Arehada Mining Limited

Arehada Mining Limited

March 20, 2009 11:57 ET

Arehada Updates on Operations and Related Party Loan

TORONTO, ONTARIO--(Marketwire - March 20, 2009) - Arehada Mining Limited (TSX:AHD)("Arehada") wishes to update on the operations of its wholly owned Chinese operating subsidiary, Arehada Mining Corporation ("Arehada China"). Currently, all personnel have returned to work and Arehada China is in the process of pumping water out of the mining wells. Arehada China expects to start mining and processing ore by the end of March 2009 and to produce products in April of 2009. Arehada China 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 is also pleased to announce that Arehada China has entered into two major supply contracts for its products. One contract is for 3,000 tons of Arehada China's lead concentrates with 60% grade and priced based on market lead price. The lead supply contract is expected to cover Arehada China's lead concentrate output for eight months. The second contract is for 8,000 tons of Arehada China's zinc concentrates with 50% grade and priced based on market zinc price. The zinc supply contract is expected to cover Arehada China's zinc concentrate output for eight months.

Lastly, Arehada announced that it had amended the terms of a loan owing by Baiyinhanshan Mining Corporation ("Baiyinhanshan") to Arehada China. Baiyinhanshan is a company controlled by Messrs. Steve Fan Wang and Tom Zhen Wang, the principal shareholders, directors and officers of Arehada. As at December 31, 2008, the principal and accrued interest of the Baiyinhanshan loan was RMB 74,921,721 ($13,448,448). The loan was guaranteed by Arehada (Barbados) Holding Corporation ("Arehada Barbados"), a company also controlled by Messrs. Steve Fan Wang and Tom Zhen Wang. As security for the guarantee, Arehada Barbados pledged a total of 80,000,000 Arehada common shares held by Arehada Barbados in favour of Arehada China. Under the current economic and market situations, the independent members of the board of Arehada have determined that it is in the best interest of Arehada to extend the loan and adjust the interest rate. Accordingly, the term of the loan has been extended by three months from March 31, 2009 to June 30, 2009, and the interest rate has been amended from 7% per annum to 5% per annum. Arehada Barbados has agreed to increase the pledge to 90,000,000 Arehada common shares.

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 is 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, 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 operations 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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