Wed Jul 5, 2000
WINSPEAR OUTLINES VALUE RECOGNITION PROGRAM IN RESPONSE TO HOSTILE BID ANNOUNCEMENT
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FOR IMMEDIATE RELEASE
· Encourages shareholders to await results of updated scoping study and drill program
· Company set to open data room to interested third parties
· Conference call scheduled for 4:30 p.m. EDT today
Vancouver, July 5, 2000 – Winspear Diamonds Inc. (TSE:WSP) today announced it is funding a comprehensive “Value Recognition Program” for the Snap Lake Diamond Project in the Northwest Territories. The purpose of the Program is to clearly demonstrate to shareholders the value and potential of Snap Lake and to show that the hostile take-over bid recently announced by De Beers significantly undervalues Winspear. The Value Recognition Program includes the commissioning of an updated scoping study and additional drilling at Snap Lake.
The Company also announced that it is in the process of negotiating Confidentiality Agreements with a number of interested third parties and has a data room available to qualified companies.
According to Randy Turner, President and Chief Executive Officer of Winspear, “The hostile bid announced by De Beers on June 26th is opportunistic and undervalues the Company. The timing and conditions of the De Beers offer are an attempt to limit Winspear’s ability to further demonstrate to shareholders the value of the Snap Lake Diamond Project.”
Value Recognition Program
Winspear has commissioned a Value Recognition Program that combines an updated scoping study and an aggressive new drilling program on the Snap Lake Project area.
The economics of the Snap Lake Diamond Project are presently defined by the Pre-Feasibility Study released in April 2000. This study was based on data collected through June 1999 and focused on a mineable resource of 12.6 million tonnes, with a diluted mine grade of 1.75 carats per tonne at an average value of US $118 per carat. This represents only a portion of the estimated June 1999 global resource of 21.3 million tonnes.
The updated scoping study will incorporate significant information assembled since June 1999. The study will be conducted by MRDI Canada, a division of AGRA Simons Limited. MRDI Canada is a well-known consulting company with significant diamond expertise in the Northwest Territories. The study will incorporate an additional 35 drill holes containing kimberlite intersections, 29 of which were completed in the spring of 2000. Results from the updated scoping study will be available for dissemination prior to the anticipated expiry date for the De Beers offer.
The purpose of the new drilling program now underway at Snap Lake is to further demonstrate the extent of the kimberlite dike down-dip to the east and northeast, beyond the current limits of the main deposit. Data collected from ongoing drilling will be incorporated in the updated scoping study as it becomes available.
Financing Considerations
The announcement of the De Beers offer appears to be an attempt to put maximum financial pressure on the Company and specifically includes a condition that Winspear not issue additional equity. The Company will secure adequate funding, as necessary, to protect and develop its interest in the Snap Lake Diamond Project in the best interest of shareholders.
On June 30th, the British Columbia Court of Appeal ruled that Aber Resources Ltd. is required to pay the Company $5 million for the costs already incurred under the current program being conducted under the joint venture agreement between the Company and Aber. This payment, plus interest, is required to be made no later than August 10, 2000.
Other Activities
In addition to the initiatives detailed above, the Company and its financial advisors, BMO Nesbitt Burns, continue to evaluate opportunities to maximize shareholder value.
“In the days and weeks ahead, the Winspear board of directors and its advisors will be working diligently to ensure that any transaction which may be entered into reflects the true value of the Snap Lake Diamond Project. The board of directors strongly urges shareholders not to make any decision with respect to the De Beers announced offer at this time,” said Mr. Turner.
Shareholders are encouraged to participate in a conference call later today, the purpose of which will be to elaborate on plans for the Value Recognition Program. Interested parties can enter the call, set to commence at 4:30 p.m. (Eastern Daylight Time) July 5, 2000, at any time after 4:15 p.m.(EDT).
Participants outside North America: 1-416-695-9753
Participants inside North America: 1-877-461-2814
As demand may exceed available lines, the call will be available for replay for seven days following the original transmission by dialing in North America 1888-509-0082, outside of North America, please call 1-416-695-9768.
As part of its ongoing efforts to inform investors and other interested parties of Winspear’s activities relating to the hostile takeover bid, the Company will be posting information on its web site at www.winspear.com. |
