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28 May 2008 07:00
Eurasia Mining plc
("Eurasia" or the "Company")
Execution of Convertible Loan Note Agreement
Execution of Warrant Instrument
Eurasia has today executed a convertible loan note agreement with Deloan Investment Limited (the "Loan Note Agreement") ("Deloan"), pursuant to which £1 million will be drawn down by the Company over a period of twelve months. It has also entered into a warrant instrument, pursuant to which up to 40,000,000 warrants over ordinary shares in the Company will be issued to Deloan in place of interest on the Loan Note Agreement.
Deloan is an investment company registered in the British Virgin Islands and is controlled in Russia.
In accordance with the Loan Note Agreement, Deloan has agreed to invest £1 million in convertible loan notes over the next 12 months in the Company (the "Loan"). The Loan can be drawn down in four tranches of £250,000 each, the first of which is to be drawn down today, and is convertible into ordinary shares in Eurasia at a price of 5p per share at any time after the date of draw down. However, if a tranche of the Loan has not converted by the date being 12 months from the date of that draw down, it will automatically convert into ordinary shares in the Company. The Company also has the option to redeem the Loan in cash with the agreement of Deloan.
The Loan does not carry interest, and instead Deloan will be issued with 10,000,000 warrants over ordinary shares in Eurasia, at a price of 5p per share, every time £250,000 is drawn down by the Company under the Loan Note Agreement. A total of 40,000,000 warrants will therefore be issued by the time the four tranches of the Loan have been drawn down.
Following the conversion of the Loan, and assuming the exercise of all the warrants, Eurasia will have raised a total of £3 million through the issue of ordinary shares to Deloan. Deloan will then hold 60 million ordinary shares in the Company, representing 29.87% of the enlarged share capital.
The money will be used by Eurasia to fund ongoing working capital and pursue new projects in Russia.
In addition to providing funding for the Company, the transaction represents Eurasia's first step towards securing a Russian partner to invest in Eurasia's platinum group mining projects in Russia.
Eurasia is currently appraising platinum group metals prospects in two regions of Russia - the central Urals and the Kola Peninsula in the north-west - both in a funded joint venture with Anglo Platinum, the world's largest platinum producer.
For further information contact:
Christian Schaffalitzky/Michael de Villiers, Eurasia Mining plc: +44 (0) 20 7932 0418
Laurie Beevers, W H Ireland Ltd: +44 (0) 161 819 8724
Allan Piper, First City Financial Public Relations: +44 (0) 20 7242 2666
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