UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report:
Date of earliest event reported: June 29, 2023
(Exact name of registrant as specified in its charter) |
|
| |||
(State or other jurisdiction |
| (Commission File Number) |
| (IRS Employer |
of incorporation) |
|
|
| Identification No.) |
| ||
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
OTC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On June 29, 2023 DynaResource, Inc. (the “Company”), entered into a Memorandum of Understanding with Ocean Partners Holdings Limited (“OP”). The Company’s Board of Directors approved the Memorandum of Understanding on June 29, 2023.
The principal terms of the Memorandum of Understanding (the “MOU”) are as follows:
| · | To extend until December 31, 2026 the term of the Gold Concentrate Purchase Agreement dated February 1, 2021, as amended (the “offtake Agreement”) by and between the Company’s affiliate and the 100% owner of mining concessions comprising the San Jose de Gracía high grade gold project in Sinaloa, Mexico DynaResource de Mexico SA de CV (“DynaMexico”), and OP’s Affiliate, MK Metal Trading Mexico SA de CV. |
|
|
|
| · | The Offtake Agreement will automatically extend annually on an evergreen basis thereafter unless written notice is given by either party no later than 365 days before the date of termination. |
|
|
|
| · | A $1 Million USD early termination fee would be paid by the Company to terminate the Offtake Agreement in certain circumstances. |
|
|
|
| · | The maximum advance credit line under the Offtake Agreement will be increased to $17.5 Million USD under the parameters that are currently in effect. |
|
|
|
| · | The Company will have the option to convert the advance credit line under the Offtake Agreement, to a maximum of $10.00 Million USD, into a revolving credit facility repayable over 12 months at 3 Million Secured Overnight Financing Rate (SOFR) + 7.50% amortized as follows: Month 1, interest only; Month 2-11, 5% principal plus interest; and Month 12, 50% principal plus interest. The Company’s Converting to a revolving credit facility would reduce the availability on the advance credit line on a pro rata percentage basis. |
|
|
|
| · | In conjunction with the execution of the extension of the Offtake Agreement, OP will purchase 1,000,000 shares of Company common stock (the “shares”) at a price of $5.00 USD per share for total proceeds of $5,000,000.00. |
| o | In a private placement transaction. |
|
|
|
| o | Ocean Partners is willing to provide further equity injections to DynaUSA at mutually agreed terms. |
| · | Upon purchase of the Shares, OP will have the right to nominate a director to be elected to the Company’s Board, or in certain instances to the Board of DynaMexico, with Brent Omland as the initial nominee. |
|
|
|
| · | OP will have a right of first refusal, so long as the Offtake Agreement is in place, to provide offtake finance and purchase other concentrates (zinc, silver, copper etc.) and gold Doré from the Company’s open pit and underground operations. |
The foregoing summary is qualified in its entirety by reference to the full text of the MOU, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein in its entirety by reference. The representations, warranties and covenants contained in the MOU were made only for purposes of the MOU and as of specific dates, were solely for the benefit of the parties to the MOU and may be subject to limitations agreed upon by the contracting parties.
| 2 |
Item 8.01 Other Events
On July 6, 2023, the Company issued a press release announcing its entry into the MOU. A copy of the Press Release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
| Description |
| ||
|
|
|
|
| 3 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DYNARESOURCE, INC. |
| |
|
|
|
|
Dated: July 6, 2023 | By: | /s/ Koy W. (“K.D.”) Diepholz |
|
|
| Koy W. (“K.D.”) Diepholz, CEO |
|
| 4 |
EXHIBIT 10.1
June 27, 2023
DynaResource, Inc.
222 West Las Colinas Blvd.
Suite 1910 North
Irving, TX 75039
Subject: MOU Re: DynaResource and Ocean Partners
Dear K.D.,
We appreciate the recent discussions around the MOU we sent back in March.
Further to our discussions we wanted to provide you with an updated memorandum of understanding for review.
