Camindex shareholders vote in favor of MVP amalgamation

Shareholders of Camindex Mines (TSE) have voted overwhelmingly in favor of an amalgamation with MVP Capital Corp. (TSE). Camindex, which has a 51% interest in the troubled Valdez Creek placer gold project in Alaska, came under the control of MVP Capital earlier this year when the latter was successful in acquiring about 91% of Camindex outstanding shares.

The amalgamation of Camindex with a wholly-owned subsidiary of MVP Capital will allow the mining finance company to acquire the 1.7 million shares of Camindex it does not now own.

Shares of MVP Capital were recently listed on the Toronto Stock Exchange and traded in the 60 range.

In April of this year, Camindex, in financial difficulties, surrendered its interest in Valdez Creek to one of its project partners; exercising an option, it regained control of the 51% interest in July after negotiating a $14 million loan from MVP Capital and repaying the project money owed. Camindex’s partners at Valdez Creek are American Barrick Resources (TSE) and Cambior Inc. (TSE).

During the first nine months of 1988, Camindex recorded a net loss of $6.7 million (36 per share) compared with $5.8 million (33 per share) for the same period last year. Gold production during the period totalled 26,000 oz compared with 14,250 oz for the same period in 1987. Higher production

Camindex Chairman R.W. Brissenden said that during the first half of this year, mining operations were concentrated on overburden stripping. He said mining and processing of pay gravel has picked up during the second half, and total output of 47,000 oz is projected by the end of the year, compared with 32,400 oz for all of 1987. Production to mid-November totalled 33,000 oz, he said.

Brissenden estimated the average production cost this year at the project will be $500(US) per oz.

In acquiring its 91% interest in Camindex, MVP Capital offered one share of MVP for every 62/3 common shares of Camindex. Brissenden said no fairness opinion or valuation was obtained to support the share exchange ratio.

MVP Capital revealed this year a strategy to transform the financing company from one with the bulk of its assets in “passive” holdings to one with about 65% of its assets directly involved in ownership of “active” gold production interests.

MVP Capital President Ian McAvity is confident increased production rates and stringent cost- control planning will serve to turn the Valdez Creek project around.

The amalgamation will place Dundee-Palliser Resources (TSE) under the control of MVP Capital; Camindex is the major shareholder of Dundee-Palliser.