Silk Road Resources Enters into Commitment Letter in Respect of Private Placement of 7% Unsecured Convertible Debenture


    TORONTO, July 3 /CNW/ - Silk Road Resources Ltd. (TSXV-SIL) (the
"Company" or "Silk Road") is pleased to announce that it has entered into a
commitment letter with Patriarco Holdings Ltd. ("Patriarco") in connection
with a non-brokered private placement of a 7% unsecured convertible debenture
(the "Debenture") for aggregate gross proceeds to the Company of $1,250,000
(the "Offering"). The Offering will close in two or more tranches with the
first tranche being for $500,000 to occur on or about July 10, 2008 (the
"Initial Closing Date") and the second tranche being for $750,000 to occur on
or about August 11, 2008.
    The Corporation intends to use the proceeds from the sale of the
Debenture for drilling at the Corporation's properties in China and for
general working capital purposes.
    Interest accrued in connection with the Debenture shall be payable
semi-annually through the issuance of common shares of the Corporation (the
"Common Shares") at the prevailing market price of the Common Shares on the
TSX Venture Exchange (the "TSXV") at the time of issuance. The Debenture will
mature three years following the Initial Closing Date (the "Maturity Date").
Any outstanding principal amount of the Debenture will be payable in Common
Shares on the Maturity Date at the conversion price of $1.00 per Common Share.
The holder of the Debenture shall have the right, exercisable at any time on
or before the Maturity Date to convert all or any portion of the then
outstanding Debenture into Common Shares at the conversion price of $1.00 per
Common Share.
    The issuance of the Common Shares in respect of either interest payments
or principal amount repayment due is subject to receipt of all necessary
corporate and regulatory approvals, including the approval of the TSXV.
    Pursuant to Multilateral Instrument 61-101 ("MI 61-101"), the issuance of
the Debenture is a "related party transaction" as Patriarco currently holds,
directly or indirectly, 4,585,530 Common Shares representing approximately
18.03% of the issued and outstanding shares of the Company. The Company is
exempt from the formal valuation requirement of MI 61-101 in connection with
issuing the Debenture in reliance on section 5.5(c) of MI 61-101 as no
securities of the Company are listed or quoted for trading on the Toronto
Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Stock market or a stock exchange outside of Canada and the United
States. Additionally the Company is exempt from obtaining minority shareholder
approval in connection with entering into of the Debenture in reliance on
section 5.7(1)(a) as the fair market value of the Offering does not exceed 25%
of the market capitalization of the Company. The Company however may be
required to obtain disinterested shareholder approval in connection with the
issuance of Common Shares in respect of either interest payments or principal
amount repayment due if the issuance of such Common Shares would result in the
creation of a new "Control Person" as such term is defined by the policies of
the TSXV.

    Forward Looking Statements

    Certain information regarding the Company set forth in this press
release, including management's assessment of the Company's future plans and
operations contains forward looking statements that involve substantial known
and unknown risks and uncertainties. These forward looking statements are
subject to numerous risks and uncertainties, some of which are beyond the
Company's and management's control, including but not limited to, the impact
of general economic conditions, industry conditions, fluctuation of commodity
prices, fluctuation of foreign exchange rates, imperfection of reserve
estimates, environmental risks, industry competition, availability of
qualified personnel and management, stock market volatility, timely and cost
effective access to sufficient capital from internal and external sources. The
Company's actual results, performance or achievement could differ materially
from those expressed in or implied by, these forward looking statements and
accordingly, no assurance can be given that any of the events anticipated to
occur or transpire from the forward looking statements will provide any
benefits to the Company.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this press release

    %SEDAR: 00012266E

For further information:

For further information: Silk Road Resources Ltd., Allen J. Palmiere,
President & CEO, Telephone: (416) 363-6045; And/or David R. Bell, Chairman,
Telephone: (416) 363-4280

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