Pamour may lose a parent, adopt a mine

It may be too early in the game to call it a battle, but the action appears to be warming up on the shareholder front at Dickenson Mines, where Pamour Inc. has purchased a 9.9% stake.

At the same time, Pamour’s most senior parent, the conglomerate Ariadne Australia, is reported to be in serious financial trouble following the collapse of world stock markets in mid-October and may have to divest itself of some holdings, including Pamour which it controls through its natural resources arm, Giant Resources of Australia.

On the North American front, Pamour has acquired 507,000 Class B shares of Dickenson during the last three months at prices ranging between $11(C) and $16.25. Pamour’s 9.9% shareholding gives it an 8.2% voting power in Toronto-based Dickenson.

According to papers filed with the Securities and Exchange Commission (sec) in Washington, D.C., (Dickenson trades on Amex in the United States), Pamour will seek representation equal to 30% on Dickenson’s board of directors, which currently has eight members.

(Corporations registered with sec are required to file a 13-D form when ownership in another corporation exceeds 5%; in Ontario, the Ontario Securities Commission must be informed when such ownership exceeds 10%.)

It has also been revealed that Pamour holds a 9.9% interest in Kam-Kotia Mines, which, through its holdings of Dickenson Class B shares, has a 33.7% interest in Dickenson. (Kam-Kotia trades only on the tse.)

(Dickenson has issued two types of shares: each Class A share entitles the holder to one vote, whereas each Class B share, convertible into a Class A share, entitles the holder to 10 votes.)

Pamour President Clifford Frame, when asked about his company`s future intentions with regards to Dickenson, said “that depends on them.” He said Pamour is “looking for a friendly association.” A meeting involving officials of Pamour and Dickenson/Kam-Kotia is planned for the near future, he said.

Pamour and its subsidiary, Giant Yellowknife Mines, were in the news this past summer when an offer was made, unsuccessfully, to buy an almost 20% stake in Dome Mines prior to the amalgamation of Dome with Placer Development and Campbell Red Lake Mines and the creation of a new company, Placer Dome.

Dickenson owns a 66% interest in the Arthur W. White gold mine near Red Lake in northwestern Ontario and reportedly has been talking with the holder of the remaining 34%, Sullivan Mines of Montreal, about acquiring the latter company’s interest. Meanwhile, on the Australian front, Ariadne, a large New Zealand- based holding company controlled by entrepreneur Bruce Judge, is said to be one of the larger casualties “down under” of the market collapse.

In a feature story in Australian Business, a weekly business journal, it was reported control of Ariadne via Judge Corp. has been placed in the hands of a New Zealand banking group.

The bankers, with the intention of bolstering Ariadne’s weakened balance sheet, are evaluating the company’s myriad of assets with the possible objective of selling off portions. “Opinion was hardening in Brisbane financial circles that one of its (Ariadne’s) main strategic assets might soon be on the market,” the Australian Business article states. That asset, the article continues, is a 40% interest in Giant Resources.

Giant has a minimum 51% interest in Jimberlana Minerals which in turn holds a 51% interest in Toronto-based Pamour. (Jimberlana, through a Canadian subsidiary, bought an initial 37.4% interest in Pamour in February, 1986.) Pamour has been transformed into a mining house which has a 50.2% interest in Giant Yellowknife Mines, a gold mining company expected to produce about 200,000 oz gold in 1987; a 66% interest in erg Resources, involved in the recovery of precious metals from low grade ore sources or residues; and a 50.2% interest in Pamorex Minerals, which acts as Pamour’s exploration arm.

The financial trouble of parent Ariadne, and the real possibility that the controlling banking group will sell Giant Resources or parts of its huge mineral resources portfolio, suggests a new controlling shareholder could be in store for the Pamour group in Canada.

However, little concern is coming from the Toronto office. “The only concern would be whom we would be dealing with,” Frame told The Nothern Miner, commenting on any new controlling shareholder of Giant.

He did confirm several large companies had made enquiries about buying Giant, before Ariadne’s financial problems surfaced in October. Frame said “Ariadne is not in any immediate danger,” adding to the general thinking that Ariadne’s bankers will not let go of Giant at fire sale prices.

Meanwhile, back in North America, in a move similar to Pamour’s purchase of Dickenson shares, the latter company has been buying shares in Wharf Resources of Calgary, which operates a heap-leach mine in South Dakota. Dickenson currently holds a 14% interest in Wharf, which will produce an estimated 43,000 oz gold this year.