BLACK SWAN (BSW) trades on the Toronto Stock Exchange at .17 with a book value of Canadian $ 1.04, with about .24 of it in cold cash:
July 21, 1998
Trading Symbol:
TSE - BSW
BERLIN - BSM
FRANKFURT - BSM
The Board of Directors of Black Swan Gold Mines Ltd. (Black Swan) announces a recent Board and management re-organisation plus plans to change the focus of the Company's strategy. Under the re-organisation:
Mr. Edmond A. Lemieux will resign as Chairman of the Board of Directors. He will remain as a Director of the Company
Mr. Arthur T. Fisher will step down as President of the Company. He will assume the role of Chairman of the Board.
Mr. Luigi Giglio will step down as Director-General Operations. He will hold no management responsibility but will remain as a Director of the Company.
The position of Vice President - Corporate Development has been eliminated. Mr. Stephen
Fabian will remain as a Director of Black Swan until the upcoming Annual General Meeting.
Mr. Bryce M. A. Porter, the current Chief Financial Officer of Black Swan has assumed the position of President.
Mr. Augusto Kishida has been appointed to the position of Vice President - Exploration. He will be responsible for all of the exploration activities of the Company.
The Board now believes that management is in a position to plan and implement a new strategy which is focused upon:
1.actively seeking to acquire or establish profitable production or near production operations that have low costs of production, relative to industry averages. Such operations need not be in gold;
2.maintaining the Brazilian portfolio of properties for exploration on a highly selective basis. Joint venture partners will be sought for the larger and more advanced projects; and 3.an increased emphasis on the exploration and development of Black Swan's diamond properties.
Previous to this change in strategy, Black Swan commissioned an independent valuation of its Brazilian mineral property interests and other assets by Watts, Griffis and McOuat Limited (WGM). WGM is a respected firm of consulting geologists and engineers which has extensive experience in the valuation of mineral properties throughout the world.
WGM has concluded that the Fair Market Value ("FMV") of Black Swan's Brazilian assets lies within the range of US $25.2 million to US $31.2 million. In addition to gold properties and other assets, the value range included US $11.0 to US $13.9 million for the diamond properties. This valuation, as at the valuation date of May 15, 1998, is based on the FMV of the mineral properties defined as "the highest price available in an open and unrestricted market between informed, prudent parties, under no compulsion to act and acting at arm's length, expressed in terms of money or money's worth."
The Board of Directors of Black Swan has determined that Black Swan's audited consolidated financial statements as at March 31, 1998 will reflect a write-down of Cdn $10.0 million in the carrying value of the Company's Brazilian gold properties. The carrying value of the company's diamond properties remains unchanged after the write-down. Including all properties, the book carrying value of the Company's Brazilian mineral properties and capital assets, as at March 31,
1998, was Cdn. $37.7 million. The Board has also approved a provision of Cdn. $0.65 million to cover costs involved in re-organising the Company's management and operations.
In addition to its Brazilian assets, the Company has over Cdn $12 million of cash and cash equivalent balances and a 19.6% holding in Lysander Gold Corporation. The book value of its shareholders'equity, as shown by the March 31 audited consolidated financial statements, is equivalent to $1.04 per common share.
The new management is developing new plans for the Company. It intends to carefully review, and take full advantage of, the opportunities offered by the current property market.
Bryce M. A. Porter
President
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One of these days the Swan will fly again. Be ready: get a few shares now while they are very depressed.
Pierre |
