U.S. REPORT Piedmont makes new acquisition

The acquisition of MMC Holding Inc. by Piedmont Mining (NASDAQ) has been finalized at a total purchase price of US$3.5 million. Of this amount, US$1 million was paid in cash and the balance is payable by notes due through to April 1994 and secured by the assets acquired.

The assets of MMC include mineral properties near Kershaw, S.C., and leased to Piedmont. Also included is the property that hosts the Haile Gold mine owned by Piedmont. The lease entitled MMC to a 3% royalty on gold production with a minimum payment of US$100,000 per year.

As well, the acquisition includes all of the equipment used by MMC in providing contract mining and hauling services to Piedmont at Haile as well as the assets used in MMC’s own mining operations. MMC mines and processes a combination of muscovite, kaolin, feldspar and quartz at a nearby operation producing a product the company calls Mineralite. The fine- grained, white mineral assemblage is used in various industrial applications, primarily as a filler in paints.

Robert Shields, chairman and chief executive officer of Piedmont, indicated that the acquisition of MMC was primarily an asset purchase, noting that purchase was made at a discount to MMC’s net asset value.

The company also plans to conduct heavy mineral exploration in the Carolinas under a joint venture with Corona (TSE), Piedmont’s major shareholder with about 11.4% of the company’s issued capital.

Piedmont has been investigating occurrences of heavy mineral sands containing titanium bearing minerals and zircons along ancient shorelines in eastern North Carolina.

Piedmont reported a record net income in the first quarter of 1990 with net income of US$406,174, compared with a net loss of US$88,855 in the first quarter of 1989.

The company attributes the improvements in results to a jump in the grade of ore mined. Average grade increased substantially, rising from 0.041 oz. gold per ton in the first quarter of 1989 to an average grade of 0.074 oz. gold in 1990. Piedmont Mining (NASDAQ) $000s except per-share items* 3 months ended Mar. 31 1990 1989 Revenue $2,291 $1,335 Net earnings (loss) 406 (89 )

per share 0.03 (0.01 )004 *US dollars