Subsequent Events
a) On June 27, 2008, the Company entered into a Joint Venture Agreement that grants the Company the right to explore for minerals on properties in Liwale and Nachigwea Districts of Tanzania in consideration for the payment of $1,000,000 upon signing the agreement and $540,000 over five years beginning July 15, 2008. The $540,000 is payable in stages on a quarterly basis of which $80,000 must be paid in the first year, $90,000 in the second year, $100,000 in the third year, $120,000 in the fourth year, and $150,000 in the fifth year. The holder of the property licenses retains a net smelter royalty return of 3%.
b) On June 26, 2008, the Company entered into an Agreement with SD Partners, LLC ("SD") for consulting and fundraising services, including a secondary public offering of securities of the Company in the United Kingdom, on an exclusive basis for a period of three years. The Agreement also contemplates a possible transaction between the Company and a Shell company (the
"Merged Shell transaction"). As compensation for SD's services, the Company agrees to pay $50,000 for the first two months of the engagement, payable as to $25,000 by June 30, 2008 (paid), and the remaining $25,000 by July 28, 2008 and to date remains active. The agreement shall automatically be extended for additional 30 days on the same condition and terms with a
payment of $25,000 per month due at the beginning of each month. In consideration of structuring the Merged Shell transaction, SD will receive warrants to acquire 5% of the shares of the Company exercisable for five years at $0.01 per share. In consideration for additional financings resulting from SD's services, the Company will pay a cash fee of 5% of the gross proceeds. If any warrants from any such financings are exercised, SD will be entitled to 5% of the gross warrant proceeds. In consideration of an acquisition by or of the Company, SD will be entitled to a fee of 10% of the value of the transaction, of which 5% is payable in cash and 5% is payable in common shares of the Company. If this agreement is terminated by the Company, and the Company receives any funding in the United Kingdom within twenty four months of termination, the Company must pay a breakup fee to SD of the greater of $200,000 or 5% of such funding.
c) On July 28, 2008, the Company entered into an Agreement with SD for fundraising services, in relation to a private placement of up to $2,100,000. The Company will pay a cash fee of 7% of the first $1,500,000 gross proceeds, 13% of the next $600,000 gross proceeds, and 10% of any amount above $2,100,000 gross proceeds. If warrants are issued with the financing, SD will be entitled to 5% of the gross proceeds from the exercise of any such warrants. The Company also agrees to issue warrants exercisable for five years at $0.01 per share to SD to acquire 3% of the total number of common shares outstanding. Should SD raise an additional $2,000,000, SD will be granted an additional 1% of the total number of common shares outstanding. The total number of warrants granted to SD will not exceed 5% of the total number of common shares outstanding after closing of the funding.
d) On August 15, 2008, the Company completed a non-brokered private placement for total proceeds of $1,767,500 comprised of:
i) 6,666,680 shares of common stock at $0.15 per share for proceeds of $1,000,000;
ii) 1,000,000 units at $0.10 per unit for proceeds of $100,000. Each unit consists of one share of common stock and one-half of one warrant. Each full warrant entitles the holder to acquire an additional share of common stock at an exercise price of $0.25 per share for a period of one year from closing;
iii) 2,000,000 units at $0.15 per unit for proceeds of $300,000. Each unit consists of one share of common stock and one- half of one warrant. Each full warrant entitles the holder to acquire an additional share of common stock at an exercise price of $0.30 per share for a period of one year from closing;
iv) 1,462,500 units at $0.20 per unit for proceeds of $292,500. Each unit consists of one share of common stock and one-half of one warrant. Each full warrant entitles the holder to acquire an additional share of common stock at an exercise price of $0.40 per share for a period of one year from closing;
v) 187,500 units at $0.40 per unit for proceeds of $75,000. Each unit consists of one share of common stock and one- half of one warrant. Each full warrant entitles the holder to acquire an additional share of common stock at an exercise price of $0.50 per share for a period of one year from closing;