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Gold/Mining/Energy : Major General--MGJ -- Ignore unavailable to you. Want to Upgrade?

To: donkeyman who wrote (576)	8/26/1998 10:51:00 PM
From: 1king	Read Replies (2) \| Respond to of 1707

D'man I wonder how this affects the MGJ deal: FOR: MCWATTERS MINING INC. ME, TSE SYMBOL: MCW AND MINORCA RESOURCES INC. ME, TSE SYMBOL: MAR AUGUST 26, 1998 McWatters Mining Inc. to Merge With Minorca Resources Inc. TORONTO, ONTARIO--McWatters Mining Inc. and Minorca Resources Inc. are pleased to announce that they have entered into an agreement pursuant to which McWatters will acquire all of the outstanding common shares of Minorca on the basis of 0.555 McWatters common shares for each Minorca common share. Claire Derome, President of McWatters, stated "we see the merger as a win/win scenario for both sets of shareholders. Since McWatters purchased the Kiena and Sigma mines we have significantly increased gold resources, gold production and lowered operating costs, and we expect more to come in the future. With the combination of McWatter's mining assets, our growth prospects and Minorca's cash and investments, McWatters will emerge as a financially stronger, more liquid, intermediate gold producer which will be more able to capitalize on the opportunities created by the current low gold price environment." Joseph Del Campo, President of Minorca, added "the merger offers Minorca shareholders the opportunity to participate directly in a well managed, growing intermediate gold producer at a substantial premium to the current price of Minorca shares." Based on the closing prices of the McWatters and Minorca shares on August 25, 1998, respectively, the transaction represents a premium of 61 percent over the closing price of a Minorca common share on The Toronto Stock Exchange. After giving effect to the transaction and the cancellation of Minorca's approximately 32 percent holding in McWatters, former Minorca shareholders will own approximately 42 percent of the outstanding McWatters shares. Consistent with Ontario Securities Commission Policy 9.1 and Policy Q-27 of the Quebec Securities Commission, the share exchange ratio was based on an independent valuation of McWatters and Minorca by TD Securities Inc. and reviewed and negotiated by independent committees established by each company. HSBC Securities Inc. has been retained by McWatters and RBC Dominion Securities Inc. has been retained by Minorca to provide fairness opinions in respect of the transaction. Under the terms of the agreement, Minorca has agreed not to solicit competing bids or other proposals. The agreement also contemplates reciprocal non-completion fees in addition to a break-up fee payable by Minorca to McWatters in certain circumstances. In support of the McWatters/Minorca merger, Minorca has also agreed to suspend the separation time under its shareholder rights plan. The McWatters/Minorca merger, which is proposed to be effected by way of a Minorca plan of arrangement, is subject to various closing conditions, including the requisite Minorca and McWatters shareholder, court and various regulatory approvals and delivery of fairness opinions from the respective financial advisors. McWatters and Minorca expect that special meetings of their respective shareholders will be held in mid-October to consider the merger. -30-