Stockwatch News Item
Stornoway Ventures Ltd (C-SWV) - News Release
Northern Empire, Stornoway plan merger
Stornoway Ventures Ltd SWV
Shares issued 16,672,788 May 16 2003 close $ 1.42
Tuesday May 20 2003 News Release
See Northern Empire Minerals Ltd (C-NEM) News Release
Mr. John Robins of Northern Empire reports
NORTHERN EMPIRE AND STORNOWAY ANNOUNCE COMBINATION - CREATION OF WORLD CLASS DIAMOND EXPLORATION COMPANY
Northern Empire Minerals and Stornoway Ventures have entered into an agreement whereby Northern Empire and Stornoway will combine their respective businesses. Management believes this transaction offers substantial benefits to both companies and their respective shareholders. The technical and financial strengths of the combined companies will create a world-class diamond exploration company with the largest diamond property portfolio of any publicly traded diamond company in Canada.
This transaction will consolidate Northern Empire's and Stornoway's respective 35-per-cent interests in the Aviat project, located on the Melville Peninsula in Nunavut and host to the recently discovered diamondiferous AV-1 kimberlite. The combined company, with a 70-per-cent interest in Aviat, will have greater control over the exploration and development of the seven-million-acre Aviat property where compelling evidence points to the existence of a new kimberlite province. The combined company will also give its shareholders exposure to continuing exploration programs in several other prospective diamond regions throughout Canada including the Churchill and Coronation areas of Nunavut as well as the Otish Mountain area of Quebec. Combined, the new company's diamond properties will encompass over 11 million acres, making its landholdings one of the largest in Canada.
Eira Thomas, the chief executive officer of Stornoway, will become the CEO of the combined company upon completion of the plan of arrangement, and will be responsible for the operational activities and development of the exploration assets of the company. Ms. Thomas is well known for her previous involvement in the discovery of Diavik, Canada's newest producing diamond mine.
John Robins, president of Northern Empire, and Catherine McLeod-Seltzer, president of Stornoway, have agreed to assume the roles of co-chairmen of the combined company.
Ms. McLeod-Seltzer stated: "This transaction represents a key step in the creation of a premiere, world-class diamond exploration company, and we are confident that the combined company will attract interest from a broader group in the investment community and make ongoing exploration easier to finance. We intend to explore our landholdings aggressively and we remain confident that new kimberlite discoveries will result."
Mr. Robins stated: "I am very excited about the future. We have the unique opportunity to combine two of Canada's strongest diamond exploration teams together with some of the country's most promising diamond prospects."
The board of directors of Northern Empire will be reconstituted with five directors, all of whom will be jointly determined by Northern Empire and Stornoway.
The combination will be completed through the acquisition by Northern Empire of all of the common shares of Stornoway under a plan of arrangement. Under the terms of the arrangement, each Stornoway shareholder will be entitled to receive 0.8734 of a common share of Northern Empire for each common share of Stornoway held. Upon completion of the arrangement, shareholders of Stornoway and current shareholders of Northern Empire will hold approximately 48.6 per cent and 51.4 per cent of the total of approximately 40,835,247 issued and outstanding common shares of the combined company (assuming no convertible securities are exercised).
The arrangement is subject to a number of conditions, including the finalization of formal documentation, receipt by each of the Northern Empire board of directors and the Stornoway board of directors of a fairness opinion regarding the transaction, receipt of court approval, regulatory approval, and approval of the shareholders of each of Northern Empire and Stornoway, of the arrangement and other customary conditions. Both Stornoway and Northern Empire anticipate holding shareholders meetings in mid-July, 2003, to consider the transaction.
Further information regarding the transaction will be included in subsequent shareholder material. This new information is available by contacting Stornoway or Northern Empire's offices.
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