Exchange halts GMD

by Doug Ashbury
Northern News Services

NNSL (Feb 09/98) - Days after the Vancouver Stock Exchange halted trading of GMD Resource Corporation shares, four of the company's directors resigned.

In the North, GMD is exploring the Royce group of claims for diamonds and the Discovery mine for gold. Royce is about 120 kilometres northwest of Yellowknife while Discovery is about 100 kilometres north of Yellowknife.

Among those to step down from GMD's board is director Paul Brownlee, a former Yellowknife resident now living in Newfoundland.

While in Yellowknife, Brownlee was associated with the financial company Planvest. He also sold real estate through Century 21.

Brownlee sold his financial client base to Bert Griffin of Griffin Financial Services.

On the halting of GMD trading, Griffin said: "With any stock there are positives and negatives. This is definitely a negative."

"This (could be) another nail in the coffin of junior mining companies."

As well as Brownlee, GMD president Don Farrell and directors Garvin McMinn and Visco Jutronich also resigned.

The four directors are also on the board of LMX Resources Ltd. Trading of LMX was also suspended. Farrell is president of both companies.

The VSE halted GMD trading after the company made two non-arms length unsecured loans.

GMD loaned $2.1 million to LMX and $918,726 to Farrell Financial Ltd., a private company owned by Don Farrell.

Non-arms length transactions raise conflict of interest questions.

Arms-length transactions are conducted as though the parties were unrelated, avoiding conflict of interest.

Because the loans were unsecured they are not backed by collateral.

GMD said it disclosed the loan details in its year end financial statements mailed to shareholders the week of January 12.