ZZL Zeehan Zinc

    RNS Number : 1064G
  Zeehan Zinc Limited
  17 October 2008
   

    17 October 2008

    ZEEHAN ZINC LIMITED
    ('Zeehan Zinc' or the 'Company')

    Related Party Loan


    On 13 October 2008 the independent Directors resolved to enter into a loan agreement with Mr Xiaojian Ren for A$500,000 (the "Loan"). Mr
Ren is a related party because he is the Managing Director and Chief Executive Officer of the Company, and a part owner and director of
Creat Group Limited, a substantial shareholder in the Company.  The purpose of the Loan is to secure short term bridging finance to assist
the Company to meet its current liabilities. 

    The Loan provides that the Company will repay the loan amount, together with interest at 10% on the loan amount in two months. The
Company's liability is capped at A$510,000 with a right exercisable by Mr Ren to access excess equipment or its sale proceeds up to
A$510,000 in the event of default. Mr Ren has agreed to release the Company from any and all liability other than for breach of the
Agreement. The Loan Agreement is conditional upon the independent directors being authorised to enter into the loan under the Company's
Constitution. Having consulted with Libertas Capital, the Company's Nominated Adviser the independent Directors consider the loan is fair
and reasonable insofar as shareholders are concerned because it is gives the Company immediate access to funds (which it would not otherwise
have) to assist meeting its short term liabilities; liability is capped and the Company is released from all liability other than for breach
of the terms; and it is consistent with building a long term relationship with Creat to secure further additional funding to benefit the Company.

    Further to the announcement of 24 September 2008, the Board is disappointed to announce that the approach it received has not progressed
to an Offer. However, the Directors continue to consider funding opportunities and the Independent Directors now expect to put plans before
shareholders in respect of additional funding to meet the Company's longer term liabilities through a capital restructure which will be
voted on at the Company's Annual General Meeting next month.  Documentation will be sent to shareholders shortly.
     
The independent Directors have been asked by the Creat Group to accept the remaining outstanding Convertible Note payment after the Annual
General Meeting of the Company.


    For further information please visit www.zeehanzinc.com or enquire to:

    
    
Zeehan Zinc plc                                      c/o Bankside
Tad Ballantyne                                       Tel: +44 (0)20 7367 8888
 
Libertas Capital                                      Tel: +44 (0)20 7569 9650
Jakob Kinde, Anthony Rowland
 
Bankside Consultants                             Tel: +44 (0)20 7367 8888
Simon Rothschild, Oliver Winters
    
 

This information is provided by RNS
The company news service from the London Stock Exchange
 
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