Directors of Sullivan Mines have come out against a takeover bid by Ste. Genevieve Resources and are proposing a merger with Cambior Inc., which currently has a 31% stake in Sullivan and has expressed an interest in increasing its share ownership.
Ste. Genevieve, a junior mining company listed on the Montreal Exchange, originally offered $6.625 per share for a minimum of 5 million and a maximum of 6 million common shares of Sullivan; the company has since raised its offer price to $7.25 per share.
Cambior, meanwhile, says it intends to increase its interest in Sullivan by a maximum 5%. Also, Cambior Vice-president Herve De Jordy says in a release hi s company is studying various alternatives in order to increase to more than 50% its interest in Sullivan.
The Sullivan directors, in a separate release, said they made their decision in part after obtaining from Levesque, Beaubien the opinion that a share price varying between $8.75 and $10 would be more in line.
Approximately 10.5 million shares on a fully diluted basis have been issued by Sullivan. Among the company’s assets is a 34% interest in the Arthur White gold mine near Red Lake, Ont. Sullivan recorded a loss in 1986 of $687,000, but the company has little long- term debt. It produced a total of 26,530 oz gold last year.
Besides Cambior, a major shareholder of Sullivan, with about 13%, is cmp, a flow-through share fund.
Ste. Genevieve was incorporated in 1985 and is involved in a number of advanced gold projects in Quebec. It expects to produce gold from its 50%-owned Duverny property in 1988.
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