Shareholders infuriated over Pomac amalgamation

Two weeks after being grilled by several holders of Acadia Mineral Ventures (TSE) stock at that company’s annual meeting (N.M., Oct 24/88), President Donald Smith was back in the hot seat — this time facing a barrage of loud accusations from a small group of impassioned Pomac Mines (ASE) shareholders at Pomac’s annual meeting.

The controversy centres on the assessment of a gold property in Vermilion and Lomond twps., near Kenora, Ont., which Pomac picked up in 1984. Originally staked in 1928, the property hosts a quartz stringer zone 5 ft wide and 100 ft long at the contact of a quartz porphyry and a volcanic boulder conglomerate on the south shore of Vermilion Lake. A 25-ton sample, taken in 1930, produced 15.75 oz of gold.

Acadia has an option to earn a 51% interest in the ground by spending $750,000 over three years and making cash payments of $300,000.

Despite spending $327,000 and making cash payments of $75,000, Acadia knows no more about the property than it did two years ago, according to director Lincoln Torrance. A drilling program conducted last year by a contractor failed to intersect economic values and was not conducted to the satisfaction of Acadia, Torrance said. Another program is contemplated for this winter.

With few prospects for raising exploration money on its own and with a $940,000 deficit, Pomac would be better off amalgamating with companies that can raise money, Smith, president of both companies, said. The directors have decided, then, to amalgamate with four other companies, all of them non- trading.

One of those companies, Richmond Gulf Resources holds a 7.9% interest in a producing geothermal property in Utah, which was acquired when Richmond took over delisted O’Brien Energy & Resources earlier this year. The other amalgamating companies are Northcap Minerals and two numbered Ontario companies.

Under the merger, Pomac shareholders end up with a 5% interest in the new company, a situation some shareholders find hard to swallow, considering, they say, the Vermilion property is the major asset of the new company, to be called Richmond Gulf Resources.

The first meeting, called to vote on the merger, had to be postponed because the incorrect day was given on some information circulars mailed to shareholders.

When proceedings continued the next day, management rejected as technically invalid, two proxies, which apparently could have swung the vote in favor of the dissident shareholders. The dissidents have the right to appeal that decision.

Management prevailed, with the required two-thirds of the shares represented at the meeting. About 25% of the company’s 3.2 million shares were voted at the meeting.