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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 31, 1996
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GRANGES INC.
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(Exact name of registrant as specified in its charter)
1-9025 Not Applicable
(Commission File No.) (I.R.S. Employer Identification No.)
British Columbia, Canada
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(State or other jurisdiction of incorporation or organization)
Suite 3000, 370 Seventeenth Street, Denver, CO, USA 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 303-629-2450
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Not Applicable
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(Former name or former address, if changed since last report)
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GRANGES INC.
Item 1. Changes in Control of Registrant
Not applicable
Item 2. Acquisition or Disposition of Assets
Not applicable
Item 3. Bankruptcy or Receivership
Not applicable
Item 4. Changes in Registrant's Certifying Accountant
Not applicable
Item 5. Other Events
(a) On July 31, 1996, the Registrant issued the following press
release:
"GRANGES AND DA CAPO TO AMALGAMATE
VANCOUVER, BRITISH COLUMBIA, JULY 31, 1996 - The boards of directors of Granges
Inc. ("Granges") and Da Capo Resources Ltd. ("Da Capo") have unanimously
approved the amalgamation of the two companies to form a new gold mining
company ("Amalco"), subject to shareholder, court and regulatory approval,
entering into a definitive amalgamation agreement and satisfactory completion
of due diligence by Granges and Da Capo by August 6, 1996.
Under the terms of the agreement, each holder of Granges shares will be
entitled to one Amalco share for each Granges share, and each holder of Da Capo
shares will be entitled to two Amalco shares for each Da Capo share.
Amalco will be a well-financed mid-tier gold producer with substantial reserves
and a large portfolio of properties located in North and South America. At
inception, Amalco will have 100,000 oz of gold production per year, from the
efficient Hycroft mine in Nevada which, in 1995, produced 101,000 oz at a cash
cost of US$272/ounce. Based on planned development and expansion projects,
annual gold production over the next three years is expected to grow to
approximately 300,000 oz resulting from the development of mines located in
Bolivia and Venezuela. Development plans call for the immediate completion of
the feasibility study for the Amayapampa-Capa Circa project in Bolivia leading
to construction and start-up by mid 1998. Similar accelerated plans are also
underway for the Guariche project in Venezuela with an anticipated start-up
during 1998.
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On completion of the amalgamation, anticipated to be in late September 1996,
Amalco will have gold resources totaling 4.4 million ounces. Proven and
probable mineable reserves will total 1.5 million ounces, based solely on the
reserves at the Hycroft mine and the Amayapampa-Capa Circa project. Definition
drilling, planned to start in the second half of 1996, is expected to add
significantly to mineable reserves.
Amalco will have additional exploration properties in Bolivia, Canada, Ecuador,
Peru, the USA and Venezuela in various stages of development. Amalco will have
a strong balance sheet, with approximately C$50 million in working capital
(C$69 million on a fully diluted basis) and no debt.
The management team of Amalco will include Mr. David Sinclair as Chairman, Mr.
Ross Beaty as Vice-Chairman, Mr. Michael Richings as President and CEO, Mr.
A.J. Ali as Vice President and CFO and Mr. R.J. McGregor as Vice President of
Operations and Development.
Michael Richings, President and CEO of Granges, commenting on the significance
of the proposed amalgamation stated, "The combination of Granges and Da Capo is
an important step in our pursuit of becoming a major multi-mine gold producer.
We are very excited about the near and long term potential of Da Capo's
properties in Bolivia. The Amayapampa-Capa Circa project will provide new low
cost gold production and add significantly to our existing reserve base. This
production, when combined with our existing production at the Hycroft mine and
the planned development at the Guariche project will ensure our future as a low
cost, intermediate gold producer. We look forward to the support and input of
Ross Beaty, who has a proven track record of bringing value to his
shareholders."
Mr. Ross Beaty, President of Da Capo commented, "Granges has clearly
demonstrated its strength as a mine operator at the Hycroft mine. Granges is
particularly well suited to develop the Amayapampa-Capa Circa project which
will result in substantial benefits to the shareholders of Amalco. I look
forward to participating in and contributing to the growth of the new
company.""
(b) On July 31, 1996, the Registrant issued the following press
release:
GRANGES ANNOUNCES SECOND QUARTER RESULTS
VANCOUVER, BRITISH COLUMBIA, JULY 31, 1996 - Granges reported a return to
normal gold production levels for the quarter ended June 30, 1996 with
consolidated production as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
CONSOLIDATED PRODUCTION 1996 1995
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<S> <C> <C>
Gold (ounces) 23,429 23,867
Silver (ounces) 110,710 157,244
</TABLE>
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The company incurred a net loss of US$2.9 million or US$0.06 per share for the
three months ended June 30, 1996 compared to net earnings of US$160,000 or
US$0.00 per share for the same period in 1995. The second quarter 1996 loss
includes US$2.1 million amortization of deferred stripping, while there was no
such charge against earnings in the corresponding quarter in 1995.
SUMMARY RESULTS
(U.S. dollars in thousands, except share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30
1996 1995
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<S> <C> <C>
Sales 9,739 10,026
Net earnings (loss) (2,931) 160
Earnings (loss) per share (0.06) 0.00
Weighted average shares outstanding 46,181,661 41,946,876
</TABLE>
Granges Inc. is an international gold mining and exploration company based in
Denver, Colorado, with its registered office in Vancouver, British Columbia.
Its holdings range from the Hycroft Mine in Nevada to exploration properties
and development projects in North and South America."
Item 6. Resignations of Registrant's Directors
Not applicable
Item 7. Financial Statements and Exhibits
(a) Financial Statements - none
(b) Pro Forma financial information - none
(c) Exhibit - none
Item 8. Change in Fiscal Year
Not applicable
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
GRANGES INC.
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(Registrant)
Date: August 8, 1996 By: /s/ A.J. ALI
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A.J. Ali, CA
Vice President Finance and
Chief Financial Officer
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