Pezim hearing adjourned until summer

Murray Pezim and several directors of his flagship company, Prime Resources Group (VSE), will have until early July to prepare for a hearing before the British Columbia Securities Commission. Pezim, John Ivany and Lawrence Page are facing insider trading allegations and other allegations relating to the management of Prime and associated company, Calpine Resources. These securities violations are alleged to have occurred during the summer and early fall of 1989 when Calpine encountered spectacular success drilling its 50% owned Eskay gold deposit near Stewart, B.C.

Originally slated for April 17, the hearing was adjourned at the request of the lawyers for Ivany and Page because of the large volume of material to be presented and the anticipated length of the proceedings.

The hearing is now expected to run for about five weeks during July and August. The delay should allow Prime directors some time to focus attention to exploration programs planned for this season on properties held by Prime group companies in northwestern British Columbia.

Before the public hearing begins, lawyers for the Vancouver Stock Exchange will formally request status to appear as a third party as some of the allegations indirectly involve a VSE member company, Canarim Investments, and because Prime management is alleged to have misled the VSE on a number of matters involving the affairs of Prime and Calpine.

Several media organizations, including the Canadian Broadcasting Corporation, will also be seeking formal approval to televise the proceedings which have already taken on a dimension beyond the outcome of the specific allegations.

The hearing is now widely perceived to be a “test case” to demonstrate that British Columbia’s securities regulators are indeed serious about enforcing regulations to protect the retail investor and thereby instil public confidence in the Vancouver Stock Exchange.

Meanwhile, several Jim Pattison Group companies recently surfaced with a sizable equity interest in Prime Resources Group. A British Columbia numbered company acting jointly with Jim Pattison Industries and Great Pacific Industries bought 110,500 shares of Prime at $6.50 each, for “investment purposes.”

As a result of this recent transaction, Jim Pattison group companies now own 3.85 million common shares and 1.02 million warrants to acquire an equal number of additional Prime shares.

Assuming exercise of the warrants, this holding represents about 11.7% of Prime’s outstanding shares. That makes the Jim Pattison Group an official insider in Prime Resources Group.

Although he is no longer on the board, Vancouver businessman Jim Pattison was a director of Prime during its early days as a venture capital company, along with company founders, Pezim, Arthur Clemiss and Toronto-based Corona (TSE).

Corona currently holds about a 16% diluted position in Prime, making it that company’s largest single shareholder. The Jim Pattison Group has indicated that it may acquire or sell additional shares of Prime, subject to general market and economic conditions, and depending on the availability and price of the shares.