VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/25/13 -- Argentex Mining Corporation ("Argentex" or the "Company") (TSX VENTURE: ATX)(OTCQB: AGXMF) is pleased to announce that it has signed a Term Sheet with Austral Gold Limited ("Austral Gold") (ASX: AGD) pursuant to which Austral Gold has agreed that it or one of its affiliates (the "Purchaser") will purchase, in a private placement, 17,347,866 units (each, a "Unit") of the Company at a price of $0.2882 per Unit for gross proceeds of $5,000,000 (the "Financing"). Each Unit will consist of one Argentex common share (each a "Unit Share") and one-half of one share purchase warrant (each whole warrant a "Unit Warrant"), and each Unit Warrant will entitle the holder to purchase one additional Argentex common share at an exercise price of $0.40 for a period of 60 months from closing. The Unit Share price represents a 92% premium, and the Unit Warrant exercise price represents a 167% premium, to the closing price of the Company's common shares on the TSX Venture Exchange on March 22, 2013.
The parties expect to close on or around April 12, 2013. At closing, it is anticipated that the purchaser will own approximately 19.9% of the Company's issued and outstanding common shares, on an undiluted basis, and it has agreed that it will not exercise any of the Unit Warrants if doing so would cause it to hold 20% or more of the Company's issued and outstanding common shares.
"We view this strategic investment by Austral Gold as very significant for Argentex and its development and exploration plans for it's Argentinean projects. First, it enables us to advance the development activities at our flagship Pinguino project by providing the sufficient funding for this and as well as for working capital, and leaving us with a treasury in excess of $6 million. Secondly, it adds local experience through a direct association with Austral Gold's Argentinean Chairman and major shareholder Mr. Eduardo Elsztain. We expect that this local knowledge, credibility and relationship network will help us advance the development of Pinguino. Finally, it provides us with access to Austral Gold's experienced management team. This team discovered and developed El Penon in Chile (sold to Yamana Gold Inc.), helped discover and develop the Cerro Negro project in Argentina before it was sold to Goldcorp Inc., and have recommissioned and developed the Guanaco open pit mine in Chile into a well performing underground gold mine," said Michael Brown, President and CEO of Argentex.
"We are pleased to build a strong relationship with Argentex Mining, and gain access to the impressive and advanced Pinguino Silver-Gold Project, and a solid portfolio of other key exploration assets in Argentina. Our team at Austral Gold has been successful in bringing the Guanaco gold mine in Chile into production, and we look to leverage our development skills and access to capital to advance Pinguino through the development cycle. Together with the respected exploration team at Argentex, we look to expand on the current resources discovered at Pinguino and build an exciting future in Argentina and Chile," commented Mr. Eduardo Elsztain, Chairman of Austral Gold.
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