| ||March 16, 2012|
MBMI Announces Revised Terms of Convertible Debenture Financing and Share Consolidation and Grant of Stock Options
| ||Richmond Hill, Ontario, March 16, 2012 -- MBMI RESOURCES INC. (the "Company") (TSX-V: MBR) announces that the terms of a previously announced private placement of convertible debentures ("Debentures") and consolidation of the common shares of the Company ("Share Consolidation") have been revised. The original terms were described in the Company's press release of February 9, 2012.|
It is proposed that the private placement would now involve an aggregate principal amount of Debentures of up to $600,000 (rather than $1,500,000 as previously proposed). The proposed Share Consolidation would take place on a 10 to 1 basis (rather than a 5 to 1 basis as previously proposed), whereby one new common share would be issued in exchange for every 10 pre-consolidation common shares outstanding. The Debentures, which will be secured (rather than unsecured as previously proposed), will accrue interest at a rate of 12% per annum and will mature one year after issuance. Following the completion of the Share Consolidation, the principal amount of the Debenture would be convertible at the option of the holder into units ("Units") at a deemed price of $0.10 per Unit.
Each Unit would be comprised of one common share of the Company and one-half of one warrant ("Warrant"), each whole Warrant being exercisable for one common share at a price of $0.12 per share for a period of one year after the Share Consolidation.
Finders or agents may be entitled to receive finder's fees of up to 8% of the principal of the Debenture placed by finders payable in shares ("Finder's Shares") with a deemed price of $0.05 per share, and a number of finder's warrants ("Finder's Warrants") equal to the number of Finder's Shares issued. Each Finder's Warrant would be exercisable to acquire, for a term of one year after the Share Consolidation, one common share at a price of $0.12 per share.
The conversion price per Unit and exercise price of the Warrants and Finder's Warrants are based on the Share Consolidation being completed on a 10 to 1 basis. If the Share Consolidation is completed at a different consolidation ratio, the conversion price and warrant exercise prices will be adjusted accordingly.
The private placement is subject to the approval of the TSX Venture Exchange. The Share Consolidation is subject to the approval of the Company's shareholders and the TSX Venture Exchange. The Company anticipates that the Share Consolidation will be proposed to shareholders for approval at the Company's next shareholders' meeting.
Grant of Stock Options
The Company has granted to Christopher Aiello, the newest member of the Company's board of directors, 250,000 share purchase options of the Company, each option entitling the holder to purchase one common share of the Company at a price of $0.10 per share for five years from the date of issuance.
In addition, Mr. Aiello has been granted 250,000 share purchase options of the Company exercisable at a price of $0.10 per share for two years from the date of grant. These options will vest upon the validation of Financial and Technical Assistance Agreements of the Company relating to certain properties in the Philippines which are currently the subject of a dispute (the "Validation") if such Validation is obtained within one year of the option grant. If the Validation is not obtained within one year of the option grant, one-half of the options granted will expire after one year from the option grant. The remaining options will either vest upon the Validation if the Validation is obtained within two years of the option grant, or expire two years from the date of grant if the Validation has not been obtained by that time.
The terms of the share purchase options granted to Mr. Aiello are consistent with those granted to the directors of the Company in late 2011. All share purchase options granted have been granted under the Company's stock option plan under which 10% of the Company's issued and outstanding shares are reserved for issuance under the plan.
For further information relating to the Company or this release, please refer to the Company's website at www.mbmiresources.com or contact John Wong, President and CEO by telephone at 905-886-3888 or by email at email@example.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
The foregoing information may contain forward-looking statements relating to the future performance of MBMI Resources Inc. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from the Company's plans and expectations. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by the Company with the TSX Venture Exchange and securities regulators. MBMI Resources Inc. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
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