(COMTEX) B: Castello Casino Corp. - Announcement
B: Castello Casino Corp. - Announcement
TORONTO, Jun 9, 2000 (BUSINESS WIRE) -- Castello Casino Corp. ("Castello")
(OTCBB:CCCZ) is pleased to announce that the Company has completed a US$560,000,
8% convertible debenture financing through Thomson Kernaghan & Co. Ltd.
The proceeds from this financing will be used to acquire options on certain
timber concessions in the Republic of Fiji and for working capital.
The Debentures will be convertible commencing June 9, 2000. The conversion price
of the Debentures shall be the lower of (i) 75% of the average closing bid price
of the stock for the five (5) trading days preceding the conversion date, and
(ii) 110% of the closing bid price (US$0.84) on May 9, 2000. Castello shall have
the right to redeem the Debentures at any time prior to conversion or redemption
at a 125% of the principal amount of the outstanding Debentures plus accrued
interest by giving ten (10) days notice. Pursuant to the agreement, Castello
must file a registration statement under the Securities Act for the purpose of
registering the issuance of not less than 200% of the common stock underlying
the Debentures and the Warrants based upon the closing date as the conversion
date of the Debentures and the Warrants. On the Closing Date, Castello issued to
the Agent a warrant to purchase US$112,000 of common shares exercisable under
the same terms as the Debenture. The Warrant expires on April 30, 2003.
The special meeting of sharedholders announced on May 8th, 2000, has been
re-scheduled to Monday, August 21st, 2000, from July 5th, 2000.
As previously announced, Castello under agreement will purchase 100% of
BioForest Investments, Inc. ("BioForest"). BioForest was formed to participate
in the development of an integrated and sustainable forestry enterprise in
partnership with the native landowners in Fiji. BioForest has the right to earn
70% of BioForest Products (Fiji) Limited and BioForest Holdings (Fiji) Limited
("H & P") upon providing US$11,000,000 to fund the establishment of the project.
H & P are 30% owned by native landowners. Discussions are currently in progress
with corporate and institutional funders.
The project is based on the sustainable exploitation of indigenous forest,
acquisition of mature mahogany plantations (not native) and the development and
planting of fast growing eucalyptus (hardwood) plantations as a source of short
fiber wood chip. The initial US$11,000,000 investment will be used to acquire
existing timber processing operations, securing the land for the pulpwood
plantations, the mahogany plantations and acquiring further forest resources.
In year one the project is expected to have annualized earnings of US$4,000,000,
and estimated annual earnings of US$60,000,000 by year five. The project will
use its asset base to construct new processing facilities, acquire the mahogany
plantations and develop the eucalyptus pulpwood plantations. As 90% of the
product will be exported, the company would qualify for a 13-year tax holiday.
The project involves the co-ordinated and orderly development of the forestry
industry in Fiji with projected annual earnings of US$150,000,000 by year ten.
The group development plans are: 1) An integrated sustainable hardwood business
based on 500,000m3/year log harvest by year four; 2) develop a modern
centralized processing facility with its own power supply to produce sawn
timber, veneers, plywood and blockboards as well as the manufacturing of doors
and parquet for the export market; 3) establish up to 100,000 hectares of fast
growing eucalyptus pulpwood plantations with 7-year rotation.
The group has been in discussions with senior North American industry entities
and will enter into a management or joint venture/partnership arrangement after
the initial 12-month establishment period. Currently, an independent senior
Canadian forestry consultant is advising the group
The Fiji Islands by virtue of its ex-colonial status is a member of the
African-Caribbean Pacific ("ACP") group of countries. The ACP was formed by the
EEC to provide aid and assistance to a select group of small countries in the
three regions. The EEC particularly encourages the development of private
enterprise projects with a minimum of 25% indigenous landowner participation.
Assistance is considered on a project by project basis, key elements being the
beneficial impact of the project on the country and the region and whether the
EEC is a consumer of the product as well as suppliers and constructors of the
project. Initial discussions indicate that the BioForest Group qualifies for
assistance with both financing and marketing. The company will request the Fiji
Government to arrange a meeting with the EEC to establish the framework for the
assistance program.
BioForest will be the controlling partner in a medium sized forestry project,
which will double the Fiji GNP and be the largest money earner in the country
within 10 years. Other unique features of the project include the group's
corporate structure through native landowners participation and its commitment
to the disciplined development of natural resources. The partnership and the
group's philosophy represents the best possible combination for responsible
forestry resource development. The unique characteristics of the project enable
the company to obtain grants, subsidies and other forms of assistance where
other companies or similar projects do not qualify.
Statements in this news release that are not historical facts, including
statements about plans and expectations regarding products and opportunities,
demand and acceptance of new or existing products, capital resources and future
financial results are forward-looking. Forward-looking statements involve risks
and uncertainties, which may cause the company's actual results in future
periods to differ materially from those expressed. These uncertainties and risk
include changing consumer preferences, lack of success of new products, loss of
the company's customers, competition and other factors discussed from time to
time in the company's filings with the Securities & Exchange Commission.
No securities regulatory authority has approved or disapproved of the contents
of this news release.
CONTACT: Castello Casino Corp.
Ross McGroarty, Chairman
or
David Hynes, President
Tel: 416/594-0528
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