Aura Silver Resources Inc.
TSX VENTURE : AUU

Aura Silver Resources Inc.

May 03, 2010 14:25 ET

Aura Silver Closes Second Tranche of Flow-Through Private Placement Financing

OTTAWA, ONTARIO--(Marketwire - May 3, 2010) - Aura Silver Resources Inc. (TSX VENTURE:AUU) ("Aura Silver" or the "Company") announces that it has closed the second tranche of its brokered private placement financing issuing an additional 1,100,000 units (the "Units") for gross proceeds of $220,000. Including the first tranche (see Press Release #10-08 of April 22, 2010) a total of 4,275,000 Units were issued for gross proceeds of $855,000. Union Securities Ltd. ("Union") has acted as agent for this financing.

Each Unit consists of one flow-through common share and one non-flow-through common share purchase warrant ("Warrant") exercisable at a price of $0.25 per share for a 24 month period from the closings. Additionally, Warrants are callable during the 24 month period, at the option of the Company, should the Company's common shares close above $0.50 for twenty consecutive trading days on the TSX Venture Exchange. Subscribers will be notified of the call provision being triggered and will have a 30 day period to exercise the Warrants.

In consideration for its services with respect to the first and second tranches of the offering, Union was paid an 8% commission totaling $68,400. Union and four other agents have also been provided a total of 427,500 non-transferrable agent compensation options to acquire non-flow-through units. The agents' compensation options are exercisable for a period of 24 months from the closings at a price of $0.20 per unit. Union has also been reimbursed for legal costs of the offering.

All securities issued in the offering are subject to a four month hold period expiring on August 23, 2010 (first tranche) or September 4, 2010 (second tranche). This private placement is subject to final acceptance of the TSX Venture Exchange.

Aura Silver intends to use the proceeds of this offering to fund a drilling program and related exploration costs for its 100% owned Greyhound, Nunavut project. The Company is presently applying for land use permits in order to carry out initial drill testing during the second quarter of 2010 before spring breakup. The flow-through share proceeds will be used to incur these Canadian exploration expenses prior to December 31, 2011 at the latest. The Company intends to renounce the qualifying expenditures to subscribers for the year ended December 31, 2010.

About Aura Silver

Aura Silver is a TSX Venture listed company engaged in the acquisition, exploration and development of precious metal prospects in Canada (100% owned Greyhound project) and in Oaxaca, Mexico at the Taviche project. Including the shares issued in this offering, Aura Silver has 53,896,902 common shares outstanding.

FORWARD-LOOKING STATEMENTS

This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business including the uncertainty as to whether further exploration will result in the target(s) being delineated as a mineral resource, capital expenditures, operating costs, mineral resources, recovery rates, grades and prices, estimated goals, expansion and growth of the business and operations, the private placement financing activities of the Company, plans and references to the Company's future successes with its business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company's most recent annual MD&A and the Company's continuous disclosure documents that can be found on SEDAR at www.sedar.com. Aura Silver does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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