The Nevada explorer plans to repurchase 5 million of its outstanding shares, offering $2.10 per share, or $2 per share plus a share purchase warrant. Each warrant would entitle the holder to buy an additional share within two years, at $2 per share.
The decision to reduce the program is attributed to an aggregate devaluation from $33 million to $29 million in the company’s 480,000 free-trading shares of Franco and 620,000 free-trading shares of Euro. The shares were acquired in exchange for the company’s Belnap, Dixie and Bill Vest claims, along with the Unger fee land, which adjoin the royalty sister’s Midas project (T.N.M., Nov. 3-Dec. 6/98).
The offer, which is still subject to regulatory approval, follows a complaint filed in the Third District Court for Salt Lake Cty., Utah, against certain subsidiaries of, and persons affiliated with, Romarco.
According to Romarco, a group representing the original owners of the Belnap claims allege that the company, among other things, misrepresented its findings while leasing the property from late 1994 till late 1995. (The company bought the claims outright at the end of the lease period.) Romarco says it will defend each allegation, citing the claims as “frivolous and without merit.” The company also intends to pursue its own action against the claimants.
Meanwhile, the company remains active at 10 properties in Nevada, all of which are targeted for drilling in the new year. Results are currently pending from the Jake Creek project, in which the company can earn a 51% interest from
Romarco currently has 26 million shares outstanding.
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