metalline_s4.htm
As
filed with the U.S. Securities and Exchange Commission on January ___,
2010
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form
S-4
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
METALLINE
MINING COMPANY
(Exact name of
registrant as specified in its charter)
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Nevada
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1000
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91-1766677
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(State
or other jurisdiction of
incorporation
or organization)
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(Primary
Standard Industrial
Classification
Code Number)
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(I.R.S.
Employer
Identification
No.)
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1330
E. Margaret Avenue
Coeur
d’Alene, ID 83815
(208)
665-2002
(Address, including
ZIP code, and telephone number,
including area
code, of registrant’s principal executive offices)
Merlin
Bingham, Chief Executive Officer
Metalline
Mining Company
1330
E. Margaret Avenue
Coeur
d’Alene, ID 83815
(208)
665-2002
(Name, address,
including ZIP code, and telephone number,
including area
code, of agent for service)
Theresa
M. Mehringer, Esq.
Burns,
Figa & Will, P.C.
6400
S. Fiddlers Green Circle, Suite 1000
Greenwood
Village, Colorado 80111
Approximate date of commencement of
proposed sale of the securities to the public: As soon as
practicable after this Registration Statement becomes effective and upon
completion of the merger described in the enclosed joint proxy
statement/prospectus.
If the
securities being registered on this Form are being offered in connection with
the formation of a holding company and there is compliance with General
Instruction G, check the following box. o
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
reporting company þ
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If
applicable, place an X in the box to designate the appropriate rule provision
relied upon in conducting this transaction:
o Exchange Act
Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
o Exchange Act
Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
CALCULATION OF REGISTRATION
FEE
Title
of Each Class of Securities to be Registered
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Amount
to Be Registered
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Proposed
Maximum Offering Price Per Unit
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Proposed
Maximum Aggregate Offering Price (3)
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Amount
of Registration Fee
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Common
stock, par value $0.01 per share
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47,724,561(1)
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$0.64(2)
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$30,543,719(3)
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$2,178
(4)
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(1) Represents
the maximum number of shares of the Registrant’s common stock to be issued in
connection with the merger described herein. The number of shares of common
stock is based on the number of shares of Dome Ventures Corporation common stock
outstanding.
(2) Calculated
pursuant to Rule 457(c) under the Securities Act, based on the average of the
high and low trading prices on January 25, 2010, as reported by the NYSE
AMEX.
(3) Estimated
solely for the purpose of computing the registration fee in accordance with
Rules 457(c) under the Securities Act.
(4) Calculated
pursuant to Rule 457(o) under the Securities Act. Determined in
accordance with Section 6(b) of the Securities Act at a rate equal to $71.30 per
$1,000,000 of the proposed maximum aggregate offering price.
The Registrant hereby amends this
Registration Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act, or until the
Registration Statement shall become effective on such dates as the Securities
and Exchange Commission, acting pursuant to said Section 8(a), may
determine.
ii
The
information in this joint proxy statement/prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This joint proxy statement/prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
Subject
to completion, dated January ____, 2010
Joint
Proxy Statement/Prospectus
MERGER PROPOSAL — YOUR VOTE IS VERY
IMPORTANT
The Board of
Directors of Metalline Mining Company and the Board of Directors of Dome
Ventures Corporation have agreed to a strategic combination of their two
companies under the terms of the Agreement and Plan of Merger and
Reorganization, dated as of December 4, 2009. Upon completion of
the merger, Dome will become a wholly owned subsidiary of
Metalline.
If the merger
is completed, Dome stockholders will receive a fixed ratio of approximately
0.96882 shares of Metalline common stock for each share of Dome common stock
that they own. This exchange ratio may fluctuate slightly based upon
number of outstanding shares of Dome at closing, but will not be adjusted to
reflect stock price changes prior to the closing of the merger. Based
on the closing price of Metalline common stock on the NYSE AMEX on November 12,
2009, the last trading day before public announcement of the merger, the
exchange ratio represented approximately $0.57 in value for each share of Dome
common stock. Based on such price on January 28, 2010, the last
trading day before the date of this joint proxy statement/prospectus, the
0.96882 exchange ratio represented approximately $________ in value for each
share of Dome common stock. Metalline stockholders will continue to
own their existing Metalline shares.
Based on the
estimated number of shares of Metalline and Dome common stock to be outstanding
immediately prior to the closing of the merger, we estimate that upon such
closing, current Metalline stockholders will own approximately 53% of the
combined company and former Dome stockholders will own approximately 47% of the
combined company. Metalline common stock is traded on the NYSE AMEX
under the symbol MMG, and Dome common stock is traded on the TSX Venture
Exchange under the symbol DV.U. Upon the closing of the merger,
Metalline and Dome expect that Metalline’s common stock will be listed on the
TSX Venture Exchange.
At the
special meeting in lieu of an annual meeting of Metalline stockholders,
Metalline stockholders will be asked to vote on the issuance of Metalline common
stock to Dome stockholders in the merger. Additionally, Metalline
stockholders will be asked to (i) approve an amendment to the Articles of
Incorporation of Metalline to increase the number of authorized shares of
Metalline common stock; (ii) approve the adoption of the 2010 Stock Option and
Stock Bonus Plan; (iii) elect the slate of directors nominated by the current
Board of Directors; and (iv) to ratify the appointment of Hein & Associates
LLP. At the special meeting of Dome stockholders, Dome stockholders
will be asked to vote on the approval of the merger
agreement.
We cannot
complete the merger unless the stockholders of both companies approve the
respective proposals related to the merger. Your vote is very important,
regardless of the number of shares you own. Whether or not you expect
to attend your special meeting in person, please vote your shares as promptly as
possible so that your shares may be represented and voted at the Metalline or
Dome special meeting, as applicable. If you are a Metalline
stockholder, please note that a failure to vote your shares may result in a
failure to establish a quorum for the Metalline special meeting. If
you are a Dome stockholder, please note that a failure to vote your shares has
the same effect as a vote against the merger.
iii
The Metalline
Board of Directors recommends that the Metalline stockholders vote “FOR” the
proposal to issue shares of Metalline common stock in the merger; “FOR” the
proposal to amend the Metalline Articles of Incorporation; “FOR” the proposal to
adopt the 2010 Stock Option and Stock Bonus Plan; “FOR” the election of the
Board of Directors' slate of nominees; and “FOR” the ratification of Hein &
Associates LLP as our independent registered accounting firm.
The Dome
Board of Directors recommends that the Dome stockholders vote “FOR” the proposal
to approve the merger agreement.
The
obligations of Metalline and Dome to complete the merger are subject to the
satisfaction or waiver of several conditions. More information about
Metalline, Dome and the merger is contained in this joint proxy
statement/prospectus. You should read this entire joint
proxy statement/prospectus carefully, including the section entitled “Risk
Factors” beginning on page __.
We look
forward to the successful combination of Metalline and Dome.
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Merlin
Bingham
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Brian
D. Edgar
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Chairman
and President
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President,
Chief Executive Officer and Director
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Metalline
Mining Company
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Dome
Ventures Corporation
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Neither the
Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the securities to be issued under this joint proxy
statement/prospectus or determined that this joint proxy statement/prospectus is
accurate or complete. Any representation to the contrary is a
criminal offense.
This joint
proxy statement/prospectus is dated ______, 2010 and is first being mailed to
the respective stockholders of Metalline and Dome on or about ______,
2010.
iv
This
document, which forms part of a registration statement on Form S-4 filed with
the U.S. Securities and Exchange Commission, which is referred to herein as the
SEC, by Metalline (File No. 333- , constitutes a prospectus of
Metalline under Section 5 of the Securities Act of 1933, as amended, which is
referred to as the Securities Act, with respect to the shares of Metalline
common stock to be issued to Dome stockholders in the merger.
This document also
constitutes a notice of meeting and a proxy statement under Section 14(a) of the
Securities Exchange Act of 1934, as amended, which is referred to as the
Exchange Act, with respect to the Metalline special meeting in lieu an annual of
stockholders, at which Metalline stockholders will be asked to consider and vote
upon certain proposals, including a proposal to approve the issuance of shares
of Metalline common stock to Dome stockholders in the merger. This
document also constitutes a notice of meeting and management information
circular prepared for the Dome stockholders in accordance with the disclosure
requirements under Canadian securities laws with respect to the Dome special
meeting of stockholders, at which Dome stockholders will be asked to consider
and vote upon a proposal to approve and adopt the merger
agreement.
v
METALLINE
MINING COMPANY
1330
E. Margaret Ave
Coeur
d’Alene, ID 83815
(208)
665-2002
NOTICE
OF SPECIAL MEETING IN LIEU OF AN ANNUAL MEETING OF METALLINE
STOCKHOLDERS
To Be Held On ______, 2010
Dear
Stockholders of Metalline Mining Company:
We are
pleased to invite you to attend a special meeting in lieu of an annual meeting
of stockholders of Metalline Mining Company, a Nevada corporation (“Metalline”),
which will be held at _________________________________, on ______, 2010, at
10:00 a.m. Mountain Time for the following purposes:
·
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to
vote on a proposal to approve the issuance of Metalline common stock, par
value $0.01 per share, in connection with the merger contemplated by the
Agreement and Plan of Merger and Reorganization, dated as of December 4,
2009, by and among Dome Ventures Corporation, Metalline and Metalline
Mining Delaware, Inc. a wholly owned subsidiary of
Metalline;
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·
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to
vote on a proposal to amend the Articles of Incorporation of Metalline to
increase the authorized number of shares of Metalline common stock from
160,000,000 to 300,000,000;
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·
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to
vote on a proposal to approve and adopt the Metalline 2010 Stock Option
and Stock Bonus Plan;
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·
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to
vote on the election of the slate of director nominees;
and
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·
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to
ratify the appointment of Hein & Associates LLP as our independent
registered public accounting firm.
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Metalline
will transact no other business at the meeting except such business as may
properly be brought before the stockholders’ meeting or any adjournment or
postponement of it. Please refer to the remainder of the joint proxy
statement/prospectus of which this notice is a part for further information with
respect to the business to be transacted at the Metalline stockholders’
meeting.
Holders of
shares of Metalline common stock at the close of business on ______, 2010, which
is the record date, are entitled to vote at the meeting and any adjournment or
postponement thereof. The presence, in person or by proxy, of holders
of one-third of the shares of common stock outstanding as of the record date
constitute a quorum for the transaction of business at the meeting.
vi
The issuance
of Metalline common stock to Dome stockholders, the approval of the Metalline
2010 Stock Option and Stock Bonus Plan, and ratification of the appointment of
Hein & Associates LLP will each be approved if a majority of the votes
cast on each such proposal vote in favor of such proposal. The
amendment to Metalline’s Articles of Incorporation will be approved if a
majority of the number of votes entitled to be cast on the proposal vote in
favor of the proposal. As to the election of directors, a stockholder
may vote for the election of each of the nominees proposed by the Board, or may
vote to withhold authority to vote for one or more of the nominees being
proposed. Directors are elected by a plurality of votes cast without
respect to broker non-votes.
Completion of
the merger is conditioned on approval of the issuance of Metalline common stock
in the merger. The election of Mr. Brian Edgar and Dr. Murray Hitzman
to the Board is conditioned on completion of the merger.
Your vote is
important. Whether or not you expect to attend in person, we urge you
to authorize a proxy to vote your shares as promptly as possible by (1)
accessing the Internet website specified on your proxy card; (2) calling the
toll-free number specified on your proxy card; or (3) signing and returning your
proxy card in the postage-paid envelope provided, so that your shares may be
represented and voted at the Metalline special meeting. If your
shares are held in the name of a bank, broker or other nominee, please follow
the instructions on the voting instruction card furnished by your bank, broker
or other nominee.
By Order
of the Board of Directors
Merlin
Bingham
President
and Chairman
_____________,
2010
vii
Dome
Ventures Corporation
Suite
2200, 885 West Georgia Street
Vancouver,
BC V6C 3E8
(604)
687-5800
NOTICE
OF SPECIAL MEETING OF DOME STOCKHOLDERS
To Be Held On ______, 2010
Dear
Stockholders of Dome Ventures Corporation:
We are
pleased to invite you to attend a special meeting of stockholders of Dome
Ventures Corporation (“Dome”), which will be held at our offices at Suite 2200,
885 West Georgia Street, Vancouver, BC, Canada on ______, 2010, at 10:00 a.m.
pacific time for the following purposes:
·
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to
consider, and if thought advisable, to approve the Agreement and Plan of
Merger and Reorganization, dated as of December 4, 2009, by and among
Dome, Metalline Mining Company and Metalline Mining Delaware, Inc., a
wholly owned subsidiary of Metalline Mining Company;
and
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·
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to
approve an adjournment of the Dome special meeting, if necessary,
including to solicit additional proxies if there are not sufficient votes
for the proposal to approve the
merger.
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Dome will
transact no other business at the special meeting. This notice is
accompanied by a document referred to as a “joint proxy statement/prospectus”
which constitutes a management information circular prepared for the Dome
stockholders in accordance with the disclosure requirements applicable under
Canadian securities laws. Please refer to the joint proxy
statement/prospectus for further information with respect to the business to be
transacted at the Dome special meeting.
Only shareholders of
record at the close of business on _________, 2010 will be entitled to receive
notice of, and to vote at, the meeting or any adjournment
thereof. Registered shareholders who are unable to or who do not wish
to attend the meeting in person are requested to date and sign the enclosed
Proxy form promptly and return it in the self-addressed envelope enclosed for
that purpose or by facsimile. To be used at the meeting, proxies must
be received by Computershare Trust Company of Canada, Proxy Department, 100
University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, Canada
(Fax: 1-866-249-7775 [within North America] or (416) 263-9524
[outside North America]) by mail or fax no later than 48 hours (excluding
Saturdays, Sundays and holidays) prior to the time of the meeting, or any
adjournment thereof, or may be accepted by the chairman of the meeting prior to
the commencement of the meeting. If a registered shareholder
receives more than one Proxy form because such shareholder owns shares
registered in different names or addresses, each Proxy form should be completed
and returned.
viii
Approval of
the merger requires the affirmative vote of at least a majority of the votes
entitled to be cast by holders of outstanding common stock of Dome.
Your vote is
important. Whether or not you expect to attend in person, we urge you
to authorize a proxy to vote your shares as promptly as possible by (1)
accessing the Internet website specified on your proxy card; (2) calling the
toll-free number specified on your proxy card; or (3) signing and returning your
proxy card in the postage-paid envelope provided, so that your shares may be
represented and voted at the Dome special meeting. If your shares are
held in the name of a bank, broker or other nominee, please follow the
instructions on the voting instruction card furnished by your bank, broker or
other nominee.
Your Board of
Directors recommends a vote “FOR” the merger
agreement.
By Order
of the Board of Directors
Brian D.
Edgar
President,
Chief Executive Officer and Director
___________,
2010
ix
This joint
proxy statement/prospectus incorporates important business and financial
information about Metalline and Dome from other documents that are not included
in or delivered with this joint proxy statement/prospectus. These
documents are available on SEDAR at www.sedar.com under the reports and
documents filed by Dome. This information is available to you without
charge upon your request. You can obtain the documents incorporated
by reference into this joint proxy statement/prospectus with respect to Dome on
SEDAR at www.sedar.com and with respect to Metalline on EDGAR at www.sec.gov or
by requesting them in writing or by telephone from the appropriate company at
the following addresses and telephone numbers:
Metalline
Mining Company
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Dome
Ventures Corporation
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1330
E. Margaret Ave
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Suite
2200, 885 West Georgia Street
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Coeur
d’Alene, ID 83815
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Vancouver,
BC V6C 3E8
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(208)
665-2002
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(604)
687-5800
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Attn: Investor
Relations
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Attn: Investor
Relations
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Investors may
also consult Metalline’s or Dome’s website for more information about Metalline
or Dome, respectively. Metalline’s website is www.metallinemining.com. Dome’s
website is www.domeventures.com. Information
included on these websites is not incorporated by
reference into this joint proxy statement/prospectus.
If you would like to
request any documents, please do so by ______, 2010 in order to receive them
before the meetings.
As required
by SEC Rule 14a-16 this joint prospectus/proxy statement and the meeting
materials are available on-line at: www_______________.
For a more
detailed description of the information incorporated by reference in this joint
proxy statement/prospectus and how you may obtain it, see “Where You Can Find
More Information” beginning on page ___.
x
ABOUT
THIS JOINT PROXY STATEMENT/PROSPECTUS
This joint
proxy statement/prospectus, which forms part of a registration statement on Form
S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by
Metalline, constitutes a prospectus of Metalline under Section 5 of the
Securities Act of 1933, as amended (the “Securities Act”), with respect to the
Metalline common stock to be issued to Dome stockholders in the
merger. This joint proxy statement/prospectus also constitutes a
joint proxy statement of both Metalline and Dome under Section 14(a) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). It
also constitutes a notice of meeting with respect to the special meeting in lieu
of annual meeting of Metalline stockholders. Further, this document
constitutes a notice of meeting and management information circular prepared for
the Dome stockholders in accordance with the disclosure requirements under
Canadian securities laws.
You should
rely only on the information contained or incorporated by reference into this
joint proxy statement/prospectus. No one has been authorized to
provide you with information that is different from that contained in, or
incorporated by reference into, this joint proxy
statement/prospectus. This joint proxy statement/prospectus is dated
______, 2010. You should not assume that the information contained in
this joint proxy statement/prospectus is accurate as of any date other than that
date. You should not assume that the information incorporated by
reference into this joint proxy statement/prospectus is accurate as of any date
other than the date of the incorporated document. Neither our mailing
of this joint proxy statement/prospectus to Metalline stockholders or Dome
stockholders nor the issuance by Metalline of common stock in connection with
the merger will create any implication to the contrary.
This joint
proxy statement/prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities, or the solicitation of a proxy,
in any jurisdiction to or from any person to whom it is unlawful to make any
such offer or solicitation. Information contained in this joint proxy
statement/prospectus regarding Metalline has been provided by Metalline and
information contained in this joint proxy statement/prospectus regarding Dome
has been provided by Dome unless otherwise noted herein.
xi
TABLE OF
CONTENTS
CALCULATION OF
REGISTRATION FEE |
ii |
MERGER
PROPOSAL |
iii |
ABOUT THIS
DOCUMENT |
v |
NOTICE OF SPECIAL
MEETING IN LIEU OF AN ANNUAL MEETING OF METALLINE STOCKHOLDERS |
vi |
NOTICE OF SPECIAL
MEETING OF DOME STOCKHOLDERS |
viii |
ADDITIONAL
INFORMATION |
x |
ABOUT THIS JOINT
PROXY STATEMENT/PROSPECTUS |
xi |
QUESTIONS AND
ANSWERS |
1 |
SUMMARY |
9 |
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Reporting Currencies
and Accounting Principles |
9 |
|
Exchange
Rates |
9 |
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The
Companies |
10 |
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Comparative Per
Share Market Information |
11 |
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Share Ownership of
Management |
11 |
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Past Material
Contacts, Transactions, or Negotiations |
12 |
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The Merger and the
Merger Agreement |
12 |
|
The Metalline
Special Meeting |
17 |
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The Dome Special
Meeting |
20 |
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Selected Historical
Consolidated Financial Data |
21 |
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Certain Historical
and Pro Forma Per Share Data |
24 |
COMPARISON OF RIGHTS
OF DOME STOCKHOLDERS AND METALLINE STOCKHOLDERS |
26 |
|
Authorized
Capital |
26 |
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Number and Election
of Directors |
26 |
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Removal of
Directors |
27 |
|
Filling Vacancies on
the Board of Directors |
27 |
|
Stockholder Meetings
and Provisions for Notices; Proxies |
27 |
|
Quorum and Voting by
Stockholders |
28 |
|
Stockholder Action
Without a Meeting |
29 |
|
Amendment of
Certificate or Articles of Incorporation |
29 |
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Amendment of
Bylaws |
30 |
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Anti-Takeover
Statutes |
30 |
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Limitation of
Liability and Indemnification of Directors and Officers |
32 |
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Appraisal/Dissenter’s
Rights |
33 |
NO APPRAISAL
RIGHTS |
34 |
|
Metalline |
34 |
|
Dome |
34 |
EXPERTS |
35 |
|
Technical
Reports |
35 |
|
Independent
Accounting Firms |
35 |
RISK
FACTORS |
36 |
|
Risk Factors
Relating to the Merger |
36 |
SPECIAL NOTE
REGARDING FORWARD-LOOKING STATEMENTS |
40 |
xii
THE
COMPANIES |
42 |
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Metalline Mining
Company |
42 |
|
Sierra Mojada
Project Technical Report |
46 |
|
Executive Summary of
Sierra Mojada Project Technical Report |
47 |
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Metalline Mining
Delaware, Inc. |
55 |
|
Dome Ventures
Corporation |
55 |
|
Description of
Dome’s Business |
55 |
|
Dome Management’s
Discussion and Analysis of Results of Operations Financial Conditions for
the Year Ended September 30, 2009 |
60 |
INFORMATION WITH
RESPECT TO CONTINUING DIRECTORS AND OFFICERS |
74 |
PRO FORMA |
84 |
|
Metalline and Dome’s
Unaudited Pro Forma Condensed Combined Financial Information |
84 |
|
Material
Changes |
95 |
THE METALLINE
SPECIAL MEETING IN LIEU OF AN ANNUAL MEETING |
96 |
|
Date, Time and
Place |
96 |
|
Purpose of the
Metalline Special Meeting |
96 |
|
Recommendation of
the Board of Directors of Metalline |
96 |
|
Metalline Record
Date; Stock Entitled to Vote |
97 |
|
Voting by
Metalline’s Directors and Executive Officers |
97 |
|
Quorum |
97 |
|
Required
Vote |
98 |
|
Failure to Vote and
Broker Non-Votes |
98 |
|
Abstentions |
98 |
|
Record
Holders |
99 |
|
Shares Held in
Street Name |
99 |
|
Changing Your
Vote |
100 |
|
Solicitation of
Proxies |
100 |
|
Confidential
Voting |
101 |
THE DOME SPECIAL
MEETING |
102 |
|
Date, Time and
Place |
102 |
|
Purpose of the
Special Meeting |
102 |
|
Recommendation of
the Board of Directors of Dome |
102 |
|
Dome Record Date;
Stock Entitled to Vote |
102 |
|
Voting by Dome’s
Directors and Executive Officers |
102 |
|
Quorum |
103 |
|
Required
Vote |
103 |
|
Failure to Vote and
Broker Non-Votes |
103 |
|
Abstentions |
103 |
|
Record
Holders |
103 |
|
Appointment of
Proxies |
104 |
|
Deadline for Receipt
of Proxies |
104 |
|
Shares Held in
Street Name |
104 |
|
Changing Your
Vote |
105 |
|
Voting of
Proxies |
105 |
|
Solicitation of
Proxies |
106 |
|
Confidential
Voting |
106 |
xiii
THE MERGER
PROPOSAL |
107 |
|
Effects of the
Merger |
107 |
|
Background of the
Merger |
107 |
|
Recommendation of
the Board of Directors of Metalline; Metalline’s Reasons for the
Merger |
109 |
|
Recommendation of
the Board of Directors of Dome; Dome’s Reasons for the Merger |
111 |
|
Severance Benefits
Under Employment Agreements |
114 |
|
Financial Interests
of Dome Directors and Officers in the Merger |
114 |
|
Positions with the
Combined Company |
114 |
|
Director and Officer
Indemnification and Insurance |
114 |
|
Board of Directors
and Management After the Merger |
114 |
|
Material U.S.
