NEWS RELEASE:
World Wide Minerals Completes Additional Debt Financing and
Restructures Management and Shareholdings
TORONTO, ONTARIO--World Wide Minerals Ltd. announced today that:
- a Cdn$9.5 million short term loan has been completed
- a management group has purchased the entire 16.3 percent
shareholding of Dundee Bancorp Inc. and its affiliates in the
Company
- the Company has increased its ownership interest in the Dornod
uranium mine in Mongolia
- Paul A. Carroll continues as Chairman and Chief Executive
Officer
- Wallace M. Mays is elected a Director and has replaced James G.
Wade as President and Chief Operating Officer.
Increased Loan Facility:
A Cdn$9.5 million loan has been provided under a Restated Loan
Agreement with Dundee Bancorp. This represents an increase from
the original Cdn$5.0 million loan made available by Dundee Bancorp
in August 1997, which had a maturity of March 31, 1998. The
increased loan will mature July 31, 1998, bear interest at the
rate of prime plus 3 percent per year and be secured on assets of
World Wide that do not represent security for the US$60 million
working capital facility which was provided in December, 1997 by
Deutsche Bank AG. The Deutsche Bank facility was partially drawn
down by the Company to finance inventories of uranium concentrates
pending production from Mongolia later this year and permitted
deliveries of 1 million lb of U3O8 to nuclear power utilities to
commence in the first quarter of 1998 under long-term and
short-term sales contracts. In addition to interest on the loan,
Dundee Bancorp also will be entitled to receive a cash fee of
Cdn$500,000 upon the Company's successful recovery of its loan
receivable from investment in uranium mines in Kazakhstan.
The net proceeds of the increased loan from Dundee Bancorp will be
used to refinance the original Cdn$5.0 million loan, to repay
additional advances recently made, to pay accrued interest on the
loan advances to date, to fund operating costs of the Company's
uranium mine development in Mongolia and for general corporate
purposes as well as to fund the purchase price for a management
group to purchase the entire share interest previously held by
Dundee Bancorp and its affiliates in World Wide.
Key Executive Share Purchase Plan:
The Board of Directors of the Company has established a Key
Executive Share Purchase Plan and Dundee Bancorp has sold its
entire 16.3 percent share position in World Wide, representing
8,631,415 shares, to the Plan. The Plan was set up to facilitate
the share purchase by a management group led by Paul A. Carroll,
Chairman and Chief Executive Officer of World Wide. The other
participants in the Plan are Wallace M. Mays, who has become
President of the Company, David J. Layman, Senior Vice-President,
Chief Financial Officer and Secretary, and Dustin J. Garrow,
Senior Vice-President, Marketing. A total of 1,226,667 of the
shares are held in escrow under an agreement with the Toronto
Stock Exchange whereby the shares will be released as to 50
percent in May of each of 1998 and 1999; this escrow will be
assumed by the participants pro rata. The price paid to Dundee is
Cdn$0.29 per share and the participants in the Plan will be
responsible to pay that amount plus interest accrued at prime plus
3 percent until July 31, 1998, at which time the loan to the
participants will become interest-free. The shares purchased will
be held as collateral security for the loan, which will otherwise
be without recourse to the participants and payable within five
years.
Purchase of Additional Assets from WM Mining:
The Company has also reached agreement with WM Mining Company LLC
to purchase its 10 percent interest in World Wide Mongolia Mining
Inc. and to convert into shares of the Company a note payable to
WM Mining which is currently due. World Wide Mongolia Mining is
the 90 percent owned subsidiary of the Company that in turn owns a
58 percent interest in the Dornod uranium mine in Mongolia. The
purchase increases the Company's effective indirect interest in
the mine from 52.2 percent to 58 percent. The note payable plus
interest accrued aggregates approximately Cdn$1,050,000. The
consideration to be paid for the share interest and the note is a
total of 5.2 million treasury shares, at an issue price of
Cdn$0.29 per share.
