EDMONTON, Sept. 12 /CNW/ - Solid Resources Ltd. ("Solid" or the "Company") announces that it has closed a $300,000 debt financing (the "Loan"). Mr. Alvin Harter, a related party to the Company, has lent $300,000 to the Company pursuant to the terms of a non-convertible promissory note (the "Note"). The Note provides: (a) for interest at the rate of 10% per annum (with interest for the first 6 month period being prepaid by a deduction against the principal amount); (b) that it is payable on demand after 90 days written notice; and (c) that no demand may be made by Mr. Harter under the note until 6 months have lapsed from the date of issue.
In conjunction with the Loan, previous issued demand debt in the aggregate amount of $1,110,739 (the "Existing Debt") owning to Mr. Harter and Ms. Lucie Doolaege has been restated such that no demand may be made prior to December 1, 2007 and thereafter demand may only be made after 90 days written notice. Also, the Company has granted collateral security on its Bear Property in the Northwest Territories to secure repayment of both the Loan and the Existing Debt.
The TSX Venture Exchange ("TSXV") has, pursuant to correspondence dated September 4, 2007, conditionally accepted the Loan, the restatement of the Existing Debt and the grant of security. The TSXV has advised that final acceptance will be issued upon receipt of executed copies of all transaction documents and the issuance of this news release. In addition, the Executive Director of the Alberta Securities Commission has, pursuant to correspondence dated Sept 7, 2007, granted permission for the loan and the restatement of the existing debt as it pertains to Mr. Harter.
The proceeds of the Loan will be used for exploration expenses on the Company's Lara Property located in Peru and for working capital.
Although the Company explored completing financings with non-related parties, the current trading halt imposed by the TSXV did not make it possible to do so. As such, the Board of Directors formed a special committee (the "Special Committee"), consisting of its independent Directors, to negotiate the terms of the Loan with Mr. Harter. The Special Committee and the Board of Directors unanimously concluded that the Loan, the restatement of the Existing Debt and the grant of security were on commercially reasonable terms and would improve the financial position of the Company.
Trading of the Company's stock on the TSXV continues to be halted pending completion of a review of Mr. Harter's suitability to be associated with the Company. As was previously announced, in response to the suitability review, the Company has voluntarily put Mr. Harter's consulting agreement in abeyance on an interim basis; during such period, Mr. Harter will not provide services to the Company and he will not be paid any compensation. The Company is committed to assisting and continues to assist the TSXV in its suitability review with a view to having trading re-instated as soon as possible.
Certain statements contained in this press release, including statements which are related to exploration activity and future prospects and profitability and which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances and/or achievements of Solid to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include fluctuations in the market conditions and prices of tantalum, lithium, tin, silver and other metals and related products and services; competition; political and economic conditions in countries in which Solid does business; changes in laws and regulations, including environmental regulations, to which Solid is subject, and other factors which are described in further detail in Solid's filings with the Canadian Securities Regulators.
The TSX Venture Exchange has not reviewed this release and does not
accept responsibility for the adequacy or the accuracy of this release.