metalline_s4.htm


As filed with the U.S. Securities and Exchange Commission on March 5, 2010
Registration No. 333-164592
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form S-4/A No. 1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
METALLINE MINING COMPANY
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Nevada
 
1000
 
91-1766677
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification No.)
 
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)
 
Copy to:
 
Theresa M. Mehringer, Esq.
Burns, Figa & Will, P.C.
6400 S. Fiddlers Green Circle, Suite 1000
Greenwood Village, Colorado  80111
USA
 
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):
 
 
 
 
 
 
 
 
Large accelerated filer o
 
 Accelerated filer o
 
Non-accelerated filer o
(Do not check if a smaller reporting company)
 
Smaller reporting company þ
 
 
 
 
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
Amount to Be Registered
Proposed Maximum Offering Price Per Unit
Proposed Maximum Aggregate Offering Price (3)
Amount of Registration Fee
Common stock, par value $0.01 per share
47,724,561(1)
$0.64(2)
$30,543,719(3)
$2,178 (4)

(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 Registration Fee was paid with the original filing.


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.
 
 
 
 
i

 
 

 

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.

March ____, 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 March 9, 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.
 
 
ii


    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.
 
Sincerely,
 
 
 
Merlin Bingham
 
Brian D. Edgar
Chairman and President
 
President, Chief Executive Officer and Director
Metalline Mining Company
 
Dome Ventures Corporation

    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 March 10, 2010 and is first being mailed to the respective stockholders of Metalline and Dome on or about March 12, 2010.
 
 
 
 
 
iii
 
 

 

ABOUT THIS DOCUMENT

      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. 333-164592), 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.
 
 
 
 
 
 
 
 
iv
 
 

 

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 April 15, 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 the offices of Metalline’s counsel, Burns Figa & Will, P.C., at 6400 S. Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111 on April 15, 2010, at 10:00 a.m. Mountain Time for the following purposes:
 
·     
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;

·     
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 approve and adopt the Metalline 2010 Stock Option and Stock Bonus Plan;

·     
to vote on the election of the slate of director nominees; and

·     
to ratify the appointment of Hein & Associates LLP as our independent registered public accounting firm.
 
    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 March 9, 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.
 
 
v

    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 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
March 10, 2010
 
 
 
 
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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 April 14, 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 April 14, 2010, at 10:00 a.m. Pacific Time for the following purposes:
 
·     
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

·     
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.
 
    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 March 9, 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.
 
 
 
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    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
March 10, 2010
 
 
 
 
 
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ADDITIONAL INFORMATION
   
    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
Dome Ventures Corporation
1330 E. Margaret Ave
Suite 2200, 885 West Georgia Street
Coeur d’Alene, ID  83815
Vancouver, BC  V6C 3E8
(208) 665-2002
(604) 687-5800
Attn:  Investor Relations
Attn:  Investor Relations
   
    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.
 
    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 ___.
 
 

 ix

 
 

 
 
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 March 10, 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.
 
 

 
 
 
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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
  Reporting Currencies and Accounting Principles  9
  Exchange Rates  9
  The Companies  10
  Comparative Per Share Market Information  11
  Share Ownership of Management  11
  Past Material Contacts, Transactions, or Negotiations  12
  The Merger and the Merger Agreement  12
  The Metalline Special Meeting  17
  The Dome Special Meeting  20
  Selected Historical Consolidated Financial Data  22
  Certain Historical and Pro Forma Per Share Data  23
COMPARISON OF RIGHTS OF DOME STOCKHOLDERS AND METALLINE STOCKHOLDERS  25
  Authorized Capital  25
  Number and Election of Directors  25
  Removal of Directors  26
  Filling Vacancies on the Board of Directors  26
  Stockholder Meetings and Provisions for Notices; Proxies  27
  Quorum and Voting by Stockholders  27
  Stockholder Action Without a Meeting  28
  Amendment of Certificate or Articles of Incorporation  28
  Amendment of Bylaws  29
  Anti-Takeover Statutes  29
  Limitation of Liability and Indemnification of Directors and Officers  31
  Appraisal/Dissenter’s Rights  32
NO APPRAISAL RIGHTS  33
  Metalline  33
  Dome  33
EXPERTS  34
  Technical Reports  34
  Independent Accounting Firms  34
  Interests of Experts 34
RISK FACTORS  35
  Risk Factors Relating to the Merger  35
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS  39
 
xi
 

 
 
