Withdrawal as direct participant in wood hardening and fine veneer
business
Big Valley Resources Inc BV
Shares issued 19,174,310 Aug 13 close $1.25
Wed 25 Nov 98 News Release
Mr. Lloyd Tattersall reports
As reported in Stockwatch Aug. 20, 1998, Big Valley and HDL Wood Industries
Inc., a private B.C. company, entered into an agreement dated Aug. 15, 1998
for the purpose of financing and developing a wood hardening and fine
veneer manufacturing business in British Columbia and Finland. The proposed
wood business was to be developed and operated through 557363 B.C. a
private B.C. company controlled equally by Big Valley and HDL.
On Aug. 17, 1998, the holding company confirmed receipt of an offer of $25
million (U.S.) to finance the proposed fine veneer and wood hardening
business. The offer to finance was made by the Melvin Leslie Applebaum
Merchant Bank in New York on behalf of the Order of St. John, International
Knights of Malta. The offer was subject to Alberta Stock Exchange approval,
Big Valley shareholder approval and the completion of satisfactory due
diligence by the financing group.
At the time of the news in Stockwatch Aug. 20, 1998 trading in the shares
of Big Valley was halted as Big Valley's involvement in the $25-million
(U.S.) financing fell within the ASE's change of business policy.
Since Aug. 19, Big Valley with HDL's assistance has attempted to provide
the ASE with all the information required by the ASE to approve Big
Valley's participation in the proposed wood business and related financing.
In early November, Big Valley was advised that the ASE considered the
proposed business to be a reverse takeover and would require, among other
things, (i) the construction of a pilot plant using the fine veneer and
wood hardening technologies; and (ii) the completion of a feasibility study
in accordance with ASE policies subsequent to a review of the results from
the pilot plant operation.
Based on the costs and delays associated with the construction of a pilot
plant, the Big Valley board of directors concluded that it would not be
possible to satisfy these requirements without breaching the terms of Big
Valley's Aug. 15, 1998 agreement with HDL and jeopardizing the $25-million
(U.S.) financing. This assessment was subsequently confirmed by letter from
the merchant bank wherein the financing group's offer of a $25-million
financing was formally terminated.
However, the merchant bank did confirm that the private investors making up
the financing group remained interested in the project and would be willing
to proceed on a private basis, outside of the Order of St. John,
International Knights of Malta. During a subsequent telephone conference
among a representative of the private investors, Big Valley and HDL, it was
confirmed that the private investors were interested in the wood business
and providing the financing, but would only proceed if they did not have to
deal with a publicly trading company. Since the said telephone conference
call, Big Valley and HDL have made every effort to restructure their
agreement for the purpose of allowing Big Valley to remain as a participant
in the proposed veneer and wood hardening business. Through no fault on the
part of either Big Valley or HDL, a workable alternate arrangement was not
possible.
Accordingly, in light of the combined requirements of the ASE and the
preference of the investors to deal with a private company, Big Valley and
HDL have agreed that HDL will pursue the $25-million (U.S.) financing with
the private investors on its own. Big Valley and HDL have also agreed that
subject to the completion of the $25,000,000 (U.S.) financing, Big Valley
will be compensated for the $1,000,000 (Canadian) in costs incurred by Big
Valley to date with respect to the fine veneer and wood hardening business.
The payment of the $1,000,000 (Canadian) will be made to Big Valley out of
the financing proceeds at the time the $25,000,000 (U.S.) financing closes.
Closing is expected to occur on or before Dec. 15, 1998.
It is with considerable regret that the board of directors of Big Valley
announce the company's withdrawal as a direct participant in the wood
hardening and fine veneer business. Big Valley has always held and
continues to hold the opinion that the proposed wood business is an
excellent business opportunity. The board of directors has every confidence
in HDL's ability to complete a financing and develop and operate a
profitable business.
RESUMPTION OF TRADING
The ASE has advised Big Valley that trading in the company's shares will be
reinstated at the opening of trading on Monday, Nov. 30, 1998.
EXTENSION OF SHARE PURCHASE WARRANTS
The ASE has extended the expiry date of 735,000 warrants from Oct. 31 to
Dec. 30, 1998. Each warrant entitles the holder to purchase one share for
$1.25.
EXPLORATION ACTIVITIES
Exploration of Big Valley's claim holdings in British Columbia is
continuing. Seven soil grids have been completed and preliminary
prospecting and rock sampling is in progress. In addition to the field
work, an extensive data correlation and interpretation has been completed
and 18 first order exploration targets have been identified. Based on this
interpretation, additional mineral claims have recently been acquired
through staking or under option from third parties. These additional
mineral claims cover both porphyry copper and bulk tonnage gold targets.
Historical records for those areas recently acquired through staking
indicate that samples from a centrally situated claim have yielded
excellent copper values in criss-crossing fractures in volcanic rocks over
an area of about 2.5 square kilometres. The values in 33 samples range from
0.03 per cent to 7.29 per cent copper. Values from 22 of these samples
assayed greater than 0.50 per cent copper. Big Valley believes that the
source of this mineralization is a buried intrusive as suggested by a high
magnetic response in the area.
The favourable intrusive rock unit underlying the Lloyd claims is much more
extensive than previously mapped based on drill information and as
suggested by aerial magnetic responses. The Lloyd 2 deposit remains open to
the east and the north. Additional drill sites are presently being located.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
