The Gazette from Montreal, Quebec, Canada • 25

Cl)C Cwctttf, Montreal, Wednesday, October 7, 1 987 C4 Profits climb i OTTAWA (CP) Operating its of industrial corporations rose 11.4 per cent during the second quar-l ter to $7.6 billion from a year ear-', lier, final estimates made public yes-1, terday by Statistics Canada show. More than half the second-quarter-increase was in the mineral and coal, and metal mining indus-', tries, which benefitted in part from rising prices for their resources. The transportation equipment in-" dustry recorded the largest profit-decrease. By KATE DUNN of The Gazette The Quebec government is pressuring Ottawa to throw federal support behind a paper mill planned for Matane despite pressure from competing paper producers opposed to government help for the project. Quebec energy and resources minister John Ciaccia says the province will stick by a commitment to give an interest-free loan believed to be as much as $75 million to support the project planned by Donohue Inc.

The commitment was first made to a Norwegian forestry firm, Saug-brugsforeningen, before it dropped out of the project due to a lack of financial commitment by the federal government. In an interview, Ciaccia said both he and the federal government are being pressured by other forestry companies not to subsidize Dono- hue's Matane project. But he feels it is necessary to get the mill built in the area which suffers 22-per-cent unemployment. "In that area you have whole villages on unemployment or welfare," Ciaccia said. "Do you know what an investment of $420 million in a region like that means? It's like putting billions into Montreal." Donohue chairman Charles-Albert Poissant says he still hopes for a loan subsidy from Ottawa as well as an extension of regional investment tax credits.

Under federal finance minister Michael Wilson's proposed tax reform, tax credits may diminish after 1988, before the Matane mill's construction bills will all be in. Ciaccia says all that really is needed from the federal government is the assurance the tax credits will not change during the time it takes to build the plant. Poissant said he hopes for a joint federal-provincial subsidy of a $150-million interest-free loan. Although Ciaccia would not say exactly what the Quebec commitment to the project will be, it is likely to be exactly half what Poissant wants from the two governments, or a $75-million interest-free loan. Jean-Luc Joncras, member of Parliament for Matapedia, said he expects word by Oct.

14 on whether the federal government will subsidize the project. UUH (JlMI Oif GINAL Montreal, Wee Quebec seeks federal aid for new Donohue mill Lortie endorses deal mice Trucker Cabano aims iJo cut debts inherited from acquired firms By ANN GIBBON of The Gazette Pierre Lortie, chairman of food and consumer-products giant Provi-go yesterday lauded the tentative free-trade deal struck between Canada and the United States, saying it will give a boost to the Canadian economy. "People will have quarrels on this aspect and that aspect of it, but overall, it's good," Lortie, also Pro-vigo's president and chief executive, said in an interview. Lortie has long been an advocate of free trade, saying that secure access to the U.S. market is essential if Canadian business expects to become more competitive in the international marketplace.

But to get that, he has argued, Canada can't be protective about its own markets. Lortie said that there is little risk that entire industries might disappear under a free-trade agreement, as some critics fear. Import safeguards that have been included in 1 shares and debentures, with the common shares eligible for a 75-per-cent tax deduction under the Quebec Stock Savings Plan. Dominion Securities Saumier Morrision Davidson Partners Inc. and Levesque, Beaubien Inc.

are acting as underwriters. Insurance costs cut Lefrancois said that since the consolidation of Brazeau and Expeditex, annual insurance costs of $3.4 million have been reduced by $1.3 million, representing savings of over $100,000 a month. On the employment side, the combined administrative staff of Brazeau and Expeditex is being reduced by about 40 per cent and unionized workers by about 10 per cent. Despite the acquisitions of Brazeau and Expeditex, which lost a combined $9.5 million last year, Cabano expects to exceed the profit it recorded in fiscal 1986 on sales of $28.3 million. (The results exclude those of Brazeau and Expeditex.) For the fiscal year ending April 30, 1988, Cabano is projecting a consolidated profit of $1.9 million or 40 cents a share on sales of $149 million.

The company expects profit to increase to $5.4 million or $1.05 a share on sales of $187.2 million in fiscal 1989. By BRIAN DUNN of The Gazette Trucking firm Cabano Expedi-tex top priority is to reduce its long-term debt through the disposal of assets and I through separate offerings of cbmmon shares and convertible debentures, executive vice-presi-: dent Gilles Lefrancois said before the company's annual meeting in Montreal yesterday. The Riviere du Loup-based "company incurred the debt earlier this year after acquiring money-losing trucking firms Brazeau Inc. and Expeditex Inc. At the same time, Cabano in-; creased its assets to $142 million from $17 million while its fleet Increased to 5,000 vehicles from 700.

The acquisitions vaulted Cabano from fifth to first place among Quebec trucking firms and fourth-largest in Canada. 15 terminals shut Lefrancois said the disposal of excess terminals should net Cabano $10 million, with about $4.2 million coming from contracts that have already been signed. Fifteen terminals closed Sept. 15 with four more slated to close in the next few months. Cabano expects to raise an additional $12 million, split evenly through the issue of common PIERRE LORTIE "Some might go under" the tentative deal would guard against that, he said.