 
THE COMPANIES  41
  Metalline Mining Company  41
  Sierra Mojada Project Technical Report  45
  Executive Summary of Sierra Mojada Project Technical Report  46
  Metalline Mining Delaware, Inc.  53
  Dome Ventures Corporation  54
  Description of Dome’s Business  54
  Dome Management’s Discussion and Analysis of Results of Operations Financial Conditions for the Year Ended September 30, 2009  59
  Dome Management’s Discussion and Analysis of Results of Operations Financial Conditions for the Quarter Ended December 31, 2009 72
INFORMATION WITH RESPECT TO CONTINUING DIRECTORS AND OFFICERS  82
PRO FORMA  91
  Metalline and Dome’s Unaudited Pro Forma Condensed Combined Financial Information  91
  Material Changes  102
THE METALLINE SPECIAL MEETING IN LIEU OF AN ANNUAL MEETING  103
  Date, Time and Place  103
  Purpose of the Metalline Special Meeting  103
  Recommendation of the Board of Directors of Metalline  103
  Metalline Record Date; Stock Entitled to Vote  104
  Voting by Metalline’s Directors and Executive Officers  104
  Quorum  104
  Required Vote  105
  Failure to Vote and Broker Non-Votes  105
  Abstentions  105
  Record Holders  106
  Shares Held in Street Name  106
  Changing Your Vote  106
  Solicitation of Proxies  107
  Confidential Voting  107
THE DOME SPECIAL MEETING  108
  Date, Time and Place  109
  Purpose of the Special Meeting  109
  Recommendation of the Board of Directors of Dome  108
  Dome Record Date; Stock Entitled to Vote  108
  Voting by Dome’s Directors and Executive Officers  109
  Quorum  110
  Required Vote  110
  Failure to Vote and Broker Non-Votes  110
  Abstentions  110
  Record Holders  110
  Appointment of Proxies  111
  Deadline for Receipt of Proxies  111
  Shares Held in Street Name  111
  Changing Your Vote  112
  Voting of Proxies  112
  Solicitation of Proxies  113
  Confidential Voting  113
 
 
xii

 
 
THE MERGER PROPOSAL  114
  Effects of the Merger  114
  Background of the Merger  114
  Recommendation of the Board of Directors of Metalline; Metalline’s Reasons for the Merger  116
  Recommendation of the Board of Directors of Dome; Dome’s Reasons for the Merger  118
  Severance Benefits Under Employment Agreements  121
  Financial Interests of Dome Directors and Officers in the Merger  121
  Positions with the Combined Company  121
  Director and Officer Indemnification and Insurance  121
  Board of Directors and Management After the Merger  121
  Material U.S. Federal Income Tax Consequences of the Merger  121
  U.S. Information Reporting  123
  Accounting Treatment of the Merger  123
  Material Canadian Federal Income Tax Consequences of the Merger  124
  Description of Metalline’s Capital Stock  130
  Exchange of Shares in the Merger  131
  Treatment of Stock Options  131
  Listing of Metalline Common Stock  132
  De-Listing and Deregistration of Dome Stock  132
  No Appraisal Rights  132
  Restrictions on Sales of Shares by Certain Affiliates  132
  Voting Agreements  132
  Summary of the Merger Agreement  125
  Terms of the Merger; Merger Consideration  134
  Completion of the Merger  134
  Representations and Warranties  134
  Conduct of Business  135
  No Solicitation of Alternative Proposals  136
  Changes in Board Recommendations  137
  Efforts to Obtain Required Stockholder Votes  138
  Efforts to Complete the Merger  138
  Governance  138
  Headquarters  139
  Other Covenants and Agreements  139
  Conditions to Completion of the Merger   140
  Termination of the Merger Agreement  141
  Expenses and Termination Fees; Liability for Breach  142
  Amendments, Extensions and Waivers  144
  Specific Performance  144
METALLINE PROPOSAL NO. 2   145
AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK   145
  Background and Discussion of Proposed Amendment  145
  Vote Required; Recommendation of the Board of Directors of Metalline; Reasons for the Amendment to the Articles of Incorporation 146
 
