Frame Fails in Comeback Attempt

Shareholder votes accompanied by jeers and heated epithets...
"He didn't win a single vote. You should have heard the heckling..."

Ex-Westray Chief Fails in Comeback Attempt

On June 9th, 1998, the shareholders voted to change the company's name
from Mineral Resources Corporation to Minroc Mines Incorporated.
On June 4th, 1999, the company's name was changed
to Cassiar Mines & Metals Incorporated (see below).

Part One
Ex-Westray Chief Fails in Bid for Comeback

Shareholders reject takeover proposal
Votes accompanied by jeers, epithets, heckling

by Paul McKay

This article appeared in
The Ottawa Citizen
Friday, September 12, 1997

Former Westray Coal chief Clifford Frame's comeback bid to gain control of an Australian-owned company ended in failure yesterday.

At a stormy 48th-floor shareholders' meeting in Melbourne, Mr. Frame failed to win any resolutions in support of his hostile takeover of Greenfields Coal.

He had sought to have the current directors evicted, himself appointed CEO of Greenfields and have his associates become majority directors of the Australian-listed company.

Each vote went against Mr. Frame by almost 70 per cent. The defeat effectively ends his bid, through TSE-listed Mineral Resources Corporation, to take over Greenfields.

According to Greenfields directors, each vote was accompanied by jeers and heated epithets aimed at Mr. Frame and his Australian associate, John Byrne. They focused on Mr. Frame's link to the 1992 Westray explosion, which killed 26 miners in Nova Scotia, and MRC president John Byrne's record of failed business ventures.

The main attraction of Greenfields lay in lucrative tax credits worth, according to Mr. Frame, as much as $80 million U.S. on the Australian company's chief asset, a coal property in West Virginia.

The takeover bid began July 4, when Mr. Frame sent a fax to Greenfields chairman Rhett Drew, giving him just 2½ hours to hand over his company to MRC.

"There's no way ahead for Mr. Frame with us," a jubilant Mr. Drew told the Citizen moments after the meeting ended. "He didn't win a single vote. You should have heard the heckling."

Other Greenfields directors confirmed that Mr. Frame had no outside backing for the post of Greenfields CEO.

The only person who spoke in favour was Mr. Frame's Canadian lawyer.

The shareholder turnout was unprecedented for an Australian junior mining company. Greenfields has 100 million shares outstanding, and about 70 million votes were accounted for at the meeting through 128 shareholders.

"Most of the people had already made up their mind" before the meeting, said Melbourne lawyer Graeme Menzies, a Greenfields director. "They (the Frame group) had a coterie of shareholders. Their original estimate was they had 26-27 million shares a few days ago. They got about 22-23 million shares only, so they had some defections."

Despite the decisive vote, the bitter feud between Greenfields and MRC is unlikely to be settled soon. Greenfields has called demand loans of $1.5 million owed to it by MRC, and has formally charged MRC and several associates with insider trading in Australian federal court. After a hearing yesterday, the case is proceeding.

Mr. Frame earlier told the Citizen he has not taken part in any insider trading and had not violated Australian trade rules. He declined to speak to the Citizen following yesterday's vote in Melbourne.

The MRC takeover bid contained no cash offer. The proposal was strictly a paper trade: eight Greenfields shares for one MRC share. At the time the takeover bid was announced in July, that offer would have discounted the market value of Greenfields shares by 50 per cent.

The final offer from MRC was identical: no cash and an eight-for-one share swap. However, in the immediate days leading up to the vote, the volume and price of MRC shares climbed dramatically on the Toronto Stock Exchange, while Greenfields shares fell in value on the Australian Stock Exchange.

That made the MRC offer more alluring.

Last week, 24,800 MRC shares were traded on the TSE, but nearly all of those moved on Thursday. On Friday, MRC closed at 65 cents.

This week, with the share price wavering between 70 and 75 cents, trading zoomed on Monday with 133,600 shares changing hands for a value of about $100,000.

It was a similar story Tuesday with buyers driving up the price to 95 cents on a volume of 82,800. On Wednesday, the day before the key vote in Australia, volume was again extraordinary by MRC standards — 72,200 shares traded and the stock closed at 89 cents.

