Dickenson management welcomes Goldcorp bid

Toronto-based gold fund Goldcorp Investments Ltd. is offering $9 per share for all of the B shares of Dickenson and $3 per share for all of the common shares of Kam- Kotia. It will also pay $8.50 for each A share of Dickenson for 50% of the outstanding A shares. (Dickenson B shares carry 10 votes each, and the A shares one vote each.)

Directors of both Dickenson and Kam-Kotia, which have an interlocking ownership, report acceptance of the new offers.

Already on the table is a bid by major North American gold-producer Corona Cor (TSE), which is offering $7.15 for each B share and $2.50 for each Kam-Kotia share. Corona previously said it intends to formulate a plan to acquire Dickenson A shares at the same price or a price equivalent to $7.15, should it acquire a majority of the publicly-held B shares.

The Corona offers, originally set to expire March 7, were extended to March 21. Directors of Dickenson and Kam-Kotia recommended against the Corona offers.

Since the initial announcement by Corona of its takeover offers, the B shares of Dickenson have traded above the $7.15 price bid.

The Dickenson B shares climbed $1.25 during the session following a day-long halt in trading on the TSE to allow for the Goldcorp announcement. Shares deposited

Corona recently announced shares in both Dickenson and Kam- Kotia have been deposited pursuant to its offers. The company said the deposited shares (as of March 7) represent, together with shares already owned by Corona and its affiliates, about 10.8% of Dickenson’s B shares and 19.3% of Kam- Kotia’s shares.

Corona could decide to raise its asking prices, but should it choose to back out of its deal, it could realize a capital gain of more than $12 million by selling the aforementioned B shares and Kam-Kotia holdings. (Corona also holds Dickenson A shares.)

Goldcorp, which is managed by CSA Management Ltd. (both companies are headed by Robert McEwen), invests mainly in gold- related investments including gold bullion and securities of companies engaged in gold exploration and the development and operation of gold mines.

The investment firm recently reported assets of $160.7 million. Its policy is to have at least 75% of the market value of its non-cash assets in gold-related investments.

Goldcorp reports it intends to borrow money from a bank to finance the takeover. Ownership interests

Under the Goldcorp offers, the investment firm would acquire 51.8% of the Dickenson B shares and 50.04% of the Kam-Kotia shares. Current management of Dickenson and Kam-Kotia would remain in place.

Basically, the deal calls for Dickenson and certain other shareholders (President John Kachmar, for example) of Kam-Kotia to tender their Kam- Kotia holdings to Kam-Kotia, while Kam-Kotia would retain its Dickenson B shareholding.

Provisions in the deal also allow for withdrawal of tendered shares should another takeover bid be received at prices above the Goldcorp offers and not matched by Goldcor Goldcorp may also be compensated if other offers are received at higher bidding prices.

Also, Goldcorp will receive $1.75 million as compensation for expenses incurred in making the offers.

Dickenson currently has a 39.7% interest in Kam-Kotia, while Kam- Kotia has a 39% voting interest (16% equity interest) in Dickenson. Also, Dickenson holds a 34.7% interest in Wharf Resources (TSE), which has a 7.6% interest in Kam-Kotia.

CSA Management recently filed a lawsuit in the Supreme Court of Ontario claiming it has an agreement with Pamour Inc. (TSE) and Pamour’s Australian parent, Giant Resources, to acquire a block of shares in each of Dickenson and Kam-Kotia, from Pamour. Corona says Pamour has agreed to sell both blocks of shares to Corona.

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