1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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COMMISSION FILE NUMBER 1-9025
GRANGES INC.
(Exact name of registrant as specified in its charter)
Province of British Columbia (Not Applicable)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Suite 3000, 370 Seventeenth Street, Denver, Colorado, 80202
(Address of principal executive offices) (Zip Code)
(303) 629-2450
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
55,881,461
----------
Common Shares, without par value, outstanding at July 10, 1996
------------------
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GRANGES INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
(i) Consolidated Balance Sheets as of June 30, 1996 and December 31, 1995 3
(ii) Consolidated Statements of Earnings (Loss) for the six months ended 4
June 30, 1996 and June 30, 1995
(iii) Consolidated Statement of Deficit for the six months ended June 30, 4
1996 and June 30, 1995
(iv) Consolidated Statements of Changes in Cash Resources for the six 5
months ended June 30, 1996 and June 30, 1995
(v) Notes to Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 13
ITEM 2. CHANGES IN SECURITIES 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13
ITEM 5. OTHER INFORMATION 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 14
SIGNATURES
In this Report, unless otherwise indicated, all dollar amounts are expressed in
United States dollars.
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GRANGES INC.
CONSOLIDATED BALANCE SHEETS
June 30 December 31
(U.S. Dollars in Thousands) 1996 1995
- -------------------------------------------------------------------------------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents $ 3,650 $ 15,210
Funds held in escrow, special warrants (Note 5) 18,496 0
Marketable securities 4 179
Accounts receivable and other 3,794 1,432
Inventories 16,680 11,090
------- --------
42,624 27,911
Investment in Zamora Gold Corp. 3,563 4,254
Property, plant and equipment, net 39,831 32,051
------ --------
86,018 64,216
====== ========
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $14,111 $ 6,239
------- --------
14,111 6,239
Provisions for future reclamation and closure costs 3,699 3,409
-------- --------
17,810 9,648
-------- --------
SHAREHOLDERS' EQUITY
Common shares without par value 54,398 54,190
(Issued 1996- 46,181,661 shares; 1995 - 46,042,911 shares)
Special warrants (Note 5) 18,505 0
Retained earnings (deficit) (3,488) 1,409
Currency translation adjustment (1,207) (1,031)
-------- --------
68,208 54,568
-------- --------
$ 86,018 $ 64,216
======== ========
Commitments and contingencies (Note 3)
The accompanying notes are an integral part of these consolidated financial
statements.
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GRANGES INC.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
Three Months Ended Six Months Ended
June 30 June 30
(U.S. Dollars in Thousands, Except Per Share Data) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------
(Unaudited)
REVENUE $ 9,739 $ 10,026 $ 16,408 $ 21,728
----------- ----------- ----------- -----------
EXPENSES
Operating costs 8,189 8,453 13,805 17,265
Depreciation, depletion and provision for
future reclamation and closure costs 1,159 944 2,273 1,837
Amortization of deferred stripping 2,121 29 2,121 29
----------- ----------- ----------- -----------
11,469 9,426 18,199 19,131
----------- ----------- ----------- -----------
RESULTS OF MINING OPERATIONS (1,730) 600 (1,791) 2,597
----------- ----------- ----------- -----------
Mineral exploration and property evaluation 765 702 1,886 1,615
Corporate administrative 503 502 1,119 1,033
Interest income - net (221) (474) (380) (940)
Other expense (income) (2) 377 196 303
Gain on sale of investments (157) (810) (298) (810)
Equity in loss of Zamora Gold Corp. 374 0 691 0
----------- ----------- ----------- -----------
1,262 297 3,214 1,201
----------- ----------- ----------- -----------
EARNINGS (LOSS) BEFORE INCOME TAXES (2,992) 303 (5,005) 1,396
CURRENT INCOME TAXES (RECOVERY) (61) 143 (108) 186
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) $ (2,931) $ 160 $ (4,897) $ 1,210
=========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE $ (0.06) $ 0.00 $ (0.11) $ 0.03
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 46,181,661 41,946,876 46,145,088 38,085,045
=========== =========== =========== ===========
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT)
Six Months Ended
June 30
(U.S. Dollars in Thousands, Except Per Share Data) 1996 1995
- ------------------------------------------------------------------------------
(Unaudited)
RETAINED EARNINGS (DEFICIT), BEGINNING OF PERIOD (Note 4) $ 1,409 $(55,275)
NET EARNINGS (LOSS) (4,897) 1,210
------- --------
DEFICIT, END OF PERIOD $(3,488) $(54,065)
======= ========
The accompanying notes are an integral part of these consolidated financial
statements.
