MACDONALD MINES EXPLORATION - RE-ISSUANCE OF PRESS RELEASE DATED MAY 12, 2006 CONCERNING THE SHARE FOR DEBT SETTLEMENT
TORONTO, ONTARIO--MacDonald Mines (TSX VENTURE:BMK)
The Corporation has reached an agreement with an arms length long-standing creditor to settle a debt in the amount of $367,645.75 through the issuance of 3.342 million common shares.
The debt was incurred as a result of a loan arrangement negotiated in 1999 with the creditor by previous management, which also provided for annual interest payments on outstanding balances. The debt includes a principal loan in the amount of $255,000 and accrued interest totaling $112,645.75. The loan has been recorded in the financial statements since 1999 and it was recommended by the corporation's auditors that it would be prudent to pay off the loan. It should be noted that as part of the audit process, such matters must be signed off by the parties involved on an annual basis to ascertain "status" for reporting purposes.
One of Management's core objectives is to put every possible dollar into exploration activities as this provides the Corporation with the best possible chance of exploration success, which will subsequently increase shareholder value. Given the amount of indebtedness, a cash payment for the "debt" would significantly reduce funds available for future exploration programs and would also require the use of non-flow-through funds.
Based on these facts, management felt in was in the best interest of all shareholders to negotiate a share for debt settlement with the arms length long standing creditor, who was very pro-active in finding a mutually suitable arrangement for both parties.
The indebtedness in the amount of $367,645.75 including all interest owing will be fully satisfied by the issuance of 3.342 million (3,342,234) common shares of the corporation.
All securities issued with respect to this transaction will be subject to a 4-month hold period from date of issuance and is also subject to final TSX Venture approval.
The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from MacDonald's expectations and projections.
There are currently 55.494 million common shares issued and outstanding.
WARNING: The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.