Merrex Gold Inc.
TSX VENTURE : MXI

Merrex Gold Inc.

December 06, 2006 15:49 ET

Merrex Gold Inc. Completes $5.3 Million Brokered Private Placement

HALIFAX, NOVA SCOTIA--(CCNMatthews - Dec. 6, 2006) - Merrex Gold Inc. (the "Corporation") (TSX VENTURE:MXI) is pleased to announce the completion of a brokered private placement offer co-led by Paradigm Capital Inc. ("Paradigm") and Wellington West Capital Markets Inc. (collectively the "Agents") for 1,948,031 units (the "Units") at a price of $0.70 per Unit, and 5,000,000 flow-through shares (the "Flow-Through Shares") at a price of $0.80 per Flow-Through Share, for total gross proceeds of approximately $5.3 million (the "Offering").

Each Unit consists of one common share (the "Common Shares") and one-half of a common share purchase warrant (the "Purchase Warrants"). Each full Purchase Warrant entitles its holder to purchase one additional Common Share at a price of $0.90 for a period of 12 months from closing. The Purchase Warrants will be subject to an accelerated expiry if, anytime following four months and one day after closing, the weighted average trading price of the common shares of the Corporation on the TSX Venture Exchange is greater than $1.50 for any 20 consecutive trading days.

As consideration for acting as Agents, the Corporation has paid a cash commission of $375,453. In addition, the Agents received 486,363 compensation options (the "Compensation Options"). Each Compensation Option is exercisable at $0.70 into one Unit of the Corporation for a period of 12 months from the Offering's closing date.

The Offering is subject to final TSX Venture Exchange acceptance for filing. All securities issued will be subject to a four-month hold period from the Offering's closing date expiring on April 7, 2007.

The proceeds of this private placement will be used primarily to fund ongoing exploration and development activities at the Corporation's Mali and Jubilee projects. Flow-through funds raised through the issuance of the Flow-Through Shares shall be used for Canadian Exploration Expenses (within the meaning of the Income Tax Act (Canada) (the "ITA")) which qualify as a "flow-through mining expenditure" for purposes of the ITA and will be renounced for the 2006 taxation year. The proceeds from the Units will be used to pay expenses related to this Offering, fund ongoing exploration at the Corporation's properties and for general corporate purposes.

Expenditures will also include exploration work on the Merrex West Voisey's Bay and Red Lake, Ontario properties. Diamond drilling in West Voisey's Bay tested deep geophysical targets with similarities to Inco's Nickel Deposit.

Merrex is a mineral resource exploration company focused on exploration for gold in Mali, West Africa, zinc in Nova Scotia, nickel in Newfoundland, and gold in Red Lake, Ontario, with a solid organization of people and projects to enable continued aggressive growth strategy.

Merrex Gold Inc. invites the public to visit its website at www.merrexgold.com or to email us at info@merrexgold.com to be added to the Corporation's email list for press releases and updates.

This press release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Corporation expects, are forward looking statements. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Merrex Gold Inc.
    Greg Isenor
    President & CEO
    (902) 832-5555
    or
    Merrex Gold Inc.
    Diane Webber
    Senior Geologist/Investor Relations
    (902) 832-5555
    (902) 832-2223 (FAX)
    Email: info@merrexgold.com
    Website: www.merrexgold.com