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Gold/Mining/Energy : IMARK Corporation (IAK was Durkin Hayes DHP)
IAK 54.76+1.8%Jul 6 4:00 PM EDT

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To: Pierre J. LeBel who wrote ()2/16/1998 7:14:00 PM
From: david  Read Replies (1) of 57
The $1,600,000 was invested in a joint venture that is to market the television series "Swamp Critters' of the Lost Lagoon" and products related to the series. The show is supposedly being aired on the Learning Channel but I have not verified this personally.

DHP has not yet issued any releases on the progress of the joint venture which is probably reflective of its lack of success (at least in terms of revenues) so far.

With respect to new management, the new CEO who had taken over about a year ago or so has resigned (in mid-late December). As the former CEO was one of the major proponents of the joint venture, it is not a good sign that he resigned (although it may be good that he resigned). The new CEO is a long time executive of DHP.

Despite the foregoing, there is still some hope for DHP. They still have a wide variety of product lines and a record of past revenue streams. The Balance Sheet is also quite clean with no debt to speak of and possibly some cash (prior to the joint venture and rights offering there was about 10 cents/share in cash). Hopefully we will see a release on 1997 year end earnings in the next few weeks that will give a better idea of how the company has been doing recently.

Finally, Algounquin Mercantile (AM on TSE) initiated a takeover bid for DHP about a year ago. They now own over 50% of the company but not the 2/3s they were seeking which would have allowed them to exercise greater control over the company. There is, therefore, the chance that AM will issue another TOB for the shares still outstanding (last TOB was at 50/cents a share). AM has a good track record of purchasing companies, then getting them on track, and then selling them for a healthy profit.

Although DHP has had a rough time over the past couple of years, there is substantial upside and limited downside for purchases under 30 cents. It would be a good idea, however, to wait for 1997 results before making any decisions just in case there are some surprises that the company hasn't been disclosing.

Good Luck,

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