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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.
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To: Island Man who wrote (27771)2/28/1998 9:39:00 PM
From: d.clarke  Read Replies (2) of 28369
 
Dear Island Man and BSR Shareholders:

To the best of our knowledge the following is a summary of the status of Bresea Resources Ltd. since 10/31/97:
1) Judge Cairns of the Alberta Queen's Bench ordered Bre-X into Bankruptcy with Deloitte & Touche as Trustee.
2) He ordered Bresea into Receivership with Price Waterhouse as Receiver and gave them the option to put Bresea into Bankruptcy.
3) The Receivership order was stayed pending appeal by Bresea's Lawyer (Jim Rooney ).
4) The appeal hearing occurred on 11/13/97 at 1:30 (the fastest this has been done in the court's history).
5) The three appellate justices had the choice of setting aside the order, letting the order stand or directing that the corporation be put into bankruptcy.
6) Clint Docken's group pushed for the "direction" option.
7) Jim Rooney made a very good case on behalf of the shareholders.
8) The Docken's group were told not to "spend any more time" trying to convince the court that Bresea was insolvent.
9) The Justices did not render a decision but they did instruct Price Waterhouse to maintain the status quo on receivership.
10) On December 4th the Court of Appeal delivered their judgment. They chose NOT to direct the Corporation into bankruptcy but leave the Interim Receiver in place with the responsibility to determine if the Corporation is insolvent.
They essentially indicated that David Walsh did not accurately portray the status of Bresea when he filed for Bankruptcy protection and Justice Cairns made a mistake in ordering the company into Receivership but the company needs the "protection" of an Interim Receiver. Price Waterhouse is the Interim Receiver that has to determine the viability of Bresea.

This means Price Waterhouse could still force the Corporation into bankruptcy if they determine it is insolvent. However, this option is unlikely if the Bresea shareholder lawsuits can be de-fused by pointing out to the shareholders involved that they can potentially achieve a better return by owning shares in a viable company versus a "dead" one. The same goes for any Bre-X shareholder lawsuits that include Bresea as a defendant.

Price Waterhouse's position seems to be that they are going to focus on determining the viability of the Corporation to continue operating and what the real value of its assets are. According to them the company is still a functioning entity and the current (incomplete) Board of Directors is still active. The current target for a decision is early summer.

At this time shareholders are free to request a General Meeting. However, there is the definite possibility that David Walsh is going to instigate a shareholder General Meeting and nominate a new set of Directors. It currently seems that neither the Calgary shareholder suit nor the Ontario shareholder suit are interested in nominating their own set of Directors.

If this information is correct, then it looks like the BSR Group of Shareholders may be the only ones in a position to oppose any potential nominees David Walsh may propose. It is not yet clear if we still need to formalize the 5% support but must proceed on that assumption. Therefore, will those of you who have not yet submitted their formal Support Packages do so as soon as possible.

At this time five candidates have accepted nomination as potential Bresea Directors, they include:
1) a consulting geologist, previously with Placer Development, currently director of several Vancouver resource companies
2) a financial manager currently with Caledonia Mining in Toronto
3) a geologist and operations manager with 16 years experience with Kennecott.
4) an exploration manager currently with Ecuadorian Minerals in S.A.
5) an investor and businessman from Ontario (the minority shareholder representative)

Thank-you for your time.

Respectfully,

D.Clarke
BSR Group of Shareholders
Gen. Delivery
Atikameg, Alberta
T0G 0C0
CANADA

E-Mail: dclark1@telusplanet.net
Fax: (403) 767-3933
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