Cross Lake Minerals Ltd.
TSX : CRN

Cross Lake Minerals Ltd.

May 18, 2006 14:36 ET

Cross Lake Minerals Ltd.: Update on Financing for QR Mine Development

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 18, 2006) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO U.S. NEWSWIRE SERVICES

Cross Lake Minerals Ltd. (the "Company" or "Cross Lake") (TSX:CRN) wishes to announce that further to its news release dated April 28, 2006, the Company has increased the number of units to be issued pursuant to its private placement with Pacific International Securities Inc. ("Pacific International") and reduced the number of units to be issued pursuant to the non-brokered offering.

As previously announced, the brokered and non-brokered offerings are subject to Cross Lake announcing and completing a share consolidation on the basis of five (5) old common shares being consolidated into one (1) new common share (the "Consolidation"), and will close concurrently with the closing of the Consolidation. The disclosure provided below is given on a post-Consolidation basis.

The private placement with Pacific International now contemplates an offering of up to 7,853,846 units (being 353,846 units in addition to the 7,500,000 units previously announced) of the Company ("Units") and up to 6,860,000 flow-through units (being 360,000 flow-through units in addition to the 6,500,000 flow-through units previously announced) of the Company ("FT Units"). In addition, the proposed accelerated expiry provision to be attached to the Units and FT Units as previously disclosed has been removed. All other terms, including the over-allotment option, remain unchanged. The gross proceeds of the increased brokered offering (not including the Non-Brokered Units described below or the over allotment option) will be $10,250,000.

With regard to the non-brokered offering previously disclosed, the Company may offer any combination of Units and FT Units for up to 2,261,642 units, on a non-brokered basis (the "Non-Brokered Units") concurrently with the Offering. It is anticipated that insiders of Cross Lake may participate in the purchase of these Non-Brokered Units to the extent of not more than 5% of the aggregate of the securities offered under the brokered and non-brokered offerings.

The total number of securities to be issued pursuant to the Offering will exceed 25% of the post-Consolidation issued and outstanding common shares of the Company. As a result, the rules of the Toronto Stock Exchange require that the Company obtain the approval of the shareholders to the Offering. Management of the Company will be seeking approval to the 30,817,385 common shares to be issued or made issuable in connection with the foregoing at the upcoming Annual & Special General Meeting of shareholders to be held on May 19, 2006.

Completion of the brokered and non-brokered offerings is subject to regulatory and Exchange approval.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

This release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration and development activities and events or developments that the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see our public filings at www.sedar.com for further information.

12(g) No. 82-2636

Contact Information

  • Cross Lake Minerals Ltd.
    Gordon A. Keevil
    President
    (604) 687-2038
    (604) 687-3141 (FAX)
    www.crosslakeminerals.com
    or
    Tangent Management Corp.
    Investor Relations
    (604) 642-0115