July 09, 2010 17:34 ET

New Island Resources Inc. Announces Private Placement Financing

ST. JOHN'S, NEWFOUNDLAND and LABRADOR--(Marketwire - July 9, 2010) - New Island Resources Inc. ("New Island") (TSX VENTURE:NIS) reports that it has arranged a private placement (the "Placement") of 3,500,000 common shares at a subscription price of CDN$ 0.08 per common share to raise gross proceeds of CDN$ 280,000. 

The Placement has been fully subscribed. Completion of the Placement is subject to TSX Venture Exchange approval.

Prior to the completion of the Placement, there are 47,227,365 common shares of New Island issued and outstanding.

The net proceeds of the Placement will be used to fund the immediate working capital requirements of New Island, including expenses for financial and legal services related to (a) a possible business combination with Mountain Lake Resources Inc. (TSX VENTURE:MOA) (hereinafter, "Mountain Lake") pursuant to terms set out in a Letter of Intent dated June 2, 2010 and (b) an unsolicited share exchange take-over bid (the "Take-over Bid") by Anaconda Mining Inc. (TSX:ANX) (hereinafter "Anaconda") pursuant to terms set out in the take-over bid circular filed by Anaconda with Canadian securities regulators on June 11, 2010.

The Placement was not made in response to Anaconda's Take-over Bid but was initiated prior to New Island receiving notice of the Take-over Bid. Under the Letter of Intent between New Island and Mountain Lake dated June 2 2010, it was contemplated by the parties that New Island would be permitted to raise up to CDN$ 250,000 to meet its immediate day-to-day requirements. This was based upon the cash requirements of New Island as understood prior to the Anaconda Take-over Bid being filed. New Island's immediate cash requirements have increased as a result of the Anaconda Take-over Bid and, as a result, the amount to be raised by the Placement was increased to CDN$ 280,000. 

While the issuance of additional capital stock by New Island is a "restricted event" within the meaning of Anaconda's Take-over Bid and therefore contravenes one of several conditions imposed by Anaconda in the Take-over Bid, it is noted that the number and scope of conditions reserved by Anaconda in the Take-over Bid are such that no sales of New Island shares would be possible absent a waiver by Anaconda of at least some of its conditions. In addition, certain circumstances of New Island known to Anaconda prior to the Take-over Bid caused conditions reserved by Anaconda to be breached immediately upon the Take-over Bid being filed. For example, Anaconda acknowledged in the Take-over Bid that New Island would likely need to raise additional working capital in the near term and that New Island was in the process of negotiating with Mountain Lake. Both circumstances (raising additional funds and the act of negotiating with Mountain Lake) constitute breaches of the proposed terms of Anaconda's Take-over Bid. 

New Island will issue a further press release in respect of the Placement upon a determination by the TSX Venture Exchange.

About New Island Resources Inc.

New Island is a diversified junior exploration company holding gold and base metal properties in the Province of Newfoundland and Labrador. Additional information concerning New Island may be obtained on New Island's website at: or from the System for Electronic Document Analysis and Retrieval (SEDAR) website at: under New Island's profile.


s/ "Harold Wareham"
President and CEO

Statements contained in this release that are not historical facts are forward-looking statements, which involve known and unknown risks and uncertainties not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements.

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

Contact Information