fails to remedy its default by the forty-fifth (45th) Day following the date of the Default Notice, then, without prejudice to any other rights available to the non-defaulting Parties to recover amounts owing to them under this Agreement each non-defaulting Party shall have the option, exercisable at any time thereafter until the Defaulting Party has completely cured its defaults, to require that the Defaulting Party completely withdraw from the Lease Agreement and this Operating Agreement, unless alternative arrangements have been made cure its defaults and mutually agreed to by all the Parties. Such option shall be exercised by alternative arrangement notice made to the Defaulting Party and each non-defaulting Party. If such option is exercised, the Defaulting Party shall be deemed to have transferred, pursuant to Article 12.6, effective on the date of the non-defaulting Party’s notice, all or part of its right, title and beneficial interest in and under this Agreement and the Lease Agreement to the non-defaulting Parties. The Defaulting Party shall, without delay following any request from the non-defaulting Parties, do any and all acts required to be done by applicable law or regulation in order to render such transfer legally valid, including, without limitation, obtaining all governmental consents and approvals, and shall execute any and all documents and take such other actions as may be necessary in order to effect a prompt and valid transfer of the interests described above. The Defaulting Party shall be obligated to promptly remove any liens and encumbrances which may exist on such transferred interests. For purposes of this Article 7.3(D), each Party constitutes and appoints each other Party its true and lawful attorney to execute such instruments and make such filings and applications as may be necessary to make such transfer legally effective and to obtain any necessary consents the Government. Actions under this power of attorney may be taken by any Party individually without the joinder of the others. This power of attorney is irrevocable for the term of this Agreement and is coupled with an interest. If requested, each Party shall execute a form prescribed by the Parties setting forth this power of attorney in more detail. In the event all Government approvals are not timely obtained, the Defaulting Party shall hold its Participating Interest in trust for the non-defaulting Parties who are entitled to receive the Defaulting Party’s Participating Interest. Notwithstanding the terms of Article XII, in the absence of an agreement among the non-defaulting Parties to the contrary, any transfer to the non-defaulting Parties following a withdrawal pursuant this Article 7.3(D) shall be in proportion to the Participating interests of the non-defaulting Parties. The acceptance by a non-defaulting Party of any portion of a Defaulting Party’s Participating Interest shall not limit any rights or remedies that the non-defaulting Party has to recover all amounts (including interest) owing under this Agreement by the Defaulting Party. |
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(E) |
The non-defaulting Parties shall be entitled to recover from the Defaulting Party all reasonable attorneys’ fees and all other reasonable costs sustained in the collection of amounts owing by the Defaulting Party. |
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(F) |
The rights and remedies granted to the non-defaulting Parties and this Agreement shall be cumulative, not exclusive, and shall be in addition to any other rights and remedies that may be available to the non-defaulting Parties. Whether at law, in equity or otherwise. Each right and remedy available to the non-defaulting Parties may be exercised from time to time and so often and in such order as may be considered expedient by the non-defaulting Parties in their sole discretion. |
7.5 Survival. The obligations of the Defaulting Party and the rights of the non-defaulting Parties shall survive the surrender of the Lease Agreement, surrender of Operations and termination of this Agreement.
7.6 No Right of Set Off. Each Party acknowledges and accepts that a fundamental principle of this Agreement is that each Party pays its Participating Interest share of all amounts due under this Agreement as and when required. Accordingly, any Party which becomes a Defaulting Party undertakes that, in respect of either any exercise by the non-defaulting Parties of any rights under or the application of any of the provisions of this Article VII, such Party hereby waives any right to raise by way of set off or invoke as a defense whether in law or equity, any failure by any other Party to pay amounts due and owing under this Agreement or any alleged claim that such Party may have against Operator, whether such claim arises under this Agreement or otherwise. Each Party further agrees that the nature and the amount of the remedies granted to the non-defaulting Parties hereunder are reasonable and appropriate in the circumstances.
| Page 25 of 48 |
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ARTICLE XIII — DISPOSITION OF PRODUCTION
8.1 Right and Obligation to Take In-Kind. Except as otherwise provided in this Article XIII, each Party shall have the right and obligation to own, take in-kind contributions and separately dispose of the share of total production available to it from any Lease Area pursuant to the Lease Agreement and this Agreement in such quantities and in accordance with such procedures as may be set forth in an offtake agreement referred to in Article 8.2 or in the special arrangements by the Operator for the sale of goods in Article 8.2.
8.2 Offtake Agreement for Production or Goods. If gold is to be produced from a Lease Area, the Operator shall in good faith, and not less than one (1) month prior to first delivery of production or goods, enter into and conclude the terms of agreements to cover the offtake of production or finished goods produced under the Lease Agreement and this Operating Agreement. If necessary and practicable, also be party to the offtake agreement. This offtake agreement shall, to the extent consistent with the Lease Agreement and this Operating Agreement, make provision for:
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(A) |
The Operator shall have the right to sell all Finished Goods produced at a 10% discount from world market price of Finished Goods or the requisite metalogical weight adjustment made for such delivery to the off taker or for the Project Account if above and beyond any off-take arrangement made by the Operator; |
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(A) |
Operator’s regular periodic advice to the Parties of estimate of total available production for succeeding periods, quantities of each grade of goods relating to twenty-four carat or the equivalent and each Party’s share for as far ahead as is necessary for Operator and the Parties to plan offtake arrangements. |
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(C) |
The delivery point, at which title and risk of loss of Participating interest shares of goods shall pass to the Parties interested (or as the Parties may otherwise agree). |
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(D) |
Operator will make every effort to sell all goods including diamonds at the highest valuable price available at the time of disposal or sale of the goods. |
ARTICLE IX — SURRENDER
9.1 Surrender of Lease Areas and Operations
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(A) |
A decision to surrender any Lease Area which have been worked as an Operation shall require the approval of the Minerals Commission in accordance with the Lease Agreement. |
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(B) |
After delivery of notice of the Operator’s proposal to complete and/or surrender such Lease Areas in accordance, such Party shall be deemed to have consented to the proposed completion and surrender. |
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(C) |
When the Operator decides to complete and/or Surrender any part of the Lease Area, it will notify all the Parties according to the Lease Agreement and this Operating Agreement, this will also include any Exclusive Operations, within the time periods allowed, to conduct an alternate Exclusive Operation in the Lease Area, if applicable. |
9.2 Surrender of Exclusive Operations. This Article IX shall apply mutatis mutandis to the surrender of an Exclusive Operation or any Lease Area in which an Exclusive Operation has been conducted (in which event all Parties having the right to conduct further operations in such Area or strata level shall be notified and have the opportunity to conduct Exclusive Operations in accordance with the provisions of this Article IX).
| Page 26 of 48 |
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9.3 Surrender Security. During preparation of a Development Plan, the Parties shall agree to the reclamation of lands, which shall be completed and executed by all Parties participating in such Development Plan prior to application for the reclamation of the Lease Area. The reclamation portion of any Lease Area shall set out the amount of the provision the parties shall provide for the surrender of operations and required, agree the same with the Government in accordance with the Lease Agreement.
