Highwood Resources Announces 1999 Results of Operations and Future Plans.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--May 3, 2000

Highwood Resources Ltd. ("Highwood") (TSE:HWD.)(OTCBB:HIWDF) announced today the operating results for the year ending December 31, 1999.

All figures are in thousands of Canadian dollars.

                                               Year ended
                                              December 31
                                            ---------------
                                            1999            1998
                                            ----            ----
   Revenue                              16,953,306      13,869,761

   Net income (loss)                       997,465      (5,498,450)
   Net income (loss) per share                0.04           (0.25)

   Cash flow from operations             2,136,654       1,851,892
   Cash flow per share from operations        0.10            0.09

   Year-end common shares outstanding   21,855,458      20,025,748

For the fourth consecutive year, Highwood has achieved strong financial performance in terms of operating profit and cash flow. The Company had net income of $997,465 or $0.04 per share compared with a net loss of $5,498,450 or $0.25 per share in 1998. The 1998 figure reflects writedowns of various asset-carrying values totaling $6,535,387 and there were no writedowns in the current year. Related cash flow from operations increased by 15.4% to $2,136,654 from $1,851,892 in the prior year.

Revenue for the year ended December 31, 1999 increased 22.2% to $16,953,306 from $13,869,761 in 1998. Approximately two thirds of this increase was from the acquisition of the Canada Talc Limited operations at the start of the year. The balance was attributable to a regular sales increase of established product lines.

2000 OPERATIONS OUTLOOK

The Canada Talc Limited acquisition offers strategic advantages that should be gained through the creation of a multi-mineral processing facility in eastern Canada servicing the very large eastern North American market. The first two stages of the upgrading and expansion of the Canada Talc plant have been completed and all barite filler production is now being conducted at this plant along with the resident talc. The focus and emphasis for 2000 is to aggressively pursue and secure talc sales and establish a significant presence in the North American talc market. Jim Roxburgh, Highwood's Chief Executive Officer, stated: "Our challenge is to gain a respectable share of a market dominated by five long-standing talc producers and, with Highwood's long history of consistent high-quality mineral production and superior customer service, this is achievable and Highwood can succeed."

Limeco Products production in Rocky Mountain House, Alberta, has been terminated and all profitable lines are now consolidated in the Lethbridge plant along with the barite drilling fluid material. This rationalization should lead to improved operational efficiencies and higher profit margins with the volumes anticipated.

RARE METALS ALLOYS INC.: THOR LAKE BERYLLIUM PROJECT

Management continues to believe that this property has significant potential when brought into commercial production. Highwood's newly created subsidiary, Rare Metal Alloys Inc., has a mandate to determine the commercial viability of processing Thor Lake's beryllium through to a master alloy for use in advanced electronics and high-technology applications. Working in conjunction with Dynatec Corporation's Metallurgical Technologies Group, the Company is currently in a project review phase for Thor Lake. This work will assess the technology, permitting and marketing aspects of the project. By the end of summer, Highwood will have completed a community consultation plan, a permitting strategy, and an evaluation of both the mine plan and process technology along with related cost estimates. This work will provide the necessary information in order to determine how the project should be advanced to the next stage of evaluation - the prefeasibility study.

MANAGEMENT CHANGES

The Corporation is pleased to announce that Garry Lynkowski, the Chief Financial Officer and a director of the Corporation, has been reappointed as President effective May 1, 2000. Jim Roxburgh retains the offices of Chairman and Chief Executive Officer.

Certain statements in this news release may constitute forward-looking statements which necessarily involve risks, uncertainties and other factors which may cause the actual results, performance of achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.