Edgar Filing: GEOVIC MINING CORP.








 






 



 





 



UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 



 



FORM 10-Q 



 



(Mark One) 

x    QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended September 30,
2014 

OR 

¨     TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

Commission File Number 000-52646 



 



 

GEOVIC MINING CORP. 

(Exact
name of registrant as specified in its charter) 



 



 




 
  
   
  
 
   
  
 

  
  DELAWARE
  
 
  20-5919886
  
 

  
  (State or other jurisdiction of
  incorporation or organization)
  
 
  (IRS Employer
  Identification No.)
  
 

  
   
  
 
   
  
 

  
  5500 E. Yale Ave. Suite 302
  Denver, Colorado
  
 
  80222
  
 

  
  (Address of principal executive offices)
  
 
  (Zip Code)
  
 




(303) 476-6455 

(Registrant’s telephone number, including
area code) 



 



Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports); and (2) has been
subject to the filing requirements for the past 90
days:    Yes  x    No  ¨ 

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post
such files).    Yes   x    No  ¨ 

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of
“large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act: 

 




 
  
   
  
 
   
  
 
   
  
 
   
  
 

  
  Large accelerated filer
  
 
  ¨
  
 
  Accelerated filer
  
 
  ¨
  
 

  
   
  
 
   
  
 
   
  
 
   
  
 

  
  Non-accelerated
  filer
  
 
  ¨  (Do not check if a smaller
  reporting company)
  
 
  Smaller reporting company
  
 
  x
  
 




Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange
Act):    Yes  ¨    No   x 

Indicate the number of shares outstanding
of each of the issuer’s classes of common stock, as of the latest practicable
date: 

110,682,589 Shares of Common Stock, $0.0001 par value,
were outstanding at December 14, 2014 



 





 












 



 










 






 



Geovic Mining
Corp.

(an
exploration stage company) 

FORM 10-Q 

For the
Three and Nine Months Ended September 30, 2014 

INDEX 

 




 
  
   
  
 
   
  
 
   
  
 

  
   
  
 
  PART I—FINANCIAL INFORMATION
  
 
   
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 1.
  
 
  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (Unaudited)
  
 
         3 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 2.
  
 
  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
  
 
      21 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 3.
  
 
  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
  MARKET RISK
  
 
      29 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 4.
  
 
  CONTROLS AND PROCEDURES 
  
 
      29 
  
 

  
   
  
 
   
  
 
   
  
 

  
   
  
 
  PART II—OTHER INFORMATION 
  
 
   
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 1.
  
 
  LEGAL PROCEEDINGS 
  
 
      32 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 1A.
  
 
  RISK FACTORS
  
 
      32 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 2.
  
 
  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
  PROCEEDS
  
 
      33 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 3.
  
 
  DEFAULTS UPON SENIOR SECURITIES
  
 
      33 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 4.
  
 
  MINE SAFETY DISCLOSURES
  
 
      33 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 5.
  
 
  OTHER INFORMATION
  
 
      33 
  
 

  
   
  
 
   
  
 
   
  
 

  
  ITEM 6.
  
 
  EXHIBITS
  
 
      34 
  
 

  
   
  
 
   
  
 
   
  
 

  
   
  
 
  SIGNATURES 
  
 
      35 
  
 




 



2



 










 






 



4. EXPLORATION COSTS 

Exploration costs relate to the search for
mineral deposits with economic potential. Exploration costs are expensed as
incurred. GeoCam gained exclusive rights for the exploitation of the cobalt and
nickel deposits with the granting of a Mining Convention by the government of
Cameroon on August 1, 2002. The Mining Convention grants GeoCam the
exclusive rights to mine, process, and export cobalt, nickel and related
substances from lands subject to a Mining Permit, which was granted by decree
on April 11, 2003. The Mining Convention, which has a primary term of 25
years, sets forth all legal and fiscal provisions governing the mining
operation. It is renewable under certain conditions in 10-year increments for
the life of the resource. In addition to exploration through GeoCam, our other
projects provide opportunities for future growth through grassroots
exploration. The following is a summary of the exploration costs incurred by
the Company: 

 




 
  
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 

  
    
   
 
   Three Months Ended 
   
    
   
   
 
   Nine Months Ended 
   
    
   
   
 
   Unaudited

   Period from

   November 16, 1994

   (inception) to

   September 30, 2014 
   
    
   
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   September 30,

   2013 
   
    
   
   
 
   September 30,

   2014 
   
    
   
   
 
   September 30,

   2013 
   
    
   
   
 
    
   
 

  
  Cameroon Africa:
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Property evaluation..................................................................... 
  
 
  $           94 
  
 
  $         192 
  
 
  $        318 
  
 
  $        440 
  
 
  $                  54,653 
  
 

  
  Office costs................................................................................... 
  
 
             221 
  
 
             249 
  
 
            739 
  
 
            901 
  
 
                       33,488 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
             315 
  
 
             441 
  
 
         1,057 
  
 
         1,341 
  
 
                       88,141 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Other Projects:
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Colorado/Wyoming.................................................................... 
  
 
              —   
  
 
              —   
  
 
             —   
  
 
             —   
  
 
                         2,070 
  
 

  
  Arizona.......................................................................................... 
  
 
             —   
  
 
               (2)
  
 
            232 
  
 
            128 
  
 
                         2,149 
  
 

  
  New Mexico.................................................................................. 
  
 
             —   
  
 
                  2 
  
 
         (299) 
  
 
                 3
  
 
                            431 
  
 

  
  New Caledonia............................................................................. 
  
 
                19 
  
 
             243 
  
 
              48 
  
 
            392 
  
 
                         3,681 
  
 

  
  Papua New Guinea...................................................................... 
  
 
                  5
  
 
                18 
  
 
              21 
  
 
              47 
  
 
                            421 
  
 

  
  Other.............................................................................................. 
  
 
              —   
  
 
              —   
  
 
             —   
  
 
             —   
  
 
                            457 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
                24
  
 
             261 
  
 
                 2
  
 
            570
  
 
                         9,209 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Exploration Costs........................................................... 
  
 
  $         339 
  
 
  $         702 
  
 
  $    1,059
  
 
  $    1,911
  
 
  $                  97,350 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

   
  
  
  
  
  
  
  
 




 



11



 











 






 



5.
PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consisted of
the following: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  Cameroon, Africa:
  
 
   
  
 
   
  
 

  
  Machinery and equipment..................................................... 
  
 
  $           857 
  
 
  $              2,990 
  
 

  
  Vehicles...................................................................................... 
  
 
               566 
  
 
                      811 
  
 

  
  Buildings.................................................................................... 
  
 
               280 
  
 
                      280 
  
 

  
  Furniture and equipment........................................................ 
  
 
               459 
  
 
                      459 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
            2,162 
  
 
                   4,540 
  
 

  
  Less accumulated depreciation.................................. 
  
 
          (1,990 )
  
 
                 (3,562 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
               172 
  
 
                      978 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  United States and Other:
  
 
   
  
 
   
  
 

  
  Machinery and equipment..................................................... 
  
 
  $             53 
  
 
  $                  235 
  
 

  
  Vehicles...................................................................................... 
  
 
                     -
  
 
                        53 
  
 

  
  Furniture and equipment........................................................ 
  
 
               413 
  
 
                      432 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
               466 
  
 
                      720 
  
 

  
  Less accumulated depreciation.................................. 
  
 
            (450)
  
 
                     (520 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
                 16 
  
 
                      200 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
   
  
 
  $           188 
  
 
  $              1,178 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




During the quarter ended March 31, 2014 the
Company put in place a plan to dispose, by sale, at auction/bid, of certain
machinery and equipment in Cameroon due to the adverse changes in the business
circumstances of the Company and current usage levels of the machinery and
equipment. The specific assets are mainly vehicles, machinery and equipment and
were reclassified as Assets Held for Sale on the condensed consolidated balance
sheet at the net book value of $643 during the nine months ended September 30,
2014. We ceased depreciation on the assets at the specific time they were
reclassified. During the nine months ended September 30, 2014 the Company
sold $76 (net book value) of this equipment for proceeds of $242. During the nine
months ended September 30, 2014 the Company also sold $22 (net book value) of
other assets for proceeds of $34.  

During the year ended December 31, 2013 the
Company recognized an impairment charge of $0.3 million on assets with a fair
value of $0.6 million. While the Company continually evaluates the recovery of
its assets, the Company determined that an impairment was appropriate in 2013
due to the adverse changes in the financial and business circumstances of the
Company. The impairment was based on a review of the individual assets
considering future cash flows and management’s best estimate of recoverable
amounts. The majority of the impairment related to assets in Cameroon of $279
due to the uncertainty of the timing of cash flows from a strategic
transaction. The remainder related to corporate assets in the United States. 

The fair value was based on a consideration of future
cash flows and management judgment using Level 3 inputs under ASC 820. Because
of possible future adverse changes in the financial and business circumstances
of the Company, it is reasonably possible that the estimate of fair value may
change in the near term resulting in the need to further adjust our
determination of fair value. 

There was no rental income in the three months and nine
months ended September 30, 2014. During the three and nine months ended September 30,
2013, GeoCam rented idle equipment to a third party and recorded $9 and $91 as
other income in our condensed consolidated statements of operations as a result
of this transaction. 

6. ACCRUED LIABILITIES AND OTHER PAYABLES/ACCRUED
PAYROLL AND RELATED 

The Company has entered into agreements with certain consultants to
defer a portion of their fees pending the closing of a strategic partner
transaction. As at September 30, 2014 the deferred fees were $227 (December
31, 2013—$105). The deferred fees are included in Accrued liabilities and other
payables on the condensed consolidated balance sheets, however such amounts
will not be paid or impact the cash position until one month after the closing
of a strategic partner transaction involving the Company’s interest in the
Cameroon project, 

The Company has also deferred Directors’ fees pending
the closing of a strategic partner transaction and/or a significant financing.
As at September 30, 2014 the deferred fees were $164 (December 31,
2013—$72). The deferred fees are included in 



12



 











 






 



Accrued
liabilities and other payables on the condensed consolidated balance sheets,
however such amounts will not be paid or impact the cash position until the
earlier of: a) receipt of proceeds from JXTC from the sale of our interest in
the Cameroon project or, b) receipt of proceeds from a significant financing in
an amount expected to be sufficient to cover the Company’s cash requirement for
at least six months. 

 

The Company has also entered into
agreements with certain employees to defer a portion of their salaries pending
the closing of a strategic partner transaction or other events. The deferred
salaries and related employee benefits were equal to $640 as at September 30,
2014 (December 31, 2013—$263). The agreements further provide for an additional
incentive of 100%—200% of the deferral and related employee benefits and as at September 30,
2014 the deferral incentives and related employee benefits were $1,236 (December
31, 2013—$481). The total of deferred salaries and deferral incentives and
related employee benefits of $1,876 (December 31, 2013—$744) is included in
Accrued payroll and related on the condensed consolidated balance sheets,
however such amounts will not be paid or impact the cash position until the
earlier of: a) receipt of proceeds from JXTC or from any other entity from the
sale of our interest in the Cameroon project, b) consummation of the
acquisition of the Company by another company, c) receipt of proceeds from a
significant financing in an amount expected to be sufficient to cover the
Company’s cash requirement for at least six months, or d) March 14, 2014
(related to the deferrals from August 2013 to January 2014 which are not
subject to a forbearance agreement or June 15, 2015 for those which are subject
to a forbearance agreement) or March 14, 2015 (related to the deferrals
from February 2013 forward). 

As of March 14, 2014 none of the foregoing events had occurred and
the Company was not in a financial position to pay the salary deferrals and
incentives. Accordingly in March 2014 the Company sought forbearance
agreements, which would extend the March 14, 2014 deadline to a future
date, from the employees who had deferred a portion of their salaries and the
employees agreed to consider entering into such agreements. Three of these  agreements
have  been finalized and one has not. 

7. SHORT-TERM DEBT 

Note Purchase Agreements

During 2014 and 2013 the Company entered into note purchase agreements
(each a “Note Purchase Agreement” and collectively the “Note Purchase
Agreements”) with a number of parties, identified below, (each a “Purchaser”).
Pursuant to the Note Purchase Agreements, the Company agreed to issue
promissory notes (each a “Note” and collectively the “Notes”) to the Purchasers
in the aggregate principal amount of $1,398 as at September 30, 2014
(December 31, 2013—$605) in consideration of the payment by each Purchaser of a
purchase price equal to the principal amount of such Purchaser’s respective
Note. 

Each Note matures one year from the date of issuance at which time the
outstanding principal amount of each Note and all accrued and unpaid interest
thereon is due and payable by the Company. Interest accrues on the outstanding
principal balance of each Note at the rate of 200% per annum on the Notes
issued in 2013 and January 2014; 300% per annum on the Notes issued from
February to August 2014 and 36% per annum on the Notes issued in September
2014.   The Company was unable to repay the amounts which became due on
September 30, 2014 and subsequent and have  amended the September, October and
November 2014  Notes to 1% interest per month and extending the maturity to 18
months from the date of issuance.  The amendments were agreed to effective as
of the original maturity date.

In June and September 2014 the Company issued additional notes in the
principal amount of $30 under similar terms as noted above except at an interest
rate of 150% and due at December 31, 2014. 

The Company may prepay each Note, in whole or in part and without
penalty, at any time upon 30 calendar days’ prior written notice. The Company
is required to prepay each Note, in whole and without penalty, within five
business days following the consummation of any acquisition by JXTC or by any
other entity of the Company’s 60.5% interest in GeoCam or the consummation of
the acquisition of the Company by another company. The Notes contain events of
default and other terms and conditions. 




 



13



 











 






 



The following
table summarizes the principal amounts of the Notes issued and outstanding as
of September 30, 2014 and December 31, 2013 and identifies the
parties to which the Notes have been issued: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  Richard G. Buckovic............................................................. 
  
 
  $          130 
  
 
  $                  100 
  
 

  
  Norman C. Rose..................................................................... 
  
 
                30 
  
 
                        30 
  
 

  
  M N Rose Shelter Credit Trust............................................. 
  
 
                40 
  
 
                        40 
  
 

  
  Paul D. Rose............................................................................ 
  
 
                60 
  
 
                        60 
  
 

  
  Dragon’s Fire Investments LLC.......................................... 
  
 
              275 
  
 
                      225 
  
 

  
  Thorne Bush Investments LLC........................................... 
  
 
              648 
  
 
                      150 
  
 

  
  Airlie Road Investors LLC.................................................... 
  
 
                75 
  
 
                       —   
  
 

  
  David/Bette McKibben......................................................... 
  
 
                50 
  
 
                       —   
  
 

  
  John/Jean Anderson.............................................................. 
  
 
                20 
  
 
                       —   
  
 

  
  Bill Shaffer.............................................................................. 
  
 
                35 
  
 
                       —   
  
 

  
  Decker JE Halstead, Revocable Living Trust.................... 
  
 
                25 
  
 
                       —   
  
 

  
  Rodney/Eileen Phillips........................................................... .............................................................................................. 
  
 
                10 
  
 
                       —   
  
 

  
  Fintech Limited....................................................................... 
  
 
                30 
  
 
                       —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Short-Term Debt Notes............................................ 
  
 
  $      1,428 
  
 
  $                  605 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




 

The following table summarizes
the amended maturity dates of the Notes issued and outstanding as of
September 30, 2014 and December 31, 2013: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  September 30, 2014................................................................... 
  
 
  $            —           
  
 
  $                  120 
  
 

  
  October 31, 2014........................................................................ 
  
 
                 —           
  
 
                      110 
  
 

  
  November 30, 2014................................................................... 
  
 
                 —           
  
 
                      125 
  
 

  
  December 31, 2014.................................................................... 
  
 
               280          
  
 
                      250 
  
 

  
  January 31, 2015....................................................................... 
  
 
               125          
  
 
                       —   
  
 

  
  February 28, 2015...................................................................... 
  
 
               150          
  
 
                       —   
  
 

  
  March 31, 2015.......................................................................... 
  
 
               170          
  
 
                       —   
  
 

  
  April 30, 2015............................................................................. 
  
 
               255          
  
 
                       —   
  
 

  
  May 31, 2015............................................................................. 
  
 
               355          
  
 
                       —   
  
 

  
  June 30, 2015.............................................................................. 
  
 
                 50          
  
 
                       —   
  
 

  
  August 31, 2015......................................................................... 
  
 
                 13          
  
 
                       —   
  
 

  
  September 30, 2015................................................................... 
  
 
                 30          
  
 
                       —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Short-Term Debt Notes................................................ 
  
 
  $       1,428          
  
 
  $                  605 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




 

Securities Purchase Agreement

On July 22, 2014, the Company entered into a
securities purchase agreement (the “Securities Purchase Agreement”),
registration rights agreement (the “Registration Rights Agreement”) and note
purchase agreement (the “Note Purchase Agreement”), in each case with Tangiers
Investment Group, LLC (“Tangiers”). 

Pursuant to the Securities Purchase Agreement,
Tangiers has committed to purchase up to $3.0 million of the Company’s common
stock, par value $0.0001 per share (the “Common Stock”), from time to time upon
the Company’s advance written request over the course of a 36 month commitment
period (the “Commitment Period”), contingent on the Company filing and
obtaining an effective registration of the underlying shares with the
Securities and Exchange Commission (the “SEC”) and the Company timely complying
with its reporting requirements under the Securities Exchange Act of 1934, as
amended, and applicable SEC regulations. The Company is entitled to request
such equity investments from Tangiers from time to time during the Commitment
Period in an amount of up to $100 per request, and in connection with each
request the Company will issue and sell to Tangiers, and Tangiers will purchase
from the Company, that number of shares of Common Stock determined by dividing
the amount of the advance requested by the Company by a purchase price equal to
85% of the lowest daily volume weighted average trading price of the Common
Stock during the five consecutive trading days following the date of the
Company’s request. The Securities Purchase Agreement includes certain
restrictions on the ability of the Company to issue or sell its capital stock
or securities granting rights to acquire its capital stock for consideration
less than the then current market price of the Company’s Common Stock. 



14



 










 






 



The Securities Purchase Agreement also
requires that the Company issue to Tangiers restricted Common Stock equal to
2.5% of Tangier’s $3.0 million commitment as a commitment fee. The commitment
fee Common Stock is issuable by the Company to Tangiers in two 50% tranches,
with the first tranche due upon the execution of the Securities Purchase
Agreement and the second tranche due 60 days following the execution of the
Securities Purchase Agreement. The number of shares of restricted Common Stock
issuable in each tranche is calculated by dividing the dollar amount of each
tranche by the average volume weighted average trading price of the Common
Stock during the five business days preceding the date on which the shares for
such tranche are due to be issued. The Company issued 3,962,987 common shares
during the third quarter pursuant to the agreement.

Pursuant to the Registration Rights Agreement, the
Company agreed to prepare and file with the SEC a registration statement on
Form S-1 or on such other form as is available and to cause such registration
statement to be declared effective by the SEC prior to the first sale to
Tangiers of the Company’s Common Stock pursuant to the Securities Purchase
Agreement. 

Pursuant to the Note Purchase Agreement, the Company
agreed to issue a 4% convertible promissory note (the “Convertible Note”) to
Tangiers, in the original principal amount of $44 , in consideration of the
payment by Tangiers of a purchase price equal to $40 , with $4 retained by
Tangiers as original issue discount for due diligence, document preparation and
legal expenses in connection with the transactions contemplated by the Note
Purchase Agreement. The Company issued the Convertible Note on July 22,
2014. 

The Convertible Note matures on July 22, 2015, at
which time the outstanding principal amount of the Convertible Note and all
accrued and unpaid interest thereon is due and payable by the Company. The
Convertible Note provides for “guaranteed” interest on the principal balance
thereof at the rate of 4%, which interest is deemed earned as of the date of
the Convertible Note’s issuance, to the extent such principal amount and
interest have been repaid or converted into the Company’s Common Stock. The
Convertible Note is convertible into shares of the Company’s Common Stock at
the option of Tangiers at a conversion price equal to 50% of the lowest trading
price of the Company’s Common Stock during the 20 consecutive trading days
prior to the date on which Tangiers elects to convert all or part of the Convertible
Note. 

The Convertible Note contains certain events of
default, including with respect to defaults in payment obligations, the
commencement of bankruptcy proceedings and certain failures relating to the
listing, trading and bid price of the Company’s Common Stock, the occurrence of
which may result in acceleration of the Company’s obligation to pay the
outstanding principal amount of the Convertible Note and all accrued and unpaid
interest thereon. Upon the occurrence and during the continuance of any event
of default, additional interest will accrue at the rate equal to the lower of
20% per annum or the highest rate permitted by law and liquidated damages
will accrue at the rate of $1 per day. In the event of any acceleration
following an event of default, the amount due and owing to Tangiers under the
Convertible Note will be increased to 150% of the outstanding principal amount
of the Convertible Note plus all accrued and unpaid interest, fees and
liquidated damages, if any. 

Promissory
Note

On October 10, 2013 the Company and The Joe Scott
Group (“JS Group”) entered into a promissory note whereby the JS Group provided
the Company with $59 to establish a certificate of deposit for financial
assurance in favor of the State of New Mexico related to surface disturbance on
the WMJV properties. The certificate of deposit was established on
November 4, 2013 (see Note 14). 

8. STOCK BASED COMPENSATION 

Stock options 

The Company adopted a stock option plan which was
amended in June 2007, 2008 and 2009 (the “Company Option Plan”), under which
18,700,000 Company shares were reserved for issuance upon exercise of options
granted under the Company Option Plan. The Company Option Plan is intended to
provide a means whereby the Company and its subsidiaries can attract, motivate
and retain key employees, consultants, and service providers who can contribute
materially to the Company’s growth and success, and to facilitate the
acquisition of shares of the Company’s common stock. The Company Option Plan
provides for incentive stock options meeting the requirements of
Section 422 of the Internal Revenue Code and nonqualified stock options
that do not meet the requirements for incentive stock options. The Company
Option Plan requires the option exercise price per share purchasable under the
option to be equal to the greater of the closing price of the Company’s common
shares on the Toronto Stock Exchange the day before or date of grant for all
nonqualified stock options and incentive stock options. The Company has historically
issued new shares when share-based awards are exercised. The following table
and related information summarizes the Company’s stock options and the stock
option activity for the three months ended September 30, 2014: 

 




 



15



 











 






 



 




 
  
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 

  
    
   
 
   Options Outstanding 
   
    
   
   
 
   Weighted

   Average

   Remaining

   Contractual

   Term (Years) 
   
    
   
   
 
   Aggregate

   Intrinsic

   Value

   (000’s) 
   
    
   
   
 

  
    
   
 
   Options Available

   for Grant 
   
    
   
   
 
   Number

   Outstanding 
   
    
   
   
 
   Weighted

   Average

   Exercise Price

   per Share* 
   
    
   
   
 

  
  Available and outstanding at
  December 31, 2013..... 
  
 
               8,618,801 
  
 
      10,081,199 
  
 
  $                0.91 
  
 
   
  
 
   
  
 

  
  Granted................................................................................. 
  
 
                           —   
  
 
                    —   
  
 
                      —   
  
 
   
  
 
   
  
 

  
  Exercised............................................................................... 
  
 
                           —   
  
 
                    —   
  
 
                      —   
  
 
   
  
 
   
  
 

  
  Forfeited................................................................................ 
  
 
                   620,000 
  
 
          (620,000 )
  
 
                     0.72 
  
 
   
  
 
   
  
 

  
  Expired.................................................................................. 
  
 
                           —   
  
 
                    —   
  
 
                      —   
  
 
   
  
 
   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
   
  
 
   
  
 

  
  Available and outstanding at September 30, 2014.... 
  
