Arehada Mining Limited announces initial closing of financing

    TORONTO, Aug. 23 /CNW/ - Arehada Mining Limited (TSX: AHD) (the
"Company") announced today the initial closing of its previously announced non
brokered private placement by issuing a total of $3,150,000 of units. Each
unit is priced at $0.40 and consists of one common share and one-half of one
common share purchase warrant of the Company (the "Warrants"). Each whole
Warrant entitles the holder to purchase one additional common share at $0.75
per share, exercisable at any time prior to 5:00 p.m. (Toronto time) (the
"Warrant Expiry Time") on the date that is the earlier of August 22, 2009 and
the 10th business day following notice of the Company to the Warrant holders
that the Company's share price closes at or above $1.50 for 20 successive
trading days on the Toronto Stock Exchange at any time following December 23,
2007. On July 26, 2007 the Company announced that it would sell up to
12 million units. If investor interest remains, Arehada plans a second closing
in the near future.
    A finder's fee of 7% was paid to certain arms length finders (the
"Finders"). In addition, the Finders received 10% finder's options to purchase
units at $0.50 per unit at any time prior to the Warrant Expiry Time, with
each unit consisting of one common share and one-half of one common share
purchase warrant, with each whole warrant entitling the holder to purchase one
additional common share at $0.75 per share at any time prior to the Warrant
Expiry Time.
    All securities issued are subject to a four month resale restriction
period expiring December 23, 2007.
    The net proceeds will be used for working capital including the purchase
of sufficient quantities of zinc concentrate feedstock to commence production
at the Company's newly completed zinc processing plant located in Inner
Mongolia, China. Once in production, the zinc processing plant will process
concentrate produced at Arehada's zinc-lead-silver mine as well as concentrate
from other regional mines in Inner Mongolia, to produce zinc oxide and
sulphuric acid.
    A significant portion of the concentrate that will be used at the plant
will come from Arehada's mine which began production in 2006 and is operating
at 1,500 tonnes per day. The Company is expanding the mine and on-site mill to
reach the 3,000 tonne per day level by the fourth quarter of 2008. Among the
capital additions being made to reach this level is the sinking of additional
vertical and incline shafts, the opening of new work faces and an increase in
milling capacity. All these measures are being financed internally from cash
flow generated by operations.

    About Arehada Mining

    Arehada Mining Limited is engaged in the exploration, development,
extraction and production of zinc, lead and silver in Inner Mongolia, China.
Arehada produces zinc and lead concentrates, which are then sold to smelters
in China.

    Forward Looking Statements
    The above contains forward looking statements that are subject to a
number of known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially from those anticipated in our
forward looking statements. Factors that could cause such differences include:
changes in world commodity markets, equity markets, costs and supply of
materials relevant to the mining industry, extent of resources actually
contained in mineral deposits, actual recoveries achieved in processing ore,
technological change, change to regulations affecting the mining industry,
risks associated with mining operation in China, environmental and safety
regulations risks, and risk associated with failure to obtain required
regulatory or third party consent. Forward-looking statements in this release
include statements regarding future programs, review completion dates and
opportunities. Although we believe the expectations reflected in our forward
looking statements are reasonable, results may vary, and we cannot guarantee
future results, levels of activity, performance or achievements.

For further information:

For further information: Christopher Harrop, Chairman, Arehada Mining
Limited, Tel.: (416) 362-5466, Email:; Martti Kangas,
Investor Relations, The Equicom Group, Tel: (416) 815-0700 x 243, Email:

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