Yesterday, with the defeated takeover bid in Australia, trading was back to normal — 5,914 shares changed hands, the stock fell 19 cents and closed at 70 cents, back where it started the day after Labour Day.

Between Labour Day and the takeover vote in Melbourne, the share price of MRC rose 27.14 per cent.

Who was behind the buying — the largest block involved was 50,000 — is not known.

Savouring their victory after the shareholders meeting, Mr. Drew and the Greenfields directors made no effort to disguise their personal delight at the defeat of Mr. Frame and Mr. Byrne.

"The whole thrust of today's proceedings was to remove all the members of the current board, and to install Mr. Frame and Mr. Byrne," Mr. Drew says.

"It was what they were trying to do in early July, except this time they did it to the shareholders. But they just gave them a bloody nose!"

One of the defectors from Mr. Frame's camp included MRC's Malaysian bankers, who control about 4 million Greenfields shares.

According to Mr. Drew and Mr. Menzies, that collapsed support, and MRC's shaky finances, could spell the end of Mr. Frame's first public company since the parent company of Westray Coal went bankrupt in 1993.

"MRC has 10 million shares issued. The last sale in Toronto last night (July 10) was at 89 cents," says Mr. Drew.

"So they have a market capitalization of $8.9 million. They owe us the best part of $2 million (Aus.). They owe some Malaysian banks $1.6 million. They have a cash requirement of $5 million to $6 million.

"Unless a white knight comes along MRC will not be an entity three months from now."

Even if that happens, Mr. Drew says, Mr. Frame's company will still have trouble on its hands. "Greenfields intends to pursue the monetary debts that MRC owes us until they are paid. Otherwise we will drive them to liquidation."

Part Two

Mineral Resources Corporation

Mineral Resources Corporation, Corporate Offices:
Scotia Plaza, 40 King Street West, Suite 3315
Toronto, Ontario   M5H 3Y2
Telephone: (416) 860-0814   Fax: (416) 860-1868
Source:   Mineral Resources Corporation 1997 Annual Report, 28 May 1998
available at SEDAR

Mineral Resources Corporation

"The Corporation undertook financial change in 1997 and early 1998, reducing debt in order to put MRC on a sound financial footing and to facilitate project undertakings. The Corporation divested its shareholding in the Greenfields Coal Company and converted a significant portion of our liabilities into equity and closed a series of private placements. Also, the Company has completed a reassessment of assets offshore. The net effect of these arrangements has been to provide MRC with the flexibility needed to finance its projects effectively and to ensure our Australian and South African ventures are fully solvent and self-sustaining..."
Source:   Mineral Resources Corporation 1997 Annual Report
available at SEDAR

Part Three

Minroc Mines Chairman Clifford H. Frame
Proposes Major Project in Northern BC

Formerly Mineral Resources Inc.

VICTORIA, June 18, 1998: — Minroc Mines Inc. (formerly Mineral Resources Inc.), owner and operator of the Cassiar Chrysotile mine in Northern British Columbia, today announced plans to pursue a $400 million to $800 million magnesium project at the mine site. Minroc Chairman and CEO Clifford H. Frame made the announcement following a meeting today with the Honourable Dan Miller, Deputy Premier, Minister of Energy and Mines, and Minister Responsible for Northern Development.

"In addition to the established reserves of chrysotile (asbestos), for which Cassiar has a world-wide reputation," said Mr. Frame, "we have identified significant concentrations of magnesium silicate in the mine tailings which can be processed economically and brought to the market."

Describing magnesium as "the metal of the 21st century," Mr. Frame noted that the ore deposit at Cassiar is similar to that at Asbestos, Quebec, where Noranda has just launched its Magnola Project. "By conservative estimates, there is a 50- to 100-year supply of magnesium at Cassiar," Mr. Frame said, drawing on preliminary findings from the independent mining engineering firm of Kilborn-SNC Lavalin.

In his meeting with Minister Miller, Mr. Frame underlined the economic benefits that would arise from the project, including jobs in a part of the province that suffers high unemployment, and investment in infrastructure.

Shares of Minroc Mines Inc. trade on the Toronto Stock Exchange under the symbol MN.

