Tangled Canacord web involves Pioneer, Prime

Vancouver stock promoter Murray Pezim has told The Northern Miner that his merchant bank, Prime Capital, may be interested in acquiring Pioneer Metals. Such a move could facilitate an attempt by Pioneer to purchase Toronto-based Canacord Resources’s principal asset — a 9.9% interest in the Silbak/Big Missouri gold project at Stewart, B.C.

“I just want them (Pioneer and Canacord) to know that I’m on the scene and watching,” Pezim said in a telephone interview from London. “They are calling a meeting soon to get approval of this thing and, of course, I’ll make my voice known at that time.”

If Prime does take over Pioneer, the latter company would hold the next largest interest in the Silbak/Big Missouri project, after Westmin Resources.

Pioneer President Robert Willis says he has heard rumors that several companies have been taking a hard look at his company and one of them could presumably be Prime Capital. But he doubts that Prime “has the ability to gather up enough stock.” Willis said Pioneer has several large institutional shareholders “who are sticking with us and who are optimistic about our growth prospects.”

“We know that our institutional shareholders have been approached by a number of people wondering if they would like to sell their blocks of stock. And basically they said if Bob Willis is tendering his stock we will do the same.”

He said Pioneer is interested in acquiring an “asset” from Canacord — not control. “As far as a takeover of Canacord, we could have done that six months ago. We went through the evaluation, looked at the number of shares outstanding, what it would take to buy all the stock, then putting up our share of the capital cost for the project which is about $8 million. After putting the numbers together, it just wasn’t an attractive deal.”

“From what I know of Prime Capital, the backers have access to a lot of money and they would probably be a very likely group that could take us on,” he said. “I would think that if we were approached, it would be in a friendly way because management is a big part of our organization.”

Pioneer tried to inrease its ownership in the Silbak/Big Missouri project earlier this year (N.M. Feb 1/88). At that time, Pioneer’s offer for Canacord’s 9.9% share in the joint venture was accepted, subject to shareholder approval. The offer, which includes cash and shares valued at about $7.6 million, was accepted by most of Canacord’s board, with the exception of two members who resigned a few weeks ago. One of the directors was Dr Robert Ginn who headed up Novamin Inc. before it was taken over by Breakwater Resources.

Prime Capital, stepped in just over a week ago to take a position in Canacord. Prime reportedly purchased a block of about one million shares on Feb 19 and it has been buying warrants as well to increase its shareholding.

Prime’s entry into the fray follows the purchase last month by Montreal-based MSV Resources of a 9.9% stake in Canacord. Both msv and Canacord are headed up by Guy Charette of Montreal who favors the Pioneer offer.

A number of possibilities are being bandied around as to why Prime and msv are interested in Canacord. Some skeptics are suggesting that msv would like to get its hands on the $7.6 million to develop its Eastmain gold project, in northern Quebec, with partner Placer Dome. They also concede that Murray Pezim is capable of raiding a company with a healthy treasury.

Prime was formed by Pezim and his sidekick Arthur Clemiss as a means of rationalizing their holdings in several natural resource companies. The 3-way ownership of the company includes International Corona Resources which also has a one-third interest. Pezim told The Northern Miner that Prime is getting ready for a public issue which should be out in June. “We are going to be a very big force in the mining industry,” he said.

A few months ago Prime purchased a major shareholding in Delaware Resources which Pezim estimates to be around 700,000 shares. Ned Goodman, who is on the board of Prime, is closely associated with Dynamic Capital whose merchant banking arm at last report was acquiring 18.4% of Delaware. This being the case, it seems highly probable that Prime could end up with control of Delaware.