Granges, Hemlo Gold settle differences

The differces between Granges Exploration (TSE) and Hemlo Gold Mines (TSE) with respect to the 2.2 million shares of Granges recently acquired by Hemlo Gold have been resolved.

Now that the dust has settled, Hemlo Gold will keep its 9.8% stake in the company, but will give voting control of the shares to Granges. An agreement to that effect was signed late last week after Granges announced it would seek to overturn the share purchase by Hemlo because a confidentiality agreement had been violated (N.M., Oct 3/88). Hemlo Gold paid $9.1 million for its acquisition, based on a price of $4 a share.

Granges said it intends to invite private placement proposals from interested mining companies, and will continue “discussions with Hemlo for that purpose.”

If Granges and Hemlo Gold do not conclude a private placement, or if Granges concludes a private placement with another party, Hemlo Gold has the option of selling its shares in co-operation with Granges, or holding them for investment purposes, in which case voting control would remain with Granges.

Earlier this year, Granges engaged Nesbitt Thompson Deacon to approach a number of senior mining companies which might be interested in making a private placement and establishing a long term relationship with the company. Granges is said to be carrying a heavy debt load from its mine- making efforts in Manitoba (Tartan Lake) and in the United States (Crofoot and Lewis mines) through its soon-to-be-amalgamated subsidiary, Hycroft Resources and Development (VSE).