Bruce: The deal between IPM and Phoenix/Omega, as explained in IPM's 10-K follows my comments. A little different than the way you explained it. Omega is a subsidiary of Phoenix, and did not give IPM any money. Rather, it looks to me like IPM has paid Omega a total of $505,000, plus in excess of 6 million IPM shares.
The question is, since IPM is once again in default on this obligation, will/has Omega agree(d) to renegotiate with IPM the terms of the deal, or has Omega decided to cash in their 6 million+ shares of IPM (1 million of which they could have cashed in at any time). It would seem more and more unlikely that IPM will ever be able to raise the $17 million still owed to Omega. Therefore, it would seem possible that Omega might have decided to cash in their IPM chips.
<From IPM's 10-K>
On May 9, 1997, the Company entered into an agreement with Omega Investment Corporation, an affiliate of Phoenix International Mining, Inc.("Omega"), pursuant to which International Precious Metals of Arizona ("IPMA"), a wholly owned subsidiary of the Company, agreed to pay an aggregate of US$27,000,000 to Omega, consisting of US$17,000,000 in cash and 1,000,000 common shares of the Company valued at US$10.00 per share, to acquire all of the rights to the unpatented mining claims comprising the Black Rock Property which the Company does not presently own. As the first two payments under the Purchase Agreement, IPMA and the Company on May 9, 1997 paid to Omega US$500,000 plus 4,000,000 common shares (of which 3,000,000 common shares will be held by Omega to secure the obligation of IPMA and the Company to make the second payment). Pursuant to an agreement made by the Company, Omega and IPMA as of July 29, 1997 (the "Extension Agreement"), (i) the last date for the second payment was extended from July 15, 1997 to October 15, 1997, (ii) the Company and IPMA will pay to Omega US$5,000 plus a number (initially 500 and increasing periodically to 1,500 as specified below) of common shares of the Company per day for each day from July 15, 1997 to the date of the second payment and (iii) the Company and IPMA will issue and transfer to Omega an additional 3,000,000 common shares of the Company as security for the second payment. The number of common shares payable is 500 for each day from July 15 through August 15, 1,000 for each day from August 16 through September 15, and 1,500 for each day from September 16 through October 15. Upon receipt of the second payment, Omega is obligated to return 6,000,000 common shares of the Company. (The Extension Agreement is filed as an exhibit to this Report and is incorporated herein by reference, and the descriptions of the Extension Agreement herein are qualified by reference to the full text of the Extension Agreement.)
The Company expects to raise cash for the second payment through private placements of its securities, but its ability to do so will depend on factors beyond its control, including economic and market conditions. |
