MINING MARKETS & INVESTMENT NEWS — QUERY — Zahavy now Xavier

Back in the mid-1960s, I purchased shares of Golsil Mines, which later became Zahavy Mines. On the basis of one share for every five of Golsil, I ended up with 120 shares of Zahavy.

The last information I received on the company was a notice from Zahavy quoting your paper dated April 21, 1983. I have been checking the unlisted market in Toronto for a few years and have never found a listing for Zahavy.

Do you have any current information on this mining company?

Gary Wile,

White Rock, B.C.

Zahavy Mines was reorganized as Xavier Mines in February 1993, with five shares of Zahavy traded for one of Xavier Mines, which traded on the Alberta Stock Exchange (ASE).

The company moved into the oil and gas business and was re-chartered in Delaware under its current name, Xavier Corporation, which traded on the Alberta Stock Exchange and on the Nasdaq in the U.S. Four old Xavier Mines shares were tradable for one new share of Xavier.

The company had a 37.5% interest in an oil venture in the Stavropol area in Russia, an established oil patch east of the Black Sea. It also had exploration licences in western Siberia. Shares were trading in the $3 range, but there was trouble just beyond the horizon.

In mid-1996, authorities in the United Kingdom began investigating a fund manager at Morgan Grenfell Asset Management. Peter Young had made a series of controversial investments, including a US$70-million purchase of stock in Solv-Ex, whose new oil-sands technology did not live up to the company’s claims. Another suspicious-sounding investment was in a company called Russ Oil and Technology, which had only one verifiable asset — a package of warrants in Xavier. Morgan Grenfell and its parent, Deutsche Bank, subsequently sued Young, alleging misdirection of money and opportunities that properly belonged to the fund he was managing.

Xavier’s outside directors were asked to review the results of the Young investigation, and concluded that Xavier management was not party to any impropriety.

Then, in March 1997, a second boot fell on Xavier. The Russian state oil and gas agency revoked the licences of its joint venture in the Stavropol field, though the company retained its Siberian land packages.

Xavier’s statutory filings were delayed because of the uncertainty surrounding its assets, and the Alberta Securities Commission ordered that trading cease in May 1997. That same month, the Nasdaq de-listed the stock, and the company went on the U.S. over-the-counter market. The ASE de-listed Xavier at the end of 1997.

Xavier (XVRC-O) is currently trading around US2 cents, and the company, which appears to be reorganizing, is no longer a reporting issuer in Canada.

Its most recent filings with the U.S. Securities and Exchange Commission, which date from April of this year, are only statutory statements of ownership from large shareholders. Zahavy continues, but 120 shares (which would be tradable for six shares in Xavier) are not worth much.

The company’s address is 1600 Smith St., Suite 4700, Houston, Tex., 77002.

Its telephone number is (713) 652-5111.