Australian owner may sell Pamour group of companies

Pamour’s immediate parent, Giant Resources, is reported to be carrying a burdensome debt load. In a recent release, it said it is staging preliminary talks with a syndicate of investors with a view to a possible sale of its Canadian assets.

While Giant has strong equity positions in its Canadian assets, it does not benefit directly from the cash flow generated.

Private Canadian company Curragh Resources, in which Giant has a 43.7% interest, is representing Giant in the talks.

Meanwhile, the parent of Giant Resources, Pioneer International, has announced it wants to sell its mineral assets and concentrate on its building materials and petroleum activities.

Pioneer, which became Giant’s controlling shareholder in late 1987-early 1988, has a 42% interest in Giant Resources. The company also has separate involvement in other mining activities in Australia.

“The funds raised (from the sale of the mining assets) will initially be used to repay debt,” D.J. Quirk, Pioneer’s managing director, said in a prepared release. “Thereafter, they will permit increased investments in our core activities in the building products field.”

A story in an Australian newspaper suggests Pioneer is trying to follow the lead of a competitor, CSR Ltd., which during the past few years has sold off its oil and mining assets. The focus of CSR’s business efforts is now on building materials and sugar.

Curragh’s majority shareholder is a company controlled by Clifford Frame, a former president of Pamour. The main mining operation of Curragh is a zinc-lead mine at Faro, Y.T.

Giant has a 67.5% interest in Pamour, a former gold producer in the Timmins, Ont., area which has become a holding company. The major gold producer of the Pamour group is Giant Yellowknife Mines, in which Pamour and Giant Resources have a combined 58.5% interest. Giant Yellowknife produced 187,354 oz gold in 1988.

Giant Resources and Pamour also have a combined 62.4% interest in ERG Resources (TSE), which is involved in a huge gold reclamation project from old tailings in the Timmins area.

For 1988, Giant Yellowknife recorded a net loss of $30.4 million, mostly accounted for by a $29.6- million writedown. The company, with gold-mining operations in Timmins and Yellowknife, N.W.T., has been struggling to reduce its operating costs.

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