Press Releases

Triax Resource Limited Partnership and Triax Resource Limited Partnership II announce special meeting of limited partners

TORONTO, May 1 /CNW/ - First Asset (I) General Partner Inc. and First Asset (II) General Partner Inc., the general partners of Triax Resource Limited Partnership (TSX: TRF.UN) ("LP I") and Triax Resource Limited Partnership II (TSX: TXL.UN) ("LP II"), respectively, announce that a special meeting of limited partners of the Partnerships has been called for June 1, 2006.

At the meeting, Limited Partners will be asked to consider, and if deemed acceptable, approve the following proposals:

  1. Changing the name of LP I to First Asset Energy & Resource Fund and the name of LP II to First Asset Energy & Resource Income & Growth Fund to reflect the management and investment management relationships the Partnerships have with First Asset companies.
  2. Eliminating the existing fixed termination dates and extension mechanisms and granting the General Partners the right, under specific circumstances, to terminate the Partnerships in the future without the approval of the Limited Partners. If approved, this would permit each Partnership to continue until such time as its General Partner believes it is no longer beneficial to Limited Partners to continue it. Circumstances currently envisaged by the General Partner would be that the net asset value of a Partnership decreased to a point where the General Partner believed that the Partnership's size made it difficult to achieve proper diversification of the Partnership's investments, and/or the expenses of managing the Partnership outweighed the benefits of continuing the Partnership.
  3. Eliminating the monthly redemption feature which was implemented in 2002. The redemption feature was proposed in 2002 primarily to accommodate the desires of many Limited Partners to achieve early liquidity, having experienced negative performance in the period from the launch of the Partnerships to January 23, 2002. Since then, the performance of the Partnerships has been increasingly positive, with LP I's NAV increasing from $8.97 to $26.83, and LP II's NAV increasing from $13.77 to $41.46, both as at April 21, 2006. The General Partners are proposing that, effective October 1, 2006, the Redemption Feature be removed. Prior to October 1, 2006, Limited Partners will still be able to tender units for redemption, Partners may continue to buy or sell Units over the TSX. This proposal, if approved, would restore the original intent of the Partnerships, which was to capitalize on long term growth opportunities in the natural resource and energy sectors without having to manage the investment portfolios having regard to liquidity considerations for regular redemptions, and enabling the Partnerships to have broader investment opportunities than that afforded a fund with regular redemption features. It is the General Partners' views that such a change may enhance performance potential of the Partnerships and will broaden the scope of investment opportunities available to them.
  4. Amending the investment objectives and strategies of the Partnerships to, among other things, give the Partnerships a broader selection of investing choices. The General Partners propose to amend the investment objectives of the Partnerships to reflect the intention of the General Partners to consider and make investments in income trusts in addition to equities. Income trusts have become a very popular business structure in Canada and often are seen as a tax advantaged way of distributing income to investors.
  5. Amending the Limited Partnership Agreement of each Partnership in order to remove the provisions as to how, and under what circumstances, the investment advisory agreements may be terminated in order to bring the Limited Partnership Agreements into conformity with new agreements recently entered into with Natcan Investment Management Inc. Natcan's agreements with respect to the services which it provides to each Partnership recently were re-negotiated at the request of Natcan which wanted to adopt its current standard form agreements. Those new agreements contain, among other things, more favourable termination rights for the Partnerships which are more consistent with current practices in the advisory market place and replace the original termination provisions which were unduly restrictive and onerous and, in the General Partners' opinions, detrimental to the Partnerships. The General Partners also propose to amend the relevant Limited Partnership Agreement to remove the requirement that a new investment advisor be confirmed by Limited Partners at a meeting of limited partners. It is proposed that Limited Partner confirmation of a new investment advisor only be required if the fees paid to the new investment advisor will be higher than the fees paid to the current investment advisor. The General Partners believe that the existing right of Limited Partners to confirm a new investment advisor is not practical and that it also hinders the General Partners' ability to appoint a successor investment advisor by creating uncertainty about whether that successor investment advisor will receive the necessary confirmation from the Limited Partners.
  6. In the case of LP II only, amending certain provisions of the Limited Partnership Agreement that relate to amendments in order to bring the Partnership into alignment with current industry practices.

Limited Partners of record on May 2, 2006 will be entitled to receive notice of and vote at the meeting which will be held on June 1, 2006, with an adjourned meeting (if required) to be held on June 12, 2006. Details of the proposals will be outlined in a management information circular to be prepared and delivered to Limited Partners in connection with the meetings.

The General Partners also announce that effective immediately, the Partnership's will cease providing quarterly financial reports and begin reporting on a semi-annual basis in accordance with National Instrument 81-106 - Investment Fund Continuous Disclosure ("NI 81-106"). The Funds are investment funds as defined under securities legislation. NI 81-106 applies to investment funds that are reporting issuers and came into force in June 2005.

For further information: please call Robert MacNiven at (416) 362-2929 or (800) 407-0287