Adex Mining Inc.

Adex Mining Inc.

November 07, 2005 13:10 ET

Adex Announces Closing Of Debenture Financing And Announces Debt Settlement

TORONTO, ONTARIO--(CCNMatthews - Nov. 7, 2005) - Adex Mining Inc. ("Adex" or the "Company") wishes to announce that it has completed the placement of Convertible Debentures in the aggregate amount of $480,000 to arm's length parties. The Company obtained a variance of its cease trade order to facilitate a financing of the Company with a view to reactivating the Company. The Debentures are unsecured and will come due on October 28, 2007. These Debentures will bear no interest for the first nine (9) months and thereafter will bear interest at the rate of 8% per annum, payable quarterly in arrears. The Debentures are convertible into common shares of Adex on the basis of one (1) common share for each $0.10 of principal amount converted (the "Conversion Rate"). The Debentures shall be automatically converted on the day on which the common shares of Adex are listed on a recognized stock exchange in Canada at the Conversion Rate. In addition, the holders of the Debentures received 4,800,000 warrants to acquire common shares of Adex ("Warrants") with each Warrant entitling the holder to acquire an additional share at a price of $0.10 per share for the first nine (9) months, $0.20 per share for the next nine (9) months and $0.30 for the last six (6) months with the Warrants expiring on October 28, 2007. Any common shares acquired on the conversion of the Debentures or exercise of the Warrants will be legended and restricted from trading until February 28, 2006 subject to the terms of the cease trade order. The Company is continuing to offer up to an additional $520,000 in Convertible Debentures on the same terms.

Adex also wishes to announce that the Company has entered into debt settlement agreements with each of William Burton, former Chairman, Chief Executive Officer, President and director of Adex, and Errol Farr, Chief Financial Officer and a director of Adex, to settle debts owed to these insiders in the amount of $79,310 and $38,060 respectively by issuing Convertible Debentures and Warrants to these insiders with the same financial terms as the above-mentioned Convertible Debentures. In addition, Errol Farr will subscribe for $18,000 worth of Convertible Debentures and Warrants pursuant to the offering.

The insider private placements are exempt from the valuation and minority shareholder approval requirements of OSC Rule 61-501 (the "Rule") by virtue of the exemptions contained in sections 5.5(2) and 5.7(2) of the Rule in that the fair market value of the consideration for the securities of Adex to be issued does not exceed 25% of its market capitalization.

The Company is preparing its audited financial statements and once completed, will present them at a shareholders' meeting and make application to all securities commissions in jurisdictions where Adex is a reporting issuer to seek full revocation of the cease trade order.

The Company is subject to a cease trade order dated June 8, 1998 (the "CTO") and effected the above-noted financings pursuant to a variation (the "Variance") of the cease trade order from the Ontario Securities Commission dated May 27, 2005. All investors were provided with copies of the CTO and the Variance. While the Company intends to use the funds raised to reactivate the Company, there is no assurance that the Company will be able to obtain a full revocation of the CTO from all relevant securities regulators.

No securities commission or regulatory authority has approved or disapproved the contents of this press release.

Contact Information

  • Adex Mining Inc.
    Errol Farr
    CFO and director
    (416) 368-7911