ACM will float new gold firm

Press, 24 September 1988, Page 33

ACM will float new gold firm

NZPA-AAP ; Perth The blue-chip gold producer, Australian Consolidated Minerals, Ltd, will float a new gold company and make a take-over bid for its base metals associate, Armada Resources, as part of a major reconstruction. A statement to the Australian Stock Exchange coincided with the release of ACM’s annual results, which revealed a 5 per cent drop in profit to sAust2o.l million from $21.2M previously. Under the reconstruction, ACM will become a holding company by floating 49.8 per cent of ACM Gold, the fully owned subsidiary which houses the group’s gold holdings. The shares will be offered to ACM shareholders by a one-for-one rights issue at an exercise price of 10c ACM Gold would control total gold reserves of about 2.77 million ounces and a production base which is expected to expand to more than 230,000 ounces a year in 1989, ACM said. ACM operates gold mines in four states, and in New Zealand. They include the wholly owned Golden Crown and Westonia mines in Western Australia. After the formation of the new gold arm, the group will launch a full bid for Armada, offering a three-for-four share swap or $1 a share. "With the gold activities run by ACM Gold, ACM itself will be well-placed to expand its non-gold activities,” ACM said. “The separate listing of ACM Gold will also provide shareholders with an opportunity to structure their investments according to their shareholders,” it said. In a separate press release, ACM’s chairman, Sir Gordon Freeth, said the consolidation of ACM Gold and Armada under ACM would result in more diversity and stability, and provide more growth potential.