St. Genevieve Res. suspends offer for Louvem shares (May 02, 1988)

A bid to buy up to 4.8 million shares of Louvem Mines (TSE) at $1.50 per share has been suspended indefinitely by St. Genevieve Resources (ME).

St. Genevieve, which owns about 56.5% of the common shares of Louvem, was seeking to increase its ownership in the latter to about 90% through its stock exchange offer. Louvem is a small gold- producer in northwestern Quebec.

An independent valuation sought by Louvem management after St. Genevieve announced its offer concluded Louvem is worth between $2.40 and $2.72 per share. In other news, St. Genevieve reports the Montreal Exchange approved the company’s proposed issue on the Swiss market of 5 5/8% convertible debentures due in 1993 for an aggregate maximum value of 50 million Swiss francs (about $45 million), due to close May 3. St. Genevieve shareholders will vote on the issue May 2.

Also, St. Genevieve has signed an agreement with an affiliate, Bay Resources and Services (ASE), whereby St. Genevieve may acquire a 7% interest in the Fontana gold property in northwestern Quebec. To earn its interest, St. Genevieve must spend $750,000 on exploration work by June 30.

The other two partners in the Fontana project are Jilbey Industries (ASE) and Stratmin Inc. (ME).

A bid to buy up to 4.8 million additional shares of Louvem Mines (TSE) at $1.50 per share has been suspended for at least 12 months by St. Genevieve Resources (ME).

However, St. Genevieve reports it has reserved the right to purchase Louvem shares via the open market.

St. Genevieve, which currently owns about 56.5% of the common shares of Louvem, was seeking to increase its ownership in the latter to about 90% through its stock- exchange offer. Louvem is a small gold producer in northwestern Quebec.

An independent valuation sought by Louvem management after St. Genevieve announced its offer, concluded Louvem is worth between $2.40 and $2.72 per share.

The boards of directors of the two companies are trying to smooth out their differences. According to a joint press release, a shaft extension at Louvem’s Chimo mine, among other projects, will be completed.

Louvem and Gold Spinner International (a Michigan company affiliated with St. Genevieve) have entered into a letter of intent which would permit almost eight million tons of tailings owned by Louvem to be processed at Louvem’s Manitou mill by way of new technology developed by Gold Spinner. In other news, Louvem reports net earnings for 1987 (to Dec 31) of $985,755 compared to a loss of about $176,000 for the previous year. (Louvem is excluding dividend arrears on the series A preferred shares which totalled about $1.5 million at Dec 31, 1987.) The 1987 earnings are for the last nine months of 1987; the company has changed its year-end from March 31.

Louvem produced 22,000 oz gold during the final nine months of 1987.

St. Genevieve reports the Montreal Exchange approved the company’s proposed issue on the Swiss market of 5 5/8% convertible debentures due in 1993 for an aggregate maximum value of 50 million Swiss francs (about $45 million), due to close May 3. St. Genevieve shareholders will vote on the issue May 2.

Also, St. Genevieve has signed an agreement with an affiliate, Bay Resources and Services (ASE), whereby St. Genevieve may acquire a 7% interest in the Fontana gold property in northwestern Quebec. To earn its interest, St. Genevieve must spend $750,000 on exploration work by June 30.

The other two partners in the Fontana project are Jilbey Industries (ASE) and Stratmin Inc. (ME).