ARTICLE X — SURRENDER, EXTENSIONS AND RENEWALS
10.1 Surrender
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(A) |
If the Lease Agreement requires the Parties to surrender any portion of the Lease Area, Operator shall advise the Parties of such requirement at least one hundred and twenty (120) Days in advance of the earlier of the date for filing irrevocable notice of such surrender or the date of such surrender. Prior to the end of such period, the Operator shall determine pursuant to Article IV the size and shape of the surrendered area, consistent with the requirements of the Lease Agreement. |
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(B) |
A surrender of all of the Lease Area shall require the unanimous consent of the Parties. |
10.2 Extension of the Term
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(A) |
A proposal by any Party to enter into or extend the term of any Exploration or Production Period or any phase of the Lease Agreement, or a proposal to extend the term of the Lease Agreement, shall be brought before the Parties pursuant to Article IV. |
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(B) |
Any Party shall have the right to enter into or extend the term of any Exploration or Production Period or any phase of the Lease Agreement or to extend the term of the Lease Agreement is valid, regardless of the level of support of all the Parties. If any Party or Parties take such action, any Party not wishing to extend shall have a right to withdraw, subject to the requirements of Article IX. |
ARTICLE XI — TRANSFER OF INTEREST OR RIGHTS
11.1 Obligations
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(A) |
Subject always to the requirements of the Lease Agreement and this Operating Agreement, the transfer of all or part of a Party’s Participating Interest, excepting transfers pursuant to this Article XI, shall be effective only if it satisfies the terms and conditions of this Article XI. |
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(B) |
The non-transferring Party shall be granted a sixty (60) day Right of First Refusal to purchase or otherwise acquire the transferring Parties Participating Interest, such purchase or acquisition shall be negotiated in good faith and each Party agrees to use reasonable efforts to allow the other to acquire the other’s Participating Interest. |
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(C) |
The transferring Party shall, notwithstanding the transfer, be liable to the other Parties for any obligations, financial or otherwise, which have vested, matured, or accrued under the provision of the Lease Agreement or this Operating Agreement prior to such transfer. Such obligations shall include, without limitation, any proposed expenditure approved by the Parties prior to the transferring Party notifying the other Parties of its proposed transfer. |
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(D) |
The transferee shall have no rights in and under the Lease Agreement, or the Lease Area, and this Operating Agreement unless and until it obtains any necessary approval of the Government and expressly undertakes in an instrument satisfactory, (e.g. Promissory Note) to the other Parties to perform the obligations of the transferor under the Lease Agreement, an Offtake Agreement and this Operating Agreement in respect of the Participating Interest being pledged and furnishes any acknowledgements of such instrument and accompanying paper work to that effect by the Government. |
| Page 27 of 48 |
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(E) |
Nothing contained in this Article XI shall prevent a Party from mortgaging, pledging, charging or otherwise encumbering all or part of its interest in the Lease Area’s Assets and in and under this Operating Agreement for the purpose of security relating to finance provided that: |
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(1) |
such Party shall remain liable for all obligations relating to such interest, |
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(2) |
the encumbrance shall be subject to any necessary approval of the Government and be expressly subdivided from the rights of the other Parties, if applicable under this Operating Agreement, and |
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(3) |
such Party shall ensure that any such mortgage, pledge, charge, or encumbrance shall be expressed to be without prejudice to the provisions of this Operating Agreement. |
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(F) |
With the sole exceptions of; any intended transfers of all or a portion of Participating Interest, whether directly or indirectly by assignment, merger, consolidation, or sale of stock or shares or other conveyance, other than to an Affiliate, shall be subject to the following procedure: |
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(1) |
Once the intended transferor Party and a proposed transferee (being a third party) have negotiated the final terms and conditions of an intended transfer, pledge, offtake agreement such final terms and conditions shall be disclosed in reasonable detail to all Parties in a notice from, and |
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(2) |
In the event that a Party’s proposed transfer of part or all of its Participating Interest involve consideration other than cash and/or involves other propertiesincluded in a wider transaction (package deal) then the Participating interest (or part thereof) shall be allocated a reasonable and justifiable cash value by the transferor in any notification to the other Parties. Such other Parities may satisfy the requirements by agreeing to pay such cash value in lieu of the consideration payable in the third-party offer or make mutually acceptable arrangements between the Parties to do so. |
ARTICLE XII — WITHDRAWAL FROM AGREEMENT
12.1 Right of Withdrawal
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(A) |
Subject to the provisions of this Article XII, any Party may withdraw from this Agreement and the Lease Agreement by giving notice to all other Parties stating its decision to withdrawal. Such notice shall be unconditional and irrevocable when given. |
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(B) |
The effective date of withdrawal for a withdrawing Party shall be the end of the calendar month following the calendar month in which the notice of withdrawal is given, provided that if all Parties elect to withdraw, the effective date of withdrawal for each Party shall be the date determined by Article 12.9. |
12.2 Partial or Complete Withdrawal
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(A) |
Within thirty (30) Days of receipt of each withdrawing Party’s notification, each of the other Parties may also give notice that it desires to withdraw from this Agreement and the Lease Agreement. Should all Parties give notice of withdrawal, the Parties shall proceed to surrender the Lease Area and terminate the Lease Agreement and this Operating Agreement. If less than all of the Parties give such notice of withdrawal, then the withdrawing Parties shall take all steps to withdraw from the Lease Agreement and this Operating Agreement on the earliest possible date and execute and deliver all necessary instruments and documents to assign their Participating Interest to the Parties which are not withdrawing, without any compensation whatsoever, in accordance with the provisions of Article 12.6. |
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(B) |
Any Party withdrawing under Article 10.2 or under this Article XII shall withdraw from the entirety of the Lease Area, including all Exploration Areas and all Discoveries made prior to such withdrawal, and thus surrendering to the other Parties not joining in its withdrawal all its rights to recover and Participate in the sale of Precious Minerals and Diamonds and the costs and expenses incurred generated by operations after the effective date of such withdrawal and all rights in associated Lease Area and Lease Agreement and this Operating Agreement will remain with the non-withdrawing Parties, subject to any applicable approved by the Government. |
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12.3 Rights of a Withdrawing Party
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A withdrawing Party shall have the right to receive its Entitlement of Precious Minerals and Diamonds produced through the effective date of its withdrawal. The withdrawing Party shall be entitled to receive all information to which such Party is otherwise entitled under this Agreement until the effective date of its withdrawal. After ninety (90) Days of withdraw, or sufficient and certain evidence is acceptable to the Non-Withdrawing Parties the Party that withdrew shall not be entitled to receive any surplus amounts of monies still on reserve in the Profit Reserve Account. |
12.4 Obligations and Liabilities of a Withdrawing Party
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(A) |
A withdrawing Party shall, following its notification of withdrawal, remain liable only for its share of the following: |
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(1) |
Costs of Operations, any additional Exclusive Operations in which it has agreed to participate, that were approved by the Consenting Parties as part of a Work Program and Budget or AFE prior to such Party’s notification of withdrawal, regardless of when they are actually incurred, |
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(2) |
Any Minimum Work Obligations for the current period or phase of the Development Plan, and for any subsequent period or phase which has been approved pursuant to Article 10.2, |
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(3) |
Emergency expenditures as described in Articles 4.2(B)(1) and 12.5, |
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(4) |
All other obligations and liabilities of the Parties or Consenting Parties, as applicable, with respect to acts or omissions under this Agreement prior to the effective date of such Party’s withdrawal for which such Party would have been liable, had it not withdrawn from this Agreement; and |
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(5) |
In the case of a partially withdrawing Party, any costs and liabilities with respect to Exploitation Areas, Commercial Discoveries and Discoveries from which it has not withdrawn. |
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The obligations and liabilities for which a withdrawing Party remains liable shall specifically include its share of any costs of Exploration, Extraction and Operation in the Lease Area in which participated (or was required to bear a share of the costs pursuant to Article 12.4(A) to the extent such costs of Exploration, Extraction, Operation Completion and Surrender are payable by the Parties under the Lease Agreement and this Operating Agreement. Any liens, charges and other encumbrances which the withdrawing Party placed on such Party’s Participating Interest prior to its withdrawal shall be fully satisfied or released within no longer than ninety (90) Days, at the withdrawing Party’s expense prior to its withdrawal. A Party’s withdrawal shall not relieve it from liability to the no-withdrawing Parties with respect to any obligations or liabilities attributable to the withdrawing Party under this Article XII merely because they are not identified or identifiable at the time of withdrawal. |
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(B) |
Notwithstanding the foregoing, a Party shall not be liable for any operations or expenditures it elected not to Participate in (other than operations and expenditures described in Article 12.4(A)(2) or 12.4(A)(3) if it sends notification of its withdrawal within five (5) Days before such operation’s begin on the Lease Area) of the Operator approving such operation or expenditure. |
12.5 Emergency. If any natural disaster or other significant emergency occurs, that materially interrupts Operations prior to the effective date of a Party’s withdrawal, the withdrawing Party shall remain liable for its Participating Interest share of the costs of such emergency, regardless of when they are actually incurred.
12.6 Assignment. A withdrawing Party shall assign its Participating Interest free of cost to each of the non-withdrawing Parties in the proportion which each of their Participating Interests (prior to the withdrawal) bears to the total Participating Interests of all the non-withdrawing Parties (prior to the withdrawal), unless the non-withdrawing Parties agree otherwise. The expenses associated with the withdrawal and assignments shall be borne by the withdrawing Party.
