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TRANSCRIPT
TONOGOLD RESOURCES, INC.
Annual Shareholders Meeting
July 8, 2011
2011
Annual Meeting
Agenda
•Introduction
•Management Presentation
•Voting
•Questions and Answers
•Vote Tabulation
•Results of Vote
•Adjourn
Tonogold Resources, Inc.
2010 Highlights
• Tonopah Divide: Drilling & Discovery
• Mineral Mountain, UT: Geological Report
• Coors, AZ: Claim Package Expansion & Sampling
• Mother Lode, CA: Past Producer Acquired
• Prospect Uranium: AEFI -Secure Energy Deal
Tonogold Resources, Inc.
Voting Proposals
• Item 1: Election of Directors
• Item 2: Approve Equity Incentive Plan
• Item 3: Approve Compensation of Executive Officers
• Item 4: Frequency of Compensation Advisory Vote
• Item 5: Ratify Actions of Board of Directors
• Item 6: Approve Acquisition of Prospect Uranium
• Item 7: Approve Appointment of Ronald Chadwick PC as Auditor
Tonogold’s Acquisition of
Prospect Uranium, Inc.
• Tonogold’s Board of Directors believes that consolidation of Prospect Uranium into Tonogold will increase Tonogold’s reserves of cash and marketable securities, reduce administrative costs, expand Tonogold’s shareholder base, improve market liquidity and trading volume for Tonogold shares and increase shareholder value for Tonogold’s current shareholders.
• Tonogold plans to purchase the 60.875% of Prospect that it does not already own.
• Tonogold will pay with common stock equal to:
– 70% times the total net book value of Prospect (this amount represents the pro-rated net book value of Prospect plus a 15% premium) PLUS
– the pro-rated face amount of debt now owed by Tonogold to Prospect (about $320,000).
• New Tonogold shares will be issued to Prospect shareholders based on the trailing 30 days’ average price for Tonogold common shares as reported through OTC Markets, Inc. at www.pinksheets.com.
• Each of Tonogold’s current directors has an interest in Prospect. In aggregate, they own 11.737% of Prospect.
• Tonogold currently owns 39.125% of Prospect.
• Any dissenting Prospect shareholders will have the right to demand an independent valuation of the transaction’s fairness.
• The closing is expected to occur by mid-August 2011.
• The final terms of the transaction may differ and are subject to final approval by Tonogold’s Board of Directors. If Tonogold’s Board of Directors determines that the final transaction terms are not in the interests of Tonogold’s shareholders, the Board will not consummate the proposed transaction.
Prospect Uranium
Share Calculation Estimate
Book Value of Prospect Uranium = $681,250
Multiplied by .70 (115% of 60.875%) = $476,875
Plus Inter-Company Loan ($320,000) = $796,875
# of Tonogold Shares Issued ($.085) 9,375,000
# of Prospect Shares (not already owned) 30,968,800
Tonogold Shares per Prospect Share 0.30272
*Actual calculation will be based on average share prices
of AEFI and TNGL for 30 day period ending July 15, 2011.
Assets
2010 2009
Cash 17,417 87,267
Plant and Equipment 954 38,521
Project Investments 42,289 22,435
Loan to Affiliate 1,620 1,620
TNR Stock (75,000 shares) 21,250 22,500
Secure Energy JV 284,599 284,659
Total Assets $368,129 $457,002
Liabilities
2010 2009
Accounts Payable 47,197 77,181
Accrued Interest 21,934 21,934
Accrued Payroll Taxes 614 5,734
Deferred Consulting Fees (Nyac) 101,334 2,000
Notes Payable 54,000 98,000
Loans from Shareholders 5,150 800
TOTAL LIABILITIES $230,229 $205,649
Revenue
2010 2009
Nyac Consulting Agreement 68,339 359,721
TNR Option Payment 21,250 47,500
Cost of Revenues (14,577)
Gross Profit $89,589 $392,644
Project Expenses
2010 2009
King Tonopah 5,120 (2,285)
Mother Lode, Caifornia 10,967
Mineral Mountain, Utah 126,937 60,719
Misc. Prospects 74,235 14,295
Mineral Property Costs $217,259 $90,706
Arizona / Coors (Cap) 19,854 19,574
Lithium Prospects (Cap) 2,952
Nyac (Cap) (91)
Capitalized Project Expenses $19,854 $22,435
Total Property (Cap+Exp) $237,113 $113,141
G&A Expenses
2010 2009
Salaries and Wages 182,572 412,992
Office Expenses 25,437 24,628
Rent 7,924 46,920
Advertising 15,191 12,806
Insurance 10,711 10,265
Travel 20,601 16,207
Telephone 19,737 14,070
Professional Fees 28,070 15,210
Other 92,659 24,091
Total G&A Expenses $402,902 577,189
Income Statement
2010 2009
Gross Profit 89,589 392,644
Operating Expenses 620,161 653,318
Operating Loss (530,572) (260,674)
Interest Expense (7,922) (21,985)
Income Taxes (538,494) (281,811)
Minority Interest (Prospect) 17,706 103,832
Net Loss ($520,788) ($177,979)
Net Loss Per Share (0.01) (0.00)
Share Structure
As of June 30, 2011
Common Stock 89,933,453
Series C Preferred Stock 800,000
Warrants* 2,495,000
Fully Diluted Common Stock 92,428,453
*Warrants expire on June 30, 2012
and have an exercise price of $.10 per share.
