Shareholders propose merger for Dickenson

A private company that claims to represent institutional shareholders of Toronto-based Goldcorp Investments (TSE) and subsidiaries Dickenson Mines (TSE) and Wharf Resource (TSE) says it wants to find solutions to the problems the gold mining group has suffered. Calling itself Angelside Inc., the private firm is proposing to amalgamate Goldcorp with parent company CSA Management and later merge the two with Dickenson, Wharf and United Coin Mines (TSE).

A wholly owned subsidiary of CSA, Goldcorp owns 61.6% of the Class A and 87.7% of the Class B shares of Dickenson which in turn owns 36.2% of Wharf. Goldcorp also owns 44.4% of Wharf which lost US$5.8 million in 1990 after taking a US$11.5-million writedown on its investment in United Coin.

Angelside President Kendall Cork said he hasn’t decided whether to call a special meeting of shareholders or wait until Goldcorp’s annual meeting in June before attempting to have shareholders vote on the proposal.

A former senior vice-president and treasurer at Noranda (TSE), Cork says he wants to be named chairman and chief executive officer of the merged company. Under the proposal Nicholas Ediger, former president and chief executive officer of Eldorado Resources (a predecessor of CAMECO), would act as president. Also prominent in the Angelside group is James McCartney, a Toronto lawyer who was a director of Dickenson before he was forced to resign from the board last April.

Although he couldn’t be reached for comment, McCartney has been critical of CSA Chairman Robert McEwen and his management style. Since Goldcorp gained control of Dickenson in April, 1989, a number of executives, including former president and chief executive officer John Kachmar and his successor David Libby, have resigned from their positions.

The group has also been losing money. Dickenson reported a loss of $39.1 million or $2.23 per share in 1990 after taking a $49.9-million writedown on the Arthur White gold mine near Red Lake, Ont. Dickenson’s A and B shares have been trading at or near their annual low point.

McEwen, now chairman, president and chief executive officer of Dickenson and Wharf, has hired Rolando Francisco from LAC Minerals to act as senior vice-president and chief financial officer. John Cook was also hired recently from LAC to be Dickenson’s vice-president of mining.

In the Angelside proposal, Cork has asked holders of CSA’s 2.3 million Class A shares and Goldcorp’s 17.5 million Class A shares to consider exchanging their shares for common shares of the merged company on a one-for-one basis.

However, as control of the Dickenson group rests with holders of CSA’s 357,582 Class B voting shares, analysts doubt that the proposal will be successful. Evanachen, the McEwen family holding company, holds 51.04% of the Class B shares of CSA which in turn is represented on the 7-member Goldcorp board by five nominees. By contrast, holders of Goldcorp’s A shares are represented by two directors.

In a brief statement, McEwen said CSA Management considers the Angelside proposal incomplete and misleading and has instructed its counsel to file a complaint with regulatory officials.