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GRANGES INC.
CONSOLIDATED STATEMENTS OF CHANGES IN CASH RESOURCES
Six Months Ended
June 30
(U.S. Dollars in Thousands) 1996 1995
- -------------------------------------------------------------------------------
(Unaudited)
OPERATING ACTIVITIES
Net earnings (loss) $(4,897) $ 1,210
Items not involving cash:
Depreciation, depletion and amortization 4,104 1,629
Provision for future reclamation and closure costs 290 260
Gain on sale of investments (298) (810)
Equity in loss of Zamora Gold Corp. 691 0
------- -------
(110) 2,289
Currency translation adjustment (176) (108)
Change in working capital,
excluding cash, cash equivalents and funds held in escrow (80) (8,914)
------- -------
(366) (6,733)
------- -------
INVESTING ACTIVITIES
Property, plant and equipment (11,372) (1,036)
Deferred stripping (512) (2,687)
Proceeds from sale of investments 473 872
Option payments received 0 29
------- -------
(11,411) (2,822)
------- -------
FINANCING ACTIVITIES
Long-term debt repayments 0 (134)
Deferred amalgamation costs 0 (1,209)
Issue of share-purchase options 208 96
Issue of special warrants (Note 5) 18,505 0
------- -------
18,713 (1,247)
------- -------
INCREASE (DECREASE) IN CASH,
CASH EQUIVALENTS AND FUNDS HELD IN ESCROW 6,936 (10,802)
CASH, CASH EQUIVALENTS AND
FUNDS HELD IN ESCROW, BEGINNING OF PERIOD 15,210 33,046
------- -------
CASH, CASH EQUIVALENTS AND
FUNDS HELD IN ESCROW, END OF PERIOD $22,146 $22,244
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
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GRANGES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(U.S. DOLLARS IN THOUSANDS UNLESS SPECIFIED OTHERWISE - UNAUDITED)
JUNE 30, 1996
1. UNAUDITED INTERIM FINANCIAL INFORMATION
The consolidated financial statements of Granges Inc. (the "Company") for the
six months ended June 30, 1996 have been prepared by the Company without audit.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary to fairly present the interim financial
information set forth herein have been made. The results of operations for
interim periods are not necessarily indicative of the operating results of a
full year or of future years.
2. CHANGE IN REPORTING CURRENCY
The consolidated financial statements of the Company have been historically
expressed in Canadian (Cdn) dollars. As a result of sales revenues and a
significant portion of expenses being denominated in United States (U.S.)
dollars, the sale of exploration properties in Canada, the increasing
international focus of the Company's operating activities, and the Company's
recent relocation to Denver, the U.S. dollar has become the principal currency
of Granges' business. Accordingly, the U.S. dollar has been adopted as the
reporting currency for the consolidated financial statements of the Company
effective January 1, 1996. The comparative information for 1995 has been
translated into U.S. dollars for the six months ended June 30, 1995 and at the
December 31, 1995 year end at a rate of one U.S. dollar to Cdn$1.3652.
3. COMMITMENTS AND CONTINGENCIES
A) The Company is committed to payments under certain operating leases for
mining equipment. Future payments under these leases in each of the next five
years and in the aggregate are as follows:
1996 $ 999
1997 1,998
1998 1,055
1999 --
2000 --
------
$4,052
======
Letters of credit totalling $2.8 million (1995-$3.5 million) have been
provided as security under these mine equipment operating leases.
B) As part of its gold hedging program, the Company has entered into agreements
with major financial institutions to deliver gold. Realization under these
agreements is dependent upon the ability of those financial institutions to
perform in accordance with the terms of the agreements. As of June 30, 1996,
the Company's consolidated hedging program consisted of the following:
(i) forward sales contracts totalling 50,000 ounces for deliveries up to
November 28, 1997 at an average price of $403 per ounce;
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(ii) matching option contracts for 1,000 ounces of gold under which the
Company can require the financial institution to buy gold at $392 per ounce,
while the financial institution can require the Company to sell the same
number of ounces at $465 per ounce. These options expire on July 31, 1996
and result in no net cost to the Company.
