Forget looks for best deal in Agnico/Dumagami merger

Jacques Forget engaged Toronto- based investment dealer Deacon, Morgan, McEwen, Easson Ltd. to evaluate both Dumagami and the terms of any merger proposals that are put to minority shareholders.

Forget, holder of a 5.5% stake in Dumagami through Montreal investment firm Invesfor, is the former editor of Finance, a bi-weekly magazine published in Montreal.

He recently announced his intention to obtain two Agnico-Eagle common shares for each Dumagami share if a merger takes place. He has also set up a shareholders committee which will seek authorization from registered and unregistered Dumagami shareholders to negotiate a 2-for-1 share exchange deal with Agnico.

But Agnico-Eagle, which holds a 43% stake in Dumagami, has refused to confirm that it will amalgamate with its affiliate this year, if at all. Paul Penna, president, recently acknowledged that negotiations involving representatives from the two companies are continuing, but refused to say more.

As reported (N.M., March 27/89), Forget’s actions are based on the fact that Agnico-Eagle has 16.4 million shares outstanding and will produce 75,000 oz gold next year. Dumagami has 9.4 million shares outstanding and will produce 85,000 oz in 1990.

“With respect to mining, Dumagami is in a much better position than Agnico and Forget feels any merger should not be based on a one-for-one share exchange ratio,” said Invesfor spokesman Daniel Guay.

Forget was unavailable for comment, but Deacon Morgan’s chief financial officer John Balazovic recently confirmed that his company has been retained by Invesfor to evaluate Dumagami.

Both Dumagami and Agnico- Eagle are based in Toronto.

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