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April 4, 2012 Vancouver, Canada - Fire
River Gold Corp. (TSXV: FAU), (OTCQX: FVGCF), (FSE: FWR) (the
"Company") is pleased to announce that it has secured a USD$12.75
million gold-backed credit facility (the "Credit Facility") with
Waterton Global Value Limited Partnership ("Waterton"). The Credit
Facility will be used to fund the development of the Company's Nixon
Fork Mine and to support its ongoing operational and logistical
objectives. The Credit Facility is also earmarked to repay existing debt
and to fund the working capital needs of the Company and its subsidiary,
Mystery Creek Resources, Inc.
Each of Fire River Gold Corp., USA and
Mystery Creek Resources, Inc. has issued a guarantee in favour of
Waterton with respect to the obligations of the Company under the Credit
Agreement. The Company's obligations in connection with the Credit
Facility are secured by a lien and a first priority security interest in
substantially all of its assets, including the Nixon Fork Mine. The
Company has also issued a share pledge in favour of Waterton over its
shares in each of Fire River Gold Corp., USA and Mystery Creek
Resources, Inc.
The Credit Facility bears interest at a
fixed rate of 5% per annum, consists of a single drawdown on closing and
is repayable by April 30, 2014. As part of the transaction, the Company
has agreed to sell to Waterton the gold and silver produced from the
Nixon Fork Mine pursuant to a gold and silver supply agreement.
In connection with the Credit Facility,
the Company will pay a cash structuring fee to Global Hunter Securities.
The Company has also issued warrants (the "Warrants") to Waterton to
purchase 8,250,000 common shares priced at CDN$0.23575 per common share.
The Warrants expire three years from the date of closing and are subject
to a four month hold period in accordance with applicable Canadian
securities laws.
Richard Goodwin, the Company's President, reports, "The completion of
this financing provides us with sufficient capital to extinguish our
current debt, increase our bonding and to further develop the Nixon Fork
Mine. We are very pleased to have Waterton as a strategic partner on
operational and logistical matters."
Cheryl Brandon, Portfolio Manager at Waterton Global, stated "We look
forward to working with Fire River Gold to provide the additional
capital required for commissioning. In addition, we have provided Fire
River access to our in-house technical team to further expand the Nixon
Fork Gold mining operations in Alaska. The Waterton Global facility will
allow Fire River to carry out further underground development,
commission the CIL circuit to improve gold recoveries and execute their
production growth strategy. We look forward to building a strong
relationship with management as the Company moves forward into
commercial production."
On behalf of the Board of Directors,
"Richard Goodwin"
Richard Goodwin
President
Cautionary Note Regarding Forward-Looking
Statements:
Certain statements contained in this news
release constitute "forward-looking information" as such term is used in
applicable Canadian securities laws, including with respect to the use
of proceeds of the Credit Facility with Waterton. Forward-looking
information is based on plans and estimates of management at the date
the information is provided and certain factors and assumptions of
management. Forward looking information is subject to a variety of risks
and uncertainties and other factors that could cause plans, estimates
and actual results to vary materially from those projected in such
forward-looking information. Factors that could cause the
forward-looking information in this news release to change or to be
inaccurate include, but are not limited to, the risks related to
unsatisfactory results of due diligence, international operations and
doing business in foreign jurisdictions, risks associated with mineral
exploration and development activities generally, the risk of commodity
price and foreign exchange rate fluctuations, and risks and
uncertainties associated with securing and maintaining necessary
regulatory approvals. The Company does not undertake to update any
forward-looking information except in accordance with applicable
securities laws.
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