Mediterranean Resources Ltd.

TSX : MNR
FRANKFURT : MHM1


Mediterranean Resources Ltd.

August 21, 2014 09:30 ET

Mediterranean Resources Announces Non-Brokered Private Placement and Provides Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 21, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN OR INTO THE UNITED STATES

Mediterranean Resources Ltd. (the "Company") (TSX:MNR)(FRANKFURT:MHM1) is pleased to announce a non-brokered private placement and to provide a corporate update.

Private Placement

The Company is pleased to announce that, subject to regulatory approval, it intends to complete a non-brokered private placement financing of units of the Company (each, a "Unit") at a price of $0.05 per Unit to raise gross proceeds of between $1,000,000 and $1,500,000 (the "Financing"). The Company intends to issue between 20,000,000 Units and 30,000,000 Units pursuant to the Financing. Each Unit will consist of one common share of the Company (each, a "Share") and one non-transferable share purchase warrant (each, a "Warrant"). Each Warrant will entitle the holder to purchase one additional Share at a price of $0.05 per Share for a period of three years from the closing of the Financing.

The Company expects that the proceeds from the Financing will be used to secure applicable operating and environmental permits, to commence exploration and geotechnical drilling programs at the Company's Taç and Çorak and adjacent properties, and for general working capital purposes. Finders' fees may be payable in connection with the Financing in accordance with applicable regulatory policies.

None of the securities to be issued in connection with the Financing will be 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 any of the securities in any state where such offer, solicitation, or sale would be unlawful.

Corporate Update

Cease Trade Order Revocations

On May 2, 2014, the British Columbia Securities Commission (the "BCSC") issued a cease trade order (a "CTO") against the Company. On May 14, 2014, the Manitoba Securities Commission (the "MSC") issued a CTO against the Company. On May 20, 2014, the Ontario Securities Commission (the "OSC" and, collectively with the BCSC and the MSC, the "Commissions") issued a CTO against the Company. The CTOs were issued in connection with the Company's failure to file its financial statements, management's discussion and analysis, annual information form and related certifications for the year ended December 31, 2013 by the filing deadline.

Since the appointment of new management ("Management") at the Company's Special Meeting of Shareholders held on May 23, 2014 (the "May 23 Meeting"), the Company has been working with the Commissions to rectify the several past disclosure issues identified by the Commissions. The Company is pleased to report that the CTOs were revoked by the Commissions on June 3, 2014, June 4, 2014 and August 1, 2014, respectively.

Continuous and Technical Disclosure Reviews

On June 30, 2014, the BCSC informed the Company that it had been selected for a continuous disclosure review. On July 4, 2014, the BCSC further informed the Company that it had also been selected for a technical disclosure review (together with the continuous disclosure review, the "Disclosure Reviews"). The results of the Disclosure Reviews indicated several historical instances of non-compliant disclosure, including the Company's technical report dated June 14, 2011 entitled "Preliminary Economic Assessment on the Taç and Çorak Deposits" (the "43-101 Report"). Management worked with the technical department of the BCSC to remedy all non-compliant disclosure pertaining to the 43-101 Report and, on July 31, 2014, the Company refiled an amended 43-101 Report. Management also worked with other departments within the BCSC and the Company has now refiled several continuous disclosure documents via SEDAR. All amended documentation and additional documentation can be found under the Company's profile on SEDAR at www.sedar.com.

Development on the Concessions

The Company is pleased to report that Management has now stabilized its operations in Turkey after a prolonged period of tremendous turmoil with its employees and contractors (the "Turkish Staff") and the Turkish partner, whose various concerns were detailed in the April 29, 2014 news release. Management has been successful in regaining the trust of both the Turkish Staff and the Company's Turkish partner, who, together with the Company's Management, have developed an 18-month work program for the Taç and Çorak concessions intended to ensure all tenements remain in good standing and commence further development on the assets (the "Concession Plan"). The Company expects that funds for the Concession Plan will be partially provided by the proceeds of the Financing. Further details with respect to the Concession Plan will be discussed in future news releases.