4. CAPITAL REDUCTION
At the March 30, 1995 extraordinary meeting, the shareholders of Granges
approved a special resolution to reduce the capital of the Company. Under this
resolution, the share capital and contributed surplus were reduced by $52.5
million and $2.7 million, respectively, with a corresponding decrease to
Granges' accumulated deficit of approximately $55.3 million. The effect of
this capital reduction was to eliminate the consolidated accumulated deficit of
Granges as of December 31, 1994 after giving effect to the estimated costs of
the May 1, 1995 amalgamation of Granges Inc. and Hycroft Resources and
Development, Inc. This deficit was caused primarily by prior write downs of
mining assets.
5. SPECIAL WARRANTS
On April 25, 1996, a private placement of 9,699,800 Special Warrants was
completed at a price of Cdn$2.60 per unit for gross proceeds of Cdn$25,219,480
(US$18,505,367). Each special warrant is exercisable into one common share and
one half of one common share purchase warrant of Granges for no additional
consideration. Each whole common share purchase warrant is exercisable into
one common share of Granges at a price of Cdn$3.00 per share until October 31,
1997.
On July 3, 1996, Granges filed a final short form prospectus with the
securities commissions in British Columbia and Ontario relating to the private
placement. The funds held in escrow were released to Granges on July 8, 1996.
Net proceeds received were Cdn$24,044,730 (US$17,548,336). The net proceeds
received will be used to fund the cash payments due upon exercise of the
Guariche option and exploration on the Guariche properties if the option is
exercised, to develop the Brimstone project at the Company's Hycroft Mine, and
to explore the Company's mineral properties in Nevada and Peru. Any remaining
net proceeds, including unused proceeds if the Guariche option is not
exercised, will be used for general corporate purposes including ongoing
exploration and development expenditures and acquisition opportunities as they
arise.
On July 10, 1996, all of the 9,699,800 outstanding special warrants were
exercised, and 9,699,800 common shares in the capital of the Company and
4,849,900 common share purchase warrants were issued to the holders of the
special warrants.
6. SUBSEQUENT EVENT - AMALGAMATION
On July 31, 1996, the boards of directors of Granges Inc. ("Granges") and Da
Capo Resources Ltd. ("Da Capo") 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
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Da Capo share. The amalgamated company will be owned 66.25 percent by Granges
shareholders and 33.75 percent by Da Capo shareholders on a fully diluted basis.
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GRANGES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the consolidated financial
statements of Granges Inc. (the "Company") for the six months ended June 30,
1996 and the notes thereto, which have been prepared in accordance with
accounting principles generally accepted in Canada. The U.S. dollar has become
the principal currency of Granges' business. Accordingly, the U.S. dollar has
been adopted as the reporting currency for the consolidated financial
statements of the Company effective January 1, 1996 as described more fully in
Note 2 to the consolidated financial statements.
A. RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 VS. THREE MONTHS ENDED JUNE 30, 1995
The net loss for the three months ended June 30, 1996 was $2.9 million compared
to net earnings of $0.2 million for the same period in 1995. The current
quarter's loss included amortization of deferred stripping of $2.1 million as
compared to $29,000 in the previous year. The net loss for the second quarter
1996 included a gain on the sale of marketable securities of $0.2 million,
while during the same period in 1995, net earnings included a gain on the sale
of marketable securities of $0.8 million.
Revenues for the second quarter of 1996 of $9.7 million decreased $0.3 million,
or three percent, from the same period in 1995. Revenue is generated solely
from the Hycroft mine. The decrease in revenues was due to a slight decrease
in production, while gold prices for the two periods were steady. The 1996
gross realized price was unchanged from 1995 at $391 per ounce of gold.
1996 1995
---- ----
(Ounces)
Gold 23,429 23,867
Silver 110,710 157,244
Gold production during the second quarter of 1996 returned to normal levels and
was within 438 ounces, or two percent, from the same period in 1995. Ore
production was 16 percent greater at 40,332 recoverable ounces mined and placed
on the leach pads during the second quarter of 1996 as compared to 34,720 for
the same period in 1995. This bodes well for gold leaching and production for
the ensuing quarters.
