GMD Resource Corp GMD
Shares issued 14,137,567 Jan 22 close $1.93
Fri 23 Jan 98 News Release
Also LMX Resources Ltd (LMX)
Mr Don Farrell reports
The company has advanced unsecured, non-arms length loans to two companies.
The loans were made without advance notice to or the acceptance by the VSE.
First Loan: A series of loans in the total principal amount of $2,057,441
as at December 31 1997 has been made to LMX Resources. LMX and GMD Resource
Corp each have four directors in common: Don Farrell (president of both
companies), Garvin McMinn, Visco Jutronich (both of Vancouver, BC) and Paul
Brownlee of St John's, Newfoundland. The oil projects are managed by
Inglewood Resources. The managing director of Inglewood Resources, Mr Gil
Dalton is also a director of GMD Resource.
LMX has provided a repayment plan to GMD to pay one-half of monies received
from the exercise of warrants, a portion of projected income from a Mexican
concession and the monies received from repayment of land rentals on one of
its Newfoundland oil projects. LMX is also taking steps to raise funds by
private placement. The rate of interest is prime plus 2% and is to be
repaid by the end of 1998.
Second Loan: The company has advanced a series of loans to Farrell
Financial, a private company owned by Don Farrell, in the total principal
amount of $918,762 as at December 31 1997. Of this amount $300,000 was
advanced by Farrell Financial to LMX. The $918,762 is due and fully
repayable by June 30 1998 with interest to be paid at the rate of 7.5% per
year. Minimum monthly payments of $25,000 are to start on February 15 1998.
Farrell Financial is also applying its management fees of $5,000 per month
effective February 1998 to repayment of the loan until the principal amount
is paid.
The directors of the company have adopted new policies which will
effectively prevent any future non-arms length loans by the company that
are not in full compliance with exchange policy.
All loans have been disclosed prior to this release in both GMD Resource
and LMX Resources year end audited financial statements to August 31 1997
were mailed to shareholders the week of January 12 1998 with the proxy
material for the AGM scheduled for February 16 1998.
GMD is continuing with its exploration programs on Royce group of claims
(diamonds) and on the Discovery mine (gold).
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