DTCT - Diatect To Sell Mining Rights for $31 Million Resulting In Major Increase In Company's Book Value
New Reflected Price $0.73 Per Share
WEDNESDAY, AUGUST 13, 2003 10:50 AM
HEBER, Utah, Aug 13, 2003 /PRNewswire-FirstCall via COMTEX/ -- Diatect International Corporation (OTC Bulletin Board: DTCT) announced today that the company has signed a letter of intent for the sale of 90% of its rights to a diatomaceous earth (DE) mining site in Oregon for $31.1 million. Under the terms of the agreement, the company will receive $1,945,350 a year through 2021 beginning September 1, 2005. The company said it expects the transaction to be completed on or before September 15, 2003.
The transaction will increase the company's book value to $0.73 per share. The company has approximately 46.2 million shares outstanding on a fully diluted basis. The mining rights will be purchased by Diatomaceous Earth Deposits of Virginia in an agreement that gives Diatect first rights to the mined minerals from the site. Diatomaceous Earth Deposits of Virginia is co- owned by Michael P. McQuade, an outside director of Diatect.
Diatomaceous earth is an essential ingredient used in production of the company's EPA labeled non-toxic insect control products. The extensive ore reserve, which has been proven by core drilling, trenching and laboratory analysis, is located near established infrastructure.
The company acquired the mineral rights to the 640-acre site near Vale, Oregon in September 2001 through a claim granted by the U. S. Bureau of Land Management, which owns the land. The mineral rights to the Vale site are renewable on an annual basis. Because of the manner in which the claim was granted, the value of the mineral rights has not been reflected on the company's balance sheet in accordance with GAAP accounting rules.
Diatect CEO Jay Downs said, "When this transaction closes, we will be able to reflect the sale of the Vale site on our balance sheet. In addition, under the terms of the agreement, the Vale site will continue to give us the ability to produce diatomaceous earth from the reserves at a quarter of market prices. Quality DE is critical of all of the company's insect control products. Our low cost of basic raw material will have a significant positive impact on our operating margins in the years ahead."
DE, also known as diatomite or silicon dioxide, is an organic replacement for chemical insecticides. It is becoming increasingly important as numerous chemical pesticides are being withdrawn from the market due to health hazards.
Diatomite is a mineral mined from the dry beds of prehistoric, fresh water lakes. DE is not a poison. It is composed of silicious shells of ancient algae that once existed in marine and fresh water. Ground diatomite consists of sharp-edged microscopic blades and spikes that cut insects' skins and shells and damage the water tight seal upon which the bug depends. DE literally draws an insect's life-sustaining fluid from it. DE is labeled by the Environmental Protection Agency (EPA) as safe for food production, water and the environment. The talc-like powder, which is harmless to mammals, birds and humans, sticks to insects on contact.
Diatect products are an EPA-labeled new generation of non-toxic insect control products marketed for sustainable and organic food production. The company's Results(TM) line for fire ant, tomato and garden, pet powder and indoor markets are packaged for the over-the-counter market and consumer use. Diatect International Corporation is an insect control and natural resource company headquartered in Heber near Salt Lake City. The company's Diatect and Results(TM) products are sold into the multi-billion dollar agriculture, industrial, home and garden industry worldwide.
An investment profile on Diatect may be found on the website www.hawkassociates.com/diatect/profile.htm
For further information contact Diatect International Shareholder Services at (435) 654-4370 or email shareholderservices@diatect.com or Frank Hawkins or Julie Marshall, Hawk Associates, at (305) 852-2383. Email: info@hawkassociates.com. Detailed information about Diatect International Corporation can be found on the website www.diatect.com. Copies of Diatect press releases, SEC filings, current price quotes, stock charts and other valuable information for investors may be found on the website: www.hawkassociates.com/diatect.
This announcement includes forward-looking statements that involve risk and uncertainties. While these statements are made to convey to the public Diatect's progress, business potential and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. Such statements are made based upon current expectations that are subject to risk and uncertainty. In particular, management's estimates of future revenue amounts and timing are based upon product delivery schedules, which may be subject to unforeseen delays. Diatect does not undertake to update forward- looking statements in this news release to reflect actual results of its marketing plan and changes in assumptions or changes in other factors affecting such forward-looking information.
SOURCE Diatect International Corporation
CONTACT: Frank Hawkins or Julie Marshall, both of Hawk Associates,
+1-305-852-2383, or email, info@hawkassociates.com, for Diatect; or Diatect
International Shareholder Services, +1-435-654-4370 or email
shareholderservices@diatect.com
URL: diatect.com |
