Western Prospector Group Ltd.
TSX VENTURE : WNP

Western Prospector Group Ltd.

July 10, 2008 17:30 ET

Western Prospector Group Waives Shareholder Rights Plan for Khan's Hostile Takeover Bid

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 10, 2008) - Western Prospector Group Ltd. (TSX VENTURE:WNP) today announced its Board of Directors has unanimously waived the application of the Company's shareholder rights plan to the inadequate hostile takeover bid by Khan Resources Inc.

The Board's decision is based on discussions with a significant number of major shareholders who have indicated they will not tender their shares to Khan's offer because it does not reflect the fundamental value of Western.

Waiving the shareholder rights plan clears the way for Western shareholders to express their views on the Khan bid before it expires on July 25, 2008.

"If Khan hopes to succeed in its offer for Western, it will have to offer shareholders fair value," said Gordon Pridham, Chairman of the Special Committee of Western's Board of Directors. "By waiving the shareholder rights plan in this case, we intend to force an end to the current offer by allowing Western shareholders to send Khan a clear and strong message that its bid is unacceptable."

The Western Board continues to recommend that all shareholders reject the hostile Khan bid and NOT TENDER their shares. In making its recommendation, the Board considered many factors, including the recommendation of the Special Committee and a written inadequacy opinion from its financial advisor, National Bank Financial. The recommendation states that the consideration provided under the Khan offer is inadequate, from a financial point of view, to the shareholders of Western.

The offer is unattractive for other reasons, including:

- The share exchange ratio under the Khan offer does not reflect relative merits of Western's assets compared to Khan's assets;

- The offer does not reflect the underlying value of Western's assets;

- The complexity of Khan's ownership structure could be detrimental to the value realized by Western shareholders;

- Synergies of the combined entity are overstated and would accrue mostly to Khan;

- The offer is timed opportunistically to disadvantage Western shareholders;

- Khan shares are historically volatile, of uncertain value and thinly traded;

- Khan is seeking to gain control of Western without paying an appropriate change of control premium;

- Western's Board is pursuing other strategic alternatives and a superior proposal may emerge;

- The offer is coercive and could result in Western shareholders holding an illiquid stock.

Western shareholders are not required to do anything in order to reject the Khan bid; all that is required is to simply abstain from tendering to the offer.

Western notes that its Board of Directors remains committed to enhancing shareholder value in both the short and long term and is open to alternative transactions. The Special Committee and its advisors have held discussions with third parties who have expressed interest in Western but there can be no assurance that any transaction will result from those discussions.

Note Regarding Forward-Looking Statements

This press release and other written or oral communication from the Company may include certain statements that may be considered "forward-looking statements" within the meaning of that phrase under Canadian securities laws. Statements other than historical facts that address possible future events, plans or developments are forward-looking statements. Such statements may be identified by the use of words such as "will", ""may", "expects", "estimate", "intend" or the use of the future or conditional tense. Certain material factors or assumptions were applied in drawing our conclusions and making those forward-looking statements. Forward-looking statements reflect management's current views with respect to possible future events and conditions and, by their nature, are based on management's beliefs and assumptions and subject to known and unknown risks and uncertainties, both general and specific to the Company. Although the Company believes the expectations expressed in such forward-looking statements are reasonable, such statements are not guarantees of future performance and actual results or developments may differ materially from those in our forward-looking statements. Readers are cautioned that risks may change or new risks may emerge. Additional information regarding the material factors and assumptions that were applied in making these forward looking statements as well as the various risks and uncertainties we face are described in greater detail in the "Risk Factors" section of our annual and interim Management's Discussion and Analysis of our financial results and other continuous disclosure documents and financial statements we file with the Canadian securities regulatory authorities which are available at www.sedar.com and available on the Company's website at www.westernprospector.com. The Company undertakes no obligation to update this forward-looking information except as required by applicable law.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

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