Morning Star Responds to Boss's Continued Desperate Tactics

VANCOUVER, Oct. 3, 2013 /CNW/ - Morning Star Resources Ltd. (the "Concerned Shareholder") today responded to Boss Power Corp.'s news release of October 1, 2013.

The Valuation

Boss's "offer" purposely attempts to significantly diminish the fair value of the B claims by relying on a "valuation" that the board knows is self-serving, biased and unreliable.  On its face, the report states that it is inconsistent with standard reporting requirements.  The valuator doesn't guarantee the report's accuracy.  The report values the B claims at April 24, 2008 - THE VERY DAY OF THE URANIUM EXPLORATION BAN.  The Concerned Shareholder has already demonstrated that the real market value of the B claims is around $4 million.

The report suggests a market value for the B claims, based on comparable U.S. properties, at the mid-mark, of US$4.82 million, based on 1.205 pounds of uranium contained in the B claims at US$4.00 per pound.  The report, however, then discounts this US$4.82 million value by 50% because the B claims are in B.C., and then a further 50% because the B claims contain a lower grade historical resource.  However, actual deals to acquire uranium properties in B.C. completed prior to the Province's expropriation were not discounted like this.  For instance, International Montoro's nearby Cup Lake transaction was valued at $4.3 million, and was not discounted for being in B.C. or for containing a lower grade historical resource.  Boss's own acquisition of the Blizzard property was similarly not discounted for being in B.C. or for containing a historical resource.  The two arbitrary 50% discounts used to cut the value of the B claims from $4.82 million to $1.22 million are without foundation and contrary to the actual transactions in the B claims area prior to the Province's uranium exploration ban.  The tactical acrobatics used by the existing board to assign a significantly reduced value to the B claims is obvious.

Boss's "valuation" also completely ignored the simple fact that, as the board is aware, Mr. Beruschi had an agreement to sell the B claims to a third party for $4.1 million immediately prior to the Province's exploration ban.  That deal (that complied with Boss's option requirements) is clearly the best indication of the real market value of the B claims.

Boss's "valuation" is another example of the board's willingness to deceive and manipulate shareholders.  Not only is Boss's report self-serving and biased, but the report itself reveals further misinformation being spread by the board.   For example, the board's own "valuation" states that the B claims have a historical resource of more than 1.205 million pounds of uranium.  Then why has Boss repeatedly told shareholders that the B claims have no known uranium resource?  In fact, Boss itself relies on similar historical estimates in stating that its Blizzard claim has a historical resource of about 10.4 million pounds.

The Arbitration

Starting a new, non-transparent arbitration as the existing board has suggested in the face of the Province's current court application makes no commercial sense for Boss's shareholders.  After waiting 23 months, Boss's shareholders deserve the simplest and quickest path forward - for the board to resign, the B claims to be delivered to the Province and the $30 million settlement proceeds taken out of risk by being paid into Court.  At that point, THE COURT can determine the fair value of the B claims based on a truly independent valuation.  The Concerned Shareholder will promptly allow the B claims to be delivered to the Province to close the $30 million settlement once at least a majority of the incumbent directors are removed as proposed.

Any suggestion by Boss's existing board that a new board will pay more than an appropriate amount for the B claims is fear-mongering.  Not only would this be a breach of the new board's fiduciary duties, but, as stated, THE COURT (NOT THE NEW DIRECTORS) WILL DETERMINE THE PROPER VALUE OF THE B CLAIMS.  Any monies paid by Boss to the Concerned Shareholder for the breach of trust should be recovered from those responsible, namely certain members of the incumbent board and its advisors.

The Incumbent Board Should Immediately Resign

For the past 2 years, the incumbent board has had only one job - to close the $30 settlement with the Province for the benefit of Boss and its shareholders.  The board has shown that it is not capable of accomplishing this.  The Concerned Shareholder has presented a straight-forward and simple solution.  At a minimum, the majority of the board must resign and be replaced by independent, qualified directors nominated by the Concerned Shareholder that are not motivated by concerns for personal liability.  The Concerned Shareholder will then promptly deliver the B claims to the Province to allow the $30 million settlement to close as proposed.  This is in the best interests of Boss and each of its shareholders.

If the existing board cannot do the right thing and immediately resign on their own, then Boss shareholders must take it upon themselves to vote the board out of office at the upcoming annual general meeting of shareholders scheduled to be held on November 14, 2013.

Information on the names and backgrounds of the Concerned Shareholder's proposed director nominees, as well as detailed reasons to support the Concerned Shareholder's position, will be more fully described in a detailed information circular to be mailed to shareholders and filed on SEDAR in due course in advance of the November 14, 2013 shareholders' meeting.

SOURCE: Morning Star Resources Ltd.

For further information:

Anthony J. Beruschi
President
Morning Star Resources Ltd.
mstar.resources@gmail.com

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