MinVen outlines terms of United Coin merger

Colorado-based MinVen Gold (TSE) is set to secure the 66% interest in the Golden Reward mine it doesn’t already own by agreeing to merge with United Coin Mines (TSE) of Toronto.

After freezing conditions in South Dakota’s Black Hills region hampered operations, Golden Reward reached commercial production in July and the heap leach mine is expected to yield 66,000 oz. next year.

Under an agreement approved by the boards of both companies, shareholders of United Coin will receive one share of MinVen for every two United Coin shares issued and outstanding. In addition, United Coin shareholders will receive a warrant to purchase an additional MinVen common share for every five United Coin shares issued on the date of the agreement. The warrants are exercisable at US$1 for up to two years after the merger closes.

The proposal is still subject to the approval of United Coin shareholders and to the reorganization of debts held by both companies.

If United Coin shareholders approve the transaction at a special meeting next month, MinVen can add about 40,000 oz. to its annual gold output in 1992. The 29.7% owned subsidiary of Denver gold fund Ventures Trident Ltd. is scheduled to produce 90,000 oz. this year from four U.S. mines and the now mothballed Blackdome operation in British Columbia.

By merging with United Coin, MinVen is taking a strategic step toward its corporate goal of being sole owner of all of the mining operations it is currently associated with. MinVen agreed to proceed with the merger after a mining initiative designed to limit the amount of land available for mining in the Black Hills was voted down last November.

However, the state Board of Minerals and Environment is proposing a 6,000-acre limit on the total area occupied by mining operations in the Black Hills until Sept. 1, 1997. Mining in the Black Hills now occupies about 2,500 acres.