Channel Resources Ltd.
TSX VENTURE : CHU

Channel Resources Ltd.

April 08, 2011 13:21 ET

Channel Resources Announces $5 Million Bought Deal Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 8, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES.

Channel Resources Ltd. ("Channel" or the "Company") (TSX VENTURE:CHU) is pleased to announce that it has entered into an agreement with Wellington West Capital Markets Inc. (the "Underwriter") to sell 14,710,000 units (the "Units") at a price of $0.34 per Unit to raise aggregate gross proceeds of up to $5,001,400 on a "bought deal", private placement basis (the "Offering"). Each Unit will consist of one common share of Channel and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share of Channel (a "Warrant Share") at a price of $0.50 per Warrant Share for 24 months following the closing of the Offering.

Channel will also grant to the Underwriter an option, exercisable at any time up to 48 hours prior to the closing of the Offering, to purchase up to 7,355,000 additional Units of Channel at a price of $0.34 per Unit for additional gross proceeds to the Company of up to $2,500,700.

Channel plans to use the net proceeds from the Offering to advance the Company's Tanlouka Gold Project in Burkina Faso, and for general corporate purposes.

The Offering is scheduled to close on or about May 6, 2011 and is subject to certain conditions typical for a transaction of this nature and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange.

The common shares and warrants comprising the Units to be issued pursuant to the Offering will be subject to a four-month restricted resale period, such period to commence upon the closing of the Offering.

This news release is not an offer of Units for sale in the United States. The Common Shares and Warrants have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

About Channel Resources Ltd.

Channel Resources Ltd. is a Canadian TSX.V listed mineral exploration Company which has an option to earn a 90% interest in the Tanlouka Gold Project in Burkina Faso, West Africa, the terms of which the Company has already satisfied, and an option to earn 100% in the Fox Creek Lithium / Potash Brine Project in Alberta. At Tanlouka, Channel has recently discovered multiple mineralized zones that are now being explored and expanded through a 10,000 metre reverse circulation drilling program. At Fox Creek, a bulk sample of brine sourced from producing natural gas wells is undergoing process testing to determine the most efficient method of producing various industrial minerals from the brine, including lithium carbonate, potash, bromine and borates. The Company is financed to advance both projects through their current programs, and is actively searching for additional opportunities to expand its project portfolio.

Some of the statements contained herein are forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the price of minerals, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise. Further disclosure on risk factors is available in the Company's various corporate filings at www.sedar.com.

Neither 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.

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