Mengold Resources Inc.

Mengold Resources Inc.

December 17, 2007 08:30 ET

Mengold Closes $1,400,000 First Tranche of Private Placement

MONTREAL, QUEBEC--(Marketwire - Dec. 17, 2007) - Mengold Resources Inc. ("Mengold") (TSX VENTURE:MNI) is pleased to announce that it has closed the first tranche of a private placement through the sale of 3,500,000 units (the "Units") at a price of $0.40 per Unit, for gross proceeds of $1,400,000. This tranche is part of a proposed private placement of up to 4,500,000 Units for total gross proceeds of up to $1,800,000. The majority of the first tranche of the private placement was subscribed for by the MineralFields Group.

Each Unit consists of one flow-through common share and one-half of one transferable share warrant (each whole share purchase warrant a "Warrant"). Each Warrant entitles the holder to acquire one additional common share at a price of $0.45 for a 12-month period from the closing date and thereafter at a price of $0.55 per share for an additional 12-month period. The Warrants will be subject to an accelerated expiry in the event that the price of the common shares of Mengold on the TSX Venture Exchange is, for a period of at least 21 consecutive trading days, more than $0.50 per common share in the first year of the exercise period. Mengold may then accelerate the expiry time to 14 calendar days from the date express written notice is provided to the holders of Warrants.

Subject to regulatory approval, Limited Market Dealer Inc. ("LMD"), a division of First Canadian Securities ®, will receive a cash finder's fee representing 6% of the gross proceeds raised by LMD and 200,000 compensation options. The compensation options entitle the holder to acquire an aggregate of 200,000 Units at an exercise price of $0.40 per Unit for a period of two years from the closing date.

"Mengold is very pleased to be renewing its relationship with MineralFields Group", stated Joel Scodnick, President and Chief Executive Officer. "This is an important milestone in the growth of Mengold and we look forward to working with MineralFields Group as we develop our property holdings."

All securities issued in conjunction with the private placement will be subject to a four month hold period expiring on April 15, 2007.

Proceeds of the private placement will be used to fund Mengold's exploration activities which are currently focused on the Burchell Lake and Goldcreek Properties in the Shebandowan area, west of Thunder Bay, Ontario.

About MineralFields, Pathway and First Canadian Securities ®

MineralFields Group (a division of Pathway Asset Management) is a Toronto-based mining fund with significant assets under administration that offers its tax-advantaged super flow-through limited partnerships to investors throughout Canada during most of the calendar year, as well as hard-dollar resource limited partnerships to investors throughout the world. Pathway Asset Management also specializes in the manufacturing and distribution of structured products and mutual funds. Information about the MineralFields Group is available at First Canadian Securities ® is active in leading resource financings (both flow-through and hard dollar) on competitive, effective and service-friendly terms, with investors both within, and outside of, MineralFields Group.

About Mengold

Mengold Resources Inc. is engaged in mineral exploration for precious and base metals. The Company is currently conducting exploration programs at the Burchell Lake and Goldcreek Properties, both prospective for gold, copper, and zinc, in the Shebandowan area of Ontario. Mengold also holds the Mountain River Property near Sainte-Anne-du-Lac, Quebec. Mengold has 35,695,088 common shares outstanding.

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Contact Information

  • In Canada: Mengold Resources Inc.
    Joel Scodnick
    President and Chief Executive Officer
    (705) 522-4439 or (807) 629-7516
    (705) 522-8694 (FAX)
    Mengold Resources Inc.
    Douglas G. Reeson
    C.F.O. and Director
    (416) 533-9664
    (416) 533-2890 (FAX)
    In Europe: Mengold Resources Inc.
    W. Ian L. Forrest
    Chairman and Director
    011 41 22 809 9511
    011 41 22 899 9501 (FAX)