Canico Resource Corp.

Canico Resource Corp.

September 16, 2005 09:00 ET

Canico Considering Take-Over Announcement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Sept. 16, 2005) - Canico Resource Corp. (TSX:CNI) cannot yet respond to the announcement yesterday by Companhia Vale do Rio Doce, (CVRD) that CVRD intends to proceed with an unsolicited all cash take-over bid for Canico at a price per Canico common share of Cdn.$17.50.

The announcement stated that the bid will be open for at least 60 days from the time it is made. However, Canico has not yet been provided with a formal offer. Canico will issue a response after it has received and reviewed the bid materials and considered the bid with its financial and legal advisors.

"The Company determined that it would be inappropriate to deny our shareholders the opportunity to consider this unsolicited proposal," said Michael Kenyon, President & CEO of Canico. "However, our decision to release CVRD from the standstill provisions of an agreement we have in place with them should not be regarded in any way as an endorsement by us of this bid. Our Special Committee and our Board will complete a full review of the formal bid materials before we respond. We do note that our shares closed yesterday at Cdn.$19.75 on the TSX, a significant premium to CVRD's offer."

The Company has had a Special Committee of independent directors in place for some time to enable us to respond effectively in a situation such as this and ensure that value for our shareholders is maximized. The Company and its Special Committee are being advised by two leading Canadian investment banking groups, BMO Nesbitt Burns Inc. and Genuity Capital Markets. Gowling Lafleur Henderson LLP is legal advisor to Canico and Davies Ward Phillips & Vineberg LLP is providing independent legal advice to the Special Committee.

Canico is a Canadian-based junior resource company focused on the development of the Onca Puma nickel laterite project in Para State, Brazil.


J. Michael Kenyon, President & Chief Executive Officer

Contact Information

  • Canico Resource Corp.
    J. Michael Kenyon
    President & Chief Executive Officer
    (604) 669-9446
    (604) 669-9447 (FAX)