Freewest Resources Canada Inc. (TSX VENTURE: FWR) urges
shareholders not to tender their shares to the unsolicited offer by
Noront Resources Ltd. for all of the common shares of Freewest.
Noront's offer expires on Friday, December 11, 2009.
Since Noront's offer was first announced on October 5, Freewest
shareholders have been subjected to numerous press releases and
other documents from Noront. Many of these contain false or
misleading information about Freewest and about Noront's offer.
Here, in plain language, is why Freewest shareholders should reject
Noront's offer and not tender their shares.
- Freewest has signed an agreement with Cliffs Natural Resources
Inc. (NYSE: CLF)(PARIS: CLF) which provides Freewest shareholders,
for each Freewest share, with a fixed amount of $1.00 in Cliffs
shares. This is vastly superior to Noront's offer.
- Even if Noront acquires a block of Freewest shares pursuant to
its offer and tries to stop the Plan of Arrangement between
Freewest and Cliffs, Freewest shareholders are certain of being
able to receive $1.00 per share from Cliffs. If Noront acquires
more than 12.5% of Freewest's shares, Cliffs has committed to
convert from its Plan of Arrangement with Freewest to a $1.00 per
share take-over bid, with no minimum tender condition. This ensures
that Freewest shareholders can reject the Noront offer and still be
guaranteed that they will be able to sell to Cliffs for $1.00 per
share.
- Freewest believes that there is little support among Freewest
shareholders for Noront's offer. Cliffs has signed support
agreements with Freewest shareholders who hold in the aggregate
more than 10% of Freewest's shares. Freewest's Board and management
unanimously support the transaction with Cliffs. Freewest's
solicitation agent has contacted more than 1,000 Freewest
shareholders, and the vast majority do not plan to tender their
shares to Noront. Freewest is gratified by this support from its
shareholders.
- Noront claims that, for each Freewest share, the warrants it
is offering have an implied value of $0.22. Freewest and its
financial advisors, and by all evidence, the marketplace, consider
this figure to be grossly exaggerated.
- If Freewest shareholders are considering tendering their
Freewest shares with the expectation that Freewest and Noront will
be merged or combined, the waiver by Noront of the 66 2/3%
condition of its offer means that this will not necessarily be the
case. If you tender your Freewest shares to the Noront offer,
Noront must buy your shares, and will pay you by issuing Noront
shares from treasury. However, if Noront acquires only a block of
Freewest shares, but less than 66 2/3%, Noront will not have
sufficient Freewest shares to guarantee the merger or combination
of the two corporations. In such circumstances, Noront will be
nothing more and nothing less than a Freewest shareholder and, in
all likelihood, a minority shareholder.
- Noront, a junior exploration company, does not have the
financial capacity to develop the Ring of Fire, which will require
substantial capital expenditures and infrastructure.
- Given the large number of shares that Noront proposes to issue
to Freewest shareholders, there will be significant dilution within
Noront and it may be difficult for Freewest shareholders to dispose
of Noront shares. This dilution will become massive if Noront ever
attempts to finance the development of the Ring of Fire through
share issuances.
- Noront's claims cannot be trusted. The latest example is
Noront's press release issued on Wednesday, December 9 at 7 p.m.,
announcing an estimated mine life and revenue projections for its
Blackbird chromite deposit. By 10:23 a.m. the next day, Noront's
stock was halted by the regulatory authorities. At 12:13 p.m.,
Noront was forced to retract its press release. Similarly, Noront
issued two press releases on November 19, 2009 relating to the
Eagle's Nest deposit, the second "clarifying" the first. It is no
coincidence that these irresponsible press releases coincide with
Noront's hostile share-for-share bid for Freewest.
- Cliffs is a stable and profitable company, with significant
international assets and operations, and the financial capacity and
expertise to develop Freewest's McFaulds chromite property. Any
capital gains realized by individual Freewest shareholders on the
transaction with Cliffs will generally be payable only in April
2011. If Freewest shareholders prefer to sell their Cliffs shares,
they can do so easily on the NYSE.
- When Noront started its hostile offer, Freewest's shares were
trading at $0.30. Freewest shareholders will now receive $1.00 per
share from Cliffs. It's hard to beat a 217% premium.
For all these reasons, the Board of Directors of Freewest
unanimously recommends that Freewest shareholders REJECT the Noront
offer and NOT TENDER their shares, and VOTE FOR the Arrangement
with Cliffs at the special meeting to be held on January 15, 2010.
Freewest's Board and management again express their appreciation
for the support expressed by so many Freewest shareholders.
For Investor Questions, Including How to Withdraw Shares from
the Noront Offer
Shareholders who have questions or who may have already tendered
their shares to the Noront offer and wish to withdraw them, may do
so by contacting Georgeson at the toll free number set out
below.
About Freewest
Freewest is a mineral exploration company actively exploring for
gold, base-metals and chromite within eastern Canada. Corporate
information can be accessed on the Internet at www.freewest.com.
Freewest's shares are listed on Tier 1 of the TSX Venture Exchange
under the symbol FWR.
Georgeson is acting as Freewest's solicitation agent in
connection with the proposed Plan of Arrangement with Cliffs
Natural Resources Inc. Georgeson may be contacted as follows:
Georgeson
100 University Avenue
11th Floor, South Tower
Toronto, Ontario
M5J 2Y1
North American Toll Free Number: 1-866-433-7579
Banks and Brokers Collect Number: 1-212-806-6859
Forward-Looking Statements
This news release contains statements that constitute
"forward-looking information" or "forward-looking statements"
within the meaning of applicable securities legislation. This
forward-looking information is subject to numerous risks and
uncertainties, certain of which are beyond the control of Freewest
Resources Canada Inc. ("Freewest"). Actual results or achievements
may differ materially from those expressed in, or implied by, this
forward-looking information. No assurance can be given that any
events anticipated by the forward-looking information will
transpire or occur, or if any of them do so, what benefits that
Freewest will derive therefrom. In particular, no assurance can be
given as to whether a proposed plan of arrangement with Cliffs
Natural Resources Inc. will be completed. Forward-looking
information is based on the estimates and opinions of Freewest's
management at the time the information is released and Freewest
does not undertake any obligation to update publicly or to revise
any of the forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Freewest Resources Canada Inc. Mackenzie I. Watson
President and CEO 514-878-3551 or 1-888-878-3551 514-878-4427 (FAX)
info@freewest.com www.freewest.com
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