Vancouver Stock Exchange Takeover bid could stir market

Trading activity in Vancouver may be stuck in a sideways pattern, but some observers think things could change if a takeover battle begins to heat up over St. Philips Resources.

Today, May 1, El Condor Resources and its merger partner Covenant Resources announced their intention to make a takeover bid for any and all of the outstanding shares of Vancouver-listed St. Philips. For those who have been on the moon for the past several months, St. Philips is involved in the immense Kemess copper-gold project in the Toodoggone district of northern British Columbia.

El Condor and Kennecott, as 60-40 partners, are earning a 60% interest in the South Kemess project from St. Philips. Work has been progressing favorably on the property and this appears to have piqued the interest of Rio Algom, a Toronto-based major, which announced a private placement in St. Philips earlier this year.

But El Condor and Covenant (the latter company is managed by the Bob Dickinson-Bob Hunter team of Mt. Milligan fame) feel they can offer St. Philips shareholders “a better deal.” The soon-to-be merged companies will offer one El Condor share for each two St. Philips shares tendered to the bid. Once the merger is completed on or about mid-July of this year, each two St. Philips shares tendered will become one share of the merged company.

At press time, trading activity on the VSE was relatively quiet, with both El Condor and Covenant halted. The resource index was up marginally at 534.71, while the composite index was flat at 567.97.

Murray Pezim’s Prime Equities announced the completion of a private placement with Teck for the sale of four million shares of Prime at $1.25. Teck also has options to buy more shares and was granted rights of first refusal and options to provide production financing. Prime Equities was off 3 cents to settle at 82 cents over our report period. But Adrian Resources got a boost of 27 cents to reach $1.75 after announcing an increase in reserves from the TOK claim gap and its Ski property in the Eskay Creek camp north of Stewart, B.C. Prime and Stikine can together earn a 50% interest in Adrian’s holdings.