Gravity Ltd.

September 07, 2010 14:40 ET

Gravity Ltd.: Press Release

TORONTO, ONTARIO--(Marketwire - Sept. 7, 2010) - Gravity Ltd. ("Gravity"), 1681 Summitridge Drive, Beverley Hills, CA, 90210, USA, announces that Zaruma Resources Inc. ("Zaruma") has issued 4,800,000 common share purchase warrants to Gravity, each such warrant being exercisable to acquire one common share of Zaruma at C$0.10 per share, subject to adjustment in certain circumstances (each, a "Warrant"). Half of the Warrants are exercisable until June 18, 2011 and the remaining half are exercisable until July 7, 2011. The Warrants were issued as consideration for Gravity advancing the aggregate principal amount of C$240,000 pursuant to the second and third tranches of a 10% Senior Unsecured Convertible Promissory Note (the "Note"), advanced on June 18, 2010 and July 7, 2010, respectively. Zaruma did not issue the Warrants immediately following the advance of the second and third tranches of the loan due to Zaruma's being subject to a cease trade order. The cease trade order was revoked effective August 10, 2010.

Prior to advancing the second and third tranches, Gravity advanced the first tranche under the Note in the principal amount of C$260,000. As consideration for receiving the first tranche, Zaruma issued 5,200,000 Warrants to Gravity. The Note will mature one year from the date of issue and is convertible into common shares of Zaruma at a conversion price of C$0.05 per share.

Gravity does not currently own and/or control any common shares of Zaruma. If Gravity converts all of the C$500,000 principal amount of the Note to common shares of Zaruma pursuant to the conversion provisions of the Note, and exercises the 10,000,000 Warrants issued to Gravity in connection with the advance of funds pursuant to the Note, it will own a total of 20,000,000 common shares of Zaruma, representing in the aggregate approximately 14.53% of the issued and outstanding common shares, calculated on a partially diluted basis (not including the exercise of any other securities convertible into common shares of Zaruma held by any other holder).

Gravity has agreed to advance funds under the Note for investment purposes. Gravity may, in the future, increase or decrease its ownership of securities of Zaruma, directly or indirectly, from time to time depending upon the business and prospects of Zaruma and future market conditions.

On May 5, 2010, Gravity entered into a non-binding Memorandum of Understanding with Zaruma regarding the financing of the Luz del Cobre copper project located on Zaruma's wholly-owned San Antonio property in Sonora, Mexico. For more details regarding the Memorandum of Understanding and the Note, see Zaruma's news release dated May 6, 2010 available under Zaruma's profile on SEDAR at www.sedar.com.

Neither 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 release.

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