Freewest Resources Canada Inc.
TSX VENTURE : FWR

Freewest Resources Canada Inc.

December 08, 2009 06:00 ET

Freewest Board Recommends Rejection of Noront's "Final" Offer

- Board unanimously recommends that Freewest shareholders reject revised "final" offer from Noront

- Freewest Board files formal Notice of Change to Directors' Circular

MONTREAL, QUEBEC--(Marketwire - Dec. 8, 2009) - The Board of Directors of Freewest Resources Canada Inc. (TSX VENTURE:FWR) has unanimously recommended that Freewest shareholders reject the revised "final" offer by Noront Resources Ltd. for all of the common shares of Freewest and not tender their shares to the Noront offer. The Board's recommendation is contained in a Notice of Change to Directors' Circular filed on SEDAR.

The Notice of Change contains the Board's recommendation and a detailed discussion of its reasons for recommending that Freewest shareholders reject the revised "final" offer from Noront. Freewest shareholders are urged to read the Notice of Change in its entirety.

In making its recommendation, the Board considered many factors, including the recommendation of a Special Committee comprised of Freewest's independent directors and advice from CIBC World Markets Inc., Freewest's financial advisor.

"We have entered into an arrangement agreement with Cliffs Natural Resources Inc. which provides Freewest shareholders, for each Freewest share, with a fixed amount of $0.90 in Cliffs shares. The Board believes that this guaranteed consideration from Cliffs is vastly superior to the offer from Noront" said Mackenzie I. Watson, President, Chief Executive Officer and a director of Freewest. "We recommend that shareholders vote for the arrangement with Cliffs and reject the inferior Noront offer."

Under the revised Noront offer, Noront is offering, for each Freewest share, 0.2857 of a Noront common share and 0.1429 of a Noront common share purchase warrant, exercisable for five years at an exercise price of $4.00.

The Board of Directors unanimously concluded that the consideration provided by revised Noront offer is inadequate, from a financial point of view, to Freewest shareholders. The Board of Directors unanimously recommends that Freewest shareholders REJECT the revised offer from Noront and NOT TENDER their common shares to the Noront offer.

As announced by Freewest on December 3, 2009, Freewest and Cliffs Natural Resources Inc. have entered into an amendment to their Arrangement Agreement, under which Freewest shareholders will receive, for each Freewest share, a fixed amount of $0.90 in Cliffs shares. The Board of Directors unanimously recommends that Freewest shareholders APPROVE the Arrangement with Cliffs at a special meeting of Freewest shareholders to be held on January 15, 2010.

Reasons for the Recommendation

The Freewest Board of Directors believes that the revised Noront offer fails to provide full value for Freewest's assets and shares and is an attempt by Noront to acquire Freewest without offering adequate consideration to Freewest shareholders. The Board of Directors cited a number of reasons for its recommendation, including that:

  • The proposed arrangement with Cliffs will provide a fixed value of $0.90 per Freewest share.
  • The value of the consideration offered under the revised Noront offer is uncertain and primarily dependent on the value of Noront's shares, which are subject to significant fluctuations.
  • The value of the consideration offered under the revised Noront offer is dependent in part on the value of the Noront warrants, which is uncertain.
  • The implied value of $0.86 per Freewest share of the revised Noront offer is not substantiated.
  • It may be difficult for Freewest shareholders to dispose of Noront shares and Noront warrants.
  • The revised Noront offer is coercive.
  • The Board of Directors continues to believe that the Noront offer fails to adequately compensate Freewest shareholders for the strategic value of Freewest's assets.
  • The Board of Directors continues to believe that the timing of the Noront offer is opportunistic and disadvantageous to Freewest shareholders.
  • Noront does not have a strategy focused on chromite.

Availability of the Notice of Change to Directors' Circular

Shareholders are urged to read the Notice of Change in its entirety. The document is available free of charge on SEDAR at www.sedar.com and on Freewest's website at www.freewest.com. Copies of the Notice of Change are being mailed to all Freewest shareholders.

For Investor Questions, Including How to Withdraw Shares from the Noront Offer

Shareholders who have questions or who may have already tendered their shares to the Noront offer and wish to withdraw them, may do so by contacting Georgeson at the toll free number set out below.

About Freewest

Freewest is a mineral exploration company actively exploring for gold, base-metals and chromite within eastern Canada. Corporate information can be accessed on the Internet at www.freewest.com. Freewest's shares are listed on Tier 1 of the TSX Venture Exchange under the symbol FWR.

Georgeson Inc. is acting as Freewest's solicitation agent in connection with a proposed Plan of Arrangement with Cliffs Natural Resources Inc. Georgeson may be contacted as follows:

                                                                Georgeson
                                                        100 University Avenue
                                                       11th Floor, South Tower
                                                             Toronto, Ontario
                                                                  M5J 2Y1

                                          North American Toll Free Number: 1-866-433-7579

                                          Banks and Brokers Collect Number: 1-212-806-6859

Forward-Looking Statements

This news release contains statements that constitute "forward-looking information" or "forward- looking statements" within the meaning of applicable securities legislation. This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond the control of Freewest Resources Canada Inc. ("Freewest"). Actual results or achievements may differ materially from those expressed in, or implied by, this forward-looking information. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Freewest will derive therefrom. In particular, no assurance can be given as to whether a proposed plan of arrangement with Cliffs Natural Resources Inc. will be completed. Forward-looking information is based on the estimates and opinions of Freewest's management at the time the information is released and Freewest does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Freewest Resources Canada Inc.
    Mackenzie I. Watson
    President and CEO
    (514) 878-3551 or 1-888-878-3551
    Fax: (514) 878-4427
    Email: info@freewest.com
    Website: www.freewest.com