Newport Gold, Inc.

2006-2007: An option in Inner Mongolia

Newport Gold, Inc. was a Nevada shell company run by President and CEO Derek Bartlett. In November 2006 it acquired its first real operating asset: an option to earn a 20% interest in a mineral exploration property in Inner Mongolia, China. It paid 2.5 million restricted shares to nine individual optionors and to the property holder, Noront Resources. Earlier in 2006 it had raised small amounts from offshore investors at $0.10 a share.

In August 2007 the company used its right of first refusal (a right to take up an offer before others) to earn another 30%, issuing 3 million more shares. That lifted its option to a full 50% interest. The option sat under a February 2006 agreement that required share issuances and $750,000 of exploration spending by February 2009.

2008-2014: Debt for shares and deregistration

In 2008 the company restated its third-quarter 2007 financial statements because it had omitted a disclosure about a share issuance. In August 2008 it cleared $711,861 of debt by issuing 14.2 million shares at $0.05 each to 15 individuals. The debt was mostly owed to insiders: Bartlett ($277,859), the estate of his late son, and major shareholder Ann Pineau ($302,000). The conversion was heavily dilutive, meaning it sharply cut the share of existing holders.

In November 2008 Newport Gold deregistered its securities, ending its duty to file reports with the US Securities and Exchange Commission. The record then goes quiet. Year-end share counts rose from about 34.8 million in 2010 to 57.3 million by 2012, but the disclosures do not explain the increase. In July 2014 the company deregistered its securities again, again ending its obligation to file SEC reports. That was the latest development on record.