History
A thinly funded Nevada lease-holder escaped a failed merger in 2006, rebuilt around the Mesquite gold mine, raised about $70m and a $105m loan, then deregistered from the SEC in 2007.
2005-2005: A thinly funded lease-holder
Western Goldfields began 2005 as a small company holding exploration leases, and the record shows how little money it had. In January, RAB Special Situations, a London fund, put $500,000 into a new class of preferred shares. They ranked ahead of the ordinary stock, paid a cumulative 7.5% dividend and voted alongside the common shares.
In August the company could not make its July repayment on its RMB credit facility. It paid $50,000 to defer the payment to October, and RMB added a new default trigger tied to a proposed merger with Romarco Minerals. Later that month Western Goldfields put its Lincoln Hill property in Nevada into a jointly owned company. Coolcharm Gold Mining could earn 60% by spending $4m or delivering a bankable feasibility study by July 2010, and would pay $225,000 in instalments plus 600,000 of its own shares. The two companies also granted each other matching options over 19.9% of the other's shares. In October the merger was signed, with each Western Goldfields share to be exchanged for two Romarco shares.
2006: Break-up and a new team
The Romarco merger was abandoned in February 2006. Western Goldfields raised $3.7m of a $6m placement at 30 cents a unit and used it to pay Romarco a $1m break fee plus its notes and expenses, and to clear the RMB debt. On the same day the whole leadership changed: Randall Oliphant became chairman, Ray Threlkeld chief executive and Brian Penny finance director, replacing Douglas Newby and Becky Corigliano. The final $2.3m of the placement closed days later, and this money was earmarked for a feasibility study on the Mesquite mine.
In August the company withdrew its 2005 annual accounts and two quarterly reports as unreliable. Granting Romarco the share option had triggered a conversion feature in RAB's preferred stock that was never accounted for. The correction was non-cash. In November it committed $60.9m to a mining fleet, including eleven 190-ton haul trucks and two shovels, for delivery in mid-2007, before project finance was in place.
2007-2009: Funding the build and leaving the register
In January 2007 the company agreed to sell 31.1 million shares at $2.25 through an underwriting syndicate, raising about $70m before $4.2m of fees. That was seven and a half times the 30 cents paid eleven months earlier. In April, Investec agreed a $105m term loan, $85m for construction and $20m for corporate purposes, secured on the mine and its shares. The condition was that the company hedge around 450,000 ounces of gold, fixing the price on much of the mine's early output. Completion was expected in the second half of 2008.
On 19 July 2007 the company deregistered its securities, ending its obligation to file reports with the SEC. This followed a move of the company's legal home from Idaho to Ontario, Canada, effective 29 June 2007, and the business carried on. In June 2009 its exchange filed to remove a class of its securities from listing. The cause is not established in the record. As of that date, the company held the Mesquite mine in California as its main asset.
Written from the 13 story beats below (2005 to 2 June 2009), which come from the company's own announcements and filings.