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12.7 Approvals. A withdrawing Party shall promptly join in such actions as may be necessary or desirable to obtain any Government approvals required in connection with the withdrawal and assignments. The non-withdrawing Parties shall use reasonable efforts to assist the withdrawing Party in obtaining such approvals. Any penalties or expenses incurred by the Parties in connection with such withdrawal shall be borne by the withdrawing Party.If the Government does not approve a Party’s withdrawal and assignment to the other Parties, then the withdrawing Party shall at its option either (1) retract its notice of withdrawal by notice to the other Parties and remain a party as if such notice of withdrawal had ever been sent or (2) hold its Participating Interest in trust for the sole and exclusive benefit of the non-withdrawing Parties with the right to be reimbursed by the non-withdrawing Parties for any subsequent costs and liabilities incurred by it for which it would not have been liable, had it successfully withdrawn.
12.8 Security
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(A) |
A Party withdrawing from this Agreement and the Lease Agreement pursuant to this Article XII shall provide security satisfactory to the other Parties to satisfy any obligations or liabilities which were approved or accrued prior to notice of withdrawal, but which become due after its withdrawal, including, without limitation, security to cover the costs of a surrender or completion of the reclamation of Lease Areas, if applicable. |
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(B) |
Failure to provide Security shall constitute default under this Agreement. |
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(C) |
“Security’’ means each of their Participating Interests share or obligations from the Project Account and Profit Distribution Account and its share has sufficient worth to pay its obligations in all reasonably foreseeable circumstances or, failing the provision of either of those, cash deposited in the Trust of an attorneys escrow account, at a mutually agreed upon financing institution duly licensed and insured and in good standing to operate within The Republic of Ghana, with the withdrawal rights granted to the Non-Withdrawing Parties. |
12.9 Withdrawal or Surrender by all Parties. In the event all Parties decide to withdraw, the Parties agree that they shall be bound by the terms and conditions of this Agreement and the Lease Area Agreement for so long as may be necessary to wind up the affairs of the Parties with the Government, to satisfy any requirements of applicable law and to facilitate the sale, disposition or surrender of property or interests held by the Parties for the Project Account or Profit Reserve Account of otherwise as necessary to Surrender the Lease Area in compliance with the Lease Area Agreement.
ARTICLE XIII — RELATIONSHIP OF PARTIES AND TAX
13.1 Relationship of Parties. The rights, duties, obligations, and liabilities of the Parties under this Agreement shall be individual, not Operators, or collective. It is not the intention of the Parties to create, nor shall this Agreement be deemed or construed to create a mining or other partnership, Operators venture or association or (except as explicitly provided in this Agreement) a trust. This Agreement shall not be deemed or construed to authorize any Party to act as an agent, servant, or employee for any other Party for any purpose whatsoever except as explicitly set forth in this Operations Agreement. In their relations with each other under his Agreement, the Parties shall not be considered fiduciaries except as expressly provided in this Agreement.
13.2 Tax. Each Party shall be responsible for reporting and discharging its own tax measured by the profit or income of the Party and the satisfaction of such Party’s share of all Participating Interest obligations under the Lease Agreement and under this Operating Agreement. Each Party shall protect, defend, and indemnify each other Party from any and all loss, cost or liability arising from the indemnifying Party’s failure to report and discharge such taxes or satisfy such obligations. The Parties intend that all income and all tax benefits (including, but not limited to, deductions, depreciation, credits, and capitalization) with respect to the expenditures made by the Parties hereunder will be allocated by the Government tax and revenue authorities to the Parties based on the share of each tax item actually received or borne by each Party. If such allocation is not accomplished due to the application of the laws and regulations of the Government or other Government action, the Parties shall attempt to adopt mutually agreeable arrangements that will allow the Parties to achieve the financial results intended. Operator shall provide each Party, in a timely manner and at such Party’s sole expense, with such information with respect to notifying the Parties such Party may reasonably request for preparation of its tax returns or responding to any audit or other tax and revenue proceeding.
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13.3 United States Tax Election
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(A) |
If, for United States federal income tax purposes, this Agreement and the operations under this Agreement are regarded as a partnership (and if the Parties have not agreed to form a tax partnership), each “U.S. Party” (as defined below) elects to be excluded from the application of all of the provisions of Subchapter “K”, Chapter 1, Subtitle “A” of the United States Internal Revenue Code of 1986, as amended (the “Code”), to the extent permitted and authorized by Section 761(a) of the Code and the regulations promulgated under the Code. Operator is authorized and directed to execute and file for each U.S. Party such evidence or this election as may be required by the Internal Revenue Service, including specifically, but not by way of limitation, all of the returns, statements, and the data required by United States Treasury Regulations Sections 1.761-2 and 1.6031(a)-1(b)(5), and shall provide a copy thereof to each U.S. Party. Should there be any requirement that any U.S. Party give further evidence of this election, each U.S. Party shall execute such documents and furnish such other evidence as may be required by the Internal Revenue Service or as may be necessary to evidence this election. |
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(B) |
No Party shall give any notice or take any other action inconsistent with the election made above. If any income tax laws of any state or other political subdivision of the United States or any future income tax laws of the United States or any such political subdivision contain provisions similar to those in Subchapter “K”, Chapter 1, Subtitle “A” of the Code, under which an election similar to that provided by Section 761(a) of the Code is permitted, each U.S. Party shall make such elections as may be permitted or required by such laws. In making the foregoing election, each U.S. Party states that the income derived by it from operations under this Agreement can be adequately determined without the computation of partnership taxable income. |
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(C) |
For the purposes of this Article XIII, “U.S. Party” shall mean any Party which is subject to the income tax law of the United States in respect of operations under this Agreement. |
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(D) |
No activity shall be conducted under this Agreement that would cause any Party that is not a U.S. Party to be deemed to be engaged in a trade or business within the United States under applicable tax laws and regulations. |
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(E) |
A Party which is not a U.S. Party shall not be required to do any act or execute any instrument which might subject it to the taxation jurisdiction of the United States. |
ARTICLE XIV — CONFIDENTIAL INFORMATION
14.1 Confidential Information
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(A) |
Subject to the provisions of the Lease Agreement and this Operating Agreement, the Parties agree that all information and data acquired or obtained by any Party in respect of Operations shall be considered confidential and shall be kept confidential and not be disclosed during the term of the Lease Agreement to any person or entity not a Party to this Agreement, except: |
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(1) |
To an Affiliate, provided such Affiliate maintains confidentiality as provided in this Article XIV, |
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(2) |
To a governmental agency or other entity when required by the Lease Agreement, |
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(3) |
To the extent such data and information is required to be furnished in compliance with any applicable laws or regulations, or pursuant to any legal proceedings or because of any order of any court binding upon a Party, |
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(4) |
To prospective or actual sub-contractors, consultants and attorneys employed by any Party where disclosure of such data or information is essential to such, consultant’s, or attorney’s work, |
| Page 31 of 48 |
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(5) |
To a bona fide prospective transferee of a Party’s Participating Interest (including an entity with whom a Party or its Affiliates are conducting bona fide negotiations directed toward a merger, consolidation, or the sale of a majority of its or an Affiliate’s shares), |
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(6) |
To a bank or other financial institution to the extent appropriate to a Party arranging for funding, |
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(7) |
To the extent such data and information must be disclosed pursuant to any rules or requirements of any government or stock exchange having jurisdiction over such Party, or its Affiliates; provided that if any Party desires to disclose information in an annual or periodic report to its or its Affiliates’ shareholders and to the public and such disclosure is not required pursuant to any rules or requirements of any government or stock exchange, then such Party shall comply with Article 18.2, |
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(8) |
To its respective employees for the purposes of Operations, subject to each Party taking customary precautions to ensure such data and information is kept confidential, and, |
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(9) |
Any data or information which, through no fault of a Party, becomes a part of the public domain. |
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(B) |
Disclosure as pursuant to Article 14.1(A), (4), (5), and (6) shall not be made unless prior to such disclosure the disclosing Party has obtained a written undertaking from the recipient party to keep the data and information strictly confidential pursuant to the terms of the Lease Agreement and not to use or disclose the data and information except for the express purpose for which disclosure is to be made. |
14.2 Continuing Obligations. Any Party ceasing to own a Participating Interest during the term of this Agreement shall nonetheless remain bound by the obligations of confidentiality in Article 14.1 and any disputes shall be resolved in accordance with Article XVII.
14.3 Proprietary Technology. Nothing in this Agreement shall require a Party to divulge proprietary technology to the other Parties; provided that where the cost of development of proprietary technology has been charged to the Project Account, such proprietary technology shall be disclosed to all Parties bearing a portion of such cost and may be used by any such Party or its Affiliates in other operations.
