Mantra Mining Inc.

Mantra Mining Inc.

May 06, 2009 09:15 ET

Mantra Announces Strategic Investment by Electrum Strategic Metals LLC and CDN$5,000,000 Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 6, 2009) -


Mantra Mining Inc. ("Mantra" or the "Company") (TSX VENTURE:MAN) is pleased to announce that it has arranged, subject to regulatory approval, a non-brokered private placement of up to 14,285,714 units (the "Units") at a price of $0.35 per Unit, for gross proceeds of up to CDN$5,000,000. Each Unit will consist of one common share and one share purchase warrant of the Company. Each warrant will entitle the holder, on exercise, to purchase one additional common share of the Company at a price of CDN$0.50 per share for a period of three years from the date of the issue of the warrant.

Electrum Strategic Metals LLC ("Electrum") has indicated its intention to purchase 7,714,286 Units of the private placement (representing more than 50% of the private placement). The share purchase warrants to be issued to Electrum as part of its Units will contain a restriction on exercise to the extent the exercise would bring the holdings of Electrum and its affiliates and joint actors to more than 19.99% of the issued and outstanding common shares of the Company. The Company has agreed to seek shareholder approval to remove such exercise restrictions. In the event shareholder approval is not obtained on or before September 30, 2009, the term of Electrum's share purchase warrants will be extended from three years to five years and such warrants would become transferable, subject to applicable laws. Electrum may be considered a joint actor with Cougar Gold LLC, the party with which Mantra entered into an agreement to acquire an interest in Golden Lynx LLC, as announced by Mantra on May 1, 2009.

Raj Chowdhry, President of Mantra, stated, "Having Electrum as a strategic partner will assist Mantra to become a serious entrant in the mining sector." Electrum Strategic Metals LLC is a member of the privately-held Electrum Group of Companies which is involved in precious metals exploration and development around the world. Other members of the Electrum Group include Electrum Ltd., which holds one of the world's largest and most diversified exploration portfolios comprising over 100 projects located in 16 countries in the Americas, Africa, Asia and Eastern Europe; Electrum Strategic Holdings LLC, which owns a strategic stake in a portfolio of exploration and development properties in Eastern Europe; Electrum Strategic Resources LLC, which owns a substantial interest in NovaGold Resources Inc., which owns a 50% interest in the 30 million ounce Donlin Creek deposit in Southwest Alaska, approximately 100 kilometers south of Mantra's Colorado Creek Property; and Electrum USA Ltd., headquartered in Denver, Colorado, which manages the Electrum Group's exploration and development activities.

The Company is also pleased to announce that Dr. Larry Buchanan, a nominee of Electrum, has agreed to become a director of the Company on the closing of the private placement. Dr. Buchanan is the 2006 recipient of the Thayer Lindsley award for the discovery of the San Cristobal Mine located in the Potosi Mining district of Bolivia.

Raj Chowdhry stated, "The Company will be very fortunate to have two Thayer Lindsley award winners on the Board of the Company. Mr. Rick Van Nieuwenhuyse, the Chairman of the Board of Directors of Mantra, won the award in 2009."

The Company intends to use the proceeds of the private placement for exploration on its properties (primarily its Colorado Creek property in Alaska) and for general working capital and other corporate purposes.

The Company has granted an aggregate of 20,000 stock options exercisable for a period of five years at a price of $0.50 per share to certain officers, employees and consultants of the Company.


Raj I. Chowdhry, C.A., President & CEO

Cautionary Notice: This release contains forward-looking statements regarding the Company's business or financial condition, including the possible completion of a private placement, the intended use of proceeds and the appointment of directors. Actual results could differ materially from those described in this news release as a result of factors, including, but not limited to: the timing of and ability to obtain required financing and regulatory approvals and other factors. The Company cautions that these and similar statements involve risk and uncertainties and are qualified by important factors, including competitive pressures, unfavorable changes in regulatory structures, general risks associated with business and the timing and success in the completion of private placements, which could cause actual results to differ materially from those in the forward looking statement. Forward-looking statements are made in the context of information available as of the date stated. The Company undertakes no obligations to update or revise such statements to reflect new circumstances or unanticipated events as they occur, unless required by applicable law.

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 release.

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