Griffin withdraws proposed takeover for Ivernia Inc

    Griffin Mining Ltd (AIM Market: Symbol "GFM")
    Ivernia Inc (TSX: Symbol "IVW")

    LONDON, April 3 /CNW/ - Griffin Mining Limited ("Griffin") has withdrawn
its proposed takeover of Ivernia Inc ("Ivernia") as a result of actions taken
by the board of Ivernia which have resulted in the current and future control
of Ivernia being delivered to a related party with latent massive dilution of
its share capital without the approval of Ivernia's shareholders or allowing
the shareholders to be given the opportunity to consider a number of
alternative proposals put forward by Griffin.
    The completion of a momentous alteration in the terms of Ivernia's
convertible debt and other related transactions were permitted to proceed on
the basis of the Toronto Stock Exchange's (the "TSX") decision to grant
Ivernia an exemption from TSX minority shareholder approval requirements for
non-arm's length transactions and for transactions exceeding specified levels
of dilution under TSX rules. Under the transaction, Ivernia's largest
shareholder and an insider, Sentient Global Resources Fund II LP, was issued
secured convertible notes (the "Notes") where (1) the conversion price was
reduced from $1.08 to $0.11 per share thereby entitling it to acquire 199.1
million shares, representing approximately 111% of the current outstanding
shares of Ivernia and effective control; (2) the term was extended by 4 years
to expire in 2013; (3) the interest payable was increased from 6% to 8% per
annum; (4) the Notes become due and payable on any "change of control" of
Ivernia; (5) Sentient assumed effective operational control over Ivernia's
wholly owned operating subsidiary, Magellan Metals Pty. Ltd.; (6) the Notes
are non-redeemable by the Company; (7) the strike price of the Notes contains
a death-spiral type of conversion feature such that if new shares are
subsequently issued at a price lower than the stated $0.11 conversion price,
the conversion price will be lowered for the Notes to that issue price. The
same mechanism is not included if Ivernia subsequently issues shares at a
higher price. The inevitable conclusion of such a one sided Note issue is the
effective entrenchment of Sentient as the controlling shareholder of Ivernia.
    Ivernia's application for exemption from shareholder approval
requirements was made on the basis of "financial hardship" notwithstanding (a)
that Sentient itself was the major creditor of Ivernia imposing the "financial
hardship"; (b) that Griffin had advised of its intention to make an offer to
purchase all of the outstanding shares of Ivernia at a 25% premium to market
and had indicated it would refinance Ivernia on the same basis as Sentient but
at a 36.4% premium to the conversion price offered by Sentient in the
Notes;and (c) Griffin had made a separate unconditional offer to Ivernia to
subscribe for 125 million shares at C$0.12 share and purchase all the
outstanding Notes to solve the financial hardship claimed by the directors of
    The defensive takeover provision and the death spiral conversion feature
were not disclosed in Ivernia press releases or material change reports, and
the extent of Sentient's ownership upon conversion of the Notes was not
disclosed in Sentient's early warning filings. It is interesting to note that
the representative of Sentient on the board of Ivernia makes up one of the
three members of the Corporate Governance Committee.

    Griffin Mining Limited's shares are quoted on the Alternative Investment
           Market (AIM) of the London Stock Exchange (symbol GFM).
     The Company's news releases are available on the Company's web site:

For further information:

For further information: Mladen Ninkov - Chairman, Telephone: +44(0)20
7629 7772, Roger Goodwin - Finance Director, GRIFFIN MINING LIMITED; Jos
Simson, Leesa Peters, CONDUIT PR LTD, Telephone: +44 (0) 20 7429 6603, Mobile:
+ 44(0) 7899 870 450

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