In my report dated February 5, 2018, I gave possible outcomes related to Desert Hawk’s future operations. Readers are referred to that report for the details regarding Desert Hawk’s suspension of operations due to the lack of required additional funding because its funding source, Platinum Partners, was forced into bankruptcy. Scenario 4 of the possible outcomes stated:
Desert Hawk could negotiate a settlement with the Bankruptcy Estate receiver in which it would receive forgiveness of the debt owed for a nominal payment of the debt, and the Bankruptcy Estate receiver would release Desert Hawk of any future obligation to the Bankruptcy Estate. The Bankruptcy Estate receiver may well agree to such a settlement because he would rather have some repayment on some of the debt rather than risk Desert Hawk’s going bankrupt, and the Bankruptcy Estate receiving nothing. This outcome would allow Desert Hawk to obtain new financing or to be sold to a large mining company without the encumbrances of the Bankruptcy Estate.
On Form D filed with the Securities and Exchange Commission on March 20, 2018 Desert Hawk stated it sold unregistered equity, either Preferred or Common Stock, in the amount of $625,000. It is assumed that this equity sold was the amount of cash Desert Hawk needed to buy out its main creditor, Platinum Partners, since Desert Hawk had no other cash to buy out its main creditor. Therefore, for the amount of $625,000 Desert Hawk was able to pay off at least $19 million of its outstanding debt. The amount paid off is obtained from Desert Hawk’s Balance Sheet as of March 31 2016 filed in its 10Q. This debt is listed as “Interest payable-related party” in the amount of $ 5,732,846 and “Note payable-related party” in the amount of $13,590,492. Most likely the amount payable was greater than that since it is assumed interest continued to accrue on the note payable from March 31, 2016 until the middle of March 2018. Readers are referred to Clifton Mining’s news release published on March 19, 2018 to read what was disclosed to the public.
Desert Hawk still needs to obtain additional funding through either the issuance of additional debt or sale of additional equity. However, it will now be much easier for Desert Hawk to obtain additional funding because investors will not have to deal with the Bankruptcy Estate receiver as stated in my report dated February 5, 2018.
This is very good news for Clifton Mining. Clifton Mining will now be receiving royalty payments under the agreement with Desert Hawk that is discussed in my previous reports titled “Clifton Mining Company, a Gold Nugget Waiting to be Discovered.” The royalty payments are expected to increase from those previously received because additional ore will be added to the heap leach pad producing more gold and silver than what was produced for the first two years of operation.
As stated in my previous reports, CFTN remains extremely undervalued and needs to be discovered by the investing public.
This article was written by Stanley Cutler on March 21, 2018. You may contact Mr. Cutler at firstname.lastname@example.org.
The author wrote this article himself, and it expresses his own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.
The author has owned CFTN for 11 years. He is currently acquiring shares at these low prices and will probably continue to acquire shares.
Disclosure: I am/we are long CFTN.