Arehada Mining Limited

Arehada Mining Limited

February 27, 2009 12:10 ET

Arehada Receives Bank Loan Extension and Prepares to Resume Operation

TORONTO, ONTARIO--(Marketwire - Feb. 27, 2009) - Arehada Mining Limited (TSX:AHD) ("Arehada") today announced that its wholly owned Chinese operating subsidiary, Arehada Mining Corporation ("Arehada China"), has obtained further extension for its bank loans and has re-assembled its management team on site to prepare for resumption of mining operations.

Arehada China has two short term bank loans with the Agricultural Bank of China (the "Agricultural Bank") in the amount of RMB 16,000,000 and RMB 14,000,000 due on February 21, 2009 and February 26, 2009 respectively, as well as a RMB 20,000,000 principal repayment due on February 20, 2009 on the five-year term loan with the Agricultural Bank. After discussions with Arehada China, the Agricultural Bank agreed to extend all three loans. The Agricultural Bank has agreed that when Arehada China re-starts its mining operation and generates cash flow from operation (after covering its operational needs), Arehada China would start to repay the interest on the loans, and when Arehada China has generated surplus cash flow after covering its operational and day-to-day business needs, the Company would start to repay the principal.

After a few months of care and maintenance, Arehada China is now gearing up to re-start its mining operations, thanks to the recent increase in zinc and lead prices. Managers, engineers and financial staff have been re-assembled at the mine site to prepare for the resumption of the mining operation. Arehada plans to further reduce costs and increase head grade of lead and zinc by targeting higher grade ore bodies and by adopting more efficient measures and technology. Arehada expects to resume the mining operation on or about mid-March, 2009. Arehada China currently does not have immediate plan to re-start the zinc processing plant.

"We are very pleased to receive the loan extension from the Agricultural Bank and we are excited that we will start our mining operations again," commented Mr. Steve Fan Wang, Chairman and CEO of Arehada. "The low metal prices in the past several months have been very difficult for mining companies like Arehada. We appreciate the co-operation and understanding shown by our bankers, shareholders and other stakeholders during this period. Now with the metal market condition improving, and with the new measures planned for our operation, we believe that the company will be back on track."

About Arehada Mining

Arehada Mining Limited is engaged in the exploration, development, extraction and production of zinc, lead and silver in Dongwuzhumuqinqi, located in Inner Mongolia, China. Arehada produces zinc and lead concentrates, which are then sold to smelters in China.

Arehada has completed construction of a zinc processing plant, to produce zinc calcine and sulphuric acid.

Forward Looking Information

The above contains forward looking information that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world commodity markets, willingness of our lenders to extend loans, costs and supply of materials relevant to the mining industry, extent of resources actually contained in mineral deposits, actual recoveries achieved in processing ore, technological change, change to regulations affecting the mining industry, risks associated with mining operation in China, environmental and safety regulations risks, and risk associated with failure to obtain required regulatory or third party consent. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information in this release include statements regarding planned resumption of our operation, repayment of bank loans, and anticipated reduction of operating costs. Although we believe the expectations reflected in our forward looking information are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. Readers should not place undue reliance on forward-looking information.

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