TORONTO, ONTARIO--(Marketwire - May 23, 2008) - Arehada Mining Limited (TSX: AHD.TO) ("Arehada") today announced that its wholly owned Chinese operating subsidiary, Arehada Mining Corporation ("Arehada China"), has obtained a new bank term loan for RMByens 16 million (Cdn$2.3 million) from the Agricultural Bank of China. The loan bears interest at 11.205% per annum, calculated and payable monthly. The loan matures on February 21, 2009. Arehada China has received verbal commitment from the bank for a second loan in the amount of RMByens 14 million (Cdn$2 million) on the same terms. The second loan is subject to formal documentation and Arehada China hopes to complete the second loan within the next 30 days.
The proceeds of the first loan and the second loan (if received) will be used primarily to purchase inventory of zinc ore feedstock to start up Arehada's zinc plant, which has a designed processing capacity of 50,000 tonnes per annum of zinc oxide and 100,000 tonnes of sulphuric acid. Although Arehada China has received the first loan, it will likely require the second loan to purchase sufficient feed stock to start the zinc plant operation. Once the second loan is received, Arehada China expects to commence the zinc plant operation within one month. 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. "We have being waiting for this credit facility for some time due to delays caused by the tightening credit situation in China," commented Chris Harrop, Chairman of the Board. "Once we receive the second loan, we will finally be in a position to commence operations of our zinc plant and to start generating new revenue source for our company. We are very pleased with this development. We look forward to completing the second loan so we can start our zinc plant operation." About Arehada Mining Arehada Mining Limited is engaged in the exploration, development, extraction and production of zinc, lead and silver in Dongwuzhumuqinqi, located in Inner Mongolia, China. Arehada produces zinc and lead concentrates, which are then sold to smelters in China. Arehada has constructed a zinc plant with a designed processing capacity of 50,000 tonnes per annum and startup is scheduled for the second quarter of 2008 contingent on receiving working capital funding from a local bank. 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. ContactsChristopher J. F. HarropArehada Mining Limited
Chairman
(416) 362-5466
Email: porrah@gmail.com
Graham Warren
Arehada Mining Limited
Chief Financial Officer
(416) 362-5466
Email: g.warren@arehadamining.com
350.77 (3.70%)
