Merger plan pits Malartic Hygrade against Gold Texas

Malartic Hygrade, with two producing mines in northwestern Quebec and an 18.9% interest in Gold Texas, has filed a suit in the Supreme Court of British Columbia seeking the right to vote its full interest in the junior against the merger. Malartic Hygrade alleges, in part, the proxy statement and prospectus regarding the proposed merger are misleading.

Gold Texas, in its suit, is seeking to prevent Malartic Hygrade from voting the shares, alleging the producer acquired the shares improperly.

The Gold Texas shareholders meeting is set for Feb 2.

The two Texas-based companies are Crown Resource Corp. and Gold Capital Corp.

Should the merger be approved, the new company would have about a 30% interest (15% each from Gold Texas and Crown Resource) in the Kettle River gold project in Washington, which could be in commercial production during the second quarter of 1990.

Operator of the Kettle River project, which hosts reserves of 1.6 million tons grading 0.199 oz gold per ton, is Echo Bay Mines, which owns the remaining 70% interest.

The three juniors are linked through their shareholdings: Gold Capital has a 14.8% interest in Gold Texas and a 15.2% interest in Crown Resource, while Crown Resource owns 8.2% of Gold Texas.

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