SOURCE: QVT Financial LLP

March 22, 2007 12:08 ET

QVT Financial LLP announces Response to Cardinal Resources

New York -- (MARKET WIRE) -- March 22, 2007 --

Europa Partners Limited

22nd March, 2007

             RESPONSE TO CARDINAL RESOURCES' LETTER TO SHAREHOLDERS
Qvt Financial LLP ("QVT") takes note of the letter sent by the board to ordinary shareholders on 20th March, 2007, which contains a number of misrepresentations. In the interests of brevity, QVT only draws attention to the following:
     
-    Despite repeated requests, the Board still appears unable to give
     shareholders a direct answer to the question as to what voting rights 
     Silver Point Finance currently has over Cardinal Resources Finance Ltd, and 
     refers them instead to that company's articles.   These indicate that 
     Silver Point can cast almost 40% of that company's votes, even without 
     exercising a single one of its more than 120 million warrants, which 
     themselves both outnumber the entire issued share capital of Cardinal 
     Resources plc, and have exercise prices well below the price paid by 
     investors in Cardinal's initial public offering less than two years ago.

-    Despite repeated requests, the Board still refused to tell shareholders
     whether there is a restriction on Cardinal Resources Finance Ltd 
     upstreaming dividends or other distributions to Cardinal Resources plc, the 
     quoted parent. The effect of such restrictions would mean, for example,  
     that the quoted parent could become insolvent even whilst the subsidiary 
     were trading profitably. The potential gravity of this is so obvious that 
     QVT believes it to be totally inadequate for the Board, and its advisor, 
     Nabarro Wells, to argue that all relevant information regarding the Silver 
     Point Financings are in the public domain.  QVT again asks, are there any 
     such restrictions?

-    The Board in their letter state that they "will not sell the Company
     without securing an appropriate price that they can recommend to 
     shareholders". If shareholders were to approve the Silver Point warrants 
     being exercisable at parent company level, Silver Point Finance would at 
     any time be able by that simple exercise own more than, and be able to 
     outvote, all the other existing shareholders combined. This would enable 
     them to replace at will the present Board, whose views as to the 
     appropriateness of price would thus become irrelevant.  It is disturbing 
     that the Board appears unable to grasp, even now, the predicament in which 
     they have placed themselves and ordinary shareholders.

Glass Lewis & Co., a prominent firm providing independent analysis and recommendations in relation to proxy contests, has recommended shareholders to vote FOR the removal of Mr. Bensh after analysing the arguments put forward by both sides. QVT again urges all shareholders to vote FOR both resolutions and to support subsequent efforts to gain back control of the Company from Silver Point Finance for the benefit of all ordinary shareholders.

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