MVP Capital to issue $1m in bonds

A Swiss securities dealer has agreed to buy $1 million in convertible bonds and warrants from MVP Capital (TSE).

MVP plans to use $500,000 of the proceeds, together with $500,000 already advanced to Dundee-Palliser Resources (TSE), to subscribe to a new issue of Dundee-Palliser convertible debentures. MVP’s 5.3 million shares of Dundee-Palliser will be pledged as security for the bonds.

Proceeds received by Dundee-Palliser will enable it to extend its option to buy the Gays River lead-zinc mine in Nova Scotia. The mine is currently owned by Westminer Canada.

In other news, MVP and its subsidiary Valdez Gold (ASE) have signed a letter of intent with Cambior (TSE) whereby Valdez would transfer to Cambior its 25% interest in the Valdez Creek Placer operation in Alaska. In return, Valdez will be freed from its obligation to pay back a gold loan and other obligations relating to the operation. Cambior will also receive 15 million shares of MVP.

The transaction, if approved, would give Cambior total ownership of the placer operation which, at year-end, had proven and probable minable reserves of 3.2 million cubic yards grading 0.09 oz. gold per cubic yard. An agreement has also been reached, subject to regulatory approval, whereby Valdez will transfer to MVP its 39.6% interest in Excellon Resources (VSE) and its interest in Valdez Gold USA, a subsidiary. As a result, Valdez will be freed from its $4.2-million debt owing to MVP.

MVP has accepted an offer from an investor group to buy its interest in Valdez for $160,000, provided the Cambior and MVP/Valdez transactions are completed.