NEWS RELEASE 08-15
Merit Mining Closes First Tranche of Private Placement
Makes $2.0 Million Option Payment on J&L Property
May 6, 2008 – Vancouver,
British Columbia. Merit Mining Corp.
reports that it has completed the first tranche of its previously announced
non-brokered private placement offering of up to 28,571,428 shares, at $0.21
per share. At the first closing,
the Company issued 18,000,000 common shares for total gross proceeds of
$3,780,000. Securities issued at
the closing are subject to a hold period until September 6, 2008.
Wega Mining ASA, an Oslo-based international mining
company and Merit’s largest shareholder, subscribed for 16,000,000 common
shares in the first closing of the private placement, for a total purchase
price of $3,360,000. As a result of
its subscription, Wega Mining ASA now owns 121,946,683 common shares of the
Company representing approximately 59.0% of the issued and outstanding shares,
and also holds 47,345,636 warrants, entitling it to acquire an aggregate of up
to 47,345,636 additional common shares.
Assuming the exercise of all of the outstanding warrants and options of
Merit, including the warrants held by Wega Mining, Wega Mining would own
169,292,319 commons shares of Merit, representing 61.3% of the common shares on
a fully diluted basis (excluding an outstanding Merit Mining convertible
debenture held by Wega Mining ASA).
Proceeds of the private placement will be used by the
Company for working capital for the Greenwood Gold Project, located near
Greenwood, BC, and for a cash option payment on the J&L polymetallic
project, which is located near Revelstoke, BC and on-going exploration at the
J&L project.
The $2.0 million option payment on the J&L project
has now been paid. As a result of
making this payment, the Company has completed the acquisition of an 85%
undivided interest in the J&L project.
To retain its 85% interest and acquire the remaining 15% interest in the
property, the Company must make payments totaling $5.79 million, in the form of
cash and semi-annual advanced royalties and/or production royalties over the
next six years.
The first phase of underground development (1,000 metres)
is on-going at the J&L project, with underground diamond drilling of 5,000
metres planned to commence in the summer of 2008.
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.