As we discussed, our current contract comes to an end at the end of 2023 and we are keen to renew this contract with you given the excellent concentrate quality, high levels of trust built between our groups and extremely professional working relationship and attitude between our groups. It has been a pleasure watching San Jose de Gracía expand, ramp-up and prosper and we are very pleased we could contribute in a meaningful way.
Our proposal would be as follows:
|
| - | The current contract is extended until December 31, 2026 with the contract to automatically extend annually on an evergreen basis, thereafter unless written notice is given by either party no later than 365 days before the date of termination. I.E., if either party wishes to terminate the contract (which cannot be any earlier than December 31, 2026), notice would need to be given by January 1, 2026 otherwise the contract would extend through December 31, 2027 with this process repeated annually until one party provides notice to terminate. This gives us initially a long-term basis to work with our receivers as well as both parties plenty of time to make alternative plans should either party wish to terminate the contract. On a change of control event, if DynaResource is unable to give meet the notice requirements or if it is before the extension date of December 31, 2026, then DynaResource, Inc. will pay Ocean Partners an early termination fee of One Million Dollars ($1,000,000.00). |
|
|
|
|
|
| - | Despite freight rates and local warehousing/export costs rising significantly, we would propose to keep the contract terms unchanged, and OP will absorb the additional freight/warehouse/export costs to allow Dyna to continue to receive the strong smelter netbacks it has received over the past three years. |
|
|
|
|
|
| - | OP to increase the maximum advance credit line to $17.5M along the same parameters we operate underneath the advance credit line today. |
OP to provide DynaResource over the life of contract, the option to convert the advance credit line, to a maximum of US$10 million, to a revolving credit facility repayable over 12 months. If DynaResource partially draws the revolving credit facility (i.e. an amount < US$10 million), the availability of the advance credit line referenced above shall be reduced pro-rata. Currently the advance credit line is limited at 80% of the value of DynaResource’s previous 3 months deliveries. As an example, if US$5 million was drawn under the revolving credit facility, the advance credit line would be reduced $5M/$10M*80% = 40% of the prior three months of deliveries. While the revolving credit facility is fully drawn (US$10 million) and Not repaid, the advance credit line would be fully unavailable for use. The revolving credit facility would bear interest at 3M SOFR + 7.50% and amortize as follows: Month 1, interest only, Month 2-11, 5% plus interest, Month 12, 50% plus interest. Upon repayment of the revolving credit facility in full, DynaResource would have the option to redraw 100% of the revolving credit facility, or recontinue the advance credit line at its full levels depending on DynaResource’s needs.
Ocean Partners Holdings Limited
The Pearce Building, 3rd Floor, West Street, Maidenhead, Berkshire, SL6 1RL UK
Telephone : +44 1628 644060 Fax : +44 1628 644070
Registered in England : No 5171663 VAT Number : GB 849 7393 65
To fully align OP’s interests with those of DynaResource shareholders, OP proposes to subscribe to a private placement of up to 1,000,000 shares of DynaResource at US$5.00 per share for total proceeds of up to US$5,000,000.00; (1) at DynaResources’s option at the time of subscription; and (2) upon approval from the DynaResource Board of Directors. If DynaResource needs further equity injections to accelerate development of the open pit operations, OP is willing to provide further equity injections at mutually agreed terms.
|
| o | The private placement shall be subject to regulatory approval, and approval from the Board of Directors of DynaResource. |
|
|
|
|
|
| o | Upon completion of Ocean Partners acquisition of 1,000,000 shares of DynaResource, or earlier as both parties may subsequently agree, Brent Omland, or another Ocean Partners’ designee to be mutually agreed with OP and DynaResource, shall be granted a seat on the Board of Directors of the DynaResource Inc. or the relevant parent company of the San Jose de Gracía mine. |
|
| - | OP shall receive a right of first refusal, so long as the concentrate contract is in place to provide offtake finance and purchase other concentrates (zinc, silver, copper etc.) and Dore from DynaResource’s open pit and underground operations. |
We very much look forward to continuing our relationship beyond the end of 2023 and we greatly appreciate the excellent working partnership we have developed and hope to be doing so for many years to come.