Prospect Generation
• 2,000 Exploration Cos. -------
Massive Need for Prospects
• Drilling Means Dilution
• Land Acquisition and Recon
• Prepare Geological Reports
• Sell or Lease Non-Core
Properties
• Joint Venture Core Properties
• More Stock Deals
Index from Mining Company Directory:
Management
• Jeffrey J Janda Chairman and President
• Brian A. Zamudio Director and EVP
• Donald G. Strachan Director and
VP of Exploration
Key Consultants
• Kevin Robinson - Coors Gold Project
• Peter Hahn - Tungsten, Gold and Silver
• North American - 6 Year Relationship
• Puchski Geocon. - Goldstrike Technical Report
• Bob Sanders - Hardrock Miner, Mother Lode
Tonopah Divide, Nevada
• 6,700 acres 5 miles south of
Tonopah, NV
• Mining Venture Agreement
with Centerra (U.S.), Inc
• Tonogold Ownership: 29%
• 5 Drill Programs since 2008,
79 Drill Holes, 74,070 feet of
RC Drilling
• Expenditures since inception
of Mining Venture: $4.5 mill.
• Recent Discoveries in
Combination Zone and Ruby
Hill Zone
Tonopah Divide, Nevada
• What now?
• Informal Assessment of WT
Cohan Mining Engineers (positive)
• Does this fit in Centerra’s
portfolio? (<1 mill oz gold equiv. -
too small)
• Southern-Central Nevada has
seen increased exploration &
mining activity
• Drilling success at nearby
Hasbrouck Mountain
• Conclusion: Tonopah Divide has a
valuable land package and
modest discoveries. More drilling
needed to get inferred resource.
From WT Cohan Block Model:
Mineral Mountain Project
Goldstrike, Utah Mining District
• Signed lease August 2009
• Property: 3,940 acres, BLM
Land
• Lease Terms: $40k/yr + 4%
NSR
• Work Commitments: $50k per
year
• Completed NI 43-101
Technical Report in 2010
• Phase I Pre-Feasibility Due
August 2011
• Interviewing Joint Venture
Partners
Mineral Mountain Project
Exploration Upside
• Past Exploration Drill Holes
were shallow <350 feet
• Current resource in surface
sandstones
• Evidence of mineralization in
Paleozoic limestones beneath
the sandstones (test this
hypothesis w/ deeper drilling)
• If limestones and contact zone
sufficiently mineralized the
resource could be much bigger
• Also: follow up good drill holes
in the Butcher Knife and Oro Vista areas
King Tonopah, NV
Claims / Land Map
King Tonopah
• Updated Report Finished, Strachan (May 2011)
• 40,000 tons of “steep vein ore” already developed valued at $1,116 per ton
• Potential to lease Austin patented claims
• Ideal as small producer with exploration upside of 1-2 mill tons of Murry Lode-style ore (15 oz/ton silver, .15 oz/ton gold)
Coors Gold Prospect
• Former high grade producer near world class Bagdad copper porphyry system.
• 34 claims on 5 historical gold mines
• Surface sampling and mapping
• Vein outcrops run as high as 2.4 oz/ton gold
• Potential for shallow horizontal structures which may be mineralized (open pittable?)
• Joint venture, lease or sell
• Additional land acquisition
Bandarita Mine, CA
• Staked Six Claims Sept 2010
• 6 adits / levels (main haulage accessible)
• Historical production: 75,000 oz. gold (closed WWII)
• Average Grade .57 oz/ton
• California Journal of Mines: “274,000 tons of gob (broken ore) in the old stopes”.
• Exploration potential: find unmined portion of the Goodwin Shoot
• Potential for direct shipping ore to nearby mill
2011-12 Goals and Events
• Complete Prospect Uranium Acquisition
• Joint Venture Mineral Mountain, Utah
• Tonopah Divide: Decision / Sell or Keep
• Lease Additional Land Near King Tonopah
• Sell, lease or JV Coors Gold Project
• Possibility for Tungsten Spinoff Company
Five Best Reasons to
Own Tonogold Shares
1. Low market capitalization
$8 million
2. Discovery at Tonopah Divide
and Mining Venture with
Centerra
3. Low Burn Rate = $40k / mo.
4. Exploration Industry is Hungry
for Good Prospects
5. Best Commodities (Gold &
Silver) and Best Places to
Mine (Nevada, Utah, Arizona)