Latest News Release I pulled off the Web!!
SVV VSE
June 25, 1998
Accepts Proposal By Canam Mining Corp.
SILVER PEAK RESOURCES LTD ("SVV-V")
- Accepts Proposal By Canam Mining Corp.
Silver Peak Resources Ltd. ("Silver Peak") is pleased to announce that
it has accepted a proposal dated May 29, 1998 forwarded to it by Canam
Mining Corporation ("Canam") pursuant to which Canam will assume control
of and refurbish the Ainsworth Mill located in the Slocan Mining
Division of the Province of British Columbia.
Under the arrangement, Silver Peak's right, title and interest in and to
the Ainsworth Mill and the lands and associated claims will be
transferred to a subsidiary company of Silver Peak and Canam, in
conjunction with an arms length financier, will provide up to
CAD$200,000 in order to place the Ainsworth Mill in a condition where it
is ready to custom mill ore in the area.
Canam will be represented on the Board of Directors of the subsidiary
through the appointment of John Mirko and Bob McTiernan.
The Ainsworth Mill, and all equipment, permits, tailings and disposal
licenses will be transferred to the subsidiary company for and in the
consideration of the sum of $1.00 and the agreement by the subsidiary
company to assume secured liabilities of Silver Peak registered against
the assets and undertaking of Silver Peak to a maximum amount of
USD$1,000,000.
The financing for the rehabilitation of the Ainsworth Mill is a loan in
the amount of CAD$200,000 which amount bears interest at the rate of
Prime plus 2% per annum. The funds for refurbishing the Ainsworth Mill
will be expended in accordance with a budget presented to Canam and the
Board of Directors of Silver Peak as prepared by Peter Jacobi, P. Eng.
As a bonus, the financier will be entitled to purchase from the treasury
of Silver Peak's subsidiary a number of shares equal to 50% of the
issued and outstanding shares for and in consideration of the sum of
CAD$500.
The agreement with Canam provides that positive cashflow from the
operations of the Ainsworth Mill will be applied first to repay the
financing loan. Thereafter, the balance of net after tax profits will be
distributed in equal 50% portions toward the repayment of the secured
debt and towards the payment of dividends to the shareholders of the
Subsidiary.
As a further incentive for Canam to successfully operate the Ainsworth
Mill and repay Silver Peak's secured creditors, Silver Peak has provided
Canam with the right to purchase its interest in the subsidiary for and
in consideration of the sum of USD$500,000. The option is exercisable at
any time during the three years following the fiscal year in which the
secured creditors have been fully paid and satisfied.
The Ainsworth Mill has been shut down for approximately ten years. The
successful operation of the Ainsworth Mill is directly proportional to
management being able to provide adequate mill feed for the operation of
the Ainsworth Mill.
In an attempt to have Silver Peak fulfill the role of providing the mill
feed, members of the former Board of Silver Peak withdrew their consent
to stand for re-election to the Board of Directors. Therefore, at the
Annual General Meeting of the Company held on June 18, 1998 and
adjourned to June 19, 1998, the shareholders elected a new board of
directors comprised of Harvey Tremblay, Ernest S. Peters and Victoria
Chen. Harvey Tremblay has further agreed to accept an appointment as
President of Silver Peak.
In the opinion of management, the proposal advanced by Canam is viewed
as being in the best interest of all shareholders. Without the Ainsworth
Mill being refurbished, the Ainsworth Mill has no value. The potential
salvage value from the Ainsworth Mill has been estimated by independent
professionals to be approximately CAD$200,000 before the cost of
reclamation. Maximum value from the Ainsworth Mill would only be
realized if the Ainsworth Mill was refurbished and placed back in
operation. In order to secure Silver Peak and its related companies for
the processing of ore, Silver Peak has been successful in negotiating a
preferred rate for custom milling of any ore that might be extracted
from the Abbott Wagner group of mineral claims, owned 70% by Silver
Peak, 30% by Golden Arch and optioned to Roper Resources Ltd, all
inter-related companies.
John Mirko is an experienced prospector who has already targeted
properties with small ore bodies which could be contract mined and
milled through the Ainsworth Mill.
Bob McTiernan is a mill manager with more than thirty years experience
in operating mills. Mr. McTiernan was previously employed in the mining
and milling industry by Skylark Resources Ltd., Newmont Mines and Texas
Gulf.
A finder's fee of $20,000 is due and payable by Silver Peak in
connection with the Canam proposal to Petco Enterprises Ltd. The fee
will be by the issuance and allotment of 118,000 treasury shares of
Silver Peak subject to exchange approval.
The accomplishment of past management in placing the Ainsworth Mill in
professional hands and new management follows the company's unsuccessful
attempts to enter the oil and gas industry in the Williston Basin. On
May 20, 1998, Silver Peak and its associated companies sold their
interest in oil and gas leases and one marginal well in the area for
USD$350,000. The net proceeds of the disposition have been disbursed to
a secured creditor that advanced funds to Silver Peak for Silver Peak's
participation in the Williston Basin.
Incidental to the above, the Board of Directors has agreed to grant
options to purchase 700,000 shares of Silver Peak to new members of the
Board, exercisable in whole or in part for a period of five years at a
price of $0.16 per share.
TEL: (604) 899-8888 Victoria Chen, Director FAX: (604) 899-6054
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