Developing “strategic relationships” has become an important part of Homestake Mining’s investment strategy in recent months, particularly in Canada. A few weeks ago the company entered into a series of agreements with Vancouver-based Galactic Resources (TSE) which will cost it $39.5 million(US).
Just recently, a Homestake affiliate agreed to take down 500,000 units of Continental Gold (VSE) at $3 per share. The warrants attached are exercisable at $4.50 up to Sept 30, 1988.
Continental is headed by Robert Hunter who is also president of North American Metals which Homestake recently won control of in a takeover battle that included Pezgold Resource Corp. North American is developing a gold mining operation in northwestern British Columbia.
The Galactic agreements call for Homestake to purchase 500,000 shares for $4.5 million and for Galactic to purchase all of Homestake’s gold mining interests in the Bodie mining district of California for $35 million in cash, stock or both. Galactic has also agreed to initiate development of the Bodie gold prospects with a minimum budget of $4.5 million.
Continental Gold was floated in January when 400,000 shares were underwritten at $1.10 each. Three months later the company purchased a 100% interest in the Trophy gold project which it says covers “Western Canada’s largest precious metal system.” Shortly after the property acquisition, Continental concluded a $2.25-million private placement with eight European institutions involving one million shares.
Continental has not done any work on the Trophy property since it was acquired but expects to be drilling there sometime in July.
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