Geddes raises cash by offering

A rights offering is expected to raise $1.6 million for Geddes Resources (TSE).

The company plans to use some of the proceeds to fund its working capital deficit.

Shareholders will be able to buy one additional share at 50 cents for every 10 shares held. Holders of record on April 10, 1995, will receive the rights, which expire on May 3, 1995.

Royal Oak Mines (TSE), which holds 39% of the company’s 33.4 million outstanding shares, plans to exercise all its rights and buy any shares not taken up under the rights plan.

Geddes lost its major asset in June, 1993, when the British Columbia government expropriated its Windy Craggy property for inclusion in a provincial park (now a world heritage site) in the province’s northwest. Almost two years later, the company is still seeking compensation. Windy Craggy was last estimated to contain proven, probable and possible reserves of 297.4 million tonnes grading 1.38% copper, plus gold and cobalt credits.

At the time of the expropriation, the government said it would pay “fair” compensation to land-holders affected by the park decision. No figures were cited.

Geddes spent $46 million on exploration and development but has not said how much it will seek in damages when discussions begin with the province.