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Gold/Mining/Energy : Bema(Bgo) and Arizona Star -- Ignore unavailable to you. Want to Upgrade?

To: terryswift who wrote (10206)	9/26/2000 11:40:49 AM
From: alannoble	Read Replies (2) \| Respond to of 10482

What is needed here is to get management of AZS out of the hands of BGO while there is still some assets left in the Star. I never saw this coming. I figured that in six months BGO would be selling some AZS, reducing its position and making an eventual management transition that much easier. With BGO giving away El Callao, I thought that this would just be putting off the process a bit. Here is an extract from AZS’s Information Circular dated Sept. 13, 2000-09-26 __ Under the terms of a convertible loan agreement between Bema and Endeavour Capital Corporation (“Endeavour”), Endeavour loaned to Bema an amount of $2 million in return for an $80,000 facility fee and the reimbursement of Endeavour’s estimated costs in connection with the loan. Endeavour is a company related to Bema by way of a common director. In consideration of Bema having provided significant financial, technical and administrative input and expertise to the Company since its inception, the Company determined that it was in its best interest to assist Bema with respect to Bema’s loan with Endeavour. In addition, the Company would receive additional cash revenue while not jeopardizing its ability to meet ongoing cash requirements. In the opinion of the Company, the negotiated terms of the Guarantee Facility are reasonable and provide a fair rate of return for a transaction of this nature. As a result, on April 14, 2000, the Company entered into an agreement (“Guarantee Facility”) with Endeavour to support the borrowings of up to $2 million by Endeavour from the Canadian Imperial Bank of Commerce (“CIBC”). As at April 30, 2000, Endeavour had fully drawn down a $2 million revolving line of credit from CIBC and loaned such funds to Bema. The credit line is subject to bank review in six months. Pursuant to the Guarantee Facility, the Company has guaranteed, in the event of default, the payment of $2 million on demand to CIBC for the amount borrowed. As collateral security, the Company has pledged $2 million to CIBC. __ Now here is a curiosity. If one looks at the ‘Report to Shareholders’, dated September 15, 2000 one finds the statement: “No financing activities took place during the fiscal year ended April 30, 2000. However, the Company remains in a healthy, positive cash position; and this, in conjunction with the low operating expenses allows the Company’s financial position to remain strong. Bema management’s idea of keeping AZS strong is not my own.