Breakwater Resources Ltd.

Breakwater Resources Ltd.

July 02, 2008 14:50 ET

Breakwater Issues News Release Pursuant to Early Warning Requirements

TORONTO, ONTARIO--(Marketwire - July 2, 2008) - In accordance with regulatory requirements, Breakwater Resources Ltd. ("Breakwater") (TSX:BWR) announced today that pursuant to an unsecured subordinated convertible debenture issued by Blue Note Mining Inc. ("Blue Note") on August 1, 2006 to Breakwater (the "Debenture"), at Breakwater's option, the Debenture is convertible to 41,666,667 common shares of Blue Note (the "Shares") at the conversion price of $0.36 per Share if exercised on or after September 1, 2008 and prior to August 1, 2011. Based upon Blue Note's disclosed 363,254,313 issued and outstanding Shares, and, assuming Breakwater fully converts the Debenture, together with its existing holdings this would bring the total holdings of Breakwater to 47,708,667 (approximately 13.13%) of the issued and outstanding Shares.

Breakwater also has the option to convert the Debenture in exchange for a 20% direct interest in the mineral properties and mine facilities which comprise the Caribou and Restigouche mines in New Brunswick (as described in the Asset Purchase Agreement) (the "Properties") at any time up to September 1, 2008 (the "Property Interest Conversion Option").

Blue Note has the option to redeem the Debenture at any time after September 1, 2008 and up to and including August 1, 2011 by a cash payment or on August 1, 2011 by issuing common shares at a price of $0.36 per share.

In the event Breakwater does not exercise its right to acquire a 20% direct interest in the Properties, any shares acquired would be held for investment purposes.

Breakwater is a mining, exploration and development company which produces and sells zinc, copper, lead and gold concentrates to customers around the world. The Company's concentrate production is derived from four mines. Two of Breakwater's mines are located in Canada, one is located in Chile and one is located in Honduras.

Contact Information

  • Breakwater Resources Ltd.
    Ann Wilkinson
    Vice-President, Investor Relations
    (416) 363-4798 Ext. 277