Farallon Resources Ltd.
TSX : FAN
OTC Bulletin Board : FRLLF

Farallon Resources Ltd.

May 13, 2008 20:04 ET

Farallon Secures $3.8 Million Loan

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 13, 2008) - Dick Whittington, President and CEO of Farallon Resources Ltd. ("Farallon" or the "Company") (TSX:FAN)(OTCBB:FRLLF), announces that the Company has reached an agreement with two arm's length investors (the "Lenders") for a $3.8 million Loan (the "Loan").

The Loan is backed by 6,304,600 warrants of Farallon with an expiry date of November 17, 2008 (the "Expiry Date"). The Loan will be repayable from the proceeds of the warrants when exercised on or before the Expiry Date. On the Expiry Date, if the Loan has not been repaid, the Lenders have the option to be paid in cash or receive common shares of the Company (the "Conversion Right"). In the event that the Conversion Right is exercised, the Lenders will receive that number of common shares obtained by dividing the outstanding principal amount of the Loan by the market price (as defined under the rules of the Toronto Stock Exchange (the "TSX")), less the maximum permissible discount under the rules of the TSX at May 12, 2008 - the date of execution and delivery of the Loan. The Loan is subject to TSX approval. The shares are subject to applicable resale restrictions.

The proceeds will be used to fund continued exploration on the Campo Morado property in Guerrero, Mexico and for working capital.

For further details on Farallon Resources Ltd. and its Campo Morado property, please visit the Company's website at www.farallonresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.

ON BEHALF OF THE BOARD OF DIRECTORS

J.R.H. (Dick) Whittington, President and CEO

Forward Looking Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, continuity of mineralization, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes that the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. The likelihood of future mining at Campo Morado is subject to a large number of risks and may require achievement of a number of technical, economic and legal objectives, including obtaining lower than expected grades and quantities of mineralization and resources, recovery rates and mining rates, changes in and the effect of government policies with respect to mineral exploration and exploitation, the possibility of adverse developments in the financial markets generally, delays in exploration, development and construction projects, fluctuations in the prices of zinc, gold, silver, copper, lead and other commodities, obtaining additional mining and construction permits, completion of pre-feasibility and final feasibility studies, preparation of all necessary engineering for underground and processing facilities as well as receipt of additional financing to fund mine construction. Such funding may not be available to the Company on acceptable terms or on any terms at all. There is no known ore at Campo Morado and there is no assurance that the mineralization at Campo Morado will ever be classified as ore. For more information on the Company and the risk factors inherent in its business, investors should review the Company's Annual Information Form at www.sedar.com and the Company's annual report on Form 20-F at www.sec.gov.

No regulatory authority has approved or disapproved the information contained in this news release.

Contact Information

  • Farallon Resources Ltd.
    Michael Curlook
    Investor Services
    (604) 684-6365 or Toll Free: 1-800-667-2114
    (604) 684-8092 (FAX)
    Website: www.farallonresources.com