Adex Mining Inc.

Adex Mining Inc.

January 11, 2007 12:19 ET

Adex Mining Inc. Announces Filing of Financial Statements and MD&A, Completion of Private Placement, Settlement of Outstanding Litigation and Appointment of President and Chief Executive Officer

TORONTO, ONTARIO--(CCNMatthews - Jan. 11, 2007) -

NOT FOR DISSEMINATION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISEMINATION IN THE UNITED STATES FOR IMMEDIATE RELEASE

Adex Mining Inc. ("Adex" or the "Corporation") announced that it has filed today with the Ontario Securities Commission (the "OSC") and the British Columbia Securities Commission (the "BCSC") on SEDAR the following disclosure documents:

(i) audited consolidated financial statements of the Corporation for the fiscal years ended December 31, 2005 and December 31, 2004 together with the report of the Corporation's auditors thereon;

(ii) audited consolidated financial statements of the Corporation for the fiscal years ended December 31, 2004, December 31, 2003, December 31, 2002, December 31, 2001, December 31, 2000, December 31, 1999 and December 31, 1998, together with the report of the Corporation's auditors thereon;

(iii) unaudited interim consolidated financial statements of the Corporation for the three months ended March 31, 2006;

(iv) unaudited interim consolidated financial statements of the Corporation for the three and six months ended June 30, 2006;

(v) unaudited interim consolidated financial statements of the Corporation for the three and nine months ended September 30, 2006;

(vi) management's discussion and analysis for the fiscal year ended December 31, 2005;

(vii) management's discussion and analysis for the fiscal year ended December 31, 2004;

(viii) management's discussion and analysis for the three months ended March 31, 2006;

(ix) management's discussion and analysis for the three and six months ended June 30, 2006;

(x) management's discussion and analysis for the three and nine months ended September 30, 2006; and

(xi) all certifications by the Chief Executive Officer and the Chief Financial Officer of the Corporation with respect to the Corporation's annual filings for 2005 and the Corporation's interim filings for the first, second and third quarters of 2006 required by Multilateral Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings.

In addition, the Corporation has paid all outstanding participation fees, filing fees and late fees which are owing to the OSC and the BCSC.

As a result of the foregoing filings, the Corporation is now up to date in the filing of its financial statements and management's discussion and analysis under the Securities Act (Ontario) and intends to apply to the OSC for an order fully revoking the cease trade order (the "Ontario Cease Trade Order") issued by the OSC on May 27, 1998 as a result of the Corporation's failure to file its financial statements for the year ended December 31, 1997. The Corporation also intends to apply to the BCSC for an order fully revoking the cease trade order (the "BC Cease Trade Order" and, together with the Ontario Cease Trade Order, the "CTOs") issued by the BCSC dated July 16, 1998 also as a result of the Corporation's failure to file its financial statements for its year ended December 31, 1997. Subsequently, on December 4, 1998, the Corporation filed and mailed to its shareholders audited financial statements for the year ended December 31, 1997 and interim financial statements for the three months ended March 31, 1998, the six months ended June 30, 1998 and the nine months ended September 30, 1998, but no further financial statements had been filed by the Corporation or mailed to its shareholders since that time until the filings made on January 11, 2007 and referred to above.

As part of the process for obtaining revocations of the CTOs, the Corporation has obtained a National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant technical report with respect to its principal asset, the Mount Pleasant Mine ("Mount Pleasant" or the "Property"), a dormant multi-metal mine development project located in Charlotte County, New Brunswick, the results of which will be released shortly.

Mount Pleasant is the site of a dormant tungsten mine that was in production between 1983 and 1985. The Property consists of 102 contiguous mining claims covering approximately 1,600 hectares located approximately 80 km south of the city of Fredericton. The Property is on a paved road with no local inhabitants, but is located within approximately 80 kilometers of ocean shipping and the United States border.

Adex also wishes to announce the completion of a private placement (the "Private Placement") of $1,000,000 principal amount of convertible debentures (the "Debentures"). The closing of the first tranche of the private placement of $480,000 principal amount of Debentures occurred on October 28, 2005 and was announced by the Corporation by way of a press release issued on November 7, 2005. The balance of the Private Placement which involved the issuance of $520,000 principal amount of Debentures was completed in a number of closings which occurred over the period from November 17, 2005 to May 15, 2006.

The Debentures bear no interest for the first nine months following issuance and thereafter bear interest at the rate of 8% per annum, payable quarterly in arrears. The Debentures are convertible at the option of the holder into common shares of the Corporation ("Common Shares") on the basis of one Common Share for each $0.10 of principal amount converted (the "Conversion Rate"). The Debentures will be automatically converted at the Conversion Rate on the day on which the Common Shares are listed on a recognized stock exchange in Canada.