Kind regards,
_________________________________________________
Ocean Partners Holdings Limited
Brent Omland
Director and CFO
Thank You Brent. I agree with the terms of this MOU. We can proceed forward with official documentation of these terms and conditions. And, likewise to your comments above, we greatly appreciate the attention and support we have received from you and the Ocean Partners team. With this extension agreement formalized we will continue our excellent partnership for many years. I am excited and looking forward to working with you and the OP team.
_________________________________________________
DynaResource Inc.
K.D. Diepholz
Chairman and CEO
Ocean Partners Holdings Limited
The Pearce Building, 3rd Floor, West Street, Maidenhead, Berkshire, SL6 1RL UK
Telephone : +44 1628 644060 Fax : +44 1628 644070
Registered in England : No 5171663 VAT Number : GB 849 7393 65
EXHIBIT 99.1
DynaResource, Inc.
FOR IMMEDIATE RELEASE
DynaResource, Inc. and DynaResource de México SA de CV.
Are pleased to Report the following:
|
| · | Extension of Commercial Offtake Agreement with Ocean Partners Holdings Ltd. through December, 2026; Including: |
|
|
|
|
|
| · | Ocean Partners to Purchase 1M Shares of Common Stock of DynaResource, Inc. at $5 / Share; |
Irving, Texas (July 6, 2023) OTCQB: DYNR–DynaResource, Inc. (“DynaUSA”, and “the Company”) is pleased to report the following Update regarding the Company and DynaResource de México SA de CV. (“DynaMéxico”), the wholly owned subsidiary of DynaUSA and the 100% Owner of Concessions comprising the San Jose de Gracía high grade gold project in Sinaloa, México (“SJG”).
|
| ➢ | Ocean Partners Holdings Ltd. (“Ocean Partners”, “OP”) and DynaMéxico have agreed: |
|
| · | To extend the current commercial Offtake Agreement through December 2026; |
|
| · | OP to Increase the Advance Credit Line available to DynaMéxico to $17.5M USD; |
|
| · | OP to provide an Option to convert the Advance Credit Line into a Revolving Credit Line, repayable in 12 months, in maximum amount of $10M USD; |
|
| ➢ | Ocean Partners and DynaUSA have agreed: |
|
| · | Ocean Partners will purchase 1M Shares of DynaUSA at $5 / Share; |
|
| · | 1 Designee of Ocean Partners will be named to the Board of Directors of DynaUSA |
In commenting on the transactions with Ocean Partners; DynaUSA Chairman-CEO, and DynaMéxico President Mr. K.D. Diepholz noted: We greatly appreciate the attention and support we have received from Ocean Partners since February 2021, and in particular; Brent Omland, Al Paterson, and Roberto Guerra. Now, with this extension of commercial offtake agreement formalized, DynaUSA and DynaMexico will continue our excellent partnership with Ocean Partners for many years.”
On behalf of the Board of Directors of DynaResource, Inc.;
DynaResource, Inc. News Release (070623);
+ 4 Year Extension of Commercial Offtake Agreement with Ocean Partners LLP.;
Increase of Advance Credit Line by Ocean Partners to $17.5M USD;
Convertible into a Revolving Credit Line available to DynaMexico of $10M USD;
Ocean Partners LLP to Purchase 1M Shares of DynaUSA at $5 USD per Share;
Ocean Partners Designee to Board of Directors of DynaUSA;
And; DynaResource Update.
Page 1
On behalf of the Board of Directors of DynaResource de México S.A. de C.V.;
K.D. DIEPHOLZ
DynaResource, Inc.; Chairman and CEO
DynaResource de México, S.A. de C.V.; Presidente;
IMPORTANT CAUTIONARY NOTE REGARDING CANADIAN DISCLOSURE STANDARDS
The Company is an "OTC Reporting Issuer" as that term is defined in Multilateral Instrument 51-509, Issuers Quoted in the U.S. Over-the-Counter Markets, promulgated by various Canadian Provincial Securities Commissions.
