Venga Aerospace Systems Inc.
PINK SHEETS : VNGAF
TSX VENTURE : VAV

Venga Aerospace Systems Inc.

October 10, 2008 12:21 ET

Venga Announces a $535,000 Private Placement and an Agreement Increasing Its Stake in GMI to 20%

TORONTO, ONTARIO--(Marketwire - Oct. 10, 2008) - Venga Aerospace Systems Inc. (TSX VENTURE:VAV)(PINK SHEETS:VNGAF) (the "Company" or "Venga") announced today that it has entered into a funding and operating agreement (the "Funding Agreement") with Global Mineral Investments LLC ("GMI") and a number of investors to raise, by way of a non-brokered private placement (the "Offering" or the "Placement"), the sum of $535,000.00 through the issue of 10,700,000 common shares at a price of $0.05 per share. While insiders of the Company have subscribed for 2,000,000 common shares of the Offering (representing 18.7%), no 'control persons' (as defined in Policy 4.1 of the TSX Venture Exchange) or new insiders will be created as a result of the Placement. The closing of the Offering is subject to the approval of the TSX Venture Exchange and all shares issued pursuant to the Placement will be subject to a hold period, which expires four months after closing.

The proceeds from the Offering are intended to be used by Venga to fund GMI's planned gold dredging operations (the "Gold Dredging Operations") in those portions of the Upper Tartweh River that flow through GMI's four concessions (the "GMI's Concessions") located in Sinoe County, Liberia, to acquire an additional 16% equity interest in GMI (giving Venga a 20% total interest) and for general corporate purposes.

Under the terms of the Funding Agreement:

- GMI is granted full operational control of the Gold Dredging Operations with Venga being given, full management and control of all aspects related to the financial affairs of the Gold Dredging Operations;

- Venga will be entitled to receive an annual financial management fee calculated as being the greater of $120,000.00 or an amount equal to 1% of all monies received, disbursed or distributed by the Company as the financial manager of Gold Dredging Operations;

- Revenues derived from the recovery of all minerals other than gold, including diamonds, will be for the benefit of all parties to the Funding Agreement so that such revenues will be included in the calculation of the distributable profit payable to such parties flowing from the Gold Dredging Operations;

- The records of Liberia's Ministry of Lands, Mines and Energy with respect to the GMI's Concessions will be amended to reflect Venga's direct ownership of these concessions in a percentage that is equal to Venga's then equity ownership position in GMI;

- Venga has been granted an option over the next two years to acquire up to an additional 5% equity interest in GMI at a cost of $100,000.00 per 1 % so acquired; and

- Any additional mining concessions secured or negotiated by GMI or Venga in Liberia or West Africa will be acquired in the joint names of GMI and Venga reflecting the parties' equal ownership of such additional concessions.

"This is an exciting time for Venga," stated Venga's President, Hirsh Kwinter. "This financing, which will enable our Global Mineral Investment partners to commence gold dredging operations in Liberia, is a significant milestone and heralds a new era for Venga," continued Kwinter. "We anticipate that this is the beginning of a productive presence for both Global Mineral Investments and Venga in Liberia and West Africa," said Kwinter.

"We are excited to know that Global Mineral Investments and Venga Aerospace Systems Inc. are going to be part of the reconstruction process of a country emerging from nearly twenty years of destructive war," stated Mr. Kpandel Fayia, Liberia's Deputy Minister for Planning and Development, Ministry of Lands Mines and Energy, Republic of Liberia. "We believe that partnering with well intentioned people like you will yield the requisite dividend with both government and partners going through a win - win scenario. We look forward to working with you," continued Deputy Minister Fayia.

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that may cause the Company's results to differ materially from expectations and speak only as of the date hereof.

SHARES ISSUED: 228,271,893

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

Contact Information

  • Venga Aerospace Systems Inc.
    Hirsh Kwinter
    President
    (514) 489-7175
    Email: venga@rogers.com