 
 
xiii

 
 
 
METALLINE PROPOSAL NO. 3 147
ADOPTION OF METALLINE 2010 STOCK OPTION AND STOCK BONUS PLAN  147
  Summary of the 2010 Plan  147
  Administration of the 2010 Plan  147
  Eligibility  148
  Adjustment  148
  Other Provisions  149
  Income Tax Consequences of the 2010 Plan  149
  Vote Required; Recommendation of the Board of Directors of Metalline; Reasons for the Adoption of the 2010 Plan  150
METALLINE PROPOSAL NO. 4   151
ELECTION OF DIRECTORS  151
  Summary of Proposal  151
  Vote Required; Recommendation of the Board of Directors for Nominees  151
METALLINE PROPOSAL NO. 5   151
RATIFICATION AND APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  151
  Summary of Proposal  151
  Vote Required; Recommendation of the Board of Directors for Ratification of Hein & Associates LLP  152
STOCKHOLDER PROPOSALS   153
  Metalline  153
  Dome  153
DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS  153
WHERE YOU CAN FIND MORE INFORMATION   154
APPROVAL OF DOME’S DIRECTORS   157
INFORMATION NOT REQUIRED IN THE JOINT PROXY STATEMENT/PROSPECTUS   158
  Indemnification of Directors and Officers   158
  Exhibits and Financial Statement Schedules   160
  Undertakings   160
SIGNATURES   161
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES   163
ANNEX A – DOME VENTURES CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008   F-1
ANNEX B – DOME VENTURES CORPORATION UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTERS ENDED DECEMBER 31, 2009 AND 2008  F-23
EXHIBIT INDEX   165
     
     
     
     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


xv
 
 

 

QUESTIONS AND ANSWERS

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 20,249,513 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 the offices of its legal counsel, Burns Figa & Will, P.C., at 6400 S. Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111, on April 15, 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 April 14, 2010, at 10:00 a.m. Pacific Time.

Q: 
How do I vote?
 
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, 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 signing and returning your proxy card in the postage-paid envelope provided.  If you are 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.


 
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 March 9, 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 March 9, 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 55,366,829 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 20,249,513 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.    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?

A:
Yes.

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;

·     
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.  In the case of Dome shareholders, 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”.
 
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.
6
 


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

 
 

 

SUMMARY
   
    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 March 9, 2010
   
Year ended December 31,
 
         
2009
 
   
2008
 
   
2007
 
 
Noon rate at end of period
  -     1.0460     1.2246     0.9881  
Average noon rate for period
  -     1.1420     1.0660     1.0748  
High noon rate for period
  -     1.3000     1.2969     1.1853  
Low noon rate for period
  -     1.0292     0.9719     0.9170  

 

 9

The Companies

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 (see 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 March 9, 2010 Metalline common stock closed at $______ per share and Dome common stock closed at $_____ 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 55,366,829 shares of Metalline common stock outstanding.  Directors, executive officers and affiliates of Metalline beneficially owned approximately 9,599,109 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 20,249,513 shares of Dome common stock outstanding. Directors, executive officers and affiliates of Dome beneficially owned approximately 51% of the shares of Dome common stock on the record date.  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 Merger (see page __)
 
    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 Dr. 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.
 
