ATW Gold Corp.
TSX VENTURE : ATW

ATW Gold Corp.

May 21, 2009 14:11 ET

ATW Closing $10 Million (USD) Gold Loan and Production Marketing Agreement-Production Increase at Burnakura

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 21, 2009) - ATW Gold Corp. (TSX VENTURE:ATW) ("ATW" or "the Company") is pleased to announce it is completing a USD$10,000,000 gold loan (the "Loan") and concurrent Production Marketing agreement with an international metals fund (the "Lender"). Due to various supporting documents being executed in three countries, the closing of the Loan is underway and expected to conclude over the next 24 to 48 hours. Proceeds of the Loan will be used to increase production at Burnakura, for exploration to increase resources and reserves at Burnakura and for general working capital.

The Loan is being extended in three tranches, the first tranche of USD$6,000,000 having been received by ATW. The second tranche of USD$3,000,000 will be made in 18 months, on certain conditions, including the condition ATW is not in default of payments to that date. The third tranche of USD$1,000,000 will be made after 24 months, on the condition ATW is not in default of payments to that date.

Repayment of the Loan will be made by 36 monthly deliveries of 475 ounces of gold from the production at ATW's Burnakura Mine (the "Payments"). The Lender has been granted options (the "Options"), for 24 months, to purchase an additional 475 ounces of gold per month at an exercise price of USD$1,000 per ounce.

ATW is also entering into a Production Marketing Agreement allowing the Lender, upon notice to ATW, to purchase any excess of production that ATW has from the Burnakura Mine, over and above the Payments and any gold delivered in connection with the exercise of the Options. Gold purchased under the Marketing Agreement will be priced, at the Lender's choosing, at either the London Gold Market AM Fixing Price or the Comex (1st Position) Settlement Price, less $0.50 per troy ounce, on the day after the Lender is notified by Barclays Bank plc that credit has been posted to a pool account.

Casimir Capital LP, an investment banking firm in New York, acted as agent in respect of the transactions (the "Agent"). The Agent will receive a commission of 6% on the funds raised under the Loan, paid in tranches as the Loan funds are received. As a result, the Agent is receiving $360,000 for the first tranche of the Loan, $180,000 on closing of the second tranche in 18 months and $60,000 on closing of the third tranche in 24 months. In addition, the Agent is being issued 500,000 broker's warrants, each warrant exercisable for one common share of ATW for a period of two years at an exercise price of $0.80 per share.

The contents of this news release have been reviewed by Brent Butler, President and CEO, who is a qualified person as defined by National Instrument 43-101.

Graham Harris, Chairman of ATW Gold Corp., commented, "ATW Gold Corp. is pleased to have entered into this arrangement. The additional capital allows us to expand the plant capacity and increase gold production at Burnakura. We will also be commencing an aggressive drill plan aimed at increasing Burnakura's current mine life. We trust that our current shareholders will appreciate the non dilutive nature of this financing and the expected increase in cash flow that will result from anticipated increases in production."

ATW GOLD CORP.

Graham Harris, Chairman and Director

"This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements."

"Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

Contact Information