Federal Income Tax Consequences of the Merger |
115 |
|
U.S. Information
Reporting |
116 |
|
Accounting Treatment
of the Merger |
116 |
|
Material Canadian
Federal Income Tax Consequences of the Merger |
117 |
|
Description of
Metalline’s Capital Stock |
123 |
|
Exchange of Shares
in the Merger |
124 |
|
Treatment of Stock
Options |
124 |
|
Listing of Metalline
Common Stock |
124 |
|
De-Listing and
Deregistration of Dome Stock |
125 |
|
No Appraisal
Rights |
125 |
|
Restrictions on
Sales of Shares by Certain Affiliates |
125 |
|
Voting
Agreements |
125 |
|
Summary of the
Merger Agreement |
125 |
|
Terms of the Merger;
Merger Consideration |
127 |
|
Completion of the
Merger |
127 |
|
Representations and
Warranties |
127 |
|
Conduct of
Business |
128 |
|
No Solicitation of
Alternative Proposals |
129 |
|
Changes in Board
Recommendations |
130 |
|
Efforts to Obtain
Required Stockholder Votes |
131 |
|
Efforts to Complete
the Merger |
131 |
|
Governance |
131 |
|
Headquarters |
132 |
|
Other Covenants and
Agreements |
132 |
|
Conditions to
Completion of the Merger |
133 |
|
Termination of the
Merger Agreement |
134 |
|
Expenses and
Termination Fees; Liability for Breach |
135 |
|
Amendments,
Extensions and Waivers |
137 |
|
Specific
Performance |
137 |
METALLINE PROPOSAL
NO. 2 |
138 |
AMENDMENT TO THE
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED
COMMON STOCK |
138 |
|
Background and
Discussion of Proposed Amendment |
138 |
|
Vote Required;
Recommendation of the Board of Directors of Metalline; Reasons for the
Amendment to the Articles of Incorporation |
139 |
xiv
METALLINE PROPOSAL
NO. 3 |
140 |
ADOPTION OF
METALLINE 2010 STOCK OPTION AND STOCK BONUS PLAN |
140 |
|
Summary of the 2010
Plan |
140 |
|
Administration of
the 2010 Plan |
140 |
|
Eligibility |
141 |
|
Adjustment |
141 |
|
Other
Provisions |
142 |
|
Income Tax
Consequences of the 2010 Plan |
142 |
|
Vote Required;
Recommendation of the Board of Directors of Metalline; Reasons for the
Adoption of the 2010 Plan |
143 |
METALLINE PROPOSAL
NO. 4 |
144 |
ELECTION OF
DIRECTORS |
144 |
|
Summary of
Proposal |
144 |
|
Vote Required;
Recommendation of the Board of Directors for Nominees |
144 |
METALLINE PROPOSAL
NO. 5 |
144 |
RATIFICATION AND
APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
144 |
|
Summary of
Proposal |
144 |
|
Vote Required;
Recommendation of the Board of Directors for Ratification of Hein &
Associates LLP |
145 |
STOCKHOLDER
PROPOSALS |
146 |
|
Metalline |
146 |
|
Dome |
146 |
DELIVERY OF
DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS |
147 |
WHERE YOU CAN FIND
MORE INFORMATION |
148 |
APPROVAL OF DOME’S
DIRECTORS |
151 |
INFORMATION NOT
REQUIRED IN THE JOINT PROXY STATEMENT/PROSPECTUS |
152 |
|
Indemnification of
Directors and Officers |
152 |
|
Exhibits and
Financial Statement Schedules |
154 |
|
Undertakings |
154 |
SIGNATURES |
156 |
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES |
158 |
ANNEX A – DOME
VENTURES CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
SEPTEMBER 30, 2009 AND 2008 |
F-1 |
EXHIBIT
INDEX |
159 |
|
|
|
|
|
|
|
|
|
|
|
|
xv
Following
are some questions that you, as a stockholder of either Metalline or Dome, may
have regarding the merger and the other matters being considered at the meetings
and the answers to those questions. Metalline and Dome urge you to
read carefully the remainder of this joint proxy statement/prospectus because
the information in this section does not provide all the information that might
be important to you with respect to the merger and the other matters being
considered at the meetings. Additional important information is also
contained in the Annexes to and the documents incorporated by reference into
this joint proxy statement/prospectus. All references in this joint
proxy statement/prospectus to “Metalline” refer to Metalline Mining Company, a
Nevada corporation; all references in this joint proxy statement/prospectus to
“Dome” refer to Dome Ventures Corporation, a Delaware corporation; all
references in this joint proxy statement/prospectus to “Merger Sub” refer to
Metalline Mining Delaware, Inc., a Delaware corporation and a direct wholly
owned subsidiary of Metalline; unless otherwise indicated or as the context
requires, all references in this joint proxy statement/prospectus to “we”, “our”
and “us” refer to Metalline and Dome collectively; and all references to the
“merger agreement” refer to the Agreement and Plan of Merger and Reorganization,
dated as of December 4, 2009, by and among Dome, Metalline and Merger
Sub. Metalline following completion of the merger is sometimes
referred to in this joint proxy statement/prospectus as the “combined
company”.
Q:
|
Why
am I receiving this joint proxy
statement/prospectus?
|
A:
|
Metalline
and Dome have agreed to combine under the terms of a merger agreement that
is described in this joint proxy
statement/prospectus.
|
|
In
order to complete the merger (among other
things):
|
·
|
Metalline
stockholders must approve the issuance of shares of Metalline common stock
in connection with the merger;
|
·
|
Dome
stockholders must approve the merger
agreement.
|
Metalline
stockholders are also being asked to approve an amendment to Metalline’s
Articles of Incorporation to increase the authorized number of shares of
Metalline common stock from 160,000,000 to 300,000,000, to approve and adopt the
Metalline 2010 Stock Option and Stock Bonus Plan, to vote on the election of the
director nominees, and to ratify the appointment of Metalline’s
auditors.
Metalline
and Dome will hold separate meetings to obtain these approvals. This
joint proxy statement/prospectus contains important information about the merger
and the meetings of the respective stockholders of Metalline and Dome, and you
should read it carefully.
Your vote
is important. You do not need to attend the special meetings in
person to vote. We encourage you to vote as soon as
possible.
1
Q:
|
What
will I receive in the merger?
|
A:
|
If
the merger is completed, holders of Dome common stock will receive, for
each share of Dome common stock outstanding immediately prior to the
merger, approximately 0.96882 shares of Metalline common
stock. The exact number of Metalline shares issued to Dome
stockholders will be determined based upon the number of outstanding
shares of Dome at closing. Upon completion of the merger,
Metalline will issue a fixed total of 47,724,561 shares of its common
stock to the holders of Dome common stock. The exact exchange
ratio of Metalline shares issued to Dome stockholders on a per share basis
will be determined pursuant to the merger agreement by dividing
47,724,561 by the number of shares of Dome common stock outstanding
immediately prior to the merger. As of the date hereof, there
are ____________ shares of Dome outstanding. Taking into
account the automatic exercise of the special warrants issued by Dome in
connection with the proposed merger on January 11, 2010, Dome expects the
per share exchange ratio to be 0.96882 shares of Metalline common stock
issued for each outstanding share of Dome common stock. This
per share exchange ratio assumes that none of Dome’s common share purchase
warrants outstanding on the date hereof will be exercised prior to the
merger. In addition, as of the date hereof, all outstanding
options of Dome have been exercised or expired and Dome does not expect to
issue any additional options prior to the
merger.
|
|
Dome
stockholders will not receive any fractional shares of Metalline common
stock in the merger. Instead, if the aggregate number of shares
of Metalline common stock that a holder of Dome common stock is entitled
to received in the merger is (i) a fractional share representing 0.5 or
more of a share, the number of shares of Metalline common stock such
holder is entitled to receive will be rounded up to the next whole number
or (ii) a fractional share representing less than 0.5 of a share, the
number of shares of Metalline common stock such holder is entitled to
receive will be rounded down to the next whole number and no additional
compensation will be paid in respect of such fractional
share.
|
Metalline
stockholders will not receive any merger consideration and will continue to hold
their shares of Metalline common stock.
Q:
|
What
is the value of the merger
consideration?
|
A:
|
Because
Metalline will issue a fixed number of shares of Metalline common stock in
exchange for each share of Dome common stock, the value of the merger
consideration that Dome stockholders will receive will depend on the price
per share of Metalline common stock at the time the merger is
completed. That price will not be known at the time of the
stockholder meetings and may be less than the current price or the price
at the time of the stockholder
meetings.
|
2
Q:
|
When
and where will the special meetings be
held?
|
A:
|
The
Metalline special meeting in lieu of an annual meeting will be held at its
offices at _________________, on _______, 2010, at 10:00 a.m. Mountain
Time. The Dome special meeting will be held at Suite 2200, 885
West Georgia Street, Vancouver, BC V6C 3E8, on ___________, 2010, at 10:00
a.m. Pacific Time.
|
A:
|
If
you are a stockholder of record of Metalline as of the close of business
on the record date for the Metalline special meeting or a stockholder of
record of Dome as of the close of business on the record date for the Dome
special meeting, you may vote in person by attending your stockholder
meeting or, to ensure your shares are represented at the meeting, you may
authorize a proxy to vote by:
|
·
|
accessing
the Internet website specified on your proxy
card;
|
·
|
calling
the toll-free number specified on your proxy card;
or
|
·
|
signing
and returning your proxy card in the postage-paid envelope
provided.
|
If you
hold Metalline shares or Dome shares in “street name” through a stock brokerage
account or through a bank or other nominee, please follow the voting
instructions provided by your broker, bank or other nominee to ensure that your
shares are represented at your special meeting.
Q:
|
My
shares are held in “street name” by my broker. Will my broker
automatically vote my shares for
me?
|
A:
|
No. If
your shares are held in the name of a broker, bank or other nominee, you
are considered the “beneficial holder” of the shares held for you in what
is known as “street name.” You are not the “record
holder” of such shares. If this is the case, this joint proxy
statement/prospectus has been forwarded to you by your broker, bank or
other nominee. As the beneficial holder, unless your broker,
bank or other nominee has discretionary authority over your shares, you
generally have the right to direct your broker, bank or other nominee as
to how to vote your shares. If you do not provide voting
instructions, your shares will not be voted on any proposal on which your
broker, bank or other nominee does not have discretionary
authority. This is often called a “broker
non-vote”.
|
Please
follow the voting instructions provided by your broker, bank or other nominee so
that they may vote your shares on your behalf. Please note that you
may not vote shares held in street name by returning a proxy card directly to
Metalline or Dome or by voting in person at your stockholder meeting unless you
first provide a proxy from your broker, bank or other
nominee.
3
If you
are a Metalline stockholder and you do not instruct your broker, bank or other
nominee on how to vote your shares, your broker, bank or other nominee will not
vote your shares on any matter over which they do not have discretionary
authority. Such a broker non-vote will have no effect on the vote on
any of the Metalline proposals, assuming a quorum is present.
If you
are a Dome stockholder and you do not instruct your broker, bank or other
nominee on how to vote your shares, your broker, bank or other nominee will not
vote your shares on any matter over which they do not have discretionary
authority. Such a broker non-vote will have the effect of a vote
against the merger agreement.
Q:
|
Who
is entitled to vote at the Metalline and Dome special
meetings?
|
A:
|
Metalline: Metalline
has fixed _______, 2010 as the record date for the Metalline stockholder
meeting. If you were a Metalline stockholder at the close of
business on such date, you are entitled to vote on matters that come
before the Metalline stockholder
meeting.
|
A:
|
Dome: Dome
has fixed _______, 2010 as the record date for the Dome stockholder
meeting. If you were a Dome stockholder at the close of
business on such date, you are entitled to vote on matters that come
before the Dome stockholder
meeting.
|
Q:
|
How
many votes do I have?
|
A:
|
Metalline: You
are entitled to one vote for each share of Metalline common stock that you
owned as of the close of business on the Metalline record
date. As of the close of business on the Metalline record date,
there were approximately ___________ outstanding shares of Metalline
common stock.
|
A:
|
Dome: You
are entitled to one vote for each share of Dome common stock that you
owned as of the close of business on the Dome record date. As
of the close of business on the Dome record date, there were approximately
_____________ outstanding shares of Dome common
stock.
|
Q:
|
What
vote is required to approve each
proposal?
|
A:
|
Metalline: The
issuance of Metalline common stock to Dome stockholders, the approval of
the Metalline 2010 Stock Option and Stock Bonus Plan, and the ratification
of the appointment of Hein & Associates LLP will each be approved if a
majority of the votes cast on each such proposal vote in favor of such
proposal. Votes to abstain and broker non-votes will have no
effect.
|
The
amendment to Metalline’s Articles of Incorporation will be approved if the
number of votes cast in favor of the proposal exceeds a majority of the number
of votes entitled to be cast on the proposal. Votes to abstain and
broker non-votes will have the effect of a vote against this
proposal.
4
The
election of directors will be by plurality of votes cast, without respect to
withheld votes for a nominee. Broker non-votes will have no
effect. The election of director nominees Edgar and Hitzman is
conditioned on completion of the merger.
A:
|
Dome: The
proposal at the Dome special meeting to approve the merger requires the
affirmative vote of at least a majority of the votes entitled to be cast
by holders of outstanding common stock of Dome as of the close of business
on the record date of the Dome special meeting. Failures to
vote, votes to abstain and broker non-votes will have the effect of a vote
against the merger proposal.
|
Q:
|
What
will happen if I fail to vote or I abstain from
voting?
|
A:
|
Metalline: If
you are a Metalline stockholder and fail to vote, mark your proxy or
voting instructions to abstain or fail to instruct your broker, bank or
other nominee to vote, it will have no effect on any of the Metalline
proposals, except for the amendment to the Articles of Incorporation, in
which case it will have the effect of a vote against the
proposal. However, if you mark your proxy or voting
instructions to withhold your vote on the election of any of the
directors, it will have no effect on the election of each such
director.
|
A:
|
Dome: If you
are a Dome stockholder and fail to vote, fail to instruct your broker,
bank or other nominee to vote, or mark your proxy or voting instructions
to abstain, it will have the effect of a vote against the proposal to
approve the merger.
|
Q:
|
What
will happen if I return my proxy card without indicating how to
vote?
|
A:
|
If
you are a holder of record and sign and return your proxy card without
indicating how to vote on any particular proposal, the Metalline common
stock or Dome common stock represented by your proxy will be voted in
accordance with the recommendation of the Board of Directors of Metalline
or Dome, as applicable.
|
Q:
|
What
constitutes a quorum?
|
A:
|
Metalline: Stockholders
who hold at least one-third of the shares issued and outstanding and who
are entitled to vote at the Metalline stockholders meeting must be present
in person or represented by proxy to constitute a quorum for the
transaction of business at the Metalline special meeting. All
shares of Metalline common stock represented at the Metalline stockholders
meeting, including shares that are represented but that abstain from
voting, and shares that are represented but that are held by brokers,
banks and other nominees who do not have authority to vote such shares
(i.e., a broker non-vote), will be treated as present and entitled to vote
for purposes of determining the presence or absence of a
quorum.
|
A:
|
Dome: Stockholders
entitled to cast one-third of all the votes entitled to be cast at the
Dome special meeting must be present in person or by proxy to constitute a
quorum for the transaction of business at the Dome special
meeting. If a quorum is not present, stockholders present in
person or by proxy may, by a majority vote and without further notice,
adjourn the meeting from time to time to a date not more than [30] days
after the original record date for the Dome special meeting, but not for a
period of more than 30 days at any one time. Even if a quorum is present at
the Dome special meeting, the merger can only be approved if at least a
majority of the votes entitled to be cast by holders of outstanding common
stock of Dome as of the close of business on the record date vote in favor
of the proposal.
|
5
Q:
|
Can
I change my vote after I have returned a proxy or voting instruction
card?
|
If you are a record holder of either
Metalline or Dome: If you are a record holder of shares, you
can change your vote at any time before your proxy is voted at your special
meeting. You can do this in one of three ways:
·
|
you
can grant a new, valid proxy bearing a later date (including by telephone
or Internet);
|
·
|
you
can send a signed notice of revocation;
or
|
·
|
you
can attend your special meeting and vote in person, which will
automatically cancel any proxy previously given, or you may revoke your
proxy in person, but your attendance alone will not revoke any proxy that
you have previously given.
|
If you
choose either of the first two methods, your notice of revocation or your new
proxy must be received by Metalline or Dome, as applicable, no later than the
beginning of the applicable special meeting. If you have voted your
shares by telephone or through the Internet, you may revoke your prior telephone
or Internet vote by any manner described above.
If you hold shares of either
Metalline or Dome in “street name”: If your shares are held in
street name, you must contact your broker, bank or other nominee to change your
vote.
Q:
|
What
are the material U.S. federal income tax consequences of the merger to
U.S. holders of Dome common stock?
|
A:
|
The
merger is intended to be treated for U.S. federal income tax purposes as a
“reorganization” within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “Code”). Assuming the
merger qualifies as such a reorganization, a U.S. holder of Dome common
stock generally will not recognize any gain or loss upon receipt of
Metalline common stock solely in exchange for Dome common stock in the
merger. See “The Merger — Material U.S. Federal Income Tax
Consequences of the Merger”.
|
6
Q:
|
When
do you expect the merger to be
completed?
|
A:
|
Metalline
and Dome are working to complete the merger in the first half of
2010.
|
Q:
|
What
do I need to do now?
|
A:
|
Carefully
read and consider the information contained in and incorporated by
reference into this joint proxy statement/prospectus, including its
Annexes. Then please authorize a proxy to vote your shares as
soon as possible so that they may be represented at your special
meeting.
|
Q:
|
Do
I need to do anything with my shares of common stock
now?
|
A:
|
No. If
you are a Dome stockholder, after the merger is completed, your shares of
Dome common stock will be converted automatically into the right to
receive approximately 0.96882 (the projected exchange ratio) shares of
Metalline common stock. You do not need to take any action at
the current time.
|
If you
are a Metalline stockholder, you are not required to take any action with
respect to your shares of Metalline common stock.
Q: Are
stockholders entitled to appraisal rights?
