LETTERS TO THE EDITOR — Broker-Dealers raise funds for

I regret that I am unable to renew my subscription due because of M.R. Brown’s column “Warding off `penny dreadfuls’ ” (T.N.M., Sept. 14/92).

I am a promoter of several of such “penny dreadfuls.” Mr. Brown presumed that companies whose shares were traded on the Canadian Dealing Network (CDN) would be exempt. Not only are CDN-listed companies not exempt, but companies listed on the Vancouver and Alberta Stock exchanges are not exempt. The Ontario Securities Commission’s current policy 5-02 relating to the financing of junior resource companies provides all of the protection contemplated by the proposed new Policy 1-10, but such prospectus financing would not be exempt.

As well, I do not know if Mr. Brown has ever attempted to raise money in the equity markets for mining exploration. But in today’s grim marketplace, none of the brokers who are members of the Investment Dealers Association or the TSE — who are not subject to the policy — undertake financing for junior mining exploration companies. I have been informed by a senior officer of one such a firm that, if I brought a “Hemlo” to them, they would not be able to do a financing.

This leaves the Broker-Dealers who have historically financed and do now continue to finance mining exploration companies and while none of my companies has found a profitable mine, they have at the very least enhanced the database of exploration information for the province, and in at least three instances, have carried out exploration programs such that several major mining companies have expressed considerable interest in obtaining a stake in the property.

If Mr. Brown were to inform himself of Policy 5.2, he would see that more than a “tiny portion of the money milked out” does get into the ground. Under this policy, the companies receive 65% of all monies raised under a prospectus.

It is disappointing to me that the publication that holds itself out as the communicator to the mining industry can be so badly informed, or relies on the Ontario Securities Commission as its only source.

Elizabeth Kirkwood

President

Kirkwood Resource Developers Toronto