Frame ends talks with Giant to buy interest in Pamour

Attempts by Clifford Frame to find a buyer for the Pamour group of companies owned by Giant Resources of Australia have come to nought.

The Australian parent says talks with Toronto-based Frame Mining Corp., owned by Frame, aimed at the purchase by Frame Mining or its nominee of Giant’s interest in the Pamour group, have been discontinued.

Giant Resources says it has received expressions of interest from a number of prospective purchasers regarding all or some of its Pamour group assets.

Giant has a 43.7% stake in lead- zinc-silver producer Curragh Resources, of which Frame is chairman. Facing debt troubles at home, Giant decided to put all of its Canadian mining assets, including its stake in Curragh, up for sale.

Frame was reportedly interested in acquiring Giant’s Curragh interest and to that end agreed to try to sell the Pamour assets.

Among the Pamour assets are controlling interests in Giant Yellowknife Mines (TSE), the group’s major gold producer, and ERG Resources (TSE), owner of a struggling tailings treatment project at Timmins, Ont.

Regarding ERG, management says discussions continue with the company’s bank which recently terminated a gold loan agreement. The 81,800-oz loan has been converted into a U.S. dollar loan, and the amount due on the loan fixed at $33.2 million(US).

The gold loan is secured by a first charge on the tailings project. Pamour Inc. (TSE), whose corporate role is that of a holding company, holds a second charge on the project for its loan which is currently worth about $48 million(C). Also lending financial assistance to ERG was Giant Resources, whose loan, worth about $28 million, is unsecured.

Pamour has a loan of $15 million from Giant Resources which was lent to ERG and is included in the $48 million owed by ERG to Pamour. Management says the financial position of Pamour would be adversely affected if ERG is unable to discharge its loans from its banker and Pamour and if Giant Resources requires repayment by Pamour of the $15 million.