 
               9,238,801 
  
 
        9,461,199 
  
 
  $                0.91 
  
 
                    3.30 
  
 
  $           —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
   
  
 
   
  
 

  
  Exercisable at September 30, 2014............................... 
  
 
   
  
 
        9,461,199 
  
 
  $                0.91 
  
 
                    3.30 
  
 
  $           —   
  
 

  
  Vested or expected to vest at September 30,
  2014..... 
  
 
   
  
 
        9,461,199 
  
 
  $                0.91 
  
 
                    3.30 
  
 
  $           —   
  
 






 



*         Some of the options are granted with Canadian dollar exercise
prices, and the weighted average prices reflect the U.S. dollar equivalent
prices. 

The following stock option grants were
issued by the Company during the nine months ended September 30, 2014 and
2013 respectively: 

•         The Company did not grant any options under the Company
Option Plan during 2014 and 2013. During the three months ended September 30,
2014 the Company recorded compensation expense of $0 relating to vesting of
previous grants (2013—$3). There was no unrecognized compensation expense
related to non-vested stock based compensation granted under the Company Option
Plan as of September 30, 2014. 

 

•         The weighted-average fair value per share of options granted
under the Company’s Options Plan during 2014 and 2013 was zero as no options
were granted. No options were exercised in the nine months ended September 30,
2014 resulting in the total intrinsic value of share options exercised of $0
(2013—$0). The total cash received from the exercise of stock options was $0
(2013—$0). 

No stock options were granted during the nine months
ended September 30, 2014 and 2013 resulting in no fair value estimates. 

The Company estimates expected forfeitures at the
grant date and compensation expense is recorded only for those awards expected
to vest. The estimate of expected forfeitures is reevaluated at the balance
sheet date. 

Option pricing models require the input of highly
subjective assumptions, particularly as to the expected price volatility of the
market value of the underlying stock. Changes in these assumptions can
materially affect the fair value estimate and therefore it is management’s view
that the existing models do not necessarily provide a single reliable measure
of the fair value of the Company’s equity instruments. 

Stock awards 

The Company adopted the 2010 Company Stock Award Plan (the “Stock Award
Plan”) that was approved in June 2010. The Common Stock that may be issued
pursuant to Stock Awards shall not exceed 2,000,000 shares of Common Stock. The
Common Stock subject to the Stock Award Plan shall be authorized and unissued
stock. Stock Awards may be granted to Employees, Directors, Officers and
Consultants. Stock Awards may be granted as Restricted Stock Awards or Restricted
Stock Units. 

During the nine months ended September 30, 2014
and 2013, we did not grant any Restricted Stock Awards. During 2011, we granted
210,000 Restricted Stock Awards to certain members of the executive management
team and the Board of Directors. The Restricted Stock Awards vest 40% on the
grant date (January 21, 2011), 30% on the 1st
anniversary of the grant date, and 30% on the 2nd
anniversary of the grant date. For the nine months ended September 30,
2014, the Company recognized compensation expense of $0 (2013—$1) related
to the Restricted Stock Awards. 




 



16



 










 






 



Also during the nine months ended September 30,
2014 and 2013, we did not grant any Restricted Stock Units. During 2011, we
granted 180,000 Restricted Stock Units to certain members of the Board of
Directors. The Restricted Stock Units vested on the first anniversary of the
grant date. The shares are issued to the recipient on the earlier of their
termination date or on the third anniversary of the grant date. During the nine
months ended September 30, 2014 no shares were issued. During the year
ended December 31, 2013, 80,000 shares were issued to two members of the
Board of Directors who did not stand for re-election. For the nine months ended
September 30, 2014 and 2013, the Company recognized no compensation
expense as they were fully expensed during 2012 related to the Restricted Stock
Units. 

9. STOCKHOLDERS’ EQUITY 

Common stock 

The Company is authorized to issue 200 million shares of common
stock, with a par value of $0.0001. There were 110,682,589 shares issued as of September 30,
2014. 

Preferred stock 

The Company is authorized to issue 50 million shares of preferred
stock, with a par value of $0.0001. There are no shares of preferred stock
issued or outstanding as of September 30, 2014. 

10.
DERIVATIVE INSTRUMENTS 

The Company currently does not hold derivative instruments to manage
its exposure to commodity prices. The Company evaluates all of its financial
instruments to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives. All derivative financial instruments
are recognized on the condensed consolidated balance sheets at fair value.
Changes in fair value are recognized in earnings if they are not eligible for
hedge accounting or other comprehensive income if they qualify for cash flow
hedge accounting. 

11. FAIR VALUE MEASUREMENTS 

ASC 820, Fair Value Measurements and Disclosures, defines fair
value as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the
measurement date and establishes a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. The hierarchy, as
defined below, gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities and the lowest priority to
unobservable inputs. 

•         Level 1, defined as observable inputs such as quoted prices
in active markets for identical assets. 

•         Level 2, defined as observable inputs other than Level 1
prices. These include quoted prices for similar assets or liabilities in an
active market, quoted prices for identical assets and liabilities in markets
that are not active, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or
liabilities. 

•         Level 3, defined as unobservable inputs in which little or no
market data exists, therefore requiring an entity to develop its own
assumptions. 

At September 30, 2014 and December 31, 2013,
the carrying amounts of cash and cash equivalents, restricted cash and trade
payables represented fair value because of the short-term nature of these
instruments. 

12. NON-CONTROLLING INTEREST 

On January 24, 2013 GeoCam shareholders approved a capital
increase equivalent to approximately $1.2 million, with the capital to be
funded with multiple cash calls. Geovic’s 60.5% share of the capital increase
was approximately $0.7 million 

On February 14, 2013 the first cash call totaling
approximately $0.4 million, of which Geovic paid approximately $0.2 million,
was completed. 

On April 17, 2013 the second cash call totaling
approximately $0.4 million, of which Geovic paid approximately $0.24 million,
was completed. 

On July 31, 2013 the third cash call
totaling approximately $0.4 million, of which Geovic paid approximately $0.24
million, was completed. 



17



 










 






 



On October 15, 2014 GeoCam shareholders
approved a capital increase equivalent to approximately $1.0 million.  Geovic’s
60.5% share of the capital increase is approximately $0.6 million.  

On November 15, 2014 the first cash call totaling
approximately $0.5 million was called, of which Geovic’s share was
approximately $0.3 million.  As of the date of filing the cash call had not
been funded by either shareholder. Geovic offset its share of the first cash
call with charges to Geocam for the provision of the services of a General
Manager in the amount of $0.5 million for the period October 1, 2012 to
September 30, 2014. An additional $0.2 million will be available to offset a
portion of the remainder of the cash call.

The non-controlling interest balance of approximately
$8,023 at September 30, 2014 (December 31, 2013—$8,471) represents the
balance from the capital increases contributed by the non-controlling interest
as described above. The difference between the amounts contributed and the
balance at September 30, 2014 represents the non-controlling interest
share of the actual expenditures from January 1, 2007 through September 30,
2014. 

13. INCOME TAXES 

The Company files income tax returns in the U.S. federal jurisdiction,
Cameroon, France, New Caledonia and Colorado. The Company has open tax years
for the U.S. federal return from 2000 forward with respect to its net operating
loss (“NOL”) carry-forwards, where the IRS may not raise tax for these years,
but can reduce NOLs. Otherwise, with few exceptions, the Company is no longer
subject to federal, state, or local income tax examinations for years prior to
2009. The Company has incurred losses since inception. Due to the full
valuation allowance against its net deferred tax asset, management would expect
that any adjustment resulting from the audit would not result in an adjustment
to the Company’s financial statements. In addition, the Company’s ability to
deduct NOL carry-forwards may be subject to a limitation if the Company were to
undergo an ownership change for purposes of Section 382 of the Internal
Revenue Code of 1986, as amended. 

There was no benefit from income taxes in the nine months
ended September 30, 2014 and during the same period in 2013. The effective
tax rate was 0% for the nine months ended September 30, 2014 and for the
same period in 2013. Our effective rates differ from the statutory federal rate
of 35% for certain items, such as state and local taxes, non-deductible
expenses, change in valuation allowance offsetting foreign and domestic
operating losses and foreign taxes at rates other than 35%. 

The Company recognizes potential accrued interest and
penalties related to unrecognized tax benefits in income tax expense. For the nine
months ended September 30, 2014, the Company recognized no potential
interest or penalties with respect to unrecognized tax benefits. 

The Company had no unrecognized tax benefit as of September 30,
2014 or change in unrecognized tax benefits that would impact the effective
rate. The Company does not anticipate a significant change to the total amount
of unrecognized tax benefits over the remainder of the year. 

 

14. JOINT VENTURE 

During 2013 the Company entered into the Wind Mountain Joint Venture
(“WMJV”) with the JS Group for exploring, defining, developing and marketing of
mining claims the Company owns in New Mexico which commenced work during the
third quarter of 2013. The funding would be provided by the JS Group in three
phases and the Company agreed to convey and transfer all right, title and
interest of 60% of the mining claims to the JS Group in such phases dependent
upon continuation of the project and funding. 

The agreement is considered a collaborative
arrangement between the Company and JS Group. The Company’s accounting policy
for collaborative arrangements is to report any costs incurred with third
parties in the statement of operations and to evaluate the income statement classification
of transactions with JS Group based on the nature of the collaborative
arrangement’s business operations and the contractual terms of the arrangement.
The Company has previously expensed all costs related to the New Mexico claims
and in accordance with ASC 932, Extractive Industries, have recorded no
gain upon conveying the original 60% of the claims. The transfer of the mining
claims to WMJV is considered equal in value to the funding in each phase and no
amounts appear in the financial statements. The funding by the JS Group,
project to date is $72. 

In April 2014 the Company and the JS Group entered
into a letter of agreement amending the original agreement, whereby the JS
Group have the option to acquire an additional 30% of the WMJV mining claims
for a total consideration of $0.3 million upon the completion of the first
phase of activities and funding related to WMJV. Further, upon payment of the
$0.3 million consideration, Geovic is to convey and assign 90% of the interest
in the mining claims to JS Group. Upon the JS Group electing to acquire the
additional 30% from the Company, Geovic shall have an option to reacquire 15%
of the interest for $150 upon written notice to the JS Group prior to the
receipt of the assay results of the first core sample during the second phase
of the project. In April 2014 upon 



18



 











 






 



completion of the
first phase of activities and funding, the JS Group elected to exercise such
option to acquire an additional 30% for $0.3 million for a total interest of
90%. Upon receipt of the $0.3 million consideration, the Company assigned 90%
of the mining claims to the JS Group. The proceeds of $0.3 million were
recorded to exploration costs where the original expenditures on the properties
were expensed. 

On October 10, 2013 the Company and the JS Group
entered into a promissory note whereby the JS Group provided the Company with
$59 to establish a certificate of deposit for financial assurance in favor of
the State of New Mexico related to surface disturbance on the WMJV properties. The
certificate of deposit was established on November 4, 2013. 

15. POSSIBLE GEOCAM TRANSACTION 

As disclosed in Note 1, on July 23,
2013 the Company announced that it had agreed to the terms and conditions of a
Definitive Agreement (“DA”) with JXTC. JXTC is a state owned large-scale
industrial enterprise with significant mining and industrial operations in
cobalt, copper, tungsten, and other rare metals. The terms and conditions of
the DA were agreed amongst JXTC, SNI (which owns or represents 39.5% of Geovic
Cameroon), the Company, Geovic Ltd. and GeoCam. 

The transaction contemplated by the DA establishes
JXTC’s intent to acquire 60.5% of the existing shares of GeoCam pursuant to the
execution of a share purchase agreement between JXTC and the Company which is
expected to be subject to a variety of conditions and approvals, many of which
are outside the control of the Company. There is no assurance that this
agreement will be finalized or that the transaction contemplated therein will
be completed. This proposed transaction would result in the complete
disposition of the Company’s interest in GeoCam and the Nkamouna Project. In
addition to acquiring 60.5% interest in GeoCam, JXTC would also secure 100% of
the mixed cobalt-nickel sulphide product to be produced by the Nkamouna Project
through a long-term arm’s length Off-Take Agreement with GeoCam. As of the date
of issuance, the share purchase agreement has not been finalized, and there is
no certainty the transaction contemplated therein will be completed. 

The DA expired on March 31, 2014 and as at that
date the parties had not entered into a share purchase agreement. In September
2014 the parties agreed to an extension of the DA retroactive to the original
expiry through December 31, 2014. There can be no assurance that a share
purchase agreement will ultimately be entered into or that the transactions
contemplated therein will be completed. 

In accordance with ASC 360, Property, Plant and
Equipment because the proposed share purchase agreement described in Note 1
is not yet finalized and approved by the stockholders of the Company, the
assets and liabilities of GeoCam continue to be classified as held and used as
of September 30, 2014. 

16. RELATED PARTY TRANSACTIONS 

[a]      During 2013 and 2014 the Company entered into agreements with
certain employees to defer a portion of their salaries pending the closing of a
strategic partner transaction or other events. The agreements further provided
for an additional incentive. The deferred salaries and incentive amounts, not
including related employee benefits, for Executive Offices and/or Directors as
at September 30, 2014 are Michael T. Mason $658 (December 31, 2013—$225),
Greg C. Hill $438 (December 31, 2013—$184) and William A. Buckovic $601 (December
31, 2013—$205). See further disclosure in Note 6. 

 

[b]      During 2013 and 2014 the Company entered into Note Purchase
Agreements with Paul D. Rose, a Director of the Company ($60), Dragon’s Fire
Investments LLC, an entity owned by Paul D. Rose ($275), Norman C. Rose, the
father of Paul D. Rose ($30), Thorne Bush Investments LLC, owned by Norman C.
Rose ($648), John and Jean Anderson, the brother-in-law and sister of William
A. Buckovic ($20) and Rodney and Eileen Phillips, in-laws of William A.
Buckovic ($10)  . Further, Richard G. Buckovic ($130) is the uncle of William
A. Buckovic, Executive Vice President and Director and the M.N. Rose Shelter
Credit Trust ($40) is a trust organized by Norman C. Rose, the father of Paul
D. Rose. See further disclosure in Note 7. 

[c]      GeoCam entered into a professional and management services
contract with SNI, the holder of 20% and representative of other holders of an
additional 19.5% of the outstanding shares of GeoCam that was effective for
fiscal year 2011. The services were for government relations and administrative
matters related to project development. No agreements have been entered into
subsequent to 2011. 

17. COMMITMENTS AND CONTINGENCIES 

[a]      In November 2009, five management level consultants or
employees of GeoCam filed litigation in Cameroon, claiming approximately
$2.2 million as compensation and damages as a result of termination of
their services by GeoCam in connection with a reduction in workforce in
February and March 2009. In April 2010 the litigation was dismissed. In July
2010 the litigation was brought by four of the claimants before one other
jurisdiction and by the fifth claimant in a separate jurisdiction. 



19



 









 






 



On June 3, 2011, the High Court of Abong-Mbang, the
court before which four of the matters were pending entered judgments
in favor of the four claimants totaling CFA 780,339,500 (approximately
$1.6 million at September 30, 2014). On November 14, 2011, the High
Court of Mfoundi, Yaoundé, the court before which the fifth matter was pending
entered a judgment in favor of the claimant totaling CFA 118,804,219
(approximately $0.2 million at September 30, 2014). GeoCam appealed all
five matters to the next highest appellate court in Cameroon, the Court of
Appeal of the East Region at Bertoua as to the four claimants and the Court of
Appeal of the Center Region at Yaoundé as to the fifth matter. In June 2014 the
appeal in the fifth matter was heard and the earlier court judgment for CFA
118,804,219 (approximately $0.2 million at September 30, 2014) was
overturned. However, the claimant may file an appeal or civil claim to another
court. 

The
Court of Appeal, before which the fifth matter was pending, authorized CFA
51,851,813 (approximately $0.1 million at September 30, 2014) of GeoCam
funds to be attached for the benefit of the claimant in the second quarter of
2012 and placed in a restricted account at GeoCam’s bank pending resolution of
the case. GeoCam has sought to have this restriction lifted. The matter was
adjourned and delayed until subsequent to the date hereof however GeoCam has
requested the restriction be immediately lifted based on the fact that the
judgment for the entire claim has been overturned. 

The
Court of Appeal before which the other four appeals were pending set aside the
judgment of the lower court discussed above and awarded the four claimants an
amount totaling CFA 125,062,7 (approximately $0.3 million at September 30,
2014) in the fourth quarter of 2012. GeoCam has filed appeals in all four
matters which stayed enforcement of the judgments pending resolution of the
appeals. This Court of Appeal also authorized CFA 108,949,204 (approximately
$0.2 million at September 30, 2014) in GeoCam funds to be attached
for the benefit of the claimants and placed in a restricted account at GeoCam’s
bank pending final resolution of the appeals. In December 2013 attached funds
related to one claim in the amount of CFA 46,353,259 (approximately $0.1 million)
were released to GeoCam. In January 2014 attached funds related to two more of
the remaining claims in the amount of CFA 42,380,887 (approximately $0.09
million) were released to GeoCam. In May 2014 attached funds related to the
remaining one claimant of CFA 20,215,058 (approximately $0.04 million) were
released to GeoCam. 

The
restricted funds related to the one claimant that remained at September 30,
2014 totaling approximately $0.1 million are included as restricted cash on our
consolidated balance sheets. The Company believes all contractual and other
obligations to the five individual claimants were satisfied; however,
given the judgments, we believe it could be deemed probable that the outcome
would be unfavorable to GeoCam and, therefore, GeoCam accrued
approximately $0.3 million for the matters in our consolidated financial
statements at the time the Court of Appeal reached its decision. It is
possible that an additional amount up to approximately $0.2 million could be
awarded to the claimants in these matters. 

[b]      On October 22, 2013, the Company entered into a severance
and release agreement (the “Severance Agreement”) with Timothy D. Arnold, the
Company’s Chief Operating Officer. The Severance Agreement provides that
October 24, 2013 was Mr. Arnold’s last day of employment with the
Company (the “Separation Date”). 

Under
the Severance Agreement the Company is obligated to pay Mr. Arnold a lump
sum severance payment equal to $0.5 million, less applicable deductions and
withholdings (the “Severance Amount”). The Company must pay the Severance
Amount to Mr. Arnold on the first business day following six months after
the Separation Date (the “Payment Date”), unless payment on that date would
jeopardize the ability of the Company to continue as a going concern, in which
case the Severance Amount is payable on the first date after the Payment Date
where making such payment would not jeopardize the ability of the Company to
continue as a going concern. As of September 30, 2014 the Company had not
paid the Severance Amount due to the jeopardy of the ability of the Company to
continue as a going concern that would have resulted from such payment.
Effective upon the actual payment of the Severance Amount, Mr. Arnold has
agreed to release, subject to limited exceptions, the Company and its
affiliates from any and all claims Mr. Arnold may have through the
effective date of the Severance Agreement. 

The
Severance Agreement replaces and supersedes the Executive Employment Agreement
between the Company and Mr. Arnold, dated as of February 1, 2011. 

[c]      The Company has engaged a consultant to provide consulting
services in connection with the Nkamouna Project. The Company paid the
consultant $11 in fees during the nine months ended September 30, 2014
(2013—$20). The consultant has agreed to defer a portion of their fees pending
the closing of a strategic partner transaction equal to $100 as at September 30,
2014. The deferred fees are accrued and will be paid per the disclosure in Note
6. Further, the Company has agreed to pay a contingent fee of approximately
$0.2 million upon completion of a successful transaction. 

[d]      In December 2009 the Company engaged a financial advisor in
connection with the financing of the Nkamouna Project. The Company agreed to
pay a fixed retainer fee of $50 per month and a $0.8 million success fee upon
completion. The terms of the agreement were based on the assumption that the
completion would occur by December 2010. A replacement agreement with GeoCam
was entered into August 2010 with substantially the same terms except the new
agreement extended the date of the expected completion of financing. During the
first quarter of 2012, the $50 per month retainer obligation was mutually
suspended. In May 2014 the financial advisor provided written notice to GeoCam
of their intention to terminate the agreement. 



20



 










 






 



Part
I—Financial Information

Item 1.           Condensed Consolidated Financial
Statements (unaudited) 

Geovic Mining Corp. 

(an
exploration stage company) 

CONDENSED CONSOLIDATED BALANCE SHEETS 

(Unaudited,
in thousands except per share amounts) 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  ASSETS
  
 
   
  
 
   
  
 

  
  Current assets:
  
 
   
  
 
   
  
 

  
  Cash and cash equivalents
  
 
  $                66    
  
 
  $                181 
  
 

  
  Restricted cash
  
 
                  159    
  
 
                    324 
  
 

  
  Prepaid expenses
  
 
                   —      
  
 
                      67 
  
 

  
  Assets held for sale [note 5]
  
 
                  643    
  
 
                     —   
  
 

  
  Other
  
 
                   —      
  
 
                      15 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total current assets
  
 
                  868    
  
 
                    587 
  
 

  
  Property, plant and equipment, net [note 5]
  
 
                  188    
  
 
                 1,178 
  
 

  
  Deposits
  
 
                    14    
  
 
                      28 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total assets
  
 
  $          1,070    
  
 
  $            1,793 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  LIABILITIES
  
 
   
  
 
   
  
 

  
  Current liabilities:
  
 
   
  
 
   
  
 

  
  Accrued liabilities and other payables [note 6]  
  
 
  $          4,528    
  
 
  $            1,067 
  
 

  
  Accrued payroll and related [note 6]   
  
 
               1,876    
  
 
                    744 
  
 

  
  Short-term debt [note 7]         
  
 
               1,531    
  
 
                    664 
  
 

  
  Accrued litigation [note 17]   
  
 
                  250    
  
 
                    250 
  
 

  
  Related party payable [note 16 (b)]     
  
 
                  360    
  
 
                    328 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total current liabilities               
  
 
               8,545    
  
 
                 3,053 
  
 

  
  Other liabilities     
  
 
                  471    
  
 
                    471 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total liabilities   
  
 
               9,016    
  
 
                 3,524 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Commitments and contingencies [note 17]
  
 
   
  
 
   
  
 

  
  EQUITY
  
 
   
  
 
   
  
 

  
  Common stock, par value of $0.0001, 200 million
  shares authorized and 106.7 million and 106.7 million shares issued
  and outstanding in 2014 and 2013, respectively             
  
 
                    11    
  
 
                      11 
  
 

  
  Additional paid-in capital  
  
 
          110,581    
  
 
            110,581 
  
 

  
  Deficit accumulated during the exploration stage        
  
 
         (126,561)
  
 
           (120,794 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total controlling stockholders’ equity (deficit)         
  
 
           (15,969)
  
 
             (10,202 )
  
 

  
  Non-controlling interest [note 12]    
  
 
               8,023    
  
 
                 8,471 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total equity (deficit)         
  
 
             (7,946)
  
 
               (1,731 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total liabilities and equity 
  
 
  $          1,070    
  
 
  $            1,793 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




The accompanying notes are an integral part of these
financial statements 

 



3



 











 






 



[e]      In January 2011, the Company
engaged a financial advisor to advise it with respect to the Company’s
obligations in connection with financing of the Nkamouna Project and to assist
in developing arrangements with strategic investors. The Company agreed to pay
a fixed retainer fee of $50 per month plus reimbursement of expenditures, and a
minimum success fee of $1.0 million based on a sliding scale depending on the
size of any financing transaction. During the first quarter of 2012, the $50
per month retainer obligation was mutually suspended at least until a financing
transaction is underway. 

[f]       The Company engaged a provider of legal and consulting
services in connection with the Nkamouna Project. The Company agreed to pay a
fixed quarterly fee and reimbursement of travel expenditures; the payment for
any additional services will be contingent upon completion of a successful
transaction. The contingent success fee as of September 30, 2014 is €349
(equivalent to approximately $0.44 million) (2013— €349 (equivalent to
approximately $0.48 million)). 