14.4 Trades. Notwithstanding the foregoing provisions of this Article XIV, Operator may, with notice to all the Parties, make trades, offtake arrangements and data trades for the benefit of the Parties, with any data so obtained to be furnished to all Parties who participated in the cost of the data that was traded. Operator shall cause any third party to such trade to enter into an undertaking to keep the traded data confidential.
ARTICLE XV — FORCE MAJEURE
15.1 Obligations. If as a result of Force Majeure any Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, other than the obligation to pay any amounts due or to furnish security then the obligations of the Party giving such notice, so far as and to the extent that the obligations are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused and for such reasonable period thereafter as may be necessary for the Party to put itself in the same position that it occupied prior to the Force Majeure, but for no longer period. The Party claiming Force Majeure shall notify the other Parties of the Force Majeure within a reasonable time after the occurrence of the facts relied on and shall keep all Parties informed of all significant developments. Such notice shall give reasonably full particulars of the Force Majeure, and also estimate the period of time which the Party will probably require to remedy the Force Majeure. The affected Party shall use all reasonable diligence to remove or overcome the Force Majeure situation as quickly as possible in an economic manner but shall not be obligated to settle any labor dispute except on terms acceptable to it and all such disputes shall be handled within the sole discretion of the affected Party.
15.2 Definition of Force Majeure. For the purposes of this Agreement, “Force Majeure” shall have the same meaning as is set out in the Lease Agreement.
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ARTICLE XVI — NOTICES
16.1 Notices. Except as otherwise specifically provided, all notices authorized or required between the Parties by any of the provisions of this Agreement, shall be in writing, in English and delivered in person or by courier service or by any electronic means of transmitting written communications which provides written confirmation of complete transmission, and addressed to such Parties as designated below. Oral communication does not constitute notice for purposes of this Agreement, and telephone numbers for the Parties are listed below as a matter of convenience only. The originating notice given under any provision of this Agreement shall be deemed delivered only when received by the Party to whom such notice is directed, and the time for such Party to deliver any notice in response to such originating notice shall run from the date the originating notice is received. The second or any responsive notice shall be deemed delivered when received “Received” for purposes of this Article XVI shall mean actual delivery of the notice to the address of the Party to be notified specified in accordance with this Article XVI. Each Party shall have the right to change its address at any time and/or designate that copies of all such notices be directed to another person at another address, by giving written notice thereof to all other Parties.
Notices are to be sent to the respective address first listed in the preamble of this Agreement and as directed below:
GUSKIN GOLD CORP.
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Attention: |
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Naana Asante, Managing Director |
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Telephone: |
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408 766 1511 |
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Telefax: |
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N/A |
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Email: |
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naana.asante@guskingold.com |
GUSKIN GOLD GHANA #1 LIMITED
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Naana Asante, Managing Director |
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Telephone: |
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408 766 1511 |
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Telefax: |
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N/A |
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Email: |
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naana.asante@guskingold.com |
Danampco Company Ltd.
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Attention: |
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Danqua Smith, Managing Director |
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Telephone: |
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+ 233 0546 822 250 |
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Telefax: |
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N/A |
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Email: |
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XXXXX@gmail.com |
Copy to, if applicable:
MINERALS COMMISSION (Ghana)
Minerals House #12
Switchback Road, Residential Area
Cantonments GL 060-1131
P.O. Box M 248, Accra Ghana
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Attention: |
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Martin Ayisi, Deputy Chief Executive Officer |
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Telephone: |
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+ 233 (0) 266 772783 |
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Telefax: |
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+ 233 (0) 302 773324 |
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Email: |
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Matrin.Ayisi@mincom.gov.gh |
Copy to, if applicable:
GHANA GEOLOGICAL SURVEY AUTHORITY
No 6, 7th Avenue, West Ridge
P.O. Box M80, Accra Ghana
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Dr. Daniel Boamah, Ag, Director General |
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Telephone: |
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+ 233 (0) 302 679 236 |
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Telefax: |
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+ 233 (0) 302 679 238 |
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Email: |
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boahamwaku@yahoo.com |
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ARTICLE XVII — APPLICABLE LAW AND DISPUTE RESOLUTION
17.1 Applicable Law. This Agreement shall be governed by, construed, interpreted, and applied in accordance with the laws of Ghana, excluding any choice of law rules which would refer the matter to the laws of another jurisdiction.
17.2 Dispute Resolution
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(A) |
Any dispute, controversy or claim arising out of or in relation to or in connection with this Agreement or the operations carried out under this Agreement, including without limitation any dispute as to the construction, validity, interpretation, enforceability, or breach of this Agreement, shall be exclusively and finally settled by arbitration in accordance with this Article 17.2. Any Party may submit such a dispute, controversy or claim to arbitration by notice to the other Parties. |
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(B) |
The arbitration shall be heard and determined by three (3) arbitrators. Each side shall appoint an arbitrator of its choice within sixty (60) Days of the submission of a notice of arbitration. The Party-appointed arbitrators shall in turn appoint a presiding arbitrator of the tribunal within sixty (60) Days following the appointment of both Party-appointed arbitrators. If the Party-appointed arbitrators cannot reach agreement on a presiding arbitrator of the tribunal and/or Party refuses to appoint it Party-appointed arbitrator within said sixty (60) Day period, the appointing authority for the implementation of such procedure shall be the high court of Ghana, who shall, appoint an independent arbitrator who does not have any financial interest in the dispute, controversy, or claim. All decisions and awards by the arbitration tribunal shall be made by majority vote. |
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(C) |
Unless otherwise expressly agreed in writing by the Parties to the arbitration proceedings: |
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(1) |
The arbitration proceedings shall be held in Ghana, |
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(2) |
The arbitration proceedings shall be conducted in the English language and the arbitrator(s) shall be fluent in the English language, |
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(3) |
The arbitrator(s) shall be and remain at all times wholly independent and impartial, |
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(4) |
The arbitration proceedings shall be conducted under the International Arbitration Rules having effect on the Effective Date, |
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(5) |
Any procedural issues not determined under the arbitral rules selectedpursuant to Article 17.2(C)(4) shall be determined by the arbitration act and any other applicable laws of Ghana, other than those laws which would refer the matter to another jurisdiction; |
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(6) |
The costs of the arbitration proceedings (including attorneys’ fees and costs) shall be borne in the manner determined by the arbitrations), |
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(7) |
The decision of the sole arbitrator or a majority of the arbitrators, as the case may be, shall be reduced to writing; final and binding without the right of appeal; the sole and exclusive remedy regarding any claims, counterclaims, issues or accountings presented to the arbitrators made and promptly paid in U.S. dollars free of any deduction or offset; and any costs or fees incident to enforcing the award, shall to the maximum extent permitted by law be charged against the Party resisting such enforcement, |
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(8) |
Consequential, punitive or other similar damages shall not be allowed except those payable to third parties for which liability is allocated among the Parties by the arbitral award or as expressly provided pursuant to the terms of this Agreement, |
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(9) |
The award shall include interest from the date of any breach or violation of this Agreement, as determined by the arbitral award, and from the date of the award until paid in full, at the Agreed Interest Rate, |
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(10) |
Judgment upon the award may be entered in any court having jurisdiction over the person or the assets of the Party owing the judgment or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be, |
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(11) |
For purposes of allowing the arbitration provided in this Article XVII, the enforcement and execution of any arbitration decision and award, and the issuance of any attachment or other interim remedy, and governmental body or agency, which becomes a Party to this Agreement agrees to waive all sovereign immunity by whatever name or title with respect to disputes, controversies or claims arising out of or in relation to or in connection with this Agreement or the operations earned out under this Agreement, |
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(12) |
The arbitration shall proceed in the absence of Party who, after due notice, fails to answer or appear. An award shall not be made solely on the default of Party, but the arbitrator(s) shall require the Party who is present to submit such evidence as the arbitrator(s) may determine is reasonably required to make an award, |
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(13) |
If an arbitrator should die, withdraw, or otherwise become incapable of serving, or refuse to serve, a successor arbitrator shall be selected and appointed in the same manner as the original arbitrator, and |
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(14) |
The arbitral award shall state the names of the arbitrators, the names and addresses of the parties, the names of the parties’ representatives, if any, and the date and place where the award was made and shall be signed by each arbitrator (or by a majority of the arbitrators with a statement that a minority of the arbitrators have refused to sign). |
ARTICLE XVIII — GENERAL PROVISIONS
18.1 Conflicts of Interest
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(A) |
Operator undertakes that it shall avoid any conflict of interest between its own interests (including the interests of Affiliates) and the interests of the other Parties in dealing with suppliers, customers and all other organizations or individuals doing or seeking to do business with the Parties in connection with activities contemplated under this Agreement. |
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(B) |
The provisions of the preceding paragraph shall not apply to: |
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(1) |
Operator(s) performance which is in accordance with the local preference laws or policies of the Government, or |
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(2) |
Operator(s) acquisition of products or services from an Affiliate, or the sale thereof to an Affiliate, made in accordance with the terms of this Agreement. |
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18.2 Public Announcements
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(A) |
Operator shall be responsible for the preparation and release of all public announcements and statements regarding this Agreement or the Operations; provided that, no public announcement or statement shall be issued or made unless prior to its release all the Parties have been furnished with a copy of such statement or announcement and the approval of the Parties has been obtained. Where a public announcement or statement becomes necessary or desirable because of danger to or loss of life, damage to property or pollution as a result of activities arising under this Agreement, Operator is authorized to issue and make such announcement or statement without prior approval of the Parties but shall promptly furnish all the Parties with a copy of such announcement or statement. |
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(B) |
If a Party wishes to issue or make any public announcement or statement regarding this Agreement or the Operations, it shall not do so unless prior to its release, such Party furnishes all the Parties with a copy of such announcement or statement, and obtains the approval of the Parties; provided that, notwithstanding any failure to obtain such approval, no Party, shall be prohibited from issuing or making any such public announcement or statement if it is necessary to do so in order to comply with the applicable laws, rules or regulations of anygovernment, legal proceedings or stock exchange having jurisdiction over such Party or its Affiliates as set forth in Articles 14.1(A)(3) and (7). |
18.3 Successors and assigns. Subject to the limitations on transfer contained in Article XI, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties.
