MBMI Resources Inc.
TSX VENTURE : MBR

MBMI Resources Inc.

May 01, 2012 17:55 ET

MBMI Closes Convertible Debenture Financing With Gwynneth Gold Limited and Kam Yuen Capital Ltd. Participating in Investment

RICHMOND HILL, ONTARIO--(Marketwire - May 1, 2012) - MBMI RESOURCES INC. (the "Company") (TSX VENTURE:MBR) announces that it has closed a previously announced private placement of convertible debentures ("Debentures") raising an aggregate principal amount of $600,000.

Following the completion of the Company's previously announced consolidation of the common shares of the Company (the "Shares") on a 10 to 1 basis (the "Share Consolidation"), the principal amount of the Debenture will be convertible at the option of the holders into units ("Units") at a deemed price of $0.10 per Unit. Each Unit would be comprised of one Share and one-half of one warrant ("Warrant"), each whole Warrant being exercisable for one Share at a price of $0.12 per share for a period of one year after the Share Consolidation. The Debentures are secured, accrue interest at a rate of 12% per annum and mature one year after issuance.

In connection with the private placement, finders are entitled to receive compensation equal to up to 8% of the principal of the Debenture placed by finders payable in shares with a deemed price of $0.05 per share ("Finder's Shares"), and finder's warrants ("Finder's Warrants") equal to the number of Finder's Shares issued. Each Finder's Warrant is exercisable to acquire, for a term of one year after the Share Consolidation, one common share at a price of $0.12 per share. Finder's fees of 320,000 Shares and 320,000 Finder's Warrants are payable by the Company to Mr. Romolo Valentino Nati, and finder's fees of 32,000 Shares and 32,000 Finder's Warrant are payable by the Company to ECP Consulting Limited.

The conversion price per Unit and exercise price of the Warrants and Finder's Warrants are based on the Share Consolidation being completed on a 10 to 1 basis. If the Share Consolidation is completed at a different consolidation ratio, the conversion price and warrant exercise prices will be adjusted accordingly.

The private placement is subject to the approval of the TSX Venture Exchange. All securities issued in this private placement are subject to a four month hold period expiring on September 1, 2012. The Share Consolidation is subject to the approval of the Company's shareholders and the TSX Venture Exchange. The Share Consolidation will be considered for approval at the Company's next shareholders' meeting to be held on May 2, 2012.

Acquisition by Gwynneth Gold Limited

Gwynneth Gold Limited ("Gwynneth"), a subsidiary of Harmony Asset Limited (TSX VENTURE:HAR), is a corporation having an address at Room 1902, Cheung Kong Center, 2 Queen's Road Central, Hong Kong. It acquired ownership and control (for investment purposes) over Debentures having a principal amount of $160,000 in the private placement. If the Debentures held by Gwynneth are converted into Units following the Share Consolidation, it would acquire 1,600,000 Shares and 800,000 Warrants. The Shares acquired by Gwynneth upon conversion would represent approximately 8.1% of the Company's outstanding Shares, causing Gwynneth to hold an aggregate of approximately 19.8% of the outstanding Shares, assuming that the Company had not issued any new Shares to any other party between the closing of this private placement and the time of the conversion, and assuming that no other Debentures or other convertible securities of the Company are converted or exercised.

Additional details of this transaction will be contained in the Early Warning Report filed by Gwynneth on SEDAR. A copy of the Early Warning Report can be obtained by submitting a request to Gwynneth by telephone at (852) 2545 6883 or by facsimile at (852) 2544 9833 to the attention of Mr. Vincent Cheng.

Acquisition by Kam Yuen Capital Ltd.

Kam Yuen Capital Ltd. ("Kam Yuen"), a corporation having an address at 805A, 8/F, Sino Plaza, 255 Gloucester Road, Causeway Bay, Hong Kong, acquired ownership and control (for investment purposes) over Debentures having a principal amount of $200,000 in the private placement. If the Debentures held by Kam Yuen are converted into Units following the Share Consolidation, it will acquire 2,000,000 Shares and 1,000,000 Warrants. The Shares acquired by Kam Yuen upon conversion would represent approximately 9.9% of the outstanding Shares, causing Kam Yuen to hold an aggregate of approximately 17.9% of the Shares, assuming that the Company had not issued any new Shares to any other party between the closing of this private placement and the time of the conversion, and assuming that no other Debentures or other convertible securities of the Company are converted or exercised.

Additional details of this transaction will be contained in an Early Warning Report filed by Kam Yuen on SEDAR. A copy of the Early Warning Report can be obtained by submitting a request to Kam Yuen by telephone at (852) 2566 2638 or by facsimile at (852) 2891 2636, to the attention of Mr. Ning, Yat Hoi.

Cautionary Statement:

The foregoing information may contain forward-looking statements relating to the future performance of MBMI Resources Inc. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from the Company's plans and expectations. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by the Company with the TSX Venture Exchange and securities regulators. MBMI Resources Inc. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

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. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Contact Information