Canadian Mining Journal

News

DIAMOND MERGER-GO-ROUND – Stornoway hunting for Ashton and Contact Diamond (July 26, 2006)

VANCOUVER - STORNOWAY DIAMOND CORP. has offered to acquire two other diamond exploration companies, ASHTON MINING O...


VANCOUVER – STORNOWAY DIAMOND CORP. has offered to acquire two other diamond exploration companies, ASHTON MINING OF CANADA and CONTACT DIAMOND CORP., in separate bids. Should the deals be concluded as planned, Stornoway says it will have a “unique diamond project pipeline” (development and exploration projects), one of Canada’s strongest management teams with a history of discovery, growth potential, an enhanced financial base, and no controlling shareholder.

Stornoway has already secured 51.7% of the issued and outstanding Ashton Mining shares through agreements with ASHTON CANADA PTY and QIT-FER ET TITANE (both subsidiaries of RIO TINTO). Stornoway is offering $1.25/share in cash or one Stornoway share plus $0.01 in cash. Stornoway has secured a $32.5-million bridge loan facility and will raise a further $22.5 million through a private placement of subscription receipts with AGNICO-EAGLE MINES of Toronto.

For Contact, Stornoway is offering 0.36 of a Stornoway share for each Contact share (worth approximately $0.45/share). Contact board members are urging their shareholders to accept the offer. Agnico-Eagle has already agreed to tender the 31% of Contact shares that it holds.

The presentation entitled “A New Force in the Canadian Diamond Industry” is available at www.StornowayDiamonds.com. It provides a detailed look at the combined company.