Mart Resources Raising Exploration Funds



Mart Resources, Inc. (TSX VENTURE: MMT) announces that, subject to receipt of regulatory approval, it will be conducting a private placement of secured convertible promissory notes (the "Secured Notes") and unsecured convertible promissory notes (the "Unsecured Notes") (collectively the "Notes") to a European-based fund for aggregate gross proceeds of $17,750,000 or approximately US$15,700,000.

The Notes will have a two year term from the date of closing and will bear an 8% annual interest rate. Interest payments are due commencing on the first anniversary date of the issuance of the notes and semi-annually thereafter until the earlier of conversion or maturity.

The $8.875 million of Unsecured Notes are convertible at the option of the holder into units of Mart at a conversion price of $0.75 per unit (the "unsecured unit") at any time prior to the maturity date. Each unsecured unit shall consist of one common share and one common share purchase warrant. Each purchase warrant shall entitle the holder to acquire one additional common share of Mart at an exercise price of $0.75 per share for a period two years from the date of issuance of the warrant.

The $8.875 million of Secured Notes are convertible at the option of the holder into units of Mart at a conversion price of $0.75 per unit (the "secured unit") at any time prior to the maturity date. Each secured unit shall consist of one common share and one-half common share purchase warrant. Each whole purchase warrant shall entitle the holder to acquire one additional common share of Mart at an exercise price of $0.90 per share for a period two years from the date of issuance of the warrant. The Secured Notes are secured by a pledge of the shares of a Barbados subsidiary of Mart which is the owner of Mart's Cooper 550 workover/drilling rig.

Mart has the right to force conversion of the Notes if the Mart common shares trade at a price greater than $1.05 per common share for 30 consecutive trading days. The Notes contain a re-pricing provision entitling the holder, in certain circumstances, to a reduction in the conversion price in the event that Mart conducts a future private placement to the higher of the future private placement issue price plus 20% or the undiscounted market price at the time of the announcement of such private placement. In the event of a reduction of the conversion price, the exercise price of the purchase warrants and the forced conversion price are also subject to an equivalent price reduction.

Assuming no future reduction in the conversion price, the maximum number of 23,666,667 common shares and 17,750,000 purchase warrants are subject to issuance upon the full conversion of the Notes.

Mart intends to use the proceeds of the financing to repay its existing convertible notes valued at approximately $8.875 million, to drill and test wells on the Umusadege oil field and the Qua Ibo oil field in Nigeria and for general working capital.

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