Aur bids $8.3 million to take over Louvem

Aur says it will spend $8.3 million to acquire about 65% of the common shares of Louvem, which operates the Chimo mine near Val d’Or, Que.

An agreement with St. Genevieve Resources (TSE) of Montreal will see Aur purchase about 8.4 million shares of Louvem held by St. Genevieve and purchase about 2.7 million shares of Louvem together with warrants to purchase an additional 1.3 million shares of Louvem from its treasury.

Aur will pay 75 cents per common share. The warrants entitle Aur to acquire one common share of Louvem at 85 cents per share for one year and at $1 per share for a second year.

Completion of the transaction is subject to Aur satisfying itself as to the status of the business and affairs of Louvem, to obtaining the necessary regulatory approvals, to the approval of the board of directors of Aur and to Aur not being required to make an equivalent follow-up offer to the minority shareholders of Louvem. Loan part of deal

Aur has agreed to loan up to $3 million to Louvem on an interim basis, pending closing of the transaction, for working capital purposes. Aur has the right to convert $1 million of the loan into a further 1.3 million shares plus 666,667 warrants to purchase Louvem shares on the same terms as the other warrants.

Louvem intends to transfer its Manitou mill facilities and agreements with Gold Spinners International to a wholly-owned subsidiary and then dividend the shares of that subsidiary to the shareholders of Louvem prior to the closing of the Aur purchase of the Louvem shares.

Aur has agreed to purchase the Louvem shares from St. Genevieve and from the Louvem treasury on an ex-dividend basis.

St. Genevieve acquired its controlling shareholding in Louvem during the latter half of 1987.

Louvem’s assets, in addition to the Manitou mill and Chimo mine, include a 50% interest in the Beaufort gold project, a 66% interest in the Monique gold deposit, a 50% interest in the Louvicourt property and a controlling interest in 26 mining properties (most of which are located in the Val d’Or area). The Chimo mine has been undergoing shaft sinking and underground development work.

Aur, which has been active in northwestern Quebec, is nearing full commercial production at its Kierens zone gold deposit at Val d’Or.

Meanwhile, trading in the shares of both St. Genevieve and Louvem was recently suspended on both the Montreal and Toronto stock exchanges; the Commission des Valeurs Mobilieres du Quebec and the Ontario Securities Commission each issued cease trading orders.

The cease trading orders are related to the release of information dealing with the results of testing of new technology belonging to Gold Spinners which is being used to process tailings at the Manitou mill.

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