Accordingly, certain disclosure in this news release or other disclosure provided by the Company has been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States securities laws. In Canada, an issuer is required to provide technical information with respect to mineralization, including reserves and resources, if any, on its mineral exploration properties in accordance with Canadian requirements, which differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”) applicable to registration statements and reports filed by United States companies pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. As such, information contained in this news release or other disclosure provided by the Company concerning descriptions of mineralization under Canadian standards may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC and not subject to Canadian securities legislation. This news release or other disclosure provided by the Company may use the terms “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”. While these terms are recognized and required by Canadian regulations (under National Instrument 43-101, Standards of Disclosure for Mineral Projects), the SEC does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted to reserves. In addition, “inferred mineral resources” have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities legislation, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, although they may form, in certain circumstances, the basis of a “preliminary economic assessment” as that term is defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects. U.S. investors are cautioned not to assume that part or all of an inferred mineral resource exists or is economically or legally mineable.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This News release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
DynaResource, Inc. News Release (070623);
Extension of Commercial Offtake Agreement with Ocean Partners LLP.;
Increase of Advance Credit Line by Ocean Partners to $17.5M USD;
Convertible into a Revolving Credit Line available to DynaMexico of $10M USD;
Ocean Partners to Purchase 1M Shares of DynaUSA at $5 USD per Share;
Ocean Partners Designee to Board of Directors of DynaUSA;
Page 2
Certain information contained in this news release, including any information relating to future financial or operating performance may be deemed “forward-looking statements.” All statements in this news release, other than statements of historical fact, which address events or developments that DynaResource expects to occur, are “forward-looking statements.” These statements relate to future events or future performance and reflect the Company’s expectations regarding the future growth, results of operations, business prospects and opportunities of DynaResource. These forward-looking statements reflect the Company’s current internal projections, expectations or beliefs and are based on information currently available to DynaResource. In some cases, forward-looking information can be identified by terminology such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “projects”, “potential”, “scheduled”, “forecast”, “budget” or the negative of those terms or other comparable terminology. Certain assumptions have been made regarding the Company’s plans at the San Jose de Gracía property. Many of these assumptions are based on factors and events that are not within the control of DynaResource and there is no assurance they will prove to be correct. Such factors include, without limitation: capital requirements, fluctuations in the international currency markets and in the rates of exchange of the currencies of the United States and México; price volatility in the spot and forward markets for commodities; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local governments in any country which DynaResource currently or may in the future carry on business; taxation; controls; regulations and political or economic developments in the countries in which DynaResource does or may carry on business; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits, diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; changes in project parameters as plans continue to be refined; accidents; labor disputes; defective title to mineral claims or property or contests over claims to mineral properties. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance, to cover these risks) as well as those risks referenced in the Annual Report for DynaResource available at www.sec.gov. Forward-looking statements are not a guarantee of future performance, and actual results and future events could differ materially from those discussed in the forward-looking statements. All forward-looking statements contained in this news release are qualified by these cautionary statements. Although DynaResource believes that the forward-looking statements contained in this news release are based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking statements. DynaResource expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.
For further information on DynaUSA and DynaMéxico, please visit www.dynaresource.com or contact:
|
Brad J. Saulter, DynaUSA V.P. – Investor Relations; US Telephone: 972-868-9066 | |
| K.D. Diepholz, DynaUSA - Chairman / CEO DynaResource de México, S.A. de C.V. – Presidente;
|
|
DynaResource, Inc. News Release (070623);
Extension of Commercial Offtake Agreement with Ocean Partners LLP.;
Increase of Advance Credit Line by Ocean Partners to $17.5M USD;
Convertible into a Revolving Credit Line available to DynaMexico of $10M USD;
Ocean Partners to Purchase 1M Shares of DynaUSA at $5 USD per Share;
Ocean Partners Designee to Board of Directors of DynaUSA;
Page 3