Infinito Completes $42.5 Million Convertible Debenture Financing Involving Debt Restructuring And Rights to Drawdown up to $8 Million in Further Convertible Debt

    Trading Symbol: TSX-V: IG

    CALGARY, Feb. 10 /CNW/ - Infinito Gold Ltd. (the "Company") announces
that it has closed the non-brokered private placement announced on February 1,
2009 under which it sold an aggregate of up to CDN$50.5 million secured
convertible notes (the "Notes") to Exploram Enterprises Ltd. ("Exploram") and
Auro Investments Ltd. ("Auro") (collectively, the "Holders"). The Holders
subscribed for an initial aggregate principal amount of CDN$42.5 million in
Notes and Exploram has agreed to give the Company the right to make subsequent
drawdowns under the Note held by Exploram of up to CDN$8 million, subject to
certain conditions. Under their subscriptions for Notes, the Holders were
issued, concurrently with the issue of the Notes, 208,333,334 common share
purchase warrants (the "Warrants"). The proceeds of $42.5 million has been
used to retire all outstanding Notes and Debentures of the Company totaling
$37,500,000 and to pay interest on such outstanding debt of $1,006,068.50 and
the balance will be used for working capital and corporate general and
administrative expenses.
    The Notes mature on February 10, 2014 and are convertible at any time up
to maturity into shares of the Company. The conversion price for the initial
$42.5 million subscription of Notes is $0.204 per share, being the 20-day
volume weighted average price of the shares of the Company for the 20 trading
days (the "20-Day VWAP") preceding the announcement of the transaction and the
conversion price for subsequent drawdowns will be the 20-Day VWAP at the date
of drawdown. If, after the Notes are issued however, the Company issues shares
for cash at a price below the conversion price of the Notes (a "Subsequent
Issuance"), the Holders shall be entitled to concurrently convert into shares
at that lower issue price an aggregate principal amount of the Notes as is
equal to the amount of the Subsequent Issuance. Shares issued for cash upon
the exercise of stock options, interest payments on the Notes or on conversion
of principal of a Note with a lower conversion price do not trigger this
    The Notes bear interest at 15% per year, payable quarterly, except that
after March 31, 2010 the Holders have the discretion to require interest to be
paid monthly. The first interest payment is due on the earlier of the first
drawdown of a project development debt financing for the Company's Crucitas
Project and September 30, 2009. (The Company announced in August of 2008 that
it had signed an engagement letter giving BNP Paribas an exclusive mandate to
act as lead arranger on the project development financing for the Crucitas
Project (the "Project Development Financing"), but financing work has been
suspended pending resolution of the Costa Rican legal challenge in respect of
the grant of a change of land use permit for the mine announced on October 21,
2008.) Interest is payable in cash or shares of the Company, at each Holders'
election, such shares to be issued at the 20-Day VWAP at the time the interest
payment is due.
    The Warrants issued at closing are exercisable until February 10, 2014
and each Warrant entitles the holder to acquire one share of the Company at
$0.204 per share. Upon future drawdowns by the Company, if any, the Company
will issue warrants concurrently with the completion of the drawdown, each
warrant to be exercisable for a period of five years and entitle the Holder to
acquire one share of the Company at a price equal to the conversion price of
the concurrent drawdown.
    The Company's obligations under the Notes are secured by: (i) a general
security agreement over all of the Company's assets and a pledge of the shares
of certain of the Company's direct subsidiaries; (ii) a guarantee of the
Company's obligations under the Notes by each of the Company's subsidiaries;
and (iii) a pledge of the shares of certain indirect subsidiaries of the
Company, including the shares of Industrias Infinito S.A., the owner of the
Company's Crucitas Project.
    The Company has the right to prepay the principal amount of the Notes, in
full or in part, at any time after three years from the issue date of the
Notes, subject to each Holders' right to convert before prepayment. Prepayment
is subject to other conditions, including that the 20-Day VWAP prior to
prepayment must be 15% greater than the conversion price of the principal
amount of the Note to be prepaid. The Notes include negative covenants,
positive covenants and conversion right adjustments that are standard for
transactions of this nature. The Notes also contain events of default to be
expected in financings under these circumstances, including a breach of the
