Prime Group firm bids for Delaware Resources

One of Murray Pezim’s Prime Group companies has moved to take control of Delaware Resources Corp., whose principal asset is the snip gold project near Stewart, B.C. Colossus Resource Equities has made an offer for 51% of Delaware’s issued capital while reserving the right to take less if need be.

Colossus currently holds 656,600 Delaware common shares or 8.84% of its issued capital. Prime Capital President John Ivany says they have been “looking at Delaware for some time” and he feels the snip property has greater potential than has been recognized to date. DCC Equities holds an approximate 19% interest in Delaware or 27% fully diluted.

Ivany doesn’t see the takeover as a “particularly hostile move,” and he notes that Colossus has no active properties at present but about $25 million in liquid assets including Delaware and Pezcorona warrants.”It’s really an investment company,” he says.

Delaware’s board has recommended that shareholders reject the offer and an information circular is being sent out to registered shareholders explaining its position. Delaware President Ron Netolitzky believes the company “has a very high probability of increasing its bottom line value in a very short period of time” which should be reflected in a higher share price.

He told The Northern Miner that Cominco has started the previously announced $4.3-million underground program at snip, and he predicted they were “within three months of getting some answers on the outside reserve potential.”

“We think there’s room to double or triple reserves. So we figure that people should hang on and if somebody wants to take us out I think we’ll get a much better price in three months.” He also noted that subject to the exercise of some warrants the company is fully financed through to production.