DKGR .005 Letter to the Shareholders of Drake Gold Resources, Inc.
CENTURY CITY, CA -- (MARKET WIRE) -- 09/15/06 -- Drake Gold Resources, Inc. (PINKSHEETS: DKGR)
To the shareholders of Drake Gold Resources:
We are now entering into the audit stage as previously outlined in our press announcements and will soon be a fully reporting company. By increasing transparency we hope to earn the trust of our investors. We will demonstrate that we are not the typical "pinksheet" that frivolously over issues shares to consultants and affiliates, diluting the company and shareholder value.
To prove my sincerity on the issue, I have personally loaned money to Drake as well as provided for the daily expenses of the company without any share issuance. I have made these loans in good faith because I am confident that the cash flows from our gold mining operations will provide an increase in shareholder value to me as well as to all of the company's shareholders.
To clarify, since the inception of Drake in February of 2006 there have only been 13,333,330 restricted shares issued for LOI, Pegasus Oil Well Services and legal work. New issuances will likely occur but only in the normal course of operations, including future acquisitions.
Although these are the only shares issued since the takeover of Drake, In the interest of full disclosure the company is releasing the amount of shares still held, not traded, by the transfer agent. This total reflects issuances that were related to the previous management and business model. The company intends to reduce the outstanding shares. Any share cancellations in the future will be released to the public openly to serve the interests of improving the company structure without employing reverse splits that are common among young companies.
Drake has made tremendous strides to building shareholder value by acquiring Pegasus and the Jackpot Placer Project. I have also personally funded the Jackpot project to this date. An update on the production plans will be released mid next week. The update will include an explanation of the timing of the BLM Operation Permits, arrival of equipment and geological report as outlined by Craig Parkinson, Drake Gold's primary geologist. (Craig L. Parkinson, RG, CPG, Arizona Registered Geologist #30843 and AIPG Certified Professional Geologist #10098, National Instrument 43-101: Independent Qualified Person. Mr. Parkinson is the president of the highly regarded consulting firm Parkinson Geologic Services (PGS). parkinsongeologic.com)
The Pegasus Project acquisition was structured in its entirety using stock based on the share price over the course of this year. Due to the recent decline in share price the management of Drake has had to weigh the benefit of the acquisition versus the amount of shares that would have to be issued. As per the contract, Drake would have to issue 700 Million restricted shares to complete the full acquisition of Pegasus Cementers D.B.A. Pegasus Oil Well Services. To this end the acquisition of the 5-year-old business does not fit into our low dilution, high return model. As of this release we are officially canceling the acquisition of Pegasus to fully focus on the development of profitable mining operations. Once the value of Drake shares has increased to a substantial level then we may reconsider the acquisition of Pegasus.
The total shares issued and outstanding are, and will continue, to be updated at our website, drakegold.com
In addition to a complete update on the operations at the Jackpot Placer Project, during the course of next week we have a series of new professional mining directors and officer additions that will be announced.
As I previously mentioned, I am a shareholder myself, I encourage other shareholders to express their points of view to the management team as we are building this company for mutual benefit. I am posting my cell phone number here so that you may contact me at any time.
Clayton Smith
Cell: 310-728-9445
Email: Info@DrakeGold.com |