18. SUBSEQUENT EVENTS 

 

Subsequent to September 30,
2014, on October 22, 2014, Greg Hill, Executive Vice President and Chief
Financial Officer and Interim Principal Accounting Officer and Secretary
resigned. Christopher A. Serin, Director of the Company, will serve as Chief
Financial Officer and Interim Principal Accounting Officer and Secretary of the
Company.  The Company may have obligations under the Mr. Hill’s employment
contract.  

 

Subsequent to September 30,
2014 on December 9, 2014 the Company received a notification that GeoCam
employees are threatening to strike as of December 15, 2014 unless all
compensation arrears are paid.  The Company is communicating with the GeoCam
staff.

 

Subsequent to September 30, 2014 on October 1, 2014, the Company
entered into a severance and release agreement (the “Severance Agreement”) with
Sheila I. Short, the Company’s Corporate Secretary. The Severance Agreement
provides that August 31, 2014 was Ms. Short’s last day of employment
with the Company (the “Separation Date”). Under the Severance Agreement the
Company is obligated to pay Ms. Short all wages, unused vacation days
earned up through the separation date, less applicable deductions and withholdings,
and submit the customary 3% to the employee’s Geovic 401(K) (“the Required
Payments”) and a lump sum severance payment equal to $0.2 million (the
“Severance Amount”). The Company must pay the Required Payments and Severance
Amount to Ms. Short on the first business day following six months after
the Separation Date (the “Payment Date”), unless payment on that date would
jeopardize the ability of the Company to continue as a going concern, in which
case the Severance Amount is payable on the first date after the Payment Date
where making such payment would not jeopardize the ability of the Company to
continue as a going concern. The Severance Agreement replaces and supersedes
the Executive Employment Agreement between the Company and Ms. Short,
dated as of June 27, 2013. 

 

ITEM  2.       MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

The following
discussion and analysis should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
contained in our Annual Report on Form 10-K for the year ended
December 31, 2013 as well as with the financial and related notes and the
other information appearing elsewhere in this report. As used in this report,
unless the context otherwise indicates, references to “we”, “our”, “ours” and
“us” refer to Geovic Mining Corp. and its subsidiaries collectively. 

Overview 

This
Management’s Discussion and Analysis (“MD&A”) is intended to provide an
analysis of our capital resources and liquidity at September 30, 2014, and
financial results for the three and nine months ended September 30, 2014
compared to the prior period. All amounts are presented in United States
dollars unless indicated otherwise. Reference should also be made to the financial
statements filed with this report and the Company’s other disclosure materials
filed from time to time on www.sec.gov or www.sedar.com or the
Company’s website at www.geovic.net. 

 

Business 

We are engaged in the business of identifying, exploring and initially
developing mineral exploration prospects. Our primary asset is a cobalt,
nickel, and manganese mining project in Cameroon, Africa (the “Nkamouna
Project”) held by GeoCam, our majority-owned (60.5%) subsidiary
incorporated under the laws of the Republic of Cameroon. We also explore for
exploitable deposits of other minerals. We hold the following early stage
exploration prospects: exploration licenses in New Caledonia (chromite); state
exploration permits in Arizona (gold); mineral leases and mining claims in
Colorado and Wyoming (uranium); mining claims in 



21



 










 






 



New
Mexico and California (rare earth and other specialty metals); and an
exploration license in Papua New Guinea (advanced and specialty metals). 

Our ability to continue operations in the future will
be largely dependent on our ability to arrange a strategic investment in the
Nkamouna Project. We expect that such an investment would involve the sale of
some or all of our interest in the Project. We do not have available financial
resources necessary to construct and open the Nkamouna Project. We are
proactively pursuing a strategic investment which, if completed, would result
in our selling some or all of our interest in the Nkamouna Project to a third
party. 

On July 23, 2013 the Company announced that it
had agreed to the terms and conditions of a Definitive Agreement (“DA”) with
Jiangxi Rare Metals Tungsten Holdings Group Company Ltd (“JXTC”) of Nanchang,
Jiangxi Province, China. JXTC is a state owned large-scale industrial
enterprise with significant mining and industrial operations in cobalt, copper,
tungsten, and other rare metals. The terms and conditions of the DA were agreed
amongst JXTC, Societe Nationale d’Investissement du Cameroun (“SNI”), the
National Investment Corporation of Cameroon that owns or represents 39.5% of
GeoCam, the Company, Geovic Ltd. and GeoCam. 

The transaction contemplated by the DA establishes
JXTC’s intent to acquire 60.5% of the existing shares of GeoCam pursuant to the
execution of a share purchase agreement between JXTC and Geovic which is
expected to be subject to a variety of conditions and approvals, many of which
are outside our control. There is no assurance that this agreement will be
finalized, or that the transaction contemplated therein will be completed. This
proposed transaction would result in the complete disposition of the Company’s
interest in GeoCam and the Nkamouna Project. In addition to acquiring 60.5%
interest in GeoCam, JXTC would also secure 100% of the mixed cobalt-nickel
sulphide product to be produced by the Nkamouna Project. The share purchase
agreement is not yet finalized and would require the approval of the
stockholders of the Company. 

The DA
expired on March 31, 2014 and as at that date the parties had not entered
into a share purchase agreement. In September 2014 the parties agreed to an
extension, retroactive to the original expiry of the DA through December 31,
2014. There can be no assurance that a share purchase agreement will ultimately
be entered into or that the transactions contemplated therein will be
completed. 

If an agreement is reached, it would be subject, among
other matters, to approval of our stockholders. If we are unable to complete
and close an agreement to sell a significant interest in the Nkamouna project
to a strategic partner, or in the alternative raise sufficient funds to develop
the Nkamouna project, in a timely manner, our plan is to place the Nkamouna
Project on a “care and maintenance” status and significantly further reduce our
level of expenditures in Cameroon. In such event, we would not have sufficient
resources to maintain our interest in the Project indefinitely and we could
lose our interest in the Project. In such a scenario, our cash resources would
likely be insufficient to sustain our other business activities. 

We are endeavoring to arrange additional financing which would allow us
to continue work on our mineral projects and pay our expenses. If we are unable
to arrange adequate financing, we may seek to further reduce our operations, to
the extent possible, while we continue efforts to monetize our investment in
GeoCam, or we may cease operations, which could include a bankruptcy filing.
Unless we arrange additional financing, we expect to nearly exhaust our cash
during August 2014. 

During 2014 and 2013 the Company entered into note purchase agreements
(each a “Note Purchase Agreement” and collectively the “Note Purchase Agreements”)
with a number of parties, identified below, (each a “Purchaser”). Pursuant to
the Note Purchase Agreements, the Company agreed to issue promissory notes
(each a “Note” and collectively the “Notes”) to the Purchasers in the aggregate
principal amount of $1,398 as at September 30, 2014 (December 31,
2013—$605) in consideration of the payment by each Purchaser of a purchase
price equal to the principal amount of such Purchaser’s respective Note. 

Each Note matures one year from the date of issuance at which time the
outstanding principal amount of each Note and all accrued and unpaid interest
thereon is due and payable by the Company. Interest accrues on the outstanding
principal balance of each Note at the rate of 200% per annum on the Notes
issued in 2013 and January 2014; 300% per annum on the Notes issued from
February to August 2014 and 36% per annum on the Notes issued in September
2014.   The Company was unable to repay the amounts which became due on
September 30, 2014 and subsequent and have amended the September, October and
November 2014  Notes to 1% interest per month and extending the maturity to 18
months from the date of issuance.  The amendments were agreed to effective as
of the original maturity date.

In June and September 2014 the Company issued additional notes in the
principal amount of $30 under similar terms as noted above except at an
interest rate of 150% and due at December 31, 2014. 

The Company may prepay each Note, in whole or in part
and without penalty, at any time upon 30 calendar days’ prior written notice.
The Company is required to prepay each Note, in whole and without penalty,
within five business days following the consummation of any acquisition by JXTC
or by any other entity of the Company’s 60.5% interest in GeoCam or the
consummation of the acquisition of the Company by another company. The Notes
contain events of default and other terms and conditions.



22



 










 






 



In April 2014 the Company and the JS Group
entered into a letter of agreement amending the original Wind Mountain Joint
Venture (“WMJV”) agreement whereby the JS Group have the option to acquire an
additional 30% of the WMJV mining claims for a total consideration of $0.3
million upon the completion of the first phase of activities and funding
related to WMJV. Further, upon payment of the $0.3 million consideration,
Geovic is to convey and assign 90% of the interest in the mining claims to JS
Group. Upon the JS Group electing to acquire the additional 30% from the
Company, Geovic shall have an option to reacquire 15% of the interest for $150
upon written notice to the JS Group prior to the receipt of the assay results
of the first core sample during the second phase of the project. In April 2014
upon completion of the first phase of activities and funding, the JS Group elected
to exercise such option to acquire an additional 30% for $0.3 million for a
total interest of 90%. Upon receipt of the $0.3 million consideration, the
Company assigned the full 90% of the mining claims to the JS Group. 

On April 29, 2014 the Company was contacted by
the TSX regarding the issuance of the short term debt promissory notes and note
purchase agreements, specifically regarding the interest rates of 200-300%. The
Company was informed that in failing to notify the TSX prior to the issuance of
the Notes the Company contravened Subsection 501(c) of the TSX Company Manual.
TSX informed the Company that acceptance of the issuance of the Notes was
subject to the following: the Company must immediately notify the lenders that
interest on the Notes will not be paid until such time as disinterested
shareholder approval is received; within one business day of approval by
disinterested shareholders the Company must provide to the TSX (a) a
certified resolution of the Board of Directors, excluding any Directors that
subscribed for Notes, approving the issuance of the Notes; (b) a certified
resolution of the disinterested shareholders approving the issuance of the
Notes along with a copy of the scrutineer’s report evidencing such approval;
and, (c) a commercial copy of the proxy statement sent to shareholders in
connection with the 2014 Annual Meeting with the comments of the TSX
incorporated therein. The Company received disinterested shareholder approval
at its Annual Meeting of Stockholders in June 2014 and provided the TSX the
required documentation. 

On May 1, 2014, the Company received notice from
the TSX that the TSX was reviewing the Company’s eligibility for the continued
listing of its shares of common stock on the TSX (the “Continued Listing
Review”). The TSX granted the Company 30 days to demonstrate that it complies
with all of the TSX continued listing requirements that are applicable to the
Company. The TSX advised the Company that the Continued Listing Review was
being conducted in connection with the Company’s issuance of the Notes to
certain related parties in 2013 and the first quarter of 2014. Specifically,
the notice from the TSX states that the Company failed to seek the TSX’s prior
approval of the Notes transaction and prior disinterested shareholder approval
for the issuance of the Notes, in each case as required under the
Section 501(c) of the TSX Company Manual. The notice also stated that the
Company appears to have breached the TSX’s Timely Disclosure Policy for its
failure to news release the key details of the Notes, including the interest
rates, which the TSX believes are not commercially reasonable. The Company
provided the TSX with written submissions addressing the deficiencies
identified in the notice and received an extension to July 25, 2014 in
order to put in place an orderly transition to another exchange. On
July 25, 2014 the Company was delisted by the TSX and transitioned to the
NEX, a separate board of the TSX Venture Exchange as of July 28, 2014
under the symbol “GMC.H”. 

A feasibility study for the Nkamouna Project was
completed in April 2011, which estimated approximately $617 million of initial
capital costs, including contingencies, to construct and start-up the Nkamouna
Project. The GeoCam financial advisor estimated that the total of capital,
financing, working capital, contingency and start-up costs would be
approximately $698 million, based on estimates included in the feasibility
study. Additionally, cost overrun requirements of lenders to the Nkamouna
Project were projected to be approximately $100 million. 

Since the feasibility study was completed, we have devoted most of our
efforts to seeking and evaluating a means to finance the Nkamouna Project. We
have considered many possible alternatives, including joint ventures or similar
arrangements, which may include a sale of a significant portion or all of our
interest in the Nkamouna Project to strategic investors who could assist in
financing and would have an interest in purchasing the cobalt, nickel and
manganese products produced from the Nkamouna Project. Beyond the Nkamouna
Project financing we would also face other significant issues affecting
development and operation of the Nkamouna Project. These include operating the
Nkamouna Project through GeoCam as an autonomous Cameroonian entity, and
GeoCam’s ability to recruit, train and retain a team of qualified mining
professionals and a stable local workforce to manage the development,
construction and operation of the Nkamouna Project in a relatively undeveloped,
remote area in Cameroon. 

Since 2012 we have been seeking to 1) realize value for the Cameroonian
assets and 2) shift the Company’s focus to a prospect generation and strategic
investment business model. Since our position in GeoCam will likely be
significantly diminished or completely eliminated through strategic investment
upon completion of a financing transaction, the future direction for the
Company will be to identify new exploration prospects, minimally develop and
prioritize existing and new prospects, and sell or joint venture further
exploration and development of those prospects to others. The Company expects
to take prospects to a level where they can be timely monetized through
strategic investments by others who have the resources and staying ability to
complete advanced exploration, permitting and development. 

We are the majority shareholder of GeoCam. Under the Shareholder
Agreement, GeoCam is operated as an autonomous entity and governed by a Board
of Directors to which we select three of the five directors and two directors
are selected by the other 



23



 










 






 



shareholders. A strategic
investment would necessitate agreement among Geovic, SNI, and the new
investors, and approval by the GeoCam Board of Directors. While we represent
the majority of Directors on the GeoCam Board, we generally have not taken
major strategic actions or decisions without general concurrence by the other
shareholders who are collectively represented by SNI. We view a good working
relationship with the other shareholders of GeoCam as important to the future
success of the Nkamouna Project. 

Capital Resources and Liquidity 

Our ability to access additional financing and to monetize the Nkamouna
Project are critical to our future financial condition. Since the completion of
the feasibility study in April 2011, spending activity for the Nkamouna Project
has mainly been limited to securing the Nkamouna Project site and protecting
assets, continuing environmental monitoring and community development programs,
and assisting potential strategic investors with their due diligence
activities. Given our limited financial resources, we plan to continue this
approach until we are reasonably satisfied that an appropriate strategic
transaction for the Nkamouna Project can be completed or the Project is put on
“care and maintenance” basis. 

At September 30, 2014 we had approximately $66 of unrestricted
cash and cash equivalents on a consolidated basis compared to $181 at
December 31, 2013, a decrease of approximately $115 during the nine months
ended September 30, 2014. Our cash is invested in U.S. dollar deposits and
in the Cameroon branch of a large international bank. 

During 2014 and 2013 the Company entered into note purchase agreements
(each a “Note Purchase Agreement” and collectively the “Note Purchase
Agreements”) with a number of parties, identified below, (each a “Purchaser”).
Pursuant to the Note Purchase Agreements, the Company agreed to issue
promissory notes (each a “Note” and collectively the “Notes”) to the Purchasers
in the aggregate principal amount of $1,398 as at September 30, 2014
(December 31, 2013—$605) in consideration of the payment by each Purchaser of a
purchase price equal to the principal amount of such Purchaser’s respective
Note. 

Each Note matures one year from the date of issuance at which time the
outstanding principal amount of each Note and all accrued and unpaid interest
thereon is due and payable by the Company. Interest accrues on the outstanding
principal balance of each Note at the rate of 200% per annum on the Notes
issued in 2013 and January 2014; 300% per annum on the Notes issued from
February to August 2014 and 36% per annum on the Notes issued in September
2014.   The Company was unable to repay the amounts which became due on
September 30, 2014 and subsequent and have amended the September, October and
November 2014  Notes to 1% interest per month and extending the maturity to 18
months from the date of issuance.  The amendments were agreed to effective as
of the original maturity date.

In June and September 2014 the Company issued additional notes in the
principal amount of $30 under similar terms as noted above except at an interest
rate of 150% and due at December 31, 2014. 

The Company may prepay each Note, in whole or in part and without
penalty, at any time upon 30 calendar days’ prior written notice. The Company
is required to prepay each Note, in whole and without penalty, within five
business days following the consummation of any acquisition by JXTC or by any
other entity of the Company’s 60.5% interest in GeoCam or the consummation of
the acquisition of the Company by another company. The Notes contain events of
default and other terms and conditions. 

The following table summarizes the
principal amounts of the Notes issued and outstanding as of September 30,
2014 and December 31, 2013 and identifies the parties to which the Notes
have been issued: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  Richard G. Buckovic............................................................. 
  
 
  $          130 
  
 
  $                  100 
  
 

  
  Norman C. Rose..................................................................... 
  
 
                30 
  
 
                        30 
  
 

  
  M N Rose Shelter Credit Trust............................................. 
  
 
                40 
  
 
                        40 
  
 

  
  Paul D. Rose............................................................................ 
  
 
                60 
  
 
                        60 
  
 

  
  Dragon’s Fire Investments LLC.......................................... 
  
 
              275 
  
 
                      225 
  
 

  
  Thorne Bush Investments LLC........................................... 
  
 
              648 
  
 
                      150 
  
 

  
  Airlie Road Investors LLC.................................................... 
  
 
                75 
  
 
                       —   
  
 

  
  David/Bette McKibben......................................................... 
  
 
                50 
  
 
                       —   
  
 

  
  John/Jean Anderson.............................................................. 
  
 
                20 
  
 
                       —   
  
 

  
  Bill Shaffer.............................................................................. 
  
 
                35 
  
 
                       —   
  
 

  
  Decker JE Halstead, Revocable Living Trust.................... 
  
 
                25 
  
 
                       —   
  
 

  
  Rodney/Eileen Phillips........................................................... .............................................................................................. 
  
 
                10 
  
 
                       —   
  
 

  
  Fintech Limited....................................................................... 
  
 
                30 
  
 
                       —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Short-Term Debt Notes............................................ 
  
 
  $      1,428 
  
 
  $                  605 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




 



24



 











 






 



The
following table summarizes the amended maturity dates of the Notes issued and
outstanding as of September 30, 2014 and December 31, 2013: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  September 30, 2014................................................................... 
  
 
  $            —           
  
 
  $                  120 
  
 

  
  October 31, 2014........................................................................ 
  
 
                 —           
  
 
                      110 
  
 

  
  November 30, 2014................................................................... 
  
 
                 —           
  
 
                      125 
  
 

  
  December 31, 2014.................................................................... 
  
 
               280          
  
 
                      250 
  
 

  
  January 31, 2015....................................................................... 
  
 
               125          
  
 
                       —   
  
 

  
  February 28, 2015...................................................................... 
  
 
               150          
  
 
                       —   
  
 

  
  March 31, 2015.......................................................................... 
  
 
               170          
  
 
                       —   
  
 

  
  April 30, 2015............................................................................. 
  
 
               255          
  
 
                       —   
  
 

  
  May 31, 2015............................................................................. 
  
 
               355          
  
 
                       —   
  
 

  
  June 30, 2015.............................................................................. 
  
 
                 50          
  
 
                       —   
  
 

  
  August 31, 2015......................................................................... 
  
 
                 13          
  
 
                       —   
  
 

  
  September 30, 2015................................................................... 
  
 
                 30          
  
 
                       —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Short-Term Debt Notes................................................ 
  
 
  $       1,428          
  
 
  $                  605 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




 

On July 22, 2014, the Company entered into a
securities purchase agreement (the “Securities Purchase Agreement”),
registration rights agreement (the “Registration Rights Agreement”) and note
purchase agreement (the “Note Purchase Agreement”), in each case with Tangiers
Investment Group, LLC (“Tangiers”). 

Pursuant to the Securities Purchase Agreement,
Tangiers has committed to purchase up to $3.0 million of the Company’s common
stock, par value $0.0001 per share (the “Common Stock”), from time to time upon
the Company’s advance written request over the course of a 36 month commitment
period (the “Commitment Period”), contingent on the Company filing and
obtaining an effective registration of the underlying shares with the
Securities and Exchange Commission (the “SEC”) and the Company timely complying
with its reporting requirements under the Securities Exchange Act of 1934, as
amended, and applicable SEC regulations. The Company is entitled to request
such equity investments from Tangiers from time to time during the Commitment
Period in an amount of up to $100 per request, and in connection with each
request the Company will issue and sell to Tangiers, and Tangiers will purchase
from the Company, that number of shares of Common Stock determined by dividing the
amount of the advance requested by the Company by a purchase price equal to 85%
of the lowest daily volume weighted average trading price of the Common Stock
during the five consecutive trading days following the date of the Company’s
request. The Securities Purchase Agreement includes certain restrictions on the
ability of the Company to issue or sell its capital stock or securities
granting rights to acquire its capital stock for consideration less than the
then current market price of the Company’s Common Stock. 

The Securities Purchase Agreement also requires that
the Company issue to Tangiers restricted Common Stock equal to 2.5% of
Tangier’s $3.0 million commitment as a commitment fee. The commitment fee
Common Stock is issuable by the Company to Tangiers in two 50% tranches, with
the first tranche due upon the execution of the Securities Purchase Agreement
and the second tranche due 60 days following the execution of the Securities
Purchase Agreement. The number of shares of restricted Common Stock issuable in
each tranche is calculated by dividing the dollar amount of each tranche by the
average volume weighted average trading price of the Common Stock during the
five business days preceding the date on which the shares for such tranche are
due to be issued. The Company issued 3,962,987 common shares during the third
quarter pursuant to the agreement.

Pursuant to the Registration Rights Agreement, the
Company agreed to prepare and file with the SEC a registration statement on
Form S-1 or on such other form as is available and to cause such registration
statement to be declared effective by the SEC prior to the first sale to
Tangiers of the Company’s Common Stock pursuant to the Securities Purchase
Agreement. 

Pursuant to the Note Purchase Agreement, the Company
agreed to issue a 4% convertible promissory note (the “Convertible Note”) to
Tangiers, in the original principal amount of $44 , in consideration of the
payment by Tangiers of a purchase price equal to $40, with $4 retained by
Tangiers as original issue discount for due diligence, document preparation and
legal expenses in connection with the transactions contemplated by the Note Purchase
Agreement. The Company issued the Convertible Note on July 22, 2014. 

 

The Convertible Note matures on
July 22, 2015, at which time the outstanding principal amount of the
Convertible Note and all accrued and unpaid interest thereon is due and payable
by the Company. The Convertible Note provides for “guaranteed” interest on the
principal balance thereof at the rate of 4%, which interest is deemed earned as
of the date of the Convertible Note’s issuance, to the 



25



 











 






 



extent
such principal amount and interest have been repaid or converted into the
Company’s Common Stock. The Convertible Note is convertible into shares of the
Company’s Common Stock at the option of Tangiers at a conversion price equal to
50% of the lowest trading price of the Company’s Common Stock during the 20
consecutive trading days prior to the date on which Tangiers elects to convert
all or part of the Convertible Note. 

The Convertible Note contains certain events of
default, including with respect to defaults in payment obligations, the
commencement of bankruptcy proceedings and certain failures relating to the
listing, trading and bid price of the Company’s Common Stock, the occurrence of
which may result in acceleration of the Company’s obligation to pay the
outstanding principal amount of the Convertible Note and all accrued and unpaid
interest thereon. Upon the occurrence and during the continuance of any event
of default, additional interest will accrue at the rate equal to the lower of
20% per annum or the highest rate permitted by law and liquidated damages
will accrue at the rate of $1 per day. In the event of any acceleration
following an event of default, the amount due and owing to Tangiers under the
Convertible Note will be increased to 150% of the outstanding principal amount
of the Convertible Note plus all accrued and unpaid interest, fees and
liquidated damages, if any. 