Under the terms of the accord, if duty reductions result in a threat to certain Canadian industries in a free-trade area, that duty may be temporarily reinstated to give the particular industry enough time to adjust. "So if a U.S. competitor comes in and threatens to wipe out a whole industry like the furniture sector, the tariff would go back up," he said. "Some firms might go under, or others might become consolidated, but whole industries won't go away." Lortie said that Montreal-based Provigo's daily operations won't be affected significantly by the deal if it's put into place, "but since it is in the consumer-goods business, if the economy does better, we do better." Lortie was appointed by the government to chair a special advisory committee on household products and consumer goods. It was one of about 15 sectoral committees formed to advise the free-trade negotiators.

mation to Corona's detriment while the two companies were negotiating towards a possible joint venture. The mine which contains an estimated 9 million ounces of gold was estimated to be worth $700 million by the trial judge, and more than $1 billion by Corona president Peter Steen. Lac shares gain On the first day of trading on the Toronto Stock Exchange after the decision, Corona gained $31.50 a share Monday to close at $79, adding a spectacular $787 million to its market value. The stock dropped $4.50 yesterday as some speculators casned in their chips. Lac shares lost $2.87 to $15.12 on Monday, but gained 25 cents Lac to appeal Hemlo decision EDMACHEJ Mr.

R. T. Ryan, President and Chief Executive Officer of The Mortgage Insurance Company of Canada is pleased to announce the appointment of Ed Machej as Director of Residential Underwriting and Claims. In his position, Mr. Machej is responsible for the Company's Risk Management program including underwriting, claims and Default Management.

Mr. Machej was formerly Regional Manager for MICC in Calgary for 6 years and has more than 25 years of mortgage experience in Western Canada. MICC, in operation for over 25 years, is Canada's only private mortgage insurance company w)th over $15.0 billion of insurance in force. It provides insurance protection to institutional mortgage lenders across Canada through a network of 13 Regional Offices and has helped more than 550,000 Canadians purchase homes with modest downpayments. MICC offers a comparable service for mult-unit dwellings, commercial and industrial properties, and ac-.

tively participates in the area of surety bonding. TORONTO (CP) Lac Minerals Ltd. will ask the Supreme Court of Canada to hear an appeal, seeking to overturn a court judgment that stripped from it one of Canada's richest gold mines, the company said yesterday. Corona awarded mine The Ontario Court of Appeal last Friday unanimously upheld a lower court ruling which gave International Corona Resources Ltd. ownership of the Page-Williams mine in the Hemlo gold fields of Northern On Sale of Disnat shares complete Financiere Entraide-Cooperants Inc.

said it has completed its previously announced purchase of 40 per cent of Montreal discount broker Disnat Investments Inc. Financiere is a recently created financial-serv tario. Lac said it instructed its counsel "to proceed as quickly as possible" with an application for leave to appeal to the highest court. In March 1986, the Ontario Supreme Court ruled Lac had improperly used information provided by Corona to buy the 11 claims on which the Page-Williams mine was founded. Corona, which financed the original discovery of the Hemlo field, claimed Lac had breached a position of trust by using confidential infor- CHOMEDEY.

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ices group owned 60-per-cent by So-ciete d'entraide. economique du Quebec 25-per-cent by Les Cooperants, a life-insurance company, and 15-per-cent by the Caisse de depot et placement du Quebec. For Registration Call Terri at (514) 933-7669 WHOLESALE SULLIVAN MINES INC. POSTAL STRIKE iMPORTANT MESSAGE TO ALL SHAREHOLDERS OF SULLIVAN MINES INC. A special meeting of all holders of Common Shares and holders of Preferred Series A Shares of Sullivan Mines Inc.

has been called for Ocjof ber 15, 1987 to consider and, if deemed appropriate, to adopt a special resolution for the approval of by-law number 1-1987 respecting trie, amalgamation of Sullivan Mines Inc. with 2537-7854 Quebec Inc.ya wholly-owned subsidiary of Cambior Inc. to form Camsul Inc. The meeting will be held in Montreal at the Salon Alfred Rouleau, section of the Hotel Le Meridien, 4, Complexe Desjardins, at 10:00 a.m. (Iota) time).

During the postal strike and afterwards, you may send to Sullivan your' proxy in respect of the votes to be held by the shareholders in respeci of the amalgamation proposal by delivering it at any office or branch of the Guaranty Trust Company of Canada, McLeod Young Weir Limited or Levesque Beaubien Inc. As well, you may call directly McLeod Young Weir Limited at (800) 361-1858 (for Quebec) and at (800) 268-8350 (for Ontario) or Mr. Boudreau of Levesque Beaubien Inc. at (800) 361-8838 (for Quebec) at (800) 361-9522 (for Ontario) or collect at (514) 879-2244. For any additional information, please do not hesitate to communicate with Me Jean Lorrain, Secretary of Sullivan Mines Inc.

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