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Gold/Mining/Energy : KWG Resources (KWG - T) -- Ignore unavailable to you. Want to Upgrade?

To: philip trigiani who wrote (140)	2/17/1998 12:08:00 PM
From: philip trigiani	Respond to of 197

No. 02-SGV-01 ST. GENEVIEVE RESOURCES LTD. ME/TSE : SGV CDN : SGVE KWG RESOURCES INC. ME/TSE : KWG NASDAQ : KWGDF CDN : KWGR ST. GENEVIEVE AND KWG FILE RESTRUCTURING PLAN MONTREAL, QUEBEC - January 23, 1998 - St. GeneviŠve Resources Ltd. ("SGV") and KWG Resources Inc. ("KWG") (collectively, the "Companies") announce that they have filed their joint restructuring plan under the Companies' Creditors Arrangement Act. The joint restructuring plan has as its main objective the sharpening of focus on key projects and the generating of sufficient funds to continue operations. The principal components of the plan are as follows : New Focus In an effort to sharpen their focus the Companies have decided to concentrate their efforts on two core projects, the Ametistovoe project in the Russian Federation and the Grand Bois project in the Caribbean. Non-strategic investments held by both Companies will be divested when conditions are favourable. To date, KWG has sold its 8,000,000 subordinate voting shares of Joutel Resources Limited, for consideration of $400,000, as well as 50% of its 49% option on Falconbridge's Managua concession in the Dominican Republic, for consideration of $1,075,000. In addition, a restructuring of the management team will be undertaken and new board members will be submitted to shareholders for election. Settlement of Debts Creditors of SGV, with the principal exceptions of its bank and its related companies, Genoil Inc. and Icelandic Gold Corporation, will be asked to convert their debts, amounting to approximately $28.1 million, into common shares of SGV on the basis of one common share for every $0.20 of debt. One of such creditors, a related company, Emerging Africa Gold (EAG) Inc., which is owed approximately $15 million, has indicated that it intends to, in turn, dividend to its shareholders the common shares of SGV that it will so acquire. The remaining creditors of SGV holding claims aggregating approximately $6.5 million (principally SGV's banker, Genoil and Icelandic) will be paid in full. Creditors of KWG (including SGV at approximately $8 million and creditors of various wholly-owned subsidiaries whose debts have been assumed by KWG but excluding certain creditors representing minor amounts) will be asked to convert their debts, amounting to approximately $14.9 million, into common shares of KWG on the basis of one common share for every $0.40 of debt. Assuming the acceptance of the plan by creditors, the issued and outstanding share capital of SGV would increase from approximately 86,000,000 shares to approximately 200,000,000 shares and the issued and outstanding share capital of KWG would increase from approximately 36,000,000 shares to approximately 73,250,000 shares. Rights Issue Assuming the acceptance of the plan by the creditors, SGV and KWG, which will then be largely debt free, will launch rights issues pursuant to which each shall issue to its respective shareholders rights to subscribe to additional shares in its capital stock. Negotiations with various parties are underway with a view to backstopping all or part of these rights issues. The rights offerings, should they be fully subscribed, would generate gross proceeds to SGV and KWG in excess of $30 million. These funds will be used to settle remaining current indebtedness of SGV and KWG and to provide working capital. Creditors are scheduled to vote on the joint restructuring plan in Montreal on February 26, 1998. The proposed share issuances by the Companies in the context of the restructuring plan and the rights issue are subject to regulatory approval. SGV and KWG are mining exploration companies currently trading (without quotation) on the Canadian Dealing Network under the symbols SGVE and KWGR. SGV and KWG intend to apply to the Montreal Exchange and The Toronto Stock Exchange (as well as NASDAQ in the case of KWG) for the resumption of trading of their shares following the reorganization. - 30 - Information : Jacques Rossignol Lapointe Rosenstein Tel : (514) 925-6336 NO REGULATORY AUTHORITY HAS APPROVED NOR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE