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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
BATTLE MOUNTAIN GOLD EXPLORATION CORP.
(Name of Issuer)
Common Stock, par value $0.001 per share
(Title of Class of Securities)
(CUSIP Number)
Tony Jensen
President and Chief Executive Officer
Royal Gold, Inc.
1660 Wynkoop Street, Suite 1000
Denver, Colorado 80202
(303) 573-1660
With copies to:
Bruce C. Kirchhoff
Vice President and General Counsel
Royal Gold, Inc.
1660 Wynkoop Street, Suite 1000
Denver, Colorado 80202
(303) 573-1660
Paul Hilton, Esq.
Hogan & Hartson L.L.P.
1200 Seventeenth Street, Suite 1500
Denver, CO 80202
(303) 899-7300
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
(Continued on following pages)
(Page 1 of 9 Pages)
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CUSIP No. |
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07159T100 |
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of |
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9 |
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1 |
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NAMES OF REPORTING PERSONS:
Royal Gold, Inc. |
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): |
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84-0835164 |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
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(a) o |
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(b) o Not Applicable |
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3 |
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SEC USE ONLY: |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS): |
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OO |
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5 |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION: |
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United States of America
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7 |
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SOLE VOTING POWER: |
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NUMBER OF |
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-0- shares |
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SHARES |
8 |
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SHARED VOTING POWER: |
BENEFICIALLY |
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OWNED BY |
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33,357,132 shares1 |
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EACH |
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SOLE DISPOSITIVE POWER: |
REPORTING |
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PERSON |
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-0- shares |
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WITH |
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SHARED DISPOSITIVE POWER: |
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33,357,132 shares1 |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: |
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33,357,132 shares 1 |
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12 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS): |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): |
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46.4%2 |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS): |
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CO |
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1 |
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Includes 12,102,940 shares of common stock
held by IAMGOLD Corporation and 4,480,000 shares of common stock issuable to
IAMGOLD Corporation upon conversion of a debenture in the principal amount of
$2,000,000 and accrued interest. Also includes 16,774,192 shares of common
stock beneficially owned by Mark Kucher, which includes 3,160,000, 1,000,000,
3,400,000 and 40,000 shares of common stock owned by Bug River Trading Corp.,
British Swiss Investment Corp., Warrior Resources Corp. and Mr. Kuchers
spouse, respectively, and also includes an option to purchase 800,000 shares of
common stock at $0.40 per share that vested April 15, 2005 and warrants to
purchase up to 2,512,096 shares of common stock at $0.31 per share. Does not
include shares of common stock, if any, that may become available for
acquisition by Royal Gold in connection with a contemplated convertible bridge
loan to be made by Royal Gold to Battle Mountain Gold Exploration Corp. that
remains subject to execution of definitive loan documentation. See Item
5 Interest in Securities of Issuer for further information. |
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Based on 64,070,442 shares of common stock
issued and outstanding as of January 18, 2007, which number is based on
information provided by Battle Mountain Gold Exploration Corp. |
Page 3 of 9
Item 1. Security and Issuer.
This statement on Schedule 13D (this Schedule 13D) relates to the common stock, par value
$0.001 per share (the Common Stock), of Battle Mountain Gold Exploration Corp., a Nevada
corporation (Battle Mountain). The address of the principal offices of Battle Mountain is Suite
600, 1 East Liberty Street, Reno, Nevada 89504.
Item 2. Identity and Background.
This
Schedule 13D is being filed by Royal Gold Inc., a Delaware corporation (Royal
Gold). Royal Gold is a company engaged in the business of acquiring and managing precious metals royalties. The address of the principal executive office of Royal Gold is 1660
Wynkoop Street, Suite 1000, Denver, Colorado 80202.
The name, citizenship, principal occupation or employment and business address of
each of the directors and executive officers of Royal Gold is set forth on Schedule A
hereto.