Our plan for the Nkamouna Project before early 2012
had been to attempt to finance the capital costs, startup expenses and
financing costs of the Project using a combination of debt secured by the
project and owners’ equity. In conventional project debt financing, GeoCam
would be required to furnish, as equity, more than 40% of the total estimated
capital and financing costs and expenses for the Nkamouna Project as a
condition to securing loans for the balance of such costs and expenses. Based
on the estimated capital and start-up costs of the Nkamouna Project, GeoCam’s
financial advisor estimated that our share of GeoCam equity to complete such
debt financing for the Nkamouna Project would be approximately $225 million,
which reflects the amount of equity capital we would be required to contribute
to GeoCam as a condition to conventional debt financing. We do not have
sufficient capital resources available to meet that estimated equity
requirement. Our ability to raise additional capital for this purpose would
depend on a number of factors, which are partly or wholly outside of our
control, including the state of worldwide financial, commodity and other markets,
the market trading price of our common stock and demand for future access to
the cobalt resources in the Nkamouna Project. 

During 2012 we continued meetings with various large
international businesses with respect to investment in the Nkamouna Project or
the potential purchase of future off-take from the Project. The Company and the
other GeoCam shareholders discussed possible strategic investment arrangements
with several companies. Since the latter part of 2012 these discussions focused
on JXTC. As discussed above, the DA with JXTC expired on March 31, 2014. In
September 2014 the parties agreed to an extension retroactive to the original
expiry date of the DA through December 31, 2014. . There can be no assurance
that a share purchase agreement for the sale of our interest in GeoCam to JXTC
will ultimately be entered into or that the transactions contemplated therein
will be completed. Any cash paid by JXTC or another strategic investor for part
or all of our interest could be available to satisfy our obligations under the
notes and fund all or a portion of our remaining project equity requirements,
if any, and for other corporate purposes. Under such an arrangement our
interest in the Nkamouna Project could be eliminated. We may consider putting
the Nkamouna Project on a “care and maintenance” status later in 2014 if we
have been unable to finalize and close an acceptable strategic investment
arrangement. 

GeoCam’s ongoing cash expenditures are presently
expected to total approximately $0.4 million for the last quarter of 2014, for
which Geovic is responsible to fund 60.5%. However, we may not be successful in
completing a sale of all or part of our interest in GeoCam on a timely basis,
or in entering into sale or joint venture transactions involving our other
exploration prospects on acceptable terms. Further, possible transactions to
raise additional capital through the issuance of equity may not be available
and would be dilutive to our stockholders. If we are unable to obtain
additional capital, we may not be able to pay for our portion of GeoCam’s cash
expenditures and we will need to seek to further curtail our operations, to the
extent possible, in order to preserve working capital, which could materially
harm our business and our ability to achieve cash flow in the future, and we
may need to cease operations, which could include a bankruptcy filing. Unless
we arrange additional financing, we expect to nearly exhaust our cash during
August 2014. 

As described in Part II, Item 1, Legal
Proceedings, five judgments originally totaling approximately $1.8 million
against GeoCam are outstanding four of which are under appeal. In June 2014 the
appeal in the fifth matter was heard and the earlier court judgment for CFA
118,804,219 (approximately $0.2 million at September 30, 2014) was
overturned. However, the claimant may file an appeal or civil claim to another
court. 

 

Two separate attachments totaling
approximately $0.33 million were allowed in two court proceedings and the funds
in those amounts were restricted until resolution of the cases. In December
2013 attached funds related to one claim in the amount of approximately $0.1
million were released to GeoCam. In January 2014 attached funds related to two
more of the remaining claims in the amount of approximately $0.09 million were
released to GeoCam. In May 2014 attached funds related to one claimant of CFA
20,215,058 (approximately $0.04 million at September 30, 2014) were
released to GeoCam. GeoCam has sought to have the one remaining restriction of
approximately $0.1 million lifted. The matter was adjourned and delayed until
subsequent to the date hereof 



26



 










 






 



however GeoCam has
requested the restriction be immediately lifted based on the fact that the
judgment for the entire claim has been overturned. 

Should the judgments be upheld in full or in part upon
exhaustion of final appeals, GeoCam would be required to satisfy the judgements.
Funding the Geovic share would adversely affect our remaining capital
resources. 

In May 2014 GeoCam received information that family
members of an employee of a GeoCam who passed away are alleging that the
individual’s death was due to worksite conditions and that they plan to take
legal action. As of the date of filing no formal notice of legal action has
been received. GeoCam plans to defend against the allegations should legal
action be taken. 

GeoCam’s operating expenses are paid through capital
increases approved by the shareholders of GeoCam and funded in accordance with
the respective ownership interests prior to the capital increase. We will be
obligated to fund 60.5% of future GeoCam capital increases while we remain a
60.5% shareholder. GeoCam completed a capital increase in October 2012 of which
our share was approximately $0.4 million. An additional capital increase
totaling approximately $1.2 million was approved by GeoCam shareholders in
January 2013, and an initial cash call totaling approximately $0.4 million to
fund an initial portion of the capital increase was completed in February,
2013. Our share of the total capital increase was approximately $0.7 million,
and our share of the initial cash call was approximately $0.24 million. On
April 17, 2013 the second cash call totaling approximately $0.4 million,
of which Geovic paid approximately $0.24 million, was completed. On
July 31, 2013 the third cash call totaling approximately $0.4 million, of
which Geovic paid approximately $0.2 million, was completed.  On November 15,
2014 the first cash call totaling approximately $0.5 million was called, of
which Geovic’s share was approximately $0.3 million.  As of the date of filing
the cash call has not been funded by either shareholder. Geovic offset its
share of the first cash call with charges to Geocam for the provision of the
services of a General Manager in the amount of $0.5 million for the period
October 1, 2012 to September 30, 2014. An additional $0.2 million will be
available to offset a portion of the remainder of the cash call.

We expect our general and administrative expenses for
the last quarter of 2014 to total approximately $0.8 million, including
administrative expenses related to other resource entity exploration activities
but not including any transaction costs related to a strategic partner
transaction related to the Nkamouna Project as well as impairment, or other
non-cash items, interest expense related to the short term debt balance at September 30,
2014 of $1.9 million, deferred salary incentives and related employee benefits
and that during the last quarter of 2014 expenditures for exploration of mineral
properties, or investment in other resource entities, in the United States and
elsewhere will total approximately $0.1 million. We expect that our cash
balances will be nearly exhausted during December 2014. Based on our current
planned 2014 expenditures we will require additional financing or completion of
a strategic transaction to continue our operations. We continue to implement
cash conservation measures for the Company and GeoCam. If we complete a strategic
partner transaction involving the Nkamouna Project or any of our other
exploration prospects, this estimate would be adjusted appropriately. 

We have budgeted a lower level of general and
administrative and other expenditures for 2014 to reflect our limited cash. We
have implemented a number of cash conservation strategies for the Company and
GeoCam that we have described in earlier reports that we have filed. These
efforts were implemented to reduce financial commitments and overheads and
preserve our cash. 

The Company and its subsidiaries have material debt
and other similar obligations or commitments from the short-term debt and
related interest expense under the Notes, the deferred accrued payroll and
related incentives, other deferred payments and any additional amounts that may
become due under pending litigation in Cameroon. The Company has delayed
payment of liabilities and has accrued, but been unable to fully pay GeoCam
payroll and related benefits of approximately $0.4 million for the months of
April to September 2014. As of the date of filing these liabilities remain
outstanding. Due to the delayed payment of these liabilities the Company may be
charged penalties in Cameroon, the amount of which cannot be currently
estimated. In May 2014 the Company received notification that GeoCam employees
were threatening to strike as of May 15, 2014 unless all compensation
arrears were been paid in their entirety and health insurance reinstated. As of
the date of this filing no formal strike has taken place. The Company has also
been unable to fully pay Geovic Mining Corp. payroll and related benefits of
approximately $0.15 for the months of June and July 2014. Further, effective
August 1, 2014 the Company laid off three non-executive employees. These
employees have not been paid July 2014 payroll, related benefits and unused
vacation pay. 

As of the date of filing these liabilities remain
outstanding. We believe there is substantial doubt whether our present capital
resources will be sufficient to satisfy the Company’s existing capital and
liquidity requirements described above, not including any equity requirements
in connection with any Nkamouna Project financing by GeoCam or satisfaction of
any judgments that may be upheld in final appeals of the pending litigation. We
have no standby financing arrangements currently in place. Many of the vendors
and service providers who have provided credit to allow the Company to continue
to operate are now refusing to provide further credit. If we are unable to find
replacement vendors and service providers and obtain additional capital, we
will need to further curtail our operations, to the extent possible, in order
to preserve funds, which could materially harm our business and our ability to
achieve 



27



 










 






 



cash flow in the future, and we may need to
cease operations, which could include a bankruptcy filing. Unless we arrange
additional financing, we expect to nearly exhaust our cash during December 2014.

 

Results of Operations 

Three Months Ended September 30, 2014 Compared to
Three Months Ended September 30, 2013: 

The Company had no revenue from operations and incurred losses from
operations during the third quarters of 2014 and 2013, and has had no revenue
from operations since inception. Until and unless we sell some or all of our
interest in the Nkamouna Project or project financing for the Project is
secured and construction commences, we expect to continue to reduce our
operating and other expenditures. 

We had a net loss attributed to the Company’s stockholders
of $2,065 for the quarter ended September 30, 2014, compared to the net
loss of $2,105 in the quarter ended September 30, 2013. 

Exploration expenses decreased by $363 in the quarter
compared to the year earlier period mainly due to a decrease in other Company
projects primarily in New Caledonia ($224) and a decrease in exploration
expense in Cameroon ($126) and. 

General and administrative expenses decreased $272 in
the quarter, when compared to the second quarter of 2013. The decrease is largely
due to lower insurance, audit and legal expenses. Lower salaries in the third quarter
of 2014 compared to third quarter 2013 were offset by the salary deferral
incentives in the third quarter of 2014. The Company continues to reduce
general and administrative expenses. 

Interest and bank charges have increased by
approximately $859 due to interest accrued on the short term debt in the second
quarter of 2014. Other income decreased due to no equipment rental income in
Cameroon in the second quarter of 2014. 

The gain on disposal increased by $65 due to the sale
of assets in Cameroon in the third quarter of 2014. 

As an exploration stage company, we have charged our
exploration and pre-construction expenses incurred for GeoCam to operations in
the periods incurred and no such expenditures have been capitalized. We expect
to continue this practice until a final development and mining plan is adopted
and project financing is committed. 

Nine Months Ended September 30, 2014 Compared to Nine
Months Ended September 30, 2013: 

The Company had no revenue from operations and incurred losses from
operations during the nine months ended September 30, 2014 and 2013, and
has had no revenue from operations since inception. Until and unless we sell
some or all of our interest in the Nkamouna Project or project financing for
the Project is secured and construction commences, we expect to continue to
reduce our operating and other expenditures. 

We had a net loss attributed to the Company’s
stockholders of $5,767 for the nine months ended September 30, 2014,
compared to the net loss of $5,645 in the nine months ended September 30,
2013. 

Exploration expenses decreased by $852 in the nine months
ended September 30, 2014 compared to the year earlier period mainly due to
the sale of property interests in New Mexico ($300), decrease in exploration
expense in Cameroon ($284), and a decrease in other Company projects primarily
in New Caledonia ($344) and Papua New Guinea ($26), offset by an increase in
exploration expenses in Arizona ($104). 

General and administrative expenses decreased $545 in
the nine months ended September 30, 2014, when compared to the same period
of 2013. The decrease is largely due to lower insurance, audit and legal
expenses. Lower salaries in the nine months ended September 30, 2014 compared
to the same period in 2014 were offset by the salary deferral incentives in the
nine months ended September 30, 2014. The Company continues to reduce general
and administrative expenses. 

Interest and bank charges have increased by
approximately $1,879 due to interest accrued on the short term debt during the nine
months ended September 30, 2014. Other income decreased due to no
equipment rental income in Cameroon in the nine months ended September 30,
2014. 

The gain on disposal increased by $164 mainly due to
the sale of assets in Cameroon in the nine months ended September 30,
2014. 



28



 











 






 



As an exploration stage company, we have
charged our exploration and pre-construction expenses incurred for GeoCam to
operations in the periods incurred and no such expenditures have been
capitalized. We expect to continue this practice until a final development and
mining plan is adopted and project financing is committed. 

Off-Balance Sheet Arrangements 

We have no off balance sheet arrangements that are reasonably likely to
have a current or future effect on our financial condition, revenues, results
of operations, liquidity or capital expenditures. 

 

Safe Harbor Statement 

Certain statements in this report constitute “forwarding-looking
statements” within the meaning of Section 27A of the Securities Act of
1933, Section 21E of the Securities and Exchange Act of 1934 and
applicable Canadian securities laws. Certain, but not necessarily all, of such
forward-looking statements can be identified by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “would”, “should,” or
“anticipates” or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and
uncertainties. 

All statements other than statements of historical
fact, included in this report regarding our financial position, business and
plans or objectives for future operations are forward-looking statements.
Without limiting the broader description of forward-looking statements above,
we specifically note the forward looking statements with respect to exploration
and mine development, construction and expansion plans, costs, grade,
production and recovery rates, permitting, financing needs, the availability of
financing on acceptable terms or other sources of funding, the timing of
additional tests, feasibility studies and environmental permitting, estimates
of mineral reserves and mineralized material; our expectations regarding the
amount of capital required prior to production at the Nkamouna Project and our
ability to source the required capital; success of exploration activities;
permitting time lines; construction and capital costs; operating expenses;
currency fluctuations; requirements for additional capital; our expectations
regarding processing and marketing of future production from the Nkamouna
Project; our ability to enter into off-take arrangements; government regulation
of mining operations; environmental risks; unanticipated reclamation expenses;
title disputes or claims; limitations on insurance coverage; commencement of
mine production, anticipated expenditures for the remainder of 2014; and our
expectations regarding securing a potential strategic investor for, or a sale
of our interest in, the Nkamouna Project and future debt and equity financing
for the Project, and our ability to satisfy our cash requirements.
Forward-looking statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance, or achievements
of the Company to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements. Such
risks and other factors include, among others, the risk factors discussed in “Risk
Factors,” and other factors described in other filings with the U.S. Securities
and Exchange Commission (the “SEC”) and Canadian securities regulatory
authorities. There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward-looking statements. The
forward-looking statements in this annual report speak only as of the date
hereof. The Company does not undertake any obligation to release publicly any
revisions to these forward-looking statements to reflect new information,
events or circumstances except as may be required under applicable securities
laws. 

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK. 

Not required. 

 

ITEM 4.       CONTROLS AND
PROCEDURES

    

Disclosure Controls and
Procedures  

 

We maintain disclosure controls
and procedures that are designed to ensure that information required to be
disclosed in our filings under the Exchange Act is recorded, processed,
summarized and reported within the periods specified in the rules and forms of
the SEC.  This information is accumulated and communicated to our Chief
Executive Officer and Chief Financial Officer to allow timely decisions
regarding required disclosure.  Our Chief Executive Officer and Chief
Financial Officer evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange
Act) as of the end of the period covered by this report.  Based on that
evaluation and the requirements of the Exchange Act, our Chief Executive
Officer and Chief Financial Officer concluded that, as of September 30, 2014,
our disclosure controls and procedures could be considered to now be ineffective
due to the small size of our company, reduction in staff and consultants
and may not provide for the required segregation of duty control functions

 

 



29



 










 






 



Internal Control Over Financial
Reporting

 

Our management is responsible
for establishing and maintaining adequate internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange
Act).  Management conducted an evaluation of the effectiveness of our
internal control over financial reporting and determined that our internal
control over financial reporting was ineffective as of September 30, 2014 due
to significant deficiencies resulting from the current financial position of
the Company.   A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control over financial reporting. 

 

Management’s assessment
identified the following significant deficiencies in internal control over
financial reporting:

 

•    The size of our Company limits
our ability to achieve the desired level of segregation of internal controls,
duties and financial reporting.  The Company has a CEO and CFO and an
Audit Committee who review and oversee the financial policies and procedures of
the Company, which achieves a degree of segregation.  However, until
such time as the Company is able to hire additional officers and staff, we
believe we do not meet the full requirement for adequate segregation of duties.

•    The size of our Company limits
our desired level of corporate governance to ensure that all of our contractual
and other agreements are in accordance with all relevant terms and
conditions.  Due to our limited capital resources and staffing,
agreements for payment with certain contractors may be formalized after the
work is performed when additional resources become available to pay for the
services.

 

As a result of the significant
deficiencies in internal control over financial reporting described above, the
Company’s management has concluded that, as of September 30, 2014, the
Company's internal control over financial reporting was not effective based on
the criteria in Internal Control - Integrated Framework issued by the COSO.

 

As of October 22, 2014, the
Company’s former CFO resigned resulting in a current member of the Audit
Committee being appointed as the CFO. This resulted in the Audit Committee,
which has three members, only having two independent members. Only two members
of the five persons Board of Directors are now independent.  To date,
the Company has not been able to add any additional members to its Board of
Directors and Audit Committee due its limited financial resources. When the
Company obtains sufficient funding, management intends to add additional independent
members to the Board of Directors, modify the Audit Committee so that it each
are comprised of a sufficient number of independent directors and that the
Board of Directors and Audit Committee will thus further assist the Company in
addressing the identified deficiencies.   The Company’s lack of
current financial resources makes it unfeasible for the Company to hire the
appropriate number of personnel needed to overcome these deficiencies and
ensure that appropriate controls and segregation of responsibilities
exist.  

 

We continue to follow the
standards for the Public Company Accounting Oversight Board (United States) for
internal control over financial reporting to include procedures that:

 

·        
Maintain
the records in reasonable detail accurately that fairly reflect the
transactions and dispositions of the Company's assets;

·        
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of the financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures are being made only
in accordance with authorizations of management and the Board of Directors; and

·        
Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company's assets that could have a
material effect on the financial statements.

 

Our management has determined
that there are deficiencies related to segregation of duties, however, management
has further determined that there were no changes made in our internal controls
over financial reporting during the fiscal year 2014 that have materially
affected, or are reasonably likely to materially affect our internal control over
financial reporting.  

 

The December 31, 2013 annual
report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to rules of the Securities
and Exchange Commission that permit the Company to provide only management’s
report in this annual report.

 

 

 

 



30



 











 






 



Geovic Mining Corp.

(an
exploration stage company) 

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS 

(Unaudited,
in thousands, except share and per share amounts) 

 




 
  
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 

  
    
   
 
   Three months ended September 30, 
   
    
   
   
 
   Nine months ended September 30, 
   
    
   
   
 
   Unaudited Period

   from Nov. 16, 1994

   (inception) to

   September 30, 2014 
   
    
   
   
 

  
    
   
 
   2014 
   
    
   
   
 
   2013 
   
    
   
   
 
   2014 
   
    
   
   
 
   2013 
   
    
   
   
 
    
   
 

  
  EXPENSES (INCOME)
  
 
   
  
 
   
  
 
   
  
 

  
  Exploration costs [note 4]............ 
  
 
  $                    339 
  
 
  $                    702 
  
 
  $                1,059 
  
 
  $                1,911 
  
 
  $                  97,350 
  
 

  
  General and administrative.......... 
  
 
                        986 
  
 
                     1,258 
  
 
                     3,194
  
 
                     3,739 
  
 
                      53,230 
  
 

  
  Stock-based compensation [note 8]....................................... 
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                             4 
  
 
                      18,701 
  
 

  
  Change in fair value of 

  warrants...................................... 
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                           (675 )
  
 

  
  Interest and bank charges............ 
  
 
                        864 
  
 
                             5 
  
 
                     1,891 
  
 
                          12 
  
 
                         2,432 
  
 

  
  Depreciation.................................... 
  
 
                          49 
  
 
                        183 
  
 
                        250 
  
 
                        581 
  
 
                         5,434 
  
 

  
  Property, plant and equipment impairment................................. 
  
 
                         —   
  
 
                        309 
  
 
                         —   
  
 
                        309 
  
 
                            309 
  
 

  
  Mineral property impairment....... 
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                         3,244 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Expenses......................................... 
  
 
                     2,238 
  
 
                     2,457 
  
 
                     6,394 
  
 
                     6,556 
  
 
                    180,025 
  
 

  
  Other Income.................................. 
  
 
                         —   
  
 
                           (9 )
  
 
                         —   
  
 
                         (91 )
  
 
                       (1,894 )
  
 

  
  (Gain)/Loss on disposal of 

  asset............................................. 
  
 
                         (53 )
  
 
                          12
  
 
                       (179 )
  
 
                         (15 )
  
 
                            180 
  
 

  
  Interest income............................... 
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                       (4,861 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Net loss before income taxes.................. 
  
 
                   (2,185 )
  
 
                   (2,460 )
  
 
                   (6,215 )
  
 
                   (6,450 )
  
 
                   (173,450 )
  
 

  
  Income tax benefit [note 13]................. 
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                         —   
  
 
                             (65 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Consolidated net loss.............................. 
  
 
                   (2,185 )
  
 
                   (2,460 )
  
 
                   (6,215 )
  
 
                   (6,450 )
  
 
                   (173,385 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Less: Net loss attributed to the non-controlling
  interest............................... 
  
 
                       (120 )
  
 
                       (355 )
  
 
                       (448 )
  
 
                       (805 )
  
 
                     (32,830 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Net loss attributed to Company stockholders.......................................... 
  
 
  $              (2,065)
  
 
  $               (2,105 )
  
 
  $               (5,767 )
  
 
  $               (5,645 )
  
 
  $              (140,555 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Net loss per share attributed to Company common
  stockholders..... 
  
 
  $                 (0.02 )
  
 
  $                 (0.02 )
  
 
  $                 (0.05 )
  
 
  $                 (0.05 )
  
 
   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
   
  
 

  
  Weighted average shares outstanding basic and
  diluted.................................. 
  
 
        107,551,132 
  
 
        106,700,261 
  
 
        107,053,602 
  
 
        106,659,896 
  
 
   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
   
  
 




The accompanying notes are an integral part of these
financial statements 

 



4



 










 






 



Controls and Procedures.

 

Changes in internal controls. Except as described above
related to segregation of duties and noted deficiencies, there were no changes
in our internal control over financial reporting that occurred during the
fiscal quarter covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

   

The Company has taken steps to
meet its Sarbanes-Oxley (SOX) Section 404 compliance requirements and
implement procedures to assure financial reports are prepared in accordance
with generally accepted accounting principles (GAAP) and therefore fairly
represent the results and condition of the Company.

 



31



 











 






 



PART
II—OTHER INFORMATION

ITEM  1.       LEGAL PROCEEDINGS. 

In November 2009, five management level consultants or employees of
GeoCam filed litigation in Cameroon, claiming approximately $2.2 million
as compensation and damages as a result of termination of their services by
GeoCam in connection with a reduction in workforce in February and March 2009.
In April 2010 the litigation was dismissed. In July 2010 the
litigation was brought by four of the claimants before one other
jurisdiction and by the fifth claimant in a separate jurisdiction. On
June 3, 2011, the High Court of Abong-Mbang, the court before which four
of the matters were pending entered judgments in favor of the four
claimants totaling CFA 780,339,500 (approximately $1.6 million at September 30,
2014). On November 14, 2011, the High Court of Mfoundi, Yaoundé, the court
before which the fifth matter was pending entered a judgment in favor of the
claimant totaling CFA 118,804,219 (approximately $0.2 million at September 30,
2014). GeoCam appealed all five matters to the next highest appellate court in
Cameroon, the Court of Appeal of the East Region at Bertoua as to the four
claimants and the Court of Appeal of the Center Region at Yaoundé as to the
fifth matter. In June 2014 the appeal in the fifth matter was heard and the
earlier court judgment for CFA 118,804,219 (approximately $0.2 million at September 30,
2014) was overturned. However, the claimant may file an appeal or civil claim
to another court. 