Operating costs for the three months ended June 30, 1996 decreased $0.3
million, or three percent, from the second quarter of 1995.
1996 1995
---- ----
(Millions)
Hycroft mine $8.2 $8.5
==== ====
The decrease in operating costs was attributable to an increase in the use of
lower cost, uncrushed run-of-mine material in the tonnage processed (71
percent of tons processed compared to 57 percent in 1995), partially offset by
higher than normal maintenance costs for major repairs in recent months.
Direct cash
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10
operating costs per ounce were $290 in the second quarter of 1996, compared to
$293 for the same period in 1995.
Depreciation, depletion and provision for future reclamation and mine closure
costs increased $0.2 million from 1995. Amortization of deferred stripping
for the quarter was $2.1 million. The actual strip ratio of 0.9:1 was below
the Central Fault average of 1.8:1, causing the amortization of previously
capitalized deferred stripping in the current quarter. A nominal amount of
deferred stripping was amortized in the same period of 1995. Mineral
exploration increased $63,000, while corporate administrative expenditures were
unchanged. Interest income decreased 53 percent from 1995 reflecting the
Company's lower average cash balances.
SIX MONTHS ENDED JUNE 30, 1996 VS. SIX MONTHS ENDED JUNE 30, 1995
The net loss for the six months ended June 30, 1996 was $4.9 million compared
to net earnings of $1.2 million in the same period of 1995. The 1996 loss was
primarily due to a significant decrease in gold production during the first
quarter together with the amortization of deferred stripping in the second
quarter.
Revenue for the six months ended June 30, 1996 of $16.4 million decreased $5.3
million, or 24 percent, from the same period in 1995. The decrease in revenues
was primarily due to lower gold and silver production in the first quarter,
which was partially offset by a favorable price variance. The gross realized
price was $394 per ounce of gold for the first six months of 1996 as compared
to $388 for the same period in 1995.
1996 1995
---- ----
(Ounces)
Gold 39,635 51,360
Silver 150,433 299,111
The decrease in gold production in the first quarter was attributable to lower
than normal recovery from a clay-rich ore section combined with delayed
recovery from a significant volume of run-of-mine ore where solution
application was held up until haulage roads could be re-routed off of the fresh
ore. Mining in the clay-rich area was completed in the second quarter of 1996,
and recent ore production has exhibited normal recovery. During the first six
months of the current year, 66,007 recoverable ounces were mined and placed on
the leach pads, compared to 59,754 ounces for the same period in 1995, again
indicating normal leaching expectations for the later quarters.
Direct cash operating costs per ounce produced were $287 and $273 for the six
months ended June 30, 1996 and 1995, respectively. The increase in direct cash
operating costs resulted from lower first quarter gold production.
Depreciation, depletion and provision for future reclamation and mine closure
costs increased $0.4 million from 1995. Amortization of deferred stripping was
$2.1 million in the first six months of 1996 as discussed above. Mineral
exploration increased $0.3 million, while corporate administrative expenditures
increased slightly. Interest income decreased 60 percent as a result of the
Company's lower average cash balances.
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OUTLOOK
Gold production and mine operating costs at the Hycroft mine returned to normal
levels after mining in the clay-rich area was completed; the year's production
is estimated at 95,000 ounces. Exploration, corporate administrative, and
other costs are expected to remain at current levels.
Management's outlook for the future growth of Granges is through the
acquisition of additional precious metals reserves, primarily in the form of
producing or near-production properties, as well as through the exploration
efforts of the Company. Granges is actively searching for acquisition targets
in North and South America.
On February 29, 1996, the Company entered into a Letter of Intent to enter into
an Option Agreement with L.B. Mining Company to acquire the Guariche gold
project in southeastern Venezuela. On June 7, 1996, the Company completed its
due diligence and negotiated the final terms of the option agreement with L.B.
Mining Company. The terms of the executed definitive option agreement provide
that the consideration for the option is $275,000 payable as to $125,000 upon
receipt of the necessary mining concessions for the property and $150,000 upon
receipt of exploration permits and upon the Company being satisfied there are
no remaining overriding interests in the property. If these requirements are
satisfied, then the Company will be required to incur minimum exploration
expenditures on the property of $350,000 over a period of five months.
