Gold Properties Plans $5-Million Stock Offering

Gold Properties Restoration Co. hopes to raise $5 million in an initial public stock offering and use the proceeds to construct a 300-ton-per-day gold ore mill in the Philippines.

The Tustin-based company, which has no operating history, plans to sell 1 million common shares at $5 per share, according to a Securities and Exchange Commission filing made on Feb. 1. Gold Properties is a subsidiary of VTN Corp., an engineering firm in Orange, and Shelly Associates Inc., a Tustin electronics manufacturer. The latter two are publicly held companies.

Gold Properties also said the proceeds will be used to complete the rehabilitation of a mining concession it acquired through its joint-venture company, Precious Metals Mining & Development Corp. in Manila.

A small portion of the proceeds, about $500,000, will be used to repay bank debt of Precious Metals.

Precious Metals has spent four years and more than $2 million in exploring and restoring the gold mine of the old North Camarines Gold Mine Co., which was closed at the start of World War II. The gold-processing facility and mining concession are both in the Paracale District in North Camarines province in northern Philippines.

Toluca Pacific Securities Corp. of Burbank, will manage the new share offering, which will be effective late March, 1991.

The prospectus said investment in the offering is “speculative in nature” and involves “a high degree of risk.” Among the risks are possible lack of proven reserves, possible difficulty obtaining government mining rights and dispute over the validity of the mining claims.

“This is not the kind of investment that a retired old man or woman should take,” said Peter Blowitz, president of Toluca Pacific. “This is a business person’s risk, someone who can afford to take risks.”

Gold Properties principal shareholders include Dan Montano, chairman of VTN and Shelly; fast-food chain owner, Carl N. Karcher; Mark A. Voorhis, chief financial officer of VTN and Shelly, and Sammy W. Cross, vice chairman of Shelly and Gold Properties.

Until it could raise the money through the initial public offering, Gold Properties is raising a bridge loan totaling $500,000, of which $225,000 has been subscribed and the remaining $275,000 will be provided by a group of private investors in Orange County.

After the initial stock offering, Shelly Associates’ interest at Gold Properties will be 30%, Montano, 12.75%, Karcher, 11.25%, while Voorhis and Cross will each have 8.25%.