Unassociated Document
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
report: June 30, 2010
CAPITAL
GOLD CORPORATION
(Exact
name of registrant as specified in Charter)
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Delaware
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001-34618
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13-3180530
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(State
of other Jurisdiction of
incorporation)
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(Commission
file no.)
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(IRS
employer identification
no.)
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76
Beaver Street, 14th
Floor
New
York, New York
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10005
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (212) 344-2785
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
ADDITIONAL INFORMATION AND
FORWARD-LOOKING STATEMENTS
CAPITAL
GOLD COPROPORATION (“CAPITAL GOLD” OR THE “COMPANY”) AND NAYARIT GOLD, INC.
(“NAYARIT”) CLAIM THE PROTECTION OF THE SAFE HARBOR FOR “FORWARD-LOOKING
STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ARE NOT HISTORICAL
FACTS. SUCH FORWARD-LOOKING STATEMENTS, BASED UPON THE CURRENT BELIEFS AND
EXPECTATIONS OF MANAGEMENT OF CAPITAL GOLD AND NAYARIT REGARDING, AMONG OTHER
THINGS, CAPITAL GOLD’S PROPOSED BUSINESS COMBINATION DISCUSSED HEREIN AND THE
BUSINESS OF NAYARIT AND ITS SUBSIDIARIES, ARE SUBJECT TO RISKS AND
UNCERTAINTIES, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THE
FORWARD-LOOKING STATEMENTS. THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE
ACTUAL RESULTS TO DIFFER FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS:
(1) CAPITAL GOLD’S ABILITY TO COMPLETE THE TRANSACTION; AND (2) OTHER RISKS
REFERENCED FROM TIME TO TIME IN CAPITAL GOLD’S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE “SEC”) AND THOSE FACTORS LISTED IN THE PROXY
STATEMENT/PROSPECTUS UNDER “RISK FACTORS”. THE
INFORMATION SET FORTH HEREIN SHOULD BE READ IN LIGHT OF SUCH RISKS. NEITHER
CAPITAL GOLD NOR NAYARIT ASSUMES ANY OBLIGATION TO UPDATE THE INFORMATION
CONTAINED IN THIS REPORT.
THE
COMPANY HAS FILED A DEFINITIVE PROXY STATEMENT/PROSPECTUS WITH THE SEC IN
CONNECTION WITH THE PROPOSED TRANSACTION. SECURITYHOLDERS OF THE COMPANY AND
OTHER INTERESTED PERSONS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS, THE CURRENT REPORT ON FORM 8-K FILED BY THE COMPANY WITH
THE SEC ON FEBRUARY 11, 2010 (TOGETHER WITH THIS REPORT, THE “CURRENT REPORTS”)
AND ANY OTHER DOCUMENTS FILED OR TO BE FILED BY THE COMPANY WITH THE SEC BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. SUCH PERSONS CAN ALSO READ THE COMPANY’S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JULY 31, 2009 (THE “ANNUAL
REPORT”) AND OTHER REPORTS AS FILED WITH THE SEC, FOR A DESCRIPTION OF THE
SECURITY HOLDINGS OF THE COMPANY’S OFFICERS AND DIRECTORS AND THEIR AFFILIATES
AND THEIR RESPECTIVE INTERESTS IN THE SUCCESSFUL CONSUMMATION OF THE PROPOSED
TRANSACTION.
THE
INFORMATION ON NEITHER CAPITAL GOLD’S NOR NAYARIT’S WEBSITE IS NOT, AND SHALL
NOT BE DEEMED TO BE, A PART OF THIS CURRENT REPORT OR INCORPORATED IN FILINGS
CAPITAL GOLD MAKES WITH THE SEC.
THIS
COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY
JURISDICTIONS IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION. NO OFFERING OF SECURITIES SHALL BE MADE EXCEPT BY MEANS OF A
PROSPECTUS MEETING THE REQUIREMENTS OF SECTION 10 OF THE SECURITIES ACT OF 1933,
AS AMENDED.
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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On June
30, 2010, Capital Gold Corporation (“Capital Gold” or the “Company”) entered
into the First Amendment to the Amended and Restated Credit Agreement (the
“Amendment”) by and among our wholly-owned Mexican subsidiaries Minera Santa
Rita S. de R.L. de C.V. and Oro de Altar S. de R.L. de C.V., as borrowers
(“Borrowers”), the Company, as guarantor, and Standard Bank PLC (“Standard
Bank”), as the lender. The Amendment amends the Amended and Restated
Credit Agreement between the parties entered into on September 18, 2008 with
retroactive effect from July 17, 2008 (the “Credit Agreement”), which amended
and restated the Credit Agreement between the parties dated August 15,
2006. The Credit Agreement provides for a senior secured term credit
facility in the aggregate amount of U.S.$12,500,000 (the “Term Facility”) and
provided for a senior secured revolving credit facility in the aggregate
principal amount of U.S.$5,000,000 (the “Revolving
Facility”). Capital Gold guarantees all obligations of the
Borrowers under the Term Facility and the Revolving Facility.
The
material amendments to the Credit Agreement contained in the Amendment are as
follows:
The
Amendment increases the Revolving Facility to U.S.$7,500,000. The
Revolving Facility is available for a two-year period commencing June 30,
2010. The Borrowers may request a borrowing of the Revolving Facility
from time to time, provided that each borrowing shall be in a minimum aggregate
amount of U.S.$500,000. All amounts due under the Revolving Facility,
including all accrued interest and other amounts described in the Credit
Agreement, shall be due and payable on June 30, 3012.
