Galveston merger approved

Shareholders approved the merger of a wholly- owned subsidiary of Galveston Resources with Blackbird Resources at an extraordinary general meeting. The complex deal will involve a reorganization of Galveston’s share capital and the issue of Galveston shares to Blackbird shareholders.

If all goes according to plan, the name and designation of Galveston’s shares will be changed to Class A subordinate voting shares without par value. They will be consolidated on a 2-for-3 basis and the A shares will carry one vote each. The directors also declared a stock dividend of one-half a Class B common share without par value for every Class A subordinate voting share held by members of record Dec 5. The Class B common shares carry 100 votes each.

The amalgamation effectively integrates the assets and business operations of Galveston and Blackbird into one corporate entity. Galveston and Blackbird each have investments in public companies and are involved in resource exploration throughout North America.

Galveston’s main asset consists primarily of warrants of PezCorona Gold which are exercisable at $7 prior to March 30, 1990. Other investments include shares of Royex Gold Mining and Lacana Mining and equity in several smaller companies. Each PezCorona warrant entitles the holder to one share of International Corona Resources before that date.

Blackbird’s investment portfolio consists primarily of common shares, preferred shares, share purchase warrants and debentures of Royex. The respective market value of the Galveston and Blackbird shareholdings as of Oct 9 was $79.7 million and $43.1 million. (No doubt this has diminished somewhat since the market crash.)

Galveston has a number of mining properties including the Baie Verte in Newfoundland where Murray Pezim told the meeting a “major deposit was in the making.” The company can earn a 50% interest in the project for $6 million. Operation Wawa in Ontario will involve an expenditure of approximately $1 million in the balance of the 1987 exploration season. Exploration is also planned for its Carlin gold belt properties under an agreement with Noranda Exploration.

Blackbird’s Fort Cady colemanite deposit near Barstow, Calif., has reached pre-feasibility and a boric acid plant could be operating there in 1989. A novel extraction process has been developed whereby dilute hydrochloric acid will be injected into the colemanite formation to extract crude boric acid and calcium chloride. The plant would cost $60 million(US) to install and generate $55 million in cash flow beginning in 1991, a Blackbird spokesman said.