SOURCE: North Bay Resources Inc.
SKIPPACK, PA--(Marketwire - Jul 30, 2012) - North Bay Resources Inc. (OTCBB: NBRI) ("North Bay" or the "Company") announced today that as the Company proceeds forward to the start of gold production at our near-term mining projects, the Board of Directors has authorized the cancellation and elimination of our Series G Convertible Preferred Stock (the "Preferred," or the "Series G Preferred"), thereby removing it entirely as a class of stock and releasing any common shares or gold inventory that had previously been reserved in the event any Preferred shares were deemed immediately convertible.
As set forth in the Company's Current Report on Form 8-K filed with the United States Securities and Exchange Commission ("SEC") on July 30, 2012, all outstanding shares of the Series G Preferred were surrendered and cancelled at the request and consent of the sole shareholder on July 25, 2012. Accordingly, as there were then no shares of the Series G Preferred that remained outstanding and none would be further issued, the Board of Directors authorized the elimination of the Series G Preferred, and the Company subsequently filed a duly executed Certificate of Elimination of the Series G Convertible Preferred Stock with the Secretary of State of the State of Delaware.
The reasons for this action are to eliminate any complication or unintended consequence that might arise once the Company begins gold production at our mining projects. The Series G Preferred was designated in March 2009, and was originally conceived as a funding vehicle for mine acquisitions. This designation created a class of Preferred stock that was directly tied to the price of gold by making each share of the Preferred stock convertible to 1/100 of an ounce of gold, or more simply, one ounce of gold for every 100 share lot. Management has since determined that this convertibility to gold would become a derivative liability on our balance sheet once we begin gold production, and as the original purpose of the class as a funding vehicle is no longer a consideration, it is in the best interest of the Company and shareholders to eliminate the Series G Preferred entirely.
Secondly, as our near-term production properties involve joint-ventures, the accounting and logistics surrounding the existence of the Series G Preferred shares was a needless complication that was best to eliminate before our first ounce of gold is produced.
Third, as the Series G Preferred was directly tied to the price of gold, we originally planned to register the Preferred with the SEC so that it may trade publicly as an OTCBB version of the GLD ETF, such that its share price would always reflect the daily movements in the price of gold. Management has since concluded that if we went forward with registering the class and listing it for trading, it would compete with our common shares, to the detriment of the shareholders of our common stock, and it is therefore in the best interest of the Company and shareholders alike to eliminate the Series G Preferred stock entirely.
In its place, and as a way to link our common shares more directly to the price of gold, the Company intends to declare a cash dividend to holders of our common stock once our net revenue from gold production exceeds a threshold level that would make any such dividend meaningful. In this way, our common stock will more directly reflect movements in the price of gold, which we firmly believe will continue to rise. Simply put, and all else being equal, as the price of gold rises our net revenue from gold production should similarly increase, thereby increasing the potential size of any future dividend. The Company believes this is a much fairer and simpler way for shareholders to directly benefit from any increase in the price of gold going forward, and without any of the complications that the Series G Preferred might have presented in the future.
To this last point, North Bay CEO Perry Leopold commented, "Companies often speak about increasing shareholder value. I see no better way of actually doing this than by providing a way for shareholders to directly benefit from their ownership of our success beyond whatever arbitrary price the market may assign to our shares on any particular day." Mr. Leopold continued, "We are excited to be on the verge of making the transition from an exploration company to a gold producer. We have accomplished a great deal recently in a relatively short period of time, and while more patience is still required before the fruits of our labor will be clearly evident to all, we are getting closer every day to achieving our primary goals."
About North Bay Resources Inc.
North Bay Resources Inc. (OTCBB: NBRI) is a fully-reporting junior mining company with over 150 mineral and placer claims encompassing approximately 60,000 acres throughout British Columbia, Canada.
In the US, the Company owns the Ruby Gold Mine in Sierra County, California, and is presently planning to acquire additional operating mines in the western US.
The Company's mission is to build a portfolio of viable mining prospects throughout the world and developing them through subsidiaries and JV partners to their full economic potential. North Bay's business plan is based on the Generative Business Model, which is designed to leverage its properties into near-term revenue streams even during the earliest stages of exploration and development. This provides shareholders with multiple opportunities to profit from discoveries while preserving capital and minimizing the risk involved in exploration and development.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Although North Bay Resources Inc. believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any assumption could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion should not be regarded as a representation by North Bay Resources Inc. or any other person that the objective and plans of North Bay Resources Inc. will be achieved.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on our website (or press releases), such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form S-1 and subsequent Form 10-K which may be secured from us, or from our website at http://www.sec.gov/edgar.shtml