Breakwater to acquire American Pacific

Management of Breakwater Resources (TSE) and American Pacific Mining (TSE) have agreed in principle to a plan that will see Breakwater acquire all the issued and outstanding shares of American Pacific Mining (TSE). American Pacific Mining owns and operates the profitable El Mochito polymetal mine in Honduras. The company reported net income after tax of $13.57 million or $1.29 per share for the nine months ended Nov. 30. During the third quarter of its fiscal year (also ended Nov. 30), 131,012 tonnes were milled with an average grade of 8.25% zinc, 1.79% lead and 2.95 oz. silver.

If all approvals are received for the proposed transaction, a wholly owned subsidiary of Breakwater would amalgamate with American Pacific Mining to form a corporation wholly owned by Breakwater.

The holders of American Pacific will receive three Breakwater shares for each share of American Pacific held. Breakwater has a large portfolio of Canadian exploration projects. However, its primary asset is a 49% interest in the Cannon gold mine near Wenatchee, Wash.

Both companies have retained financial advisers to provide an opinion with respect to the financial fairness of the terms of the proposed arrangement. A special meeting of shareholders of American Pacific is planned for March.