The Court of Appeal, before which the fifth matter was
pending, authorized CFA 51,851,813 (approximately $0.1 million at September 30,
2014) of GeoCam funds to be attached for the benefit of the claimant in the
second quarter of 2012 and placed in a restricted account at GeoCam’s bank
pending resolution of the case. GeoCam has sought to have this restriction
lifted. The matter was adjourned and delayed until subsequent to the date
hereof however GeoCam has requested the restriction be immediately lifted based
on the fact that the judgment for the entire claim has been overturned. 

The Court of Appeal, before which the fifth matter was
pending, authorized CFA 51,851,813 (approximately $0.1 million at September 30,
2014) of GeoCam funds to be attached for the benefit of the claimant in the
second quarter of 2012 and placed in a restricted account at GeoCam’s bank
pending resolution of the case. GeoCam has sought unsuccessfully to have this
restriction lifted. The appeal of this case has not been decided by the court
as of the date this report is filed. 

The Court of Appeal before which the other four
appeals were pending set aside the judgment of the lower court discussed above
and awarded the four claimants an amount totaling CFA 125,062,887
(approximately $0.3 million at September 30, 2014) in the fourth quarter
of 2012. GeoCam has filed appeals in all four matters which stayed enforcement
of the judgments pending resolution of the appeals. This Court of Appeal also
authorized CFA 108,949,204 (approximately $0.23 million at September 30,
2014) in GeoCam funds to be attached for the benefit of the claimants and
placed in a restricted account at GeoCam’s bank pending final resolution of the
appeals. In December 2013 attached funds related to one claim in the amount of
CFA 46,353,259 (approximately $0.1 million) were released to GeoCam. In January
2014 attached funds related to two more of the remaining claims in the amount
of CFA 42,380,887 (approximately $0.09 million) were released to GeoCam. In May
2014 attached funds related to the remaining one claimant of CFA 20,215,058
(approximately $0.04 million) were released to GeoCam. 

The restricted funds related to the one claimant that
remained at September 30, 2014 totaling approximately $0.1 million are
included as restricted cash on our consolidated balance sheets. The Company
believes all contractual and other obligations to the five individual claimants
were satisfied; however, given the judgments, we believe it could be
deemed probable that the outcome would be unfavorable to GeoCam and,
therefore, GeoCam accrued approximately $0.3 million for the matters in our
consolidated financial statements at the time the Court of Appeal reached
its decision. It is possible that an additional amount up to approximately $0.2
million could be awarded to the claimants in these matters. 

In May 2014 GeoCam received information that family
members of an employee of a GeoCam who passed away are alleging that the
individual’s death was due to worksite conditions and that they plan to take
legal action. As of the date of filing no formal notice of legal action has
been received. GeoCam plans to defend against the allegations should legal
action be taken. 

ITEM  1A.       RISK FACTORS. 

In addition to the Risk Factors previously disclosed in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2013, the
following Risk Factors should be considered. 

We may run out of cash before we are able to arrange
financing or complete a sale of our interest in GeoCam and the Nkamouna Project
or one of our other projects. 

 

We expect to nearly exhaust our cash resources during
August 2014, and we face the risk that we may be unable to secure additional
financing or timely complete a sale of our interest in GeoCam and the Nkamouna
Project or one of our other projects to 



32



 











 






 



fund our
overhead, continuing operations and project transaction costs. We plan to
continue our efforts to secure additional financing but we presently do not
have agreements from any source under which such funding will be received. We
are seeking to sell our interest in GeoCam and the Nkamouna Project and since
the latter part of 2012 our discussions have been primarily with JXTC. In July
2013 we entered into the DA with JXTC; however, the DA expired on
March 31, 2014.  In September 2014 the parties agreed to an extension of
the DA retroactive to the original expiry date through December 31, 2014. There
can be no assurance that a share purchase agreement for the sale of our
interest in GeoCam to JXTC will ultimately be entered into or that the
transactions contemplated therein will be completed. Even if we enter into a
share purchase agreement with JXTC, the transaction would be subject to certain
conditions, including the approval of the stockholders of the Company, and we may
run out of cash before such conditions are satisfied and the transaction is
completed. If the DA is not extended or we do not enter into a share purchase
agreement with JXTC, we would seek another potential buyer for our interest in
GeoCam and the Nkamouna Project but may not be able to identify or complete a
transaction with another buyer before our cash resources are exhausted. If no
additional funding can be secured through additional financing or the
completion of a sale of our interest in GeoCam and the Nkamouna Project or one
of our other projects, we may not be able to remain in business or complete a
pending project sale or other transaction. 

The market price of our common stock and our ability
to raise funds could be adversely affected as the result of the delisting of
our common stock from the Toronto Stock Exchange (“TSX”) and the new listing of
our common stock on the NEX.


On May 1, 2014, the Company received notice from
the TSX that the TSX was reviewing the Company’s eligibility for the continued
listing of its shares of common stock on the TSX. The Company was delisted by
the TSX on July 25, 2014 and has transitioned to the NEX, a separate board
of the TSX Venture Exchange as of July 28, 2014 trading under the symbol
“GMC.H”. Our delisting from the TSX and new listing on the NEX could adversely
affect the liquidity of the trading market for our stock and therefore could
have a negative impact on the market price of our common stock and on our
ability to raise funds for the Company. 

ITEM  2.       UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS. 

None. 

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES. 

None. 

ITEM  4.       MINE SAFETY DISCLOSURES. 

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act and Item 104 of Regulation S-K, issuers that
are operators, or that have a subsidiary that is an operator, of a coal or
other mine in the United States are required to disclose in their annual
reports filed with the SEC information regarding specified health and safety
violations, orders and citations, related assessments and legal actions, and
mining-related fatalities. During the fiscal year ended December 31, 2013 and
through September 30, 2014, our U.S. exploration properties were not
subject to regulation by the Federal Mine Safety and Health Administration
under the Federal Mine Safety and Health Act of 1977. 

ITEM  5.       OTHER INFORMATION. 

None. 

 



33



 











 






 



ITEM 6.        EXHIBITS.

(a) Exhibits. 

 




 
  
   
  
 
   
  
 

  
   
  
 
   
  
 

  
    10.1
  
 
  Form of Note
  Purchase Agreements August 2014
  
 

  
   
  
 
   
  
 

  
    10.2
  
 
  Form of Note
  Purchase Agreements September 2014
  
 

  
   
  
 
   
  
 

  
    10.3
  
 
  Form of Note
  Purchase Amendment September 2014
  
 

  
   
  
 
   
  
 

  
    10.4
  
 
  Form of Salary
  Deferral Agreements August 2014
  
 

  
   
  
 
   
  
 

  
    10.5
  
 
  Form of Salary
  Deferral Agreements September 2014
  
 

  
   
  
 
   
  
 

  
    31.1
  
 
  Certification of
  Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities
  Exchange Act of 1934, as amended
  
 

  
   
  
 
   
  
 

  
    31.2
  
 
  Certification of
  Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities
  Exchange Act of 1934, as amended
  
 

  
   
  
 
   
  
 

  
    32.1
  
 
  Certification of
  Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  
 

  
   
  
 
   
  
 

  
    32.2
  
 
  Certification of
  Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  
 

  
   
  
 
   
  
 

  
  101.INS
  
 
  XBRL Instance
  Document
  
 

  
   
  
 
   
  
 

  
  101.SCH
  
 
  XBRL Taxonomy
  Extension Schema Document
  
 

  
   
  
 
   
  
 

  
  101.CAL
  
 
  XBRL Taxonomy
  Extension Calculation Linkbase Document
  
 

  
   
  
 
   
  
 

  
  101.DEF
  
 
  XBRL Taxonomy
  Definition Linkbase Document
  
 

  
   
  
 
   
  
 

  
  101.LAB
  
 
  XBRL Taxonomy
  Extension Label Linkbase Document
  
 

  
   
  
 
   
  
 

  
  101.PRE
  
 
  XBRL Taxonomy
  Extension Presentation Linkbase Document
  
 




 



34



 











 






 



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 thereunto
duly authorized. 

 


 
  
   
  
 
   
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
  GEOVIC MINING CORP.
  Registrant
  
 

  
   
  
 
   
  
 
   
  
 
   
  
 

  
  December 14,
  2014
  
 
   
  
 
  By:
  
 
  /s/ Michael T.
  Mason
  
 

  
   
  
 
   
  
 
   
  
 
  Michael T. Mason
  
 

  
   
  
 
   
  
 
   
  
 
  Chief Executive
  Officer
  
 

  
   
  
 
   
  
 
   
  
 
   
  
 

  
  December 14,
  2014
  
 
   
  
 
  By:
  
 
  /s/ Christopher
  A. Serin
  
 

  
   
  
 
   
  
 
   
  
 
  Christopher A.
  Serin
  
 

  
   
  
 
   
  
 
   
  
 
  Chief Financial
  Officer
  
 











35



 











 






 



 

EXHIBIT
INDEX 

 




 
  
   
  
 
   
  
 

  
   
  
 
   
  
 

  
    10.1
  
 
  Form of Note
  Purchase Agreements August 2014
  
 

  
   
  
 
   
  
 

  
    10.2
  
 
  Form of Note
  Purchase Agreements September 2014
  
 

  
   
  
 
   
  
 

  
    10.3
  
 
  Form of Note
  Purchase Amendment September 2014
  
 

  
   
  
 
   
  
 

  
    10.4
  
 
  Form of Salary
  Deferral Agreements August 2014
  
 

  
   
  
 
   
  
 

  
    10.5
  
 
  Form of Salary
  Deferral Agreements September 2014
  
 

  
   
  
 
   
  
 

  
    31.1
  
 
  Certification of
  Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities
  Exchange Act of 1934, as amended
  
 

  
   
  
 
   
  
 

  
    31.2
  
 
  Certification of
  Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities
  Exchange Act of 1934, as amended
  
 

  
   
  
 
   
  
 

  
    32.1
  
 
  Certification of
  Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  
 

  
   
  
 
   
  
 

  
    32.2
  
 
  Certification of
  Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  
 

  
   
  
 
   
  
 

  
  101.INS
  
 
  XBRL Instance
  Document
  
 

  
   
  
 
   
  
 

  
  101.SCH
  
 
  XBRL Taxonomy
  Extension Schema Document
  
 

  
   
  
 
   
  
 

  
  101.CAL
  
 
  XBRL Taxonomy
  Extension Calculation Linkbase Document
  
 

  
   
  
 
   
  
 

  
  101.DEF
  
 
  XBRL Taxonomy
  Definition Linkbase Document
  
 

  
   
  
 
   
  
 

  
  101.LAB
  
 
  XBRL Taxonomy
  Extension Label Linkbase Document
  
 

  
   
  
 
   
  
 

  
  101.PRE
  
 
  XBRL Taxonomy
  Extension Presentation Linkbase Document
  
 




 

 




 



 



 










 






 



Exhibit 10.1


NOTE PURCHASE
AGREEMENT 

This Note Purchase Agreement (this “Agreement”)
is made and entered into as of August     ,
2014 (the “Effective Date”), by and between Geovic Mining Corp., a
Delaware corporation (the “Company”), and                     
                    ,
a                     
                    
(“Purchaser”). The Company and Purchaser sometimes are referred to
herein collectively as the “Parties,” and each individually as a “Party.”


RECITALS 

The Company and Purchaser desire to enter into this
Agreement pursuant to which, among other things, Purchaser agrees to acquire
from the Company, and the Company agrees to issue to Purchaser, a promissory
note (the “Note”) in the principal amount of $        
(the “Principal Amount”). This Agreement and the Note sometimes are
collectively referred to in this Agreement as the “Transaction Documents.”


AGREEMENTS 

In consideration of the mutual promises,
representations, warranties, covenants and conditions in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the Parties agree as follows: 

1. Purchase and Sale of the Note.
Subject to the terms and conditions in this Agreement, on the Effective Date,
the Company agrees to sell to Purchaser, and Purchaser agrees to purchase from
the Company, the Note in the form attached as Exhibit A, for
a purchase price equal to the Principal Amount (the “Purchase Price”).


2. Payment of the Purchase Price and Delivery of Note. On the
Effective Date the Company shall deliver to Purchaser the Note, duly executed
by the Company, and Purchaser shall pay to the Company the Purchase Price for
its Note, by certified check or wire transfer of immediately available funds to
the Company’s designated account. 

3. Representations and Warranties of the
Company. The Company represents and warrants to Purchaser, to the best of
its knowledge and belief, as follows: 

3.1 Organization, Good Standing and Qualification. The Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to
so qualify would reasonably be expected to have a material adverse effect on
its business or properties. 

3.2 Authorization. All corporate action on the part of the
Company necessary (i) for the authorization, execution and delivery of the
Transaction Documents, and (ii) for the performance of all obligations of
the Company under the Transaction Documents has been taken. The Transaction
Documents will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and transfer and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies, and
(iii) except as set forth in Section 4.3. 

 

3.3 Valid Issuance of Note. The Note
when issued, sold and delivered in accordance with the terms of this Agreement
for the consideration provided in this Agreement, will be duly and validly
issued. 

3.4 No Conflict. The execution, delivery and performance of the
Transaction Documents and the consummation of the transactions contemplated by
the Transaction Documents will not (i) result in any violation or default
under any material contract or agreement to which the Company is a party or by
which the Company or its assets are bound or any provision of the Company’s
certificate of incorporation or by-laws or (ii) violate any instrument,
agreement, judgment, decree or order, or any statute, rule or regulation of any
federal, state or local government or agency to which the Company is a party or
its assets are subject, except as set forth in Section 4.3. 

4. Representations, Warranties and
Covenants of Purchaser. Purchaser hereby represents, warrants and covenants
that: 

4.1 Authorization. Purchaser has full power and authority to
enter into the this Agreement, and this Agreement constitutes its valid and
legally binding obligation, enforceable against Purchaser in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and transfer and other laws
of general application affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. 










 



 











 






 



4.2 Private
Placement. Purchaser understands and acknowledges that the sale of the Note
to Purchaser under this Agreement is intended to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), by
virtue of Section 4(2) of the Securities Act and the applicable provisions
of Regulation D promulgated thereunder (“Regulation D”) and that the
Company is relying on Purchaser’s representations and warranties in connection
with the Regulation D exemption. In furtherance thereof, Purchaser represents
and warrants to the Company as follows: 

(a) Purchaser is an “accredited investor” as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act. 

(b) Purchaser realizes that the basis for exemption would not be
available if the sale of the Note was part of a plan or scheme to evade
registration provisions of the Securities Act or any applicable state or
federal securities laws. 

(c) Purchaser is acquiring the Note solely for Purchaser’s own
beneficial account, for investment purposes, and not with a view towards, or
resale in connection with, any distribution of all or any portion of the Note. 

 

(d) Purchaser has the financial ability to
bear the economic risk of Purchaser’s investment, has adequate means for
providing for its current needs and contingencies, and has no need for
liquidity with respect to an investment in the Note. 

(e) Purchaser understands and accepts that the purchase of the Note is
highly risky. Purchaser represents that it is able to bear any loss associated
with an investment in the Note, including loss of all or any portion of the
Principal Amount and/or accrued and unpaid interest on the Note. 

(f) Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Note. 

(g) Purchaser has had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of the Company
concerning the sale of the Note and the business, financial condition, results
of operations and prospects of the Company. Purchaser has had access to such
information concerning the Company and the Note as it deems necessary to make
an informed investment decision concerning the purchase of the Note. 

(h) Purchaser is unaware of, and is in no way relying on, any form of
general solicitation or general advertising, including, without limitation, any
article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
electronic mail over the Internet, in connection with the sale of the Note and
is not purchasing the Note and did not become aware of the sale of the Note
through or as a result of any seminar or meeting to which Purchaser was invited
by, or any solicitation of a subscription by, a person not previously known to Purchaser
in connection with investments in securities generally. 

(i) Purchaser represents that it is not relying on (and will not at any
time rely on) any communication (written or oral) of the Company, as investment
advice or as a recommendation to purchase the Note, it being understood that
information and explanations related to the terms and conditions of the Note
shall not be considered investment advice or a recommendation to purchase the
Note. 

(j) Purchaser confirms that the Company has not (i) given any
guarantee or representation as to the potential success, return, effect or
benefit (either legal, regulatory, tax, financial, accounting or otherwise) of
investment in the Note or (ii) made any representation to Purchaser
regarding the legality of an investment in the Note under applicable legal
investment or similar laws or regulations. In deciding to purchase the Note,
Purchaser is not relying on the advice or recommendations of the Company and
Purchaser has made its own independent decision that the investment in the Note
is suitable and appropriate for Purchaser. 

(k) In entering into this Agreement and purchasing the Note, Purchaser
is relying only on the representations and warranties of the Company set forth
in Section 3 of this Agreement and specifically disclaims that it is
relying on or has relied on any representations, warranties or statements that
may have been made by any other person. 

 

(l) Purchaser understands that no federal
or state agency has passed upon the merits or risks of an investment in the
Note or made any finding or determination concerning the fairness or
advisability of this investment. 

4.3 Usury. Purchaser understands, acknowledges and accepts
that the ____% interest rate on the Note may exceed the maximum rate of interest
permissible under any applicable law at any time and that as a result Purchaser
may not receive all or any portion of the interest to which it would otherwise
be entitled pursuant to the terms of the Note, and may incur civil or criminal
liability therefor. 

4.4 Restricted Securities. Purchaser understands that the Note
is characterized as a “restricted security” under the federal securities laws
inasmuch as it is being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
the Note may be resold without registration under the Securities Act only in
certain limited circumstances. In the absence of an effective registration
statement covering the Note or an available exemption from registration under
the Securities Act, the Note must be held indefinitely. In this connection,
Purchaser represents that it is familiar with and understands the resale
limitations imposed thereby and by the Securities Act. 



2



 











 






 



4.5 Restrictions on Transfer. 

(a) In addition to the restrictions stated
in Section 5.2 below, Purchaser agrees not to make any disposition of all
or any portion of the Note unless and until: 

(i) There is then in effect a registration statement under the
Securities Act, covering such proposed disposition and such disposition is made
in accordance with such registration statement; or 

(ii) (A) The transferee has agreed in writing to be bound by the terms
of all of the Transaction Documents, (B) Purchaser shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
(C) the Company shall have reasonably approved the proposed disposition,
and (D) if reasonably requested by the Company, Purchaser shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of proposed
transaction involving the Note under the Securities Act. 

(b) The Note shall be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws or as provided
elsewhere in this Agreement): 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS GEOVIC MINING CORP. (THE “COMPANY”) HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED. THE TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE
AGREEMENT, DATED AS OF AUGUST     , 2014, BY
AND AMONG THE COMPANY AND PURCHASER (AS DEFINED THEREIN), AS AMENDED AND
MODIFIED FROM TIME TO TIME. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED
BY THE COMPANY UPON WRITTEN REQUEST AND WITHOUT CHARGE. 

4.6 Tax and Legal Advisors. Purchaser has reviewed with its own
tax and legal advisors the federal, state and local tax consequences and legal
aspects of this investment, where applicable, and the transactions contemplated
by the Transaction Documents. Purchaser is relying solely on such advisors and
not on any statements or representations of the Company or any of its agents.
Purchaser understands that Purchaser (and not the Company) shall be responsible
for Purchaser’s own tax liability that may arise as a result of this investment
or the transactions contemplated by this Agreement. 

5. Miscellaneous. 

5.1 Survival. The representations, warranties and covenants of
the Company and Purchaser in this Agreement shall survive the execution and
delivery of this Agreement. 

5.2 Successors and Assigns. Purchaser may not assign any of its
rights or obligations under this Agreement or the Note without the prior
written consent of the Company, and the Company shall not assign any of its
rights or obligations hereunder without the prior written consent of Purchaser.
Subject to the foregoing, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the permitted successors and
assigns of the Parties (including any permitted transferees of the Note).
Nothing in this Agreement, express or implied, is intended to confer upon any
Party, other than the Parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Any permitted
successor or assignee of Purchaser shall be treated as a “Purchaser” for all
purposes hereunder. 

5.3 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the domestic laws of the
State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. The Delaware Court of Chancery shall have
exclusive jurisdiction over any and all disputes, whether in law or equity,
arising out of or relating to this Agreement, and the Parties consent to and
agree to submit to the exclusive jurisdiction of such court; provided, however,
that if the Delaware Court of Chancery determines that it does not have
jurisdiction, the Parties consent to and agree to submit to the exclusive
jurisdiction of the state or federal courts located within the State of
Delaware. 

5.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. 



3



 











 






 



5.5 Notices.
All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (i) upon personal delivery to the Party to be
notified, (ii)when sent by email if sent during normal business hours of the
recipient, if not, then on the next business day; (iii) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the address on the
signature page hereof or at such other address as such Party may designate by
ten days advance written notice to the other parties hereto.

5.6 Finder’s Fee. Each Party represents that it neither is nor
will be obligated for any finders’ fee or commission in connection with this
transaction. Each Party agrees to indemnify and to hold harmless the other
Party from any liability for any commission or compensation in the nature of a
finders’ fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Party or any of its officers, members,
agents, employees or representatives is responsible. 

5.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the prior written consent of the Company and
Purchaser. 

5.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms. 

5.9 Entire Agreement. This Agreement, the Transaction Documents
and the documents referred to herein and therein constitute the entire
agreement between the Parties and no Party shall be liable or bound to any
other Party in any manner by any warranties, representations or covenants
except as specifically stated in the Transaction Documents. 

5.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when executed, will be deemed to be an original
and all of which, when taken together, will be deemed to constitute one and the
same instrument. A signed copy of this Agreement delivered by email, facsimile
or other means of electronic transmission shall be deemed to have the same
legal effect as delivery of an original signed copy of this Agreement. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 










4



 











 






 



Geovic Mining Corp.

(an exploration stage company) 

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY


(Unaudited,
in thousands, except share amounts) 

 




 
  
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 

  
    
   
 
   Common Stock 
   
    
   
   
 
   Additional

   paid-in capital 
   
    
   
   
 
   Deficit 
   
    
   
   
 
   Non-controlling

   Interest 
   
    
   
   
 
   Total 
   
    
   
   
 

  
    
   
 
   Shares 
   
    
   
   
 
   Amount 
   
    
   
   
 

  
  Balance, December 31, 2012
  
 
      106,639,602 
  
 
  $          11 
  
 
  $          110,577 
  
 
  $    (113,563 )
  
 
  $              8,973 
  
 
  $     5,998 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Vesting of restricted stock [note 8]............ 
  
 
                80,000 
  
 
             —   
  
 
                       —   
  
 
                  —   
  
 
                       —   
  
 
             —   
  
 

  
  Stock-based compensation [note 8].......... 
  
 
                      —   
  
 
             —   
  
 
                           4 
  
 
                  —   
  
 
                       —   
  
 
                 4 
  
 

  
  Non-controlling interest contribution.......... 
  
 
                      —   
  
 
             —   
  
 
                       —   
  
 
                  —   
  
 
                      478 
  
 
             478 
  
 

  
  Net loss for year............................................. 
  
 
                      —   
  
 
             —   
  
 
                       —   
  
 
             (7,231 )
  
 
                     (980 )
  
 
        (8,211 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Balance, December 31, 2013..................... 
  
 
      106,719,602 
  
 
  $          11 
  
 
  $          110,581 
  
 
  $    (120,794 )
  
 
  $              8,471 
  
 
  $    (1,731 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Issuance of common stock [note 6].......... 
  
 
          3,962,987
  
 
             —   
  
 
                       —   
  
 
                  —   
  
 
                       —   
  
 
             —   
  
 

  
  Net loss............................................................. 
  
