To All
Here is the NR:
GMD RESOURCE CORP. - CORPORATE UPDATE
VANCOUVER, Jan. 26 /CNW/ - GMD Resource Corp.
VSE Symbol - GMD
The Company wishes to advise that it has advanced unsecured, non-arms
length loans to two companies. The loans were made without advance notice to
or the acceptance by the Vancouver Stock Exchange.
First Loan: A series of loans in the aggregate principal amount of
$2,057,441 as at December 31, 1997 have been made to LMX Resources Ltd.
(''LMX''). LMX and GMD Resource Corp. each have four directors in common: Don
Farrell (president of both companies), Garvin McMinn, Visco Jutronich (all of
Vancouver, B.C.) and Paul Brownlee of St. John's, Newfoundland. The monies
were used by LMX principally to pay for its obligations arising from two oil
prospects in Newfoundland. The oil projects are managed by Inglewood
Resources Ltd. The managing director of Inglewood Resources Ltd., Mr. Gil
Dalton is also a director of GMD Resource Corp.
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 Ltd., a private company owned by Don Farrell, (''Farrell'') in the
aggregate principal amount of $918,762 as at December 31, 1997. Of this
amount $300,000 was advanced by Farrell Financial Ltd. 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 annum. Minimum monthly payments of $25,000 are to start on
February 15, 1998. Farrell Financial Ltd. 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
Corp. and LMX Resources Ltd. 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 Annual General Meeting scheduled for February 16, 1998.
GMD is continuing with its exploration programs on Royce Group of Claims
(diamonds) and on the Discovery Mine (gold).
On behalf of the Board
GMD RESOURCE CORP.
Don Farrell
President
Damn poor judgement and taints the play in my opinion.
Some house cleaning is called for to maintain respectability.
Regards |
