Cambior gobbles Sullivan Mines

A merger agreement between Cambior Inc. and Sullivan Mines has been announced by Cambior President Louis Gignac. Cambior, which currently has a 35% stake in Sullivan, plans to increase to 100% its share ownership.

“We have offered to buy all Sullivan’s shares at $7.50 cash per share,” Mr Gignac tells The Northern Miner. “The market price for the shares has been $7.25 for a while now.”

The merger won’t be final until after the next shareholders’ meeting, scheduled for Oct 15.

Last July Sullivan came out against a takeover bid by Ste. Genevieve Resources, a junior Montreal-listed company. Ste. Genevieve originally offered $6.62 per share for a minimum of five million and a maximum of six million shares of Sullivan; it later raised its offer price to $7.25 per share.

Sullivan’s chief asset is a 34% interest in the Arthur W. White gold mine, near Red Lake, Ont. The mine produced just under 68,000 oz in 1986 and has proven and probable reserves of more than three million tons averaging 0.31 oz per ton.

Cambior’s crown jewel is a 50% interest in the Doyon mine in Bousquet Twp., Que., which produced 213,000 oz gold in 1986. “The company’s over-all gold production in 1987 will be 145,000 oz,” Mr Gignac says. “The Sullivan takeover will cause that to increase to more than 200,000 oz next year and 250,000 oz in 1989.”

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