Some news on T.HWD
Highwood and Dynatec update terms of corporate reorganization
TORONTO and CALGARY, Oct. 30 /CNW/ - Highwood Resources Ltd. (TSX - HWD)
and Dynatec Corporation (TSX - DY) are pleased to announce that they have
entered into an Arrangement Agreement that will, if approved by the
shareholders of Highwood, result in a reorganization of Highwood's current
financial affairs, assets and share ownership structure in a manner that will
preserve value for Highwood's public shareholders. The terms of the
Arrangement have been amended from the terms originally announced by Highwood
and Dynatec on August 30, 2002 and provide for the acquisition of all of the
outstanding common shares of Highwood by Dynatec in exchange for, at the
election of each Highwood shareholder, (1) shares of a newly-created company,
expected to be named "Beta Minerals Inc."("Beta") that will own the Beta
Assets (as defined below); or (2) cash; or (3) a combination of cash and
shares of Beta ("Beta Shares"). A maximum of $865,990 of cash will be provided
by Dynatec to be distributed to Highwood public shareholders subject to
proration procedures. As a result of the Arrangement, Highwood shareholders
who receive Beta Shares will be able to continue to participate in a junior
mineral exploration and development company that owns the Beta Assets and has
an experienced team of industry professionals as its board of directors,
approximately $1.75 million in cash and no debt.
A meeting of Highwood shareholders is scheduled for 10:00 am on Tuesday,
November 26, 2002 at the Ramada Hotel Downtown, Calgary, Alberta at which time
shareholders will be asked to approve, among other matters, the terms of the
Arrangement. Based upon the recommendation of an independent committee who
have evaluated the terms of the Arrangement and have obtained a valuation
report and fairness opinion from Northern Securities Inc., the independent
members of Highwood's Board of Directors unanimously support the Arrangement
and have recommended that Highwood shareholders approve the Arrangement at the
meeting. Subject to receipt of shareholder, court, regulatory and stock
exchange approval, it is anticipated that the Arrangement will become
effective on November 29, 2002.
Terms of the Arrangement
------------------------
The Arrangement will result, through a series of transactions, in the
following:
(1) all of Highwood's existing interests in the Thor Lake beryllium and
other rare metals property and the Elk Lake tantalum property, both
located in the Northwest Territories, the Mikwam gold property
located near Timmins, Ontario, and the Yellow Giant gold and base
metals property located on Banks Island near Prince Rupert, British
Columbia (collectively, the "Beta Assets") being transferred to Beta
free and clear of any encumbrances from Highwood's principal lender
or Dynatec;
(2) Dynatec injecting $1.75 million of cash into Beta;
(3) the existing Shareholders of Highwood (other than Dynatec, its
affiliates and dissenting shareholders, if any) receiving, at their
election, the following:
(a) one Beta Share for each Highwood common share; or
(b) $0.145 in cash for each Highwood common share, subject to
proration procedures; or
(c) a combination of cash and Beta Shares for each Highwood common
share, subject to proration procedures; and
(4) Dynatec acquiring all of the issued and outstanding Highwood common
shares and, by virtue thereof, assuming all of Highwood's secured and
unsecured indebtedness currently standing at approximately
$8.3 million, and all of Highwood's assets other than the Beta
Assets.
Under the Arrangement terms, where a cash or cash and shares election is
made, no Highwood Shareholder will be entitled to receive more than $0.145 per
common share nor will more than $865,990 be distributed to all Highwood
shareholders.
Following the completion of the Arrangement, Beta will be a company owned
by Highwood's shareholders in accordance with the election made by such
shareholders, subject to proration, and Highwood will be a wholly-owned
subsidiary of Dynatec. As Dynatec will be providing the cash to be distributed
to Highwood shareholders, Dynatec will become the indirect owner of one Beta
Share for every $0.145 that is distributed to Highwood shareholders. If all of
the cash provided by Dynatec is distributed, Dynatec will own 25% of the Beta
Shares. In addition, if there are Highwood shareholders who exercise dissent
rights in connection with the Arrangement, Dynatec will remain the indirect
owner of the Beta Shares that such dissenting shareholders would have received
but for the exercise of their dissent rights.