 
                      —   
  
 
             —   
  
 
                       —   
  
 
             (5,767 )
  
 
                     (448 )
  
 
        (6,215 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Balance, September 30, 2014.................... 
  
 
      110,682,589 
  
 
  $          11 
  
 
  $          110,581 
  
 
  $    (126,561 )
  
 
  $              8,023 
  
 
  $    (7,946 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 




The accompanying notes are an integral part of these
financial statements 

 



5



 











 






 



IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 


 
  
   
  
 
   
  
 
   
  
 
   
  
 

  
  COMPANY:
  
 

  
   
  
 

  
  GEOVIC MINING
  CORP.
  
 

  
   
  
 
   
  
 
   
  
 

  
  By:
  
 
   
  
 
   
  
 

  
  Name:
  
 
  Michael T. Mason
  
 

  
  Title:
  
 
  Chief Executive
  Officer
  
 

  
   
  
 
   
  
 
   
  
 

  
  Address:
  
 
   
  
 
  5500 E. Yale Avenue, Suite 302
  
 

  
   
  
 
   
  
 
  Denver, Colorado 80222
  
 

  
   
  
 
   
  
 
  Attention: Chief Financial Officer
  
 

  
   
  
 
   
  
 
  Email: ghill@geovic.net
  
 

  
   
  
 

  
  PURCHASER:
  
 

  
   
  
 

  
   
  
 

  
   
  
 
   
  
 
   
  
 

  
  By:
  
 
   
  
 
   
  
 

  
  Name:
  
 
   
  
 
   
  
 

  
  Title:
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
   
  
 

  
  Address:
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
  Attention:
  
 
   
  
 

  
   
  
 
   
  
 
  Email:
  
 
   
  
 

   
  
  
  
  
 


[SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT] 

 










 



 











 






 



EXHIBIT A

Form of Promissory Note 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS GEOVIC MINING CORP. (THE “COMPANY”) HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED. THE TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE
AGREEMENT, DATED AS OF AUGUST     , 2014, BY AND
AMONG THE COMPANY AND PURCHASER (AS DEFINED THEREIN), AS AMENDED AND MODIFIED
FROM TIME TO TIME. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE
COMPANY UPON WRITTEN REQUEST AND WITHOUT CHARGE. 

PROMISSORY NOTE 

 




 
  
   
  
 
   
  
 

  
  Principal
  Amount: $        
  
 
                                                                                         August     , 2014     
  
 




FOR VALUE RECEIVED, the undersigned, Geovic Mining
Corp., a Delaware corporation (the “Company”), hereby promises to pay to
the order of                     
                    ,
a                     
                    
(“Purchaser”), at the offices of Purchaser, located at                     
                    ,
on the Maturity Date, in lawful money of the United States of America in
immediately available funds, the Principal Amount of $        
(the “Principal Amount”) and Interest thereon from the date of this Note
at the Interest Rate. 

Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Note Purchase
Agreement, dated as of August     , 2014, by
and between the Company and Purchaser, as amended, modified, restated or
supplemented from time to time (the “Note Purchase Agreement”). 

1. Note Interest. Except as otherwise provided
in this Note, interest (“Interest”) shall accrue on the outstanding
Principal Amount of the Note at the rate of two hundred percent
(____%) per annum (the “Interest Rate”) and shall be due and
payable on the Maturity Date (as defined in Section 2). 

2. Note Maturity. The maturity date of this
Note shall be the first anniversary of the date of this Note (the “Maturity
Date”). 

3. Prepayment. The Company may prepay this
Note, in whole or in part and without penalty, at any time upon 30 calendar
days’ prior written notice to Purchaser. The Company shall prepay this Note, in
whole (but not in part) and without penalty, within five business days
following the consummation of the acquisition by Jiangxi Rare Metals Tungsten
Holdings Group Company Ltd or by any other entity of the Company’s 60.5%
interest in Geovic Cameroon, PLC, or the consummation of the acquisition of the
Company by another company. All prepayments shall be applied first to accrued
but unpaid Interest, and then to the unpaid Principal Amount. 

 

4. Interest. If the
effective rate of Interest which would otherwise be payable under this Note
would exceed the maximum non-usurious rate of interest permitted under
applicable law (the “Highest Lawful Rate”), or if the Purchaser shall receive
monies that are deemed to constitute interest which would increase the
effective rate of Interest payable under this Note to a rate in excess of the
Highest Lawful Rate, (i) all such sums shall be spread over the entire
life of the Note, (ii) to the extent required, the amount of Interest
which would otherwise be payable under the Note shall be reduced to the maximum
amount allowed under applicable law, and (iii) any Interest paid by the
Company in excess of the Highest Lawful Rate shall, at the option of the
Purchaser, be either refunded to the Company or credited on the Principal
Amount. 

5. Events of Default. In case of the
occurrence of any of the following events (each, an “Event of Default”):


(a) the Company shall fail to pay the Principal Amount or Interest
under this Note when due and payable, whether at the Maturity Date, by
acceleration or otherwise, and shall not have cured such failure to pay within
thirty days; 

(b) any representation or warranty made by the Company in the Note
Purchase Agreement shall be false or misleading in any material respect on the
Effective Date; 










 



 











 






 



(c) the Company
shall (i) voluntarily commence any proceeding or file any petition or any
notice of its intent to commence or file any such proceeding, petition or
proposal seeking relief under Title 11 of the United States Code or any other
federal or state bankruptcy, insolvency or similar law, (ii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator or
similar official for any such Person (as defined below) or for any substantial
part of its property or assets, (iii) make a general assignment for the
benefit of creditors, or (iv) take any corporate or stockholder action in
furtherance of any of the foregoing; “Person” means an individual, a
partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
or governmental entity or any department, agency or political subdivision
thereof; or

(d) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Company or of any substantial part of the
property or assets thereof, under Title 11 of the United States Code or any
other federal or state bankruptcy, insolvency or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for the Company or any substantial part of its property or (iii) the
winding-up or liquidation of the Company, and such proceeding, petition or
order shall continue unstayed and in effect for a period of 90 consecutive
days; 

then, upon the
occurrence of any such Event of Default (other than an Event of Default
described in Section 5(c) or (d) above, in which case the Principal
Amount of this Note and all accrued and unpaid Interest automatically shall
become immediately due and payable in full), at any time thereafter during the
continuation of such Event of Default, Purchaser may elect, by written notice
to the Company, to declare this Note to be forthwith due and payable, whereupon
the entire unpaid Principal Amount of this Note, together with accrued and
unpaid Interest, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Company, anything in the Note Purchase Agreement or
this Note to the contrary notwithstanding. In that event, Purchaser shall be
entitled to exercise any and all other remedies provided hereunder and under
this Note or available at law or in equity. 

6. Transfer. Purchaser shall not dispose of all
or any portion of this Note without the prior written consent of the Company,
and then only in compliance with all of the provisions of Section 4.5 of
the Note Purchase Agreement. 

7. Waiver. The Company hereby waives diligence,
presentment, demand, protest and notice of any kind whatsoever, other than as
expressly required by the Note Purchase Agreement. The nonexercise by Purchaser
of any of its rights hereunder or under the Note Purchase Agreement in any
particular instance shall not constitute a waiver thereof in that or any
subsequent instance. 

8. Governing Law; Submission to Jurisdiction.
This Note shall be governed by and construed in accordance with the domestic
laws of the State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. The Delaware Court of Chancery
shall have exclusive jurisdiction over any and all disputes, whether in law or
equity, arising out of or relating to this Note, and the Company and Purchaser
consent to and agree to submit to the exclusive jurisdiction of such court; provided,
however, that if the Delaware Court of Chancery determines that it does
not have jurisdiction, the Company and Purchaser consent to and agree to submit
to the exclusive jurisdiction of the state or federal courts located within the
State of Delaware. 

9. Invalidity. In the event that any one or
more of the provisions of this Note shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Note. 

* * * 

 




 
  
   
  
 
   
  
 

  
  GEOVIC MINING
  CORP.
  
 

  
   
  
 
   
  
 

  
  By:
  
 
   
  
 

  
  Name:
  
 
   
  
 

  
  Title:
  
 
   
  
 













2



 











 






 



Exhibit 10.2


NOTE PURCHASE
AGREEMENT 

This Note Purchase Agreement (this “Agreement”)
is made and entered into as of September     ,
2014 (the “Effective Date”), by and between Geovic Mining Corp., a
Delaware corporation (the “Company”), and                     
                    ,
a                     
                    
(“Purchaser”). The Company and Purchaser sometimes are referred to
herein collectively as the “Parties,” and each individually as a “Party.”


RECITALS 

The Company and Purchaser desire to enter into this
Agreement pursuant to which, among other things, Purchaser agrees to acquire
from the Company, and the Company agrees to issue to Purchaser, a promissory
note (the “Note”) in the principal amount of $        
(the “Principal Amount”). This Agreement and the Note sometimes are
collectively referred to in this Agreement as the “Transaction Documents.”


AGREEMENTS 

In consideration of the mutual promises,
representations, warranties, covenants and conditions in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the Parties agree as follows: 

1. Purchase and Sale of the Note.
Subject to the terms and conditions in this Agreement, on the Effective Date,
the Company agrees to sell to Purchaser, and Purchaser agrees to purchase from
the Company, the Note in the form attached as Exhibit A, for a purchase
price equal to the Principal Amount (the “Purchase Price”). 

2. Payment of the Purchase Price and Delivery of Note. On the
Effective Date the Company shall deliver to Purchaser the Note, duly executed
by the Company, and Purchaser shall pay to the Company the Purchase Price for
its Note, by certified check or wire transfer of immediately available funds to
the Company’s designated account. 

3. Representations and Warranties of the
Company. The Company represents and warrants to Purchaser, to the best of
its knowledge and belief, as follows: 

3.1 Organization, Good Standing and Qualification. The Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to
so qualify would reasonably be expected to have a material adverse effect on
its business or properties. 

3.2 Authorization. All corporate action on the part of the
Company necessary (i) for the authorization, execution and delivery of the
Transaction Documents, and (ii) for the performance of all obligations of
the Company under the Transaction Documents has been taken. The Transaction
Documents will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and transfer and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies, and
(iii) except as set forth in Section 4.3. 

 

3.3 Valid Issuance of Note. The Note
when issued, sold and delivered in accordance with the terms of this Agreement
for the consideration provided in this Agreement, will be duly and validly
issued. 

3.4 No Conflict. The execution, delivery and performance of the
Transaction Documents and the consummation of the transactions contemplated by
the Transaction Documents will not (i) result in any violation or default
under any material contract or agreement to which the Company is a party or by
which the Company or its assets are bound or any provision of the Company’s
certificate of incorporation or by-laws or (ii) violate any instrument,
agreement, judgment, decree or order, or any statute, rule or regulation of any
federal, state or local government or agency to which the Company is a party or
its assets are subject, except as set forth in Section 4.3. 

4. Representations, Warranties and
Covenants of Purchaser. Purchaser hereby represents, warrants and covenants
that: 

4.1 Authorization. Purchaser has full power and authority to
enter into the this Agreement, and this Agreement constitutes its valid and
legally binding obligation, enforceable against Purchaser in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and transfer and other laws
of general application affecting enforcement of creditors’ rights generally,
and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. 










 



 











 






 



4.2 Private
Placement. Purchaser understands and acknowledges that the sale of the Note
to Purchaser under this Agreement is intended to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), by
virtue of Section 4(2) of the Securities Act and the applicable provisions
of Regulation D promulgated thereunder (“Regulation D”) and that the
Company is relying on Purchaser’s representations and warranties in connection
with the Regulation D exemption. In furtherance thereof, Purchaser represents
and warrants to the Company as follows: 

(a) Purchaser is an “accredited investor” as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act. 

(b) Purchaser realizes that the basis for exemption would not be available
if the sale of the Note was part of a plan or scheme to evade registration
provisions of the Securities Act or any applicable state or federal securities
laws. 

(c) Purchaser is acquiring the Note solely for Purchaser’s own
beneficial account, for investment purposes, and not with a view towards, or
resale in connection with, any distribution of all or any portion of the Note. 

 

(d) Purchaser has the financial ability to
bear the economic risk of Purchaser’s investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with
respect to an investment in the Note. 

(e) Purchaser understands and accepts that the purchase of the Note is
highly risky. Purchaser represents that it is able to bear any loss associated
with an investment in the Note, including loss of all or any portion of the
Principal Amount and/or accrued and unpaid interest on the Note. 

(f) Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Note. 

(g) Purchaser has had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of the Company
concerning the sale of the Note and the business, financial condition, results
of operations and prospects of the Company. Purchaser has had access to such
information concerning the Company and the Note as it deems necessary to make
an informed investment decision concerning the purchase of the Note. 

(h) Purchaser is unaware of, and is in no way relying on, any form of
general solicitation or general advertising, including, without limitation, any
article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
electronic mail over the Internet, in connection with the sale of the Note and
is not purchasing the Note and did not become aware of the sale of the Note
through or as a result of any seminar or meeting to which Purchaser was invited
by, or any solicitation of a subscription by, a person not previously known to
Purchaser in connection with investments in securities generally. 

(i) Purchaser represents that it is not relying on (and will not at any
time rely on) any communication (written or oral) of the Company, as investment
advice or as a recommendation to purchase the Note, it being understood that
information and explanations related to the terms and conditions of the Note
shall not be considered investment advice or a recommendation to purchase the
Note. 

(j) Purchaser confirms that the Company has not (i) given any
guarantee or representation as to the potential success, return, effect or
benefit (either legal, regulatory, tax, financial, accounting or otherwise) of
investment in the Note or (ii) made any representation to Purchaser
regarding the legality of an investment in the Note under applicable legal
investment or similar laws or regulations. In deciding to purchase the Note,
Purchaser is not relying on the advice or recommendations of the Company and
Purchaser has made its own independent decision that the investment in the Note
is suitable and appropriate for Purchaser. 

(k) In entering into this Agreement and purchasing the Note, Purchaser
is relying only on the representations and warranties of the Company set forth
in Section 3 of this Agreement and specifically disclaims that it is
relying on or has relied on any representations, warranties or statements that
may have been made by any other person. 

 

(l) Purchaser understands that no federal
or state agency has passed upon the merits or risks of an investment in the
Note or made any finding or determination concerning the fairness or
advisability of this investment. 

4.3 Usury. Purchaser understands, acknowledges and accepts
that the ____% interest rate on the Note may exceed the maximum rate of
interest permissible under any applicable law at any time and that as a result
Purchaser may not receive all or any portion of the interest to which it would
otherwise be entitled pursuant to the terms of the Note, and may incur civil or
criminal liability therefor. 

4.4 Restricted Securities. Purchaser understands that the Note
is characterized as a “restricted security” under the federal securities laws
inasmuch as it is being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
the Note may be resold without registration under the Securities Act only in
certain limited circumstances. In the absence of an effective registration
statement covering the Note or an available exemption from registration under
the Securities Act, the Note must be held indefinitely. In this connection,
Purchaser represents that it is familiar with and understands the resale
limitations imposed thereby and by the Securities Act. 



2



 











 






 



4.5 Restrictions on Transfer. 

(a) In addition to the restrictions stated
in Section 5.2 below, Purchaser agrees not to make any disposition of all
or any portion of the Note unless and until: 

(i) There is then in effect a registration statement under the
Securities Act, covering such proposed disposition and such disposition is made
in accordance with such registration statement; or 

(ii) (A) The transferee has agreed in writing to be bound by the terms
of all of the Transaction Documents, (B) Purchaser shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
(C) the Company shall have reasonably approved the proposed disposition,
and (D) if reasonably requested by the Company, Purchaser shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of proposed
transaction involving the Note under the Securities Act. 

(b) The Note shall be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws or as provided
elsewhere in this Agreement): 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS GEOVIC MINING CORP. (THE “COMPANY”) HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED. THE TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE
AGREEMENT, DATED AS OF SEPTEMBER     , 2014, BY
AND AMONG THE COMPANY AND PURCHASER (AS DEFINED THEREIN), AS AMENDED AND
MODIFIED FROM TIME TO TIME. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE
COMPANY UPON WRITTEN REQUEST AND WITHOUT CHARGE. 

4.6 Tax and Legal Advisors. Purchaser has reviewed with its own
tax and legal advisors the federal, state and local tax consequences and legal
aspects of this investment, where applicable, and the transactions contemplated
by the Transaction Documents. Purchaser is relying solely on such advisors and
not on any statements or representations of the Company or any of its agents.
Purchaser understands that Purchaser (and not the Company) shall be responsible
for Purchaser’s own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement. 

5. Miscellaneous. 

5.1 Survival. The representations, warranties and covenants of
the Company and Purchaser in this Agreement shall survive the execution and
delivery of this Agreement. 

5.2 Successors and Assigns. Purchaser may not assign any of its
rights or obligations under this Agreement or the Note without the prior
written consent of the Company, and the Company shall not assign any of its
rights or obligations hereunder without the prior written consent of Purchaser.
Subject to the foregoing, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the permitted successors and
assigns of the Parties (including any permitted transferees of the Note).
Nothing in this Agreement, express or implied, is intended to confer upon any
Party, other than the Parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Any permitted
successor or assignee of Purchaser shall be treated as a “Purchaser” for all
purposes hereunder. 

5.3 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the domestic laws of the
State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. The Delaware Court of Chancery shall have
exclusive jurisdiction over any and all disputes, whether in law or equity,
arising out of or relating to this Agreement, and the Parties consent to and
agree to submit to the exclusive jurisdiction of such court; provided, however,
that if the Delaware Court of Chancery determines that it does not have
jurisdiction, the Parties consent to and agree to submit to the exclusive
jurisdiction of the state or federal courts located within the State of
Delaware. 

5.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. 



3



 











 






 



5.5 Notices.
All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (i) upon personal delivery to the Party to be
notified, (ii)when sent by email if sent during normal business hours of the
recipient, if not, then on the next business day; (iii) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the address on the
signature page hereof or at such other address as such Party may designate by
ten days advance written notice to the other parties hereto.

5.6 Finder’s Fee. Each Party represents that it neither is nor
will be obligated for any finders’ fee or commission in connection with this
transaction. Each Party agrees to indemnify and to hold harmless the other
Party from any liability for any commission or compensation in the nature of a
finders’ fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Party or any of its officers, members,
agents, employees or representatives is responsible. 

5.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the prior written consent of the Company and
Purchaser. 

5.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms. 

5.9 Entire Agreement. This Agreement, the Transaction Documents
and the documents referred to herein and therein constitute the entire
agreement between the Parties and no Party shall be liable or bound to any
other Party in any manner by any warranties, representations or covenants
except as specifically stated in the Transaction Documents. 

5.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when executed, will be deemed to be an original
and all of which, when taken together, will be deemed to constitute one and the
same instrument. A signed copy of this Agreement delivered by email, facsimile
or other means of electronic transmission shall be deemed to have the same
legal effect as delivery of an original signed copy of this Agreement. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 










4



 











 






 



IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 


 
  
   
  
 
   
  
 
   
  
 
   
  
 

  
  COMPANY:
  
 

  
   
  
 

  
  GEOVIC MINING
  CORP.
  
 

  
   
  
 
   
  
 
   
  
 

  
  By:
  
 
   
  
 
   
  
 

  
  Name:
  
 
  Michael T. Mason
  
 

  
  Title:
  
 
  Chief Executive
  Officer
  
 

  
   
  
 
   
  
 
   
  
 

  
  Address:
  
 
   
  
 
  5500 E. Yale Avenue, Suite 302
  
 

  
   
  
 
   
  
 
  Denver, Colorado
  80222
  
 

  
   
  
 
   
  
 
  Attention: Chief Financial Officer
  
 

  
   
  
 
   
  
 
  Email: ghill@geovic.net
  
 

  
   
  
 

  
  PURCHASER:
  
 

  
   
  
 

  
   
  
 

  
   
  
 
   
  
 
   
  
 

  
  By:
  
 
   
  
 
   
  
 

  
  Name:
  
 
   
  
 
   
  
 

  
  Title:
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
   
  
 

  
  Address:
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
   
  
 

  
   
  
 
   
  
 
  Attention:
  
 
   
  
 

  
   
  
 
   
  
 
  Email:
  
 
   
  
 

   
  
  
  
  
 


[SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT] 

 










 



 











 






 



EXHIBIT A

Form of Promissory Note 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR UNLESS GEOVIC MINING CORP. (THE “COMPANY”) HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED. THE TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE
AGREEMENT, DATED AS OF SEPTEMBER     , 2014, BY
AND AMONG THE COMPANY AND PURCHASER (AS DEFINED THEREIN), AS AMENDED AND
MODIFIED FROM TIME TO TIME. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED
BY THE COMPANY UPON WRITTEN REQUEST AND WITHOUT CHARGE. 

PROMISSORY NOTE 

 




 
  
   
  
 
   
  
 

  
  Principal
  Amount: $        
  
 
                                                                                  September     , 2014     
  
 




FOR VALUE RECEIVED, the undersigned, Geovic Mining
Corp., a Delaware corporation (the “Company”), hereby promises to pay to
the order of                     
                    ,
a                     
                    
(“Purchaser”), at the offices of Purchaser, located at                     
                    ,
on the Maturity Date, in lawful money of the United States of America in
immediately available funds, the Principal Amount of $        
(the “Principal Amount”) and Interest thereon from the date of this Note
at the Interest Rate. 

Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Note Purchase
Agreement, dated as of September    , 2014, by and
between the Company and Purchaser, as amended, modified, restated or
supplemented from time to time (the “Note Purchase Agreement”). 

1. Note Interest. Except as otherwise provided
in this Note, interest (“Interest”) shall accrue on the outstanding
Principal Amount of the Note at the rate of two hundred percent
(_____%) per annum (the “Interest Rate”) and shall be due and
payable on the Maturity Date (as defined in Section 2). 

2. Note Maturity. The maturity date of this
Note shall be the first anniversary of the date of this Note (the “Maturity
Date”). 

3. Prepayment. The Company may prepay this
Note, in whole or in part and without penalty, at any time upon 30 calendar
days’ prior written notice to Purchaser. The Company shall prepay this Note, in
whole (but not in part) and without penalty, within five business days
following the consummation of the acquisition by Jiangxi Rare Metals Tungsten
Holdings Group Company Ltd or by any other entity of the Company’s 60.5%
interest in Geovic Cameroon, PLC, or the consummation of the acquisition of the
Company by another company. All prepayments shall be applied first to accrued
but unpaid Interest, and then to the unpaid Principal Amount. 

 

4. Interest. If the
effective rate of Interest which would otherwise be payable under this Note
would exceed the maximum non-usurious rate of interest permitted under
applicable law (the “Highest Lawful Rate”), or if the Purchaser shall receive
monies that are deemed to constitute interest which would increase the
effective rate of Interest payable under this Note to a rate in excess of the
Highest Lawful Rate, (i) all such sums shall be spread over the entire
life of the Note, (ii) to the extent required, the amount of Interest
which would otherwise be payable under the Note shall be reduced to the maximum
amount allowed under applicable law, and (iii) any Interest paid by the
Company in excess of the Highest Lawful Rate shall, at the option of the
Purchaser, be either refunded to the Company or credited on the Principal
Amount. 