terms of the Notes, bankruptcy, insolvency or receivership proceedings, a
change of control of the Company, a change of business of the Company's Costa
Rican subsidiary, a failure to obtain and maintain regulatory approvals in
respect to the Crucitas Project, a failure to make the initial drawdown under
the Project Development Financing before September 30, 2009 and a court
decision that impairs or prevents the ability to construct the Crucitas
    The Company has paid a cash structuring fee of $150,000 to the Holders in
respect of funds advanced at closing not utilized to retire existing debt, has
agreed to pay the Holders a further $375,000 in respect of the funds used to
retire existing debt on or before the earlier of June 30, 2009 and the date of
the first drawdown under the Project Development Financing and to pay the
Holders a cash structuring fee of 3% of all future drawdowns.
    Subsequent drawdowns on the Note held by Exploram to a maximum of
$8,000,000 may be made at the Issuer' request in increments of between
$500,000 and $2,000,000 subject to specified conditions precedent to
subsequent drawdowns, including the rendering of a favorable ruling in the
Costa Rican legal challenge referred to above.
    The financing is a related party transaction under MI 61-101 as each of
Exploram and Auro are related parties. As such, the Company formed a Special
Committee of independent directors to consider and negotiate the terms of the
transaction. The Company is exempt from the formal valuation requirements of
MI 61-101 as its shares are only listed on the TSX Venture Exchange and the
Company is exempt from the minority shareholder approval requirement under MI
61-101 as both the Board of Directors and the independent directors each
determined, in good faith, that (i) the Company is in serious financial
difficulty, (ii) the transaction is designed to improve the financial position
of the Company, and (iii) the terms of the transaction are reasonable in the
circumstances of the Company. These determinations were based in part upon the
advice of its financial advisors. Due to the potential dilution to minority
shareholders under this transaction, the Special Committee also recommended
that the Company make available to minority shareholders an opportunity to
mitigate the dilutive impact through participation in an offering of units
priced at a comparable level. Accordingly, the Company plans to approach
certain of its minority shareholders to see if there is interest in such an
offering on a private placement basis.
    On closing Exploram was issued a Note in the aggregate amount of $34
million and 166,666,667 Warrants and Auro was issued a Note in the aggregate
amount of $8.5 million and 41,666,667 Warrants. Exploram presently holds
61,154,490 shares of the Company and, upon conversion in full of its Note at
$0.204 per share and exercise of all of its Warrants, could acquire a further
333,333,334 shares of the Company. Auro presently holds 5,714,285 shares of
the Company and, upon conversion in full of its Note at $0.204 per share and
exercise of all of its Warrants, could acquire a further 83,333,334 shares of
the Company. The Company presently has 121,429,289 shares outstanding.
    The Notes and the Warrants and any shares issuable thereunder are subject
to a hold period expiring on June 11, 2009.

    Caution Regarding Forward-Looking Information and Statements
    Certain statements in this press release address future events and
conditions and, as such, involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by the statements. These factors include,
among others, the inherent risks involved in the exploration and development
of mineral properties, the uncertainties involved in interpreting drilling
results and other geological data, fluctuating metal prices, the possibility
of project cost overruns or unanticipated costs and expenses, uncertainties
relating to the availability and costs of financing needed in the future, the
possibility that all necessary governmental and regulatory approvals will not
be received, and the availability of a qualified workforce and third party
contractors necessary for the development and operation of a mine. The Company
undertakes no obligation to update these forward-looking information or
statements if circumstances or management's estimates or opinions should
change. The reader is cautioned not to place undue reliance on forward-looking
information or statements.


    John Morgan

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

For further information:

For further information: INFINITO GOLD LTD., Suite 216, 102 - 8th Avenue
S.W., Calgary, Alberta, T2P 1B3, Telephone: (403) 444-5191

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Infinito Gold Ltd.

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