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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: d:oug who wrote (4364)	6/21/2002 8:25:09 AM
From: Frank Pembleton	Read Replies (1) \| Respond to of 39344

Corner Bay Silver: New Merger Terms May Have More Upside DOW JONES NEWSWIRES VANCOUVER -- Shareholders of Corner Bay Silver Inc. (T.BAY), whose stock fell 14% Thursday in Toronto, will see more leverage to silver prices in a revised merger deal with Pan American Silver Corp. (PAAS), Corner Bay chairman Peter Mordaunt said. As reported, the two companies announced revised share-exchange terms that now include Pan American warrants, and exclude the creation of a new exploration company. Under the new terms, each Corner Bay share will be exchanged for 0.385 common shares of Pan American plus 0.1925 of a Pan American warrant. Each whole warrant will allow the holder to buy a common share of Pan American at C$12 for five years. When the transaction was announced in May, Pan American said it would offer 0.54 of a common share plus 0.25 of a share of a newly formed exploration company for each Corner Bay share. "Some shareholders felt they'd rather see the money in their jeans or closely tied to the deal," Mordaunt said of the decision to scrap the new exploration company. In addition, the cost and time involved in structuring a new company was of concern. "Our conclusion was the warrants are probably a better way to get exposure (to silver)," he said. Mordaunt, a holder of 750,000 Corner Bay shares or about 1.3 million fully diluted, said that, given the historical volatility of Pan American shares and the underlying volatility of silver prices, "we're really keen on the warrants as a store of value" because they tend to move faster than the underlying share price. "I can't help but feel that, potentially, some of the less sophisticated guys don't really understand what the warrants mean," Mordaunt told Dow Jones after his company's share-price drop Thursday. With a strike price of C$12 a share, the warrants are almost in the money, and the five-year term is substantial, he noted. "It potentially is a hell of a good ride for warrants that will be listed and trading with fairly decent liquidity," Mordaunt said. As for Pan American, the warrants build in a "nice financing mechanism," Mordaunt said. A spokeswoman for Pan American declined to comment on the revised agreement. In Toronto, Pan American gained 50 Canadian cents to C$12.00. Pan American is a silver mining and exploration company with interests in Peru and Mexico. Corner Bay is an exploration company with a development project in Mexico. Company Web Sites: cornerbay.com, www.panamericansilver.com -Lynne Olver, Dow Jones Newswires; 604-669-1595; lynne.olver@dowjones.com Updated June 20, 2002 5:31 p.m. EDT