With the acquisition of 296,504 additional units that became available through the additional subscription privilege of a recent Pioneer rights offering, Pegasus’ equity investment in Pioneer currently amounts to 1,818,494 shares or about a 7.98% interest. The units represent 296,504 shares of common stock and a like number of warrants that entitle Pegasus to acquire an additional 148,252 Pioneer shares.
Pegasus also holds a $12 million (C) convertible debenture issued by Pioneer which is convertible into Pioneer common stock at $4 per share. The financing was primarily used for Pioneer’s additional capital costs at the 40%- owned Premier Gold project in British Columbia being brought into production by operator Westmin Resources (TSE) this spring.
Assuming full conversion of the debenture and the exercising of all warrants, Pegasus’ equity position in Pioneer would amount to 5,314,591 shares or about a 20.21% position.
According to Robert Willis, president of Pioneer, the company is now fully funded to meet all its commitments and exploration plans for the 1989 season. Although Willis said the company is still struggling to meet commercial production standards at its 100%-owned Puffy Lake mine in Manitoba, he noted that a further $1.7 million work program to include calculation of reserves is planned this season for the 100%- owned Bonito gold-silver project in New Mexico. An updated reserve figure is also being prepared for the 50%-owned Stibnite seasonal open pit, heap leach gold mine in Idaho.
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