Shareholders okay Bre-X's stock split plan

Shareholders okay Bre-X's stock split plan

CALGARY, Canada (Reuter): Shareholders of high-flying Bre-X Minerals Ltd, packed into a crowded special meeting, approved on Friday a much anticipated 10-for-one stock split.

The split will take effect on May 24. Shares in Bre-X, which owns 90 percent of the rich Busang gold strike in Indonesia, were trading at 201.75 in Toronto after rising from 3.95 on the Alberta Stock Exchange one year ago.

Shareholders also approved a spin-off of non-Busang properties into a new company. Shares in the new company will be offered to Bre-X shareholders on a one-for-one basis before the split.

Bre-X chief executive David Walsh told reporters before the annual meeting that the company's expected Nasdaq listing is in the hands of the U.S. Securities and Exchange Commission and should be effective very soon.

Bre-X shareholders also approved a shareholder rights plan to give the company's directors 90 days to consider a hostile takeover bid.

Walsh, who is a major shareholder of Bre-X as well as Bresea Resources Inc, which owns 23 percent of Bre-X, is exempt from the poison pill because he held more than 10 percent of the stock before Jan. 31.

Shareholders of Bresea, which is 11 percent owned by Bre-X and also headed by Walsh, passed a similar shareholder rights plan at a meeting on Friday.

"Bresea owns Bre-X and Bre-X owns Bresea and with what I own, those are three friendly entities. I shouldn't be prohibited from buying more of my own stock without triggering the shareholder rights plan," he said.

But Walsh told reporters that he does not feel the rights plans will ever be used.

Friendly

"If there was to be a takeover, which we don't want, it would have to be friendly because they'd be up against the wall with that 23 percent alone," he said. "And we could round up -- and we've tested the waters -- very quickly 45 percent of the shares outstanding."

Bre-X in April also enlisted former Lac Minerals and Goldcorp executive Rolando Francisco as chief financial officer to help the company grow into a major international mining force, he said.

Walsh's statements counter speculation in the worldwide mining industry that Bre-X could be courted by a handful of international firms with deep pockets.

Still, the company is on track to bring in a partner before the end of this year, which would take up to 25 percent of Busang and help bring the project to the production stage, Walsh said.

He said a financial adviser for the transaction is likely to be selected within the next two weeks, which will kick off the process.

A deal would include a partner paying a cash component for the stake as well as the estimated US$750 million in capital necessary for building a plant for Busang production.

He declined to give his expectations for the value Bre-X would like to see for such a stake.

Walsh, who recently moved his residence to Nassau, Bahamas from Calgary, repeated that he did not disagree with an Indonesian government estimate that pegged Busang's gold reserves at 40 million ounces.