If drilling and technical studies during the option period satisfy the Company
of the potential of a minimum proven and probable minable reserve of 500,000
ounces of gold, the Company can exercise the option to purchase the property
for $15 million payable as to $5 million in shares and $10 million in cash.
The Company is required to pay for additional proven and probable minable
reserves discovered in excess of the 500,000-ounce minimum at an effective cost
of $30 per ounce.
Subsequent to June 30, 1996, the boards of directors of the Company and Da Capo
Resources Ltd. ("Da Capo") 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 the Company and Da
Capo by August 6, 1996.
Under the terms of the agreement, each holder of the Company shares will be
entitled to one Amalco share for each Granges Inc. share, and each holder of Da
Capo shares will be entitled to two Amalco shares for each Da Capo share. The
amalgamated company will be owned 66.25 percent by Granges shareholders and
33.75 percent by Da Capo shareholders on a fully diluted basis.
B. LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated cash balance as of June 30, 1996 was $22.1 million,
an increase of $6.9 million since December 31, 1995. This increase results
from $18.7 million received from share issues offset by $11.8 million used in
capital expenditures primarily for the development of the Brimstone deposit,
including additional mining equipment and construction in progress of a
processing plant and new leach pad. The share issue is described more fully in
Note 5 to the consolidated financial statements.
During the first three months of 1996 the Company, through its subsidiary,
arranged a secured stand-by credit facility. The facility is available for
drawdown until December 31, 1996, in dollars or as a gold loan, to a maximum of
$13.0 million or the gold ounce equivalent thereof (not to exceed 35,000
ounces). Drawdowns under the facility bear interest at LIBOR plus 1.60 percent
for dollar loans and gold lease
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rates plus 1.60 percent for gold loans. The loan is repayable in seven
semi-annual installments commencing the earlier of 12 months after the first
drawdown or June 30, 1997. In the event the Company generates cash surpluses
after debt service, it is required to make annual mandatory prepayments equal to
25 percent of excess cash flow, up to a maximum of $2.5 million annually and
$5.0 million in aggregate.
In addition to the loan facility, the Company has also arranged a hedging
facility for up to 275,000 ounces of gold for deliveries up to the year 2001.
Both the hedging and credit facilities are secured by the assets at the Hycroft
mine and parent company guarantee.
C. RECLAMATION AND ENVIRONMENTAL
As reported in the Company's Form 10-K for 1995, the Nevada Department of
Environmental Protection (NDEP) and the Nevada Bureau of Land Management (BLM)
were notified of Granges' intent to begin mining the private lands associated
with the Brimstone deposit. The NDEP Bureau of Mining Regulation and
Reclamation has granted its approval for this action. Pre-stripping of the
Brimstone deposit commenced in February 1996.
In April 1996, a draft environmental assessment for exploration drilling was
submitted to the BLM.
The Nevada Bureau of Mining Regulation and Reclamation requested modifications
to the solution collection ditch on Leach Pad #1 after deteriorated sections of
liner were observed during its quarterly inspection in May. This leach pad is
not currently in production, and the Company intends to reline the entire ditch
at an estimated cost of $100,000.
During the first six months of 1996, there were no material environmental
incidents or non-compliance issues with any applicable environmental
regulations.
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GRANGES INC.
PART II - OTHER INFORMATION
- -------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual general meeting of Granges Inc. was held on Wednesday,
May 22, 1996. The matters voted upon at the meeting included:
(a) the election of directors to hold office until the next annual
general meeting or until their successors are duly elected or
appointed; and
(b) the re-appointment of Coopers & Lybrand, Chartered Accountants,
Vancouver, British Columbia, as the auditors of Granges Inc. to
hold office until the next annual general meeting at a
remuneration to be fixed by the board of directors.
