Dayton shareholders hamper expansion
By PETER KENNEDY
Vancouver Bureau The Financial Post
Small Vancouver gold producer Dayton Mining Corp., said yesterday its
expansion plans are being jeopardized by a proxy battle with unhappy
U.S. investors.
In a letter seeking shareholder support for the board, chairman
Roland Horst said the company has recently sought at least a dozen
merger, acquisition or investment opportunities.
It has even considered a transaction with Toronto-based Minorca Resources Inc., which owns 14.8% of Dayton, but has decided not to
bid. "Some of these transactions are currently being pursued,'' said Horst.But he said those plans are being hampered by Manchester
Securities Corp., the New York firm representing institutions owning
9.7% of Dayton stock.Unhappy at seeing the share price slip from $9 in
early 1997, the U.S. group is attempting to oust the board and replace
it with its nominees.Dayton shares (DAY/TSE) rose 7› to $1.70 sterday.
However, the proxy battle has unnerved the company's bankers, and
they have put themselves in a position to recall a $36-million loan.
As a result, Dayton will have to shelve expansion plans until
shareholders vote on Manchester's proposals at the annual meeting in
Toronto in June, Horst said.Analysts said Dayton faces shareholder
unrest because it has done a poor job of communicating a clear
corporate strategy. They said the company needs to find new assets
because its Andacollo mine in Chile is a depleting asset that has not
met performance targets.Andacollo produced 18,109 ounces of gold in
the first quarter, 5% below budget. "Without growth, there is no
upside for the investor,'' said Hatham Hodaly, mining analyst with
Salman Partners Inc. in Vancouver.
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