5. Events of Default. In case of the
occurrence of any of the following events (each, an “Event of Default”):


(a) the Company shall fail to pay the Principal Amount or Interest
under this Note when due and payable, whether at the Maturity Date, by
acceleration or otherwise, and shall not have cured such failure to pay within
thirty days; 

(b) any representation or warranty made by the Company in the Note
Purchase Agreement shall be false or misleading in any material respect on the
Effective Date; 










 



 











 






 



(c) the Company
shall (i) voluntarily commence any proceeding or file any petition or any
notice of its intent to commence or file any such proceeding, petition or
proposal seeking relief under Title 11 of the United States Code or any other
federal or state bankruptcy, insolvency or similar law, (ii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator or
similar official for any such Person (as defined below) or for any substantial
part of its property or assets, (iii) make a general assignment for the
benefit of creditors, or (iv) take any corporate or stockholder action in
furtherance of any of the foregoing; “Person” means an individual, a
partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
or governmental entity or any department, agency or political subdivision
thereof; or

(d) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Company or of any substantial part of the
property or assets thereof, under Title 11 of the United States Code or any
other federal or state bankruptcy, insolvency or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for the Company or any substantial part of its property or (iii) the
winding-up or liquidation of the Company, and such proceeding, petition or
order shall continue unstayed and in effect for a period of 90 consecutive
days; 

then, upon the
occurrence of any such Event of Default (other than an Event of Default
described in Section 5(c) or (d) above, in which case the Principal
Amount of this Note and all accrued and unpaid Interest automatically shall
become immediately due and payable in full), at any time thereafter during the
continuation of such Event of Default, Purchaser may elect, by written notice
to the Company, to declare this Note to be forthwith due and payable, whereupon
the entire unpaid Principal Amount of this Note, together with accrued and
unpaid Interest, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Company, anything in the Note Purchase Agreement or
this Note to the contrary notwithstanding. In that event, Purchaser shall be
entitled to exercise any and all other remedies provided hereunder and under
this Note or available at law or in equity. 

6. Transfer. Purchaser shall not dispose of all
or any portion of this Note without the prior written consent of the Company,
and then only in compliance with all of the provisions of Section 4.5 of
the Note Purchase Agreement. 

7. Waiver. The Company hereby waives diligence,
presentment, demand, protest and notice of any kind whatsoever, other than as
expressly required by the Note Purchase Agreement. The nonexercise by Purchaser
of any of its rights hereunder or under the Note Purchase Agreement in any
particular instance shall not constitute a waiver thereof in that or any
subsequent instance. 

8. Governing Law; Submission to Jurisdiction.
This Note shall be governed by and construed in accordance with the domestic
laws of the State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. The Delaware Court of Chancery
shall have exclusive jurisdiction over any and all disputes, whether in law or
equity, arising out of or relating to this Note, and the Company and Purchaser
consent to and agree to submit to the exclusive jurisdiction of such court; provided,
however, that if the Delaware Court of Chancery determines that it does
not have jurisdiction, the Company and Purchaser consent to and agree to submit
to the exclusive jurisdiction of the state or federal courts located within the
State of Delaware. 

9. Invalidity. In the event that any one or
more of the provisions of this Note shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Note. 

* * * 

 




 
  
   
  
 
   
  
 

  
  GEOVIC MINING CORP.
  
 

  
   
  
 
   
  
 

  
  By:
  
 
   
  
 

  
  Name:
  
 
   
  
 

  
  Title:
  
 
   
  
 













2



 











 






 



Geovic Mining Corp.

(an
exploration stage company) 

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS 

(Unaudited, in thousands) 

 




 
  
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 
    
   
 

  
    
   
 
   Three months

   ended September 30, 
   
    
   
   
 
   Nine months

   ended September 30, 
   
    
   
   
 
   Unaudited Period

   from Nov. 16, 1994

   (inception) to

   September 30, 2014 
   
    
   
   
 

  
    
   
 
   2014 
   
    
   
   
 
   2013 
   
    
   
   
 
   2014 
   
    
   
   
 
   2013 
   
    
   
   
 
    
   
 

  
  OPERATING ACTIVITIES
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Consolidated net loss............................................................. 
  
 
  $    (2,185 )
  
 
  $    (2,460 )
  
 
  $    (6,215 )
  
 
  $    (6,450 )
  
 
  $               (173,385 )
  
 

  
  Adjustments to reconcile net loss to net
  cash used in operating activities:
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Depreciation expense............................................................. 
  
 
               49 
  
 
             183 
  
 
             250 
  
 
             581 
  
 
                         5,434 
  
 

  
  Stock-based compensation expense................................... 
  
 
             —   
  
 
             —   
  
 
            —   
  
 
                 4 
  
 
                       18,701 
  
 

  
  Change in fair value of warrants......................................... 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                           (675 )
  
 

  
  (Gain)/Loss on disposal of assets......................................... 
  
 
              (53 )
  
 
               12
  
 
           (179 )
  
 
              (15 )
  
 
                             180 
  
 

  
  Property, plant and equipment impairment [note 5]....... 
  
 
             —   
  
 
             309
  
 
             —   
  
 
             309
  
 
                             309 
  
 

  
  Write-off of mineral leases.................................................... 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                         3,244 
  
 

  
  Changes in non-cash operating working
  capital:
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Decrease (increase) in restricted cash.................................. 
  
 
               35 
  
 
             (11)
  
 
             165 
  
 
               71 
  
 
                           (159 )
  
 

  
  Decrease (increase) in prepaid expenses............................. 
  
 
               99
  
 
             156 
  
 
               67
  
 
             352 
  
 
  
  —  
  
 

  
  Decrease (increase) in other assets....................................... 
  
 
               62
  
 
               45 
  
 
               15
  
 
               55 
  
 
  
  —  
  
 

  
  Decrease (increase) in deposits............................................. 
  
 
                 6
  
 
             236
  
 
               14 
  
 
             208
  
 
                              (14 )
  
 

  
  Increase (decrease) in accrued liabilities and other
  payables.............................................................................. 
  
 
         1,431 
  
 
             195
  
 
         3,461 
  
 
               30
  
 
                         4,528 
  
 

  
  Increase in accrued payroll and related.............................. 
  
 
             379 
  
 
             250
  
 
         1,132 
  
 
             250
  
 
                         1,876 
  
 

  
  Increase in accrued litigation................................................ 
  
 
             —   
  
 
             250
  
 
             —   
  
 
             250 
  
 
                             250 
  
 

  
  Increase (decrease) in other liabilities.................................. 
  
 
             —   
  
 
          (250)
  
 
             —   
  
 
          (250)
  
 
                             471 
  
 

  
  Increase (decrease) in related party payable..................... 
  
 
             —   
  
 
                (2 )
  
 
               32 
  
 
              (31 )
  
 
                             360 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Cash used in operating activities............................ 
  
 
           (177 )
  
 
        (1,087 )
  
 
        (1,258 )
  
 
        (4,636 )
  
 
                   (138,880 )
  
 

  
  INVESTING ACTIVITIES
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Purchases of property, plant and equipment..................... 
  
 
             —   
  
 
                 (2)
  
 
             —   
  
 
              (11 )
  
 
                        (7,191 )
  
 

  
  Proceeds on sale of assets..................................................... 
  
 
               52 
  
 
               27
  
 
             276 
  
 
               58 
  
 
                             436 
  
 

  
  Acquisition of mineral leases................................................ 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                        (3,244 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Cash provided by (used in)
  investing activities... 
  
 
               52 
  
 
               25
  
 
             276 
  
 
               47 
  
 
                        (9,999 )
  
 

  
  FINANCING ACTIVITIES
  
 
   
  
 
   
  
 
   
  
 
   
  
 
   
  
 

  
  Increase in short-term debt................................................... 
  
 
               92 
  
 
             120
  
 
             867 
  
 
             120
  
 
                         1,531 
  
 

  
  Non-controlling interest contribution................................... 
  
 
             —   
  
 
             160 
  
 
             —   
  
 
             478 
  
 
                       40,853 
  
 

  
  Proceeds from issuance of common stock
  and preferred stock..................................................................................... 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                       95,589 
  
 

  
  Cash paid to rescind exercise of stock options.................. 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                              (15 )
  
 

  
  Proceeds from issuance of stock warrants......................... 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                       16,168 
  
 

  
  Proceeds from exercise of stock options and warrants.... 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                         2,564 
  
 

  
  Stock issue costs...................................................................... 
  
 
             —   
  
 
             —   
  
 
             —   
  
 
             —   
  
 
                        (7,745 )
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Cash provided by financing activities................... 
  
 
               92 
  
 
             280 
  
 
             867 
  
 
             598 
  
 
                     148,945 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Net increase (decrease) in cash................................ 
  
 
            (33) 
  
 
           (782 )
  
 
           (115 )
  
 
        (3,991 )
  
 
                               66 
  
 

  
  Cash, beginning of period........................................... 
  
 
               99 
  
 
         1,050 
  
 
             181 
  
 
         4,259 
  
 
                             —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 

  
  Cash, end of period..................................................... 
  
 
  $           66 
  
 
  $        268
  
 
  $           66 
  
 
  $        268 
  
 
  $                           66 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 
  
   
  
  
 




The accompanying notes are an integral part of these
financial statements 

 



6



 











 






 



Exhibit 10.3


 

AMENDMENT
NUMBER 1 TO NOTE purchase agreement

 

The Note Purchase Agreement (the
“Agreement”)  between Geovic Mining Limited and               dated as
of                  , 2013 is hereby amended effective as of October 31,
2014 as follows:.

A.   
Paragraph 1 of Exhibit A to the Note Purchase
Agreement which states:

 

1.                 
Note Interest. 
Except as otherwise provided in this Note, interest (“Interest”) shall
accrue on the outstanding Principal Amount of the Note at the rate of two
hundred percent (200%) per annum (the “Interest Rate”) and shall be due
and payable on the Maturity Date (as defined in Section 2).

 is hereby
deleted and replaced as follows:

1.                 
Note Interest. 
Except as otherwise provided in this Note, interest (“Interest”) shall
accrue on the outstanding Principal Amount of the Note at the rate of two
hundred percent (200%) per annum  for the first year and one percent (1%) per
month thereafter (the “Interest Rate”) and shall be due and payable on
the Maturity Date (as defined in Section 2).

 

B.    
Paragraph 2 of Exhibit A to the Note Purchase
Agreement which states:

 

2.                 
Note Maturity. 
The maturity date of this Note shall be the first anniversary of the date of
this Note (the “Maturity Date”).

is hereby
deleted and replaced as follows:

2.                 
Note Maturity. 
The maturity date of this Note shall be eighteen (18) months after the date of
this Note (the “Maturity Date”).

 

C.    
The Promissory Note issued pursuant to the
Agreement is hereby voided and replaced with the Promissory Note attached as
Exhibit A hereto.

 

D.   
Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Note Purchase
Agreement.

 

E.    
All other terms and conditions in the Note
Purchase Agreement remain in effect as of                   , 2014.

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

 




 



2



 











 






 



IN WITNESS
WHEREOF, the Parties have executed this Agreement as of                 ,
2014

 

COMPANY:

 

GEOVIC MINING CORP.

 

 

 

By:                                                                  

Name:  Michael T. Mason

Title:    Chief Executive Officer

Address:     5500 E. Yale Avenue, Suite 302

Denver, Colorado 80222

Attention: Chief Financial Officer

Email: caserin@macspence.com

 

 

PURCHASER:

 

                                                            

 

 

 

By:                                                                  

Name:                                                              

Title:                                                                

Address:                                                          

                                                                        

Attention:                                      

Email:                                            




 



3



 










 






 



Exhibit A

The securities represented hereby have not been registered under the
Securities Act of 1933, as amended (the "Act"), and may not be
offered, sold or otherwise transferred, assigned, pledged or hypothecated
unless and until registered under the Act or unless geovic mining corp. (the
“Company”) has received an opinion of counsel reasonably satisfactory to the
Company and its counsel that such registration is not required.  The transfer
of the securities represented by this certificate is subject to the conditions
specified in thE NOTE Purchase Agreement, dated as of OCTOBER __, 2013, by and
AMONG the Company and Purchaser (as defined therein), as amended and modified
from time to time.  A copy of such conditions shall be furnished by the Company
upon written request and without charge.

 

 

PROMISSORY
NOTE

 

 

Principal Amount: $                                                                                          
                                 , 2013

 

 

FOR VALUE RECEIVED, the undersigned, Geovic Mining Corp., a Delaware
corporation (the “Company”), hereby promises to pay to the order of                                                                                                                                                  (“Purchaser”),
at the offices of Purchaser, located at                                                                                                                                                                                                                                                 ,
on the Maturity Date, in lawful money of the United States of America in
immediately available funds, the Principal Amount of $  (the “Principal
Amount”) and Interest thereon from the date of this Note at the Interest
Rate.

Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Note Purchase Agreement, dated as of                ,
2013, by and between the Company and Purchaser, as amended, modified,
restated or supplemented from time to time (the “Note Purchase Agreement”).


1.         Note Interest.  Except as otherwise provided in
this Note, interest (“Interest”) shall accrue on the outstanding Principal
Amount of the Note at the rate of two hundred percent (200%) per annum  for the
first year and one percent (1%) per month thereafter (the “Interest Rate”) and
shall be due and payable on the Maturity Date (as defined in Section 2).  

2.         Note Maturity.  The maturity date of this Note
shall be eighteen (18) months after the date of this Note (the “Maturity
Date”).

3.         Prepayment.  The Company may prepay this Note, in
whole or in part and without penalty, at any time upon 30 calendar days’ prior
written notice to Purchaser.  The Company shall prepay this Note, in whole (but
not in part) and without penalty, within five business days following the
consummation of the acquisition by Jiangxi Rare Metals Tungsten Holdings Group
Company Ltd of the Company’s 60.5% interest in Geovic Cameroon, PLC.  All prepayments shall be applied first to accrued but unpaid Interest, and then to
the unpaid Principal Amount.  

4.         Interest.  If
the effective rate of Interest which would otherwise be payable under this Note
would exceed the maximum non-usurious rate of interest permitted under
applicable law (the “Highest Lawful Rate”), or if the Purchaser shall receive
monies that are deemed to constitute interest which would increase the
effective rate of Interest payable under this Note to a rate in excess of the
Highest Lawful Rate, (i) all such sums shall be spread over the entire
life of the Note, (ii) to the extent required, the amount of Interest
which would otherwise be payable under the Note shall be reduced to the maximum
amount allowed under applicable law, and (iii)  any Interest paid by the
Company in 



4



 











 






 



excess of the Highest Lawful Rate shall, at
the option of the Purchaser, be either refunded to the Company or credited on
the Principal Amount.

5.         Events of Default.  In case of the occurrence of
any of the following events (each, an “Event of Default”):

(a)        the Company shall fail to pay the Principal Amount or
Interest under this Note when due and payable, whether at the Maturity Date, by
acceleration or otherwise, and shall not have cured such failure to pay within
thirty days; 

 (b)       any representation or warranty made by the Company in the
Note Purchase Agreement shall be false or misleading in any material respect on
the Effective Date;

(c)        the Company shall (i) voluntarily commence any proceeding
or file any petition or any notice of its intent to commence or file any such
proceeding, petition or proposal seeking relief under Title 11 of the United
States Code or any other federal or state bankruptcy, insolvency or similar
law, (ii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for any such Person (as defined
below) or for any substantial part of its property or assets, (iii) make a
general assignment for the benefit of creditors, or (iv) take any corporate or
stockholder action in furtherance of any of the foregoing; “Person”
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or governmental entity or any department, agency or
political subdivision thereof; or

(d)       an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Company or of any substantial part of the
property or assets thereof, under Title 11 of the United States Code or any
other federal or state bankruptcy, insolvency or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for the Company or any substantial part of its property or (iii) the winding-up
or liquidation of the Company, and such proceeding, petition or order shall
continue unstayed and in effect for a period of 90 consecutive days;

then, upon the
occurrence of any such Event of Default (other than an Event of Default
described in Section 5(c) or (d) above, in which case the Principal Amount of
this Note and all accrued and unpaid Interest automatically shall become
immediately due and payable in full), at any time thereafter during the
continuation of such Event of Default, Purchaser may elect, by written notice
to the Company, to declare this Note to be forthwith due and payable, whereupon
the entire unpaid Principal Amount of this Note, together with accrued and unpaid
Interest, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Company, anything in the Note Purchase Agreement or this Note to
the contrary notwithstanding.  In that event, Purchaser shall be entitled to
exercise any and all other remedies provided hereunder and under this Note or
available at law or in equity.

6.         Transfer.  Purchaser shall not dispose of all or
any portion of this Note without the prior written consent of the Company, and
then only in compliance with all of the provisions of Section 4.5 of the Note
Purchase Agreement. 

7.         Waiver.  The Company hereby waives diligence,
presentment, demand, protest and notice of any kind whatsoever, other than as
expressly required by the Note Purchase Agreement.  The nonexercise by
Purchaser of any of its rights hereunder or under the Note Purchase Agreement
in any particular instance shall not constitute a waiver thereof in that or any
subsequent instance.

8.         Governing Law; Submission to Jurisdiction.  This
Note shall be governed by and construed in accordance with the domestic laws of
the State of Delaware, without giving effect to any choice of law or 



5



 











 






 



conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.  The Delaware Court of Chancery shall have exclusive jurisdiction
over any and all disputes, whether in law or equity, arising out of or relating
to this Note, and the Company and Purchaser consent to and agree to submit to
the exclusive jurisdiction of such court; provided,
however, that if the Delaware Court of Chancery determines that it does
not have jurisdiction, the Company and Purchaser consent to and agree to submit to the exclusive jurisdiction of the
state or federal courts located
within the State of Delaware.

9.         Invalidity.  In the event that any one or more of
the provisions of this Note shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Note. 

* *
*

            GEOVIC
MINING CORP.

 

 

 

                                                                        By:_____________________________________    

                                                                
       Name:  Michael T. Mason                                           

                                                                
       Title:    CEO                                                                










6



 











 






 



Exhibit 10.4


 




 
  
   
   
  
 
   
  
 

  
  August 14, 2014
  
 
  VIA E-MAIL
  
 




Employee
Name and Address 

Re: Salary Deferral Opportunity for August 2014 

Dear [Employee Name]: 

As you know, we are working on a strategic partner transaction with
JXTC in China that would involve the sale of our interest in the Cameroon
project. We are making progress, but it would take additional time to
close and is subject to a variety of conditions and approvals. 

We are also working on possible transactions involving
our other projects, as well as raising additional financing for the company. 

Under the circumstances, we are seeking to reduce the
company’s expenditures.

As part of that effort, we are presenting
to you and all other salaried employees a VOLUNTARY opportunity with respect to
the August payroll, as follows: 

1. You may, if
you choose to do so, defer one-half of your base salary compensation for the
month of August 2014. If you desire to defer more than this up to your
full base salary compensation for August 2014, you are also welcome to do so
(but in all events you must receive on a current basis enough of your base
salary to cover mandatory tax and other withholdings as estimated by the
company in its sole discretion on a good-faith basis). 

2. Any amount
that you defer would be payable to you, along with an additional payment equal
to 200% of the amount deferred (the “Deferral Inducement Amount”), on
the earlier of the following: (a) receipt of proceeds from JXTC or from
any other entity from the sale of our interest in the Cameroon project,
(b) consummation of the acquisition of the Company by another company,
(c) receipt of proceeds from a significant financing in an amount expected
to be sufficient to cover the company’s cash requirement for at least 6 months,
or (d) March 14, 2014. We presently anticipate that the sale
event involving JXTC or any other entity, or any acquisition of the Company, or
any financing event, if they occur, may not be for a number of months. 

I want to emphasize that the deferral opportunity
described above (the “Deferral Opportunity”) is subject to your
acceptance, and is entirely VOLUNTARY.

 

If you desire to accept the Deferral
Opportunity, please complete the attached Salary Deferral Election and return
it to Shelia Short by 5:00 p.m. (MT), August 20, 2014. If you do not
return the Salary Deferral Election to Shelia by that time, we will assume that
you decided to not participate in the Deferral Opportunity. 

Thank you very much for your consideration. 

 




 
  
   
  
 

  
  Best regards,
  
 

  
   
  
 

  
  Michael Mason
  
 

  
  CEO
  
 




Attachment:
Salary Deferral Election Form 

 










1



 











 






 



Salary Deferral Election

I,                     
                    
(print your name), hereby elect to take advantage of the “Deferral
Opportunity” set forth in the accompanying letter sent to me by Geovic
Mining Corp. (the “Company”), dated August 14, 2014 (the “Letter”).
My deferral election is as follows: 

1. I hereby
elect to defer     % (print clearly the whole
percentage of August 2014 salary you wish to defer) of my base salary for the
month of August 2014 (the “Deferral Amount”). I understand that the
Deferral Amount can be no less than 50% of my base salary for the month and may
be up to the full amount of my base salary for the month, but that in all
events I will receive on a current basis enough of my base salary for August
2014 to cover my mandatory tax and other withholdings as estimated by the
Company in its sole discretion on a good-faith basis. 

2. I
understand and agree that the Deferral Amount and the Deferral Inducement
Amount (as defined in the Letter) would be paid at the time or times set forth
in the Letter. 

3. I have read
the Letter and reviewed the Deferral Opportunity in its entirety. I have been
given the opportunity to consult with tax, legal, and financial advisors prior
to making this deferral election. 

4. I am making
this base salary deferral on a VOLUNTARY basis and of my own free will. The
Company has not pressured me in any way to make or refrain from making this
deferral election. 

5. I
understand that the Deferral Amount and the Deferral Inducement Amount will be
paid from the general assets of the Company, and no cash or other property will
be held in trust or set aside for me in any way. I understand further that I
will have no special claim to any of the Company’s assets as a result of this
deferral election. My right to receive the amount I defer and to receive the
Deferral Inducement Amount shall be no greater than a general, unsecured
creditor of the Company, and will be wholly dependent on the Company’s ability
to pay such amounts as and when they come due. 

6. I
understand and agree that the Letter and this Salary Deferral Election
constitute an amendment to any employment agreement, offer letter, or similar
agreement that I may have with the Company, and that the terms and conditions
of the Letter and of this Salary Deferral Election supersede any inconsistent
terms of such other agreements. 

7. I
understand and agree that all other terms and conditions of any employment
agreement, offer letter, or similar agreement that I may have with the
Company shall remain in full force and effect. 

8. I
understand and agree that the Letter, the Deferral Opportunity, and this Salary
Deferral Election are intended to be exempt from the requirements of the
Employee Retirement Income Security Act of 1974, as amended, as well as the
provisions of Section 409A of the Internal Revenue Code of 1986, as
amended. I understand and agree that I am solely responsible for any tax
consequences that may apply to me based on the arrangement created by the
Letter, the Deferral Opportunity, and this Salary Deferral Election. 

This Salary
Deferral Election is hereby executed by the Employee identified below, on the
date set forth below. 

 




 
  
   
  
 
   
  
 

  
   
  
 

  
   
  
 

  
  Employee
  Signature
  
 

  
   
  
 

  
   
  
 

  
  Print Employee
  Name
  
 

  
   
  
 

  
   
  
 

  
  Date
  
 
   
  
 

  
   
  
 

  
  Accepted
  and agreed to by the Company:
  
 

  
   
  
 

  
  Geovic Mining
  Corp.
  
 

  
   
  
 
   
  
 

  
  By:
  
 
   
  
 

  
   
  
 
   
  
 

  
  Title:
  
 
   
  
 

  
   
  
 
   
  
 

  
  Date:
  
 
   
  
 













-1-



 











 






 



Exhibit 10.5


 




 
  
   
   
  
 
   
  
 

  
  September 19,
  2014
  
 
  VIA E-MAIL
  
 




Employee
Name and Address 

Re: Salary Deferral Opportunity for September 2014 

Dear [Employee Name]: 

As you know, we are working on a strategic partner transaction with
JXTC in China that would involve the sale of our interest in the Cameroon
project. We are making progress, but it would take additional time to
close and is subject to a variety of conditions and approvals. 

We are also working on possible transactions involving
our other projects, as well as raising additional financing for the company. 

Under the circumstances, we are seeking to reduce the
company’s expenditures.