18.4 Waiver. No waiver by a Party of any one or more defaults by another Party the performance of this Agreement shall operate or be construed as a waiver of any future default or defaults by the same Party, whether of a like or of a different character. Except as expressly provided in this Agreement no Party shall be deemed to have waived, released or modified any of its rights under this Agreement unless such Party has expressly stated, in writing, that it does waives, release or modify such right.
18.5 Severance of Invalid Provisions. If and for so long as any provision of this Agreement shall be deemed to be judged invalid for any reason whatsoever, such invalidity shall not affect the validity or operation of any other provision of this Agreement except only so far as shall be necessary to give effect to the construction of such invalidity, and any such invalid provision shall be deemed severed from this Agreement without affecting the validity of the balance of this Agreement.
18.6 Modifications. Except as is provided in Articles 10.2(B) and 18.5, there shall be no modification of this Agreement or the Lease Agreement except by written consent of all Parties.
18.7 Headings. The topical hearings used in this Agreement are for convenience only and shall not be construed as having any substantive significance or as indicating that all the provisions of this Agreement relating to any topic are to be found in any particular Article.
18.8 Singular and Plural. Reference to the singular includes a reference to the plural and vice versa.
18.9 Gender. Reference to any gender includes a reference to all other genders.
18.10 Counterpart Execution. This Agreement is executed in any number of original counterparts and each such counterpart shall be deemed an original Agreement for all purposes provided no Party shall be bound to this Agreement unless and until all Parties have executed a counterpart. For purposes of assembling all counterparts into one document, Operator is authorized to detach the signature page from one or more counterparts and, after signature thereof by the respective Party, attach each signed signature page to a counterpart.
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18.11 Warranties as to Payments, Gifts and Loans
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(A) |
Each Party warrants that it and its Affiliates have not made, offered, or authorized and will not make, offer or authorize with respect to the matters which are the subject of this Agreement, any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any public official (i.e. any person holding a legislative, administrative or judicial office, including any person employed by or acting on behalf of a public agency, a public enterprise or a public international organization) or any political party or political party official or candidate for office, where such payment, gift, promise or advantage would violate (i) the applicable laws of Ghana; (ii) the laws of the country of incorporation of such Party or such Party’s ultimate parent company and of the principal place of business of such ultimate parent company; or (iii) the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on December 17, 1997, which entered into force on February 15, 1999, and the convention’s Commentaries. Each Party shall defend, indemnify, and hold the other Parties harmless from and against any and all claims, damages, losses, penalties, costs and expenses arising from our related to, any breach by such first Party of such warranty. Such indemnify obligation shall survive termination or expiration of this Agreement. Each Party shall in good time (i) respond in reasonable detail to any notice from any other Party reasonably connected with the above-stated warranty; and (ii) furnish applicable documentary support for such response upon request from such other Party. |
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(B) |
Each Party agrees to (i) maintain adequate internal controls; (ii) properly record and report all transactions; and (iii) comply with the laws applicable to it. Each Party must rely on the other Party’s system of internal controls, and on the adequacy of the full disclosure of the facts, and of financial and other data regarding the Operations undertaken under this Agreement. No Party is in any way authorized to take any action on behalf of another Party that would result in an inadequate or inaccurate recording and reporting of assets, liabilities, or any other transactions, or which would put such Party in violation of its obligations under the laws applicable to the operations under this Agreement. |
18.12 Entirety. This Agreement is the entire agreement of the Parties with respect to the subject matter contained herein and supersedes all prior understandings and negotiations of the Parties.
IN WITNESS of their agreement each Party has caused its duly authorized representative to sign this instrument on the first indicated above.
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DANAMPCO COMPANY LTD. |
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Per: |
/s/ |
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Date: _________________________ |
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Name: Danqua Smith |
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Title: Managing Director |
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GUSKIN GOLD GHANA LTD. |
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Per: |
/s/ |
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Date: _________________________ |
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Name: Naana Asante |
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Title: President and Director |
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| Page 37 of 48 |
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EXHIBIT “A”
ACCOUNTING PROCEDURE
THIS ACCOUNTING PROCEDURE is attached to, and hereby made part of the Operating Agreement, by and between GUSKIN GOLD GHANA LTD. and DANAMPCO COMPANY LTD., hereinafter called the “Agreement” effective as of the Effective Date of the Operating Agreement of which this Exhibit A is attached.
