John S. and Christobel D. Rendall - Page 6

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          sands or in the waste tailings that result after the oil sands              
          are processed.  Solv-Ex contended that the value of those                   
          marketable minerals was three times the value of the oil produced           
          from the oil sands.                                                         
               Beginning in 1981 with its initial public offering, Solv-Ex            
          was a public company, and its shares were traded on the NASDAQ              
          Small Cap Market.  Its financial statements reflected its status            
          as a “development stage enterprise” in accordance with Statement            
          of Financial Accounting Standards No. 7 (FAS 7), which includes             
          in the description of such companies a company for which                    
          “[p]lanned principal operations have not commenced * * * [or]               
          [p]lanned principal operations have commenced, but there has been           
          no significant revenue therefrom.”                                          
               During 1995, Solv-Ex acquired a 90-percent interest in oil             
          sands leases in Alberta, Canada (the leases).  After performing             
          feasibility studies for development and commercial operation of             
          the leases, Solv-Ex decided to develop the leases and raise the             
          capital required to construct an oil extraction and upgrading               
          plant in Alberta at an estimated cost of $125 million.  In 1996,            
          Solv-Ex was able to raise only $77 million through the sale of              
          convertible debentures and stock.  Because that was less than the           
          estimated construction cost for the plant, Solv-Ex decided to               
          modify its plans and build only an initial stage plant in                   
          Alberta, the remaining facilities to be built later.  Solv-Ex’s             






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