Continental Precious Minerals Inc.
TSX VENTURE : CZQ

Continental Precious Minerals Inc.

April 10, 2006 10:40 ET

Continental Announces Private Placement Financing

TORONTO, ONTARIO--(CCNMatthews - April 10, 2006) - Continental Precious Minerals Inc. (the "Company")(TSX VENTURE:CZQ) announced today that it has agreed on the principal terms of a non-brokered private placement providing for the issuance by the Company of up to 8,250,000 units at a price of $0.90 per unit for gross proceeds of up to $7,425,000. Each $0.90 unit consists of one common share of the Company and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one common share at a price of $1.20 and will expire two years from the date of issuance.

Sprott Asset Management Inc. ("SAM") has agreed to subscribe for 3,000,000 units, Pinetree Capital Ltd. and its affiliates have agreed to subscribe for 1,850,000 units, a group of private investors has agreed to subscribe for 1,400,000 units and RAB Special Situations (Master) Fund Ltd. ("RAB") has agreed to subscribe for up to 2,000,000 units. Completion of the private placement is conditional upon the execution of definitive documentation and the receipt of regulatory approval. The issuance of units to RAB is also subject to shareholder approval and completion of the issuance of not less than 3,000,000 units to other investors.

The Company expects to complete the issuance of units on or about April 13, 2006, except that the issuance to RAB will be completed immediately following receipt of shareholder approval.

The securities issued pursuant to the financing will be subject to a 4 month hold period from the date of issuance.

Under a previously announced private placement, RAB agreed to subscribe for 6,000,000 units at a price of $0.75 per unit. Each of the $0.75 units consists of one common share of the Company and one common share purchase warrant with each warrant entitling the holder thereof to purchase one common share at a price of $1.00 until March 29, 2009.

2,560,378 of the $0.75 units were issued on March 29, 2006 and resulted in RAB holding 19.9% of the outstanding common shares. Issuance of the remaining 3,439,622 $0.75 units, as well as the common shares underlying the warrants issued on March 29, 2006 is subject to shareholder approval at a special meeting of shareholders originally called for April 27, 2006.

The Company will be seeking shareholder approval for the issuance of up to 2,000,000 $0.90 units to RAB at the same meeting. In order to facilitate this, the date of the special meeting has been rescheduled to May 11, 2006.

The 6,000,000 common shares included in the $0.75 units would have represented a 36.9% interest in the Company on a when issued basis before issuance of any $0.90 units. If RAB subscribes for all 2,000,000 $0.90 units and the Company successfully completes the private placement of all 8,250,000 units referred to above, RAB's ownership interest will be approximately 32.7%. There are currently 12,801,891 common shares outstanding.

The Company has agreed to pay a finder's fee of $216,000 upon the issuance of the 3,000,000 $0.90 units to SAM and a finder's fee comprised of (i) cash equal to 8% of the gross proceeds received by the Company in respect of the $0.90 units issued to RAB and (ii) finder warrants of the Company equal in number to 4% of the number of $0.90 units issued to RAB.

With the proceeds of the offering, the Company intends, among other things, to undertake the following on its MMS Licences in northwest Sweden which are decribed in more detail in its press release of January 16, 2006: initial compilation of historical exploration data, re-analyze existing core samples from historical drilling, check and exploration drilling, bulk sampling and metallurgical testing. On the Company's HRU Licences which are described in more detail in its press releases of July 29, 2005 and October 5, 2005 and National Instrument 43-101 technical report available on SEDAR (www.sedar.com), the Company intends to complete its environmental assessment on three of the licences and to commence confirmatory drilling to validate previous drilling results.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding the Company's issuance of $0.90 units and $0.75 units by way of private placement including statements as to the anticipated timing of the issuance of the units. Actual developments may differ materially from those contemplated by these statements depending upon, among other things, the risk that the proposed private placements may not be completed whether because of a failure to agree on definitive documentation or otherwise. The forward looking statements contained in this press release represent the Company's views and expectations as of the date of this release and should not be relied upon as representing its views and expectations at any subsequent date.

THIS PRESS RELEASE WAS PREPARED BY CONTINENTAL, WHICH ACCEPTS RESPONSIBILITY FOR ITS ACCURACY. THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Continental Precious Minerals Inc.
    Ed Godin
    President
    (416) 805-3036