Abermin should benefit from Aberford/Encor merger

A merger between Aberford Resources and Encor Energy (formerly Dome Canada) is expected to benefit Vancouver-based Abermin Corp. According to Roger P. Taylor, Abermin president, the proposed merger will lead to a “broader public distribution” of his company’s shares.

He confirms that Aberford will distribute its substantial equity position in Abermin to existing shareholders; Aberford will also convert a debenture which Mr Taylor admits will lead to some dilution of Abermin shareholders’ equity.

The merger transaction will completely sever Abermin’s relationship with Aberford, allowing Abermin to develop its mineral properties independently. Production is expected from the company’s Tartan Lake gold project this spring and exploration results from its polymetallic gold deposit near Duncan on Vancouver Island continue to suggest that one day it could become a producer.

Earlier this month, Abermin announced it had entered into an agreement with CMP Funds Management for the sale of $4 million in common stock on a flow-through basis to cover 1987 exploration expenses. At the same time Abermin stated that it had “arranged for the conclusion of the financing commitment agreement with Aberford Resources effective Dec 31, 1986.” Under that agreement Aberford had the right to purchase $6 million worth of Abermin stock on a flow-through basis at $1 per share from Jan 1, 1986, to Dec 31, 1988.

Approximately $1.3 million was unspent under that agreement and Abermin agreed to pay Aberford one common share for every $3 unspent as a means of winding up the financing agreement. The CMP agreement was used as a substitute.