JML Resources Ltd.

JML Resources Ltd.

October 12, 2005 08:30 ET

Progress Report on JML Resources Ltd.

TORONTO, ONTARIO--(CCNMatthews - Oct. 12, 2005) -

NOT for distribution in the United States.

Aquila Resources Merger

JML Resources Ltd. (TSX VENTURE:JJJ) ( "JML" or the "Company") is pleased to announce the following update with respect to the merger with Aquila Resources Corp. ("Aquila") and 2079537 Ontario Ltd. ("Cashco"). The transaction is being treated as a reverse take-over ("RTO") under the TSX Venture Exchange Policies.


The Company has amended the terms of the private placement associated with the RTO. The private placement now includes up to 12,500,000 units of Cashco (the "Units") offered through Jennings Capital Inc. ("Jennings") to qualified investors on a best efforts basis at a price of $0.20 per unit (the "Offering") for gross proceeds of up to $2,500,000.

The Offering is scheduled to close no later than October 31, 2005, or such other date as agreed to between the Company and Jennings (the "Closing Date").

Each Unit is comprised of one common share and one common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional common share of the Company at a price of $0.30 per share for a period of two years from the Closing Date, subject to the Company's right to accelerate the expiry date as described below. Jennings will have the option, exercisable at any time up to 48 hours prior to the Closing Date, to increase the size of the financing by up to an additional 2,500,000 Units for additional aggregate proceeds of up to $500,000. The Offering is subject to regulatory approval. If at any time following the completion of the RTO, the closing price of the common shares of the Company on the TSX Venture Exchange is greater than $0.45 per share for 20 or more consecutive trading days, the Company may give notice to the holders of the Warrants that the expiry date for exercise of the Warrants has been accelerated, in which case the Warrants will expire on the 20th day following the date of such notice.

Jennings, as exclusive agent, will receive a commission of 8% of the subscription proceeds payable on the completion of the RTO and non-transferable agent's warrants equal to 10% of the Units, which shall be exercisable at an exercise price of $0.30 per share for a period of two years from the date of issuance.

The proceeds of the private placement will be used to fund the obligations of Aquila with respect to the Back Forty Project and for working capital purposes.

The table below summarizes the share capital of JML before and after the RTO based on the amended terms of the financing:

Total before acquisition Common 27,326,910
of Aquila plus Preferred
3,823,130 31,150,040
Total before consolidation 80,216,486
Consolidation 1:3 26,738,828
Maximum Shares to be issued
for acquisition of Cashco 15,000,000
Pro Forma outstanding of JML 41,738,828
after the RTO (Post-consolidated
common shares)


In accordance with the TSXV policies, JML is preparing and finalizing the documentation required to be filed according to Policy 5.2 of the TSXV, including the Management Information Circular which provides full disclosure of all the material facts relating to the RTO.

Completion of the transaction is subject to a number of conditions including but not limited to TSXV acceptance and approval by the shareholders of JML and Aquila. The transaction cannot close until the required shareholder approvals are obtained. There can be no assurance that the transaction can be completed at all.

Investors are cautioned that except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of JML should be considered highly speculative.

To find out more about JML Resources Ltd. (TSX-V:JJJ), visit our website at

Shares Outstanding: 27,326,910

The TSX Venture Exchange has not reviewed or approved the contents of this release.

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