During the last five years neither Royal Gold, nor to the knowledge of Royal Gold, any person
named in Schedule A (i) has been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors) or (ii) was a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction, and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
In
connection with the Letter Agreement described in Item 4, Royal Gold entered into Option and
Support Agreements (Support Agreements) each dated as of March 5, 2007 with Mark D. Kucher
(Kucher) and IAMGOLD Corporation, a Canadian corporation (IAMGOLD and together with Kucher, the
Stockholders). Royal Gold may be deemed to have acquired beneficial ownership of the shares of
Common Stock subject of this Schedule 13D by reason of Royal Gold entering into the Support
Agreements. No payments were made by or on behalf of Royal Gold in connection with the execution
of the Support Agreements. The Support Agreements are incorporated by reference to Exhibit 99.1
and Exhibit 99.2 hereto.
Item 4. Purpose of the Transaction.
The purpose of Royal Gold entering into the Support Agreements is to support its proposal to
acquire 100% of the equity interests in Battle Mountain. The Support Agreements were entered in
connection with Royal Gold entering into a letter agreement making a proposal to acquire Battle
Mountain accepted February 28, 2007 (the Letter Agreement), which provides, among other things,
for an exclusive 45 day period for Royal Gold and Battle Mountain to negotiate definitive
documentation (the Definitive Documentation) for the acquisition of 100% of the Common Stock of Battle Mountain by Royal Gold for 1,570,507 shares of
Royal Gold common stock (the Acquisition) by means of a merger. Pursuant to the
Page 4 of 9
Letter
Agreement, Battle Mountain agrees to a 45 day exclusive period
to refrain from soliciting any competing
transaction (Competing Transaction), declaring or paying any dividends, incurring additional debt
or issuing additional securities. Battle Mountain also agreed to pay a break-up fee equal to $2.5
million, plus fees and expenses, to Royal Gold in the event Battle Mountain enters into an
agreement with respect to a Competing Transaction with another party within twelve months of the
expiration of the Letter Agreement. The Letter Agreement also
provides for a reciprocal break-up fee
equal to $1.0 million, plus fees and expenses, payable in the event that either Royal Gold or
Battle Mountain breaches the Letter Agreement. The summary of the Letter Agreement contained in
this Schedule 13D is qualified in its entirety by reference to the Letter Agreement, which is
incorporated by reference to Exhibit 99.3 hereto.
Pursuant to the terms of the Support Agreements, the Stockholders have agreed to
vote, and granted Royal Gold an irrevocable proxy to vote, their shares of Common Stock (i) in
favor of the Acquisition and the Definitive Documentation and (ii) against any action, agreement,
transaction or proposal that is made in opposition to, or is in competition or inconsistent with
the Acquisition or the Definitive Documentation, relates to a Competing Transaction or that could
otherwise prevent, impede or delay the consummation of the Acquisition. Pursuant to the Support
Agreements, the Stockholders agree to refrain from initiating, soliciting or encouraging any
inquiries or the making of any proposal that constitutes or reasonably may be expected to lead to a
Competing Transaction and to advise Royal Gold of any such inquiries or proposals of which such
Stockholder becomes aware.
In addition, each Stockholder agrees that it will not (i) tender into any tender or exchange
offer or otherwise directly or indirectly transfer its Common Stock
or (ii) grant any proxies with
respect to such Common Stock, deposit such Common Stock into a voting trust, enter into a voting
agreement with respect to such Common Stock or otherwise restrict the ability of such Stockholder
freely to exercise all voting rights with respect to such Common Stock.
The voting and transfer restrictions on IAMGOLD will terminate in the event Royal Gold has
been notified of a written and publicly announced acquisition proposal that the Board of Directors
of Battle Mountain concludes is more favorable to Battle Mountains shareholders than the
Acquisition or a written offer pursuant to which IAMGOLD will receive a per share purchase price at
least 7.5% higher than the per share consideration specified in the Letter Agreement or Definitive
Documentation (a Superior Proposal).
