Tirex Resources Ltd.
TSX VENTURE : TXX

Tirex Resources Ltd.

October 09, 2008 09:00 ET

Tirex Arranges EUR 6 Million ($9 Million CAD) Financing With European Bank for Reconstruction and Development

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 9, 2008) - Tirex Resources Ltd. ("Tirex") (TSX VENTURE:TXX) is pleased to announce that it has arranged a EUR 6 Million Convertible Loan financing with the European Bank for Reconstruction and Development ("EBRD"). The EUR 6 Million (approximately $9 million in Canadian funds) will be advanced to Tirex in three equal tranches as requested by Tirex and will require equal matching equity investments for tranche two and tranche three from the commercial sector, thereby bringing the combined financing to a total of EUR 10 Million (approximately $15 million in Canadian funds). The first tranche will be advanced to Tirex immediately.

The EBRD was established in 1991 to nurture private sector business in emerging economies within eastern Europe and central Asia, and is the largest single investor in this region. In 2007, the EBRD invested EUR 5.6 billion in projects in the region, which is the Bank's highest level of investment to date. The EBRD is owned by 61 countries and two intergovernmental organizations and invests mainly in private enterprises, usually in conjunction with commercial partners. The EBRD mobilizes significant direct foreign investment beyond its own financing in many investment situations and its prudent operational and financial policies along with its strong capital position has resulted in a credit rating of AAA from Standard & Poors, Aaa from Moody's and AAA from Fitch. The EBRD has a subscribed capital totaling EUR 20 billion.

The EBRD to date has cumulatively invested in over 40 projects in Albania, with a net business volume of over EUR 400 million. While the EBRD is the largest institutional investor in Albania, today's debt funding arrangement with Tirex reflects the first ever EBRD investment in the Albanian natural resource sector. As a condition of the EBRD financing, the EBRD has the right to appoint a nominee to the Tirex Board of Directors. It is expected that this Director will add significant additional expertise to Tirex as the company grows. Tirex is pleased to welcome EBRD as a long term financial partner to the company and looks forward to both EBRD and commercial partners playing a key role in future financing for Tirex, including production financing if required. The financing arranged with EBRD will be by way of a Convertible Loan. Three equal tranches of EUR 2,000,000 will be advanced over time. The first tranche will be made upon satisfaction of all conditions precedent, including TSX Venture Exchange approval. The subsequent tranches will be made following Tirex's application for loan advances, each of which will be conditional upon Tirex raising equivalent amounts of equity financing. All of the loans will mature and be payable five years following the date of the first advance. Tirex may pay the interest as it falls due, or accrue the same to maturity.

At any time prior to maturity, EBRD may, at its election, convert any or all of the outstanding principal and interest under the loan into common shares of Tirex. The first EUR 2,000,000 tranche may be converted, during the first two years of the loan, at Tirex's closing share price as of the date of the Loan Agreement, such conversion price increasing by 10% each year thereafter. The second and third tranches may be converted at the greater of (i) Tirex's closing share price as of the date of the Loan Agreement, and (ii) Tirex's closing share price as at the time of the applicable advance. Interest may be converted at the greater of (i) Tirex's closing share price as of the date of the Loan Agreement, and (ii) Tirex's closing share price as at the time of conversion.

Bryan Slusarchuk, CEO of Tirex Resources, states, "Today's financing announcement represents a very significant corporate achievement for Tirex Resources. EBRD is an ideal partner for Tirex, for a variety of reasons. EBRD is not only very strong financially, as indicated by its capital position and credit rating, but it is also an organization that can add significant value to Tirex in terms of expertise in government relations, environment and community relations, and operations. With EBRD now a major stakeholder in Tirex, we feel very well positioned to advance the Mirdita project quickly with a goal of proving up the full potential of the District. The EBRD does not enter into loan agreements such as this agreement with Tirex lightly, and it is rewarding to note that this agreement was reached after extensive due diligence that involved a very in-depth and detailed analysis of the geology and logistics of Tirex's Mirdita District, the Tirex technical and corporate teams, and the operating procedures of the company. As EBRD's first investment in the natural resource sector in Albania, we know that our progress will be closely watched and we are working hard to exceed expectations in every facet of the project. EBRD has taken a long term view on the development of Mirdita and our goal is to see the development of a world-class VMS District in Albania that will be materially important to the rapidly emerging Albanian economy. We look forward to working with EBRD during the months and years ahead as we intensify our program at Mirdita. We thank the entire EBRD organization for their vision in concluding this mutually successful agreement.

The proceeds of the EBRD loan will be used to continue work on Tirex's Volcanogenic Massive Sulphide District in Mirdita, Albania.

Tirex is a company purpose-built to explore and develop the large 344 square kilometer Mirdita Property in Albania. The nature of the VMS mineralization in this District provides Tirex investors with exposure to a basket of metals: Copper, Zinc, Gold and Silver. The property is readily accessible by paved and gravel roads and is located 70 km north of the capital city of Tirana. The property covers the core of the historically productive Mirdita VMS base metal district. It represents an opportunity to explore Copper, Zinc, Gold and Silver zones that were previously partially mined, explored or evaluated at lower metal prices, and provides an opportunity to apply modern exploration techniques toward the discovery of new VMS deposits and extensions of known zones. In addition to the historical deposits identified by previous state-run exploration, Tirex has identified numerous high priority exploration targets resulting from the 2007 airborne geophysical survey, ongoing ground geophysics, geological mapping and other field work. The Mirdita exploration project is managed by an experienced team of Canadian geologists and other professionals, and several senior Albanian geologists, geophysicists and surveyors.

Further details on the European Bank for Reconstruction and Development can be found on the EBRD website at www.ebrd.com.

Further details on the company and the Mirdita Project can be found on the Tirex website at www.TirexResources.com.

ON BEHALF OF TIREX RESOURCES LTD.

Bryan Slusarchuk, CEO and Director

Forward-Looking Statements. This Tirex News Release may contain certain "forward-looking" statements and information relating to Tirex that are based on the beliefs of Tirex management, as well as assumptions made by and information currently available to Tirex management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, changes, industry practices, and one-time events. Should any one or more of these risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results and forward-looking statements may vary materially from those described herein.

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

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