A:
|
No. Neither
the stockholders of Metalline nor the stockholders of Dome are entitled to
appraisal rights in connection with the
merger.
|
Q:
|
What
happens if I sell my shares of Dome common stock before the Dome special
meeting?
|
A:
|
The
record date of the Dome special meeting is earlier than the date of the
Dome special meeting and the date that the merger is expected to be
completed. If you transfer your Dome shares after the Dome
record date but before the Dome special meeting, you will retain your
right to vote at the Dome special meeting, but will have transferred the
right to receive the merger consideration in the merger. In
order to receive the merger consideration, you must hold your shares
through the effective time of the
merger.
|
Q:
|
What
if I hold shares in both Metalline and
Dome?
|
A:
|
If
you are a stockholder of both Metalline and Dome, you will receive two
separate packages of proxy materials. A vote as a Metalline
stockholder will not count as a vote as a Dome stockholder, and a vote as
a Dome stockholder will not count as a vote as a Metalline
stockholder. Therefore, please separately vote each of your
Metalline and Dome shares.
|
7
Q:
|
Are
there any risks I should consider in deciding how to
vote?
|
A: Yes. See
“Risk Factors” on page ___ of this joint proxy
statement/prospectus.
Q:
|
Who
can help answer my questions?
|
A:
|
Metalline
stockholders or Dome stockholders who have questions about the merger or
the other matters to be voted on at the special meetings or desire
additional copies of this joint proxy statement/prospectus or additional
proxy cards should contact:
|
Metalline Mining
Company
1330
E. Margaret Ave.
Coeur
d’Alene, ID 83815
(208)
665-2002
Attn: Investor
Relations
|
Dome Ventures
Corporation
Suite
2200, 885 West Georgia Street
Vancouver,
BC V6C 3E8
(604)
687-5800
Attn: Investor
Relations
|
The above
questions and answers do not provide all the information relating to the Dome or
Metalline special meetings or the proposed merger and are qualified in their
entirety by the more detailed information elsewhere in this joint proxy
statement/prospectus. You are urged to read this joint proxy
statement/prospectus in its entirety before deciding how to vote your
shares.
8
This summary
highlights information contained elsewhere in this joint proxy
statement/prospectus and may not contain all the information that is important
to you. Metalline and Dome urge you to read carefully the remainder
of this joint proxy statement/prospectus, including the Annexes, and the other
documents to which we have referred you because this summary does not provide
all the information that might be important to you with respect to the merger
and the other matters being considered at the Metalline and Dome special
meetings. See also the section entitled “Where You Can Find More
Information” on page ___. We have included page references in this
summary to direct you to a more complete description of the topics presented
below.
Reporting
Currencies and Accounting Principles
Unless
otherwise indicated, all references herein to “$” in this joint prospectus/proxy
statement refer to U.S. dollars and all references to “Cdn$” in this Circular
refer to Canadian dollars.
Metalline’s
financial statements are reported in U.S. dollars and are prepared in accordance
with U.S. GAAP. Dome’s financial statements are reported in U.S. dollars and are
prepared in accordance with Canadian GAAP. See Note 12 to Dome’s
audited consolidated financial statements attached to this proxy statement as
Annex A for differences between Canadian and United States generally accepted
accounting principles.
Exchange
Rates
The following
table sets forth (i) the noon rates of exchange for the Canadian dollar,
expressed in Canadian dollars per U.S. dollar, in effect at the end of the
period indicated, (ii) the average noon rates of exchange for such periods, and
(iii) the high and low noon rates of exchange during such periods, in each case
based on the noon rates of exchange as quoted by the Bank of
Canada:
Canadian
Dollar per U.S. dollar
Canadian
Dollar per U.S. dollar
|
|
January
1, 2010 through January 27, 2010
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
Noon
rate at end of period
|
|
1.0657 |
|
|
1.0460 |
|
|
1.2246 |
|
|
0.9881 |
|
Average
noon rate for period
|
|
1.0405 |
|
|
1.1420 |
|
|
1.0660 |
|
|
1.0748 |
|
High
noon rate for period
|
|
1.0657 |
|
|
1.3000 |
|
|
1.2969 |
|
|
1.1853 |
|
Low
noon rate for period
|
|
1.0251 |
|
|
1.0292 |
|
|
0.9719 |
|
|
0.9170 |
|
Metalline
Mining Company (see page __)
Metalline
Mining Company
1330 E.
Margaret Ave
Coeur
d’Alene, Idaho 83815
Telephone: (208)
665-2002
Metalline, a
Nevada corporation, is an exploration stage company, engaged in the business of
mineral exploration. The Company currently owns sixteen concessions,
which are located in the municipality of Sierra Mojada, Coahuila, Mexico (the
“Property”). The Company’s objective is to define sufficient mineral
reserves on the Property to justify the development of a mechanized mining
operation (the “Project”). The Company conducts its operations in
Mexico through its wholly owned Mexican subsidiaries, Minera Metalin S.A. de
C.V. (“Minera”) and Contratistas de Sierra Mojada S.A. de C.V.
(“Contratistas”).
Additional
information about Metalline and its subsidiaries is included in documents
incorporated by reference into this joint proxy
statement/prospectus. See “Where You Can Find More Information” on
page ____.
Merger Sub, a
wholly owned subsidiary of Metalline, is a Delaware corporation that was formed
on December 3, 2009 for the purpose of effecting the merger. In the
merger, Merger Sub will be merged with and into Dome, with Dome surviving as a
wholly owned subsidiary of Metalline.
Dome
Ventures Corporation (see page __)
Dome
Ventures Corporation
Suite
2200, 885 West Georgia Street
Vancouver,
BC V6C 3E8 Canada
Telephone: (604)
687-5800
Dome, a
Delaware corporation, was incorporated in Canada and domesticated to the United
States on December 16, 1999. Dome’s principal business activities are
the acquisition and exploration of mineral properties domiciled in Gabon,
Africa. Dome is in the exploration stage and has not yet determined
whether any of its mineral properties contain ore reserves that are economically
recoverable.
Additional
information about Dome and its subsidiaries is included elsewhere in this joint
proxy statement/prospectus. See “Description of Dome Ventures
Corporation” on page ___.
10
Comparative
Per Share Market Information
Metalline
common stock is traded on the NYSE Amex under the symbol “MMG” and Dome common
stock is listed on the TSX Venture Exchange under the symbol
“DV.U”. No quarterly cash dividends were declared by Metalline or
Dome and accordingly no cash dividend per share information is
reported. On November 12, 2009, the last full trading day prior to
public announcement of the execution of the letter of intent with respect to the
proposed merger, Metalline common stock closed at $0.59 per share, and Dome
common stock closed at $0.46 per share. We urge you to obtain current
market quotations before making any decision with respect to the
merger.
The following
table sets forth the high and low trading prices per share of Metalline common
stock and Dome common stock for the periods indicated:
|
|
Metalline |
|
|
Dome |
|
|
|
High |
|
|
Low |
|
|
High |
|
|
Low |
|
Calendar Year Ended December
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter |
|
$0.95 |
|
|
$0.39 |
|
|
$0.72 |
|
|
$0.15 |
|
3rd
Quarter |
|
$0.50 |
|
|
$0.23 |
|
|
$0.17 |
|
|
$0.15 |
|
2nd
Quarter |
|
$0.36 |
|
|
$0.18 |
|
|
$0.20 |
|
|
$0.16 |
|
1st
Quarter
|
|
$0.40 |
|
|
$0.11 |
|
|
$0.21 |
|
|
$0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metalline |
|
|
Dome |
|
|
|
High |
|
|
Low |
|
|
High |
|
|
Low |
|
Calendar Year Ended December
31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter |
|
$0.87 |
|
|
$0.20 |
|
|
$0.33 |
|
|
$0.11 |
|
3rd
Quarter |
|
$1.68 |
|
|
$0.60 |
|
|
$0.63 |
|
|
$0.31 |
|
2nd
Quarter |
|
$2.34 |
|
|
$1.62 |
|
|
$0.75 |
|
|
$0.37 |
|
1st
Quarter
|
|
$2.70 |
|
|
$1.77 |
|
|
$0.51 |
|
|
$0.38 |
|
|
On January
25, 2010 Metalline common stock closed at $0.64 per share and Dome common stock
closed at $0.60 per share.
Share
Ownership of Management
Metalline. As of
the record date for the Metalline special meeting in lieu of an annual meeting,
there were ____________
shares of Metalline common stock outstanding. Directors,
executive officers and affiliates of Metalline beneficially owned approximately
______ of the
outstanding Metalline common stock on the record date. Metalline’s
directors and officers have indicated that they intend to vote all of the
Metalline shares of common stock held by them in favor of the proposal to
approve the issuance of the Metalline shares of common stock to effect the
merger (and effective as of January 25, 2010 certain of Metalline’s officers and
directors entered into voting agreements with respect to this proposal), the
proposal to approve the Metalline 2010 Stock Option and Stock Bonus Plan, the
amendment to Metalline’s Articles of Incorporation to increase the company’s
authorized capital, the election of the director nominees, the ratification and
approval of Hein & Associates LLP, and any proposal that may be presented to
adjourn the meeting. The following votes are required to approve each
proposal: a majority of Metalline’s shares outstanding and entitled
to vote is required to approve the proposed amendment to the company’s articles
of incorporation; a majority of the votes cast is required to approve the
issuance of the shares of common stock to effect the merger, to approve the
adoption of the 2010 Stock Option and Bonus Plan and to approve/ratify the
appointment of Hein & Associates; and directors are elected by a plurality
of votes cast.
11
Dome. As
of the record date for the Dome special meeting, there were _____ shares of Dome common
stock outstanding. Directors, executive officers and affiliates of Dome
beneficially owned approximately ____ % of the shares of Dome common stock on
the record date. After the automatic exercise of Dome’s special
warrants immediately prior to the merger, directors, executive officers and
affiliates of Dome are expected to beneficially own approximately ___% of the
shares of Dome common stock. Each of Dome’s officers and directors
has indicated that they intend to vote for the approval and adoption of the
merger agreement. The transaction requires that a majority of votes
entitled to be cast approve the agreement.
Past
Material Contacts, Transactions, or Negotiations
Although
Metalline and Dome are both engaged in the exploration of mineral properties the
parties have not previously had substantive discussions regarding a material
transaction, business combination or any similar type of transaction between the
two companies. Other than the Agreement and Plan of Merger and
Reorganization, there have been no past negotiations, transactions, or material
contacts during the past two years between Metalline and Dome.
The
Merger and the Merger Agreement
The Board
of Directors of Metalline and the Board of Directors of Dome have agreed to a
strategic combination of their two companies under the terms of the merger
agreement. Upon completion of the merger, Dome will become a wholly
owned subsidiary of Metalline. Metalline and Dome encourage you to
read the entire merger agreement carefully because it is the principal document
governing the merger.
Terms
of the Merger; Merger Consideration (see page __)
The
merger agreement provides for the merger of Merger Sub with and into Dome, with
Dome surviving as a wholly owned subsidiary of Metalline. Upon
completion of the merger, each share of Dome common stock issued and outstanding
immediately prior to the completion of the merger, except for any shares of Dome
common stock held by Metalline or Merger Sub (which will be cancelled), will be
converted into the right to receive approximately 0.96882 shares of Metalline
common stock, although the exact exchange ratio may vary based on the number of
shares of Dome common stock issued and outstanding at the time of
closing.
12
Metalline
will not issue any fractional shares of Metalline common stock in the
merger. Instead, if the aggregate number of shares of Metalline
common stock that a holder of Dome common stock is entitled to received in the
merger is (i) a fractional share representing 0.5 or more of a share, the number
of shares of Metalline common stock such holder is entitled to receive will be
rounded up to the next whole number or (ii) a fractional share representing less
than 0.5 of a share, the number of shares of Metalline common stock such holder
is entitled to receive will be rounded down to the next whole number and no
additional compensation will be paid in respect of such fractional
share.
Treatment
of Stock Options (see page ___)
Stock
Options. Upon completion of the merger, each outstanding stock
option to purchase Dome common stock (if any) will be converted pursuant to the
merger agreement into a stock option to acquire shares of Metalline common stock
on the same terms and conditions as were in effect immediately prior to the
completion of the merger. The number of shares of Metalline common
stock underlying each converted Dome stock option will be determined by
multiplying the number of shares of Dome common stock subject to such stock
option immediately prior to the completion of the merger by the 0.96882 exchange
ratio, and rounding down to the nearest whole share. The exercise
price per share of each converted Dome stock option will be determined by
dividing the per share exercise price of such stock option by the 0.96882
exchange ratio, and rounding up to the nearest whole cent. However,
Dome does not expect that any options will be outstanding at or immediately
prior to the completion of the merger.
Material
U.S. Federal Income Tax Consequences of the Merger (see page
__)
The merger is
intended to be treated for U.S. federal income tax purposes as a
“reorganization” within the meaning of Section 368(a) of the
Code. Assuming the merger qualifies as such a reorganization, a U.S.
holder of Dome common stock generally will not recognize any gain or loss upon
receipt of Metalline common stock solely in exchange for Dome common stock in
the merger.
Tax matters
are very complicated and the tax consequences of the merger to each Dome
stockholder will depend on such stockholder’s particular facts and
circumstances. Dome stockholders are urged to consult their tax
advisors to understand fully the tax consequences to them of the
merger.
Recommendations
of the Board of Directors of Metalline (see page __)
At a special
meeting held on December 3, 2009, the Metalline Board of Directors determined
that the merger and the other transactions contemplated by the merger agreement,
including the issuance of Metalline common stock in the merger, are advisable
and in the best interests of Metalline and its stockholders. Accordingly, the Metalline Board of
Directors recommends that the Metalline stockholders vote “FOR” the proposal to
issue shares of Metalline common stock in the merger.
13
Recommendation
of the Board of Directors of Dome (see page __)
At a
meeting held on December 2, 2009, the Dome Board of Directors, by the unanimous
vote of its directors, determined that the merger and the other transactions
contemplated by the merger agreement are in the best interests of Dome
stockholders, and directed that the merger be submitted for consideration by the
Dome stockholders at the Dome special meeting. Accordingly, the Dome Board of
Directors recommends that the Dome stockholders vote “FOR” the approval of the
merger agreement.
Financial
Interests of Metalline Directors and Officers in the Merger (see page
__)
In
considering the recommendation of the Metalline Board of Directors that you vote
to approve the issuance of Metalline common stock in connection with the merger,
you should be aware that some of Metalline’s directors and officers have
financial interests in the merger that are different from, or in addition to,
those of Metalline stockholders generally. The Metalline Board of
Directors was aware of and considered these potential interests, among other
matters, in evaluating the merger agreement and the merger, and in recommending
to you that you approve the issuance of Metalline common stock in connection
with the merger.
Following
the completion of the merger, members of the Metalline Board of Directors,
except Mr. Roger Kolvoord, will continue to be directors of the combined
company, and it is anticipated that all executive officers of Metalline will
continue to be executive officers of the combined company.
Each of
Metalline’s current executive officers (being Messrs. Bingham, Kolvoord, Brown
and Devers) has entered into an employment agreement with the
company. Each agreement provides that if there is a “change of
control” of the company and the executive’s employment agreement is not renewed
in the year following the calendar year that the change of control event
occurred, then the executive would be entitled to a severance payment equal to
one year of his annual salary. The merger transaction would likely be
a “change of control” event as the term is used in each executive’s employment
agreement. Thus, if any of the employment agreements is terminated
during 2009, or not renewed for 2010,then the affected executive may be entitled
to a severance payment under the terms of his employment agreement.
Financial
Interests of Dome Directors and Officers in the Merger (see page
___)
These
interests include the following:
·
|
Brian
Edgar, the current Chief Executive Officer and Director of Dome, is
included in the slate of nominees for the combined company, and will serve
on the Metalline Board if elected by the Metalline
stockholders.
|
·
|
Certain
Dome affiliates hold equity interests in Metalline and upon closing the
merger will be entitled to receive shares of Metalline common stock in
exchange for their Dome shares. However, the exchange ratio to
be received by the Dome affiliates will be the same as that of other Dome
stockholders.
|
14
Board
of Directors and Management After the Merger (see page __)
Upon the
effective time of the merger, the Metalline Board of Directors will be expanded
from its current size of five members to seven members. Four of the
original members of the pre-merger Metalline Board of Directors, plus one new
Metalline nominee, will be appointed to the post-merger Metalline
board. One member of the pre-merger Dome board, plus one Dome nominee
not currently affiliated with Dome, will be appointed to the post-merger
Metalline board at the effective time of the merger, subject to election by the
Metalline stockholders. Mr. Edgar is the current Dome director on the
slate for election to the Metalline board, and Dr. Murray is the other Dome
nominee on the slate for election of Metalline directors.
Following
the merger, it is expected that Mr. Edgar, currently Chief Executive Officer,
President and a director of Dome, will serve as Chairman of the combined
company. Merlin Bingham, currently the President and Chairman of
Metalline, will continue to serve as President and a director of the combined
company. All other executive officers of Metalline are anticipated to
continue to serve as executive officers of the combined company.
Regulatory
Approvals Required for the Merger (see page __)
Metalline
and Dome have agreed to use their reasonable best efforts to obtain all
governmental and regulatory approvals required to complete the transactions
contemplated by the merger agreement. The combined company must use
its reasonable efforts to obtain, prior to the merger, approval for the
listing/quotation of the Metalline shares to be issued in the merger on the NYSE
Amex and the TSX Venture Exchange.
Completion
of the Merger (see page __)
Metalline
and Dome currently expect to complete the merger in the first half of 2010,
subject to receipt of required stockholder and regulatory approvals and the
satisfaction or waiver of the conditions to the merger described in the merger
agreement.
Conditions
to Completion of the Merger (see page __)
As more
fully described in this joint proxy statement/prospectus and in the merger
agreement, the completion of the merger depends on a number of conditions being
satisfied or, where legally permissible, waived. These conditions
include, among others, the receipt of the approval of Dome stockholders of the
merger agreement, the receipt of the approval of Metalline stockholders of the
issuance of Metalline common stock in the merger, listing in NYSE AMEX of the
shares issued in the merger, listing all of Metalline shares on the TSX Venture
Exchange, the receipt of all required consents approvals, the accuracy of
representations and warranties made by the parties in the merger agreement,
performance by the parties of their obligations under the merger agreement
(subject in each case to certain materiality standards), and the absence of a
material adverse effect on each party. Dome and Metalline cannot be
certain when, or if, the conditions to the merger will be satisfied or waived,
or that the merger will be completed.
15
None of the
following are conditions to completion of the merger: (i) approval of
the amendment to Metalline’s Articles of Incorporation; (ii) approval of the
Metalline 2010 Stock Option and Stock Bonus Plan; (iii) election of any
individual director on the slate of nominees; (iv) ratification of the
appointment of Hein & Associates LLP.
Termination
of the Merger Agreement (see page __)
The
merger agreement may be terminated at any time prior to the effective time of
the merger, even after the receipt of the requisite stockholder approvals, under
the following circumstances:
·
|
by
mutual written consent of Metalline and
Dome;
|
·
|
by
either Metalline or Dome if:
|
Ø
|
the
merger is not completed by May 30,
2010;
|
Ø
|
any
law or regulation is passed that makes the merger illegal or any decree or
order is issued that enjoins either Metalline or Dome from completing the
merger;
|
·
|
by
Dome upon written notice to Metalline if (i) the Metalline Board
withdraws, modifies or changes in a manner adverse to Dome its approval or
recommendation of the share issuance to Dome stockholders pursuant to the
merger agreement, (ii) the Metalline Board approves or recommends a
superior proposal (as defined in the merger agreement), or (iii) the
merger is not submitted for the approval of Metalline stockholders by May
15, 2010;
|
·
|
by
Metalline upon written notice to Dome if: (i) the Dome Board withdraws,
modifies or changes in a manner adverse to Metalline its approval or
recommendation of the merger, (ii) the Dome Board approves or recommends a
superior proposal, or (iii) the Merger is not submitted for the approval
of Dome stockholders by May 15,
2010;
|
·
|
by
Metalline upon written notice to Dome in order to enter into a definitive
written agreement with respect to a superior
proposal;
|
·
|
by
Dome upon written notice to Metalline in order to enter into a definitive
written agreement with respect to a superior
proposal;
|
·
|
by
Dome if the Metalline stockholders shall not have approved the share
issuance to the Dome stockholders pursuant to the Merger
Agreement;
|
16
·
|
by
Metalline if the Dome stockholders shall not have approved the
merger;
|
·
|
upon
notice by Dome to Metalline if certain conditions for the benefit of Dome
have not been satisfied or waived by Dome;
or
|
·
|
upon
notice by Metalline to Dome if certain conditions for the benefit of
Metalline have not been satisfied or waived by
Metalline.
|
Additionally,
the following conditions precedent in the Merger Agreement have already been
met:
·
|
Metalline
received gross proceeds of $2,990,000 by way of a private placement on or
before December 23, 2009; and
|
·
|
Dome
completed a private placement of special warrants for gross proceeds of
$13,010,000, which amount is held in escrow until the effective time of
the merger. The special warrants are further described herein
under the heading “Description of Dome’s
Business.”
|
Expenses
and Termination Fees (see page __)
Generally,
all fees and expenses incurred in connection with the merger and the
transactions contemplated by the merger agreement will be paid by the party
incurring those expenses. However, upon termination of the merger
agreement under certain circumstances, Metalline may be obligated to pay Dome a
termination fee of $964,000 and, in other circumstances, Dome may be obligated
to pay Metalline a termination fee of $964,000. Additionally, either
party may be obligated to pay certain agency fees and expenses in connection
with the special warrant private placement conducted by Dome.
