Tirex Resources Ltd.
TSX VENTURE : TXX

Tirex Resources Ltd.

January 05, 2011 09:32 ET

European Bank for Reconstruction and Development (EBRD) Increases Investment in Tirex Resources

- EBRD and Tirex Complete Agreement Enabling a 25% Expansion of EBRD's Current Investment

- Approximately CAD $2,000,000 of Additional Funding for Advancement of Mirdita VMS District

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 5, 2011) - Tirex Resources Ltd. ("Tirex") (TSX VENTURE:TXX) is pleased to announce that the company has completed an agreement dated 30 December 2010 with the European Bank for Reconstruction and Development (the "EBRD") through which an additional EUR 1,500,000 (approximately CAD $2,000,000) of funding is available to Tirex for the advancement of the Mirdita District.

The new funding agreement comes during a time of substantial progress at Mirdita. On December 13, 2010, Tirex announced results from recent drilling which included a thick intercept of robust mineralization assaying 19.3m (63.3 ft) of 3.66% Copper, 1.13% Zinc and 1.2g/t Gold including 6.7m (22.0 ft) of 7.38% Copper, 1.77% Zinc and 1.6g/t Gold at South Gurthi No. 2. Tirex is expecting assays from several more holes drilled during the last quarter of 2010.

Additionally, mineral resource estimates based on Tirex definition drilling to date for Koshaj, South Gurthi No. 1, Letitna and South Gurthi No. 2 zones are now being calculated by SRK Consulting (U.K.) Ltd. Tirex plans to conduct a Preliminary Economic Assessment (PEA) of Koshaj, South Gurthi No. 1, Letitna and South Gurthi No. 2. The PEA will start immediately upon completion of resource calculations for the deposits, considering potential production scenarios. There are 17 known historical deposits on Tirex's property (9 of which were formerly in production). Koshaj, South Gurthi No.1, Letitna and South Gurthi No. 2 are the first four historical deposits that have been drill tested by Tirex. Drilling of other historical deposits at Mirdita will occur in 2011, targeting expansion of certain deposits on strike and at depth. Most of the deposit areas have never been tested with large scale, systematic and modern exploration.

The new EBRD facility totals EUR 1,500,000 (approximately CAD $2,000,000). The funding is via a 25% expansion of the current Tirex-EBRD convertible debenture facility with some additional terms.

Funds will bear interest at EURIBOR plus 1.5% when drawn. The new funds will be advanced under the terms of the facility for a five year term, convertible in the first two years at the market price at closing of the common shares of Tirex on the TSX Venture Exchange as of the day immediately prior to the date of the loan agreement, increasing 10% each year thereafter.

Interest may be compounded to the principal at Tirex's election to the date of maturity and is convertible at the EBRD's election. The funds will be available for Tirex to draw, subject to certain business terms, and will require Tirex raising $3 in equity for every $1 it draws from the facility. Funds can be drawn from the facility by Tirex in a maximum of two tranches of an aggregate amount of approximately CAD $2,000,000, convertible into 4,123,000 common shares of Tirex at the current strike price. This is additional to the previous funding provided by EBRD to Tirex through which the EBRD is able to convert a total of EUR 6,000,000 into common shares of Tirex. In total, once Tirex draws from the enhanced facility, EBRD will have the option to convert EUR 7,500,000 of convertible debt into common shares of Tirex.

As of the date of the agreement, the EBRD had the right to convert its outstanding convertible loans so as to hold 17,124,935 common shares of Tirex, representing approximately 23.3% of the issued and outstanding shares of Tirex based on there being 56,243,312 common shares currently in issue (assuming the conversion of the principal and interest but not including the corresponding or concurrent equity Tirex raises in the future as a condition to drawing on the facility). The EBRD has not converted any part of its loan facility into common shares, and does not currently hold any common shares in the capital of Tirex. As well, the loan agreement restricts the conversion into common shares of Tirex of any part of the loan facility that would result in EBRD becoming a new control person. The EBRD has advised Tirex that no other persons currently act jointly or in concert with the EBRD. This portion of the press release is being issued pursuant to National Instrument 62-103.

Further details on the company and the Mirdita Project including a location map for the areas described in this news release can be found on the Tirex website at www.TirexResources.com.

About European Bank for Reconstruction and Development

The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. www.ebrd.com The EBRD is located at One Exchange Square, London EC2A 2JN, London, UK. 

ON BEHALF OF TIREX RESOURCES LTD.

Bryan J.R. Slusarchuk, CEO and Director

Forward Looking Statements

This Tirex News Release may contain certain "forward-looking" statements and information relating to Tirex that are based on the beliefs of Tirex management, as well as assumptions made by and information currently available to Tirex management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events. In particular, it should be noted that the expansion of this convertible debt facility referenced today may not close and if it does not close in a timely manner, will not fund. Final loan documentation has not yet been signed and will be further reviewed by both Tirex and the EBRD prior to signing. Should any one or more of these risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results and forward-looking statements may vary materially from those described herein.

"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 news release."

Contact Information