Camindex prepares debenture issue

A private placement of $13,609,000 of 3% convertible debentures has been arranged by Camindex Mines.

Of that total, the company reports, $6.1 million represents a rollover of existing debt and $7.5 million will be subscribed for cash; $2,146,000 will be subscribed by Consolidated Talcorp, $1,396,000 in exchange for existing debt and $750,000 for cash, and $2.4 million will be subscribed by mvp Capital.

The debentures mature Dec 31, 1997, and are convertible at the option of the holder into common shares or into gold. The share conversion is initially on the basis of 1,500 common shares of Camindex for each $1,000 principal amount of debentures (66 cents per share). The gold conversion begins three years from the date of issue and the conversion rate is tied to the London bullion market price.

Completion of the new financing is subject to shareholder approval at a July 27 meeting. On a fully diluted basis and assuming full conversion into shares of the new debentures (as opposed to the gold conversion option), Talcorp’s holding in Camindex will be reduced from 43% to 27%.

Camindex was in default of various obligations to the Valdez Creek placer gold project in Alaska in which the company has a 51% interest. (Camindex’s partners in the project are American Barrick Resources and Sullivan Mines.) Upon completion of the new financing, together with an agreed $2 million(US) working capital facility, Camindex will be in a position to meet all of its current obligations, the company reports.

The Valdez Creek project is expected to produce 40,000 oz gold in 1987, of which 11,300 oz were produced prior to a temporary shutdown in April. Gold production is scheduled to recommence before the end of this month.

Camindex shareholders will vote July 27 on whether or not to consolidate company shares on a one- for-four basis, and on a company name change to Valdez Mines Ltd.

Camindex recorded a net loss of $8.2 million (48 cents per share) in 1986, compared to a profit, after an extraordinary item, of $28,522 (less than 1 cents per share) in 1985. During the first quarter of this year, Camindex recorded a net loss of $403,948 compared with a loss of $92,641 for the same period last year.