Imperial, Bethlehem plan merger

Two Toronto-listed juniors, Bethlehem Resources and Imperial Metals, plan to join forces in order to develop potential properties.

The merged company would initially focus on Imperial’s Mt. Polley copper-gold project, which is now seen as a stand-alone operation following a decision by Gibraltar Mines to drop its option.

Minable reserves are estimated at 54 million tons averaging 0.38% copper and 0.016 oz. gold per ton within a geologic resource of 254 million tons grading 0.26% copper and 0.01 oz. gold. Daily production of 15,000 tons is projected to yield 33 million lb. copper and 80,000 oz. gold per year over a 10-year life as an open pit.

Shareholders of Bethlehem have the option of receiving one common share of Imperial for every three shares of Bethlehem or 50 cents cash, up to a maximum payment of $2 million. Those holding more than 3 million shares of Bethlehem will enter lock-up agreements to vote in favor of the merger. Imperial will buy 2.6 million common shares, as well as 2 million special warrants, of Bethlehem in private transactions from five shareholders at a price of 47 cents for each share and each warrant.

The special warrants are convertible to one common share and one ordinary warrant which, in turn, are convertible to one common share at 52 cents until May 20, 1996. This block purchase represents 29% of Bethlehem’s outstanding shares.

Bethlehem is the operator and half-owner of the Goldstream copper-zinc mine near Revelstoke, B.C. Drilling has attempted to define the downdip plunge extension of the orebody, and the company hopes to release a revised reserve estimate by year-end. (Vancouver-listed Goldnev Resources owns the other half interest.)

Bethlehem is also involved in exploration joint ventures in Mexico and El Salvador.

Imperial has working capital of $19 million and no debt; it holds 5.3 million shares of Cathedral Gold (TSE).