Whitemud Resources Announces Closing of $10.5M Debenture Financing



    
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    DISSEMINATION IN THE UNITED STATES/
    

    CALGARY, Aug. 6 /CNW/ - Whitemud Resources Inc. ("Whitemud" or the
"Company") (WMK - TSXV) is pleased to announce that it has closed a brokered
private placement financing of 10,513 units ("Units") for gross proceeds of
approximately $10.513 million (the "Offering"). Dundee Securities Corporation
(the "Agent") acted as sole agent in connection with the Offering.
    Each Unit consists of a $1,000 principal amount of 12% secured redeemable
convertible debentures (the "Debentures") and 200 common share purchase
warrants (the "Warrants"). The Debentures bear an interest rate of 12% per
annum payable semi-annually on July 31 and January 31 of each year, commencing
on January 31, 2010. At the option of the holder of Debentures, the Company
may satisfy the interest payments by issue of common shares of the Company
(the "Interest Shares"), subject to regulatory approval. The Debentures will
mature on July 31, 2012 and are convertible into common shares of the Company
(the "Conversion Shares") at a conversion price of $0.91 per Conversion Share
(the "Conversion Price"). The Debentures have been secured by a general
security agreement and demand debenture charging all of the Company's real and
personal property, which security will rank ahead of all creditors and debt
except for existing senior bank debt in an amount of $2.0 million together
with cash held to support outstanding letters of credit.
    Each whole Warrant shall entitle the holder thereof to acquire one (1)
common share of the Company (the "Common Shares") at $1.14 per Common Share
for a period of 36 months from closing of the Offering. The Company will have
the right to redeem the Debentures after twenty-four (24) months from closing
of the Offering provided that the weighted average trading price of the Common
Shares on the TSX Venture Exchange for the 20 consecutive trading days ending
5 trading days preceding the date on which the notice of redemption is given
is at least 125% of the Conversion Price.
    In connection with the Offering, the Agent received a cash commission
equal to 6.0% of the gross proceeds of the Offering and was granted warrants
(the "Agent's Warrants") equal to 3% of the gross proceeds of the Offering.
The Agent's Warrants are subject to early expiry if the closing price of the
Common Shares of the Company on the TSX Venture Exchange is equal to or
exceeds $1.50 for thirty (30) consecutive trading days, in which case, upon
written notice to the Agent from the Company, the Agent's Warrants will expire
thirty (30) days from the date of such notice.
    The proceeds from the Offering will be used to reduce short-term
indebtedness and for general corporate purposes that advances the Company's
metakaolin product to commerciality.
    Whitemud is also pleased to announce that it has entered into an
agreement with its existing lender to convert its existing $2 million bridge
facility into a secured credit facility for the same amount. The credit
facility will have a 2 year term and carries an interest rate of 10% per
annum.

    About Whitemud Resources

    Whitemud Resources Inc. (www.whitemudresources.com) is a Canadian-based
corporation that is exploiting a large kaolin deposit in southern
Saskatchewan. The Company produces Whitemud(MK), a high-reactivity,
cement-grade metakaolin that enhances the performance of cement used in
construction and in oil and gas wells. The Company is positioned to benefit
from expanding North American infrastructure needs and growing environmental
pressures.

    
    Neither TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this release.

    For further information on Whitemud, go to www.whitemudresources.com
    For email alerts regarding Whitemud Resources, please go to Whitemud
Resources Inc. - Email Alerts
    

    %SEDAR: 00024724E




For further information:

For further information: Burl Aycock, Chairman & CEO, Whitemud
Resources, Telephone: (403) 695-1012; Ron Love, Vice President, Finance and
CFO, Whitemud Resources, Telephone: (403) 517-0040; Kelly Babichuk, President
and COO, Whitemud Resources, Telephone: (403) 517-0040; Kevin Graham, Vice
President, Communications, Whitemud Resources, Telephone: (403) 517-0040

Organization Profile

WHITEMUD RESOURCES INC.

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