Great Lakes, Geomaque merger talks end

Discussions involving a proposed merger between Great Lakes Minerals (TSE) and Geomaque Explorations (TSE) were recently terminated by Geomaque’s board.

This development puts on hold plans to merge the companies into a single entity that would have gold production rising from 55,000 oz. in 1995 to 110,000 oz. in 1996.

Great Lakes insists, however, that it has strong support for the merger from several major shareholders of Geomaque, including Geomaque director Donald Empey. Empey and his family own about 8% of Geomaque shares.

“This story is far from over,” says Great Lakes President Nick Tintor, adding that the company intends to continue pursuing the merger proposal. “We see it as a classic management entrenchment issue.”

Geomaque President John Paterson says the board decided not to pursue the proposed merger with Great Lakes “because it was felt not to be in the best interests of all Geomaque shareholders”. He also indicated that a number of the company’s major shareholders are solidly supportive of management.

“Essentially, they (Great Lakes) came to us with an unsolicited proposal and we hired someone to look at it and make a presentation,” Paterson said. “But we felt the deal was more beneficial to Great Lakes shareholders than Geomaque shareholders. We believe we can maximize shareholder values by completing initiatives that were not taken into account by their offer.” Geomaque cancelled its annual meeting on April 27, and intends to set a new date shortly. Meanwhile, Great Lakes has initiated proceedings in the Superior Court of Quebec to set a new date for this annual and special meeting.

An independent financial adviser was retained by Geomaque to review the proposed exchange ratio related to the merger. “It is our understanding that the exchange ratio was found to be fair,” Tintor said.