No
Appraisal Rights (see page ___)
Under the
Nevada General Corporation Law, the holders of Metalline common stock are not
entitled to appraisal rights in connection with the merger or any of the
Metalline proposals. Under the Delaware General Corporation Law, the
holders of Dome common stock are not entitled to appraisal rights in connection
with the merger.
The Metalline Special
Meeting
Date,
Time and Place (see page __)
The special
meeting of Metalline stockholders will be held at ______________________, on
______, 2010, at 10:00 a.m. Mountain Time
Purpose
of the Metalline Special Meeting (see page __)
At the
Metalline special meeting, Metalline stockholders will be asked:
17
·
|
to
vote on a proposal to approve the issuance of Metalline common stock to
Dome stockholders in connection with the
merger;
|
·
|
to
vote on a proposal to amend the Articles of Incorporation of Metalline to
increase the authorized number of shares of Metalline common stock from
160,000,000 to 300,000,000;
|
·
|
to
vote on a proposal to adopt the Metalline 2010 Stock Option and Stock
Bonus Plan;
|
·
|
to
vote on the election of the slate of director
nominees;
|
·
|
to
ratify the appointment of Hein & Associates LLP as its independent
registered public accounting firm;
and
|
·
|
to
vote upon an adjournment of the Metalline special in lieu of annual
meeting (if necessary or appropriate, including to solicit additional
proxies if there are not sufficient votes for the approval of any of the
foregoing proposals).
|
Completion of
the merger is conditioned on approval of the issuance of Metalline common stock
in the merger. None of the following are conditions to completion of
the merger: (i) approval of the amendment to Metalline’s Articles of
Incorporation; (ii) approval of the Metalline 2010 Stock Option and Stock Bonus
Plan; (iii) election of any individual director on the slate of nominees (except
for nominees Edgar and Hitzman); (iv) ratification of the appointment of Hein
& Associates LLP.
Metalline
Record Date; Stock Entitled to Vote (see page __)
Only holders
of shares of Metalline common stock at the close of business on _______, 2010,
the record date for the Metalline special meeting, will be entitled to notice
of, and to vote at, the Metalline special meeting or any adjournments or
postponements thereof. On the record date, there were outstanding a
total of ________ shares of Metalline common stock. Each outstanding
share of Metalline common stock is entitled to one vote on each proposal and any
other matter coming before the Metalline special meeting.
Required
Vote (see page __)
The required
votes to approve the Metalline proposals are as follows:
·
|
The
issuance of Metalline common stock to Dome stockholders, the approval of
the Metalline 2010 Stock Option and Stock Bonus Plan, and the ratification
of the appointment of Hein & Associates LLP will each be approved if a
majority of the votes cast on each such proposal vote in favor of such
proposal. Votes to abstain and broker non-votes will have no
effect.
|
·
|
The
amendment to Metalline’s Articles of Incorporation will be approved if the
number of votes cast in favor of the proposal exceeds a majority of the
number of votes entitled to be cast on the proposal. Votes to
abstain and broker non-votes will have the effect of a vote against this
proposal.
|
18
·
|
The
election of directors will be by plurality of votes cast, without respect
to withheld votes for a nominee. Broker non-votes will have no
effect. The election of director nominees Edgar and Hitzman is
conditioned on completion of the
merger.
|
As of the
close of business on the Metalline record date, directors and executive officers
of Metalline and their affiliates had the right to vote ________ shares of
Metalline common stock, or ________ % of the combined voting power of the
outstanding shares of Metalline common stock entitled to vote at the Metalline
special meeting.
Approval
of the Amendment to Metalline’s Articles of Incorporation (see page
___)
Metalline is
seeking stockholder approval of an amendment to its Articles of Incorporation to
increase the authorized number of shares of Metalline common stock from
160,000,000 to 300,000,000. Currently Metalline has outstanding
55,334,429 shares of its common stock. If the merger is consummated,
Metalline expects to have 103,058,990 outstanding shares of common stock (which
includes the shares issued to effect the merger
transaction). Currently options and warrants to acquire 21,234,713
shares of common stock are outstanding, of which approximately 20,212,994 are
expected to be outstanding immediately following the merger. If the
2010 Stock Option and Stock Bonus Plan is approved, and Metalline’s stockholders
approve the proposed increase to the company’s authorized capital, additional
shares will be reserved for issuance pursuant to grants under that
plan. In total approximately 133,577,883 shares of common stock
either outstanding or reserved for issuance if the merger is approved and the
2010 Plan is approved.
The Metalline
Stockholder Rights Plan, which was approved by stockholders of record in 2007,
can only be effective with respect to protection of stockholders’ interests if
twice the number of shares are authorized as is outstanding at any point in
time. Because of the approvals being asked from stockholders in this
joint proxy statement/prospectus, and the expansion of Metalline’s exploration
activities, the Board believes it is necessary to increase the authorized
capital of Metalline. The Board may determine, in its discretion, not
to adopt and file the amendment if the merger is not consummated, even if the
stockholders of Metalline approve the amendment.
The
Metalline Board of Directors recommends that Metalline stockholders vote “FOR”
the proposal to amend the Articles of Incorporation.
Approval
of the Metalline 2010 Stock Option and Stock Bonus Plan (see page
___)
Metalline
is seeking stockholder approval of the Metalline 2010 Stock Option and Stock
Bonus Plan. Currently Metalline’s option plans have very few options
still available for issuance. The 2010 Plan would allow the combined
company to continue to use stock options and restricted stock grants to attract
and retain independent directors, management and key
employees. Metalline anticipates using some of the stock options to
attract key employees needed for an increase in exploration activities in Sierra
Mojada. If the 2010 Plan is not approved, after the merger the
combined company will not have sufficient share capacity to make appropriate
grants to key employees and other individuals.
19
Following
completion of the merger, the combined company will not make any grants of
equity awards under any Dome equity compensation plan. Stockholder
approval of the Metalline 2010 Stock Option and Stock Bonus Plan is not a
condition to completion of the merger.
The
Metalline Board of Directors recommends that Metalline stockholders vote “FOR”
the proposal to approve the Metalline 2010 Stock Option and Stock Bonus
Plan.
Metalline is
seeking stockholder approval of the election of each nominee included on its
slate of director nominees. If elected, each will hold office a term of one
year, until their successors are duly elected or appointed or until their
earlier death, resignation or removal; provided that Mr. Edgar and Dr. Hitzman,
if elected, will not hold office until the effective time of the
merger.
The Metalline
Board of Directors recommends that Metalline stockholders vote “FOR” each of the
nominees included on its slate.
Metalline is
seeking stockholder ratification of the appointment of Hein & Associates LLP
as its independent registered public accounting firm. The Board of
Directors directed that we submit the selection of Hein for ratification and
approval by our stockholders at the special meeting. Although
Metalline is not required to submit the selection of independent registered
public accountants for stockholder approval, if the stockholders do not ratify
this selection, the Board of Directors may reconsider its selection of
Hein. The Board considers Hein to be well qualified to serve as the
independent auditors for the Company.
The Metalline
Board of Directors recommends that Metalline stockholders vote “FOR” the
ratification of Hein & Associates LLP as our independent registered public
accounting firm.
Date,
Time and Place (see page __)
The special
meeting of Dome stockholders will be held at Dome’s offices at Suite 220, 885
West Georgia Street, Vancouver, BC, Canada on ________, 2010 at 10:00 a.m.
Pacific Time.
Purpose
of the Dome Special Meeting (see page __)
At the Dome
special meeting, Dome stockholders will be asked:
20
·
|
to
approve the merger agreement pursuant to which Merger Sub will be merged
with and into Dome; and
|
·
|
to
approve an adjournment of the Dome special meeting, if necessary,
including to solicit additional proxies if there are not sufficient votes
for the proposal to approve the merger
agreement.
|
Dome
Record Date; Stock Entitled to Vote (see page __)
Only
holders of shares of Dome common stock at the close of business on ________,
2010, the record date for the Dome special meeting, will be entitled to notice
of, and to vote at, the Dome special meeting or any adjournments or
postponements thereof. On the record date, there were outstanding a
total of ________ shares of Dome common stock. Each outstanding share
of Dome common stock is entitled to one vote on each proposal and any other
matter coming before the Dome special meeting.
Required
Vote (see page __)
The
required votes to approve the Dome proposals are as follows:
·
|
Approval
of the merger agreement requires approval by the affirmative vote of at
least a majority of the votes entitled to be cast by holders of
outstanding common stock of Dome. Votes to abstain and broker
non-votes will have the effect of a vote against this
proposal.
|
As of the
close of business on the Dome record date, directors and executive officers of
Dome and their affiliates had the right to vote ________ shares of Dome common
stock, or ________ % of the combined voting power of the outstanding shares of
Dome common stock entitled to vote at the Dome special meeting.
The Dome
Board of Directors recommends a vote “FOR” the approval of the merger
agreement.
Selected
Historical Consolidated Financial Data
Selected
Historical Consolidated Financial Data of Metalline
The tables below present summary
selected financial data of Metalline prepared in accordance with U.S. generally
accepted accounting principles. The following selected financial data
should be read in conjunction with Metalline’s financial statements and related
notes, Management’s
Discussion and Analysis of Results of Operations and Financial Condition for the
year ended October 31, 2009, and other financial information in
Metalline’s Annual Report on Form 10-K for the fiscal year ended October 31,
2009, as filed with the SEC on January 11, 2010, and Annual Report on 10-K for
the fiscal year ended October 31, 2008 as filed with the SEC on February 13,
2009 which are incorporated by reference into this prospectus. See “Where You Can Find More
Information” on page ____. ,
page ___.
21
The statement
of operations data set forth below for the fiscal year ended October 31, 2009,
2008 and 2007 and the balance sheet data as of October 31, 2009 and 2008, are
derived from, and qualified by reference to, the audited financial statements of
Metalline and the related notes thereto that are incorporated by reference into
this prospectus. The statements of operations data for the fiscal
years ended October 31, 2005 and 2006, and the balance sheet data as of October
31, 2006 and 2005, are derived from audited financial statements not included
in, or incorporated by reference into, this prospectus.
|
|
(in
thousands, except per share data)
Year
Ended October 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from continuing operations
|
|
$ |
(4,850 |
) |
|
$ |
(12,320 |
) |
|
$ |
(6,932 |
) |
|
$ |
(11,193 |
) |
|
$ |
(3,302 |
) |
Weighted
average basic and diluted shares outstanding
|
|
|
41,483 |
|
|
|
39,583 |
|
|
|
35,253 |
|
|
|
30,749 |
|
|
|
20,014 |
|
Basic
and Diluted Net Loss per common share
|
|
|
(0.12 |
) |
|
|
(0.31 |
) |
|
|
(0.20 |
) |
|
|
(0.36 |
) |
|
|
(0.16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
& Marketable Securities
|
|
$ |
1,483 |
|
|
$ |
2,229 |
|
|
$ |
9,334 |
|
|
$ |
6,615 |
|
|
$ |
213 |
|
Total
Assets
|
|
|
7,042 |
|
|
|
7,818 |
|
|
|
15,233 |
|
|
|
11,612 |
|
|
|
5,085 |
|
Total
Liabilities
|
|
|
805 |
|
|
|
378 |
|
|
|
401 |
|
|
|
490 |
|
|
|
303 |
|
Stockholders’
Equity
|
|
|
6,237 |
|
|
|
7,440 |
|
|
|
14,832 |
|
|
|
11,122 |
|
|
|
4,783 |
|
Selected
Historical Consolidated Financial Data of Dome
The tables
below present summary selected financial data of Dome prepared in accordance
with Canadian generally accepted accounting principles and reconciled to U.S.
generally accepted accounting principles. The following selected
financial data should be read in conjunction with Dome’s financial statements
and related notes included as Annex A to this prospectus. Also see Dome Management’s
Discussion and Analysis of Results of Operations and Financial Condition for the
year ended September 30, 2009 on page ___.
The statement
of operations data set forth below for the fiscal year ended September 30, 2009,
and 2008 and the balance sheet data as of September 30, 2009 and 2008 are
derived from, and qualified by reference to, the audited financial statements of
Dome and the related notes thereto that are included as Annex A to this
prospectus. The statements of operations data for the fiscal years
ended October 31, 2007, 2006 and 2005, and the balance sheet data as of
September 30, 2007, 2006 and 2005, are derived from audited financial
statements not included in, or incorporated by reference into, this
prospectus.
22
|
|
(in
thousands, except per share data)
Year
Ended September 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from continuing operations
|
|
$ |
(1,228 |
) |
|
$ |
(2,080 |
) |
|
$ |
(1,036 |
) |
|
$ |
(623 |
) |
|
$ |
(15 |
) |
Weighted
average basic and diluted shares outstanding
|
|
|
18,700 |
|
|
|
11,260 |
|
|
|
10,180 |
|
|
|
10,000 |
|
|
|
9,937 |
|
Basic
and Diluted Net Loss from continuing operations per common
share
|
|
|
(0.07 |
) |
|
|
(0.18 |
) |
|
|
(0.10 |
) |
|
|
(0.06 |
) |
|
|
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
& Marketable Securities
|
|
$ |
2,513 |
|
|
$ |
3,735 |
|
|
$ |
4,877 |
|
|
$ |
3,947 |
|
|
$ |
4,444 |
|
Total
Assets
|
|
|
2,533 |
|
|
|
3,757 |
|
|
|
4,894 |
|
|
|
5,368 |
|
|
|
5,953 |
|
Total
Liabilities
|
|
|
3 |
|
|
|
105 |
|
|
|
127 |
|
|
|
156 |
|
|
|
139 |
|
Stockholders’
Equity
|
|
|
2,530 |
|
|
|
3,652 |
|
|
|
4,767 |
|
|
|
5,212 |
|
|
|
5,814 |
|
Selected
Unaudited Pro Forma Condensed Combined Consolidated Financial
Information
The pro forma
balance sheet information combines Metalline’s October 31, 2009 consolidated
balance sheet with Dome’s September 30, 2009 consolidated balance sheet as if
the merger and related equity transactions had occurred on October 31,
2009. The pro forma statement of operations information for the
fiscal year ended October 31, 2009 combines Metalline’s consolidated statement
of operations for the fiscal year ended September 30, 2009 as if the merger had
occurred on November 1, 2009, the first day of Metalline’s 2009 fiscal
year. The unaudited pro forma financial data does not purport to
represent what the combined results of operations of Metalline and Dome would
have been had the merger occurred on November 1, 2008 or to project the results
of operations or financial condition for any future date or
period. The summary unaudited pro forma financial information is
based upon the assumptions described in the notes thereto and should be read in
conjunction with the “Unaudited Pro Forma Condensed
Consolidated Financial Statements” beginning on page ___.
|
|
(in
thousands,
except
per share
data)
Year
Ended
October
31, 2009
|
|
Selected
Operating Data:
|
|
|
|
Loss
from operations attributable to Metalline/Dome
|
|
$ |
(6,521 |
) |
Weighted
average basic and diluted shares outstanding
|
|
|
94,109 |
|
Basic
and Diluted Net Loss per common share
|
|
|
(0.07 |
) |
|
|
|
|
|
Selected
Balance Sheet Data:
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$ |
18,436 |
|
Total
Assets
|
|
|
37,368 |
|
Total
Liabilities
|
|
|
808 |
|
Stockholders’
Equity
|
|
|
36,560 |
|
Certain
Historical and Pro Forma Per Share Data
The following
tables set forth certain historical, pro forma and pro forma equivalent per
share financial information for Metalline’s common stock and Dome’s common
stock. The pro forma and pro forma equivalent per share information
gives effect to the merger as if the merger had occurred on October 31, 2009 in
the case of book value per share data and as of November 1, 2008 in the
case of net income per share data. No Dividends were declared by
Metalline or Dome and accordingly no dividend per common share data is
presented.
The pro forma
per share balance sheet information combines Metalline’s October 31, 2009
consolidated balance sheet with Dome’s September 30, 2009 consolidated balance
sheet as if the merger had occurred on October 31, 2009. The pro
forma per share statement of operations information for the fiscal year ended
October 31, 2009 combines Metalline’s consolidated statement of operations for
the fiscal year ended October 31, 2009 with Dome’s consolidated statement of
operations for the fiscal year ended September 30, 2009 as if the merger had
occurred on November 1, 2009, the first day of Metalline’s 2009 fiscal
year. The Dome pro forma equivalent per share financial information
is calculated by multiplying the unaudited Metalline pro forma combined per
share amounts by the expected 0.96882 exchange ratio.
24
The following
information should be read in conjunction with the audited consolidated
financial statements of Metalline and Dome, which are included or incorporated
by reference in this joint proxy statement/prospectus, and the financial
information contained in the section entitled “Metalline and Dome Unaudited Pro
Forma Condensed Combined Financial Information” beginning on page
___. The unaudited pro forma information below is not necessarily
indicative of the operating results or financial position that would have
occurred if the merger had been completed as of the periods presented, nor is it
necessarily indicative of the future operating results or financial position of
the combined company. In addition, the unaudited pro forma
information does not purport to indicate balance sheet data or results of
operations data as of any future date or for any future period.
|
|
As
of and for the Year Ended October 31, 2009
|
|
Metalline
Historical Data Per Common Share:
|
|
|
|
Loss
from continuing operations – Basic and Diluted
|
|
|
$(0.12) |
|
Book
value per share
|
|
|
$0.13 |
|
|
|
As
of and for the Year Ended September 30, 2009
|
|
Dome
Historical Data Per Common Share:
|
|
|
|
Loss
from continuing operations – Basic and Diluted
|
|
|
$(0.07) |
|
Book
value per share
|
|
|
$0.14 |
|
|
|
As
of and for the Year Ended
October
31, 2009
|
|
Metalline
Pro-Forma Combined Data Per Common Share:
|
|
|
|
Loss
from continuing operations – Basic and Diluted
|
|
|
$(0.07) |
|
Book
value per share
|
|
|
$0.35 |
|
|
|
As
of and for the Year Ended September 30, 2009
|
|
Dome
Pro-Forma Equivalent Per Common Share:
|
|
|
|
Loss
from continuing operations – Basic and Diluted
|
|
|
$(0.07) |
|
Book
value per share
|
|
|
$0.34 |
|
25
COMPARISON
OF RIGHTS OF DOME STOCKHOLDERS
AND
METALLINE STOCKHOLDERS
Dome is
incorporated under the laws of the State of Delaware, and Metalline is
incorporated under the laws of the State of Nevada. As a result of
the merger, the stockholders of Dome will become stockholders of
Metalline. As stockholders of Dome, their rights are currently
governed by the Delaware General Corporation Law and by Dome’s certificate of
incorporation, as amended, and its bylaws. The following discussion
summarizes material differences between Dome’s certificate of incorporation, as
amended, and Dome’s bylaws and Metalline’s articles of incorporation as amended
and Metalline’s amended and restated bylaws; and between certain provisions of
Delaware law and Nevada law affecting stockholders’ rights. This
section does not include a complete description of all differences between the
rights of these holders, nor does it include a complete description of the
specific rights of these holders. In addition, the identification of
some of the differences in the rights of these holders as material is not
intended to indicate that other differences that are equally important do not
exist.
Dome. The total
number of authorized shares of capital stock of Dome is 150,000,000 shares,
consisting of 100,000,000 common shares, par value $0.001 per share, and
50,000,000 preferred shares, par value $0.001 per share. There are
currently no shares of preferred stock issued and outstanding.
Metalline. The
total number of authorized shares of capital stock of Metalline is 160,000,000
shares, consisting solely of common stock, par value $0.01. However,
Metalline is submitting to the shareholders for approval an amendment to
increase authorized capital to 300,000,000 shares of common stock.
Number and Election of
Directors
Dome. The Board of
Directors of Dome currently consists of six members. Dome’s
certificate of incorporation, as amended, provides that the number of directors
shall be fixed as specified or provided for in the bylaws of the
corporation. Dome’s bylaws provide that the Dome Board of Directors
will consist of a number of directors, of not less than 3 but no more than 15,
with the number to be fixed from time to time by resolution of the Dome Board of
Directors.
