CALGARY, July 23 /CNW/ - Birch Mountain Resources Ltd. ("Birch Mountain"
or the "Company") (BMD: TSX and AMEX) announces that the Special Committee of
independent directors and the Board have determined that it is imperative to
pursue an immediate sale of the Company to unlock maximum value for its
shareholders. The Company believes that the current lack of liquidity has
compressed Birch Mountain's share price to a level significantly below its
The Company reports that it is has received notice of an event of default
in connection with the financial covenants in the loan agreement with its
senior secured lender. Discussions are ongoing with the senior secured lender
through the Special Committee and its financial advisor RBC Capital Markets.
It is the Company's belief that an immediate and focused sale process
will maximize value. In the event this immediate sales process does not
achieve an acceptable price, the Company intends to work with its stakeholders
to recapitalize the balance sheet to improve liquidity and permit delivery of
the business plan.
In other news, Birch Mountain is pleased to announce that it has signed
an agreement with the East Athabasca Highway Proponents led by Suncor Energy,
for the acquisition, construction and operation of the South Haul Road
("SHR"). The sale price is $4.8 million plus Birch Mountain will sell
aggregates from inventory for the construction of the 9 kilometres to be built
and will have unlimited use of the SHR into the future.
"The South Haul Road is an integral link to the proposed East Athabasca
Highway and will facilitate building this new highway that will extend east to
several oil sands projects," explains Joel Jarding, President and Chief
Operating Officer. "This agreement is pivotal for the Company and has both
short and long term benefits. These include the cash payment and the
opportunity to sell aggregates for the construction of more than 50 kilometres
of new roads. In addition, the direct road access from our quarry to major oil
sands projects in the area will provide long term opportunities to supply
aggregate and reagent products into the future.
We have identified a significant number of business opportunities over
the next 18 months and we are focused on converting these opportunities into
sales. Importantly, Birch Mountain is now supplying, on a trial basis, the
bulk of the regional demand for reagent limestone used in air emissions
purification. Within the quarry, our operations personnel remain focused on
containing costs and increasing productivity," says Jarding.
Forward Looking Statements: This news release contains certain
forward-looking statements. All statements, other than statements of
historical fact, included herein, including without limitation, statements
regarding resources and reserves, exploration and development plans and
results, anticipated capital expenditures and financing thereof, anticipated
outcomes and timing of regulatory applications and approvals and the future
plans and objectives of Birch Mountain are forward-looking statements that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Certain
amounts in the financial statements are based on estimates using the best
currently available information and assumptions of management. Important
factors that could cause actual results to differ materially from Birch
Mountain's expectations are disclosed elsewhere in documents that are
available to the public at www.sedar.com and www.sec.gov.
For further information:
For further information: Company Contacts: Birch Mountain, Tel. (403)
262-1838, Fax (403) 263-9888; Steve Chizzik, Equity Communication, Tel. (908)
688-9111; Website: www.birchmountain.com