Mart Resources, Inc.
TSX VENTURE : MMT

Mart Resources, Inc.

November 17, 2006 12:07 ET

Mart Resources, Inc., Amends Terms of Convertible Note Financing

CALGARY, ALBERTA--(CCNMatthews - Nov. 17, 2006) - Mart Resources, Inc. (TSX VENTURE:MMT) announces that it will be increasing the size and amending the conversion terms of the convertible note financing previously announced by the company on October 24, 2006.

The size of the private placement of secured convertible promissory notes (the "Secured Notes") and unsecured convertible promissory notes (the "Unsecured Notes") (collectively the "Notes") will be increased from $17,750,000 (approximately US$15,700,000) to $18,375,000 (approximately US$16.2 million).

The Notes will have a two year term from the date of closing and will bear an 8% annual interest rate. Interest payments are due commencing on the first anniversary date of the issuance of the notes and semi-annually thereafter until the earlier of conversion or maturity.

The $8,875,000 of Unsecured Notes are convertible at the option of the holder into units (the "unsecured units") of Mart at a conversion price of $0.66 per unsecured unit during the first year of their term and at a conversion price of $0.75 per unsecured unit after the first year until maturity. Each unsecured unit shall consist of one common share and one common share purchase warrant (an "unsecured warrant"). Each unsecured warrant shall entitle the holder to acquire one additional common share of Mart at an exercise price of $0.66 per share if the unsecured warrant is exercised within one year of the date of issuance of the unsecured warrant and at an exercise price of $0.75 per share if the unsecured warrant exercised after one year from the date of its issuance.

The $9,500,000 of Secured Notes are convertible at the option of the holder into units (the "secured units") of Mart at a conversion price of $0.66 per secured during the first year of their term and at a conversion price of $0.75 per secured unit after the first year until maturity. Each secured unit shall consist of one common share and one-half common share purchase warrant (an "secured warrant"). Each secured warrant shall entitle the holder to acquire one additional common share of Mart at an exercise price of $0.79 per share if the secured warrant is exercised within one year of the date of issuance of the unsecured warrant and at an exercise price of $0.90 per share if the secured warrant exercised after one year from the date of its issuance. The Secured Notes are secured by a pledge of the shares of a wholly-owned Barbados subsidiary of Mart which is currently the owner of Mart's 1500 horsepower drilling rig.

Mart has the right to force conversion of the Notes if Mart's common shares trade at a price greater than $0.92 per common share for 30 consecutive trading days during the first year from the date of issuance of the Notes and at $1.05 per common share for 30 consecutive trading days thereafter. The Notes contain a re-pricing provision entitling the holder, in certain circumstances, to a reduction in the conversion price in the event that Mart conducts a future private placement at a price less than the conversion price. In such circumstances and subject to certain other limitations, the conversion price could be reduced to the higher of the issue price of future common shares plus 20% or the undiscounted market price at the time of the announcement of such private placement. In the event of a reduction of the conversion price, the exercise price of the purchase warrants and the forced conversion price are also subject to an equivalent price reduction.

A maximum of 27,840,908 common shares and 21,117,424 purchase warrants are subject to issuance where the full conversion of the Notes and exercise of purchase warrants occurs within one year of the date of issuance of the Notes. Should the Notes not be converted in the first year, the maximum number of shares and warrants subject to issuance are 24,499,999 common shares and 18,583,333 purchase warrants respectively.

In addition, Mart intends to issue up to an additional 600,000 common shares at $0.48 per common share to existing noteholders in satisfaction of accrued interest payments due on existing convertible notes.

Mart intends to use the proceeds of the financing to repay its existing convertible notes valued at approximately $9.5 million, to drill and test wells on the Umusadege oil field and the Qua Ibo oil field in Nigeria and for general working capital.

Certain statements in this News Release constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that any future closings of the private placement will occur within the time frames indicated or at all.

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

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