Winspear prepares for Diamondex spinoff
Winspear Resources Ltd WSP
Shares issued 33,721,333 Mar 24 close $3.60
Thu 25 Mar 99 Street Wire
by Brent Mudry
Winspear Resources plans to launch its spinoff, called Diamondex Resources,
with $1-million in working capital and Winspear's 11 diamond exploration
properties, all but one in the Northwest Territories, according to
Winspear's draft management circular. Winspear filed the circular in the
Supreme Court of British Columbia on Tuesday, in preparation of the
company's annual meeting, to be held April 29 at the Four Seasons Hotel in
Vancouver. Winspear lawyer Robert Holmes of McRae Holmes & King notes that
after the spinoff, Winspear will have $11.3-million of working capital, not
including the $1-million paid in to Diamondex. The circular and other court
filings make no additional disclosure on Winspear's current dispute with
Aber Resource on financing commitments for the flagship Camsell Lake
project.
Shareholders will receive 0.125 of a share of Diamondex for each Winspear
share held at the record date of March 22. After the spinoff, Diamondex
will have 4.9 million shares issued and outstanding, with an additional
816,400 shares allocated and authorized for issuance under share purchase
warrants and mineral property acquisition agreements. Diamondex's new board
will comprise Winspear directors Randy Turner, John A. McDonald, John
Greig, David Lucas and Mike Muzylowski.
The new company will hold all of Winspear's properties, except for its
flagship Camsell Lake diamond property. "The petitioner has determined that
the true value of the exploration properties will only be reflected in the
marketplace if the exploration properties are transferred to Newco and the
Camsell Lake property is left with the petitioner," states Mr. Holmes.
Winspear notes that it has spent $4-million in aggregate expenditures on
the exploration properties. "One of the most significant properties from a
commercial perspective is the 100 per-cent-owned Hilltop property on which
approximately $1-million has been spent and for which the 1999 exploration
program involves expenditures of approximately an additional $1.5-million,"
notes the circular. Diamondex will assume the full $108,000 of Winspear's
liabilities from the exploration properties.
The circular also reveals salary increases for Winspear's two top
executives. Winspear president and geological consultant Randy Turner
signed a five-year management agreement on Nov. 1, 1998, with a monthly
base salary of $13,000, or $156,000 annually. This is almost a double of
Mr. Turner's pay. The executive was paid $86,000 in 1998 and $84,000 in
1997, under a November 1996 two-year contract at a base salary of $72,000
plus annual cash bonuses. Winspear exploration vice-president John A.
McDonald, who earned $62,500 in 1998, is now paid $150,000 a year under an
August 1 management agreement. The five-year agreement, signed with Iminex
Geoscience, Mr. McDonald's personal services company, calls for a monthly
salary of $12,500.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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