Petaquilla Minerals Ltd.
OTC Bulletin Board : PTQMF

Petaquilla Minerals Ltd.

March 27, 2009 08:32 ET

Petaquilla Announces US$40 Million Convertible Senior Secured Notes Financing and Repricing of Warrants

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 27, 2009) - Petaquilla Minerals Ltd. (the "Company") (TSX:PTQ)(OTCBB:PTQMF)(FRANKFURT:P7Z) is pleased to announce that it has negotiated a private placement of Convertible Senior Secured Notes of up to US$40,000,000. Each Note in the principal amount of US$1,000 is convertible into common shares at CAD$2.25 per share. The Notes will bear interest at an annual rate of fifteen percent (15%), of which the first 12 months' interest shall be prepaid in full at the time of issuance of the Note. All interest payments will be grossed up for Canadian withholding tax, if any.

The Notes will mature two years from date of issuance at 110% of the principal amount of such Notes; provided however that in the event of a change of control of the Company, the Notes shall be immediately due and payable. The Company shall have the right to prepay the Notes at any time for an amount equal to 110% of the principal amount of such Notes and accrued and unpaid interest on the principal amount of the Notes (it being understood that any and all prepaid interest shall be forfeited as a penalty).

The indebtedness represented by the Notes will be senior to all other indebtedness of the Company and will rank pari passu with the previously issued senior secured notes.

In connection with this offering, subject to regulatory approval, the Company has agreed to reduce the exercise price of 23,836,800 warrants from CAD$2.30 per share to CAD$0.65 per share provided that under the revised terms, if the common shares of the Company trade at a weighted average trading price of CAD$1.00 or more per share for 30 consecutive trading days, the holders of the warrants must exercise the warrants within 30 days.

The Offering is conditional upon, among other things, the Company obtaining all necessary regulatory and TSX approvals.

The Company will pay the placement agent upon closing of the financing, a 5% cash commission on the gross proceeds raised by the agent on the offering.

Holders of the previously issued Series 1, Series B and Series C notes are being offered the opportunity to exchange amounts due upon maturity of their existing notes and participate pro rata in the Convertible Senior Secured Notes offering up to a maximum of US$24,187,083. The remaining proceeds of the private placement will be used for the continued commissioning of the Molejon Gold Project located in Panama and for working capital.

The offered securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold within the United States, absent registration thereunder or in transactions exempt from such registration requirements.

About Petaquilla Minerals Ltd. - Petaquilla Minerals Ltd. is an emerging gold producer scheduled to bring its 100%-owned Molejon Gold Project into production in 2009. The plant will utilize three ball mills and a carbon-in-pulp processing facility.

On behalf of the Board of Directors of PETAQUILLA MINERALS LTD.

Richard Fifer, President and Chief Executive Officer

No stock exchange has approved or disapproved the information contained herein.

Contact Information

  • Petaquilla Minerals Ltd.
    Richard Fifer
    President and Chief Executive Officer
    (604) 694-0021 or Toll Free: 1-877-694-0021
    (604) 694-0063 (FAX)