Campbell, Meston shareholders approve amalgamation plan

Shareholders of Toronto-based Campbell Resources and Montreal- based Meston Lake Resources have voted in favor of amalgamating Meston with a wholly-owned subsidiary of Campbell, Camsub Holdings.

Meston’s main asset is the Joe Mann gold-copper mine in the Chibougamau area of Quebec. It was 64% owned by Campbell. Under the amalgamation plan, shares of Meston will cease to exist.

Each Meston shareholder will be offered either 2.35 common shares of Campbell, or one redeemable retractable preference share, for each Meston share. Campbell will redeem the preference shares at $6.75 per share on Dec 31 of this year.

To help finance the acquisition of the Meston shares, Campbell earlier this year completed a private placement of 5.6 million equity units worth a total of $17.3 million. Each unit consists of one common share, one-half a warrant and one- eighth of a gold purchase warrant.

At the Campbell shareholders’ meeting, a motion to boost the size of the company’s board of directors from nine to 12 members was approved.

The Joe Mann operation, which went into production in April of this year, is one of four mines being run by Campbell in the Chibougamau area. President Richard Lister said the current production rate there is 700 tons ore per day. Exploration both east and west of the main Joe Mann deposit has been encouraging, he said.

The other three mines are the S-3 project, which also entered production this year, and the Cedar Bay and Henderson 2 mines.

While Campbell produced almost 21,000 oz gold in 1986, Lister said the current annualized rate from all four mines is 65,000 oz. The Northern Miner in September reported a combined operating cost of $310(US) per oz for the Chibougamau mines.

The four mines are feeding one mill at a current rate of 2,200 tons per day, equal to about two-thirds of the mill’s capacity, Lister said.

The company president said Campbell also has another copper project in the area which, depending on the price for the base metal, could be brought into production in 1988.