July 21, 2008 – Vancouver, British Columbia. Merit Mining Corp. reports it has completed the first closing of the $5,000,000 private placement offering of three year convertible debentures (the “Debentures”) previously announced on June 25, 2008. In the first closing, the Company has completed the issuance of Debentures in the principal amount of $3,246,000 to subscribers resident in the Provinces of Manitoba and Saskatchewan.
Proceeds of the private placement will be used by the Company to further develop the Company’s Greenwood Gold Project currently in production in Greenwood, British Columbia and its J&L Project near Revelstoke, British Columbia, where a major underground development and exploration program is underway, as well as for working capital purposes.
The Debentures will mature in three years, with interest payable annually at 10%. The principal amount of the Debentures will be convertible into shares of the Company at $0.27 in the first year, $0.35 in the second year and $0.40 in the third year from the date of closing of July 21, 2008. Interest may be paid in cash or shares at the option of the holder.
Should the holders of the Debentures elect to receive the 10% annual interest payment in shares instead of cash, the share price used to determine the number of shares granted will be the greater of:
1) the applicable conversion price for the year in question, less 10%;
2) the weighted average daily market price of the shares for the previous 20 trading days prior to the interest payment date less 10%; and
3) the last closing price prior to the news release announcing the conversion of interest to shares.
all subject to the requirements of the TSX-V.
The Debentures will be fully secured by a call on future gold production of the Company.
All securities to be issued on conversion of the Debentures will be subject to a four month hold until November 21, 2008 or a 12 month hold until July 21, 2009 if the holder is a resident of the Province of Manitoba or a person to whom the laws of the Province of Manitoba extends.
Jory Capital Inc. of Winnipeg, Manitoba assisted the Company with respect to the offering and has been paid a fee of 5% of the total subscription proceeds received.
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.