Sutton board thrashes it out over African assets

Engaged in a public battle for control of Sutton Resources (VSE), management has completed a special warrants financing, to the tune of $22 million.

Proceeds will be used to develop the Bulyanhulu gold deposit in Tanzania toward the bankable feasibility stage.

The deposit contains about 8 million tons grading 0.44 oz. gold per ton. A preliminary evaluation suggests a 1,650-ton-per-day operation could produce 200,000 oz. per year at a projected cash cost of US$125 per oz.

The financing consists of 1.9 million special warrants priced at $12.50 each. A special warrant consists of one common share and one half-warrant. One full warrant entitles the purchase of an additional share at $16 per share until September 1998.

Barbara Sinclair, wife of ousted chairman James Sinclair, has requisitioned an extraordinary meeting for April 11.

She is seeking to remove all the current directors of Sutton and replace them with a new board, headed up by her husband.

The Sinclairs, who hold 19% of Sutton’s outstanding shares, argue that the Bulyanhulu property should be developed with the help of a partner that has experience in Africa.

Current management is

opposed to joint-venturing Bulyanhulu, believing it could be the cornerstone for Sutton’s growth.