Davidson shareholders question non-mining deals

Several non-mining investments made by Davidson Tisdale Mines (TSE) came under shareholder attack at the company’s annual meeting. Despite dissension by a minority group, shareholder approval for the investments was received following a ballot.

The investments include a $610,000 real estate deal with a division of Canada Packers Ltd., which is building a residential, commercial and industrial complex near Maple, Ont. The other deal involves a $300,000 investment in a plastic engine manufacturer based in Kingston, Ont.

The complaints over the deals prompted Kenneth Kent, Davidson Tisdale’s president, to reassure shareholders that “we’re not getting out of the mining business, we’re just spreading the risk around.”

Davidson’s mining business has been hard hit by a major downgrading of reserves at its 50%-owned Tisdale gold project near Timmins, Ont. Mineable reserves were reduced to 55,000 tons grading 0.23 oz gold per ton. This reserve will be mined from established mine workings and will be processed on a toll basis in Timmins.

“Underground exploration failed to prove up drill-indicated reserves,” Chairman William Dingwall told the meeting. Previous reserves were estimated as high as 823,850 tons grading 0.36 oz. Future mining investments will likely take place via Davidson’s 47%- owned affiliate Vital Pacific Resources (VSE). “We see the company continuing its interest in mining through Vital Pacific,” Kent added. Real estate and industrial investments will continue through Davidson Tisdale.

During the meeting, a shareholder from Holland complained to management that he had been promised compensation for past promotional services he had provided the company. Pieter Buiskool told the meeting that he had a verbal agreement with Dingwall that Davidson Tisdale would fund his promotional activities in Europe. He claims that he is owed in excess of $80,000. Dingwall denied owing any money for promotional services.