Geoinformatics Exploration Inc.

Geoinformatics Exploration Inc.

September 19, 2005 16:19 ET

Geoinformatics Announces Closing of Equity Financing and New Strategic Investor

TORONTO, ONTARIO--(CCNMatthews - Sept. 19, 2005) -


Geoinformatics Exploration Inc (TSX VENTURE:GXL) ("Geoinformatics" or the "Company") is pleased to announce that it has completed the first tranche of its previously announced equity financing raising Cdn $4,450,240. Salman Partners Inc. (the "Agent") acted as agent in respect of the financing. The Company issued 11,800,000 Units at a price of $0.25 per Unit and 5,358,000 Flow-Through Units at a price of $0.28 per Flow-Through Unit, which included the Agent's exercise of an over allotment option of 1,780,000 Units. The proceeds of the Unit Offering will be used for working capital and general corporate purposes. The proceeds from the Flow-Through Unit Offering will be used to incur Canadian Exploration Expenses on the Redton project as well as other projects in the West Cordillera, British Columbia and the Yukon. The second tranche of the financing is anticipated to close within the next week.

Each Unit consists of one common share and one-half of one common share purchase warrant. Each Flow-Through Unit consists of one common share issued on a flow-through basis and one-half of one common share purchase warrant. Each whole warrant is exercisable to acquire one common share of the Company at a price of $0.30 per share for a twenty-four month term.

The Agent received a cash commission of 7% of the gross proceeds of the financing and compensation warrants totaling 10% of the number of Units and Flow-through Units sold. Each compensation warrant is exercisable to acquire one common share of the Company at a price of $0.30 per share for a twenty-four month term.

The common shares, flow-through shares, warrants and compensation warrants issued pursuant to the financing will be subject to resale restrictions for a period of four months and one day from the date hereof.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State or to such persons in which such offer, solicitation or sale would be unlawful.

Geoinformatics is also pleased to announce the purchase of a 22.8% interest in Geoinformatics, comprising 20 million shares of the Company, at a price of $0.175 per share by certain managed accounts and investment funds managed by Sun Valley Gold LLC ("Sun Valley") and by certain investment funds managed by Geologic Resource Partners LLC. ("Geologic") from St Andrew Goldfields Ltd. (TSX-SAS) ("St Andrew"). Pursuant to the terms of the binding purchase agreement, Sun Valley and Geologic will acquire an additional 2 million shares of the Company on the same terms from a party affiliated with St Andrew. The completion of both purchases is expected to occur prior to September 30, 2005 whereupon Sun Valley and Geologic will have control and discretionary trading authority over an aggregate of 28 million shares of the Company representing approximately 31.9% of its issued and outstanding shares.

About Geoinformatics

Geoinformatics is a global resources company which has developed a unique and innovative approach to resources exploration. The Company's team of geoscientists and technical experts has created a scientific and technology platform (the "Geoinformatics Process") which integrates data aggregation, data mining and three-dimensional modeling to identify and prioritize exploration drill targets. The Geoinformatics Process has been designed to assist in understanding and quantifying risk at a much earlier stage of the exploration cycle than has traditionally been available. The Company's objective has been to bring a faster, less expensive and more reliable analytical methodology to resources exploration.

This news release includes certain forward-looking statements concerning the future performance of our business, its operations and its financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and the availability of financing, as described in more detail in our recent securities filings available at Actual events or results may differ materially from those projected in the forward looking-statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information