Red Back Mining Inc.

Red Back Mining Inc.

April 20, 2007 17:11 ET

Red Back Announces Private Placement of Up to $350,000,000 by Way of Subscription Receipts and Special Warrants

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 20, 2007) -


Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to announce that it has entered into an agreement with a syndicate of agents led by GMP Securities LP and Cormark Securities Inc., and including Scotia Capital Inc., Haywood Securities Inc., Dundee Securities Corporation and Paradigm Capital Inc., to act as agents on a best efforts agency basis to sell, on a private placement basis, up to $350 million of units (the "Offering") of the Company (the "Units"). Each Unit will consist of 0.2 special warrants (the "Special Warrants") and 0.8 subscription receipts of the Company (the "Subscription Receipts"). Each whole Special Warrant will entitle holders to receive, without payment of any further consideration, one common share in the capital of the Company (a "Common Share") at any time prior to the Expiry Date (as hereinafter defined). Each Subscription Receipt will entitle the holder to receive, without payment of additional consideration, one Common Share immediately following the acquisition by the Company of the Tasiast gold project from Lundin Mining Corp. (the "Acquisition") and the satisfaction of certain other conditions (the "Release Conditions"). Upon closing of the offering, the proceeds of the sale of the Subscription Receipts, being approximately 80% of the gross proceeds of the Offering, (the "Escrow Funds") will be deposited and held by an escrow agent to be released upon satisfaction of the Release Conditions. If the Release Conditions have not been met on or prior to the date which is 90 days following the closing of the Offering, the Escrow Funds will be returned in full to the holders of the Subscription Receipts and the Subscription Receipts will be cancelled. The funds raised pursuant to the issuance of the Special Warrants, being approximately 20% of the Offering, will be released to the Company upon closing.

The price of the Units will be determined by the Company and the Agents in the context of the market. The Company intends to use the net proceeds of the Offering for the Acquisition and for general corporate purposes. All securities issued pursuant to the Offering will be subject to a four-month hold period. The Company has agreed to use commercially reasonable best efforts to obtain a final receipt for a short form prospectus qualifying the distribution of the Common Shares underlying the Special Warrants and the Subscription Receipts within (90) days following the closing of the Offering. Completion of the Offering is subject to certain conditions including the approval of the Toronto Stock Exchange.

The Company currently operates the Chirano Gold Project located in Ghana, West Africa which has budgeted production in 2007 of 137,000 ounces of gold. The acquisition of the Tasiast Gold Project in Mauritania is expected to add a minimum of 100,000 ounces of gold annually to the Company's production profile.

This press release contains "forward-looking information" that is based on Red Back's current expectations, estimates, forecasts and projections. This forward-looking information includes, among other things, statements with respect to Red Back's plans, outlook and business strategy. The words "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "intend", "estimate", "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases are intended to identify forward-looking information.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Red Back's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to drilling results; the ability to raise sufficient capital to fund exploration; changes in economic conditions or financial markets; changes in prices for Red Back's mineral products or increases in input costs; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration activities; and labour relations matters.

This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Red Back disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.


Richard P. Clark, President

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The 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 any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Contact Information