Zenmac Zinc makes bid for shares of Vestgron

One asset the international consortium headed by Teck Corp. may not b e inheriting when it closes its deal later this month with Canadian Pacific to purchase 31% of Cominco Ltd. is the latter’s 62.5% interest in Vestgron Mines.

At that time, Vestgron may be in the fold of Zenmac Zinc a junior mining company listed on the Alberta Stock Exchange where it currently trades around the $3.00 level. Among other things, this company holds a 20% working interest option on Corp. Falconbridge Copper’s rich Winston Lake zinc deposit near Schrieber, Ont. if the deposit is brought to production. It also holds 30% of Madeleine Mines which plans to bring the large open pit platinum-palladium-gold deposit at Lac des Iles into production in northwestern Ontario.

Zenmac has made an offer to purchase all of the outstanding shares of Vestgron at 50 cents per share through the Toronto Stock Exchange where the shares currently trade around the 65 cents level. The offer expires at the end of business on Oct. 17.

There are 4,227,968 common shares outstanding of Vestgron. Cominco holds 62.5% or 2,642,618 shares. At 50 cents per share, Zenmac would pay $2.1 million for all the outstanding Vestgron shares, including $1.3 million for Cominco’s share.

In an agreement reached with Zenmac late last month, Cominco has agreed to tender all of its shares in response to this bid. However, Cominco says if a competing bid at a higher price is made for all outstanding shares of Vestgron and Zenmac declines to revise its bid to meet that higher price, then Cominco has the right to tender its shares in acceptance of the competing higher bid.

Cominco corporate secretary Lyle Beaudoin says no competing bids that the company is aware of so far have been received.

Earlier this summer Vestgron sold its 100% interest in Greenex A/S to Boliden AB. Greenex was the operator of the Black Angel zinc-lead mine near Maarmorilik, Greenland. Hurt by weak base metals prices, the Black Angel ceased operations on June 1 of this year.

Vestgron received approximately $825,000 at the time of closing the sale of Greenex and will receive a future payment if sufficient proceeds are realized on the sale of Greenex’s June 1 inventory of zinc concentrate.

At the year-ended Dec. 31, 1985 Vestgron posted a net loss of $29.6 million or $7.01 per share compared to net earnings of $4.2 million or $1 per share in the year earlier period. Its working capital position stood at $2.3 million at the end of 1985 versus $14 million at the end of 1984.