Under
Delaware law, stockholders do not have cumulative voting rights for the election
of directors unless the corporation’s certificate of incorporation so
provides. Dome’s certificate of incorporation, as amended, provides
that no holder of common stock or preferred stock shall have any right to
cumulate votes in the election of directors.
Metalline. The
Board of Directors of Metalline currently consists of five
members. Both Metalline’s articles of incorporation and its bylaws
provide that the number of directors shall be not less than 3 but no more than
9, with the number to be fixed from time to time by resolution of the Metalline
Board of Directors.
26
Under Nevada
law, cumulative voting in the election of directors is only available to
stockholders if the corporation’s articles of incorporation so
provide. Metalline’s articles of incorporation expressly provide that
cumulative voting is not permitted.
Dome. Under
Delaware law, any director or the entire Board of Directors of a Delaware
corporation may be removed with or without cause by the holders of a majority of
the shares then entitled to vote at an election of
directors. Likewise Dome’s certificate of incorporation, as amended,
provides that any director or the entire Board of Directors may be removed at
any time but only with the affirmative vote of holders of at least a majority of
the outstanding shares of capital stock entitled to vote in the election of
directors.
Metalline. Under
Nevada law, a director may be removed by the vote of the holders of not less
than two-thirds of the voting power of the issued and outstanding stock entitled
to vote, subject to certain restrictions concerning cumulative
voting. However, a Nevada corporation may include in its articles of
incorporation a provision requiring the approval of more than two-thirds of the
voting power to remove a director. Metalline’s articles of
incorporation do not provide for a larger percentage of the voting power to
remove a director. Under Metalline’s bylaws, any director or the
entire Board of Directors may be removed, with or without cause, by the holders
of two-thirds of the shares of issued and outstanding capital stock entitled to
vote. However, Metalline’s bylaws provide that a director may be
removed by the stockholders only at a meeting called for the purpose of removing
him and the notice for that meeting must state that the purpose, or one of the
purposes, of the meeting is removal of directors.
Filling
Vacancies on the Board of Directors
Dome. Pursuant to
Dome’s certificate of incorporation, as amended, and Dome’s bylaws, vacancies
and newly created directorships resulting from any increase in the authorized
number of directors elected by all of the stockholders having the right to vote
as a single class may be filled by the affirmative vote of a majority of the
directors then in office. Any directors elected to fill vacancies or
newly created directorships shall hold office until the next annual meeting of
stockholders at which the term of the class to which such directors shall have
been chosen expires (but such directors shall be eligible for election at such
meeting), and when their successors shall be duly elected and
qualified.
Metalline. In
accordance with Nevada law, vacancies and newly created directorships, including
those resulting from any increase in the authorized number of directors, may be
filled by the affirmative vote of a majority of the directors then in
office. Any directors elected to fill vacancies or newly created
directorships shall hold office until the next election of the class for which
such directors shall have been chosen, and until their successors shall be duly
elected and qualified.
27
Stockholder Meetings and Provisions
for Notices; Proxies
Dome. Dome’s
bylaws provide that the annual meeting of the stockholders shall be held at such
place, within or without the State of Delaware, on such date and at such time as
the Board of Directors shall fix and set forth in the notice of the
meeting.
Dome’s
certificate of incorporation, as amended, provides that a special meeting of
stockholders for any proper purpose or purposes may be called at any time by the
Board of Directors, the Chairman of the Board, the Chief Executive Officer, the
President, or by one or more stockholders holding shares in the aggregate
sufficient to vote not less than a majority of all of the issued and outstanding
shares of the corporation.
Under
Dome’s bylaws, written notice stating the place, day and hour of annual or
special meetings of stockholders must be mailed no less than 10 days and no more
than 60 days before the date of such annual or special meeting to each
stockholder entitled to vote at the meeting. For special meetings,
the purpose or purposes for such meeting must also be stated in the
notice.
Under
Delaware law, no proxy shall be valid after three years from the date of its
execution, unless the proxy provides for a longer period.
Metalline. Metalline’s
bylaws provide that an annual meeting of the stockholders shall be held on such
date and at such time as may be designated by the Board of
Directors. Unless the date or time or location is otherwise specified
by the Board of Directors, Metalline’s bylaws provide that the annual meeting
shall be held at the principal business office of the Corporation in Coeur
d’Alene, Idaho on the fourth Monday in April of each year at 10:00 a.m. local
time, or as close thereto as practicable.
Metalline’s
bylaws provide that special meetings of stockholders may be called for any
purpose or purposes described in the notice of the meeting, and may be called by
a two-thirds (2/3) majority of the Board of Directors or by the
President.
Pursuant
to Metalline’s bylaws, written notice may designate the place, date and hour of
the annual or special meeting shall be given to each stockholder of record
entitled to vote at such meeting between 10 and 60 days before the date of such
meeting. Every notice of a special meeting shall state the purpose or
purposes for which the meeting is called.
Under
both Metalline’s bylaws and Nevada law, no proxy shall be valid after six months
from the date of its creation, unless the proxy provides for a longer period,
which in no event may exceed seven years from such date.
Quorum and Voting by
Stockholders
Dome. Dome’s
bylaws provide that the holders of one third of the shares entitled to vote at
any meeting of stockholders, present in person or represented by proxy, shall
constitute a quorum at any such meeting of stockholders.
28
Dome’s bylaws
provide that directors are elected by a plurality of the votes of the shares
present in person or by proxy at the meeting and entitled to vote on the
election of directors, and except as otherwise required by law, Dome’s
certificate of incorporation as amended, or Dome’s bylaws, all other matters
shall be determined by a majority of the votes cast, at any meeting at which a
quorum is present.
Metalline.
Metalline’s bylaws provide that the holders of one third of the shares entitled
to vote at any meeting of stockholders, present in person or represented by
proxy, shall constitute a quorum at any such meeting of
stockholders. Metalline’s bylaws provide that if a quorum is present,
the affirmative vote of a majority of the shares cast in favor of the subject
matter shall be the act of the stockholders, unless the vote of a greater
proportion or number or voting by classes is otherwise required by statute or by
the articles of incorporation or the bylaws. Under Nevada law,
directors must be elected at the annual meeting of the stockholders by a
plurality of the votes cast at the election, unless the articles of
incorporation or the bylaws require more than a plurality of the votes cast or
unless elected by written consent by at least a majority of the voting
power. Metalline’s articles of incorporation and bylaws do not
require more than a plurality of votes cast for director elections.
Stockholder Action Without a
Meeting
Dome. Delaware law
provides that any action permitted or required by law, or the certificate of
incorporation or the bylaws, to be taken at a meeting of the stockholders, may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall by
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon are present and
vote.
Metalline.
Nevada law permits stockholders to take actions without a meeting, unless
prohibited by a corporation’s articles of incorporation or
bylaws. However, Metalline’s bylaws prohibit Metalline stockholders
from taking action except at an annual or special meeting.
Amendment of Certificate or Articles
of Incorporation
Dome. Under
Delaware law, unless the certificate of incorporation requires a greater vote, a
proposed amendment to the certificate of incorporation requires a declaration by
the Board of Directors of the amendment’s advisability and, except with respect
to a certificate of designations or a short form merger to change the
corporation’s name, an affirmative vote of a majority of the outstanding stock
entitled to vote thereon and a majority of the outstanding stock of each class
entitled to vote thereon. Dome’s certificate of incorporation, as
amended, grants the right to amend the certificate of incorporation or any
provision thereof, but does not provide for a greater vote than that required
under Delaware law, except for certain provisions thereof, the amendments of
which also require the prior approval of a majority of Dome’s
directors.
Metalline. Under
Nevada law, the articles of incorporation may be amended by the affirmative vote
of the holders of a majority of the voting power or such greater proportion as
may be required in the case of a vote by classes or series or by the articles of
incorporation. The Board of Directors must adopt a resolution setting
forth the proposed amendment and submit it to a stockholder
vote. Metalline’s articles of incorporation do not modify the Nevada
standard requiring the approval of at least a majority of the issued and
outstanding shares entitled to vote to amend the articles of
incorporation.
29
Dome. Dome’s
bylaws may be amended or repealed, or rescinded by either the stockholders or by
the Board of Directors without action on the part of the
stockholders. Under Dome’s bylaws, the stockholders may amend Dome’s
bylaws only by an affirmative vote of the majority of the outstanding shares of
capital stock entitled to vote at a meeting of stockholders called for that
purpose. Dome’s Board of Directors may also repeal, alter, amend, or
rescind the bylaws by a vote of the majority of the Board of Directors at a duly
called board meeting.
Metalline. Nevada
law provides that the directors of a corporation may amend the bylaws, subject
to any bylaws adopted by the stockholders. Unless otherwise
prohibited by any bylaw adopted by the stockholders, the directors may adopt,
amend or repeal any bylaw, including any bylaw adopted by the
stockholders. The articles of incorporation of a Nevada corporation
may grant the authority to adopt, amend or repeal bylaws exclusively to the
directors. Metalline’s bylaws provide that they may be amended or
repealed by a two-thirds (2/3) majority of the Board of Directors, unless
otherwise required by law, or by stockholders of the corporation holding at
least sixty-six and two-thirds percent (66 2/3%) of the corporation’s
outstanding voting shares then entitled to vote at an election of
directors.
Dome. The
provisions of Delaware law relating to business combinations do not apply to a
corporation if, among other things, the certificate of incorporation or bylaws
of the corporation contain a provision expressly electing not to be governed by
the provisions of the statute or the corporation does not have voting stock
listed on a national securities exchange or held of record by more than 2,000
stockholders.
Dome has not
“opted out” of the Delaware laws relating to business combinations.
Under certain
provisions of Delaware law, a corporation may not engage in certain transactions
with an “interested stockholder.” For purposes of this provision, an “interested
stockholder” generally means any person who, together with its affiliates or
associates, directly or indirectly owns 15% or more of the outstanding voting
stock of the corporation. These provisions prohibit certain business
combinations between an interested stockholder and a corporation for a period of
three years following the date that the stockholder acquired its stock
unless:
·
|
prior
to the stockholder becoming an interested stockholder, the Board of
Directors of the corporation approved the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder;
|
·
|
the
interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding
shares held by directors who are also officers and shares held by certain
employee stock plans) in which such stockholder became an interested
stockholder; or
|
·
|
the
business combination is approved by the Board of Directors and authorized
at an annual or special meeting of stockholders by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder
|
Metalline. Nevada
law generally provides that a Nevada resident domestic corporation may not
engage in any combination with an interested stockholder for a period of three
years following the date that such stockholder first became an interested
stockholder unless prior to that time the Board of Directors of the corporation
approved either the combination or the transaction by which the stockholder
first became an interested stockholder. After expiration of the
three-year period, a Nevada corporation may engage in a combination with an
interested stockholder only if such stockholder receives approval from the
holders of a majority of the disinterested shares at a meeting called no earlier
than three years after the person first became an interested stockholder, or the
offer meets certain fair price criteria specified under Nevada
law. For purposes of the foregoing provisions, a resident domestic
corporation means a Nevada corporation that has 200 or more stockholders and an
interested stockholder generally means any person that is the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the outstanding
voting shares of the corporation, or its affiliate or associate.
The above
provisions generally do not apply to any combination involving a Nevada resident
domestic corporation:
·
|
whose
original articles of incorporation expressly elect not to be governed by
these anti-takeover provisions of Nevada
law;
|
·
|
which
does not, as of the date that a person first becomes an interested
stockholder, have a class of voting shares registered with the SEC under
Section 12 of the Securities Act of 1933, unless the articles of
incorporation provide
otherwise;
|
·
|
whose
articles of incorporation were amended to provide that the corporation is
subject to the above provisions and which did not have a class of voting
shares registered with the SEC under Section 12 of the Securities Act of
1933 on the effective date of such amendment if the combination is with a
person who first became an interested stockholder before the effective
date of the amendment; or
|
·
|
that
amends its articles of incorporation, approved by a majority of the
disinterested shares, to expressly elect not to be governed by the
anti-takeover provisions of Nevada
law.
|
Metalline’s
articles are governed by Nevada’s “Combinations with Interested Stockholder”
statutes. However, Metalline’s Board of Directors has expressly
approved the Agreement and Plan of Merger and Reorganization and other
transactions for purposes of these statutes so the restrictions do not apply to
Metalline.
Nevada
also has “acquisition of controlling interest” statutes which provide in effect
that a person acquiring a controlling interest in an issuing corporation, and
those acting in association with such person, obtain only such voting rights in
the control shares as are conferred by stockholders (excluding such acquiring
and associated persons) holding a majority of the voting power of the issuing
corporation unless the articles of incorporation or bylaws of the corporation in
effect on the tenth day following the acquisition provide that these statutes do
not apply to the corporation or to an acquisition specifically by types of
stockholders. For purposes of the foregoing provisions, a
“controlling interest” means the ownership of voting shares sufficient to enable
an acquiring person to directly or indirectly exercise one-fifth or more but
less than one-third, one-third or more but less than a majority, or a majority
or more of the voting power is the election of directors. An “issuing
corporation” means a corporation organized in Nevada which has 200 or more
stockholders of record, at least 100 of whom have addresses in Nevada on the
corporation’s stock ledger, and which does business in Nevada directly or
through an affiliate. Since Metalline does not do business in Nevada,
these statutes do not apply to the corporation.
31
Limitation of Liability and
Indemnification of Directors and Officers
Dome. Dome’s
certificate of incorporation, as amended, provides that no director of the
corporation shall be personally liable to Dome or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for a breach of the
duty of loyalty, acts or omissions that were not done in good faith or otherwise
involving intentional misconduct or violation of the law, and unlawful payment
of dividend, stock purchase or redemption transactions from which the director
received a personal benefit. Dome’s certificate of incorporation, as
amended, also provides that Dome shall, to the fullest extent permitted by law,
indemnify any and all officers and directors of Dome, and may, to the fullest
extent permitted by law or to such lesser extent as is determined in the
discretion of the Board of Directors, indemnify any and all other persons whom
it shall have power to indemnify, from and against all expenses, liabilities, or
other matters arising out of their status as such or their acts, omissions or
services rendered in such capacities. Dome’s certificate of
incorporation, as amended, also provides that Dome shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of Dome as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not Dome would have the power to
indemnify him against such liability.
Metalline. Metalline’s
bylaws provide for indemnification of directors and officers to the fullest
extent permitted by Nevada law. Nevada law provides that a Nevada
corporation may indemnify and Metalline’s bylaws provide that the corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action, suit or proceeding,
except an action by or in the right of the corporation, by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, against expenses, including attorneys’ fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
the action, suit or proceeding, if the person (a) is not liable pursuant to NRS
§ 78.138 or (b) acted in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the
corporation. NRS § 78.138 and the bylaws provide that a director of
Metalline shall not be personally liable to Metalline or its stockholders or
creditors for damages resulting from any action or failure to act in his or her
capacity as a director or officer, if his or her act or omission did not
constitute a breach of his or her fiduciary duties and did not involve
intentional misconduct, fraud or a knowing violation of law. Nevada
law provides that, to the extent a director, officer, employee or agent has been
successful on the merits or otherwise in the defense of an action, suit or
proceeding, Metalline shall indemnify such person against expenses incurred in
connection with the defense. Metalline’s bylaws provide that any
repeal or amendment of a person’s rights to indemnification shall be prospective
only, and a director shall not be liable to Metalline or its stockholders or
creditors to such further extent as permitted by any law enacted after adoption
of the bylaws, including, without limitation, any subsequent amendment to the
NRS.
32
Appraisal/Dissenter’s
Rights
Dome. Under
Delaware law, Dome stockholders do not have appraisal rights with respect to
shares of any class or series of stock if such shares are (1) listed on a
national securities exchange or (2) held by more than 2,000 stockholders of
record, unless the stockholders receive in exchange for their shares anything
other than shares of stock of the surviving or acquiring entity, or depository
receipts in respect thereof, or shares of stock, or depository receipts in
respect of any other entity that is publicly listed or held by more than 2,000
holders, or cash in lieu of fractional shares or fractional depository receipts
described above, or a combination of the foregoing. Since Metalline’s
common stock is publicly listed and Dome stockholders are receiving Metalline
common stock as merger consideration, under Delaware law, stockholders are not
entitled to appraisal rights in connection with the merger.
Metalline. Under
Nevada law, Metalline stockholders are not entitled to dissenter’s rights in
connection with the issuance of the Metalline common stock in connection with
the merger contemplated by the Agreement and Plan of Merger and
Reorganization.
33
NO
APPRAISAL RIGHTS
Metalline
Under §
92A.390 of the Nevada General Corporation Law, the holders of Metalline common
stock are not entitled to appraisal rights in connection with the merger or any
of the Metalline proposals.
Under §
262(b)(2) of the Delaware General Corporation Law, the holders of Dome common
stock are not entitled to appraisal rights in connection with the
merger.
34
EXPERTS
Technical
Reports
Certain
scientific and technical information is included in this joint proxy
statement/prospectus in reliance upon the “Technical Report and Resource
Estimate for the Sierra Mojada Project, Mexico” dated January 29, 2010 as
prepared by Jeremy L. Clark, J. Ross, Conner, P.Geo, and Aaron M. McMahon, P.G.
of Pincock Allen & Holt, an international consulting and engineering firm
and filed on SEDAR (www.sedar.com) in accordance with the requirements of
National Instrument 43-101F1. Jeremy L. Clark, J. Ross Conner, P.Geo
and Aaron M. McMahon are each a “qualified person” as that term is defined in
National Instrument 43-101.
Independent
Accounting Firms
The
consolidated financial statements of Metalline as of October 31, 2009, 2008, and
2007 and for the years then ended included in Metalline’s Annual Reports on Form
10-K for the fiscal years ended October 31, 2009 and 2008, have been audited by
Hein & Associates LLP, independent registered public accounting firm, as set
forth in its reports appearing therein. The audit reports and corresponding
financial statements are incorporated herein by reference in reliance upon such
reports given on the authority of such firm as experts in accounting and
auditing.
The
consolidated financial statements of Dome as of September 30, 2009 and 2008 and
for the years then ended appearing in Dome’s annual report distributed to its
stockholders, have been audited by Manning Elliott LLP, chartered accountants as
set forth in its reports thereon, and included as Annex A.
35
RISK
FACTORS
In addition to the
other information included or incorporated by reference in this joint proxy
statement/prospectus, including the matters addressed under “Cautionary
Statement Concerning Forward-Looking Statements,” Metalline and Dome
stockholders should carefully consider the following risks before deciding how
to vote. In addition, Metalline and Dome stockholders should read and
consider the risks associated with the businesses of each of Metalline and
Dome in deciding whether to vote to issue the shares or approve the
merger agreement because these risks will relate to Metalline and
Dome after the merger. Certain of these risks can be found in
Metalline’s Annual Report on Form 10-K for the year ended October 31, 2009 which
are incorporated by reference into this joint proxy
statement/prospectus. You should also consider the other information
in this joint proxy statement/prospectus and the other documents incorporated by
reference into this joint proxy statement/prospectus. See “Where You Can Find
More Information.”
Risk
Factors Relating to the Merger
The
exchange ratio is fixed and will not be adjusted in the event of any change in
either Metalline’s or Dome’s stock price.
The
aggregate number of shares to be issued to Dome stockholders at closing is fixed
in the Agreement and Plan of Merger and Reorganization at 47,724,561 shares of
Metalline common stock. The exact per share exchange ratio will be
determined by dividing 47,728,561 by the number of outstanding shares of Dome
immediately prior to the closing, and is currently expected to be
0.96882. The exchange ratio will not be adjusted for changes in the
market price of either Dome common stock or Metalline common
stock. Changes in the price of Metalline common stock prior to
completion of the merger will affect the market value that Dome stockholders
will receive on the date of the merger. Stock price changes may
result from a variety of factors (many of which are beyond our control),
including the following factors:
·
|
changes
in Dome’s and Metalline’s respective businesses, operations and prospects,
or the market assessments thereof;
|
·
|
market
assessments of the likelihood that the merger will be completed, including
related considerations regarding regulatory approvals of the merger;
and
|
·
|
general
market and economic conditions and other factors generally affecting the
price of Metalline’s and Dome’s common
stock.
|
The price of
Metalline common stock at the closing of the merger may vary from its price on
the date the merger agreement was executed, on the date of this joint proxy
statement/prospectus and on the date of the stockholders’ meetings of Dome and
Metalline. As a result, the market value represented by the exchange
ratio will also vary.
36
The
issuance of a significant number of Metalline shares could adversely affect the
market price of Metalline shares.
If the merger
is completed, a significant number of additional shares of Metalline common
stock will be available for trading in the public market. The
increase in the number of Metalline shares may lead to sales of such shares or
the perception that such sales may occur, either of which may adversely affect
the market for, and the market price of, Metalline shares.
Because
the date that the merger is completed will be later than the date of the
stockholder meetings, at the time of your meeting, you will not know the exact
market value of the Metalline common stock that Dome stockholders will receive
upon completion of the merger.
