Freewest Resources Canada Inc.
TSX VENTURE : FWR

Freewest Resources Canada Inc.

November 02, 2009 17:14 ET

Freewest Resources Questions and Answers About the Inadequate All-Share Offer From Noront Resources for All Outstanding Freewest Shares

MONTREAL, QUEBEC--(Marketwire - Nov. 2, 2009) - The Board of Directors of Freewest Resources Canada Inc. (TSX VENTURE:FWR) wishes to provide Freewest shareholders with questions and answers regarding the unsolicited all-share offer by Noront Resources Ltd. for the outstanding shares of Freewest. These questions and answers can also be found on Freewest's website at www.freewest.com.

- Should I accept or reject the Noront offer?

The Freewest Board of Directors unanimously recommends that Freewest shareholders REJECT the Noront offer and NOT TENDER their Freewest shares. Members of the Freewest Board of Directors and Freewest's senior officers ARE NOT tendering their Freewest shares to the Noront offer, which the Board of Directors views as offering inadequate consideration to Freewest shareholders.

- How do I reject the Noront offer?

You do not need to do anything. Simply DO NOT tender your Freewest shares.

- What is the Freewest Board of Directors doing in response to the Noront offer?

The Freewest Board of Directors has established a Special Committee of independent directors which, along with the Board of Directors, is actively working to evaluate a range of strategic alternatives to enhance value for Freewest shareholders. Discussions are underway with third parties with a view to exploring alternative value-maximizing transactions.

- Why does the Freewest Board of Directors believe that the Noront offer should be rejected?

The Freewest Board of Directors believes that the Noront offer fails to provide full value for Freewest and is an attempt by Noront to acquire Freewest without offering adequate consideration to Freewest shareholders. The Board of Directors' reasons include:

-- The Board of Directors believes that the Noront offer fails to adequately compensate Freewest shareholders for the strategic value of Freewest's assets.

-- The Board of Directors believes that the timing of the Noront offer is opportunistic and disadvantageous to Freewest shareholders.

-- Noront does not have a strategy focused on chromite.

-- The Board of Directors believes that the Noront offer does not reflect an adequate premium for control of Freewest.

-- As at the date of Freewest's Directors' Circular (October 27, 2009), the consideration offered under the Noront offer represented a discount to the then-trading price of Freewest shares.

-- The value of the consideration offered under the Noront offer is uncertain and entirely dependent on the value of Noront's shares, which are subject to significant fluctuations.

-- It may be difficult for Freewest shareholders to dispose of Noront shares.

-- Superior proposals or other alternatives may emerge.

-- Freewest's financial advisor - CIBC World Markets Inc. - has provided a written opinion dated October 27, 2009 that, as of the date of such opinion, the consideration offered under the Noront offer is inadequate, from a financial point of view, to Freewest shareholders.

-- The Noront offer is highly conditional.

-- The Noront offer is not a "Permitted Bid" under Freewest's Shareholder Rights Plan.

-- Freewest has a track record of creating value for Freewest shareholders.

A summary of all of the reasons for the unanimous recommendation of the Freewest Board of Directors is set out on pages 4 to 11 of Freewest's Directors' Circular.

- What are some of the significant conditions of the Noront offer?

The Noront offer is highly conditional; some of the most important conditions are as follows:

-- There being validly deposited under the Noront offer Freewest shares representing not less than 66 2/3% of the total outstanding Freewest shares (calculated on a fully-diluted basis).

-- The Freewest Shareholder Rights Plan being waived, invalidated or cease traded.

- What happens if not all of the Noront conditions are satisfied?

Unless all of the conditions of the Noront offer have been satisfied or waived by Noront prior to the expiry of the Noront offer, Noront will not have any obligation to take up and purchase Freewest shares tendered to the Noront offer, and Noront can withdraw the Noront offer. If the Noront offer is withdrawn, none of the Freewest shares will be purchased by Noront.

- This has been referred to this as a "hostile" take-over bid. Is that true?

YES. In a friendly take-over, the two companies work together to reach an agreement that enhances shareholder value. In this case, Noront chose to launch the Noront offer without first reaching an agreement with Freewest's Board of Directors. As a result, the Noront offer is a "hostile" offer and the Freewest Board of Directors is determined to consider alternatives to enhance value for Freewest shareholders.

- My broker advised me to tender my Freewest shares. Should I?

NO. The Freewest Board of Directors has unanimously recommended that Freewest shareholders REJECT the Noront offer and NOT TENDER their Freewest shares.

You should be aware that Noront may engage soliciting dealers and that Noront may agree to pay brokers for Freewest shares tendered to the Noront offer.

- Do I have to decide now? Is there any advantage to tendering my Freewest shares early?

NO. You do not have to take any action at this time and you obtain no advantage by tendering your Freewest shares early. The Noront offer is scheduled to expire on November 18, 2009. Given that the Freewest Board of Directors is considering alternatives to enhance shareholder value, the Board of Directors recommends that you not take any action until closer to this date, to ensure that you are aware of all options available to you.

However, if you have already tendered your Freewest shares to the Noront offer and you decide to withdraw these Freewest shares from the Noront offer, you must allow sufficient time to complete the withdrawal process prior to the expiry of the Noront offer. Contact your broker or Freewest at the number set out below.

- Can I withdraw my Freewest shares if I have already tendered?

YES, you can withdraw your Freewest shares at any time until your Freewest shares have been taken up and paid for by Noront, or if your Freewest shares have not been paid for by Noront within three business days after being taken up by Noront, or under certain other circumstances described in the Noront offer.

- How do I withdraw my Freewest shares?

Withdrawal of Freewest shares deposited under the Noront offer must be effected by notice of withdrawal and must be physically received by Noront's depositary, Equity Transfer & Trust Company, within the required time limits.

We recommend that you contact your broker or Freewest at the number set out below for further information on how to withdraw your Freewest shares.

- Who do I ask if I have more questions?

The Freewest Board of Directors recommends that you read the information contained in the Freewest Directors' Circular, which is available on Freewest's website at www.freewest.com. Please contact Freewest with any questions or requests for assistance that you may have.

Freewest is a well-financed mineral exploration company. It is 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.

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