SECTION 1 — GENERAL PROVISIONS
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1.1 |
Purpose |
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1.1.1 |
The purpose of the Accounting Procedure is to establish equitable methods for determining charges and credits applicable to operations under the Agreement which reflect the costs of Operations to the end that no Party shall gain or lose in relation to other Parties. |
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It is intended that approval of the Work Program and Budget and AFEs as provided in the Agreement shall constitute approval of the rates and allocation methods used therein to currently charge the Project Account. All rates and allocation methods contained in Work Programs, Budgets and AFEs as provided in this agreement shall be in accordance with Article 1.9, but subject to verification by audit and adjustment to actual at a later date as provided in the Accounting Procedure. |
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1.1.2 |
The Parties agree, however, that if the methods prove unfair or inequitable to Operator, the Parties shall meet and in good faith endeavor to agree on changes in methods deemed necessary to correct any unfairness or inequity. |
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1.2 |
Conflict with Agreement |
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In the event of a conflict between the provisions of this Accounting Procedure and the provisions of the Agreement to which this Accounting Procedure is attached, the provisions of the Agreement shall prevail. |
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1.3 |
Definitions |
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The definitions contained in Article 1 of the Agreement to which this Accounting Procedure is attached shall apply to this Accounting Procedure and have the same meanings when used herein. Certain terms used herein are defined as follows: |
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“Accrual basis” means that basis of accounting under which costs, and benefits are regarded as applicable to the period in which the liability for the costs is incurred or the right to the benefit arises, regardless of when invoiced, paid, or received. |
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“Material” shall mean Goods, such as Gold and/or other minerals acquired for Operations of the Lease Area. |
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“Property” means any Operators property which is moveable or not permanently affixed to the ground or so affixed or can be removed without unreasonable damage to such property. |
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1.4 |
Project Account Records and Currency Exchange |
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1.4.1 |
Operator shall always maintain and keep true and correct records of the production and disposition of all Precious Minerals and of all costs and expenditures under the Agreement, as well as other data necessary or proper for the settlement of accounts between the Parties hereto in connection with their rights and obligations under the Agreement. The Operator will be responsible for the fiscal obligations relating to the Operations save in respect of those taxes which are the legal responsibility of the Government, or each of the Parties. |
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1.4.2 |
Operator shall maintain accounting records pertaining to Operations in accordance with the Lease Agreement and generally accepted accounting practices used in the international mining industry and any applicable statutory obligations of Ghana as well as the provisions of the Lease Agreement and this Operating Agreement. |
| Page 38 of 48 |
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1.4.3 |
Project Account records shall be maintained by Operator in the English language and in United States of America (“US”) currency and in such other language and local Cedi currency as may be required by the laws of Ghana or the Lease Agreement. Conversions of currency shall be recorded at the rate actually experienced in that conversion. Currency translations for expenditures and receipts shall be recorded at the rate establish by the standard accounting procedures of the Operator which is currently the arithmetic average of the buying and selling rates at the close of business on the last Business Day of the previous month as quoted and published by a reputable international reporting agency or a top twenty-five global world bank. |
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1.4.4 |
Any realized currency exchange gain or losses shall be credited or charged to the Project Account, except as otherwise specified in this Accounting Procedure. |
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1.4.5 |
This Accounting Procedure shall apply, mutatis mutandis, to Exclusive Operations in the same manner that it applies to Operations; provided, however, that the charges and credits applicable to Consenting Parties shall be distinguished by an Exclusive Project Operation Account. For the purpose of determining and calculating the remuneration of the Consenting Parties, including the premiums for Exclusive Operations, the costs and expenditures shall be expressed in US currency and/or in the local Ghana currency Cedi (irrespective of the currency in which the expenditure was incurred). |
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1.4.6 |
The Accruals Basis for accounting shall be used in preparing accounts concerning the Projects Operations. |
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1.5 |
Statements and Billings |
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1.5.1 |
Unless otherwise agreed by the Parties, Operator shall issue quarterly to each Party, on or before the last Day of each quarter, statements of the costs and expenditures incurredduring the prior quarterly period, indicating by appropriate classification the nature thereof, the corresponding budget category AFE and the portion of such costs charged to each of the Parties. |
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These statements, as a minimum, shall contain the following information: |
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Advances or Distribution of profits or funds received from each Party, |
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the share of each Party in total expenditures, |
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the accrued expenditures, |
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the current account balance of each Party, |
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summary of costs, credits and expenditures on a current quarterly, year-to-date basis, and |
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details of unusual charges and costs in excess of US$200,000. |
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1.5.2 |
Operator shall, upon request, furnish a description of the accounting classifications used by it. |
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1.5.3 |
Amounts included in the statements and billings shall be expressed in US currency or Cedi currency. |
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1.5.4 |
Each Party shall be responsible for preparing its own accounting and tax reports to meet the requirements of Ghana and of all other countries to which it may be subject. Operator, to the extent that the information is reasonably available from the Project Account records, shall provide Parties in a timely manner with the necessary statements to facilitate the discharge of such of such responsibility. |
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1.6 |
Payments and Advances |
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1.6.1 |
Upon approval of any Work Program, Budget and AFE, if Operator so requests, each Party shall advance its share of estimated cash requirements or pledge its share from the succeeding month’s operations. Each such cash call shall be equal to the Operator’s estimate of the money to be spent in the currencies required to perform its duties under the approved Work Program and Budget during the quarter concerned. The Operator may determine that the cash to be called for a month may be paid in separate amounts within the month, if applicable. For information purposes the cash call shall contain an estimate of the funds required for the succeeding one (1) month. |
| Page 39 of 48 |
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| Page 40 of 48 |
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1.7 |
Adjustments |
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Payments of any advances or billings shall not prejudice the right of any Party to protest or question the correctness thereof; provided, however, all bills and statements rendered to Parties by Operator during any calendar year shall conclusively be presumed to be true and correct after twenty-four (24) months following the end of such calendar year, unless within the said twenty-four (24) month period a Party takes written exception thereto and makes claim on Operator for adjustment. Failure on the part of a Party to make claim on Operator for adjustment within such period shall establish the correctness thereof and preclude the filing of exceptions thereto or making claims for adjustment thereon. No adjustment favorable to Operator shall be made unless it is advised within the same prescribed period. The provisions of this paragraph shall not prevent adjustments resulting from a physical inventory of the Property as provided for in Section V. Operator shall be allowed to make adjustments to the Project Account after such twenty-four (24) month period if these adjustments result from audit exceptions outside of this Agreement, third party claims, or Government requirements. Any such adjustments shall be subject to audit within the time period specified in Section 1.8.1. |
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1.8 |
Audits |
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1.8.1 |
A Non-Operator, upon at least sixty (60) Days advance notice in writing to Operator and all other Non-Operators, shall have the right to audit the Project Accounts and records of Operator relating to the accounting hereunder for any calendar year within the twenty- four (24) month period following the end of such calendar year. The cost of each such audit shall be borne by Parties conducting the audit. It is provided, however, that Non-Operators must take written exception to and make claim upon the Operator for all discrepancies disclosed by said audit within said twenty-four (24) month period. Where there are two or more Non-Operators, the Non-Operators shall make every reasonable effort to conduct Operations or simultaneous audits in a manner which will result in a minimum of inconvenience to the Operator. Operator and Non-Operators shall make every effort to resolve any claim resulting from an audit within ninety (90) days of the receipt of the audit report. If at the conclusion of the ninety (90) day period the claim remains unresolved, the matter will be referred back to all the Parties. |
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1.8.2 |
Any information obtained by a Non-Operator under the provisions of this Section 1.8 shall be kept confidential and shall not be disclosed to any third party, except as would otherwise be permitted by Article 14.1 (A) (3) and (9) of the Agreement. |
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1.8.3 |
The Operator’s Affiliate’s records in respect of services referred to in Section 2.6.2 shall not be subject to audit. The Non-Operators will be granted the opportunity to provide an audit program questionnaire to the Operator’s statutory auditors with regard to the form and content of their audit of the Operator’s cost allocation procedures,administrative costs and time-writing. On completion of their audit the Operator’s statutory auditors will provide the Operator with a detailed report with their conclusions as to whether the cost allocation procedures have been followed and whether these procedures are fair and reasonable. The Operator shall distribute this report to the Non-Operators. If the Operator’s statutory auditors decline to provide such a report, the Non-Operators shall select an internationally reputable independent firm of public accountants to provide such report pursuant to instructions given by the Non-Operators. These instructions shall be handed over to the Operator. The Operator shall accept such firm selected by non-Operators unless it causes a conflict of interest. All costs of the audits specified in this Article 1.8.3 shall be borne by the Non-Operators unless the Operating Committee confirms that the Operator’s cost allocation procedures have not been followed as provided for in Article 1.9, in which case, the audit costs shall be charged to the Project Account. |
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1.8.4 |
In the event that the Operator is required by the Government, to employ a public accounting firm to audit the Project Account(s) and records of Operator relating to the accounting hereunder, the cost thereof shall be a charge against the Project Account and a copy of the audit certificate/report shall be furnished to each Party. |
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1.8.5 |
At the conclusion of each audit, the Parties shall endeavor to settle outstanding matters expeditiously. To this end the Parties conducting the audit will make a reasonable effort to prepare and distribute a written report to the Operator and all the Parties who participated in the audit as soon as possible and in any event within ninety (90) Days after the conclusion of each audit. The report shall include all claims arising from such audit together with comments pertinent to the operation of the accounts and records. Operator shall make a reasonable effort to reply to the report in writing as soon as possible and in any event no later than ninety (90) Day after receipt of the report. Should the Non-Operators consider that the report or reply requires further investigation of any item therein, the Non-Operators shall have the right to conduct further investigation in relation to such matter notwithstanding the provisions of Sections 1.7 and 1.8.1 that the period of twenty-four (24) months may have expired. However, conducting such further investigation shall not extend the twenty-four (24) month period for taking written exception to and making a claim upon the Operator for all discrepancies disclosed by said audit. Such further investigations shall be commenced within thirty (30) Days and be concluded within sixty (60) Days after the receipt of such report or reply. |