If the price
of Metalline common stock increases between the date of the stockholder meetings
and the effective time of the merger, Dome stockholders will receive shares of
Metalline common stock that have a market value that is greater than the market
value of such shares on the date of the stockholders meetings. On the
other hand, if the price of Metalline common stock decreases between the date of
the stockholder meetings and the effective time of the merger, Dome stockholders
will receive shares of Metalline common stock that have a market value that is
less than the market value of such shares on the date of the stockholder
meetings. Therefore, because the exchange ratio is fixed,
stockholders cannot be sure at the time of the stockholder meetings of the
market value of the consideration that will be paid to Dome stockholders upon
completion of the merger.
Obtaining
required approvals necessary to satisfy closing conditions may delay or prevent
completion of the merger.
Completion of
the merger is conditioned upon the receipt of certain regulatory authorizations,
consents, or other approvals, including the NYSE Amex. Metalline and
Dome intend to pursue all required approvals in accordance with the merger
agreement. These approvals may impose conditions or obligations on
Metalline and Dome and such conditions may jeopardize or delay completion of the
merger. Further, no assurance can be given that the required
approvals will be obtained and, even if all such approvals are obtained, no
assurance can be given as to the terms, conditions and timing of the approvals
or that they will satisfy the terms of the merger agreement.
Failure
to complete the merger could negatively impact the stock prices and the future
business and financial results of Metalline and Dome.
If the merger
is not completed, the ongoing businesses of Metalline and Dome may be adversely
affected. Additionally, if the merger is not completed, Metalline or
Dome may be required to pay a termination fee under the merger agreement of
$964,000, and will have to pay certain costs relating to the merger, such as
legal, accounting, financial advisor, filing, printing and mailing
fees. Any of the foregoing, or other risks arising in connection with
the failure of the merger, including the diversion of management attention from
pursuing other opportunities during the pendency of the merger, may have an
adverse effect on the business, financial results and stock prices of Metalline
and Dome.
37
The
merger agreement contains provisions that could discourage a potential competing
acquirer of either Metalline or Dome.
The merger
agreement provides that in some circumstances, upon termination of the merger
agreement one of the parties will be required to pay a termination fee of
$964,000 to the other party. These provisions could discourage a
potential competing acquirer that might have an interest in acquiring all or a
significant part of Metalline or Dome from considering or proposing that
acquisition, even if it were prepared to pay consideration with a higher per
share cash or market value than the market value proposed to be received or
realized in the merger, or might result in a potential competing acquirer
proposing to pay a lower price than it might otherwise have proposed to pay
because of the added expense of the $964,000 termination fee that may become
payable in certain circumstances.
If the
merger agreement is terminated and either Metalline or Dome determines to seek
another business combination, it may not be able to negotiate a transaction with
another party on terms comparable to, or better than, the terms of the
merger.
The
pendency of the merger could adversely affect the business and operations of
Metalline and Dome.
In
connection with the pending merger, third parties utilized or relied on by
Metalline and Dome may make decisions, which could negatively Metalline and Dome
regardless of whether the merger is completed. For example, current
and prospective employees of Metalline and Dome may experience uncertainty about
their future roles with Metalline following the merger, which may materially and
adversely affect the ability of each of Metalline and Dome to attract and retain
key personnel.
If
the merger does not qualify as a tax-free reorganization under Section 368(a) of
the Code, the stockholders of Dome may be required to pay substantial U.S.
federal income taxes.
The merger is
intended to qualify as a tax-free reorganization under Section 368(a) of the
Code, and that no gain or loss will be recognized as a result of the
merger. The intended tax consequences of the merger are described in
this joint proxy statement/prospectus under “Material U.S. Federal Income Tax
Consequences of the Merger”. The Agreement provides that after
completion of the merger neither the combined entity, Metalline nor any of their
affiliates shall knowingly take any action, cause any action to be taken, fail
to take any action or cause any action to fail to be taken, which action or
failure to act could cause the merger to fail to qualify as a reorganization
within the meaning of Section 368(a) of the Code. However, if the IRS
or a court determines that the merger is taxable, Dome stockholders would
recognize taxable gain or loss on their receipt of Metalline stock in the
merger.
38
The
combined company may not realize the benefits currently anticipated due to
challenges associated with integrating the operations of Metalline and
Dome.
The success
of the combined company will depend in large part on the success of management
of the combined company integrating the operations of Dome with those of
Metalline after the completion of the merger. The failure of the
combined company to achieve such integration could result in the failure of the
combined company to realize the anticipated benefits of the merger and could
impair the results of operations, profitability, and financial results of the
combined company.
The overall
integration of the operations of Dome and Metalline may also result in
unanticipated operational problems, expenses, liabilities and diversion of
management’s time and attention.
39
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This joint
proxy statement/prospectus and the documents incorporated by reference into this
joint proxy statement/prospectus contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
“forward-looking information” within the meaning of applicable Canadian
securities laws with respect to the financial condition, results of operations,
business strategies, operating efficiencies, synergies, plans and objectives of
management of Metalline, Dome and the combined company, and with respect to the
merger and the markets for Metalline and Dome common stock and other
matters. Statements in this joint proxy statement/prospectus and the
documents incorporated by reference herein that are not historical facts are
hereby identified as “forward-looking statements” for the purpose of the safe
harbor provided by Section 21E of the Exchange Act and Section 27A of the
Securities Act. These forward-looking statements and forward looking
information, including, without limitation, those relating to the future
business prospects of Metalline, Dome, and the combined company, and those
related to the merger and the expected benefits thereof, wherever they occur in
this joint proxy statement/prospectus or the documents incorporated by reference
herein, are necessarily estimates reflecting the judgment of the respective
managements of Metalline and Dome and involve a number of risks and
uncertainties that could cause actual results to differ materially from those
suggested by the forward-looking statements and forward looking
information. These forward-looking statements and forward looking
information should, therefore, be considered in light of various important
factors, including those set forth in this joint proxy statement/prospectus and
incorporated by reference into this joint proxy
statement/prospectus.
Words such as
“pro forma”, “estimate,” “project,” “plan,” “intend,” “expect,” “anticipate,”
“believe,” “would,” “should,” “could” and similar expressions are intended to
identify forward-looking statements and forward looking
information. These forward-looking statements are found at various
places throughout this joint proxy statement/prospectus. Important
factors that could cause actual results to differ materially from those
indicated by such forward-looking statements include those set forth in
Metalline’s filings with the SEC, including its Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q. These important factors
also include those set forth under “Risk Factors,” beginning on page __, as well
as, among others, risks and uncertainties relating to:
·
|
the
risk that upon completion of the merger, the market value of the Metalline
shares will be different from the value at the time the formula for the
exchange ratio was agreed;
|
·
|
the
risk that the other synergies anticipated to be realized from the merger
may not be fully realized or may take longer to realize than
expected;
|
·
|
the
risk of operating and technical difficulties in connection with
exploration and mining development
activities;
|
·
|
the
risk that the conditions to the merger will not be satisfied or
waived;
|
40
·
|
disruption
from the merger making it difficult to maintain relationships with
employees or suppliers;
|
·
|
the
risk that the businesses will not be integrated successfully, or that the
integration will be more costly or more time consuming and complex than
anticipated;
|
·
|
continued
access to equity markets on favorable terms, and the maintenance by
Metalline of its NYSE AMEX listing;
|
·
|
general
market, labor and economic conditions and related uncertainties;
and
|
·
|
the
risk that there may be unforeseen or unexpected consequences to the
transactions which would have a material adverse effect on the combined
company;
|
In addition,
pro forma information contained herein is based on certain assumptions,
including the assumption that Metalline stockholders will vote in favor of the
share issuance to effect the merger, and Dome stockholders will vote in favor of
the merger and that all other conditions to the merger are satisfied or
waived. Other assumptions include, but are not limited to, the
ability of the combined company to realize the benefits of the combined
company’s growth projects, and meet key cost estimates.
Although
Metalline and Dome have attempted to identify important factors that could cause
actions, events or results to differ materially from those described in
forward-looking statements and forward-looking information in this joint proxy
statement/prospectus, and the documents incorporated by reference herein, there
may be other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There is no assurance that such
statements will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements or
information.
Readers are
cautioned not to rely on any forward-looking statement or forward-looking
information, which speaks only as of the date of this joint proxy
statement/prospectus or, if such statement is included in another document
incorporated into this joint proxy statement/prospectus, as of the date of such
other document. The parties undertake no obligation to update any
forward-looking statement or forward-looking information, whether as a result of
new information, future events or otherwise, unless otherwise required by
law. Readers also should understand that it is not possible to
predict or identify all relevant factors that may impact forward-looking
statements and that the above list and the Risk Factors set forth in Metalline’s
Annual Report on Form 10-K for the year ended October 31, 2009 should not be
considered a complete statement of all potential risks and
uncertainties.
41
Metalline
Mining Company
1330 E.
Margaret Ave.
Coeur
d’Alene, Idaho 83815
Telephone: (208)
665-2002
Metalline,
a Nevada corporation, is an exploration stage company, engaged in the business
of mining. The Company currently owns sixteen concessions, which are
located in the municipality of Sierra Mojada, Coahuila, Mexico (the
“Property”). The Company’s objective is to define sufficient mineral
reserves on the Property to justify the development of a mechanized mining
operation (the “Project”). The Company conducts its operations in
Mexico through its wholly owned Mexican subsidiaries, Minera Metalin S.A. de
C.V. (“Minera”) and Contratistas de Sierra Mojada S.A. de C.V.
(“Contratistas”).
Additional
information about Metalline and its subsidiaries is included in documents
incorporated by reference into this joint proxy statement/prospectus, including
Metalline’s Annual Report on Form 10-K for the year ended October 31, 2009, a
copy of which is being delivered along with this joint proxy
statement/prospectus. Additionally, Metalline has incorporated
certain reports it has filed with the Securities and Exchange Commission by
reference. See “Where You Can Find More Information” on page
____.
Intercorporate
Relationships
The following
chart illustrates the intercorporate relationships among Metalline and its
subsidiaries before the proposed merger with Dome:
42
The following
chart illustrates the intercorporate relationships among Metalline and its
subsidiaries after the proposed merger with Dome:
(1) Upon
the effectiveness of the proposed merger, Dome will merge with and into
Metalline Mining Delaware Inc.
Consolidated
Capitalization
The following
table sets forth the consolidated capitalization, cash, cash equivalents and
long-term debt of Metalline as at October 31, 2009, before and after giving
effect to the issuance of 47,724,561 Metalline shares pursuant to the merger,
based on the number of Dome shares outstanding on October 31, 2009 and assuming
all Dome options outstanding on September 30, 2009 were
exercised. This table also takes into account the 6,500,000 shares
issued in the Metalline private placement shares which was completed on December
22, 2009. The table should be read in conjunction with the audited
annual consolidated financial statements of Metalline the year ended October 31,
2009, including the notes thereto, and Metalline’s management’s discussion and
analysis for the year ended October 31, 2009, as well as the unaudited pro forma
consolidated financial statements, including the notes thereto, of Metalline
incorporated by reference to this joint proxy statement/prospectus.
|
|
As
of
October
31, 2009
|
|
|
As
of
October
31, 2009 after giving effect to the Merger
|
|
|
|
|
|
|
|
|
Issued
Capital
|
|
$ |
55,632,558 |
|
|
$ |
86,455,540 |
|
Cash
& Cash Equivalents
|
|
|
1,482,943 |
|
|
|
18,435,914 |
|
Long-Term
Debt
|
|
|
- |
|
|
|
- |
|
Accumulated
Losses
|
|
|
(51,917,015 |
) |
|
|
(52,417,015 |
) |
Other
Comprehensive Income
|
|
|
2,521,596 |
|
|
|
2,521,596 |
|
TOTAL
CAPITALIZATION
|
|
$ |
7,720,082 |
|
|
$ |
54,996,035 |
|
43
Prior
Sales
The following table summarizes the
issuances of Metalline shares and options granted by Metalline within the 12
months prior to the date of this Joint prospectus/proxy statement.
|
|
|
|
Number
and type of securities
|
|
December
22, 2009
|
|
|
$0.46 |
|
6,500,000
Units(1)
|
Shares
issued pursuant to a private placement for working
capital
|
October
31, 2009
|
|
|
$0.54 |
|
32,400
Common Shares
|
Shares
issued to independent directors for quarterly directors
fees
|
October
16, 2009
|
|
|
$0.32 |
|
1,150,000
Common Shares
|
Exercise
of Warrants
|
October
16, 2009
|
|
|
$0.40 |
|
113,450
Common Shares
|
Exercise
of Warrants
|
October
14, 2009
|
|
|
$0.32 |
|
1,750,000
Common Shares
|
Exercise
of Warrants
|
October
14, 2009
|
|
|
$0.40 |
|
690,000
Common Shares
|
Exercise
of Warrants
|
September
4, 2009
|
|
|
$0.25 |
|
495,912
Units(2)
|
Shares
issued pursuant to a private placement for working
capital
|
August
13, 2009
|
|
|
$0.25 |
|
40,000
Units(2)
|
Shares
issued pursuant to a private placement for working
capital
|
July
31, 2009
|
|
|
$0.25 |
|
3,220,000Units(2)
|
Shares
issued pursuant to a private placement for working
capital
|
July
31, 2009
|
|
|
$0.29 |
|
32,400
Common Shares
|
Shares
issued to independent directors for quarterly directors
fees
|
June
23, 2009
|
|
|
$0.25 |
|
850,040
Units(2)
|
Shares
issued pursuant to a private placement for working
capital
|
April
30, 2009
|
|
|
$0.27 |
|
32,400
Common Shares
|
Shares
issued to independent directors for quarterly directors
fees
|
April
29, 2009
|
|
|
$0.25 |
|
686,000
Units(2)
|
Shares
issued pursuant to a private placement for working
capital
|
February
11, 2009
|
|
|
$0.34 |
|
705,619
Options
|
Stock
options granted pursuant to compensation deferral
agreements
|
February
11, 2009
|
|
|
$0.34 |
|
90,000
Warrants
|
Warrants
granted pursuant to consulting deferral agreement
|
January
31, 2009
|
|
|
$0.33 |
|
32,400
Common Shares
|
Shares
issued to independent directors for quarterly directors
fees
|
(1)
|
Each
Metalline unit consists of one share of common stock and one common stock
purchase warrant, two of which warrants entitle the holder to purchase one
share of Metalline common stock at an exercise price of
$0.57.
|
(2)
|
Each
Metalline unit consists of one share of common stock and one common stock
purchase warrant, two of which warrants entitle the holder to purchase one
share of Metalline common stock at an exercise price of
$0.50.
|
Market
Information
Metalline’s
common stock is traded on the NYSE Amex (formerly known as the American Stock
Exchange) under the symbol “MMG”. The following table sets forth the
high and low sales prices of Metalline’s common stock, as well as the trading
volume traded, for each month of the 12 months preceding the date of the
prospectus as reported by the NYSE Amex.
44
|
|
|
|
|
|
|
|
|
|
January
2010 (January 1 – 27)
|
|
|
$0.87 |
|
|
|
$0.62 |
|
|
|
1,335,681 |
|
December
2009
|
|
|
0.95 |
|
|
|
0.55 |
|
|
|
3,718,081 |
|
November
2009
|
|
|
0.95 |
|
|
|
0.52 |
|
|
|
2,818,544 |
|
October
2009
|
|
|
0.74 |
|
|
|
0.39 |
|
|
|
3,704,939 |
|
September
2009
|
|
|
0.50 |
|
|
|
0.30 |
|
|
|
2,926,982 |
|
August
2009
|
|
|
0.32 |
|
|
|
0.27 |
|
|
|
956,319 |
|
July
2009
|
|
|
0.31 |
|
|
|
0.23 |
|
|
|
1,289,910 |
|
June
2009
|
|
|
0.32 |
|
|
|
0.27 |
|
|
|
1,397,557 |
|
May
2009
|
|
|
0.33 |
|
|
|
0.18 |
|
|
|
2,697,931 |
|
April
2009
|
|
|
0.36 |
|
|
|
0.25 |
|
|
|
944,831 |
|
March
2009
|
|
|
0.33 |
|
|
|
0.11 |
|
|
|
1,598,203 |
|
February
2009
|
|
|
0.37 |
|
|
|
0.17 |
|
|
|
1,674,449 |
|
January
2009
|
|
|
0.40 |
|
|
|
0.24 |
|
|
|
2,892,406 |
|
Transfer
Agents, Registrars, Trustees or Other Agents
The stock
transfer agent of Metalline is OTC Stock Transfer, Inc. of 231 E. 2100 South,
Suite #3, Salt Lake City, Utah 84115.
Additional
Documents Incorporated By Reference
In addition
to those documents and reports incorporated by reference into this Form S-4, to
comply with the requirements of the Canadian securities laws the following are
incorporated into this joint proxy statement/prospectus by
reference:
§
|
Metalline’s
financial statements (being its consolidated balance sheet and the related
consolidated statements of operations, stockholders’ equity and cash
flows) for the fiscal year ended October 31, 2008 and 2007 filed with
Metalline’s Annual Report on Form 10-K for the fiscal year ended October
31, 2008 filed on February 13,
2009.
|
§
|
The
disclosure included under Item 7. “Management’s Discussion and Analysis or
Plan of Operations” of Metalline’s Annual Report on Form 10-K for the
fiscal year ended October 31, 2008.
|
§
|
The
description of the material terms of each of the agreements designated as
“material agreements” in reports filed by Metalline under Section 13(a) of
the Securities Exchange Act of 1934 as are currently in effect, and
generally described in Metalline’s Form 10-K for the fiscal year ended
October 31, 2009 and in a Current Report on Form 8-K dated December 4,
2009.
|
Events
Subsequent to Metalline’s 2009 Fiscal Year End
The following
subsequent events have occurred since Metalline’s fiscal year-end
October 31, 2009:
45
·
|
On
December 4, 2009, Metalline executed the Agreement and Plan of Merger and
Reorganization with Dome whereby upon the closing of the transaction, Dome
will become a wholly owned subsidiary of
Metalline.
|
·
|
On
December 22, 2009 and pursuant to the Merger Agreement, Metalline
completed a private placement of 6,500,000 units at a price of $.46 per
unit, with each unit consisting of one share of common stock and one
common stock purchase warrant, two of which warrants will entitle the
holder to purchase one share of common stock. The warrants are
exercisable only upon termination of the proposed merger transaction until
one year following the date of issuance, with an exercise price of $0.57
per share of common stock. Net proceeds from this placement
were $2,990,000.
|
·
|
On
December 22, 2009, Metalline’s Board of Directors of the Company adopted
the 2010 Stock Option and Stock Bonus Plan. To date no options
or stock bonuses have been granted under this
plan.
|
·
|
Upon
closing of the $2,990,000 private placement on December 22, 2009,
Metalline’s Board of Directors determined that the company had raised
sufficient operating capital to continue its operations and agreed to pay
all deferred salaries, independent director fees, and consulting
costs. On December 24, 2009, the Company paid $430,406 of
deferred costs.
|
Sierra
Mojada Project Technical Report
Preliminary
Note
As required
by NI 43-101, the Technical Report (described below) contains certain disclosure
relating to measured, indicated and inferred mineral resource estimates for
Metalline’s Sierra Mojada Project. Such mineral resources have been
estimated in accordance with the definition standards on mineral resources of
the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI
43-101. Measured mineral resources, indicated mineral resources and inferred
mineral resources, while recognized and required by Canadian regulations, are
not defined terms under the SEC’s Industry Guide 7, and are normally not
permitted to be used in reports and registration statements filed with the
SEC.
However, the
summary of the Report is being included in this joint proxy statement and
prospectus pursuant to Instruction 3 to Paragraph (b)(5) of Industry Guide 7
that provides in part, “. . . where such estimates previously have been provided
to a person (or any of its affiliates) that is offering to acquire, merge or
consolidate with, the registrant or otherwise acquire the registrant’s
securities, such estimates may be included.”
46
Availability
of Full Report
The full text
of the Technical Report will be available on SEDAR at www.sedar.com on _____,
2010 under the reports and documents filed by Dome and is incorporated by
reference into this document for purposes of compliance with Canadian Securities
laws .
Cautionary
Note Regarding Mineral Resource Estimates
Investors are
cautioned not to assume that any part or all of the mineral resources in these
categories will ever be converted into mineral reserves. These terms
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. In particular, it should
be noted that mineral resources which are not mineral reserves do not have
demonstrated economic viability. It cannot be assumed that all or any
part of measured mineral resources, indicated mineral resources or inferred
mineral resources discussed in the news release and Report will ever be upgraded
to a higher category. In accordance with Canadian rules, estimates of
inferred mineral resources cannot form the basis of feasibility or other
economic studies. Investors are cautioned not to assume that any part
of the reported measured mineral resources, indicated mineral resources or
inferred mineral resources referred to in this document and in the Technical
Report are economically or legally mineable.