New President Appointed:
Effective February 27, 1998, James G. Wade resigned as President
of World Wide to pursue other business interests; he remains a
Director. Wallace M. Mays has been elected a Director and has
been appointed President and Chief Operating Officer of World
Wide. Mr. Mays, who has been Executive Vice-President of the
Company since July 1997, brings to the office of President over 25
years experience as a uranium company senior executive. During his
career he has held positions of increasing responsibility in
several US-based uranium companies. Most recently, he was
President of Energy Fuels Nuclear, Inc. (1992 - 1994) and
Chairman, Chief Executive Officer and President of Uranium
Resources, Inc. (1994 - 1995). In 1995 he left Uranium Resources,
Inc. and acquired CIMA Energy, Inc. and established WM Mining
which developed the transaction whereby it acquired a majority
interest in the Dornod uranium mine in Mongolia.
Paul A. Carroll, Chairman and Chief Executive Officer of World
Wide said that "in appointing Mr. Mays as President we now have a
very experienced uranium executive in charge of planning and
implementing the uranium operations of World Wide Uranium. Mr.
Wade gave two and a half years of valuable service to the Company
during its formative period. However, we now must focus entirely
on developing the uranium production and marketing business. We
will continue to pursue our strategy of diversifying our sources
of production and becoming a respected supplier of choice to
nuclear utility fuel buyers. We intend to demonstrate that we can
market uranium and meet industry criteria of price, reliability
and flexibility of delivery."
Regulatory Approvals:
Completion of certain of these transactions is subject to approval
of the Toronto Stock Exchange, including the issue of shares and
the transfer of shares within escrow. Such approvals have been
requested.
Feasibility Study for Underground Mine:
A final feasibility study is being prepared for the development of
the underground portion of the Dornod uranium mine and is expected
to be completed within the next couple of months. Based on that
feasibility study, the Company proposes to raise project finance
for the project and at that time will reconsider a rights issue of
common shares to the extent necessary, with other funds available,
to complete the underground development. Discussions are already
being held with a limited number of financial institutions that
have provided project finance for comparable mining projects in
emerging markets.
A preliminary, internal economic and technical study of the open
pit and underground mines, based on earlier Soviet development
work and the Company's own experience at the mine, indicates a
total mineable resource from the open pit mine of 3.5 million
tonnes grading 0.126 percent U3O8, from the underground mine of
2.9 million tonnes grading 0.359 percent U3O8 and from an ore
stockpile containing 238,000 tonnes grading 0.084 percent U3O8.
Combined production over a mine life exceeding 10 years indicates
total production of at least 27 million lbs. U3O8 at estimated
average cash and all-in costs which will be in the lowest quartile
of production costs worldwide. Further operating efficiencies are
being considered. Total expenditures to develop both mines,
phased over the next two years, is approximately US$45 million,
including funds already invested by the Company.
Future Financing Plans:
World Wide has canceled for the present time its plans for a
rights offering of shares. Instead, the Company will be seeking
capital in the international private placement market and will
integrate this with equipment financing, other export credits and
short term funding that is expected to be available. World Wide
has been informed by the Government of Kazakhstan that the
Government recognizes that it has a responsibility to repay the
Company's investment in that country. However, no offer of
compensation has yet been received. Any proceeds from settlement
of these issues will be employed as part of the capital of the
Company when received.
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FOR FURTHER INFORMATION PLEASE CONTACT:
World Wide Minerals Ltd.
Paul A. Carroll
Chairman and CEO
1-416-369-7217
1-416-369-6088 (FAX)
E-Mail: pcarroll@worldwideminerals.com
or
World Wide Minerals Ltd.
Corinna J. de Beer
Director of Investor Relations
1-416-369-6084
1-416-369-6088 (FAX)
E-Mail: cdebeer@worldwideminerals.com
Web Site: www.worldwideminerals.com |
