Telstar Resources Ltd.
TSX VENTURE : TST

April 05, 2006 14:19 ET

Telstar Announces Shareholder Approval of Share Capital Reorganization

CALGARY, ALBERTA--(CCNMatthews - April 5, 2006) - Telstar Resources Ltd. (TSX VENTURE:TST) (the "Corporation") is pleased to announce that the proposed reorganization of share capital (the "Reorganization") previously announced was approved by special resolution of the shareholders of the Corporation at a special meeting of shareholders held on April 4, 2006.

Under the Reorganization, on the effective date of the Reorganization, which is currently anticipated to be April 11, 2006, each common share, other than those held directly or indirectly by Kary Holdings Ltd., Kenneth M. Kary, K. Greg Kary, Ardis Kary and Gail Lagasse (collectively, the "Majority Shareholder") will be converted into one (1) Series I Preferred Share of the Corporation ("Series I Preferred Share"). The Series I Preferred Shares will immediately be redeemed after issuance for $0.11 cash per share.

The Corporation has not received notices from any shareholders dissenting from the Reorganization. Accordingly, up to 1,736,434 Series I Preferred Shares, the amount of common shares held by shareholders other than the Majority Shareholder will be authorized for issuance and redemption. The aggregate redemption price for the Series I Preferred Shares is approximately $191,008. Shareholders will be entitled to receive redemption funds provided that they have deposited letters of transmittal with the Corporation's depositary, Olympia Trust Company, together with the certificates representing the common shares of the Corporation to be converted into Series I Preferred Shares and any other documents required by the letter of transmittal. Letters of transmittal, and instructions on delivery, were delivered to shareholders with the information circular dated February 16, 2006 which was mailed to shareholders in connection with the Reorganization. Additionally, letters of transmittal can be found on SEDAR at www.sedar.com. Redemption funds will be delivered by the depositary after the effective date of the Reorganization.

After the effective date of the reorganization, the Corporation intends to complete the necessary filings with the TSX Venture Exchange to delist the common shares of the Corporation from the TSX Venture Exchange. Thereafter, the Corporation intends to apply to the Alberta Securities Commission and the British Columbia Securities Commission for orders declaring that the Corporation is no longer a reporting issuer in those provinces and accordingly, need not comply with continuous disclosure obligations under the securities laws of those provinces.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Telstar Resources Ltd.
    Greg Kary
    Vice-President
    (403) 261-4020