Kam-Kotia seeks new acquisitions

The transition of Kam-Kotia Mines (TSE) from a holding company into an operating company is under way, shareholders were informed at the annual meeting.

In March of this year the company reached agreement with Saskatchewan Minerals to acquire a sodium sulphate business from the provincial Crown corporation. “Management views this acquisition as a base from which Kam- Kotia will be able to grow and acquire other businesses in the highly profitable field of selected industrial minerals,” President J. O. Kachmar said.

Cost of the Crown company was $12.5 million, subject to final working capital adjustments. Kachmar said the sodium sulphate business operates two modern plants producing two commercial grades of sodium sulphate, one grade used in the production of detergents and the other a salt-cake product sold mainly to the pulp and paper industry.

The sodium sulphate business has ore reserves that will sustain operations at current rates for more than 25 years, he said, adding that the prairie company has a workforce of 80 and is Canada’s largest producer of natural sodium sulphate. Current sales will generate a cash flow approaching $3 million per year, he said.

To help pay for the Saskatchewan business, Kam-Kotia in March issued two million common shares by way of a private placement at $2.15 per share. Including the proceeds of this placement, Kam-Kotia has about $13.5 million in its treasury, the president said.

Kam-Kotia’s major shareholder is Dickenson Mines (TSE), in which the former, through ownership of Dickenson’s B shares, has a 14% equity interest and a 33% voting interest. (Dickenson is Kam-Kotia’s major shareholder.)

Elected to Kam-Kotia’s 7-member board of directors were Kachmar, R. W. Brissenden, R. J. Hicks, Rene Lavertu, H. E. Neal, D. A. Sloan and A. W. White. The seven people nominated were elected as presented.

For 1987, Kam-Kotia reported net income, after an extraordinary item, of $2.2 million (25 cents per share), compared with $2 million (22 cents per share) in 1986.