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

To: Walter who wrote (167)	6/20/1998 1:01:00 PM
From: philip trigiani	Read Replies (1) \| Respond to of 197

Attention Business/Financial Editors: UPDATE ON ST. GENEVIEVE AND KWG MONTREAL, June 19 /CNW/ - St. GeneviŠve Resources Ltd. (''St. GeneviŠve'') and KWG Resources Inc. (''KWG '') (collectively, the ''Companies'') provide an update on their situation since the Superior Court of Quebec ratified on May 8th their respective plans of arrangement filed under the Companies' Creditors Arrangement Act. Prospectus/Rights Issue ----------------------- The Companies must each submit a prospectus to the Quebec Securities Commission (''QSC'') as well as to other provincial securities regulatory bodies for the purpose of qualifying several issues, including the issuance of shares to creditors in settlement of debt and the issuance of shares related to their respective rights offerings. As part of the debt settlement, SGV will issue 144,265,523 shares and KWG will issue 35,400,889 shares. It should be noted that of the approximately 35 million shares to be issued by KWG, 18,992,180 shares will go to SGV in consideration of inter-company debt. Each of the Companies' preliminary prospectuses is now almost complete, and should be submitted to the QSC in draft form for initial review within the week. Upon receipt of the QSC's comments, the Companies will formally file preliminary prospectuses with the other provincial securities regulatory authorities. It is expected that it will take 6-8 week's for these documents to be cleared. In the meantime, on June 9th and 10th, treasury orders were submitted to Montreal Trust to issue share certificates to the Companies' creditors and deliver the same to Richter & Associes, their monitor. These share certificates will be held in trust by Richter & Associes to be released to creditors upon clearance of the aforementioned prospectuses. Financial Technology Research Corporation ----------------------------------------- On June 17, 1998, Financial Technology Research Corporation (''Financial''), a New York-based financial services company, filed a motion in the Superior Court of Quebec to ask the Court to confirm the validity of its claim against KWG and to review the Court order approving the reorganization plan of KWG. As previously reported, on January 17, 1996 KWG received a notice from Financial stating that Financial was exercising options to acquire a total of 25,000 common shares at a price of $3.50 per share. These options were allegedly acquired by Financial pursuant to an agreement concluded with the Company on October 13, 1993. Since the agreed upon services were never rendered by Financial nor was an invoice ever received by KWG, the Company and its attorneys informed Financial in 1996 that Financial did not hold any valid options to acquire common shares and consequently the Company did not comply with Financial's exercise notice. KWG did not receive any further communication in this regard from Financial despite specific requests having been made for corroborating information to substantiate Financial's claim. KWG's current refusal to recognize Financial's Proof of Claim is merely a reiteration of its earlier position, and in done with a view to preventing any unnecessary dilution to the interest of its shareholders resulting from the issuance of shares to pay Financial's claim. This position is consistent with previous disclosures made in the Company's Annual Reports for 1995 and 1996 as well as in its May 1996 Prospectus. KWG considers Financial's recent legal proceedings to be particularly abusive and dilatory and consequently, on June 15, 1998 sent default notices to Financial, its President and its attorneys, advising them of its intention to sue and seek damages as a result of Financial utilizing the Courts and the press to put undue pressure on the Company in an attempt to obtain a settlement for a claim which it knows is without merit. Status of Ametistovoe Deposit ----------------------------- On June 17th KWG announced that an agreement relating to the development of the Ametistovoe Gold Deposit, concluded March 20, 1998 between KWG's subsidiary, Far East Gold Inc. (''Far East'') and Astra Limited (''Astra''), an Irish company, had been terminated due to Astra's non-performance of the terms of agreement. The termination of this agreement leaves KWG, through Far East with its previous 80% interest in the Russian Deposit which boasts identified resources of 11 million tonnes grading 8.24 g Au/t and 37.92 g Ag/t. The Ametistovoe project remains in care and maintenance status, as the Company negotiates with several potential joint venture partners. St. Genevieve and KWG are mining exploration companies currently trading (without quotation) an the Canadian Dealing Network (CDN) under the symbols SGVE and KWGR. St. Genevieve and KWG have respectively 230,351,656 and 74,636,959 issued and outstanding common shares (including shares to be issued to creditors). NO REGULATORY AUTHORITY HAS APPROVED NOR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE -0- 06/19/98 For further information: Mary Peschka, St. GeneviŠve Resources Ltd., (416) 941-8709 --------------------------------------------------------------------------