Arehada Mining Limited

Arehada Mining Limited

August 19, 2010 11:36 ET

Arehada Provides Update on Shareholders' Meeting and Related Party Loan

TORONTO, ONTARIO--(Marketwire - Aug. 19, 2010) - Arehada Mining Limited (TSX:AHD) ("Arehada") today announces that its annual and special shareholders' meeting will proceed on September 10, 2010 at 10:00 a.m. (Toronto time). However, the meeting will not deal with the ratification of the proposed sale by Arehada's wholly-owned subsidiary, Arehada (Barbados) Corporation ("ABC"), to Shanjin Mining Corporation ("Shanjin"), a Shandong based Chinese mining company, of the shares ABC holds in Arehada Mining Corporation ("Arehada China"), Arehada's Chinese operating subsidiary. 

As previously announced on February 23, May 13, 2010 and July 19, 2010, the agreement between ABC and Shanjin will only become effective upon the fulfillment of certain conditions, including governmental approvals in both the Shandong Province and the Inner Mongolia Autonomous Region. Shanjin has advised ABC that Shanjin has obtained the approval of the sale from the Asset Supervision and Administration Commission of the Shandong Province. However, Arehada China has not yet received the approval of the Bureau of Commence of Inner Mongolia. The sale agreement has therefore not become effective. In addition, Arehada China and Shanjin are still in the process of finalizing the independent valuation and audit reports on Arehada China. The final cash purchase price will be based on the net asset value of Arehada China as shown in the valuation and audit reports.

For these reasons, Arehada has decided to call a special meeting of shareholders once the sale agreement has become effective, to be held subsequent to the September 10 meeting to ratify the sale to Shanjin.

Arehada also reports that Arehada China has received repayment in the total amount of RMB 19 million of the related party loan from Baiyinhanshan Mining Group Limited, a company controlled by Messrs. Steve Fan Wang and Tom Zhen Wang, directors, officers and controlling shareholders of Arehada. After this repayment, the related party loan will have approximately RMB 1 million outstanding. Arehada China will use the repayment amount to pay down its liabilities. Arehada China expects the remaining balance of this related party loan to be fully repaid in the next few weeks.

About Arehada Mining

Arehada Mining Limited is engaged in the exploration, development, extraction and production of zinc, lead and silver in Dongwuzhumuqinqi, located in Inner Mongolia, China. Arehada produces zinc and lead concentrates, which are then sold to smelters in China.

Arehada has completed construction of a zinc processing plant, to produce zinc calcine and sulphuric acid.

Forward Looking Information

The above contains forward looking information that is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world commodity markets, costs and supply of materials relevant to the mining industry, extent of resources actually contained in mineral deposits, actual recoveries achieved in processing ore, technological change, change to regulations affecting the mining industry, risks associated with mining operations in China, environmental and safety regulations risks, and risk associated with failure to obtain required regulatory or third party consent. Generally, forward looking information can be identified by the use of forward looking terminology such as "plans", "expects", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information in this release include statements regarding the Company's proposed sale to Shanjin Mining Corporation, the effectiveness of the purchase agreement between Arehada (Barbados) Corporation and Shanjin Mining Corporation, the fulfillment of the conditions set out in the purchase agreement, and the expected repayment of the balance of the related party loan. Although we believe the expectations reflected in our forward looking information are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. Readers should not place undue reliance on forward looking information.

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