As part of the Private Placement, the holders of the Debentures were also issued an aggregate of 10,000,000 warrants to acquire Common Shares (the "Debenture Warrants"), with each Debenture Warrant entitling the holder to acquire one Common Share. The terms of the Debenture Warrants were subsequently amended to extend their exercise period such that each Debenture Warrant entitles the holder to acquire one Common Share at a price of: (i) $0.10 per Common Share from the time of issuance up to 5:00 p.m. (Toronto time) on March 15, 2007; (ii) $0.20 per Common Share up to 5:00 p.m. (Toronto time) on December 15, 2007; and (iii) $0.30 per Common Share up to 5:00 p.m. (Toronto time) on June 15, 2008, when the Debenture Warrants will expire.

In conjunction with the Private Placement, the Corporation entered into a debt settlement (the "Debt Settlement") with each of William Burton, the former President and Chief Executive Officer, who became a director of the Corporation on January 9, 2007, and Errol Farr, the Chief Financial Officer and a director of the Corporation, to settle debts owed by the Corporation to them in the amounts of $79,310 and $38,060, respectively, by issuing Debentures and Debenture Warrants to them. The amounts outstanding were in respect of services rendered to the Corporation and out-of-pocket disbursements made by Messrs. Burton and Farr to maintain the Corporation since 1998. William Burton was issued a Debenture in the aggregate principal amount of $79,310 and 793,100 Debenture Warrants and Errol Farr was issued a Debenture in the aggregate principal amount of $38,060 and 380,600 Debenture Warrants. The Debentures and Debenture Warrants issued as part of the Debt Settlement were over and above the $1,000,000 principal amount of Debentures and 10,000,000 warrants comprising the Private Placement and were issued on May 15, 2006.

The Debt Settlement was exempt from the valuation and minority approval requirements of OSC Rule 61-501 - Insider Bids, Issuer Bids, Business Combination and Related Party Transactions (the "Rule") by virtue of the exemptions contained in Sections 5.5.2 and 5.7.2 of the Rule due to the fact that neither the fair market value of the consideration for, not the fair market value of, the securities of Adex issued exceeded 25% of the market capitalization of the Corporation. The Debt Settlement was originally announced in a press release issued by the Corporation on November 7, 2005 concerning the closing of the initial tranche of the Private Placement and was also the subject of a material change report filed on November 7, 2005. The press release dated November 7, 2005 also indicated that Errol Farr would subscribe for $18,000 principal amount of Debentures pursuant to the Private Placement. This subscription did not occur.

The Private Placement was effected pursuant to a variation (the "Variation") of the Ontario Cease Trade Order granted by the OSC on May 27, 2005. All investors in the Private Placement were provided with copies of the Ontario Cease Trade Order and the Variation in accordance with the terms of the Variation.

The Corporation also announced the settlement of the action (the "Litigation") in which it was the defendant in respect of payment for a feasibility study on the Corporation's Mount Pleasant Property in New Brunswick prepared by the engineering firm of Kvaerner Metals Davey Ltd. ("Kvaerner"). The amount claimed under the Litigation was $500,000. The settlement agreement reached between the Corporation and Kvaerner on August 10, 2006 provided for the settlement of the Litigation in exchange for an immediate payment of $100,000 by the Corporation to Kvaerner and a subsequent payment of $100,000 by the Corporation to Kvaerner to be made on or before December 31, 2006. As a result of the Corporation making the second $100,000 payment, all parties have now been released from any further financial obligations to each other and any obligations under the Litigation.

The Corporation is also pleased to announce the appointment, effective August 1, 2006, of Kabir Ahmed, M.B.A., LL.B., as its new President and Chief Executive Officer. Mr. Ahmed was also appointed to the board of directors of the Corporation on January 9, 2007. Mr. Ahmed is an entrepreneurially-trained mining executive with a track record of executing corporate strategy and guiding publicly traded companies through the securities and regulatory framework in both Canada and the U.S. He has played an important role in taking a number of junior resource companies public by way of initial public offerings.

About Adex:

Adex is a reporting issuer in Ontario and British Columbia and is currently subject to the CTOs. The Corporation's primary asset is the Mount Pleasant Mine, a dormant multi-metal mine development project located in Charlotte County, New Brunswick, approximately 80 kilometers south of Fredericton, 97 kilometers northwest of Saint John and 38 kilometers north of St. George.

No securities commission or regulatory authority has approved or disapproved the contents of this press release.

Contact Information

  • Adex Mining Inc.
    Errol Farr
    Chief Financial Officer and Director
    (647) 296-1270
    (416) 946-1376 (FAX)