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Tourism drop hurts Explorer

Thorunn Howatt
Northern News Services

Yellowknife (Aug 21/02) - The company that owns Yellowknife's Explorer Hotel and Discovery Inn has been told it has four months to get in line with stock exchange rules.

NNSL Photo

The Explorer Hotel has suffered since the Sept. 11 terrorist attacks in the U.S. Last week shares of the company that owns the hotel were reviewed by the Toronto Stock Exchange. - Merle Robillard/NNSL photo

Last week the Toronto Stock Exchange (TSX) said it is reviewing the common shares of Grandfield Pacific Inc. because the hotel company wasn't meeting all the requirements of the exchange.

"The implications are that the stock may be de-listed if they are not able to demonstrate that they meet all the areas they need to in order to be in compliance with the regulations," said investment advisor Todd Ferguson.

Grandfield Pacific shares would no longer be traded on the Toronto exchange if it was de-listed. But they could qualify to trade on the venture exchange -- owned by the TSX -- which has different listing requirements.

Grandfield Pacific is a publicly traded company listed on the TSX as symbol GFD. It is involved in the hotel industry. Its head office is in Yellowknife.

Last year the company's books were in the black, showing a positive balance sheet for its 2000-2001 year-end at April 2001.

But the good news turned sour after the Sept. 11 tragedy. Grandfield Pacific's shares had a rough ride, dropping to less than 20 cents.

"There has been a return to profitability in the last two months," said the company's president Harry Symington. "Will it get back to pre-Sept. 11 this year? - I don't think so. It might get back to 1999."

Grandfield Pacific shares plunged after the Sept. 11 terrorist attacks in the U.S.

That event wrecked havoc on Yellowknife's aurora tourism industry. The Explorer Hotel caters largely to Japanese tourists.

In order to be a trading member of the Toronto Stock Exchange a company has to have a market capitalization of at least $3 million. Grandfield Pacific has 7.3 million shares outstanding at about 17 cents a share. That means its capitalization is less than $2 million.

The company will try to either raise the value of its shares or issue more shares, said Symington. He added that the company is not interested in moving to the venture exchange.

Grandfield Pacific hasn't released its year-end statements but will have them available by Sept. 11.

"We will be posting a loss," said Symington.

But the new year looks much brighter. Aurora tourism has picked up. Japanese visitors are filling the hotel for autumn Northern Lights viewing.

"The hospitality industry is still suffering from both the Sept. 11th, 2001, disaster and the continuing downturn in the Japanese economy which in turn has slowed down our hotel operations considerably," said notes from a Grandfield Pacific release last March after its poor third quarter.

Grandfield Pacific's annual general meeting will be Oct. 21 in Vancouver.