| Page 41 of 48 |
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1.8.6 |
All adjustments resulting from an audit agreed between the Operator and the Non-Operator conducting the audit shall be reflected promptly in the Project Account by the Operator and reported to the Non-Operator(s). If any dispute shall arise in connection with an audit, it shall be reported to and discussed by the Parties, and, unless otherwise agreed by the parties to the dispute, resolved in accordance with the provisions of Article XVII of the Agreement. If all the parties to the dispute so agree, the adjustment(s); may be referred to an independent expert agreed to by the parties to the dispute. At the election of the parties to the dispute, the decision of the expert will be binding upon such parties. Unless otherwise agreed, the cost of such expert will be shared equally by all parties to the dispute. |
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1.9.1 |
Allocations |
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If it becomes necessary to allocate any costs or expenditures to or between Operations and any other operations, such allocation shall be made on a countable basis. For informational purposes only, Operator shall furnish a description of its allocation procedures pertaining to these costs and expenditures and its rates for personnel and other charges, along with each proposed Work Program and Budget |
SECTION 11 — DIRECT CHARGES
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Operator shall charge the Project Account with all costs and expenditures incurred in connection with the Operations. It is also understood that charges for services normally provided by an Operator such as those contemplated in Section 2.6.2 which are provided by Operator’s Affiliates shall reflect the cost to the Affiliate, excluding profit, for performing such services, except as otherwise provided in Section 2.6 and Section 2.6.1. |
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The costs and expenditures shall be recorded as required for the settlement of accounts between the Parties hereto in connection with the rights and obligations under this Agreement and for purposes of complying with the tax laws of Ghana and of such other countries to which any of the Parties may be subject. Without in any way limiting the generality of the foregoing, chargeable costs and expenditures shall include: |
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2.1 |
Licenses, Permits, etc. |
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All costs, if any, attributable to the acquisition, maintenance, renewal or relinquishment of licenses, permits, Lease Agreement and/or surface rights payments, for Operations paid in accordance with the Lease Agreement when paid by Operator in accordance with the provisions of the Agreement. |
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2.2 |
Salaries, Wages and Related Costs |
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2.2.1 |
The salaries, wages and related costs of the employees of Operator and its Affiliates in Ghana directly engaged in Operations whether temporarily or permanently assigned. |
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2.2.2 |
The salaries, wages and related costs of the employees of Operator outside Ghana directly engaged in Operations whether temporarily or permanently assigned. |
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2.2.3 |
Salaries and wages shall include everything constituting the employees’ total compensation. To the extent not included in salaries and wages, the Project Account shall also be charged with the cost to Operator of holiday, vacation, sickness, disability benefits, living and housing allowances, travel time, bonuses and other customary allowances applicable to the salaries and wages chargeable hereunder, as well as costs Operator for employee benefits, including but not limited to employee group life insurance, group medical insurance, hospitalization, retirement and other benefit plans of a like nature applicable to labor costs of Operator. Operators’ employees participating in Ghana benefit plans may be charged at a percentage rate to reflect payments or accrualsmade by Operate applicable to such employees. Such accruals for Ghana benefit plans shall not be paid by Non-Operators, unless otherwise approved by the Parties, until the same are due and payable to the employee, upon withdrawal of a Party pursuant to the Agreement, or upon termination of the Agreement. which-ever occurs first. |
| Page 42 of 48 |
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2.2.4 |
Expenditures or contributions made pursuant to assessments imposed governmental authority for payments with respect thereto or on account of such employees. |
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2.2.5 |
Reasonable expenses (including related travel costs) of those employees whose salaries and wages are chargeable to the Project Account under Sections 2 2.1 and 2.2.2 of this Section II and for which expenses the employees are reimbursed. |
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2.2.6 |
If employees are engaged in other activities in addition to the Project Operations, the cost of such employees shall be allocated in accordance with Article l.9. |
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2.2.7 |
Except as provided in Section 2.2.9, Operator’s cost of employees’ relocation to or from the vicinity or location where the employees will reside or work, whether permanently or temporarily assigned to the Project Operations. If such employee works on other activities in addition to Operations, such relocation costs shall be allocated in accordance with Article 1.9. |
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2.2.8 |
Such relocations costs shall include transportation of employees, families, personal and household effects of the employee and family, transit expenses and all other related costs. |
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2.2.9 |
Relocation costs from the vicinity of Ghana to another location classified as a foreign location by Operator shall not be chargeable to the Project Account unless such foreign location is the point of origin of the employee. |
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2.3 |
Offices, Camps and Miscellaneous Facilities |
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Cost of maintaining any offices, sub-offices, camps, warehouses, housing and other facilities of the Operator and/or Affiliates directly serving the Project Operations. If such facilities serve operations in additions to the Project Operations, the costs shall be allocated to the properties served in accordance with Article 1.9. |
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2.4 |
Material |
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Cost, net of discounts taken by Operator, if applicable of Materials purchased or furnished by Operator. Such costs shall include, but are not limited to, export broker’s fees, transportation charges, loading, unloading fees, export and import duties and license fees associated with the procurement of Precious Mineral Material and in transit losses, if any, not covered by insurance. So far as it is reasonably practical and consistent with efficient and economical operation, only such Precious Mineral Material shall be purchased for and the cost thereof to, the Project Account as may be required for immediate use. |
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2.5 |
Exclusively Owned Equipment and facilities of Operator and Affiliates |
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Charges for exclusively owned equipment, facilities and utilities of Operator and its Affiliates at rate not to exceed the average commercial rates of non-affiliated third parties, then prevailing for like equipment, facilities and utilities for use in the area where the same are used hereunder. Operator shall furnish Non-Operators a list of rates and the basis of application. Such rates shall be revised if found to be either excessive or insufficient every six (6) months. |
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Drilling tools and other equipment lost in the hole or damaged beyond repair may be charged at replacement cost plus transportation costs to deliver like equipment to the location where used. |
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2.6 |
Services |
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2.6.1 |
The rates for services provided by Operator’s Affiliates and/or third parties within Ghana shall not exceed those rates currently prevailing for services performed by non-affiliated third parties, considering type, quality and availability of such services. |
| Page 43 of 48 |
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2.6.2 |
The cost of services performed by Operator’s Affiliates technical and professional staff not permanently located within Ghana, shall be charged at the rates generally used by Operator’s Affiliates for such personnel and represent the Operator’s Affiliates actual cost for that employee or type of employee. These rates shall include all costs incidental to the employment of such personnel but do not include transportation and living expenses which they may incur for the performance of such work. Such expenses shall be charged separately. |
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As early as possible, the Operator shall provide the Non-Operator with the rates referred to above for each annual year. Estimated rates will be used during the calendar year which will be retrospectively adjusted to actual rates within three (3) months of the end of the Operator’s Affiliates financial year, if necessary. |
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Examples of such services include, but are not limited to, the following: |
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Geological Studies and Interpretation |
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Surveying work airborne or groundwork |
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Log Analysis, Correlation and Interpretation |
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Laboratory Services |
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Site Geology |
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Project Engineering |
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Source Rock Analysis |
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Geochemical Analysis |
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Drilling Supervision and Labor |
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Development Evaluation |
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Project Accounting and Legal professional servicesCosts shall include salaries and wages of such technical and professional personnel, lost time, governmental assessments, employee benefits and reasonable expenses. Costs shall also include all support costs necessary for such technical and professional personnel to perform such services, such as, but not limited to, rent, utilities, support staff, drafting, telephone and other communications expenses, computer support, data center support, energy costs, water supply, camp construction and logistics, supplies and depreciation and administrative overhead. |
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2.7 |
Affiliate Overhead |
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2.7.1 |
Purpose |
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Operator shall charge the Project Account monthly for the cost of redirect services and related office costs of Operator and its Affiliates not otherwise provided in this Accounting Procedure. Indirect costs chargeable under this Section 2.7 represent the cost of general assistance and support services provided by Operator and its Affiliates. These costs are such that it is not practical to identity or associate them with specific projects but are for services which provide the Operations with needed and necessary resources which Operator requires and provide a real benefit or to engage in Operations. No cost or expenditure included under other parts of Section II shall be included or duplicated under this Section 2.7. The charges under Section 2.7 are not subject to audit under Sections 1.8.1 and 1.8.2 other than to verify that the overhead percentages are applied correctly to the expenditure basis. |
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2.7.2 |
Amount |
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2.7.2.1 |
The indirect charge under Section 2.7.1 for any month shall equal the greater of the total amount of indirect charges for the period beginning at the start of the Calendar Year through the end of the period covered by Operator’s invoice (“Year-to-Date”) determined under Section 2.7.2.2, less indirect charges previously made under Section 2.7.1 for the Calendar Year in question, or the amount of the minimum assessment determined under Section 2.7.2.3, calculated on an annualized basis (but reduced pro rata for periods of less than one year), less indirect charges previously made under Section 2.7.1 for the Calendar Year in question. |
| Page 44 of 48 |
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2.7.2.2 |
Unless exceeded by the minimum assessment under Section 2.7.2.3, the aggregate Year-to-Date indirect charges shall be a percentage of the Year-to-Date expenditures, calculated on the following scale (US Dollars):
Annual Expenditures
US$0 to US$5,000,000 of expenditures = TBD%
Next US$10,000,000 of expenditures = TBD%
Excess above US$15,000,000 of expenditures = TBD% |
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2.7.2.3 |
A minimum amount of US$50,000 shall be assessed each Calendar Year calculated from the Effective Date and shall be reduce, pro rata for periods of less than a year. |
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2.7.2.4 |
Indirect Charge for Projects
As to major projects (such as, but not limited to processing plants, and dismantling for decommissioning of camps and/or other related facilities) when the estimated cost of each project amounts to more than US$1,000,000 a separate indirect charge for such project shall be approved by the Parties from time to time during the time of the project.
