Mandorin terminates proposed eBillings transaction
Mandorin Goldfields Inc MGD
Shares issued 28,991,228 Feb 23 close $0.73
Thu 30 Nov 2000 News Release
Mr. Malcolm Stevens reports
Termination of proposed eBillings transaction
As previously announced, the company had entered into an investment
agreement dated June 29, 2000, which was subsequently amended on Sept. 18,
2000, with Oyster Ventures Limited, e-billing company, Inc. (FounderCo,
owned by the founders of the e-billing business) and eBillings, Inc.
regarding the organization of eBillings. Pursuant to the investment
agreement, each of Oyster and FounderCo were to acquire a 50-per-cent
interest in eBillings and, in turn, the company was to acquire Oyster's
proposed 50-per-cent interest in eBillings. Various other related
commercial agreements were also entered into among Oyster, FounderCo and/or
eBillings regarding the operation of eBillings.
The deterioration in market conditions that resulted from the downturn in
the technology sector in April, 2000, made the raising of capital for a
start-up business such as e-billing increasingly difficult. Recognizing
this, Oyster commenced extensive negotiations with FounderCo. The
negotiations were directed toward repricing the original purchase
arrangements between Oyster and FounderCo to better reflect the
deteriorating market conditions.
The negotiations proved to be arduous and protracted and, ultimately, did
not result in a downward repricing. Consequently, using the pre-April,
2000, valuation model, Oyster was unable to raise sufficient funds from
investors to allow it to complete its obligations with FounderCo to acquire
50 per cent of eBillings. As a result, FounderCo issued to Oyster and the
company a notice of termination dated Nov. 7, 2000, of the investment
agreement and related transaction documents, which necessitates the
termination of the arrangements between the company and Oyster in respect
of the eBillings transaction. The company has no further liabilities under
the investment agreement as a result of the termination.
The company and FounderCo then entered into discussions with the
possibility of the company acquiring 100 per cent of eBillings. The company
required a significant change to the original arrangements to reflect the
changed values in the global market. These discussions were not fruitful.
In pursuing this transaction, the company has incurred or will incur
expenses of approximately $110,000 (Canadian) for legal fees and corporate
advisory expenses.
As at Sept. 30, 2000, the company had consolidated working capital of
$57,250 (Canadian).
Further to the termination of the eBillings transaction, the sponsorship
agreement between the company and Golden Capital Securities Ltd. is no
longer required, and will be terminated. For Golden Capital's corporate
finance fee under the sponsorship agreement, the company issued to Golden
Capital 50,000 units at a deemed value of 60 Canadian cents per unit and is
still to pay Golden Capital a further $10,000 (Canadian) in cash. Each unit
consisted of one common share of the company and one warrant to purchase
one common share of the company at 60 Canadian cents per share until Oct.
16, 2001.
The on-line procurement market
The on-line procurement market continues to expand and, as a result, the
company remains fully committed to becoming involved in developing and
commercializing a highly secure on-line billing, and payment product
offering so that it can directly benefit from the inevitable growth in
e-business. With that goal, the company is commencing (i) due diligence
investigations on a developed on-line billing system that has an existing
client base and established relationships with the major global credit card
providers, and (ii) the selection of a state-of-the-art e-business security
solution that will enhance the on-line billing product offering.
Development relating to the company's mining assets in Zimbabwe
Data review on gold assets:
Mandorin has given permission for its geological data to be reviewed by
parties who have expressed interest in acquiring EPOs 1,072 and 1,080, and
the mining claims.
New mining opportunities under review
Platinum
The company has been presented with, and is actively investigating, a
number of opportunities to purchase tenements in eastern Africa in regions
that are considered to be prospective for platinum group metals.
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