EXPLORATION ’95 — Granges and Atlas ponder exploration

The boards of Granges (TSE) and its 50.5% subsidiary, Hycroft Resources & Development (TSE), have approved an amalgamation of the companies, subject to regulatory and shareholder approvals.

The proposed merger also has the approval of Granges’ 37.2% shareholder, Atlas (NYSE), reports Granges President John Auston.

Granges and Atlas worked out a revised agreement which sets the stage for both parties to review joint exploration ventures, including development of a South American program and joint exploration at the Atlas Goldbar property in Nevada.

Commenting on the proposed amalgamation, Auston said: “The new Granges will be a financially strong gold production and exploration company, well-positioned to expand its activities on a broad front in the gold mining sector.”

The name of the amalgamated company will be Granges.

Shareholders of Granges will receive one common share of the amalgamated company for each common share. Hycroft shareholders will receive 0.88 of a common share of the amalgamated company for each common share. Shareholders of both companies will vote on the merger plans in late March. At the same time, they will be asked to approve a shareholder rights protection plan. Atlas has already agreed to support the adoption of this rights plan by the amalgamated company.

On the financial front, Granges reported net earnings of $7 million (or 20 cents per share) for 1994, compared with $2.8 million for 1993. Earnings in 1994 included a gain of $12.6 million on the sale of the company’s interest in the Trout Lake base metal mine in Manitoba.

Hycroft reported a net income of $260,000 for the year, compared with $91,000 a year earlier. The company’s Crofoot-Lewis gold mine, in Nevada, produced 94,868 oz. gold last year, an increase of 10% from 1993.

An increased rate of production in the second half of the year was attributed mainly to a significant increase in ore production, reflecting the first introduction of run-of-mine ore from the South Central pit, along with crushed ore.