Griffin Mining Proposed Acqui

RNS Number : 4221P

Griffin Mining Ld

24 March 2009

GRIFFIN MINING LIMITED

60 St James's Street, London SW1A 1LE, United Kingdom

Telephone: + 44 (0)20 7629 7772 Facsimile: + 44 (0)20 7629 7773

E mail: griffin@griffinmining.com

24th March 2009

Griffin's Proposed Offer for Ivernia Inc

Griffin Mining Limited ('Griffin' or 'the Company'), has announced today that it intends to make a cash offer ('the Offer') through a wholly owned subsidiary to acquire all of the issued and outstanding common shares of Ivernia Inc ('Ivernia') at a price of C$0.15 per Ivernia share. The total consideration payable under the Offer is expected to be approximately C$27 million excluding expenses if the entire offer is accepted. In addition Griffin is seeking to acquire or repay US$33.4m of convertible loan notes in the event the offer is successful.

Ivernia's shares are traded on the Toronto Stock Exchange under the symbol 'IVW'. The Offer price represents a premium of approximately 25 per cent over the closing price of Ivernia shares on 24 March, 2009 being the last dealing day prior to the date of this announcement and a premium of approximately 26.1 per cent over the average trading price of Ivernia's shares for the previous 20 trading days.

The offer will not be subject to any financing conditions and will be financed with Griffin's current cash resources. The offer will be made to Ivernia's shareholders following receipt of a complete shareholder list from Ivernia or earlier by publication of an advertisement and filing of the takeover bid circular as required under applicable Canadian securities laws. The takeover bid will be open for acceptance for not less than 35 calendar days from the date of mailing or publication of an advertisement of the takeover bid that includes full details of the offer.

Completion of the offer will be subject to certain conditions, including there having been deposited under the offer and not withdrawn, a number of Ivernia shares which constitutes not less than 50.1 per cent of the outstanding Ivernia shares (on a fully diluted basis), there having been obtained all government and regulatory approvals that Griffin considers necessary or desirable in connection with the offer, the waiver or cease trade of the Ivernia's shareholder rights plan, the withdrawal or defeat by shareholders of Ivernia's proposed refinancing, and no material adverse change having occurred in the business of Ivernia. Any of these conditions may be waived by Griffin in its discretion.

Ivernia advised in a news release on 20 March 2009 that it intends to a) reduce the conversion price from US$1.08 per share to US$0.11 per share on US$20 million of outstanding convertible notes (at least half of which are held by a related party), b) add an additional US$3 million to these notes for interest and fees, and c) issue an additional US$10.4 million of notes to a related party with the same conversion price. This will cause Ivernia's fully diluted share capital to be increased by 303.6 million shares, or 169% of Ivernia's outstanding share capital, primarily to related parties. Ivernia has advised that it intends to proceed with these related party transactions without shareholder approval by seeking an exemption from the Toronto Stock Exchange on the basis that Ivernia is in serious financial difficulty, and by relying on a similar exemption from shareholder approval and valuation requirements of the Ontario Securities Commission. It has previously been reported by Ivernia that this debt was due for settlement by April 27, 2009 and calls into question the timing and price of this refinancing with a related party being sought without shareholder approval.

In the event that Griffin is successful in acquiring a controlling stake in Ivernia but minority shareholders remain, Griffin is prepared to complete the same financings at a conversion price of US$0.15 which equates to an amount payable of US$33.4. This represents a premium of approximately 36% to the new conversion prices which Ivernia and its related parties have agreed upon.

RATIONALE OF PROPOSED TRANSACTION

Griffin has successfully constructed and brought into production its Caijiaying zinc, gold, silver, lead mine in Northern China, on time and to budget. Although production is currently suspended, Caijiaying has operated as a low cost profitable mine. With substantial cash balances and no debt, Griffin has the funds and ability to bring Ivernia's 100% owned Magellan lead mine in Western Australia, currently shut, following an environmental incident, back into production. Griffin already has a presence in Western Australia with administrative and service offices in Perth, and a 39.2% interest in Spitfire Oil Ltd with its Salmon Gums lignite project in Western Australia. The acquisition of Ivernia will give Griffin control over a second project in a different commodity and a separate geographical area from its principal venture in China and enhance its existing management team.