Source: Minroc Mines Inc. press release, June 18, 1998

Minroc Mines Incorporated
(formerly Mineral Resources Corporation)

Minroc Mines Inc. Head Office:
777 Bay Street, Suite 1910, Box 127
Toronto, Ontario   M5G 2C8
Telephone: (416) 204-1455   Facsimile: (416) 204-1450
Minroc Mines Inc. website at
Source:   Minroc Mines Incorporated 1998 Annual Report, 26 April 1999
available at SEDAR

Part Four

Minroc Mines Inc.
changes name to
Cassiar Mines & Metals Inc.

Clifford H. Frame, Chairman & CEO

TORONTO, June 4, 1999: — Minroc Mines Inc. announces that it has changed its name to Cassiar Mines & Metals Inc. effective immediately. The Company's shares, which have been trading on the Toronto Stock Exchange under the symbol MN, will trade under the symbol CIR effective Tuesday, June 8th, 1999.

The Company stated that the name change was approved by the shareholders at their annual meeting last week in order to properly reflect and focus on the core business of the Company, which is the redevelopment of the famous Cassiar Mine in northern British Columbia to produce magnesium silicate fibre and magnesium metal. The Cassiar Mine has some 20 million tonnes of mined serpentine ore resources on surface containing approximately 23.5% magnesium metal and 4% to 10% magnesium silicate fibres, as well as extensive in-mine resources.

The Company announced last week that it had signed an agreement to provide a $5 million loan facility which will be used to bring the first Phase of the magnesium silicate fibre project into commercial production without delay. The first Phase plan provides for the production and sale into world markets of 18,000 tonnes per year of high quality fibres commencing in the third quarter of 1999.

The Company is also proceeding with its Magnesium Metal Project, based on the recovery of the metal from the Cassiar mined ore stockpile on surface, from which it is planning to construct a plant to produce 150 to 200 million pounds of magnesium metal annually for an initial 50 year period.

Clifford H. Frame, Chairman & CEO

For further information: Clifford H. Frame, Chairman,
Phone: (416) 204-1455

Source: Cassiar Mines & Metals Inc. press release, June 4, 1999

SEDAR website at
Profile of Cassiar Mines & Metals Inc.
View Cassiar Mines & Metals' public documents
Cassiar Mines & Metals Inc. website at

Cassiar Mines & Metals Incorporated
(formerly Minroc Mines Incorporated)
(formerly Mineral Resources Corporation)

Cassiar Mines & Metals Inc., Head Office:
777 Bay Street, Suite 1910, Box 127
Toronto, Ontario   M5G 2C8
Telephone: (416) 204-1455   Facsimile: (416) 204-1450
Cassiar Mines & Metals Inc. website at

Cassiar Mines & Metals Inc. 1999 Annual Report
(Includes brief biographies and photos of the Directors) Source:   Cassiar Mines & Metals Inc. 1999 Annual Report
available at SEDAR
Brief biographies and photos of the Directors are available at

Part Five

Cassiar Mines & Metals Inc.
changes name to
Cassiar Magnesium Inc.

Clifford H. Frame, Chairman & CEO

TORONTO, April 18, 2000: — The shareholders of the Company today approved a change in the corporate name to Cassiar Magnesium Inc. The Stock Symbol is unchanged as CIR on the Toronto Stock Exchange. The Company stated that the change has been made in order to clearly and simply identify the core business and focus of the Company as a developer and producer of magnesium metal and magnesium silicate fibre products in northern British Columbia, Canada ... The Chairman stated that the principal use for magnesium metal is in the automotive, beverage can and aeronautic industries. The average magnesium metal content of automobiles has increased from two kilograms to eight kilograms per car in recent years and forecast to increase at a rate of 9.4% annually through 2000 and 5% annually after that...
Source: Cassiar Magnesium Inc. press release, April 18, 2000

