From: portfolio@newswire.ca
Date sent: Thu, 12 Feb 1998 08:38:49 -0500
Subject: IMPERIAL AND PRINCETON TO MERGE
To: "Portfolio Email User" <portfolio@newswire.ca>
Attention Business Editors:
IMPERIAL AND PRINCETON TO MERGE
Princeton Merger Press Release:
IMPERIAL METALS CORPORATION & PRINCETON MINING CORPORATION
Trading Symbol: IPM (TSE) and Trading Symbol: PMC (TSE)
VANCOUVER, Feb. 12 /CNW/ - Imperial Metals Corporation (IPM-T)
(''Imperial'') and Princeton Mining Corporation (PMC-T)
(''Princeton'') are pleased to announce that they have agreed to
merge by way of plan of arrangement, subject to shareholder and
regulatory approval and subject to a number of conditions being
fulfilled, including receipt of appropriate agreements from major
creditors including the Japan Group, the British Columbia Ministry
of Employment and Investment, Sumitomo Corporation and R.E.W. Holdings
Ltd.
The plan of arrangement will be structured with the dual
objective of combining the mining operations of Princeton and
Imperial and satisfying the best efforts undertaking of Princeton
under a loan agreement between Princeton as borrower and R.E.W.
Holdings Ltd. as lender, to reorganize the assets of Princeton in
order to make use of non mining assets in Princeton for the
benefit of Princeton shareholders through the acquisition of certain
real property assets.
Under the plan of arrangement, three new classes of shares will
be created in Princeton: Class B voting common shares, Class C
non-voting shares and non-voting preferred shares. All of the assets
and liabilities of Princeton, including the existing debentures will
be transferred to a new company created by Princeton (''New
Princeton''). The issued share capital of New Princeton will consist
of Class A voting common shares.
Princeton shareholders will exchange their common shares of
Princeton on the basis of one common share of Princeton for one Class
B voting common share of Princeton plus one preferred share of
Princeton. Princeton shareholders will then exchange their preferred
shares of Princeton on the basis of one preferred share of Princeton
for one Class A voting common share of New Princeton. Princeton will
then acquire the real property assets in exchange for Class B voting
common shares and Class C non-voting shares.
Imperial will acquire all of the Class A common shares of New
Princeton by issuing 0.073 of one common share of Imperial for every
one Class A common share of New Princeton. The loan from R.E.W.
Holdings Ltd. will be satisfied in full through cash repayment.
The $9 million in debentures outstanding will be satisfied in full
through a repayment in shares of Imperial with each holder of
Princeton debentures receiving 486.1641 shares of Imperial for each
$1,000 of debentures held. In total, Imperial will issue 12,500,000
common shares to Princeton shareholders and debenture holders to
acquire New Princeton and settle its outstanding debentures.
The benefits to Princeton shareholders of this reorganization
will include ownership of shares in a company which combines the
existing mining assets of both Imperial and Princeton including the
Huckleberry Mine and the Mount Polley Mine. In addition, they will
hold approximately $2.8 million ($0.025 per existing Princeton common
share) worth of voting shares in a company (formerly Princeton) with
income producing real estate properties located primarily in the
Greater Vancouver area. These income producing properties will be
acquired from Madison Development Corporation and affiliates
(''Madison'') and Vanac Development Corporation and affiliates
(''Vanac''). Madison and Vanac have been involved in the ownership,
construction and management of real estate properties in the
Vancouver area for the last 20 years.
Shareholders of Princeton holding in excess of 43 million common
shares and debenture holders of Princeton holding $6,200,000 of
debentures have agreed in writing or otherwise to support and vote
in favor of the merger. To be successful, the merger must be approved
by a two thirds majority of shareholders and debenture holders
present at the meeting called to consider it. A breakup fee of
$500,000 plus reasonable transaction expenses will be payable to
Imperial in the event that the directors or shareholders of
Princeton elect to proceed with a competing merger proposal from
any third party.
The company resulting from the merger of Imperial and Princeton,
to be called Imperial Metals Corporation, will produce 55 million
pounds of copper and 57,000 ounces of gold per year from two recently
built British Columbia mines: the Mount Polley mine owned 55% by
Imperial and 45% by Sumitomo Corporation and the Huckleberry mine
currently owned 60% by Princeton and 40% by the Japan Group, a
consortium comprised of Marubeni Corporation, Mitsubishi Materials
Corporation, Dowa Mining Co. Ltd. and Furukawa Co. Ltd. Imperial
will be the operator of both mines.
The move will significantly reduce costs through improved
efficiency, better economies of scale and overhead reduction. The new
company will emerge stronger and better able to deal with the
challenges of low metal prices and the tougher competitive environment
presently facing the mining industry.
Imperial will continue to advance its 100% owned Silvertip project
to commercial production. A recently completed exploration program
increased the mineral resource at Silvertip to 2.57 million tonnes
grading 325 g/t (9.490 oz/t) silver, 8.8% zinc, 6.4% lead and 0.63 g/t
gold. There is excellent potential for expanding this high grade
deposit. Plans are now being considered for a starter open pit
followed by underground mining with major process equipment to come
from the 100% owned Goldstream mill, where operations ceased in l997.
Having just completed the permitting, financing, and construction of
two new mines in British Columbia, Imperial is well positioned to
rapidly advance the Silvertip project.
A recently completed drill program at the 100% owned Similco mine,
now on standby, has outlined a resource of 142 million tonnes grading
0.397% copper with gold and silver credits. Prior to suspension of
operations in November, 1996, Similco, produced 1.74 billion pounds of
copper, 9.1 million ounces of silver and 730,000 ounces of gold. This
fully permitted mine can be reopened with relatively little capital
when metal prices improve. The potential for further expansion of
reserves is considered excellent here as well. Also, the 100% owned
Giant Copper property, located near Similco, could add
significant value to the Similco mine.
Mutual due diligence and receipt by Princeton of a satisfactory
fairness opinion are to be completed in time for a mailout to
Princeton shareholders on or before March 18, 1998. A shareholders'
meeting is scheduled for April 9, 1998 with closing of the transaction
shortly thereafter but no later than May 15, 1998. Concurrently with
this transaction, Imperial is considering a private placement of up to
5 million shares at $1.00 per share, subject to regulatory approval.
William H. Myckatyn, President and Chief Executive Officer of Princeton, said ''We are pleased with the merger of Imperial and
Princeton. The merger with Imperial provides Princeton shareholders
with the critical mass and financial strength to get through these
difficult times.''
Imperial will use its strengths as a proven mine developer and
operator to attract new projects and access debt and equity markets as
needed to satisfy its capital requirements. Imperial intends to grow
primarily through the development of advanced projects and
acquisitions.
(signed)
----------------------------- -----------------------------
Pierre Lebel, William H. Myckatyn,
President President and C.E.O.
Imperial Metals Corporation Princeton Mining Corporation
For further information: Imperial Metals Corporation, Contact: Pierre
Lebel, President, Tel: (604) 669-8959, Fax (604) 687-4030; Princeton
Mining Corporation, Contact: William H. Myckatyn, President and CEO,
Tel: (604) 688-2511, Fax: (604) 688-4772 |
