Passport questions why WGI Heavy Minerals, Inc. refused to accept a higher-priced offer for the Transworld Garnet India operations

SAN FRANCISCO, Jun 17, 2008 (Canada NewsWire via COMTEX) -- WGHMF | Quote | Chart | News | PowerRating -- PASSPORT CAPITAL, LLC (Passport) today stated it has formally requested that WGI Heavy Minerals, Inc. (TSX: WG | Quote | Chart | News | PowerRating) board delay the June 25, 2008 annual shareholders' meeting as a result of WGI's failure to provide full details regarding the previously announced Transworld Garnet India (Pvt.) Limited (TGI) transaction. Passport notes that not only has the WGI board failed to provide complete details regarding the agreement reached with V.V. Mineral, Passport is now aware that another credible third party in the heavy minerals industry had offered WGI US$25 million for the TGI assets and had also agreed to enter into a distribution and supply agreement with WGI.

As an alternative offer was made to WGI with a purchase price that was US$5.5 million higher, Passport believes shareholders should have serious questions about WGI's motivation for accepting V.V. Minerals' offer. As a higher-priced transaction would allow for more cash to be distributed to shareholders, Passport asks whether WGI entered into the best transaction possible or did it enter into a transaction with V.V. Mineral in a hasty attempt to placate shareholders in the circumstances of the current proxy contest? WGI's board has publicly stated that shareholders should vote to re-elect them because failure to do so "would jeopardize the completion of the TGI transaction" with V.V. Mineral. Passport asks whether it was appropriate for WGI's current board to ask shareholders to vote for their entrenchment when they seem to have refused a higher offer for undisclosed reasons.

Passport believes that WGI's shareholders, who will vote to either re-elect WGI's board members or replace them with the new directors proposed by Passport, have the fundamental right to base their decision on full and complete disclosure. Passport believes that WGI has not been providing the complete details that are required in order for shareholders to make an informed decision. In addition to what has been highlighted above, Passport would also stress that there is potential material information regarding the announced transaction with V.V. Mineral that WGI has not yet made available to the public. For example:

<< - Is the transaction subject to V.V. Mineral obtaining financing? - Is the transaction subject to any regulatory approvals? - Will any regulatory approvals be difficult to obtain in India, a country where WGI has already stated that government interests have tried to seize WGI's holdings in the past? - Most importantly, did WGI obtain a fairness opinion in connection with the TGI transaction? If not, what comfort do shareholders have that WGI is receiving a fair price for its TGI assets, especially in light of alternative offers? >>

Before WGI's board can legitimately hail the announced TGI transaction as a panacea for all of the company's problems, shareholders have the right to receive complete disclosure regarding the material terms of the transaction. Passport has communicated with WGI on several occasions and requested that it publicly file the transaction documents entered into with V.V.

Mineral as required under Canadian securities laws. While WGI

may yet file the documents, in Passport's view, WGI has purposefully delayed the filing in an attempt to secure as many shareholder votes as possible in advance of the upcoming meeting which is of critical importance for the future of the company. Passport reminds shareholders that WGI has chosen to disseminate two detailed press releases subsequent to the announcement of the transaction but has conveniently chosen not to concurrently file the documents despite Passport's various requests.

Passport believes that the lack of disclosure with respect to the proposed transaction with V.V. Mineral is materially misleading because it deprives WGI's shareholders of sufficient information to permit them to form an informed and reasoned judgment concerning the election of directors at the upcoming meeting. As a result Passport has requested that WGI delay the June 25, 2008 meeting until such time as shareholders have been provided with the complete information they require in order to decide on the future stewardship of the company.

Once WGI's shareholders have had the opportunity to assess complete information, Passport is confident that they will determine that it is Passport's director nominees that, together, possess the required financial, operational and industry experience to provide the strategic direction that WGI needs to protect and increase shareholder value.

Passport notes that its interests are entirely aligned with the interests of all of WGI's shareholders. Passport is not attempting to take "control of the board" or the cash resources of WGI as WGI's current board suggests. Passport is a value investor with a long-term investment horizon seeking to increase WGI's value for the benefit of all shareholders. If Passport's director nominees are elected, Passport will have no greater ownership or financial interest in WGI than it has today and no greater ability to determine the outcome of future board elections. The only way that Passport can benefit from the election of its director nominees is by increasing WGI's share price, an improvement that will benefit all shareholders.

As it is not yet certain that the shareholders' meeting will be delayed, Passport continues to urge shareholders to vote the YELLOW proxy as soon as possible and prior to 5:00 p.m. (EDT) on June 20, 2008. Please note that if you have already voted using management's proxy, you have every right to change your vote by simply voting the enclosed YELLOW proxy. This action cancels all previous votes - only your latest dated proxy counts. For more information, Passport directs shareholders to please contact Passport's proxy solicitation agent:

Kingsdale Shareholder Services Inc. North American Toll Free Phone (1-800-775-4067); Outside North America, Banks and Brokers Call Collect (416-867-2272)