Cassiar Magnesium Incorporated

Cassiar Magnesium Inc. is the continuing company resulting from the amalgamation of Cassiar Mines & Metals Inc. and Cassiar Mining Inc. under the Business Corporations Act of Ontario on October 8, 1999 as Cassiar Mines & Metals Inc. and the continuing company resulting from the amalgamation of Cliff Resources Corporation and Canaustra Gold Exploration Limited under the Business Corporations Act of Ontario on January 9, 1989 as Cliff Resources Corporation. The Company changed its name from Cliff Resources Corporation to Mineral Resources Corporation by articles of amendment dated September 6, 1995, and then to Minroc Mines Inc. by articles of amendment on June 10, 1998 and then to Cassiar Mines & Metals Inc. by articles of amendment on May 21, 1999 and then to Cassiar Magnesium Inc. by articles of amendment on April 25, 2000. The Company's registered and executive office is located at 777 Bay Street, Suite 1910, P.O. Box 127, Toronto, Ontario, M5G 2C8.
Source: Cassiar Magnesium Inc. Annual Information Form, May 18, 2001
available at SEDAR

Cassiar Magnesium Incorporated
(formerly Cassiar Mines & Metals Incorporated)
(formerly Minroc Mines Incorporated)
(formerly Mineral Resources Corporation)

Cassiar Magnesium Inc., Head Office:
777 Bay Street, Suite 1910
Toronto, Ontario   M5G 2C8
Telephone: (416) 204-1455   Facsimile: (416) 204-1450
Cassiar Magnesium Inc. website at
Source: Cassiar Magnesium Inc. Annual Information Form, May 18, 2001
available at SEDAR

Part Six

Greyling Takes Control
Cassiar Magnesium Incorporated
Senior Management Changes at Cassiar Magnesium

TORONTO, June 1, 2001 /CNW/ — The Board of Directors of Cassiar Magnesium Inc. announced today that control of the Company has been acquired by Greyling Investments, Inc. of Grand Cayman and Greyling Resources, LLC of the United States, two companies affiliated with each other. The two companies, the Greyling Group, which now owns 49.62% of the issued common shares of the Company, is part of a large investment trust headquartered in Dallas, Texas. The investment trust owns a diversified portfolio of investments, with an emphasis on the oil and gas sector.

The Greyling Group has now advised the Company that it intends to introduce and install its own nominees to the Board of Directors and operating management of the Company at the Company's next Annual and Special Meeting, which is scheduled to take place in July 2001. Discussions between the Greyling Group and management and designated directors of the Company have now made it clear that the Greyling Group does not propose to proceed with the present Board of Directors or the present senior officers and management of the Company.

The Board of Directors of the Company has decided that, in view of the change in control and the Greyling Group's stated intentions, the initial course of action of the Board, in the best interests of all of the shareholders of Cassiar Magnesium Inc. is to terminate the present engagement of Mr. C. H. Frame, as Chairman and Chief Executive Officer, and of Mr. K. H. Bates, as President of the Company, effective today. Mr. C. H. Frame and Mr. K. H. Bates have also now resigned as directors of the Company.

Mr. Michael Burns has been appointed to be Chairman of the Company's Board of Directors until the Annual and Special Meeting of the Company in July, 2001. The remaining members of the Board of Directors are Mr. Ken Berkeley, Mr. Carl Freitag and Mr. James A. Hunt...

Source: Cassiar Magnesium Inc. press release, June 1, 2001
also available at SEDAR

Part Seven

Cassiar Magnesium Inc.
changes name to
Cassiar Resources Inc.

Michael Burns, Chairman

On July 13, 2001, the Company shareholders approved the change of the Company's name from Cassiar Magnesium Inc. to Cassiar Resources Inc. On the same date, the shareholders elected a new Board of Directors. During the second quarter of 2001, the Company's previous Board of Directors terminated the Chairman and President of the Company for reasons which were not disclosed. The sum of $3,689,649 was paid to the former Chairman and President during the quarter. Of this amount, $396,577 had been accrued by the Company at December 31, 2000. The current Board of Directors is investigating the arrangements with the former management and the circumstances surrounding their termninations. The Directors have not reached any conclusions about these matters...
Source: Cassiar Resources Inc.
Interim Financial Report, Second Quarter 2001
available at SEDAR

Source: Cassiar Magnesium Inc. Management Information Circular
Solicitation of Proxies as of May 25, 2001 for Use at the Annual and Special Meeting of Shareholders to be held on July 13, 2001
available at SEDAR

Cassiar Resources Incorporated
(formerly Cassiar Magnesium Incorporated)
(formerly Cassiar Mines & Metals Incorporated)
(formerly Minroc Mines Incorporated)
(formerly Mineral Resources Corporation)

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