Executive
Summary of Sierra Mojada Project Technical Report
This is a
summary of the technical report (the “Report”) on the Sierra Mojada Project that
was prepared by Pincock Allen & Holt (“PAH”) for Metalline. The
Report discloses an inferred resource estimate for the Sierra Mojada project in
Coahuila State, Mexico. Metalline is not currently a publicly listed
company in Canada. After the completion of the merger, the parties
intend for Metalline to be a reporting company under the laws of certain
provinces in Canada, thereby subjecting Metalline’s disclosure of scientific or
technical information to Canadian National Instrument 43-101 (NI 43-101)
standards. The Report was prepared to meet NI 43-101 standards in
anticipation of the merger.
The Sierra
Mojada project site was visited between the dates of July 28 to August 2, 2009
by PAH personnel including J. Ross Conner, P. Geo., Principal Environmental
Geologist; Aaron McMahon, P.G., Senior Geologist; and Jeremy Clark (AIG), Senior
Geologist. Jeremy Clark also visited the Sierra Mojada site between
August 17 and 25, 2009. During the initial site visits, inspections
were made of the property, electronic data stored on site, the core collection,
handling and processing facilities as well as a tour of underground
workings. An additional PAH visit was made by Mr. Conner between the
dates of January 18 and 20, 2010.
Metalline has
purchased 15 mining concessions located at Sierra Mojada, Coahuila,
Mexico. It operates in Mexico through a wholly owned Mexican
subsidiary; Minera Metalin S.A. de C.V. All minerals in Mexico are
owned by the federal government and mineral rights are granted by soliciting
mining concessions which by law have priority over surface land
use. It is PAH’s understanding that all necessary agreements are in
place and that the mining and surface rights are in good standing for the
resource estimates presented in this Report.
47
The Sierra
Mojada project is located in west central Coahuila State in central northern
Mexico at 27˚21’ North Latitude, 103˚43’ West Longitude. Located
approximately 250 kilometers by road north of the major city of Torreon, access
is primarily by good paved road to the town of La Esmeralda and then a gravel
road for 1 kilometer to the site. The nearby townships of La
Esmeralda and Sierra Mojada have approximately 500 to 1,000 residents combined,
and have basic amenities including water and electricity.
Although
power levels are sufficient for current operations and exploration, any
development of the project would potentially require additional power
sources. The Comisión Federal de Electricidad
(English: Federal Electricity Commission) is the Mexican state-owned
electricity monopoly, widely known as CFE, which provides service to the
area. High voltage (13,400 v) power is available in the vicinity of
the head frame for the San Salvador shaft (500 KVA), the Encantada shaft (300
KVA), and the Metalline shop area (112.5 KVA).
History
Silver and
lead were first discovered by a foraging party in 1879, and mining to 1886
consisted of native silver, silver chloride, and lead
carbonate. After 1886 silver-lead-zinc-copper sulfate ores within
limestone and sandstone units were produced.
Approximately
90 years ago zinc silicate and zinc carbonate minerals were discovered
underlying the silver-lead mineralized horizon. Since discovery and
up to 1990 zinc, silver and lead ores were mined from various mines along the
strike of the deposit including from the Sierra Mojada property. Ores
mined from within these areas were hand sorted and the concentrate shipped
mostly to smelters in the United States.
Estimates
from 1931, by Hayward and Dickenson, puts production, along the mineralized
trend of which the Sierra Mojada property is a subset, at approximately 5
million short tons (all of the following will be short tons). That
compares with Shaw who in his 1922 AIME paper estimated that production to 1920
was 3 to 3.5 million tons of lead-silver ores; and 1.5 to 2 million tons of Ag
and Cu-Ag ores. Based on fragmented records, anecdotal evidence, and
stope volumes perhaps 900,000 tons of additional oxide zinc may have been mined
from red zinc and white zinc areas on the Sierra Mojada property. It
is assumed that there was significant production between 1920 and 1950 from the
district with the involvement of major international mining companies operating
small daily tonnage mines during that period.
Between 1996
and 2003 Metalline has been involved in several joint ventures to explore the
property the most recent of which, with Peñoles, was terminated in
2003. Metalline subsequently acquired 100% of the project and since
2003 Metalline has continued sampling numerous underground workings through
channel and grab samples. Surface and underground diamond drilling
has been completed and is still ongoing at the project site.
48
Geology
The Sierra
Mojada district is located within the Eastern Zone of Mexico’s three geologic
zones, defined by age and rocks types that are basements orogens (Campa and
Coney, 1983). Basement of the Eastern Zone is mostly heterogeneous
rocks of late Paleozoic age accreted to the Precambrian craton of North America
during the Appalachian-Ouchits-Marathon orogeny. Basement is
unconformably overlain by Middle Jurassic continental red beds and Cretaceous
marine carbonate rocks. The latter carbonate rocks host the mineral
deposits within the Sierra Mojada district.
The Sierra
Mojada district lies on the northeast leading edge of the Laramide thrust belt
and as a result has upright kink folds, broad domes and some low-angle faults
related to this compression. However steep normal and reverse faults
dominate the district and are related to the history of the Sabinas basin,
rather than the Laramide orogeny. The resulting geomorphology has a
distinct basin and range geometry and structure aligned northwest.
Several
authors have attempted to map the stratigraphic sequence of the district both at
surface and sub-surface; however, due to the structural complexities a detailed
understanding of the district statigraphy has yet to be
completed. Structural complexities appear to disrupt the continuity
and stratigraphy both along strike and vertically giving rise to the
difficulties in establishing the stratigraphic sequence in the
district.
Within the
property limits the difficulties are further enhanced by potential hydrothermal
overprinting and remobilization of minerals. Mineral dating has led
to the interpretation of the lithologies on the northern side of the Sierra
Mojada Fault as older, having given dates from Kimmeridigan through to the
Hauterivian/Barremian whereas the lithologies on the south side of the fault are
younger.
These dates
result in the interpretation that the lithologies found on either side of the
Sierra Mojada Fault form different parts of the carbonate cycle. Of
particular note is that the evaporites formed in the middle Cretaceous are
missing in the sequence in the district. The lack of these rocks
indicates they are probably dissolved or sheared out along a major decollment,
during Larmide thrusting. The thrusting, along with basin-bounding
faults, now brings Menchaca formation in contact (north side) with Aurora (south
side) formation. This effectively removes 200m and 25 million years
from the sequence. The San Marcos formation, which is clastic in
origin, usually forms part of this sequence, and has been noted in the field
within the district by several authors. Discussions with site
personnel and field observations lead to the interpretation that the “red beds”
overlying the north side mineralization are the San Marcos formation, however
PAH believes further investigation is warranted. Observations by PAH
in the field indicate that at least some of these “red beds” could be the
product of hydrothermal alteration and replacement of the limestone formations
and as a result do not form part of the stratigraphic sequence.
49
The
stratigraphic sequence remains a point of conjecture with both the district and
more specifically within the deposit. A detailed understanding of the
stratigraphy will enhance the structural reconstruction of the deposit as well
as enabling a genetic exploration model to be established.
The Sierra
Mojada deposit is very unique and does not easily lend itself to common deposit
type definitions. Both the zinc and silver mineralization bodies are
hosted in limestone/dolomite. Morphologically, these bodies are
mantos indicating broad stratal controls on mineralization. There
also appears to be some structural control on mineralization proximal to the
Sierra Mojada Fault. The Sierra Mojada deposit has a total absence of
high temperature mineral phases either in the deposit or as spatially and
temporally related peripheral alterations (Hodder, 2001). No evidence
of replacement of sulfide minerals by oxide minerals is found.
The deposits
are probably low temperature carbonate hosted deposits formed from basinal
brines. This interpretation differs from the high temperature
carbonate hosted deposits commonly found in Mexico, and in Arizona and New
Mexico in the United States.
Mineralization
The Sierra
Mojada deposit can be separated into three main mineralized
zones: the south side zinc zone, the north side silver zone, and the
mixed zone between these south and north zones. Generally, the south
and north zones are separated by the Sierra Mojada Fault, which strikes
east-west and dips to the north between 60 to 80o. Each
of the zones within the deposit is outlined below.
South
Side Mineralization
Mineralization within
the south side zinc zone commonly occurs in two forms, Iron Oxide Manto (Red
Zinc) and Smithsonite Manto (White Zinc). Both the Red Zinc and White
Zinc are zinc-rich, with lower concentrations of silver and lead
mineralization. Both the Red and White Zinc zones have similar
orientation which plunge towards 110o at
-30o.
The Red Zinc
zone has a known strike length of 2,400m and a thickness up to
100m. This zone appears to be parallel or semi-parallel to the
primary dolomitic host bedding, which dips to the south at approximately 15o. PAH
has interpreted a higher grade zone of semi-massive to massive hemimorphite
(minor smithsonite), within a halo of fracture fill and replacement lower grade
mineralization.
The White
Zinc zone commonly underlies the Red Zinc zone but on several occurrences lies
adjacent, possibly due to structural displacement. The White Zinc
zone is slightly higher in zinc grade than the Red Zinc zone, lower in lead and
higher in aluminum. Mineralogically the White Zinc zone differs from
the Red Zinc zone with much higher concentration of smithsonite and a lower
amount of hemimorphite.
For the
purpose of this resource estimate only the Red Zinc zone has been
included.
50
North
Side Mineralization
Mineralization within
the North Silver zone commonly occurs directly below and is conformable with the
contact of the red clay-rich rock, commonly referred to as the San Marcos
formation, and the underlying Limestone (Manchaca formation). The
origin of this contact is debatable, with one school of thought believing this
contact is an unconformity, while another believes this contact is a low angle
thrust fault. Mineralization ranges from a few meters thick up to 50
meters and appears to cross cut bedding, or at least has a markedly different
orientation. The parallel orientation of mineralization suggests the
overlying clay-rich layer potentially acts a confining layer for fluid
movement.
Mineralogy of
the north side differs from the south side with very little hemimorphite or
smithsonite present, and the common occurence of sulphides. Mineral
studies by Hodder, 2001 suggests sulfides, sulfosalts and sulfarsenide minerals
rich in copper and silver and poor in sulfur are present
locally. Sphalerite and galena occur but rarely and mostly as
secondary formations along fractures.
Mixed
Zone
Between the
North Silver zone and the Red Zinc zone on the north and south side of the
Sierra Mojada fault a mixed mineralized zone occurs, which contains relatively
high levels of silver and zinc. Commonly associated with this zone of
mineralization is copper occurring as mostly malachite and azurite.
Exploration
Exploration
has focused on the definition of the remaining zinc and silver
mineralization-bearing structures which have similar strike but differing
dips. Generally, the zinc and silver zones are separated by the
steeply dipping Sierra Mojada Fault, which strike east west has a variable dip
of 60 to 80o. The
Red Zinc zone lies on the southern side of the fault, dips to the south at
approximately 15o, and
plunges to the east at 30o. The
silver mineralization commonly lies on the northern side of fault, dips to the
north at approximately 30o and
plunges to the east at 30o. PAH
believes a mixed zone of zinc and silver can be found between the north side and
south zones, which commonly has copper associated.
The Sierra
Mojada project has accumulated an extensive amount of data through past years of
exploration which provide the background for the resource estimates and analysis
that underpin this Technical Report. The recommendations for further
development of the project are primarily concerned with confirming the existing
data and the acquisition of additional information to confirm the geological
interpretation and increase the level of confidence in the resource
estimate.
Current
exploration efforts consist of both surface and underground diamond drilling as
well as the continuation of mineralogical and structural
investigations.
51
QA/QC
Currently,
all resources for the Sierra Mojada deposit are classified as inferred despite
very high sampling density in many parts of the deposit. This is in
large part due to insufficient QA/QC procedures used in the past during sample
preparation and analysis. A robust QA/QC program provides a measure
of confidence in the analytical results returned from the lab. This
measure of confidence is currently lacking. Specific deficiencies
identified are as follows:
·
|
No
Twin Samples, Coarse Duplicates, Coarse Blanks, Pulp Duplicates, and Pulp
Blanks inserted into the sample
stream.
|
·
|
Infrequent
submission of Check Samples to a secondary
lab.
|
·
|
The
average grades and standard deviations of Standards submitted to the
primary lab are neither known nor
certified.
|
Metalline and
PAH are in the process of executing a re-sampling program. The aim of
this program is to provide the measure of confidence in the analytical results
that is currently lacking.
Data
Verification
Data
validation completed by PAH included a review of all available
information. This review included:
·
|
All
available driller’s reports, which typically recorded the hole ID, design
azimuth and dip, and any reflex down-hole
surveys.
|
·
|
Reconciliation
of assay data between the digital drill hole database and assay
certificates.
|
·
|
Reconciliation
of channel sample locations and underground
workings.
|
·
|
Comparison
of the driller’s reports to holes currently in the
database. This was completed to validate all holes in the
database and find “missing” and inconsistent
holes.
|
·
|
All
survey information including compilation of all collar coordinates, dip
and azimuth readings using the collar DH survey method, and all data
previously compiled by survey and engineer personnel. After
compilation of the data, comparisons to the current database were
conducted to determine potential errors in the
database.
|
·
|
Bulk
density data were reviewed by comparing hard copy sheets to the spread
sheet provided to PAH by site
personnel.
|
52
·
|
QA/QC
procedures were reviewed and all available data were verified in
hardcopy.
|
During this
review, several errors were noted by PAH. PAH was then involved in
investigating the source and mitigation of these errors. Following
the corrective actions taken by PAH and Metalline, the integrity of the digital
data appears to be sound. PAH believes that the analytical data have
sufficient accuracy to allow the calculation of resource estimates for the
Sierra Mojada deposit.
Resource
Statement
The geologic
three dimensional resource model was constructed by PAH at its offices in
Denver, in September 2009. All resources stated in this Report are
classified as inferred and are represented in Table 1-1, Inferred Resource
Estimate for the Sierra Mojada Deposit.
The resources
are reported at a variety of cut off grades; however, PAH currently recommends
60 g/t silver as the cut off for the North Side mineralization, while 6 percent
zinc is recommended as the cutoff for the South Side
mineralization.
TABLE 1-1
Metalline Mining Company
Technical Report, Sierra Mojada Project
Inferred Resource Estimate for the Sierra Mojada Deposit
Domain |
Cut Off
Element
|
Cut Off
Grade
|
Tonnes
(,000's)
|
Silver g/t |
Silver Ounces
(,000's)
|
Zinc % |
Zinc
Tonnes
(,000's)
|
North |
Ag |
60 g/t |
28,422 |
149 |
136,346 |
2.67 |
758 |
Red Zinc |
Zn |
6% |
20,405 |
23 |
15,242 |
10.59 |
2,160 |
Conclusions
The Sierra
Mojada project is an advanced project with 553 drill holes totaling 78,081
meters of sampling drilled into two different mineralized
areas. Historical production has occurred within project limits, with
total production estimated to be approximately 10 million short tons over the
past 100 years.
·
|
The
available geological data (drilling, surveys, assays, density, lithology,
etc.) for the Sierra Mojada deposit are of sufficient quality and quantity
to estimate mineral resources for the
property.
|
·
|
PAH
has generated a resource estimate for the North Side and Red Zinc zones of
the Sierra Mojada Deposit.
|
·
|
Currently,
all resources for the Sierra Mojada deposit are classified as inferred
despite very high sampling density in many parts of the
deposit. This is in large part due to insufficient QA/QC
procedures used in the past during sample preparation and
analysis. A robust QA/QC program provides a measure of
confidence in the analytical results returned from the
lab. This measure of confidence is currently lacking, but is in
the process of being improved.
|
·
|
The
resource estimate is limited by concession boundaries particularly on the
Western side of the property. The current estimate excludes any
material that does not fall inside Metalline’s concession
boundaries.
|
53
·
|
The
resource estimate is limited by unknown underground
workings. There are large areas at Sierra Mojada where
Metalline believes underground workings exist, but have not been
surveyed. The current estimate excludes any material from these
areas.
|
Recommendations
Re-sampling
Program
Currently,
all resources for the Sierra Mojada deposit are classified as inferred despite
very high sampling density in many parts of the deposit.
Core halves,
coarse rejects and pulps covering the core drilling and channel sampling
campaigns dating back to 1998 are stored at the site. The author
recommended re-sampling, preparing and analyzing a significant percentage of
this material under a robust QA/QC program. Analysis of the QA/QC
data and a comparison of the old and new assay results will then provide a
measure of confidence for the sample data used to estimate resources at Sierra
Mojada. This exercise will provide an opportunity to re-assess the
current resource classification scheme and potentially upgrade a portion of the
inferred resources to a higher level of confidence.
Metalline and
the author are in the process of executing this re-sampling
program. The estimated costs for this program are
US$76,000.
Exploration
Drill Program
With regard
to the North Side Silver resource, further surface exploration appears
warranted. A surface drill program designed to better delineate the
mineralization as well as provide better geological information into the
continued development of the resource model is recommended.
The current
resource model has significant zones, particularly in the western area of the
North Side silver resource, with only sparse sampling supporting the projection
of the geological model. A program of surface drilling should be
undertaken to delineate the resource boundaries in this
area. Delineation of the resource boundaries in the western end of
the deposit should then be followed up with infill drilling directed toward
increasing the confidence level in the current resource estimate.
PAH
recommends an initial Phase 1 drilling program of 32 holes comprising 4,200
meters of drilling at an estimated cost of $150/meter all inclusive, for a total
initial drilling cost of $630,000.
54
Surface
and Underground Mapping / Surveying
There is
considerable debate over the genesis of the Sierra Mojada deposits and further
mapping of both underground and surface features is recommended. This
work will assist in the understanding of the deposit and aid in the use of the
geological model for resource estimation.
PAH
anticipates that an initial mapping program will take approximately 5 months to
complete at a cost of $50,000.
Metalline
Mining Delaware, Inc.
Merger Sub, a
wholly owned subsidiary of Metalline, is a Delaware corporation that was formed
on December 3, 2009 for the purpose of effecting the merger. In the
merger, Merger Sub will be merged with and into Dome, with Dome surviving as a
wholly owned subsidiary of Metalline.
Dome
Ventures Corporation
Dome
Ventures Corporation
Suite
2200, 885 West Georgia Street
Vancouver,
BC V6C 3E8
Telephone: (604)
687-5800
Description
of Dome’s Business
Background
and Corporate Structure
Dome Ventures
Corp. (“Dome”) was incorporated in Canada and domesticated to the United States
on December 16, 1999. Dome’s permanent establishment is in British
Columbia, Canada and its head and registered office is at Suite 2200 - 885 West
Georgia Street, Vancouver, BC, V6C 3E8. Dome’s principal business
activities are the acquisition and exploration of mineral properties domiciled
in Gabon, Africa. Dome is in the exploration stage and has not yet
determined whether any of its mineral properties contain ore reserves that are
economically recoverable. Dome conducts its operations through its
wholly owned subsidiaries identified in the following chart:
55
Dome is
listed on the TSX Venture Exchange (trading
symbol: DV.U).
Background
In November
2006, Dome was granted the Mitzic exploration license covering 10,910 square
kilometres in Gabon. In July of 2008, after two years of aggressive
fieldwork Dome converted three areas of its 12,800 square kilometres Mitzic
“prospection” permit into three exploration licenses, the Mitzic license, the
Mevang license and the Ndjole license, each covering an area of 2,000 square
kilometres.
As of January
25, 2010, Dome had one full time employee and also utilizes consultants and
advisors with respect to its business operations.
Description
of Exploration Licenses
The Mitzic
license, the Mevang license and the Ndjole license allow Dome to explore 6,000
square kilometres approximately 150 km east of Libreville, the capital of
Gabon. Dome may employ sub-surface exploration methods, such as
drilling and trial mining to look for potential gold, iron and manganese
projects. These licenses are valid for three years, are transferable
and are renewable twice for three year periods.
Ndjole and Mevang Joint
Venture Agreement
On October
29, 2009, Dome entered into a joint venture agreement with AngloGold Ashanti
with respect to the Ndjole and Mevang licenses. Under the terms of
the joint venture agreement, AngloGold Ashanti has earned a 20% interest by
paying to Dome $400,000 on signing of the joint venture
agreement. AngloGold Ashanti can earn an additional 40% interest by
paying Dome $100,000 per year over the next three years and by incurring
exploration expenditures under the Ndjole and Mevang licenses in the amount of
$3.7 million over the next three years at the rate of $1 million in the first
year, $1.2 million in the second year and $1.5 million in the third
year.
Should
AngloGold Ashanti fail to perform its funding obligations, a 100% interest in
the Ndjole and Mevang licenses shall revert to Dome and the joint venture will
terminate. AngloGold Ashanti shall be entitled to withdraw from the
joint venture without penalty at any time after it has spent $1 million on
exploration expenditures. AngloGold Ashanti can earn an additional
10% interest (70% total) by spending $5 million on exploration expenditures
within two years of earning into a 60% interest as set out above. If
the parties reach a 70/30 joint venture under the terms of the joint venture
agreement, if Dome elects not to contribute to work programs and budgets,
AngloGold Ashanti can elect to earn an additional 15% interest (85% total) by
carrying the project to a completed pre-feasibility study.