Pursuant to the Support Agreement with Kucher, Kucher granted Royal Gold an irrevocable option
to purchase his Common Stock at an exercise price per share of 0.016925 shares of Royal Gold common
stock. Royal Golds option to purchase Kuchers shares will terminate upon the twelve-month
anniversary of the Support Agreement. Pursuant to the Support Agreement with IAMGOLD, IAMGOLD
granted Royal Gold an irrevocable option to purchase its Common Stock at an option price per share
equal to the greater of (i) 0.016925 shares of Royal Gold common stock, (ii) the per share
consideration offered pursuant to a Superior Proposal and (iii) the highest price paid by Royal
Gold to any other shareholder of Battle Mountain at any time during the ninety days prior to the
date that the shareholders of Battle Mountain approve the Acquisition and the Definitive
Documentation. Royal Golds option to purchase IAMGOLDs shares will terminate, unless previously
exercised, upon the earlier of (i) September 5, 2007, (ii) five business days after Royal Gold is notified of a
Superior Proposal and (iii) the date on which the Support Agreement with IAMGOLD terminates.
Page 5 of 9
The Support Agreement with Kucher will terminate in the event that Definitive Documentation is
terminated, in accordance with its terms, or the Letter Agreement is terminated other than by
reason of execution of the Definitive Documentation, provided however, Royal Golds option to
purchase Kuchers shares will survive until the twelve month anniversary of the date of the Support
Agreement. The Support Agreement with IAMGOLD will terminate upon the termination of the
Definitive Documentation, consummation of the Acquisition or if the Acquisition has not been
completed on or prior to October 1, 2007, provided however, Royal Golds option to purchase
IAMGOLDs shares will survive if it delivered an exercise notice prior to the termination of the
Support Agreement until the option exercise is consummated or otherwise terminated.
The
summaries of the Support Agreements contained in this
Schedule 13D are qualified in their
entirety by reference to the Support Agreements, each of which is incorporated by reference to
Exhibit 99.1 and Exhibit 99.2 hereto.
Item 5. Interest in Securities of the Issuer.
(a) Under the definition of beneficial ownership as set forth in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the Exchange Act), as a result of the provisions set
forth in the Support Agreements, Royal Gold may be deemed to have acquired beneficial ownership of
33,357,132 shares of Common Stock, constituting approximately 46.4% of the outstanding shares of
Common Stock and all of the Common Stock subject of this Schedule 13D. This number does not
include shares of Common Stock, if any, that may become available for acquisition by Royal Gold in
connection with a contemplated convertible bridge loan to be made by Royal Gold to Battle Mountain
that remains subject to the execution of definitive loan documentation. On February 28, 2007,
Royal Gold entered into a term sheet with Battle Mountain to provide Battle Mountain up to $20
million in bridge financing. Under the term sheet, it is contemplated that advances under the
loan, if any, will be subject to a number of conditions, including the execution of definitive
documentation for the Acquisition and acquisition by Battle Mountain of certain royalty interests.
Under the term sheet, it is also contemplated that the loan will provide Royal Gold with the right
to convert principal, interest and other expenses, if any, into Common Stock at a conversion price
per share of $0.60.
By virtue of their relationship with Royal Gold, the persons listed in Schedule A
hereto may be deemed to beneficially own the Common Stock subject of this Schedule 13D. Neither
the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission
that any person named in Item 2 above or Schedule A hereto is the beneficial owner of the
Common Stock subject of this Schedule 13D for purposes of Section 13(d) of the Exchange Act or for
any other purpose, and such beneficial ownership is expressly disclaimed.
(b) Royal Gold does not have the sole power to vote or to direct the vote, or sole power to
dispose or to direct the disposition of, any of the Common Stock subject of this Schedule 13D.
Royal Gold has shared power to vote and to direct the vote, and has or may be deemed to have shared
power to dispose of or direct the disposition of, the Common Stock subject of this
Schedule 13D as a result of the arrangements set forth in the Support Agreements described in
Item 4.
