Passport questions why WGI Heavy Minerals, Inc. refused to accept a higher-priced offer for the Transworld Garnet India operations



    SAN FRANCISCO, June 17 /CNW/ - PASSPORT CAPITAL, LLC (Passport) today
stated it has formally requested that WGI Heavy Minerals, Inc. (TSX: WG) board
delay the June 25, 2008 annual shareholders' meeting as a result of WGI's
failure to provide full details regarding the previously announced Transworld
Garnet India (Pvt.) Limited (TGI) transaction. Passport notes that not only
has the WGI board failed to provide complete details regarding the agreement
reached with V.V. Mineral, Passport is now aware that another credible third
party in the heavy minerals industry had offered WGI US$25 million for the TGI
assets and had also agreed to enter into a distribution and supply agreement
with WGI.
    As an alternative offer was made to WGI with a purchase price that was
US$5.5 million higher, Passport believes shareholders should have serious
questions about WGI's motivation for accepting V.V. Minerals' offer. As a
higher-priced transaction would allow for more cash to be distributed to
shareholders, Passport asks whether WGI entered into the best transaction
possible or did it enter into a transaction with V.V. Mineral in a hasty
attempt to placate shareholders in the circumstances of the current proxy
contest? WGI's board has publicly stated that shareholders should vote to
re-elect them because failure to do so "would jeopardize the completion of the
TGI transaction" with V.V. Mineral. Passport asks whether it was appropriate
for WGI's current board to ask shareholders to vote for their entrenchment
when they seem to have refused a higher offer for undisclosed reasons.
    Passport believes that WGI's shareholders, who will vote to either
re-elect WGI's board members or replace them with the new directors proposed
by Passport, have the fundamental right to base their decision on full and
complete disclosure. Passport believes that WGI has not been providing the
complete details that are required in order for shareholders to make an
informed decision. In addition to what has been highlighted above, Passport
would also stress that there is potential material information regarding the
announced transaction with V.V. Mineral that WGI has not yet made available to
the public. For example:

    
    -   Is the transaction subject to V.V. Mineral obtaining financing?

    -   Is the transaction subject to any regulatory approvals?

    -   Will any regulatory approvals be difficult to obtain in India, a
        country where WGI has already stated that government interests have
        tried to seize WGI's holdings in the past?

    -   Most importantly, did WGI obtain a fairness opinion in connection
        with the TGI transaction? If not, what comfort do shareholders have
        that WGI is receiving a fair price for its TGI assets, especially in
        light of alternative offers?
    

    Before WGI's board can legitimately hail the announced TGI transaction as
a panacea for all of the company's problems, shareholders have the right to
receive complete disclosure regarding the material terms of the transaction.
Passport has communicated with WGI on several occasions and requested that it
publicly file the transaction documents entered into with V.V. Mineral as
required under Canadian securities laws. While WGI may yet file the documents,
in Passport's view, WGI has purposefully delayed the filing in an attempt to
secure as many shareholder votes as possible in advance of the upcoming
meeting which is of critical importance for the future of the company.
Passport reminds shareholders that WGI has chosen to disseminate two detailed
press releases subsequent to the announcement of the transaction but has
conveniently chosen not to concurrently file the documents despite Passport's
various requests.
    Passport believes that the lack of disclosure with respect to the
proposed transaction with V.V. Mineral is materially misleading because it
deprives WGI's shareholders of sufficient information to permit them to form
an informed and reasoned judgment concerning the election of directors at the
upcoming meeting. As a result Passport has requested that WGI delay the
June 25, 2008 meeting until such time as shareholders have been provided with
the complete information they require in order to decide on the future
stewardship of the company.
    Once WGI's shareholders have had the opportunity to assess complete
information, Passport is confident that they will determine that it is
Passport's director nominees that, together, possess the required financial,
operational and industry experience to provide the strategic direction that
WGI needs to protect and increase shareholder value.
    Passport notes that its interests are entirely aligned with the interests
of all of WGI's shareholders. Passport is not attempting to take "control of
the board" or the cash resources of WGI as WGI's current board suggests.
Passport is a value investor with a long-term investment horizon seeking to
increase WGI's value for the benefit of all shareholders. If Passport's
director nominees are elected, Passport will have no greater ownership or
financial interest in WGI than it has today and no greater ability to
determine the outcome of future board elections. The only way that Passport
can benefit from the election of its director nominees is by increasing WGI's
share price, an improvement that will benefit all shareholders.
    As it is not yet certain that the shareholders' meeting will be delayed,
Passport continues to urge shareholders to vote the YELLOW proxy as soon as
possible and prior to 5:00 p.m. (EDT) on June 20, 2008. Please note that if
you have already voted using management's proxy, you have every right to
change your vote by simply voting the enclosed YELLOW proxy. This action
cancels all previous votes - only your latest dated proxy counts. For more
information, Passport directs shareholders to please contact Passport's proxy
solicitation agent:

