Strike Minerals to borrow $3.5-million from Waterton

2012-02-27 13:16 ET - News Release

Mr. Michael Newbury reports

STRIKE MINERALS INC. SECURES EDWARDS MINE PROJECT FINANCING WITH WATERTON GLOBAL VALUE

Strike Minerals Inc. has signed an agreement with Waterton Global Value LP that will provide the company with up to $3.5-million of financing consisting of gold stream debt financing.

The principal amount of the Gold Stream Debt Financing, being $3,500,000, will be secured by the assets of the Company, including the assets comprising the Edwards Mine Project. Assuming no early repayment events occur, repayment of such financing will occur by the Company making payments to Waterton commencing on the last business day of March 2013, and ending on the last business day of February 2015. Each monthly repayment will be made, at the option of Waterton, by the Company delivering to Waterton either gold bullion ounces or certain fixed cash amounts. If the Company makes any monthly payment by delivering gold bullion ounces to Waterton, the number of ounces so delivered shall be calculated based on a deemed gold price that is, effectively, equal to 80% of the then prevailing spot price of gold. Any outstanding principal amount of the Gold Stream Debt Financing shall accrue interest at a rate of 7.00% per annum.

A portion of the first advance of the Gold Stream Debt Financing will be used to repay the $350,000 Bridge Loan previously advanced to Strike by Waterton. In connection with the Gold Stream Debt Financing, Waterton will be provided with 14,000,000 warrants that are exercisable at a price of $0.10 for a period of 3 years.

The Company will use the proceeds of the Financing for the development and initial production from the Edwards Mine Project.

The Company has separately entered into a mine gold and silver supply agreement with Waterton, pursuant to which the Company will sell gold and silver produced at the Edwards Mine Project to Waterton based on certain agreed terms and conditions.

Mike Newbury President & CEO, comments, "Strike appreciates Waterton's practical approach, confidence and support to provide the $3,500,000 financing that is expected to be adequate funds to complete dewatering, conduct underground exploration and commence initial production at the Edwards Mine site. Financing through debt is less dilutive than equity and this financing, in conjunction with our recent equity financings will see us into production in 2012. The dewatering, which is now below the 120 m level, has allowed Strike to commence initial underground development on the 60m and 90m levels to intersect the new mineralized zones that were identified from surface drilling."

Cheryl Brandon, Portfolio Manager at Waterton Global, stated, "Waterton is pleased to be able to partner with Strike Minerals. We look forward to building a strong relationship with the management team and further developing the Edwards Mine into production. As a fully-permitted near-term gold producer, the company is well-positioned to benefit from strong commodities markets".

We seek Safe Harbor.