Distribution of Shares of KHD Humboldt Wedag International AG

Jun 21, 2010, 16:00 ET from Terra Nova Royalty Corporation

NEW YORK, June 21 /PRNewswire-FirstCall/ -- Terra Nova Royalty Corporation (NYSE: TTT) (the "Company") is pleased to announce that it will distribute 7,571,228 common shares (the "KID Shares") of KHD Humboldt Wedag International AG ("KID"), representing approximately 23% of the total issued KID Shares, by way of a pro-rata special dividend (the "Distribution") to the Company's shareholders.  The Distribution will be:

  • paid to shareholders of record as of July 1, 2010 (the "Record Date");
  • on the basis of one KID Share for every four common shares of the Company held at the Record Date (no fractional shares will be issued and amounts will be rounded to the nearest whole number); and
  • made available on July 1, 2010 (the "Distribution Date") in electronic form through Clearstream Banking AG ("Clearstream").

The Distribution is in furtherance of the Company's previously announced plan to restructure into two distinct publicly traded companies, being: (i) a mineral royalty and natural resources company; and (ii) an industrial plant technology, equipment and service company.  

The KID Shares are listed on the Frankfurt Stock Exchange under the symbol "KWG".  The KID Shares are exempt from registration in the United States under Rule 12g3-2 under the Securities Exchange Act of 1934.  As such, KID will publish in English, on its website at www.KHD.com, information made public pursuant to the applicable securities laws of Germany and the requirements of the Frankfurt Stock Exchange, which currently includes annual financial statements for the fiscal year ended December 31, 2009 and interim financial information for the quarter ended March 31, 2010.  In addition, for further information respecting KID please refer to KID's website and the Company's Management Information Circular dated March 29, 2010, which includes an information statement respecting KID, its business and operations and which is available under the Company's profile on www.sedar.com and was filed with the United States Securities and Exchange Commission on Form 6-K on March 3, 2010.  

The Distribution

Pursuant to the Distribution, each holder of record as at the Record Date, will receive one KID Share for every four common shares of the Company held at such date.  No fractional KID Shares or interests therein will be issued and the amount of KID Shares to be distributed will be rounded to the nearest whole number.  

The KID Shares will be made available on the Distribution Date in electronic form through Clearstream, a security depository and the principal clearing house for the Frankfurt Stock Exchange.

In order to receive their pro rata share of the Distribution, shareholders or their broker or nominee will be required to have a Clearstream eligible account.  Computershare Trust Company N.A. ("Computershare") will be the distribution agent for the Distribution.  Computershare has agreed to provide access to a Clearstream eligible custodian account for registered shareholders who are United States persons and who do not have access to a Clearstream eligible account.  Registered shareholders who are United States persons whose KID Shares have been deposited into this account can provide instructions to Computershare in the event that they wish to transfer their KID Shares and Computershare will carry out such instructions.  

Depository Trust Company and CDS Clearing and Depository Services Inc. participants and registered shareholders, who are not US Persons, will be required to provide instructions to Computershare as to the deposit of their shares in a Clearstream eligible account. The KID Shares of such shareholders will be retained by the Company in its own custodian's Clearstream eligible account until such instructions are delivered to Computershare.

The KID Shares of non-registered shareholders who own the Company's common shares through a broker or other nominee, will either be: (i) deposited into such Clearstream eligible account as their broker or nominee has instructed Computershare prior to the distribution date; or (ii) if no such instructions have been provided by the broker or nominee, retained by the Company, in the case of non-United States holders, for deposit into its custodian's Clearstream eligible account or will be delivered by the Company for deposit in Computershare's custodian account, in the case of United Sates holders. In such event, such non-registered shareholder will have to have their broker or nominee contact the Company in the event that such non-registered shareholder wishes to transfer their KID Shares. Non-registered shareholders should contact their brokerage firm for further information.

