On November 6, 2008, Geneva Resources, Inc., a Nevada
corporation (the "Company") filed a Writ of Summons and Statement of
Claim (collectively, the “Statement of Claim”) against St. Elias Mines Ltd.
(“St. Elias”) and John Brophy ((“Brophy”) in the Supreme Court of British
Columbia. The Statement of Claim relates to that certain property option
agreement dated January 22, 2007 between the Company and St. Elias (the
“Property Option Agreement”). In accordance with the terms and provisions of the
Property Option Agreement, St. Elias was to grant to the Company an option to
acquire not less than an undivided 66% legal, beneficial and registerable
interest in certain mining leases in Peru in the Vilcoro Gold Property project
comprised of approximately 600 hectares in Peru (collectively, the “Vilcoro
Properties”.
Mutual Release
On May 5, 2010, the Company entered into that certain
mutual release with St. Elias (the “Mutual Release”) pursuant to which St. Elias
and the Company agreed to release one another from all causes of action, claims
and demands of any nature or kind whatsoever arising out of or in any way
related to any of the subject matter of the Statement of Claim. As of the date
of this Current Report, St. Elias is returning the 50,000 shares of common stock
previously issued to the Company.
Background
Under the terms of the Vilcoro Option Agreement and in
order to exercise the Vilcoro Option,the Company was required to make the
following non-refundable cash payments to St. Elias aggregating $350,000 as
follows: (i) $50,000 within five business days from the execution of the Vilcoro
Option Agreement, which was paid; (ii) $100,000 due on or before the
12-month anniversary of execution of the Vilcoro Option Agreement , which was
paid; and (iii) $200,000 due on or before the 24-month anniversary of execution
of the Vilcoro Option Agreement. In accordance with the terms and provisions of
the Vilcoro Option Agreement, the Company was further required to: (i) issue to
St. Elias 50,000 shares of our restricted common stock on or before the 12-month
anniversary of execution of the Vilcoro Option Agreement, which were issued; and
(ii) incur costs totaling $2,5000,000 as follows: (a) first expenditure of
$500,000 is to be incurred on or before the 12-month anniversary of execution of
the Vilcoro Option Agreement; (b) second expenditure of $750,000 is to be
incurred on or before the 24-month anniversary of execution of the Vilcoro
Option Agreement; and (iii) third expenditure of $1,250,000 is to be incurred on
or before the 36-month anniversary of execution of the Vilcoro Option
Agreement.
On approximately April 9, 2008, the Company received a
technical report (the “Technical Report”) in accordance with the provisions of
National Instrument 43-101 of the Canadian Securities Administrators on the
Vilcoro Properties. The Technical Report was prepared in accordance with that
certain Technical Services Agreement between the Company and St. Elias (the
“Technical Services Agreement”). The Technical Report was authored by John A.
Brophy, P.Geo.
Statement of Claim
The Statement of Claim alleged the following claims: (i) in
tort against Brophy alleging non-disclosure of material facts and complete and
accurate information relating to the ownership of the Vilcoro Property and to
the ownership of the adjacent property, including failure to disclose that
Brophy and his wife had an interest in the Vilcoro Property and the adjacent
property, which entitled the Company to rescind the Property Option Agreement
and return of an aggregate of $150,000 paid to St. Elias under the Property
Option Agreement, an aggregate of $486,000 paid in exploration expenditures, and
50,000 shares of the Company’s common stock issued to St. Elias; (ii) breach of
the Property Option Agreement relating to the failure by St. Elias to provide to
the Company all data and information in its possession or under its control
relating to St. Elias’ exploration activities on and in the vicinity of the
Vilcoro Properties; and (iii) breach of the Technical Services Agreement by
failure of St. Elias to timely prepare and provide a budget or work programs or
to expeditiously advance the work on the Vilcoro Properties and diversion by St.
Elias of money, time and resources.
The Company sought to rescind the Property Option Agreement
and the Technical Services Agreement and damages associated with tortious
misrepresentation and breach, punitive or exemplary
damages.
On December 23, 2008, a statement of defense was filed by
St. Elias and Brophy denying the majority of the allegations made by us in our
Statement of Claim. In addition, St. Elias and Brophy also filed a counter claim
against us for abuse of process and punitive damages.
SECTION
9. FINANCIAL STATEMENTS AND EXHIBITS
Item
9.01 Financial Statements and
Exhibits.
(a)
Financial Statements of Business Acquired.
Not
applicable.
(b)
Pro forma Financial Information.
Not
applicable.
(c)
Shell Company Transaction.
Not
applicable.
(d)
Exhibits.
99.1 Mutual
Release dated May 5, 2010 between Geneva Resources Inc. and St. Elias Mines
Ltd.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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GGENEVA
RESOURCES, INC.
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Date: May
17, 2010
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/s/
MARCUS JOHNSON
___________________________________
Name:
Marcus Johnson
Title:
President/Chief Executive Officer
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