CMQ announces completion of previously announced private placement and extension of forbearance


CALGARY, Nov. 3, 2011 /CNW/ - CMQ Resources Inc. (TSXV: NV) ("CMQ") announced today that it has obtained all necessary approvals, including the conditional approval of the TSX Venture Exchange (the "Exchange"), and that it has completed the private placement previously announced on October 19, 2011 (the "Offering") of $1,500,000 principal amount of secured convertible debentures to Matco Investments Ltd. ("Matco"), CMQ's principal creditor and shareholder and a control person of CMQ.

The Offering resulted in the issuance of $1,500,000 principal amount of convertible debentures (the "Debentures") secured against all present and after acquired property of CMQ on similar terms to CMQ's existing secured indebtedness owing to Matco.  The Debentures have a maturity date of October 15, 2013 and bear interest at a rate equal to 9% per annum.  The accrued principal and interest amounts owing on the Debentures shall be convertible, at Matco's election, into common shares of CMQ at a price equal to $0.10 per common share.  Matco was the only subscriber to the Offering.  Matco and related persons currently hold 22,094,141 common shares of CMQ, representing 49.99% of CMQ's outstanding common shares and would hold 37,094,141 common shares of CMQ, representing 63% of CMQ's outstanding common shares if the full principal amount of the Debentures were to be converted.  The Debentures are subject to a hold period under applicable securities laws which hold period expires on March 4, 2012.

At the annual and special meeting of shareholders of CMQ held on June 21, 2011 (the "Meeting"), the shareholders of CMQ had previously passed a resolution both on a majority basis and on a "majority of the minority" basis, approving Matco's participation in such a financing, including the possibility of Matco acquiring up to 90% of the issued and outstanding shares of CMQ and becoming a de facto control person of CMQ in accordance with Multilateral Instrument 61-101.

In connection with completion of the Offering, and for no additional consideration, Matco has agreed to forbear from enforcing its rights and remedies against CMQ in respect of substantially all amounts CMQ was indebted to Matco.

The net proceeds of the Offering will be used principally for working capital purposes.

This press release is not an offer to sell securities in the United States.  Securities may not be offered or sold in the United States in the absence of registration or an exemption from registration.

The Exchange does not accept responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws including with respect to the timing, completion of and terms of the Offering. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements typically contain statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "intend", "may", "will", "shall", "project", "would", "should", or similar words suggesting future outcomes.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to CMQ and shareholders. Forward-looking statements are based on management's current beliefs as well as assumptions made by, and information currently available to, management. Though management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. The forward-looking statements contained in this press release are made as of the date hereof and CMQ does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

SOURCE CMQ Resources Inc.

For further information:

contact Ryan Jennings, Corporate Secretary, CMQ Resources Inc., Tel: (403) 294-6496

Profil de l'entreprise

CMQ Resources Inc.

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