Changes in Management

The Company is pleased to announce the appointment of Brigitte McArthur who replaces Cheryl Harpestad as the Company's Corporate Secretary. Ms. McArthur brings a tremendous wealth of experience to the Company.

Application for Migration to the TSX Venture Exchange

The Company has applied to the TSX Venture Exchange (the "TSX-V") to migrate the listing of the Shares to the TSX-V (the "TSX-V Listing") from the Toronto Stock Exchange (the "TSX"). The Shares are currently scheduled to be delisted from the TSX on August 22, 2014. The Company has requested a further extension from the TSX with respect to the delisting of the Shares from the TSX (the "Delisting Extension") in order to allow time for the TSX-V Listing to be completed. The following is a summary of the Company's progress related to the application for the TSX-V Listing:

  • On March 21, 2014, the TSX announced that the Company had several non-compliance issues. The Company was given 60 days to rectify all compliance issues. After failing to meet the 60 day deadline of May 20, 2014, the TSX announced they would delist the Company at the close of business on June 16, 2014.

  • Following the May 23 Meeting, Management proposed a plan to the TSX to rectify all past non-compliance issues in order to return the Company to good standing. This plan included: the completion of necessary filings, completing the work necessary to affect the revocation of the CTOs, the completion of the Financing and the completion of the TSX-V Listing. The TSX granted an initial Delisting Extension to June 19, 2014 and then a further Delisting Extension to July 17, 2014. The Company continued to show signs of progress with the CTO revocations and the Disclosure Reviews and was granted an additional extension to August 1, 2014.

  • Following the completion of the Disclosure Reviews, and after receiving the final CTO revocation from the OSC, the TSX granted the Company an additional Delisting Extension to August 22, 2014 and lifted its trading suspension to allow the Shares to begin trading again on August 5, 2014.

  • On August 12, 2014, the Company received conditional approval from the TSX-V to migrate its listing from the TSX to the TSX-V as a Tier 1 Mining Issuer and to complete the Financing announced in this News Release.

  • The Company is pleased to report that it has, to date, received subscriptions for $1,250,000 in connection with the Financing announced in this News Release. The closing of the Financing is expected to satisfy the final condition required to be met in order for the Company to obtain the TSX-V Listing. The Company intends to seek a final Delisting Extension from the TSX in order to permit the Company time to close the Financing. The Company has not yet set a closing date for the Financing but intends to close as soon as practicable.

Next Steps

The CTO revocations and the successful completion of the Disclosure Reviews mark significant milestones in the Company's pursuit to return to good standing since the May 23 Meeting. Although a further Delisting Extension from the TSX would allow additional time for the Company to complete its migration to the TSX-V, there are no assurances that the Delisting Extension will be granted, or that the TSX-V Listing will be obtained before the Company has received a decision with respect to the Delisting Extension application. In the event a further Delisting Extension is not granted, the Company intends to remain committed to closing the Financing and completing the TSX-V Listing.

Signed on behalf of the Board of Directors.

Robert Abenante, Chairman, President & CEO

The Toronto Stock Exchange has not reviewed, and does not accept responsibility for, the adequacy or accuracy of the contents of this release.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations, and include statements with respect to: (i) the proposed Financing and the use of proceeds thereof; (ii) the Concession Plan and other statements with respect to the Company's planned operations; and (iii) the application for the Delisting Extension and the TSX-V Listing. Such statements are qualified in their entirety by the inherent risks and uncertainties which may prevent the Company from achieving such plans and objectives, including: (i) that the Company may be unable to complete the Financing, including the closing of any subscription agreements received as of the date of this news release; (ii) that the Company may be unable to proceed with the Concession Plan due to risks and uncertainties associated with operations in Turkey and the mining industry in general; (iii) that the Company will be unable to obtain a further Delisting Extension from the TSX; (iv) that the Company may be unable to satisfy the outstanding conditions necessary to obtain the TSX-V Listing; and (v) other factors beyond the Company's control. Such forward-looking statements should therefore be construed in light of such factors, and the Company is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.

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