Tirex secures $9 million for Albanian exploration

Vancouver – In a market plagued with financial uncertainty, where many mining companies are cutting back on exploration programs, cancelling acquisitions, and reducing financings, one junior just arranged a $9-million financing.

Tirex Resources (TXX-V), the Vancouver-based junior explorer advancing the district-scale Mirdita project in Albania, announced a long-term financial partnership with the European Bank for Reconstruction and Development (EBRD) that comes with sufficient money keep Tirex safe from the markets and focused on drilling.

“This really puts us on a comfortable footing to aggressively explore the project,” says Bryan Slusarchuk, Tirex’s CEO. “As other companies are battening down the hatches we’re able to continue with exploration as normal while really reducing the risk for our shareholders by removing that financing question.”

EBRD has signed on to provide Tirex with 6 million through a convertible loan, available in three equal tranches. The first tranche will be available immediately. The second and third tranches will be available at Tirex’s request but have to be met by equal equity raises, which will bring the total money raised to 10 million (approximately $15 million).

The EBRD was established in 1991 to support private sector business in emerging economies within eastern Europe and central Asia. The bank is now the single largest investor in the region, having invested 5.6 billion in 2007 alone in its biggest year of investments. The bank is owned by 61 countries and two intergovernmental organizations and invests mainly in private enterprises.

To date the EBRD has invested in over 40 projects in Albania, with a net business volume of over 400 million. The agreement with Tirex, however, marks EBRD’s first investment in the Albanian natural resource sector.

All three loans will mature five years following the date of the first advance. At any time prior to that EBRD may convert any or all of the outstanding principle and interest into common share of Tirex. The first tranche can be converted at Tirex’s closing price on the date of the loan agreement, with 10% added each year.

The second and third tranches can be converted at the greater of that same price or Tirex’s share price at the time of the applicable tranche. Put more simply, the conversion prices of tranches two and three have a floor but have no ceiling.

“If the markets treat us well and the stock goes higher we can draw that second tranche and there’s no ceiling,” says Slusarchuk. “But if it’s the reverse, if the markets continue to slide we can start by delaying drawing the tranche but then, when we do need it, the floor price is already set.

“It’s a deal that just wouldn’t make sense for any normal investment firms, which have to care about profit,” Slusarchuk continues. “It’s EBRD’s mandate to foster growth in places like Albania that makes this possible.”

EBRD will have the right to appoint a nominee to the Tirex board of directors. Tirex says it welcomes EBRD onto its board because the bank brings with it significant expertise with respect to advancing a project in a country like Albania.

Tirex is exploring the 344-sq. km Mirdita property in north-central Albania. The property is highly prospective for volcanogenic massive sulphide (VMS) mineralization; VMS deposits can be rich in copper, gold, silver, lead and zinc.

The company’s advantage is that Albania was completely isolated from the worl from almost 50 years following World War II. Under the rule of socialist dictator Enver Hoxha, Albanians were not allowed to practice religion, drive, leave the country, or speak freely, among a litany of restrictions.

One result of the isolation was that knowledge of geological exploration techniques never made it into the country. Once the borders opened and the country, after a tumultuous decade, stabilized, Tirex moved in and staked all of the country’s most prospective district. The company current has three drill rigs turning at Mirdita.

Tirex’s share price barely responded to the news, losing 2 to close at 60. The company has a 52-week trading range of 58 to $4.17 and has 37.3 million shares issued.