JML Resources Ltd.

JML Resources Ltd.

January 23, 2006 10:07 ET

JML Closes Aquila Financing for Zinc Gold Property


JML Resources Ltd. (TSX VENTURE:JJJ) ("JML" or the "Company") is pleased to announce the completion of financings for the agreed merger transaction (the "Merger") between JML and Aquila Resources Corp. ("Aquila") to finance exploration work on the Back Forty project in Michigan. A second tranche of the brokered private placement of units of 2079537 Ontario Ltd. ("Cashco") and completion of a non-brokered tranche of Subscription Receipts of JML (which replaced part of the initial tranche of the Cashco private placement) bring the total combined amount of the financing to $2,365,900. The total consists of 1,230,000 Subscription Receipts of JML totalling $246,000 and 10,599,500 units of Cashco, totalling $2,119,900 (the "Cashco Financing"). Net funds from the financings are being held in trust pending completion of the Merger. The non-brokered offering of Subscription Receipts and the brokered Cashco Financing were priced at $0.20 per security. Each Subscription Receipt and Cashco Financing Unit will be converted into or exchanged for one post-consolidated common share of the merged company ("Newco") and one common share purchase warrant (a "Warrant") on completion of the Merger. Each Warrant will entitle the holder to purchase one additional post-consolidated common share of Newco at a price of $0.30 per share for a period of two years from the date of issuance, subject to the Newco's right to accelerate the expiry date if the shares of Newco trade over $0.45 for more than 20 consecutive days. The Subscription Receipt financing provides RRSP eligible investments to subscribers who could not subscribe for the units in the Cashco Financing.

Jennings Capital Inc. acted as exclusive agent (the "Agent") for the Cashco Financing and received a cash commission equal to 8% of the gross subscription proceeds at closing of each tranche of the financing. The Agent was also issued a total of 1,059,950 agent compensation warrants (the "Broker Warrants") pursuant to the financings. Each Broker Warrant is exercisable at an exercise price of $0.30 per post-consolidated share for a period of 2 years from the date of issuance.

Finder's fees equal to 8% of the gross proceeds of the Subscription Receipts financing are payable to Standard Securities Capital Corporation and Secutor Capital Management Corp. The finders were also issued a total of 123,000 compensation warrants of JML (the "Finder's Warrants") pursuant to the Subscription Receipt offering. Each Finder's Warrant is exercisable at an exercise price of $0.30 per post-consolidated share of JML for a period of 2 years from the date of issuance.

The financings are a part of the Merger in which JML will acquire 100% of the shares of Aquila in return for 49,066,466 common shares of JML. Subsequently, the shares of JML will be consolidated on a one for three basis, and Cashco will be merged with the consolidated entity on a one for one basis to form Newco. Newco will have the net cash proceeds of the financings and the Back Forty project as it focus with 38,568,286 shares outstanding on a Pro Forma basis after the Merger. Both the Subscription Receipts financing and the Cashco Financing are subject to the approval of the TSX Venture Exchange.

Status of the RTO

In accordance with TSXV policies and in conjunction with the TSXV, JML is finalizing documentation providing full disclosure of the transaction required to be filed according to Policy 5.2 of TSXV which includes the Management Information Circular. Completion of the transaction is subject to a number of conditions including but not limited to TSXV acceptance and approval by the shareholders of JML and Aquila. The transaction cannot close until shareholder approvals are obtained. There can be no assurance that the transaction can be completed at all. Investors are cautioned that except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of JML should be considered highly speculative.

Certain information regarding the Company contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

The securities being offered have not and will not be registered in the United States under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws, and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This news release does not constitute an offer to sell or a solicitation of an offer to purchase securities in the United States.

Shares Outstanding: 27,326,910

The TSX Venture Exchange has not reviewed and does not accept responsibility for the contents of this release.

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