Asian Mineral Resources Limited

Asian Mineral Resources Limited

December 21, 2007 06:30 ET

Asian Mineral Resources Limited Comments: Dissidents' Proposal Is Opportunistic and Bad for Shareholders

TORONTO, ONTARIO--(Marketwire - Dec. 21, 2007) - Asian Mineral Resources Limited ("AMR" or the "Company") (TSX VENTURE:ASN) announced today that its board of directors reaffirms its recommendation that shareholders vote FOR the Company's shareholder rights plan and AGAINST the removal of the incumbent board of directors of the Company. The directors have considered the dissident information circular filed by various funds managed by Dragon Capital Management Inc. ("Dragon") and determined those proposals to be opportunistic, vague and based upon false allegations and misleading information.

In making the announcement Jim Askew, Chairman of AMR's board, commented "Earlier this week, the Company achieved a major milestone by being granted a mining license for the Ban Phuc project and it is poised to become the first Vietnamese nickel producer in the near future. In anticipation of this, Dragon launched an attempt to seize control of the Company for its own undisclosed purposes. The incumbent board of directors are confident that shareholders will vote in favour of maintaining the Shareholder Rights Plan and reaffirm their support for the incumbent board of directors."

Dragon says that the Company's activities at the Ban Phuc project could result in "even ultimately a refusal to grant the (mining license)."

The Company has just received its mining license after the granting authority made a visit to the site to see for themselves the activities being undertaken in preparation for the license being granted.

The Board, acting in the best interests of shareholders, has relied on its Vietnamese resident managers who have repaid that confidence by creating a plan for the Ban Phuc development which can now be implemented with the objective of commencing production early in 2009. If Dragon's nominees replace the incumbent directors there can be no assurance that development will be implemented in accordance with such development plan.

Dragon says that the incumbent board of directors completed a private placement at an issue price significantly below the then available market price or the terms offered by Dragon.

Dragon's criticism of the October private placement being priced at a discount to market price is inaccurate. The private placement price had been negotiated in September and the price was actually a small premium to the volume weighted average price of AMR's shares at that time.

Dragon has criticized the October private placement and implied that it had offered financing on better terms. Dragon stopped all financing discussions when it announced that it had lost confidence in the incumbent directors. Had the Company waited for Dragon's investment, AMR would now be insolvent.

The Company's private placement announced on December 17, 2007 will provide the Company with up to $34.3 million financing at an average price of $1.88 per share (representing a premium of approximately 19% over the average price of the Company's shares on the TSX Venture Exchange for the prior 10 days).

Dragon says that the incumbent board of directors has failed to develop and implement strategies to realize a higher share price.

The incumbent directors have been very clear and open about their strategies to maximize shareholder value. As stated repeatedly, they have focused their efforts on bringing the Ban Phuc project into commercial production as quickly as possible. They oversaw the preparation of the feasibility study, have supervised activities at Ban Phuc and have ensured that the Company has maintained sufficient working capital at all times. With the receipt of the mining licence, the incumbent board of directors intends to proceed with the development of Ban Phuc with the goal of commencing production in early in 2009.

In contrast, Dragon has said nothing about its intentions and plans if its nominees are elected. Three of Dragon's four nominees to the Company's board of directors is either closely associated with Dragon as employees or consultants or otherwise non-independent. We haven't been told who will manage the Company or what Dragon's strategy will be (e.g. it has not provided any timetable for commercial production at Ban Phuc). Despite criticizing the Company's directors for raising capital, Dragon hasn't told shareholders how it intends to finance the development of the mine or how it intends to spend the Company's funds.

Shareholders can and should draw their own conclusions about Dragon's intentions and plans in light of the fact that Dragon's other Vietnamese mining investment includes ownership of Tiberon which is attempting to develop a tungsten property in Vietnam. Shareholders may justifiably determine that Dragon's hidden agenda may be to merge AMR and Tiberon in a way that will affect adversely the value of their current investment in AMR, which is a pure nickel investment - hence, their reticence to tell shareholders what they plan to do.

Dragon says that the Shareholder Rights Plan is designed to prevent or hinder the free trading of the Company's publicly listed shares and restrict possible value creating transactions between arms' length shareholders, with potentially negative effects on all shareholders.

This is not true. The Shareholder Rights Plan does not affect your ability to trade your shares of the Company unless you own at least 20% of the Company.

Dragon acquired its original 19% stake in the Company in an off-market private placement. Then it acquired a further 18.8% stake in the Company from another shareholder in a further off-market trade at $1.75 (being an 8.7% premium to the previous day's closing price). Dragon never offered to purchase any shares from you or any other public shareholder. It never offered to share its premium with any of you. Having refused to proceed with a transaction to purchase the Company in October, Dragon wants to take control for free.

Even if you vote to remove the incumbent board of directors of the Company, it would be in your best interests to vote in favour of the continuing Shareholder Rights Plan.

The Shareholder Rights Plan won't affect your ability to buy or sell shares in the Company. In fact, it will protect you by ensuring that any party who tries to buy control of the Company is compelled to make the same offer to each of you so that everyone can participate equally and on the basis of equal information. Dragon wants you to vote against the Plan so that it will expire, leaving them free to increase its ownership at will. Dragon will be free to sell control over the Company to anyone it chooses. You may be excluded from a possible value-creating transaction and Dragon won't be required to share the benefits.

Company Profile:

Asian Mineral Resources Limited is currently engaged in the exploration and development of the Vietnamese located Ban Phuc Nickel Project in which it currently has a 90% interest. The Project is part of a granted Foreign Investment License covering 150 square kilometres of highly prospective ultramafic hosted nickel occurrences.

For further details on the Company and the Ban Phuc Nickel Project please refer to the website at

Forward-Looking Statements

This press release includes certain "Forward-Looking Statements." All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Asian Mineral Resources Limited 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. Important factors that could cause actual results to differ materially from Asian Mineral Resources Limited's expectations are disclosed under the heading "Risk Factors" and elsewhere in Asian Mineral Resources Limited documents filed from time-to-time with the TSX Venture Exchange and other regulatory authorities.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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