NEWS RELEASE 08-26
Merit Mining
Arranges Convertible Debenture of Up to $5.0 Million
October
2, 2008 ? Vancouver, British
Columbia. Merit Mining Corp. (TSX-V:MEM) reports that it has
arranged a convertible debenture financing of up to $5.0 million. The debentures are repayable as to 25%
of the principal amount on or before 8 months from the date of closing of the
debenture financing and payments of 25% of principal every six months
thereafter, with interest of 10% per annum payable coincident with repayments
of principal. The debentures will
be secured by a first charge on mobile equipment and buildings of the Company,
plus the right to take over the J&L option agreement, subject to approval
by the property holder. The debentures
will be convertible to common shares of the Company at the debenture holders?
option, at a conversion price of $0.13 per share.
The convertible
debenture financing is subject to acceptance for filing by the TSX Venture
Exchange. All securities to
be issued on conversion of the debentures will be subject to a four month hold
from the closing date of the debentures.
The proceeds
from the debenture financing will be used for working capital and to retire a
current outstanding convertible debenture with a face value of $2.0 million,
which is held by Wega Mining ASA.
Wega Mining ASA,
major shareholder of the Company, is expected to subscribe for debentures in
the amount of $2,895,000.
Wega Mining ASA currently owns 126,039,056 common shares of Merit Mining
Corp., representing approximately 58.1% of the issued and outstanding shares.
Post closing, assuming that Wega Mining subscribes for the amount of
$2,895,000, it would hold 57.5% on a fully diluted basis (assuming full
conversion of the debentures).
Munday Home
Sales Ltd., an insider of the Company, is expected to subscribe for debentures
in the amount of $1,105,000. Munday
Home Sales Ltd. currently owns 22,693,131 common shares of Merit Mining Corp.,
representing approximately 10.5% of the issued and outstanding shares. Post
closing, assuming that Munday Home Sales Ltd. subscribes for the amount of
$1,105,000, it would hold 9.8% on a fully diluted basis (assuming full
conversion of the debentures).
Merit Mining Corp.
Signed
?Fred Sveinson?
Fred Sveinson,
President & CEO
For further information please contact:
Fred Sveinson at (604)
694-2344
For Investor
Relations Information Contact:
MarketSmart
Communications (604) 261-4466
(Toll Free 1-877-261-4466)
The TSX
Venture Exchange has not reviewed and does not accept responsibility for the
adequacy or accuracy of this release.
The statements made in this News
Release may contain certain forward-looking statements. Actual events or results may differ from
the Company?s expectations. Certain
risk factors may also affect the actual results achieved by the Company.