Further materials respecting the Distribution will be mailed to shareholders shortly and posted to the Company's website.  Such materials will include forms to be used by registered shareholders to designate a Clearstream eligible account for the deposit of their KID Shares.  For further information respecting the Distribution please contact Computershare at:

Computershare Trust Company N.A.

PO Box 43001

Providence, Rhode Island 02940-3001


Contact: Computershare Global Transaction Unit

Telephone: 1-877-624-5999 (toll free within North America) or 1-781-575-4086

Email: USAllGlobalTransactionTeam@computershare.com

Further KID Distribution

The Company currently intends to distribute an additional 9,383,728 KID Shares, representing approximately 29% of the outstanding KID Shares, to shareholders on a pro-rata basis in the third quarter of 2010.

Canadian Withholding Tax and Ineligible Jurisdictions

Shareholders who are residents of the United States for the purposes of the Canada-United States Income Tax Convention and who are entitled to the benefits of such treaty will generally be subject to a withholding tax rate of 15%.  Shareholders who are not residents of Canada will be subject to non-resident withholding taxes under the Income Tax Act (Canada) at a rate of 25% of the value of the KID Shares received under the Distribution unless such rate is reduced by an applicable income tax treaty, such as in the case of United States. Shareholders may be able to claim such withholding taxes when computing their tax liability in their resident jurisdiction.

Computershare will act as the withholding agent under the Distribution and will withhold a portion of the KID Shares subject to the Distribution, liquidate such shares and remit the withholding amounts to the Canada Revenue Agency on behalf of the Company.

The foregoing discussion of withholding taxes is of a general nature, does not include applicable tax rules other than Canadian withholding taxes, is not intended to be construed as legal or tax advice to any shareholder, is not exhaustive of all possible income tax consequences and does not take into account or anticipate any changes in the law or the administrative or assessing practice or policies of the Canada Revenue Agency.  In addition, the foregoing doe not take into account provincial, territorial or foreign tax considerations.  We recommend that shareholders contact their financial and tax advisors for guidance with respect to the taxation of the Distribution.

Pursuant to the Distribution, KID Shares will not be distributed in any jurisdiction in which such distribution would be unlawful. Shareholders resident in such jurisdictions will have their pro rata entitlement liquidated by Computershare and will receive the proceeds less applicable withholding taxes.

About Terra Nova Royalty Corporation

Terra Nova Royalty Corporation is active in the mineral royalty and natural resources industry.

Disclaimer for Forward-Looking Information

Certain statements in this news release are forward-looking statements, which reflect our management's expectations regarding our future growth, results of operations, performance and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits we will obtain from them. These forward-looking statements reflect management's current views and are based on certain assumptions and speak only as of the date hereof. These assumptions, which include management's current expectations, estimates and assumptions about our business and the markets we operate in, the global economic environment, interest rates, exchange rates and our ability to manage our assets and operating costs, may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (i) changes in iron ore and other commodities prices; (ii) the performance of the properties underlying our interests; (iii) decisions and activities of the operator of our royalty properties and other interests; (iv) unanticipated grade, geological, metallurgical, processing or other problems experienced by the operators of our royalty properties and other interests; (v) economic and market conditions; and (vi) the availability of royalties for acquisition or other acquisition opportunities and the availability of debt or equity financing necessary to complete such acquisitions. There is a significant risk that our forecasts and other forward-looking statements will not prove to be accurate. Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. Except as required by law, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about these and other assumptions, risks and uncertainties are set out in our MD&A filed with Canadian securities regulators and filed on Form 6-K with the SEC and our Form 20-F for the year ended December 31, 2009.




Terra Nova Royalty Corp.

Allen & Caron Inc.

Allen & Caron Inc.

Rene Randall

Joseph Allen

Len Hall

1 (604) 683-8286 ex 224

1 (212) 691-8087

1 (949) 474-4300




SOURCE Terra Nova Royalty Corporation