PGM Ventures Corporation

PGM Ventures Corporation

May 23, 2006 12:09 ET

PGM Announces $25,000,000 Financing for Aguas Tenidas Project

TORONTO, ONTARIO--(CCNMatthews - May 23, 2006) - PGM Ventures Corporation (TSX VENTURE:PPG) ("PGM") is pleased to provide the following update on Aguas Tenidas, SAU ("MATSA"), its wholly owned Spanish subsidiary and the Aguas Tenidas project:

1) PGM has accepted a Canadian $25 million offer of financing from Dundee Resources Limited. ("Dundee Resources"). The financing will be a private placement of a $25,000,000 principal amount subordinated convertible debenture (the "Debenture") issued at par. The Debenture will bear interest at the rate of 6% per annum, payable semi-annually. The outstanding principal amount of the Debenture will be convertible at Dundee Resources' option at any time, in whole or in part, into units of PGM ("Units") at a conversion price of $1.25 per Unit (the "Conversion Price"). Each Unit will be comprised of one Common Share and one-half of a warrant ("Warrant"), with each Warrant being exercisable for one Common Share at an exercise price of $2.00 for a period of two years after the date of issue of the Warrants. At any time, after three years from the closing date of the financing, PGM will be entitled to accelerate the conversion of the Debenture by giving 30 days notice, if the Common Shares have a closing price above $2.00 for a period of 20 consecutive trading days. The issue of the convertible debenture is subject to a number of conditions including: completion of an equity financing by PGM resulting in PGM's receiving gross proceeds of $15,000,000 by issuing 15,000,000 Common Shares; the completion of due diligence to the satisfaction of Dundee Resources; execution of definitive documentation; and receipt of all required consents and approvals, including regulatory approval. It is anticipated that the financing will close on or about June 30, 2006. Dundee Resources is a private Canadian company and is the resource merchant banking arm of Toronto Stock Exchange listed Dundee Corporation.

2) MATSA has received authorization from the Junta de Andalucia (the regional government) for the "Recommencement of Exploitation" at the Aguas Tenidas Mine. Among other things, this authorization allows MATSA to: extend the main ramp at the mine; extend the exploration decline and undertake additional drilling, in order to further define mineable resources; and develop the surface infrastructure required to reopen the mine. The Recommencement of Exploitation is one of two principal permits that MATSA requires to begin production at Aguas Tenidas. MATSA has already made application to the Junta de Andalucia for the remaining permit, "Ampliacion de la actividad en Mina de Aguas Tenidas con la Construccion de una Planta de Tratamiento de Mineral y un Deposito de Esteriles". (Expansion of the activity at Aguas Tenidas Mine with a Construction of an Ore Treatment Plant and Tailings Deposit).

PGM is a Canadian exploration and development company that is redeveloping the Aguas Tenidas poly-metallic, base metal mine into a 1.6 million tonne per year mining operation. Aguas Tenidas is located in Huelva Province in the Region of Andalucia, south-west Spain.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are in Canadian dollars unless otherwise noted.

The TSX Venture Exchange does not accept responsibility for the adequacy of accuracy of this release.

Contact Information

  • PGM Ventures Corporation
    Peter Miller
    (416) 815-8666
    PGM Ventures Corporation
    Norm Brewster
    (416) 815-8666