Amounts
borrowed under the Term Facility and the Revolving Facility bear interest at a
rate per annum equal to the LIBO Rate, as defined in the Credit Agreement, for
the applicable interest period plus the applicable margin. The
applicable margin for the Revolving Facility was increased in the Amendment to
3.0% per annum.
The
Borrowers are to use the proceeds of the Revolving Facility to fund general
corporate and working capital requirements in connection with the El Chanate
gold mining project and the Saric gold exploration project.
The
Amendment increased the Tangible Net Worth (as defined in the Credit Agreement)
requirement to at least U.S.$30,000,000 and requires Capital Gold to maintain at
all times a Ratio of Debt to Cash Flow from Operations, as defined in the
Amendment, of no greater than 2:50:1:00.
The
foregoing summary is qualified in its entirety by reference to the Amendment,
which is attached hereto as Exhibit 10.1. For more detailed
information on the terms of the Credit Agreement, please see the disclosure in
our Annual Report on Form 10-K filed with the Securities and Exchange Commission
on October 29, 2008 and the text of the Credit Agreement, which is attached as
Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended
July 31, 2008 (filed on October 29, 2008).
On July
6, 2010, the Company and Nayarit Gold Inc., an Ontario corporation (“Nayarit”)
entered into an extension agreement (the “Extension”) to extend the time to
complete the proposed business combination between the Company and Nayarit from
July 10, 2010 to August 2, 2010, in order to accommodate the special meeting of
Nayarit shareholders which is scheduled to be held on July 12, 2010. The
foregoing summary is qualified in its entirety by reference to the Extension,
which is attached hereto as Exhibit 10.2.
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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Pursuant
to the Severance Agreement dated April 29, 2010 by and between John Brownlie the
Company, on July 1, 2010, Mr. Brownlie resigned as a member (“Director”) of the
Board of Directors of the Company. He also resigned as President of
the Company, effective July 1, 2010. Mr. Brownlie did not
resign from the Company’s Board of Directors as a result of any disagreements
with the Company on any matter relating to the Company’s operations, policies or
practices.
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Item
5.07
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Submission
of Matters to a Vote of Security
Holders
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On July
2, 2010, the Company held its Special Meeting of Stockholders. The following is
a tabulation of the voting on the proposals presented at the Special
Meeting.
Proposal
1: To adopt the business combination agreement, including the annexed
amalgamation agreement (the “Business Combination Agreement”) dated February 10,
2010 as amended on April 29, 2010, between Capital Gold and Nayarit Gold Inc.,
an Ontario corporation (“Nayarit”) pursuant to which Nayarit will
amalgamate with a to be formed wholly-owned Ontario subsidiary of Capital Gold
and Capital Gold will issue approximately 12,099,135 shares of its common stock
to stockholders of Nayarit and reserve for issuance an additional approximately
4,830,938 and 1,218,403 shares of Capital Gold pursuant to warrants and options,
respectively, of Nayarit. As a result of the transaction, Nayarit
will become a wholly-owned subsidiary of Capital Gold (the “Business
Combination”);
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Shares Voted For
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Shares Voted
Against
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Shares
Abstaining
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Broker Non-Votes
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15,386,363
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9,759,375
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47,899
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0
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Proposal
2: To consider and vote upon the adjournment of the Capital Gold
Special Meeting to a later date or dates, if necessary, to permit further
solicitation and vote of proxies if, at the time of the Capital Gold Special
Meeting, it appears we cannot consummate the transactions contemplated by the
Business Combination Agreement and the other proposals to be considered by
stockholders.
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Shares Voted For
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Shares Voted
Against
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Shares
Abstaining
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Broker Non-Votes
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15,997,005
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9,087,412
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109,219
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0
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On
July 6, 2010, Capital Gold issued a press release announcing that at its
special meeting of stockholders held on July 2, 2010, its stockholders voted to
approve the business combination with Nayarit Gold, Inc. A copy of the press
release is annexed to this Current Report on Form 8-K as Exhibit
99.1.
On
July 7, 2010, Capital Gold issued a press release announcing that the
Company entered into the First Amendment to the Amended and Restated Credit
Agreement by and among its wholly-owned Mexican subsidiaries Minera Santa Rita
S. de R.L. de C.V. and Oro de Altar S. de R.L. de C.V., as borrowers, the
Company, as guarantor, and Standard Bank PLC, as the lender. A copy of the press
release is annexed to this Current Report on Form 8-K as Exhibit
99.2.
The
information furnished under this Item, including the exhibit related thereto,
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, nor shall it be deemed incorporated by reference in any
disclosure document of Capital Gold, except as shall be expressly set forth by
specific reference in such document.
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Item 9.01.
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Financial Statements and
Exhibits
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(d)
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Exhibits
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10.1
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First
Amendment to Amended and Restated Credit Agreement, dated as of June 30,
2010, by and among Standard Bank PLC, Minera Santa Rita S. de R.L. de
C.V., Oro de Altar S. de R.L. de C.V. and Capital Gold
Corporation
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10.2
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Extension
dated July 6, 2010 between the Company and Nayarit
Gold.
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10.3*
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Severance
Agreement and Release between the Company and John Brownlie dated April
29, 2010
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99.1
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Press
release dated July 6, 2010 regarding special meeting of
stockholders
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99.2
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Press
release dated July 6, 2010 regarding First Amendment to the Amended and
Restated Credit
Agreement
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*Incorporated by reference to the
Company's Registration Statement on Form S-4 filed with the SEC on April 30,
2010.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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CAPITAL
GOLD CORPORATION
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/s/ Christopher
Chipman
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Name:
Christopher Chipman
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Title:
Chief Financial Officer
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Dated:
June 30, 2010