WGI Heavy Minerals announces sale of Transworld Garnet India (Pvt.) Limited

    COEUR D'ALENE, ID, June 11 /CNW/ - WGI Heavy Minerals, Incorporated (TSX:
WG) today announced that the Company and its partner, Heavy Industrial
Minerals India (Pvt.) Limited, have entered into an agreement to sell their
investment in Transworld Garnet India (Pvt.) Limited ("TGI") for a cash
consideration of 836,000,000 Ruppees, approximately US $19.5 million, to V.V.
Mineral, of Tamil Nadu, India. WGI's share of the proceeds is approximately
US $17.3 million consisting of its 74% equity interest and the repayment of
debt financing. The exact amount of the proceeds to be received by WGI will
depend upon exchange rates at the time of closing which is expected to be in
August, 2008.
    WGI has also signed a three-year distribution agreement with annual
renewals with V.V. Mineral covering garnet, ilmenite and other minerals that
may be present in the beach sands mined by V.V. Mineral. The distribution
agreement provides WGI with an assured minimum supply of 60,000 metric tons
annually of garnet, which is a significant increase over current production
rates. Garnet grades and quality levels will be consistent with material
currently supplied to WGI by TGI. Additional quantities of garnet will be
supplied as V.V. Mineral's capacity expands. In addition, WGI will act as a
broker for the sale of V.V. Mineral's ilmenite products and will have first
opportunity to negotiate contractual arrangements for other minerals with V.V.
Mineral once production begins.
    The Board of Directors of WGI is currently intending that, following the
closing of the sale to V.V. Mineral, the Board will distribute US $0.80 per
share in cash to the Company's shareholders.
    "The transaction and this partnership with V.V. Mineral are very positive
steps for WGI shareholders who will benefit from the Company's exit from its
problematic production operations in India while maintaining a reliable supply
of minerals. This will allow WGI to focus on its core business of marketing
and selling garnet," said Greg Emerson, Chief Executive Officer of WGI..
    "This alliance matches V.V. Mineral, one of the leading producers of
heavy minerals in India, with WGI, an experienced, global marketing, sales and
distribution network for those products. WGI expects to continue supplying the
quality garnet products its customers rely on through the Bengal Bay Garnet(R)
and WesJet(R) brands with the improved reliability that comes with V.V.
Mineral's extensive mining capabilities", said William Meyerholtz, WGI's
Vice-President of Marketing and Sales, International.
    The sale of Transworld Garnet to V.V. Mineral is the result of a review
undertaken by a Special Committee of the Board of Directors of WGI to consider
strategic alternatives for the Company. The Special Committee considered a
wide range of alternatives, including a possible outright sale of WGI, and
concluded that it would be in the interests of WGI shareholders to unlock the
value of WGI's current investment in India through a sale of that business and
the entering into of an Industrial Mineral Supply Agreement. Based on WGI's
experience, the Special Committee also believed that the most likely buyer of
this business would be a company with experience in the beach sands mining
business in India. The Special Committee canvassed a number of potentially
interested parties which led to the signing of Confidentiality Agreements with
five such parties. Due diligence was undertaken and competitive bids were
received from three parties. The sale to V.V. Mineral announced today is
considered by the Special Committee, and the Board of Directors of WGI, to be
the most attractive transaction available to WGI and therefore in the best
interest of the company and its shareholders. In making this determination,
the Special Committee and the Board of Directors considered a number of issues
including the price to be paid, the fact that the consideration to be received
is all cash, and the ability of V.V. Mineral to complete the transaction.

    Filing of Dissident Proxy Circular

    The Board of WGI also confirmed today that Passport Capital, LLC has
filed a dissident proxy circular in connection with the Company's annual
meeting, scheduled for June 25, 2008. The dissidents are seeking shareholder
support for a resolution to remove the existing members of the Board of
Directors and replace them with nominees to the Board proposed by the
    The Company will respond to the dissident proxy circular at the
appropriate time and advises shareholders to take no action in response to the
dissident action until they have received the Company's response.

    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 East Sherman,
Coeur d'Alene, ID, 83814, U.S.A., (208) 770-2208, Fax (208) 666-4000,
www.wgiheavyminerals.com, E-mail: ed@wgiheavyminerals.com

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WGI Heavy Minerals, Incorporated

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