    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.
 
15
 

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;
 
·  
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.
 
 
 
16
 


    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 the offices of its legal counsel, Burns Figa & Will, P.C., at 6400 S. Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111 on April 15, 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 meeting  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 March 9, 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 55,366,829 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 had the right to vote 2,266,745 shares of Metalline common stock, or approximately 4.1% of the combined voting power of the outstanding shares of Metalline common stock entitled to vote at the Metalline special meeting (excluding any options or warrants held by the respective officer or director).
 
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.
 
The Dome Special Meeting
 
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 April 14, 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 March 9, 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 20,249,513 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 10,675,898 shares of Dome common stock, or 51% 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 ____.
 
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 September 30, 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
  $ (6,516 )
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
    35,172  
Total Liabilities
    808  
Stockholders’ Equity
    34,364  
 
 
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.
 
23

    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
    $0.33  

   
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
    $0.32  

24
 
 

 

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.
 
Authorized Capital
 
    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.
 
 
25


    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.
 
Removal of Directors
 
    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.
 
 
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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.
 
    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.

 27
 

 
    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.

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Amendment of Bylaws
 
    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.

Anti-Takeover Statutes
 
    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
 
 

 29

·  
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.
 
 
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    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.
 
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.

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    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.
 
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.

 
 
 
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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.

Dome
 
    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.

 
 
 
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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 shareholders , have been audited by Manning Elliott LLP, chartered accountants as set forth in its reports thereon, and included as Annex A.
 
Interests of Experts
 
    To the knowledge of the management of Metalline and Dome, none of the experts named herein held, at the time they prepared or certified their report, received after such time or will receive any registered or beneficial interest, direct or indirect, in any of the securities or other property of Metalline, Dome or the combined company or any of their affiliates.



 

34
 
 

 

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.
 

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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 and the TSX Venture.  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.
 
 
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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.
 
 

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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.

 
 

 38
 
 

 

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;
 
 
 
39

·  
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.




40
 
 

 

THE COMPANIES

Metalline Mining Company

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:
 




41

 
    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     $ 84,259,505  
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     $ 52,800,000  

 
 
42

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.

Date
 
Price per share (US$)
 
Number and type of securities
Reason for issuance
January 31, 2010     $0.64   32,400 Common Shares Shares issued to independent directors for quarterly directors fees
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

(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.
 
Trading Price and Volume
 
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.
 
Month
 
High
   
Low
   
Volume
 
March 1 - March 9, 2010
    $0.74       $0.64        
February 2010      0.72       0.62        1,652,249  
January 2010     0.87       0.60       2,288,124  
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  
 

43

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:
 
·      
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.
 
 
44

·      
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.”
 
Availability of Full Report
 
      The full text of the Technical Report will be available on SEDAR at www.sedar.com on March 10, 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.
 
 
45

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.
 
    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).
 
46

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.
 
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.
 
 
47

    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.
 
    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.
 
 
48

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.
 
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.
 
 
49

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.
 
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.
 
 
50

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.
 
·  
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.
 
51

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.
 
·  
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.
 
 
52

    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.
 
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.
 
 
53

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:
 

 
 
    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 the date hereof, Dome had one full time employee and also utilizes consultants and advisors with respect to its business operations.
 
54

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.
 
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 a 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.
 
 
55

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.
 
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.
 
 
56

    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.

Period
 
Low
   
High
 
Jan. 1, 2010 - March 9, 2010
  $ 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
 
Holders

    As of March 9, 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.
 
 
57

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
 
Plan category
 
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
 
(b)
   
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
 
(c)
 
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  

 
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.
 
 
58

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.
 
    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.
 
 
59

    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.
 
 
60

 
 

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.

 
 

61

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.
 
 

62

 
    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  

 
 
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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