Huldra Silver Inc.
TSX VENTURE : HDA

Huldra Silver Inc.

July 14, 2011 09:52 ET

Huldra Silver Inc. Announces Closing of Special Warrant and Flow-Through Special Warrant Offering

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 14, 2011) - Huldra Silver Inc. (TSX VENTURE:HDA) (the "Company" or "Huldra") today announces that it has raised aggregate gross proceeds of $9,336,763 by way of a brokered private placement (the "Offering") of 6,476,880 special warrants (the "Special Warrants") at a price of $1.05 per Special Warrant and 2,113,366 flow-through special warrants (the "FT Special Warrants") at a price of $1.20 per FT Special Warrant (the Special Warrants and FT Special Warrants collectively, the "Offered Securities"). The Offering was completed pursuant to an agency agreement dated July 14, 2011 (the "Agency Agreement") among Huldra and two agents (collectively, the "Agents"). Bayfront Capital Partners Ltd. received a finder's fee in connection with the Offering.

Huldra intends to use the proceeds of the Offering to advance its Treasure Mountain project towards production, for mill design and construction and for general working capital purposes. Huldra intends to use the gross proceeds of the sale of the FT Special Warrants to incur expenses that qualify as "Canadian exploration expenses" and "flow-through mining expenditures" for purposes of the Income Tax Act (Canada), and intends to renounce an amount equal to such gross proceeds of the sale of the FT Special Warrants in favour of the holders of the FT Special Warrants, with an effective date of no later than December 31, 2011.

The Special Warrants are governed by a special warrant indenture dated July 14, 2011 (the "Special Warrant Indenture") between Huldra and Computershare Trust Company of Canada ("Computershare"). Each Special Warrant entitles the holder thereof, upon the exercise of each Special Warrant, to receive, without payment of additional consideration, one common share of the Company (a "Special Warrant Share") and one common share purchase warrant (a "Warrant"). The Warrants are governed by a warrant indenture dated July 14, 2011 (the "Warrant Indenture") between Huldra and Computershare. Each Warrant entitles the holder thereof to acquire one additional common share (a "Warrant Share") at a price of $1.35 per Warrant Share until July 14, 2013.

The FT Special Warrants are governed by a flow-through special warrant indenture dated July 14, 2011 (the "FT Special Warrant Indenture") between Huldra and Computershare. The FT Special Warrants were issued as "flow-through shares" as defined in subsection 66(15) of the Income Tax Act (Canada). Each FT Special Warrant entitles the holder thereof, upon the exercise of each FT Special Warrant, to receive, without payment of additional consideration, one common share (an "FT Special Warrant Share").

Pursuant to the Agency Agreement, Huldra paid to the Agents a cash fee equal to 8.0% of the gross proceeds from Offered Securities sold by the Agents pursuant to the Offering, issued to the Agents that number of special warrants (the "Special Broker Warrants") equal to 8.0% of the number of Special Warrants sold by the Agents pursuant to the Offering and issued to the Agents that number of flow-through special warrants (the "FT Special Broker Warrants") equal to 8.0% of the number of FT Special Warrants sold by the Agents pursuant to the Offering (the Special Broker Warrants and the FT Special Broker Warrants are collectively referred to herein as the "Broker Securities").

Each Special Broker Warrant, upon the exercise thereof, entitles the holder thereof to receive, without payment of additional consideration, one broker warrant (a "Broker Warrant"). Each Broker Warrant entitles the holder to acquire one common share (a "Broker Share") and one common share purchase warrant (a "BW Warrant") at an exercise price of $1.05 until July 14, 2013. Each BW Warrant entitles the holder to acquire one common share (a "BW Share") at an exercise price of $1.35 per BW Share until July 14, 2013. The BW Warrants will be issued pursuant to the Warrant Indenture. Each FT Special Broker Warrant, upon the exercise or deemed exercise thereof, entitles the holder thereof to receive, without payment of additional consideration, one broker warrant (an "FT Broker Warrant"). Each FT Broker Warrant entitles the holder to acquire one common share (an "FT Broker Share") at an exercise price of $1.05 per FT Broker Share until July 14, 2013.

Pursuant to the Agency Agreement, Huldra has agreed to prepare and file a prospectus and all other necessary documents in order to qualify the securities issuable upon the conversion of the Offered Securities (the "Underlying Securities") to subscribers resident in Canada, or otherwise subject to Canadian securities laws, upon exercise of the Broker Securities. In the event that the date (the "Qualification Date") on which a receipt for the final prospectus is issued by the British Columbia Securities Commission, as principal regulator, on its own behalf and on behalf of each of the other securities commissions or securities regulatory authorities, as applicable, has not occurred prior to 5:00 p.m. (Vancouver time) on September 12, 2011 (the "Qualification Deadline"), each unexercised Special Warrant will thereafter entitle the holder to receive, upon the exercise thereof, for no additional consideration, an additional 10% of the Special Warrant Shares and the Warrants otherwise issuable, which would consist of 1.1 Special Warrant Shares (instead of one Special Warrant Share) and 1.1 Warrants (instead of one Warrant), subject to adjustment (the additional Special Warrant Shares and Warrants are collectively referred to herein as the "Penalty Securities"). The holders of the FT Special Warrants will not be entitled to any Penalty Securities.

In the event that the Qualification Date has not occurred prior to the Qualification Deadline, (i) each unexercised Special Broker Warrant will thereafter entitle the holder to receive upon the exercise thereof, for no additional consideration, an additional 10% of the Broker Warrants otherwise issuable, which would consist of 1.1 Broker Warrants (instead of one Broker Warrant) subject to adjustment and (ii) each unexercised FT Special Broker Warrant will thereafter entitle the holder to receive upon the exercise thereof, for no additional consideration, an additional 10% of the FT Broker Warrants otherwise issuable, which would consist of 1.1 FT Broker Warrants (instead of one FT Broker Warrant) subject to adjustment (the additional Broker Warrants and FT Broker Warrants are referred to herein as the "Broker Penalty Securities").

The Offered Securities, Broker Securities, Penalty Securities, Broker Penalty Securities and Underlying Securities will be subject to hold periods expiring on November 15, 2011 under Canadian securities laws and the policies of the TSX Venture Exchange, and certain Special Warrants will also be subject to a hold period under United States securities laws. None of the securities issued have been registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there by any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.

About Huldra

Huldra is currently working on plans to put its Treasure Mountain Project, located 3 hours east of Vancouver, BC, into development, subject to permitting and financing. The Company is also actively assessing other opportunities for acquisition and development.

On behalf of the Board of Directors of HULDRA SILVER INC.

Ryan Sharp, MBA, President, CEO & Director

Disclaimer for Forward-Looking Information

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events related to the conversion of the Offered Securities, exercise of the Broker Securities, issuance of the Penalty Securities and Broker Penalty Securities, tax treatment of the FT Special Warrants and the Company's ability to meet its obligations under the Agency Agreement, including: (i) the number of securities that may be issued; (ii) fees that may be paid; (iii) the ability of the Company to incur eligible expenditures for "flow-through" tax treatment of the FT Special Warrants and the likelihood of such expenditures being incurred; (iv) the ability of the Company to renounce such expenditures in favour of the holders of the FT Special Warrants and the likelihood of the Company renouncing such amount; and (v) the likelihood of the Company filing the prospectus to qualify the Underlying Securities before the Qualification Deadline. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause the Company's actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions in North America and internationally; (2) failure of any securities regulatory authority to provide final approval of any prospectus filed by the Company to qualify the Underlying Securities; and (3) other factors beyond the Company's control. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by law, the Company assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.

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.

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