During its process of winding-up Operations, Operator shall have the right to charge the greater of the sliding scale percentage rate or the minimum indirect charge for a period of twenty-four (24) months. If the winding-up process continues beyond the end of such period, the charge shall be confined to and based upon the sliding scale percentage rate.
Notwithstanding the foregoing, the indirect rates and related calculation method for development operations, production operations, and dismantling for decommissioning of platforms and related facilities shall be agreed upon by the Parties prior to and for those phases(es) of operations. |
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2.7.3 |
Exclusions
The expenditures used to calculate the monthly indirect charge shall not include the indirect charge (calculated either as a percentage of expenditures or as a minimum monthly charge), rentals on surface rights acquired and maintained for the Project Account, guarantee deposits, pipeline tariffs, concession acquisition costs, bonuses paid in accordance with the Lease Agreement, royalties and taxes on production or revenue to the Project Account paid by Operator, expenditures associated with major construction projects for which a separate indirect charge is established hereunder, payments to third parties in settlement of claims, and other similar items.
Credits arising from any government subsidy payments, disposition of Material, and receipts from third parties for settlement of claims shall not be deducted from total expenditures in determining such indirect charge. |
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2.8 |
Insurance |
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Premiums paid for insurance required by law or the agreement to be carried for the benefit of the Operations. |
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2.9 |
Damages and Losses to Property |
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2.9.1 |
All costs or expenditures necessary to replace or repair damages or losses incurred by fire, flood, storm, theft, accident, or any other cause. Operator shall furnish Non-Operator written notice of damages or losses incurred in excess of US$500,000 as soon as practical after report of the same has been received by Operator. |
| Page 45 of 48 |
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| Page 46 of 48 |
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SECTION III - ACQUISITION OF EQUIPMENT
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3.1 |
Acquisitions |
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Equipment and Material purchases for the Project Account shall be charged at net cost paid by the Operator and recorded in the accounting records in accordance with the standard accounting procedures of the Operator. The price of Equipment and/or Materials purchased shall include, but shall not be limited to export broker’s fees, insurance, transportation charges, loading (mobilization) and unloading fees Demobilization), import duties, license fees and demurrage (retention charges or deposits) associated with the procurement of Equipment and/or other necessary Materials and applicable taxes less all discounts taken. |
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3.2 |
Materials Furnished by Operator |
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Materials required for operations shall be purchased for direct charge to the Project Account whenever practicable, except the Operator may furnish such Equipment and/or other Materials from its stock under the following conditions: |
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3.4 |
Warranty of Material Furnished by Operator |
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Under circumstances where the Operator furnishes materials from their own inventory then the following shall apply. |
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(a) |
in the case of new unused items, the Operator shall ensure that all warranties and guarantees issued by the manufacturer are transferred to the Project Account. In case of defective Material, credit shall not be passed tothe Project Account until adjustment has been received by Operator from the manufacturers or their agents. |
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(b) |
in the case of used second-hand materials or Equipment the Operator is deemed at the time of transfer to certify that the material is fit for purpose. In case of defective material, the Operator is required to credit the Project Account in full. |
| Page 47 of 48 |
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SECTION IV - DISPOSAL OF MATERIALS
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4.1 |
Disposal |
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Operator shall be under no obligation to purchase the interest of Non-Operators in new or used surplus Materials. Subject to the conditions stipulated in this Operating Agreement, Operator shall have the right to dispose of Materials but shall advise and secure prior agreement of the Parties of any proposed disposition of Non-Operators Materials having proceeds from such sale, if any credited to the Project Account either individually or in the aggregate. When any Operations are relieved of Materials charged to the Project Account, Operator shall advise each Non-Operator of the original cost of such Materials to the Project Account so that the Parties may eliminate such costs from their asset records. Credits for Materials sold by Operator shall be made to the Project Account in the month in which the payment is received for the Materials. Any Materials sold or disposed of under this Section shall be on an ‘as is, where is’ basis without guarantees or warranties of any kind of nature. Costs and expenditures incurred by Operator in the disposition of Materials shall be charged to the Project Account. |
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4.2 |
Material Purchased by a Party or Affiliate |
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Material purchased from the Operator’s Property by a Party or an Affiliate thereof shall be credited by Operator to the Project Account, with new Material valued in the same manner as new Material under Section 3.2.1 and used Material valued in the same manner as used Material under Section 3.2.2, unless otherwise agreed by the Parties. |
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4.3 |
Sale to Third Parties |
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Material purchased from the Operator’s Property by third parties shall be credited by Operator to the Project Account at the net amount collected by Operator from the Buyer. If on transactions in excess of US$100,000 the sales price is less than that determined in accordance with the procedure set forth in Section 4.2, then approval by the Parties shall be required prior to the sale. Any claims by the buyer for defective materials or otherwise shall be charged back to the sale. Any claims by the buyer for defective materials or otherwise shall be charged back to the Project Account if and when paid by Operator. |
SECTION V — INVENTORIES
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5.1 |
Periodic Inventories – Notice and Representation |
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At reasonable intervals, inventories shall be taken by Operator, of all Equipment and Materials on which detailed accounting records are normally maintained. The expense of conducting periodic inventories shall be charged to the Project Account. Operator shall give Non-Operators written notice at least thirty (30) Days in advance of its intention to take inventory and Non-Operators, at their sole cost and expense, shall each be entitled to have a representative present. The failure of any Non-Operator to be represented at such inventory shall bind such Non-Operator to accept the inventory taken by Operator, who shall in that event furnish each Non-Operator with a reconciliation of overages and shortages. Inventory adjustments to the Project Account shall be made for overages and shortages. Any adjustment equivalent to US$200,000 or more shall be brought to the attention of the Parties. |
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5.2 |
Special Inventories |
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Whenever there is a sale or change of interest in the Agreement, a special inventory may be taken by the Operator provided the seller and/or purchaser or such interest agrees to bear all the expense thereof. In such cases, both the seller and the purchaser shall be entitled to be represented and shall be governed by the inventory so taken. |
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Page 48 of 48 |
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EXHIBIT 31.1
CERTIFICATION
I, Naana Asante, certify that:
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1. |
I have reviewed this Annual Report on Form 10-K of GUSKIN GOLD CORP for the year ended September 30, 2021; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
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(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this report is being prepared; |
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(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
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a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: January 31, 2022 |
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/s/ Naana Asante |
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Naana Asante |
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Chief Executive Officer (principal executive officer) |
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EXHIBIT 31.2
CERTIFICATION
I, Mario Beckles, certify that:
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1. |
I have reviewed this Annual Report on Form 10-K of GUSKIN GOLD CORP. for the year ended September 30, 2021; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
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(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this report is being prepared; |
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(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
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a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: January 31, 2022 |
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/s/ Mario Beckles |
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Mario Beckles |
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Chief Financial Officer (principal financial and accounting officer) |
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of GUSKIN GOLD CORP. (the “Company”) on Form 10-K for the year ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Naana Asante, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:
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(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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Date: January 31, 2022 |
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/s/ Naana Asante |
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Naana Asante |
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Chief Executive Officer (principal executive officer) |
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A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of GUSKIN GOLD CORP. (the “Company”) on Form 10-K for the year ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mario Beckles, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:
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(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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Date: January 31, 2022 |
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/s/ Mario Beckles |
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Mario Beckles |
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Chief Financial Officer (principal financial and accounting officer) |
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A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.