UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
January
21, 2011
Date of
Report
(Date of
Earliest Event Reported)
GUNPOWDER
GOLD CORPORATION
(Exact
name of registrant as specified in its charter)
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Nevada
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001-34976
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26-3751595
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State
or other
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(Commission
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(I.R.S.
Employer
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jurisdiction
of
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File
Number)
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Identification
No.)
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10 th
Floor
3 Hardman
Street, Manchester
United
Kingdom, M3 3HF
(Address
of principal executive offices)
011-44-161-932-1446
(Registrant’s
telephone number, including area code)
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 – Registrant’s Business and Operations
Item
1.01 Entry Into a Material Definitive Agreement.
On
January 21, 2011, Gunpowder Gold Corporation (the "Company") entered into an
Option Agreement (the "Agreement") with Horizon Exploration Inc.
("Horizon"), whereby Horizon granted the Company the sole and exclusive right
and option to acquire an undivided 100% right, title and interest in and to the
Dome Rock Property which contains 62 unpatented mineral claims and subject only
to a royalty, being located in La Paz County, Arizona (the
"Property").
Under
the terms of the Agreement, Horizon has granted the Company the sole and
exclusive option to acquire a 100% undivided interest in and to the Property by
making cash payments to Horizon of $67,448.53 within 31 days of signing the
Agreement, $20,000 on or before January 21, 2012, $30,000 US on or before
January 21, 2013, $40,000 on or before the January 21, 2014, $50,000 on or
before January 21st, 2015, $60,000 on or before January 21, 2016, $60,000
on or before January 21st, 2017. The Company shall also be responsible for
making all necessary property payments to keep the Property in good standing
which includes all annual maintenance fees, exploration and other permits,
property taxes, levies, insurance, and other assessments.
The
Company shall complete the following exploration expenditures on the Property as
follows: (i) $750,000 on or before the first anniversary of the signing of the
Agreement (ii) $750,000 on or before the second anniversary of the signing of
the Agreement; and (iii) $500,000 on or before the third anniversary of the
signing Agreement.
The
Company may terminate the Agreement at any time by giving 30 days notice of such
termination of the Agreement.
In the
event that the company spends, in any period, more than the specified sum, the
excess shall be carried forward and applied to the exploration expenditures to
be incurred in the succeeding period for no more than three consecutive years.
In the event the exploration expenditures are not completed during the required
time frame, any deficits will be paid in cash to Horizon immediately after the
end of the anniversary in which it occurs.
The
Company has the right to accelerate all payments due under this Agreement in
order to exercise the Option at an earlier date.
If and
when the Option has been exercised, a 100% right, title and interest in and to
the Property will vest in the Company free and clear of all charges,
encumbrances and claims, save and except for the Royalty. At such time, the
Company shall be entitled to record such transfers at its own cost with the
appropriate government office to effect legal transfer of such interest in the
Property into the name of the Company
Upon the
Commencement of Commercial Production, the Company shall pay to Horizon a 3.0%
of Net Smelter Returns on the Property (Royalty), on the terms and conditions as
set out in the agreement.
If the
Company is in default of the Agreement, Horizon may terminate the Agreement but
only if:
Horizon
has first given the Company notice of the default containing particulars of the
obligations which the Company has not performed or the warranty breached and the
Company has not, within 30 days following delivery of such notice of default,
cured such default or commenced proceedings to cure such default by appropriate
payment or performance, the Company hereby agreeing that should it so commence
to cure any default it will prosecute the same to completion without undue
delay. In the event the Company is forced to cure the defect to preserve the
status of the property, the cure of the defect by the Company will include a 10%
overhead to Horizon.
Should
the Company fail to comply with the provisions in the last paragraph, Horizon
may thereafter terminate this Agreement by giving notice thereof to the Company,
always provided that the default in question has not been cured or substantially
cured at the time of Horizon giving such notice of termination.
The
agreement contains an arbitration clause and is governed by the laws of the
State of Nevada.
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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Gunpowder
Gold Corporation
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Date: January
24, 2011
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By
:
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/s/
Neil Jason Pestell
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Neil
Jason Pestell,
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President
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