Channel Resources Ltd.
TSX VENTURE : CHU

Channel Resources Ltd.

June 22, 2005 17:22 ET

Channel Resources Ltd.: Private Placement

KELOWNA, BRITISH COLUMBIA--(CCNMatthews - June 22, 2005) - NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Channel Resources Ltd. (TSX VENTURE:CHU) (the "Company") has entered into a letter of engagement with Quest Securities Corporation (the "Agent") pursuant to which the Agent, as the agent of the Company, agrees to offer for sale by way of private placement, on a best efforts basis, up to 7,000,000 units ("Units"), each Unit comprised of one common share of the Company ("Common Shares") and one warrant (a "Warrant"), with each Warrant being exercisable for one Common Share ("Warrant Share") at an exercise price of $0.40 for a period of 12 months, and $0.60 for an additional period of 12 months. The Common Shares comprising part of the Units and the Warrant Shares will be subject to a four month and one-day hold or restricted period under applicable securities legislation.

The Agent will receive a commission of 7.0% of the gross proceeds of the Units. In addition, the Agent will receive a warrant which will entitle the Agent to purchase Common Shares equal in number to 10.0% of the Units sold at an exercise price of $0.30 per Common Share at any time during the 24 months after the Closing Date.

The proceeds of the private placement will be used to fund a comprehensive exploration program on the El Mozo Property, Ecuador and for general corporate purposes.

Completion of the private placement, which is expected to take place on or before July 15, 2005 is subject to execution and delivery of standard documentation including an agency agreement and subscription agreements, and receipt of all required regulatory approvals and consents.

The Company has a total of 35,323,740 common shares issued and outstanding prior to the completion of the above referenced private placement.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this Release.

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