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Gold/Mining/Energy : Canabrava Diamond -- Ignore unavailable to you. Want to Upgrade?

To: m.philli who wrote (1804)	1/28/2000 5:00:00 PM
From: m.philli	Read Replies (1) \| Respond to of 2402

hillsborough news hillsborough Resources Ltd. Restructuring Proposal Received VANCOUVER, BRITISH COLUMBIA--NOT FOR DISTRIBUTION TO U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES Hillsborough Resources Limited (TSE/HLB) ("Hillsborough") announced today that it had received a letter of intent from New York based Vulcan Capital Management Inc. ("Vulcan") which will form the basis for a restructuring proposal for Hillsborough and its subsidiary, Quinsam Coal Corporation ("Quinsam"), under the Companies Creditor Arrangements Act ("CCAA"). The principal elements of the restructuring proposal are: -refinancing of the existing secured indebtedness held by Northgate Exploration of approximately $3,000,000; -payment to the unsecured creditors of Quinsam of the lesser of (i) a pro rata allocation of 25% of the Company's free cash flow generated over the next two calendar years and (ii) 20% of the amount of the debt in question; and -issuance of new equity to Vulcan, such that the existing shareholders of Hillsborough will own 5% of the equity of Hillsborough with Vulcan owning the remainder. The proposal is subject to a number of conditions precedent, among the more significant of which are: approval of Hillsborough's shareholders, amendments to Hillsborough's collective bargaining agreement, approval of creditors, the acquisition, on satisfactory terms, of petroleum and natural gas rights in the areas in which Hillsborough's subsidiaries, Quinsam and T'Sable River Coal Corporation own the undersurface rights to coal and, as well, the approval of the Court and the securities regulatory authorities. Hillsborough and Quinsam will be applying to Court in Vancouver, BC on Monday, January 31, 2000 in the CCAA proceedings, at which time Hillsborough and Quinsam will request that the Court direct that the restructuring plan be presented to creditors and shareholders. David Slater, President and Chief Executive Officer -30- FOR FURTHER INFORMATION PLEASE CONTACT: Hillsborough Resources Limited David Slater President and Chief Executive