Details Regarding Beta
----------------------
Following the Arrangement, Beta intends to focus on advancing the Thor
Lake and Mikwam properties as well as evaluating new acquisition opportunities
to increase shareholder value. The following is a brief description of the
anticipated directors of Beta after giving effect to the Arrangement.
Dr. David Trueman, Ph. D, P.Geo. - Director, President and Chief
Executive Officer
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Dr. Trueman is a consulting geologist who has been involved in the
mineral industry for 40 years. His experience includes geological, geophysical
and geochemical exploration of precious, base-metal, rare-metal and industrial
mineral deposits, project initiation, mine production, metallurgical research,
project feasibility, senior corporate management and project finance. Dr.
Trueman is currently a director of Highwood and has been a director and
officer of a number of public and private mining and mineral companies during
his career.
James Currie, P.Eng. - Director
-------------------------------
Mr. Currie was the Operations manager of Ivanhoe Mines Ltd. and a member
of the board of directors of Myanmar Ivanhoe Copper Company between August
1999 and October 2002. As Operations Manager for Ivanhoe, Mr. Currie was
responsible for Ivanhoe's copper operations in Myanmar including an open pit,
heap leach SX/EW mine producing approximately 25,000 tons per year of LME
Grade A copper cathode, and a development project which is expected to produce
125,000 tons per year of copper cathode. Prior to joining Ivanhoe, Mr. Currie
was Vice President of Behre Dolbear & Co. Ltd. of Vancouver, B.C., an
international mining consultancy firm, where he conducted reviews, studies and
valuations of a number of foreign and domestic mining properties and projects.
James Roxburgh,P.Eng., MBA, - Director
--------------------------------------
Mr. Roxburgh, is a senior minerals management executive with experience
in operations, finance, marketing and business development. Mr. Roxburgh has
been involved in the mining industry since 1966 having worked in positions
ranging from mine manager to Vice-President (Environment and Technology) with
Rio Algom until 1990. In 1993, he joined Mountain Minerals Co. Ltd. as V.P.
Operations and, in 1995 joined Dynatec as V.P. Operations. More recently, Mr.
Roxburgh was CEO and Chairman of Highwood between September 1999 and June 2001
and President of Highwood between November 1999 and May 2000. Since then, Mr.
Roxburgh has been an independent mining consultant.
Roy Hudson, LLB - Director
--------------------------
Mr. Hudson is a Calgary, Alberta based lawyer whose practise focuses
primarily on publicly traded junior resource companies. Mr. Hudson is
currently a partner with the national firm of Borden Ladner Gervais LLP and is
a director and officer of a number of TSX and TSX-V listed companies.
Neville Simpson - Director
--------------------------
Mr. Simpson is currently a director of Highwood and is the Director of
Marketing, South American operations for Snap-On Incorporated, a major
equipment supplier to the mining industry.
Philip Martin, B.Sc. (Eng.), MBA, P. Eng. - Director
----------------------------------------------------
Mr. Martin is an independent financial consultant who has a diverse and
extensive background in business management, corporate and international
finance and resource operations, planning and management. Mr. Martin is
currently an independent director of Southern Era Resources Limited, a
publicly traded mining company on the TSX. He is a former director and Vice-
President Finance of First Associates Investments Inc. He is also a former
director and Managing Partner, Investment Banking of Gordon Capital
Corporation where he focused on the mining sector.
About Highwood
Highwood Resources Ltd. is a Canadian processing and manufacturing
company that supplies high-value industrial mineral products to paint and
chemical markets throughout the world. The Company has mining and processing
facilities in North America and Southeast Asia and markets barite, talc,
silica, gypsum, dolomite and zeolite products through an extensive
distribution network.
About Dynatec
Dynatec Corporation is a leading international provider of mining
services, drilling services and metallurgical technologies. The Company is
focused on increasingly applying its mineral expertise on its own behalf, and
is actively seeking ownership interests in mining properties.
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