COEUR D'ALENE, ID, Oct. 27 /CNW/ - WGI Heavy Minerals, Incorporated (WGI)
(TSX: WG) today announced that its board of directors has approved a special
cash distribution to shareholders in the amount of US$0.80 per share. This
special distribution represents a return to the shareholders of up to
US$19.5 million (including distributions on shares anticipated to be issued
upon the exercise of restricted stock units or stock options) to shareholders
of record on December 19, 2008. It is anticipated that the special cash
distribution will be paid to shareholders on December 22, 2008.
The Company previously announced its intention to distribute US$0.80 per
share in cash upon the completion of the sale of Transworld Garnet India (Pvt)
Limited (TGI). The sale of TGI was completed on September 12, 2008 with effect
on August 14, 2008 after substantially all of the proceeds of sale and
repayments of debt were released from escrow and repatriated to WGI.
The special cash distribution will be made in the form of a return of
capital to the extent that the return of capital does not exceed the paid-up
capital of the Company's shares and is not a taxable dividend for Canadian
income tax purposes. The Company has sought a ruling from the Canada Revenue
Agency to confirm the acceptable level of capital that may be returned to
shareholders. It is estimated that the return of capital portion of the
special cash distribution will be in the range of US$0.60 per share to US$0.80
per share. The balance of the special cash distribution, if any, will be
distributed as a taxable dividend.
The portion of the special distribution that will be a return of capital
is subject to the approval by shareholders of a resolution authorizing the
reduction of the stated capital of the Company's common shares and the receipt
of a final advance tax ruling from the Canada Revenue Agency.
The Company will promptly request a shareholder meeting to approve the
proposed reduction of stated capital. A proxy circular will be mailed to WGI's
shareholders in November for a meeting to be held on December 11, 2008. The
record date for the shareholders meeting is November 11, 2008. At that
meeting, shareholders will be asked to approve a reduction of stated capital
for the Company's common shares and a return of that amount of paid up capital
reduction to the shareholders. To the extent this paid up capital reduction is
not equal to US$0.80 per share the balance of the special distribution will be
in the form of an ordinary taxable dividend.
The Company believes a special cash distribution of US$0.80 per share is
currently appropriate and prudent given the completion of the sale of the
Company's investment in TGI and the current economic climate in the market
place. The Board of Directors and management believe that this amount of
special distribution allows the Company to realize its existing business goals
The Company will regularly evaluate opportunities to return additional
capital to shareholders after taking into account the market risks and
opportunities facing the Company at that time and the Company's financial
results in general.
The Board of Directors elected Mr. Gordon Fear as its new Chairman.
Mr. Fear, as Chairman of the Special Committee of the Board, was instrumental
in leading a strategic review of the Company's operations resulting in the
sale of TGI. The Board also recognized the important role Greg Emerson,
Interim CEO, has played during this transition. Mr Emerson was appointed CEO.
The Board of Directors has significantly reduced the corporate directors
committees and overhead.
WGI Heavy Minerals, Incorporated is a marketer of industrial grade
minerals sourced primarily out of India, producer of industrial-grade garnet
out of Idaho and Germany and manufacturer of replacement parts for ultra-high
waterjet cutting systems in the U.S. The Company's shares are listed on the
Toronto Stock Exchange under the symbol WG.
This press release contains forward-looking statements concerning the
business, operations, and financial performance and condition of WGI Heavy
Minerals, Incorporated. A number of the matters discussed and statements made
in the press release contain forward-looking statements reflecting current
expectations regarding future assets. When used in this press release, the
words "believe", "anticipate", "intend", "estimate", "expect", "project", and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such words. These
forward-looking statements are based on current expectations and are naturally
subject to risks, uncertainties, and changes in circumstances beyond
management's control that may cause actual results to differ materially from
those expressed or implied by such forward-looking statements. Factors that
may cause such differences include but are not limited to: exploration and
development risks; risks related to permits and title to property; risks
related to foreign countries and regulatory requirements; operating hazards;
foreign currency fluctuations; competition; fluctuations in the market price
of mineral commodities and transportation costs; uncertainty as to
calculations of mineral deposit estimates; uninsured risks; and dependence
upon key management personnel and executives. Actual results may differ
materially from those expressed here. You should not place undue reliance on
such forward-looking statements. The Company is under no obligation to update
or alter such forward-looking statements, whether as a result of new
information, future events, or otherwise.
For further information:
For further information: Ed Kok, Investor Relations, 810 Sherman Ave.,
Coeur d'Alene, ID, 83814, U.S.A., Phone (208) 770-2208, E-mail firstname.lastname@example.org,