Page 6 of 9
(c) Neither Royal Gold nor, to the knowledge of Royal Gold, any person named on Schedule
A hereto has effected any transaction during the past 60 days in any shares of the Common
Stock.
(d) Other than each Stockholder with respect to the Common Stock of which it is a record
owner or beneficial owner, Royal Gold does not know of any other person who has the right to
receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the
Common Stock subject of this Schedule 13D.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
Except for the arrangements described in Items 3, 4 and 5 of this Schedule 13D to the
knowledge of Royal Gold, there are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 and between such persons and any person with respect to any
securities of Battle Mountain, including but not limited to transfer or voting of any of the
securities, finders fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of
profits, division of profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
The following documents are filed as exhibits to this Schedule 13D:
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Exhibit No. |
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Description |
99.1
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Option and Support Agreement by and
between Royal Gold, Inc. and
Mark D. Kucher dated as of March 5, 2007 |
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99.2
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Option and Support Agreement by and
between Royal Gold, Inc. and
IAMGOLD Corporation dated as of March 5, 2007 |
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99.3
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Letter Agreement by Royal Gold,
Inc. and accepted by Battle Mountain Gold Exploration Corp. dated as of February 28, 2007 |
Page 7 of 9
Schedule A
Directors and Executive Officers of Royal Gold
The name, principal occupation and business address of each director and
executive officer of Royal Gold are set forth below. All of the persons listed below are citizens
of the United States of America.
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Name and Position |
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Present Principal Occupation and Residence or Business Address |
Stanley Dempsey
Executive Chairman
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Executive Chairman
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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Edwin W. Peiker, Jr.
Director
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Retired
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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John W. Goth
Director
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Non-executive Director of Denver Gold Group, Director of Behre Dolbear
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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James W. Stuckert
Director
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Senior Executive of Hilliard, Lyon, Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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Merritt E. Marcus
Director
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Retired
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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S. Oden Howell, Jr.
Director
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President of Howell & Howell Contractors, Owner of Kessinger Service
Industries, LLC
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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Donald Worth
Director
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Director of Sentry Select Capital Corporation, Director of
Cornerstone Capital Resources, Inc. and Director of Tiomin Resources,
Inc.
1660 Wynkoop Street
Suite 1000
Denver, Colorado 80202 |
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Tony Jensen
President, Chief Executive Officer
and Director
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President, Chief Executive Officer and Director
1660 Wynkoop Street
Suite 1000
Denver, CO 80202 |
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Karen P. Gross
Vice President & Corporate Secretary
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Vice President & Corporate Secretary
1660 Wynkoop Street
Suite 1000
Denver, CO 80202 |
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William H. Heissenbuttel
Vice President, Corporate Development
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Vice President, Corporate Development
1660 Wynkoop Street
Suite 1000
Denver, CO 80202 |
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Stefan Wenger
Chief Financial Officer
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Chief Financial Officer
1660 Wynkoop Street
Suite 1000
Denver, CO 80202 |
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Bruce C. Kirchhoff
Vice President and General Counsel
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Vice President and General Counsel
1660 Wynkoop Street
Suite 1000
Denver, CO 80202 |
Page 8 of 9
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
Dated: March 15, 2007
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ROYAL GOLD, INC.
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By: |
/s/ Bruce C. Kirchhoff
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Name: |
Bruce C. Kirchhoff |
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Title: |
Vice President and General Counsel |
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Page 9 of 9
EXHIBIT INDEX
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Exhibit No. |
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Description |
99.1
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Option and Support Agreement by and
between Royal Gold, Inc. and
Mark D. Kucher dated as of March 5, 2007 |
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99.2
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Option and Support Agreement by and
between Royal Gold, Inc. and
IAMGOLD Corporation dated as of March 5, 2007 |
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99.3
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Letter Agreement by Royal Gold,
Inc. and accepted by Battle Mountain Gold Exploration Corp. dated as of February 28, 2007 |