Heritage Explorations Ltd.
TSX VENTURE : HXL

Heritage Explorations Ltd.

June 02, 2005 12:16 ET

Heritage Explorations Ltd. And St Andrew Goldfields Ltd. To Combine

OAKVILLE, ONTARIO--(CCNMatthews - June 2, 2005) - HERITAGE EXPLORATIONS LTD. (TSX VENTURE:HXL) announced that it has entered into an agreement for the business combination of Heritage with St Andrew Goldfields Ltd. (TSX: SAS).

The business combination will be effected by means of a plan of arrangement pursuant to which St Andrew will acquire all of the outstanding shares of Heritage not currently owned by St Andrew in exchange for common shares of St Andrew on the basis of 1.2 St Andrew common shares for each one Heritage common share. Warrants and options to acquire common shares of Heritage will be exchanged for warrants and options to acquire common shares of St Andrew on the basis of the same exchange ratio as the common shares.

St Andrew currently owns 64.7% of Heritage and will issue approximately 18,083,000 St Andrew common shares, being approximately 3.4% of St Andrew's current outstanding shares, to acquire the remaining 35.3% of Heritage.

Implementation of the business combination is subject to the approval of shareholders of Heritage, as well as to court and regulatory approvals. The annual and special meeting of shareholders of Heritage will be held on August 3, 2005 to vote on the transaction. Approval will be required to be obtained from two-thirds of Heritage's shareholders and warrantholders voting as a group and by a majority of the minority shareholders. Heritage will mail its management proxy circular to its shareholders in early July.

The management proxy circular will contain the fairness opinion prepared by Ross Glanville & Associates Ltd. and delivered to the independent committee of directors of Heritage. Ross Glanville & Associates Ltd. has concluded that the proposed share exchange ratio is fair, from a financial point of view, to the shareholders (other than St Andrew) of Heritage.

Assuming that all necessary approvals are obtained, the transaction is expected to be completed prior to the end of August, 2005.

The combined business will have greater critical mass, enhancing capital raising capabilities and capital market awareness for the exploration and development of its various assets. The strength of the combined business will create an attractive gold mining and exploration company with a growth production profile and advanced exploration projects. Overhead components required for managing two separately listed public companies will be reduced or eliminated and potential conflicts of interest arising from St Andrew's equity interest in Heritage will be eliminated. Shareholders of Heritage will hold a security with increased liquidity.

The TSX Venture Exchange assumes no responsibility for the adequacy or accuracy of this Release and neither approves nor disapproves of the same.

Contact Information