Dundee, Placer in business venture with CMP, Plexus

A numbered company owned 50/50 by Dundee Bancorp (TSE) and Placer Dome (TSE) has reached agreement-in-principle with CMP Resources (ME) and Plexus Resources (TSE) to form a new company.

Robert Buchan has been named chairman of the company, which will have market capital of about $50 million.

As partial payment for its half-ownership in 1021105 Ontario Corp., Dundee has contributed assets worth about $6.6 million, which it acquired from Placer in exchange for 445,000 shares of Homestake Mining (NYSE). (Dundee says that in other private and market transactions, it has sold an additional 1,574,000 shares of Homestake, raising about $24 million; it has retained about 6.8 million shares — a 4.9% interest — of Homestake.) The amalgamation will proceed by way of share exchanges. A valuation report is being prepared by Goepel Shields & Partners and shareholder meetings of both companies have been scheduled for May 18.

Dundee has about a 23% indirect interest in CMP, which in turn has an approximate 25% interest in Plexus.

The main assets of the new company will be interests in the Denton-Rawhide gold mine in Nevada and the QR gold project in British Columbia, as well as a 10.6% interest in CS Resources.