Joint venture
dilution provisions apply and if Dome’s interest in the joint venture is diluted
to 5% or less due to lack of contribution to exploration budgets, its interests
will be converted to a 2% net smelter return which can be purchased at appraised
value 14 months after commencement of commercial production.
56
Ogooue Joint Venture
Agreement
AngloGold
Ashanti has acquired a reconnaissance license over an area comprising 8,295
square kilometers in Gabon, West Africa, for its gold potential. In
October 2009, Dome and AngloGold Ashanti entered into a joint venture agreement
establishing an joint venture in which AngloGold Ashanti holds an 80% interest
and Dome holds a 20% interest. Dome was instrumental in identifying
the ground covered by the licensee and assisting with the application. AngloGold Ashanti has
agreed pursuant to the joint venture agreement to spend a minimum of $100,000 on
exploration and will fund the first $3 million of exploration expenditures,
after which the parties will contribute on an 80/20 basis. Should
AngloGold Ashanti not meet its funding obligation, the license will be assigned
to Dome. Joint venture dilution provisions apply and if Dome’s
interest in the joint venture is diluted to 5% or less due to lack of
contribution to exploration budgets, its interests will be converted to a 2% net
smelter return which can be purchased at an appraised value 14 months after
commencement of commercial production.
Dome’s
Strategy
Dome’s recent
execution of the Ndjole and Mevang joint venture agreement and the Ogooue joint
venture agreement each with AngloGold Ashanti Limited, one of the world's
biggest gold mining companies, advanced Dome’s strategy of performing
professional and efficient exploration work to attract a world class and
experienced mining company to partner with Dome and further advance exploration
under Dome’s licenses. Under the terms of these two joint venture
agreements, AngloGold Ashanti will spend a total of US $6.7 million prior to
Dome being asked to contribute to the joint ventures.
Dome’s third
exploration license in Gabon, the Mitzic license, is prospective primarily for
iron ore and while no direct exploration expenses are planned at this time, Dome
plans to group this license with other exploration licenses which are proposed
to be applied for prospective for iron ore to form a property package which
could be offered to international iron ore companies.
Dome’s
current strategy is to monitor the progress of its partner AngloGold Ashanti and
move its Mitzic license forward through a joint venture with a major mining
company.
57
Recent
Developments – The Merger Agreement
On December
4, 2009, Dome entered into the Merger Agreement whereby it agreed with
Metalline, subject to the conditions therein, that it would merge with and into
Merger Sub, becoming a wholly-owed subsidiary of Metalline. See
“The Merger and the Merger
Agreement” above. If the merger with Metalline is completed,
certain members of Dome’s management will be focused on advancing work programs
to be carried out at Metalline’s Sierra Mojada project.
Recent
Developments – Issuance of Special Warrants
On January
11, 2010, Dome completed a brokered placement of special warrants at a price of
US$0.45 per special warrant for gross proceeds of US$13,010,000. Each
special warrant will be automatically converted, without additional
consideration, to one share of common stock of Dome upon the satisfaction of the
Release Conditions (as described below).
The Release
Conditions are (i) the approval of the NYSE Amex to list the shares of Metalline
common stock to be issued as part of the merger and the approval of the TSX
Venture Exchange to the merger of Dome and Metalline, (ii) the US registration
statement of Metalline registering the issuance of the shares of Metalline to
the holders of Dome shares having been declared effective; and (iii) Dome having
confirmed that all the conditions to the merger, including the requisite
approval of the shareholders of both Dome and Metalline, have been satisfied or
waived.
If the
Release Conditions are not satisfied by July 10, 2010, then the proceeds of the
offering of special warrants, plus any interest and less any withholding taxes,
will be repaid to the holders of the special warrants.
The gross
proceeds from the sale of the special warrants are being held in escrow subject
to the satisfaction of the Release Conditions. Upon satisfaction of
the Release Conditions and the completion of the previously announced merger of
Dome and Metalline, the net proceeds from the Offering will be used for
exploration and development at Metalline’s Sierra Mojada project and for general
working capital.
The
completion of the private placement of special warrants satisfied one of the
conditions to the merger.
Auditor
The auditor
of Dome is Manning Elliott LLP. Manning Elliott LLP was first
appointed the auditor of Dome in 2002.
Market
Information
The Dome
shares are listed and posted for trading on the TSX-V under the symbol
“DV.U”. The following table sets out the market price range of the
Dome shares on the TSX-V for the periods indicated.
|
|
|
|
|
|
|
Jan. 1,
2009 - Jan. 27, 2009
|
|
$ |
0.60 |
|
|
$ |
0.69 |
|
Oct. 2009
– Dec. 2009
|
|
|
0.15 |
|
|
|
0.72 |
|
July
2009 – Sept. 2009
|
|
|
0.14 |
|
|
|
0.17 |
|
April
2009 – June 2009
|
|
|
0.16 |
|
|
|
0.20 |
|
Jan. 2009
– March 2009
|
|
|
0.13 |
|
|
|
0.21 |
|
Oct. 2008
– Dec. 2008
|
|
|
0.11 |
|
|
|
0.33 |
|
July
2008 – Sept. 2008
|
|
|
0.31 |
|
|
|
0.63 |
|
April
2008 – June 2008
|
|
|
0.37 |
|
|
|
0.75 |
|
Jan. 2008
– March 2008
|
|
|
0.38 |
|
|
|
0.51 |
|
Source: http://ca.finance.yahoo.com
58
Holders
As of January
22, 2010, Dome’s transfer agent reported that there were approximately 18
registered holders of shares of Dome common stock. The vast majority
of shares of Dome common stock are registered in the name of CDS, which acts as
a nominee for many brokerage firms.
Dividends
Dome has not
declared or paid any dividends on its common shares since the date of its
incorporation. Dome does not expect to pay dividends or to make any
other distributions in the near future.
Equity
Compensation Plans
Under Dome’s
February 3, 2004 stock option plan, which was approved, ratified and confirmed
at its 2009 annual general meeting held on March 11, 2009, Dome may grant
options to its directors, officers, employees or a company that is wholly-owned
by a director, senior officer or employee, a consultant or a consultant
company. Under Dome’s plan, options granted will total no more than
10% of the issued and outstanding common shares at any time. The
per-share exercise price of each option granted will be the current market price
of a common share, unless set otherwise by Dome at the time of the grant, but
will not be less than the discounted market price of a common
share. Options will vest as of the grant date, unless set otherwise
by Dome at the time of the grant. Each option's maximum term is five
years.
Equity
Compensation Plan Information as at September 30,
2009
|
|
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
(a)
|
|
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
Equity
compensation plans approved by security holders
|
|
|
1,550,000 |
|
|
$ |
0.11 |
|
|
|
319,951 |
|
Equity
compensation plans not approved by security holders
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total
|
|
|
1,550,000 |
|
|
$ |
0.11 |
|
|
|
319,951 |
|
59
Accounting
and Financial Disclosure
During Dome’s
last two fiscal years, there has not been any material disagreement between Dome
and its accountants on any matter regarding accounting or financial
disclosure.
Dome
Management’s Discussion and Analysis of Results of Operations Financial
Conditions for the Year Ended September 30, 2009
(AMOUNTS
IN US DOLLARS UNLESS OTHERWISE INDICATED)
The following
discussion and analysis of the results of operations and financial condition
(“MD&A”) for Dome Ventures Corporation (“Dome” or the “Company”) should be
read in conjunction with the audited consolidated financial statements for the
year ended September 30, 2009 and related notes thereto and in conjunction with
year-end audited financial statements of September 30, 2008. The
financial information in this MD&A is derived from Dome's year-end
consolidated financial statements prepared in accordance with Canadian generally
accepted accounting principles. The effective date of this MD&A
is December 7, 2009.
Forward
Looking Statements
Certain
statements contained in the following Management’s Discussion and Analysis and
elsewhere constitute forward-looking statements. Such forward-looking
statements involve a number of known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of Dome
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date the statements were made, and readers are advised to
consider such forward-looking statements in light of risks set
below.
Business
of Dome
Dome Ventures
Corporation is a publicly traded mineral exploration company listed on the TSX
Venture Exchange (trading symbol: DV.U) that currently is conducting mineral
exploration activities in Gabon, West Africa.
Overall
Performance and Results Of Operations
Dome had a
net loss of $4,137 from operations for the three months ended September 30, 2009
compared to a net loss of $445,590 from operations for the three months ended
September 30, 2008. The loss for the quarter ended September 30, 2009
stems largely from exploration and project investigation costs of
$115,441. The loss for the quarter ended September 30, 2008 stems
largely from exploration and project investigation costs of
$308,132.
60
Dome had a
net loss of $1,214,377 from operations for the year ended September 30, 2009
compared to a net loss of $2,080,184 from operations for the year ended
September 30, 2008. The loss for the year ended September 30, 2009
stems largely from exploration and project investigation costs of $539,926 and
of wages and benefits of $193,596. For the year ended September 30,
2008 the loss largely stems from exploration and project investigation costs of
$1,542,101.
During the
three months ended September 30, 2009, regulatory fees were $3,278 (2008 -
$4,264) with the decrease partially due to reduced payments made to the transfer
agent; management fees were $17,617 (2008 - $16,396); rent was $8,100 (2008 -
$8,100); wages and benefits were $24,286 (2008 – $63,254). The
decrease in wages and benefits is mainly due to the president not receiving a
salary for two months. This amount has not been
accrued. Stock-based compensation expense was $13,939 (2008 –
$(1,842)) with the increase due to vesting of options calculation.
The balance
of expenses for the three months ended September 30, 2009 includes exploration
costs of $115,441 (2008 - $308,132) with the decrease mainly due to less field
expenses and labor incurred in the field; office and miscellaneous of $8,965
(2008 - $142); professional and consulting fees of $Nil (2008 – ($38,828) with
decrease related to Dome’s audit; and travel and entertainment of $Nil (2008 –
$7,047).
During the
year ended September 30, 2009, regulatory fees were $26,007 (2008 - $33,952)
with the decrease partially due to reduced payments made to the transfer agent;
management fees were $67,686 (2008 - $68,054); rent was $32,400 (2008 -
$32,400); wages and benefits were $193,596 (2008 – $265,397). The
decrease in wages and benefits is partially due to decreased staff costs and the
president not receiving a salary for two months. Stock-based
compensation expense was $113,145 (2008 - $17,847) with the increase due to the
vesting of options during the year ended September 30, 2009.
The balance
of expenses for the year ended September 30, 2009 includes exploration costs of
$539,926 (2008 - $1,542,101) with the decrease mainly due to less field expenses
and labor incurred in the field; office and miscellaneous of $45,404 (2008 -
$45,060); professional and consulting fees of $47,854 (2008 - $26,977) with
increase related to Dome’s audit; and travel and entertainment of $9,788 (2008 –
$11,334) with the decrease due to reduce travel in seeking other potential
exploration investments for Dome.
Exploration
Overview
Prior to the
signing of the joint venture agreement with AngloGold Ashanti on 30 October
2009, all of Dome’s field programs were on hold and the licenses were
effectively in care and maintenance. The deal with AngloGold Ashanti includes
Dome’s Ndjole and Mevang exploration Licenses and AngloGold Ashanti’s Ogooue
prospection permit and totals over 12,000 square kilometers in
area. Dome will be the initial operator for the Ndjole and Mevang
licenses, and Anglo Gold Ashanti staff will run the field operations on the
Ogooue permit, which is scheduled to start in early 2010. Fieldwork
is currently underway on Dome’s Ndjole license as outlined below.
61
Figure
1. Outline of the Licenses that are part of the Dome-AngloGold Ashanti
deal.
Summary
of the Ndjole and Mevang Exploration Program
A work
program designed for the Ndjole and Mevang explorations licenses was put into
action at the beginning of November 2009 and focuses on three projects
previously identified during Dome’s 2007 and 2008 field seasons and are shown
below in figure 2. For the remainder of 2009 work will focus on the
La Mboumi project and will extend to the Mianga and Ebel projects in
2010.
Figure
2. Location of the projects within Dome's Ndjole and Mevang
Licenses.
62
Ndjole
Licence Exploration Plan
Three
controls for the gold mineralization seen in the La Mboumi area are
observed:
1)
|
Gold
is controlled by a series of prominent NE-SW trending structures in the
area. Typical structural traps such as jogs and structural
bends, and hanging walls of any steep thrust component will be the main
targets;
|
2)
|
Gold
is controlled by graphitic-quartzite package which form topographic highs
in the area. Favorable gold traps will most likely be found the
hinges of folds where the competency difference between the graphite and
quartzite units will be most
exaggerated;
|
3)
|
Gold
is controlled by intersections of the NE-SW trending structures and the
graphitic-quartzite unit.
|
Three soil
grids totaling over 7500 samples have been designed to test areas considered
favorable for the theories described above and is shown below in Figure
3. In addition to the soil sampling program, geologists continue to
map along the road cuts and rivers to better constrain the geology and
mineralization in the area.
To date the
LaMboumi soil grid 3 was completed on 24 November and totalled over 2600
samples. These are currently being prepared to be sent for analysis
at ALS Laboratories in Vancouver. Work on La Mboumi soil grid 2 is
scheduled to start on 1 December and is planned to be completed before 15
December 2009.
Figure
3. Location of the La Mboumi soil grids.
Subject to
favorable results, the next step after this program will involve augering,
trenching, geophysics and eventually drilling.
Mevang
Licence Exploration Plan
The planned
work plan for the Mevang license focuses on the Mianga Project and is expected
to commence in early 2010.
63
An anomalous
gold area was highlighted with the Mianga soil grid and is coincident with a
very strong VTEM geophysics anomaly. The anomalous area falls within
the basal unit of the Ogooue Supergroup, Proterozoic in age, and at the thrust
front of the Archean-Proterozoic contact. Gold mineralization is
suspected to be controlled along steepening thrust faults or within other
typical structural traps common to thrust regimes, or possibly, though less
likely, within lithologies such as conglomerates at the base of the sediments –
these are mentioned in texts but have not yet been seen in the
field.
The initial
exploration program will consist of mapping and hard rock sampling to better
understand the structure and style of mineralization. The steep
nature of the relief and high erosion in the area means exploration personnel
are likely to find fresh outcrop to sample and map.
The following
table summarizes exploration costs in Gabon and other areas by type of
costs:
By
type of cost
|
|
Additions
Q1 ending Dec 31, 2008 - Gabon
|
|
|
Additions
Q2 ending March 31, 2009 - Gabon
|
|
|
Additions
Q3 ending June 30, 2009 - Gabon
|
|
|
Additions
Q4 ending Sept. 30, 2009 - Gabon
|
|
|
Additions
Q4 ending Sept. 30, 2009 – Others
|
|
|
Balance
accumulated at
Sept
30, 2009- Gabon
|
|
|
Balance
accumulated at
Sept
30, 2009- Others
|
|
|
Total
accumulated as at
Sept. 30,
2009
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
Camp
and housing rental
|
|
|
4,489 |
|
|
|
10,200 |
|
|
|
3,888 |
|
|
|
1,391 |
|
|
|
-0- |
|
|
|
127,425 |
|
|
|
-0- |
|
|
|
127,425 |
|
Field
supplies, equipment and labour
|
|
|
63,201 |
|
|
|
30,797 |
|
|
|
13,821 |
|
|
|
11,982 |
|
|
|
-0- |
|
|
|
673,849 |
|
|
|
21,185 |
|
|
|
695,034 |
|
Field
transportation
|
|
|
12,577 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
6,008 |
|
|
|
-0- |
|
|
|
264,096 |
|
|
|
-0- |
|
|
|
264,096 |
|
Consulting
fees
|
|
|
-0- |
|
|
|
26,410 |
|
|
|
37,346 |
|
|
|
-0- |
|
|
|
8,552 |
|
|
|
108,874 |
|
|
|
24,494 |
|
|
|
133,368 |
|
Geological,
Geophysical & Geochemical
|
|
|
98,177 |
|
|
|
39,975 |
|
|
|
13,129 |
|
|
|
-0- |
|
|
|
14,300 |
|
|
|
964,198 |
|
|
|
26,681 |
|
|
|
990,879 |
|
Maps,
reports, survey and sampling costs
|
|
|
15,237 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
521,188 |
|
|
|
-0- |
|
|
|
521,188 |
|
Office
and miscellaneous
|
|
|
10,744 |
|
|
|
6,007 |
|
|
|
4,605 |
|
|
|
52,729 |
|
|
|
-0- |
|
|
|
92,338 |
|
|
|
-0- |
|
|
|
92,338 |
|
Transportation,
travel & accommodations
|
|
|
11,475 |
|
|
|
16,732 |
|
|
|
5,675 |
|
|
|
-0- |
|
|
|
20,477 |
|
|
|
323,373 |
|
|
|
130,675 |
|
|
|
454,048 |
|
Total
|
|
|
215,900 |
|
|
|
130,121 |
|
|
|
78,464 |
|
|
|
72,110 |
|
|
|
43,329 |
|
|
|
3,075,341 |
|
|
|
203,035 |
|
|
|
3,278,376 |
|
By
type of cost
|
|
Balance
accumulated at
Sept
30, 2007- Gabon
|
|
|
Balance
accumulated at
Sept
30, 2007 - Others
|
|
|
Total
accumulated as at
Sept
30, 2007
|
|
|
Additions
for 2008 – as at
Sept. 30,
2008 – Gabon
|
|
|
Additions
for 2008 – as at
Sept. 30,
2008 – Others
|
|
|
Balance
accumulated at
Sept
30, 2008- Gabon
|
|
|
Balance
accumulated at
Sept
30, 2008- Others
|
|
|
Total
accumulated as at
September
30, 2008
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
Camp
and housing rental
|
|
|
34,307 |
|
|
|
-0- |
|
|
|
34,307 |
|
|
|
73,150 |
|
|
|
-0- |
|
|
|
107,457 |
|
|
|
-0- |
|
|
|
107,457 |
|
Field
supplies, equipment and labour
|
|
|
329,851 |
|
|
|
21,185 |
|
|
|
351,036 |
|
|
|
224,197 |
|
|
|
-0- |
|
|
|
554,048 |
|
|
|
21,185 |
|
|
|
575,233 |
|
Field
transportation
|
|
|
146,691 |
|
|
|
-0- |
|
|
|
146,691 |
|
|
|
98,820 |
|
|
|
-0- |
|
|
|
245,511 |
|
|
|
-0- |
|
|
|
245,511 |
|
Consulting
fees
|
|
|
34,610 |
|
|
|
15,942 |
|
|
|
50,552 |
|
|
|
10,508 |
|
|
|
-0- |
|
|
|
45,118 |
|
|
|
15,942 |
|
|
|
61,060 |
|
Geological,
Geophysical & Geochemical
|
|
|
332,289 |
|
|
|
-0- |
|
|
|
332,289 |
|
|
|
480,628 |
|
|
|
12,381 |
|
|
|
812,917 |
|
|
|
12,381 |
|
|
|
825,298 |
|
Maps,
reports, survey and sampling costs
|
|
|
62,002 |
|
|
|
-0- |
|
|
|
62,002 |
|
|
|
443,949 |
|
|
|
-0- |
|
|
|
505,951 |
|
|
|
-0- |
|
|
|
505,951 |
|
Office
and miscellaneous
|
|
|
11,862 |
|
|
|
-0- |
|
|
|
11,862 |
|
|
|
6,391 |
|
|
|
-0- |
|
|
|
18,253 |
|
|
|
-0- |
|
|
|
18,253 |
|
Transportation,
travel & accommodations
|
|
|
140,659 |
|
|
|
66,953 |
|
|
|
207,612 |
|
|
|
148,832 |
|
|
|
43,245 |
|
|
|
289,491 |
|
|
|
110,198 |
|
|
|
399,689 |
|
Total
|
|
|
1,092,271 |
|
|
|
104,080 |
|
|
|
1,196,351 |
|
|
|
1,486,475 |
|
|
|
55,626 |
|
|
|
2,578,746 |
|
|
|
159,706 |
|
|
|
2,738,452 |
|
64
Qualified
Person
Timothy
Barry, a director of Dome and its registered geologist (MAusIMM), is a Qualified
Person as defined by National Instrument 43-101 and has reviewed and approved
the exploration and technical disclosure in this MD&A.
Selected
Annual Information
|
|
Fiscal
Year Ended September 30
(Audited)
|
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
|
$
(Restated)
|
|
|
$
(Restated)
|
|
|
$
|
|
Interest
income
|
|
185,961 |
|
|
140,819 |
|
|
25,070 |
|
Gain
on sale of subsidiary
|
|
448,594 |
|
|
-0- |
|
|
-0- |
|
Net
income (loss)
|