    
                     Kingsdale Shareholder Services Inc.
               North American Toll Free Phone (1-800-775-4067);
     Outside North America, Banks and Brokers Call Collect (416-867-2272)


                       CAST YOUR VOTE NOW - HERE'S HOW
                       -------------------------------

    -------------------------------------------------------------------------
    To ensure your vote counts, vote your YELLOW proxy TODAY. Time is
    critical - please act immediately.

    THE QUICKEST WAY TO VOTE IS TO LOG-ON TO WWW.PROXYVOTE.COM AND TO ENTER
    THE TWELVE DIGIT CONTROL NUMBER THAT IS LOCATED ON YOUR YELLOW PROXY.

    Your proxy must be received from you or your intermediary no later than
    5:00 p.m. (EDT) on June 20, 2008 in order to ensure it will be
    represented at the meeting.
    -------------------------------------------------------------------------

    Please note that if you have already voted using management's proxy, you
    have every right to change your vote by simply voting the enclosed YELLOW
    proxy. This action cancels all previous votes - only your latest dated
    proxy counts.

    ONLY FOLLOW THE DIRECTIONS ON THE YELLOW PROXY
                                      ------

    For your proxy vote to count, you must follow the directions on the
    YELLOW proxy.
    ------

    How do I vote my YELLOW proxy?
                     ------

    If you are a registered shareholder (i.e. you do not hold your shares
    with a broker), sign, date and fax your YELLOW proxy to the number
    indicated on the proxy form. If you do not have access to a fax machine,
    please return the YELLOW proxy promptly in the postage-paid envelope
    provided.

    If you hold your shares with a broker (i.e. you are a non-registered
    holder), sign, date and return your YELLOW proxy or YELLOW voting
    instruction form to the FAX number indicated on the YELLOW proxy form or
    YELLOW voting instruction form, or otherwise follow the instructions on
    your YELLOW proxy form or voting instruction form.

    I have multiple holdings. Do I need to return a proxy for each holding?

    Yes. If you hold your shares in multiple accounts, you will receive a
    YELLOW proxy for each account. In order to ensure that your common shares
    are fully represented at the meeting on June 25, 2008, it is important
    that you properly execute and return each YELLOW proxy that you receive.
                                              ------

    Please contact our proxy solicitor if you have questions about the
    Passport materials, or need assistance in voting?

                     KINGSDALE SHAREHOLDER SERVICES INC.
                             The Exchange Tower
               130 King Street West, Suite 2950, P.O. Box 361
                               Toronto, Ontario
                                   M5X 1E2

                       North American Toll Free Phone:
                               1-800-775-4067
           Outside North America, Banks and Brokers Call Collect:
                                 416-867-2272
                           Facsimile: 416-867-2271
                     Toll Free Facsimile: 1-866-545-5580
                 Email: contactus@kingsdaleshareholder.com
    

    PASSPORT CAPITAL, LLC

    Passport Capital, LLC is a San Francisco based global investment firm
with approximately US$4.5 billion of assets under management. Passport and its
principals have extensive experience investing in the Canadian, U.S. and
global capital markets. The funds it manages are long-term, value-oriented
shareholders which, as of the date hereof, collectively own or control an
aggregate of 3,080,500 common shares of WGI, representing approximately 13.1%
of the currently outstanding common shares, making them today the largest
shareholders of WGI.

    Certain statements contained in this press release may constitute
forward-looking statements. Such statements reflect Passport's current views
and intentions with respect to future events and are subject to certain risks,
uncertainties and assumptions. Many factors could cause the actual results,
performance, actions or achievements of WGI or others that may be expressed or
implied by such forward-looking statements to vary from those described herein
should one or more of these risks or uncertainties materialize. Such factors
include, but are not limited to, economic, business, technological,
competitive and regulatory factors as well as the terms of contractual
commitments to which WGI is subject of which Passport is not aware.

    
     Your Vote Is Important To The Future Of Your Investment - Vote Your
                             Yellow Proxy Today
                             ------
    





For further information:

For further information: If you have any questions and/or need
assistance in voting your shares, please call Kingsdale Shareholder Services
at 1-800-775-4067 or (416) 867-2272 (collect calls accepted)

Organization Profile

PASSPORT MANAGEMENT, LLC

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