Dickenson shopping for gold operations

With approximately $60 million in its treasury, Dickenson Mines has a 2-fold purpose: it is looking to acquire additional North American producing gold operations in addition to maximizing production at its Arthur W. White mine in Red Lake, Ont.

Approximately one-third of these funds have come from a recently completed private placement of $19.8 million convertible guaranteed subordinate notes. The notes are automatically convertible into class A shares of the company at $9.50 per share not later than the filing and acceptance of a prospectus with the Ontario Securities Commission.

John Kachmar, the company’s vice-president finance and treasurer, notes that that should take place approximately in February, 1987.

Regarding its potential acquisitions, Mr Kachmar says the company is reviewing many different alternatives both in Canada and the U.S., adding that the company would “like to acquire more gold production.”

The company’s Arthur White mine has turned out some 2.5 million oz of gold from 5.5 million tons of ore milled since 1948.

Production this year should reach 72,000 oz, while next year’s total output is projected at 84,000 oz . In 1988 some 98,000 oz are expected to be produced when the mill reaches its current capacity of 1,000 tons.

Closely-associated Kam-Kotia Mines, which has a 33.3% voting interest in Dickenson, is also out shopping for new acquisitions, says Mr Kachmar. However, he notes, Kam Kotia’s target is not gold producers, rather selective industrial minerals. Kam-Kotia recently completed a private placeme nt of $4.2 million convertible subordinate notes.

These notes are automatically convertible into common shares at $2.15 per share for 1,027,349 shares and $2.30 per share for 869,348 shares.

The conversion is to take place not later than the filing and acceptance of a prospectus with the Ontario Securities Commission.

In addition to these funds, Kam Kotia also has approximately $3.5 million in its treasury.

First Marathon Securities acted as the financial adviser and agent on the two above transactions.

Dickenson and Kam Kotia both trade on the Toronto Stock Exchange at about the $9.88 level and $4.25 level, respectively.