All nominees for directors as listed in the Management Information and
Proxy Circular dated April 9, 1996 were elected at the meeting and
voting for the election of directors was as follows:
Nominee Votes for Votes against Votes withheld Abstentions
------- --------- ------------- -------------- -----------
David J. Birkenshaw 22,011,894 - 175,694 30,180
William Calhoun 22,163,174 - 24,414 30,180
C. Thomas Ogryzlo 22,155,174 - 32,414 30,180
Michael B. Richings 22,155,294 - 32,294 30,180
David R. Sinclair 22,160,394 - 27,194 30,180
Keith Steeves 22,161,674 - 25,914 30,180
Alan G. Thompson 22,161,674 - 25,914 30,180
John S. Walton 22,161,894 - 25,694 30,180
Peter Walton 22,161,394 - 26,194 30,180
The shareholders also approved the re-appointment of Coopers & Lybrand
as auditors of Granges Inc. at a remuneration to be fixed by the board
of directors, with 22,200,604 shares cast in favor of the resolution,
9,600 shares against, 264 shares withheld and 7,300 abstentions.
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ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10(i) Employment Agreement dated January 1, 1996 between Granges
(U.S.) Inc. and Warren Bates.
10(ii) Employment Agreement dated January 1, 1996 between Granges
(U.S.) Inc. and A. J. Ali.
10(iii) Employment Agreement dated June 1, 1996 between Granges
(U.S.) Inc. and Ronald J. McGregor.
10(iv) Underwriting Agreement dated April 25, 1996 between Granges
Inc. and ScotiaMcLeod Inc., First Marathon Securities
Limited, Yorkton Securities Inc. and Geopel Shields and
Partners Inc.
10(v) Special Warrant Indenture dated as of April 25, 1996 between
Granges Inc. and Montreal Trust Company of Canada.
10(vi) Warrant Indenture dated as of April 25, 1996 between Granges
Inc. and Montreal Trust Company of Canada.
11 Statement re: computation of per share earnings.
27 Financial Data Schedule.
(b) Reports on Form 8-K
(i) The Company has filed a report on Form 8-K dated April 1,
1996 which reported under Item 5 (Other Events) and Item 6
(Resignation of Registrant's Directors) the appointment of
C. Thomas Ogryzlo as a new director and the resignation of
Peter Steen.
(ii) The Company has filed a report on Form 8-K dated April 10,
1996 which reported under Item 5 (Other Events) the private
placement of 7,690,000 special warrants.
(iii) The Company has filed a report on Form 8-K dated April 25,
1996 which reported under Item 5 (Other Events) the closing
of the private placement of 9,699,800 special warrants.
(iv) The Company has filed a report on Form 8-K dated
May 2, 1996 which reported under Item 5 (Other Events) an
exploration program update for Ecuador.
(v) The Company has filed a report on Form 8-K dated May 8, 1996
which reported under Item 5 (Other Events) its 1996
first quarter results.
(vi) The Company has filed a report on Form 8-K dated June 7,
1996 which reported under Item 5 (Other Events) that the
Company signed an option agreement for the Guariche Project
in Venezuela.
(vii) The Company has filed a report on Form 8-K dated June 24,
1996 which reported under Item 5 (Other Events) and Item 6
(Resignation of Registrant's Directors) the resignation
of David Birkenshaw on June 21, 1996.
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GRANGES INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRANGES INC.
(Registrant)
Date: August 13, 1996 By: signed "Michael B. Richings"
-------------------------------------
Michael B. Richings
President and
Chief Executive Officer
Date: August 13, 1996 By: signed "A. J. Ali"
-------------------------------------
A. J. Ali
Vice President Finance and
Chief Financial Officer
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EXHIBIT INDEX
-------------
Exhibit Number Description
- -------------- -----------
10(i) Employment Agreement dated January 1, 1996 between Granges
(U.S.) Inc. and Warren Bates.
10(ii) Employment Agreement dated January 1, 1996 between Granges
(U.S.) Inc. and A. J. Ali.
10(iii) Employment Agreement dated June 1, 1996 between Granges
(U.S.) Inc. and Ronald J. McGregor.
10(iv) Underwriting Agreement dated April 25, 1996 between Granges
Inc. and ScotiaMcLeod Inc., First Marathon Securities
Limited, Yorkton Securities Inc. and Geopel Shields and
Partners Inc.
10(v) Special Warrant Indenture dated as of April 25, 1996 between
Granges Inc. and Montreal Trust Company of Canada.
10(vi) Warrant Indenture dated as of April 25, 1996 between Granges
Inc. and Montreal Trust Company of Canada.
11 Earnings Per Share Computation
27 Financial Data Schedule
16