As part of that effort, we are presenting
to you and all other salaried employees a VOLUNTARY opportunity with respect to
the September payroll, as follows: 

1. You may, if
you choose to do so, defer one-half of your base salary compensation for the
month of September 2014. If you desire to defer more than this up to your
full base salary compensation for September 2014, you are also welcome to do so
(but in all events you must receive on a current basis enough of your base
salary to cover mandatory tax and other withholdings as estimated by the
company in its sole discretion on a good-faith basis). 

2. Any amount
that you defer would be payable to you, along with an additional payment equal
to 200% of the amount deferred (the “Deferral Inducement Amount”), on
the earlier of the following: (a) receipt of proceeds from JXTC or from
any other entity from the sale of our interest in the Cameroon project,
(b) consummation of the acquisition of the Company by another company,
(c) receipt of proceeds from a significant financing in an amount expected
to be sufficient to cover the company’s cash requirement for at least 6 months,
or (d) March 14, 2015. We presently anticipate that the sale
event involving JXTC or any other entity, or any acquisition of the Company, or
any financing event, if they occur, may not be for a number of months. 

I want to emphasize that the deferral opportunity
described above (the “Deferral Opportunity”) is subject to your
acceptance, and is entirely VOLUNTARY.

 

If you desire to accept the Deferral
Opportunity, please complete the attached Salary Deferral Election and return
it to Shelia Short by 5:00 p.m. (MT), September 23, 2014. If you do not
return the Salary Deferral Election to Shelia by that time, we will assume that
you decided to not participate in the Deferral Opportunity. 

Thank you very much for your consideration. 

 




 
  
   
  
 

  
  Best regards,
  
 

  
   
  
 

  
  Michael Mason
  
 

  
  CEO
  
 




Attachment:
Salary Deferral Election Form 

 










1



 











 






 



Salary Deferral Election

I,                     
                    
(print your name), hereby elect to take advantage of the “Deferral
Opportunity” set forth in the accompanying letter sent to me by Geovic
Mining Corp. (the “Company”), dated September 19, 2014 (the “Letter”).
My deferral election is as follows: 

1. I hereby
elect to defer     % (print clearly the whole
percentage of September 2014 salary you wish to defer) of my base salary for
the month of September 2014 (the “Deferral Amount”). I understand that
the Deferral Amount can be no less than 50% of my base salary for the month and
may be up to the full amount of my base salary for the month, but that in all
events I will receive on a current basis enough of my base salary for September
2014 to cover my mandatory tax and other withholdings as estimated by the
Company in its sole discretion on a good-faith basis. 

2. I
understand and agree that the Deferral Amount and the Deferral Inducement
Amount (as defined in the Letter) would be paid at the time or times set forth
in the Letter. 

3. I have read
the Letter and reviewed the Deferral Opportunity in its entirety. I have been
given the opportunity to consult with tax, legal, and financial advisors prior
to making this deferral election. 

4. I am making
this base salary deferral on a VOLUNTARY basis and of my own free will. The
Company has not pressured me in any way to make or refrain from making this
deferral election. 

5. I
understand that the Deferral Amount and the Deferral Inducement Amount will be
paid from the general assets of the Company, and no cash or other property will
be held in trust or set aside for me in any way. I understand further that I
will have no special claim to any of the Company’s assets as a result of this
deferral election. My right to receive the amount I defer and to receive the
Deferral Inducement Amount shall be no greater than a general, unsecured
creditor of the Company, and will be wholly dependent on the Company’s ability
to pay such amounts as and when they come due. 

6. I
understand and agree that the Letter and this Salary Deferral Election
constitute an amendment to any employment agreement, offer letter, or similar
agreement that I may have with the Company, and that the terms and conditions
of the Letter and of this Salary Deferral Election supersede any inconsistent
terms of such other agreements. 

7. I
understand and agree that all other terms and conditions of any employment
agreement, offer letter, or similar agreement that I may have with the
Company shall remain in full force and effect. 

8. I understand
and agree that the Letter, the Deferral Opportunity, and this Salary Deferral
Election are intended to be exempt from the requirements of the Employee
Retirement Income Security Act of 1974, as amended, as well as the provisions
of Section 409A of the Internal Revenue Code of 1986, as amended. I
understand and agree that I am solely responsible for any tax consequences that
may apply to me based on the arrangement created by the Letter, the Deferral
Opportunity, and this Salary Deferral Election. 

This Salary
Deferral Election is hereby executed by the Employee identified below, on the
date set forth below. 

 




 
  
   
  
 
   
  
 

  
   
  
 

  
   
  
 

  
  Employee
  Signature
  
 

  
   
  
 

  
   
  
 

  
  Print Employee
  Name
  
 

  
   
  
 

  
   
  
 

  
  Date
  
 
   
  
 

  
   
  
 

  
  Accepted
  and agreed to by the Company:
  
 

  
   
  
 

  
  Geovic Mining
  Corp.
  
 

  
   
  
 
   
  
 

  
  By:
  
 
   
  
 

  
   
  
 
   
  
 

  
  Title:
  
 
   
  
 

  
   
  
 
   
  
 

  
  Date:
  
 
   
  
 













-1-



 











 






 



 

Exhibit 31.1 

Certification pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended 

CERTIFICATION 

I, Michael T. Mason, Chief Executive Officer
(Principal Executive Officer) certify that: 

1.        I have reviewed this quarterly report on Form 10-Q of Geovic
Mining Corp. for the fiscal quarter ended September 30, 2014; 

2.        Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
report; 

3.        Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial position, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report; 

4.        The registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting ( as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: 

a.       Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared: 

b.       Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under my
supervisions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; 

c.        Evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure control and procedures, as of the end of the
period covered by this report based on such evaluation; and 

d.       Disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting;
and 

5.        The registrant’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the
equivalent functions): 

a.       All significant deficiencies and material weaknesses in the
design or operating of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and 

b.       Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant’s internal
control over financial reporting. 

 


 
  
   
  
 
   
  
 
   
  
 

  
  Date: December
  14, 2014
  
 
  By:
  
 
  /s/ Michael T. Mason
  
   
  
  
 

  
   
  
 
   
  
 
  Michael T. Mason
  
 

  
   
  
 
   
  
 
  Chief Executive
  Officer
  
 







 



 











 






 



Geovic Mining Corp.

(an
exploration stage company) 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 

(dollars
in thousands, except per share amounts or as otherwise stated) 

1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS 

Geovic Mining Corp. (the “Company”) is incorporated under the laws of
the state of Delaware. The Company owns 100% of the shares of Geovic, Ltd.
(“Geovic”), a company that has been in the exploratory stage since its
inception on November 16, 1994. The Company is an exploration stage
company that is identifying mineral properties through its subsidiaries. As an
exploration stage entity we would require further technical analysis and
financing in order to bring our properties into development. 

As at June 30, 2014 our common stock was traded
on the Toronto Stock Exchange (“TSX”) under the symbol GMC.TO. The Company’s
shares were delisted from the TSX at the close of business on July 25,
2014 and commenced trading on the NEX, a separate trading board of the TSX
Venture Exchange at the open of business on July 28, 2014 under the symbol
“GMC.H”. Our common stock is also traded on the over-the-counter bulletin board
(“OTC-BB”) under the symbol: “GVCM”. 

Geovic is engaged in the business of exploring for
cobalt, nickel and related minerals through its majority-owned
(60.5%) subsidiary, Geovic Cameroon, PLC (“GeoCam”), a financially
dependent public limited company duly organized and incorporated under the laws
of the Republic of Cameroon. 

The Company is also engaged in the worldwide
exploration of energy and mineral resources directly or indirectly through its
ownership of Geovic Energy Corp. and Geovic Mineral Sands Corp., formed in 2007
and 2009, respectively, under the laws of the State of Colorado, and Geovic
France SAS, formed in December 2008 under the laws of France, and Geovic
Nouvelle-Calédonie SAS, formed in March 2009 under the laws of New Caledonia,
and Geovic PNG Limited, formed in May 2012 under the laws of Papua New Guinea. 

As an exploration stage company, we have a history of
losses, deficits and negative operating cash flows and will continue to incur
losses in the future. We continue to evaluate our cash position and cash
utilization. Our ability to access additional financing will be critical to our
financial condition as we attempt to obtain proceeds from the sale, joint
venture, farm-out, or similar-type transaction involving one or more of our
exploration prospects, the most significant of which is our 60.5% ownership
stake in the Nkamouna Project in Cameroon. Based on the estimated capital and
start-up costs of the Nkamouna Project, we presently do not have sufficient
capital resources available to meet anticipated equity requirements. Our ability
to raise additional capital for this purpose would depend on a number of
factors, many of which would result in significant dilution of our current
stockholders. Consequently, we have been proactively pursuing a strategic
investment which, if successful, would result in our selling some or all of our
interest in the Nkamouna Project to a third party. 

On July 23, 2013 the Company announced that it
had agreed to the terms and conditions of a Definitive Agreement (“DA”) with
Jiangxi Rare Metals Tungsten Holdings Group Company Ltd (“JXTC”) of Nanchang,
Jiangxi Province, China. JXTC is a state owned large-scale industrial
enterprise with significant mining and industrial operations in cobalt, copper,
tungsten, and other rare metals. The terms and conditions of the DA were agreed
amongst JXTC, Societe Nationale d’Investissement du Cameroun (“SNI”), the
National Investment Corporation of Cameroon that owns or represents 39.5% of
GeoCam, the Company, Geovic Ltd. and GeoCam. 

The transaction contemplated by the DA establishes
JXTC’s intent to acquire 60.5% of the existing shares of GeoCam pursuant to the
execution of a share purchase agreement between JXTC and the Company, which is
expected to be subject to a variety of conditions and approvals, many of which
are outside the control of the Company. There is no assurance that this
agreement will be finalized or that the transaction contemplated therein will
be completed. This proposed transaction would result in the complete
disposition of the Company’s interest in GeoCam and the Nkamouna Project. In
addition to acquiring 60.5% interest in GeoCam, JXTC would also secure 100% of
the mixed cobalt-nickel sulphide product to be produced by the Nkamouna
Project. 

The DA expired on March 31, 2014 and as at that
date the parties had not entered into a share purchase agreement. In September
2014 the parties agreed to an extension retroactive to the original expiry of
the DA through December 31, 2014. There can be no assurance that a share
purchase agreement will ultimately be entered into or that the transactions
contemplated therein will be completed. 

        We
have been closely monitoring our fixed and variable costs and have restricted
such costs to those expenses that are necessary to complete activities related
to securing a strategic investment for the Nkamouna Project, to identify
opportunities to generate cash from our existing exploration properties and to
obtain additional sources of working capital in support of such activities.
Management 



7



 











 






 



 

Exhibit 31.2 

Certification pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended 

CERTIFICATION 

I, Christopher A Serin, Chief Financial Officer
(Principal Financial Officer) of the Company certify that: 

1.        I have reviewed this quarterly report on Form 10-Q of Geovic
Mining Corp. for the fiscal quarter ended September 30, 2014; 

2.        Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
report; 

3.        Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial position, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report; 

4.        The registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting ( as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: 

a.       Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared: 

b.       Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under my
supervisions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; 

c.        Evaluated the effectiveness of the registrant’s disclosure
controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure control and procedures, as of the end of the
period covered by this report based on such evaluation; and 

d.       Disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting;
and 

5.        The registrant’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the
equivalent functions): 

a.       All significant deficiencies and material weaknesses in the
design or operating of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and 

b.       Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant’s internal
control over financial reporting. 

 


 
  
   
  
 
   
  
 
   
  
 

  
  Date: December
  14, 2014
  
 
  By:
  
 
  /s/ Christopher A. Serin
  
   
  
  
 

  
   
  
 
   
  
 
  Christopher A. Serin
  Chief Financial Officer
  (Principal Financial Officer)
  
 







 



 










 






 



 

Exhibit 32.1 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350, AS ADOPTED 

PURSUANT
TO 

SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002 

In connection with the Quarterly Report
of Geovic Mining Corp. (the “Company”) on Form 10-Q for the period
ended September 30, 2014 as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, Michael T. Mason, Chief Executive Officer
of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the
best of my knowledge: 

(1)      The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)      The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the
Company. 

 


 
  
   
  
 
   
  
 
   
  
 

  
  Date: December
  14, 2014
  
 
  By:
  
 
  /s/ Michael T. Mason
  
   
  
  
 

  
   
  
 
   
  
 
  Michael T. Mason
  Chief Executive Officer
  
 







 



 










 






 



 

Exhibit 32.2 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350, AS ADOPTED 

PURSUANT
TO 

SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002 

In connection with the Quarterly Report
of Geovic Mining Corp. (the “Company”) on Form 10-Q for the period
ended September 30, 2014 as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, Greg Hill, Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my
knowledge: 

(1)      The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)      The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the
Company. 

 


 
  
   
  
 
   
  
 
   
  
 

  
  Date: December
  14, 2014
  
 
  By:
  
 
  /s/ Christopher A. Serin
  
   
  
  
 

  
   
  
 
   
  
 
  Christopher A. Serin
  Chief Financial Officer
  
 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 







 















 






 



and the Board of Directors have implemented
a number of cash conservation strategies for the Company and GeoCam. We have
deferred payment of certain expenses and salaries in agreement with the
counterparties as disclosed in Note 6. The Company has delayed payment of
liabilities and has accrued, but been unable to fully pay GeoCam payroll and
related benefits of approximately $0.4 million for the months of April to September
2014. As of the date of filing these liabilities remained outstanding. Due to
the delayed payment of these liabilities the Company may be charged penalties
in Cameroon, the amount of which cannot be currently estimated. In May 2014 the
Company received notification that GeoCam employees were threatening to strike
as of May 15, 2014 unless all compensation arrears were been paid in their
entirety and health insurance reinstated. No formal strike took place.  On
December 9, 2014 the Company received a further notification that GeoCam
employees are threatening to strike as of December 15, 2014 unless all
compensation arrears are paid.  The Company is communicating with the GeoCam
staff. The Company has also been unable to fully pay Geovic Mining Corp.
payroll and related benefits of approximately $0.27 million for the months of
June to September 2014.  Further, effective August 1, 2014 the Company
laid off three non-executive employees and effective September first the
Company laid off one executive employee. These employees have not been paid the
outstanding 2014 payroll, related benefits and unused vacation pay. On
September 30, 2014, Gary R. Morris, Senior Vice President resigned and was not
replaced.   The Company may have obligations under his executive employment
contract.  

As we are seeking to realize value for the Cameroonian assets, we have
shifted the Company’s focus to a prospect generation and strategic investment
business model. Since our position in GeoCam would likely be significantly
diminished or completely eliminated through strategic investment, the future
direction for the Company will be to identify new exploration prospects,
minimally develop and prioritize existing and new prospects, and sell or joint
venture further exploration and development of those prospects to others. The
Company intends to take prospects to a level where they can be timely monetized
through strategic investments by others who have the resources to complete
advanced exploration, permitting and development. 

Our consolidated unrestricted cash balance at September 30, 2014
was approximately $66. We are endeavoring to arrange financing which would
allow us to continue work on our mineral projects and pay our transaction and
other expenses. If we are unable to arrange adequate financing, we may seek to
further reduce our operations while we continue efforts to monetize our
investment in GeoCam, or we may cease operations which could include a
bankruptcy filing. Unless we arrange additional financing, we expect to nearly
exhaust our cash during December 2014. 

During 2014 and 2013 the Company entered into note purchase agreements
(each a “Note Purchase Agreement” and collectively the “Note Purchase
Agreements”) with a number of parties, identified below, (each a “Purchaser”).
Pursuant to the Note Purchase Agreements, the Company agreed to issue
promissory notes (each a “Note” and collectively the “Notes”) to the Purchasers
in the aggregate principal amount of $1,398 as at September 30, 2014
(December 31, 2013—$605) in consideration of the payment by each Purchaser of a
purchase price equal to the principal amount of such Purchaser’s respective
Note. 

Each Note matures one year from the date of issuance at which time the
outstanding principal amount of each Note and all accrued and unpaid interest
thereon is due and payable by the Company. Interest accrues on the outstanding
principal balance of each Note at the rate of 200% per annum on the Notes
issued in 2013 and January 2014; 300% per annum on the Notes issued from
February to August 2014 and 36% per annum on the Notes issued in September 2014.
  The Company was unable to repay the amounts which became due on September 30,
2014 and subsequent and have amended the September, October and November 2014  Notes
to 1% interest per month and extending the maturity to 18 months from the date
of issuance.  The amendments were agreed to effective as of the original
maturity date.

In June and September 2014 the Company issued additional notes in the
principal amount of $30 under similar terms as noted above except at an
interest rate of 150% and due at December 31, 2014. 

The Company may prepay each Note, in whole or in part and without
penalty, at any time upon 30 calendar days’ prior written notice. The Company
is required to prepay each Note, in whole and without penalty, within five
business days following the consummation of any acquisition by JXTC or by any
other entity of the Company’s 60.5% interest in GeoCam or the consummation of
the acquisition of the Company by another company. The Notes contain events of
default and other terms and conditions.




 



8



 











 






 



The following
table summarizes the principal amounts of the Notes issued and outstanding as
of September 30, 2014 and December 31, 2013 and identifies the
parties to which the Notes have been issued: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  Richard G. Buckovic............................................................. 
  
 
  $          130 
  
 
  $                  100 
  
 

  
  Norman C. Rose..................................................................... 
  
 
                30 
  
 
                        30 
  
 

  
  M N Rose Shelter Credit Trust............................................. 
  
 
                40 
  
 
                        40 
  
 

  
  Paul D. Rose............................................................................ 
  
 
                60 
  
 
                        60 
  
 

  
  Dragon’s Fire Investments LLC.......................................... 
  
 
              275 
  
 
                      225 
  
 

  
  Thorne Bush Investments LLC........................................... 
  
 
              648 
  
 
                      150 
  
 

  
  Airlie Road Investors LLC.................................................... 
  
 
                75 
  
 
                       —   
  
 

  
  David/Bette McKibben......................................................... 
  
 
                50 
  
 
                       —   
  
 

  
  John/Jean Anderson.............................................................. 
  
 
                20 
  
 
                       —   
  
 

  
  Bill Shaffer.............................................................................. 
  
 
                35 
  
 
                       —   
  
 

  
  Decker JE Halstead, Revocable Living Trust.................... 
  
 
                25 
  
 
                       —   
  
 

  
  Rodney/Eileen Phillips........................................................... .............................................................................................. 
  
 
                10 
  
 
                       —   
  
 

  
  Fintech Limited....................................................................... 
  
 
                30 
  
 
                       —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Short-Term Debt Notes............................................ 
  
 
  $      1,428 
  
 
  $                  605 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




 

The following table summarizes
the amended maturity dates of the Notes issued and outstanding as of September 30,
2014 and December 31, 2013: 

 




 
  
    
   
 
    
   
 
    
   
 

  
    
   
 
   September 30,

   2014 
   
    
   
   
 
   December 31,

   2013 
   
    
   
   
 

  
  September 30, 2014................................................................... 
  
 
  $            —           
  
 
  $                  120 
  
 

  
  October 31, 2014........................................................................ 
  
 
                 —           
  
 
                      110 
  
 

  
  November 30, 2014................................................................... 
  
 
                 —           
  
 
                      125 
  
 

  
  December 31, 2014.................................................................... 
  
 
               280          
  
 
                      250 
  
 

  
  January 31, 2015....................................................................... 
  
 
               125          
  
 
                       —   
  
 

  
  February 28, 2015...................................................................... 
  
 
               150          
  
 
                       —   
  
 

  
  March 31, 2015.......................................................................... 
  
 
               170          
  
 
                       —   
  
 

  
  April 30, 2015............................................................................. 
  
 
               255          
  
 
                       —   
  
 

  
  May 31, 2015............................................................................. 
  
 
               355          
  
 
                       —   
  
 

  
  June 30, 2015.............................................................................. 
  
 
                 50          
  
 
                       —   
  
 

  
  August 31, 2015......................................................................... 
  
 
                 13          
  
 
                       —   
  
 

  
  September 30, 2015................................................................... 
  
 
                 30          
  
 
                       —   
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 

  
  Total Short-Term Debt Notes................................................ 
  
 
  $       1,428          
  
 
  $                  605 
  
 

  
   
  
 
  
   
  
  
 
  
   
  
  
 




Our near-term expenses could be greater than projected
and we may be unable to generate additional proceeds through the sale of part
or all of our interest in the Nkamouna Project to a strategic partner or future
business transactions on our exploration prospects. We may not be successful in
completing such a sale on a timely basis, or in entering into sale or joint
venture transactions involving our other exploration prospects on acceptable
terms. Further, possible transactions to raise additional capital through the
issuance of equity may not be available and would be dilutive to our
stockholders. If we are unable to obtain additional capital, we will need to
seek to further curtail our operations, to the extent possible, in order to
preserve working capital, which could materially harm our business and our
ability to achieve cash flow in the future, and we may need to cease
operations, which could include a bankruptcy filing. Unless we arrange
additional financing, we expect to nearly exhaust our cash during December
2014. 

2. BASIS OF PRESENTATION AND GOING CONCERN 

The accompanying interim unaudited condensed consolidated financial
statements of the Company have been prepared in accordance with generally
accepted accounting principles in the United States (“GAAP”) for interim
financial statements and the instructions to Form 10-Q and Article 10 of
Regulation S-X and accordingly do not include all disclosures required for
annual financial statements. These interim condensed consolidated financial
statements follow the same significant accounting policies and methods of
application as the Company’s audited annual consolidated financial statements
as included in the Company’s annual report on Form 10-K for the year ended
December 31, 2013 (the “Annual Financial Statements”). The interim
condensed consolidated financial statements should be read in conjunction with
the Annual Financial Statements. 



9



 











 






 



In June 2014 the Financial Accounting
Standards Board ( “FASB”) issued update 2014-10 related to Topic 915
Development Stage Companies which eliminated the requirements to
(1) present inception-to-date information in the statements of income,
cash flows, and shareholder equity, (2) label the financial statements as
those of a development stage entity, (3) disclose a description of the
development stage activities in which the entity is engaged, and
(4) disclose in the first year in which the entity is no longer a
development stage entity that in prior years it had been in the development
stage. The update is effective for annual reporting periods beginning after
December 15, 2014 and interim periods therein. 

These financial statements have been prepared on a
going concern basis and do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company has limited cash resources
and has not established an ongoing source of revenue sufficient to cover
operating costs and has incurred losses since inception, which raises
substantial doubt about our ability to continue as a going concern. As
discussed in Note 1, Nature of Business and Continuance of Operations, we
are pursuing a strategic investment which would result in our selling some or
all of our interest in the Nkamouna Project to a third party which, if
successful, could assist us in covering our operating costs through at least
December 31, 2014. Our ability to continue as a going concern is dependent
upon a sale of some or all of our interest in the Nkamouna Project, entering
into sale or joint venture transactions involving our other exploration
prospects on acceptable terms, and/or obtaining the necessary financing through
the issuance of equity to meet our current obligations arising from normal
business operations when they come due. 

In the opinion of management, all adjustments
(including normal recurring accruals) considered necessary for a fair
presentation of the Company’s financial condition have been included. Operating
results for this interim period are not necessarily indicative of the result
that may be expected for the full year ending December 31, 2014. 

 

3. LOSS PER SHARE 

Loss per share is
computed by dividing net loss attributed to the Company’s stockholders by the
weighted average number of common shares outstanding during the period. Stock
options will be dilutive when the Company has income from continuing operations
and when the average market price of the common shares during the period
exceeds the exercise price of the options and warrants. Due to the net loss
attributed to the Company for all periods presented, the stock options have
been anti-dilutive and, therefore, not included in the loss per share
calculations. All outstanding warrants expired in the second quarter of 2012
and are no longer considered for potential dilution in 2014 or 2013.




10