AFCAN Grants Eldorado a Movable Hypothec on its Assets.TORONTO -- AFCAN AFCAN Antica Fabbrica Ceramiche Artistiche Napoletane (Italy) Mining Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :AFK) ("AFCAN, the "Company" or "we") announces, that in order to secure its obligations under a Loan Facility in an amount of US$15 million made available by Eldorado, AFCAN has agreed to grant a movable hypothec Hy`poth´ec n. 1. (Scot. Law) A landlord's right, independently of stipulation, over the stocking (cattle, implements, etc.), and crops of his tenant, as security for payment of rent. and a general security agreement on its assets, to Eldorado. The Loan Facility, announced on July 11, 2005, forms part of a Compromise Agreement signed July 8, 2005 whereby Eldorado will acquire all of AFCAN'S outstanding securities (the "Transaction"). Advances under the Loan Facility will be used to fund the continuing construction of the Tanjianshan Gold Project in Qinghai Province in Western China (the "TJS Project") and the Company's obligations relating to the acquisition of the TJS Project. Advances under the Loan Facility shall bear interest at a rate of LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 3% per annum. A Special Meeting of Afcan's shareholders and warrantholders called to approve the Transaction between AFCAN and Eldorado, is scheduled to be held on September 8, 2005. The Transaction is expected to close on September 16, 2005 subject to the approval of AFCAN shareholders and warrantholders, court and other regulatory approvals. It is expected that following the closing of the Transaction, the position of Chief Financial Officer for Afcan will be abolished. In that context, Afcan's Chief Financial Officer, Mr. Frank Chen, has resigned effective immediately. Afcan's Board of Directors have agreed to an offer from Eldorado Gold Corporation (TSX: ELD, AMEX AMEX See: American Stock Exchange : EGO) whereby Afcan will become a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Eldorado. Afcan owns 85% of the TJS Project. A Bankable Feasibility Study has been completed on the Project and construction of the 150,000 oz/year mine has commenced. There are an additional 23 anomalies on the licence area of 341 km2 that have been identified. ON BEHALF OF AFCAN MINING CORPORATION David G Netherway President and Chief Executive Officer Afcan Mining Corporation's shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSX:AFK). The TSX has neither approved nor disapproved the form or content of this release. AFCAN MINING CORPORATION (TSX:AFK) |
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