Shares in Olympus Pacific Minerals (OYM-V) dropped nearly 10% in early trading in Vancouver on Mar. 1, after the company announced an all-share deal to increase its stake in the Phuoc Son gold project in central Vietnam.
Under the deal, Olympus will acquire Ivanhoe Mines‘ (IVN-T) 32.64% stake in New Vietnam Mining (NVM), which holds an 85% interest in Phuoc Son, in return for just shy of 10.3 million shares. Olympus will also issue some 3.2 million shares to New Zealand-based investment company Zedex in exchange for its 10.18% interest in NVM.
In the end, Olympus will have an 85% stake in Phuoc Son, with government controlled Mien Trung Industrial holding the balance. On the flipside, Ivanhoe’s stake in Olympus will nearly double to 19.93% and Zedex’s stake will climb to 17.9% from 16.94%.
Also under the deal, Ivanhoe and Zedex will each nominate two directors to Olympus’ board. The directors will remain as along as the nominating company has at least a 15% stake in Olympus. If either company’s stake drops below 15%, but remains above 10%, it will retain just one director on Olympus’ board. Board representation is revoked at anything below 10%.
The latest deal replaces one inked in late 2002 that called for Olympus to acquire a 10.18% interest in NVM from each of Ivanhoe and Zedex. The new deal is subject to regulatory and shareholder approval.
Olympus recently tabled an independent resource estimate for the Bai Dat and Bai Go zones at Phuoc Son. Based on a cutoff grade of 4.5 grams gold per tonne, measured and indicated resource are pegged at 318,000 tonnes averaging 14.32 grams gold per tonne. Another 188,000 tonnes averaging 12.12 grams gold are classified as inferred resources (T.N.M., Feb 9-15/04).
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